Full text of Commercial and Financial Chronicle : June 3, 1948, Vol. 167, No. 4704

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ADM"LIBRARY

BUS.

ESTABLISHED 1S39

Reg. U. 8. Pat. Office

Volume

New

Number 4704

167

Unions'Demands and

The Uncommon Man

Managers' Policy
Chairman,
■:

Economist

Consulting

inc.*

New

^,-/"■Q V

v;f

and dislocate

Union

wages

increased

Steel industry leader declares America is

■

Economist, Central Fife Insurance Co. of Illinois

particular

develop their

aptitudes,

with

contradictory motivations in Public Housing
both subsidized houses and more infla-;
tion.
Estimates it would take century to give home to every low »
income family and would end by having government own and
operate more than half of American homes.
Analyzes difficulties
in subsidized housnig and concludes it furnishes unparalleled oppor¬
tunity for patronage and political favoritism.
Dr. Palyi points out

Program and

■

;

results,

miraculous

Points to "hokum" circulated about sinfulness of profits, stating

;they

land of Uncommon Men

are

necessary

for furnishing tools of production and jobs.

Contrasts small pay to

Profits

tool owners with wages. Pleads for better r
understanding of stockholders' position, maintaining that every ' ;
levels as per¬
stockholder is a worker, and every employe a capitalist.
centage of sales.
Recommends
: :
farm price ceilings to protect
It is my wish to speak to you briefly about the Uncommon Man
consumer, wages to slide down;; because this meeting is in recognition of men who this day receive
and
up
with cost of living,
diplomas certifying that they are Uncommon Men.It is thus my
privilege and pleasure to speak far more in terms of congratulation
greater productivity with ban on
than of ad-V
"feather-bedding."
monition.
| • '
1
\
,v'
now

at prewar

are

4 The unions

again demand-*,

are

union

■

tracts

therefore

rates

should

rise;

(2) profits are

large

and

therefore

workers' earnings should increase.
These

arguments

streets.

lowering

one-way

are

union

urges

ever

cost

because

wages

the

Men., Yet

housing prob-

(Continued on page 38)

requires

that

the

Un¬
Men

common

(1) the
of living

wage

Elisha M. Friedman

also want

U ri common

stated:

within-it

ap¬

Usual, BUT

the
fundamentals

Voorheea

the

solved in
such a fashion

play that role at the beginning of' 'next year, interest and
attention is focused mainly, almost solely, upon candidates.
that underlie
It is, moreover, the personal qualities, the "vote-getting"
it because it is
to them that others turn for guid¬
abilities and the amenability to party control of the indi¬
ance
in attitudes and
decisions vidual candidates
which'chiefly concern the "professional
which can have far-reaching ef¬
politicians" who largely control the party. What the beliefs,
fects on our country,
if any, of these aspirants for high office may be, or their
-,:H;Can It Endure?
individual attitudes toward vital topics of the day appear
This is not always easy to do
to play a secondary role, if any, among those gentlemen
because the very conditions which
who traditionally occupy the "smoke-filled rooms" in which
make it possible for men in Amer¬
ica
-v
to make the most of that party decisions are so often made.
which is uncommon about them¬
:
What the great rank and file are thinking as to
selves
are v also
the
conditions
either the tactics or candidates of either the opposition
which insidiously tempt them to
or of the Democratic party, it would not be easy to say
(Continued on page 36)
V
with great assurance. If one may judge from such camM.

v„

poor

"campaign year,'*-and both the rank and file
of the people and the individuals and political groups di¬
rectly at interest are proceeding quite as usual. As to the
hopes of ceasing to
'opposition,"> which entertains
This is

Q n e

lem

Quite

preciate

Enders

not"

are

Uncom¬

Men

re¬

■

mon

be strik¬
ing.
The old
arguments

and

.>!■

the objec-

say,

another.

for

may

•..

with

ica of and for

gone

tives

EDITORIAL

to keep Amer¬

cost

Needless
:

and

2,500jjr

has

homes.

either raising our own tax burdens or causing more price-inflation.

land .of

con¬

not like to

cent"

compatible

members

will

...

Being generous, we
see people ill-housed even if they cannot afford "de¬
Being practical, we want to provide them without

other land
ours
is the

both
expired
and
soon to expire,

000

."*.''."1.7;'•

both practical and generous.

are

any

about

than

With many

increases.

wage

means

Americans

says

■

ing

Visiting Professor, University of Chicago

because all individuals have freedom and competitive compulsion

;

econo¬

than consumers' prices.

Housing?

By MELCHIOR PALYI

Chairman, Finance Committee, United States Steel Corporation

increases will harm

wage

consumers

my.

Copy

Institute

Econometric

■'

■

Shonld We Subsidize

By ENDERS M. VOORIIEES*

By ELISHA M. FRIEDMAN
i

Price 30 Cents

York, N. Y., Thursday, June 3, 1948

homes

the

should

t h

be allocated to

t h ose.w ho

really

need

them.

There¬

fore, we do

Melchior

Dr.

Palyi-

the

not, trust

profit motive to take care of the
allocation, while we believe fn the
profit motive otherwise. We want
it done in

to have

businesslike

fashion, but we trust it to bureau¬
crats
of a sort.. We
know that
subsidized
business
is
unsound

but

business,

nation's

the

put

are

inclined to
largest

second

subsidized

basis.

industry

Also,

want more construction

PICTORIAL

See

PICTURES

Spring

SECTION for

taken

Outing

Annual

Francisco

San

Traders Association.

Security

(Continued

■

on page

26)

*Mr.

Voorhees'

commencement

Trade

the

New

York

28)

on page

;

•

City,

May 26, 1948..

Havana

(Continued

York

School,

address

day

State and

'•

Municipal
Franklin Custodian

Lithographing Go.

Funds,

inc.

STATE

and

MUNICIPAL

BONDS

A Mutual Fund
'

COMMON STOCK SERIES

Members

New

York Stock

25 Broad St., New
HAnover 2-0600

UTILITIES SERIES
1

„

York 4, N. Y.
London

Prospectus

request

Bond

Dept. Teletype: NY 1-708

We have prepared a

memorandum

Town of Surf side,

•

Underwriters and
>

Distributors of Municipal

and

Optional 1953 4
;•

OTIS & CO.

Gordon Graves & Co.

(Incorporated)
Established 1899;.''

\y--v,

Street, New York 4, N. Y.

Tel. WHitehall 3-2840

Tele. NY 1-809

CHASE

■

NATIONAL BANK

HAnover 2-M80

Bell Teletype NY 1-3M

7 Montreal

New York

THE

CITY OF NEW YORK

Toronto

Chicago
Denver
Columbus Toledo Buffalo

Public Service Co.■
1

BONDS & STOCKS

«,''

*•

Copy

upon

request

■

•

>;
>

Dominion Securities
Est.

1896

Members New York Stock

Exchange

120 Broadway, New

Grporatio?!

York 5

Telephone REctor 2-7340

PREFERRED

SUTRO BROS. & CO.

New York
Cincinnati

Central Vermont

CANADIAN

& Fibre Company

INVESTMENTS

CLEVELAND
30 Broad

Corporate Securities

f
INSTITUTIONAL

The Champion Paper

Florida

@ 3.65%

THE

64 Wall Street, New York 5

Due March 1, 1974

WILLIAM ST., N. Y.
; r

■

York Security Dealers Assn.

New

OF NEW YORK

FRANKLIN DISTRIBUTORS, Inc.

4V.v'Geneva (Eepresentatlve) 4

50,000

Members

INCOME (BALANCE FUND) SERIES

Teletype NT 1-210

Cleveland

Chicago

THE NATIONAL CITY BANK HART SMITH & CO.

BOND SERIES

Exchange

and other Exchangee

Bond Department

PREFERRED STOCK SERIES

HlRSCH & Co.

40 Exchange

Place, New York 5, N.Y.

IRA HAUPT &CO.
Members
and

New

111

Broadway, N. Y. 6

WOrth 4-6000
Bell System

Teletype NY 1-702-3

Boston

York Stock Exchange

other Principal Exchanges

Teletype NY U2708

Telephone:

Enterprise 1820

COMMERCIAL

THE

(2414)

FINANCIAL

CHRONICLE

Thursday, June 3, 1948
refer to

Trust

Air Products Inc.

Federal Water & Gas
<*

-ft-

Conv.
and

BOUGHT

—

SOLD

QUOTED

—

Corporation

invested between $5
million in equities during
February and March..

ob¬
the

shares to

the

public. Al¬
though over
60%

South Carolina

trusts

ered

Electric & Gas

the

bought

Prospectus

from

ac¬

companying

Request

the

table that only

Henry A. Long

eight such

^CpONNELL&rO.
Members

York Curb Exchange

New

120 BROADWAY, NEW YORK 5
'

Tel. REctor

companies de-

2-7815

Central States Elec. (Va.)
Common

management

from

stocks,

companies

were the big favorites,
they had been for almost two
years.
Next in popularity were

the

non-ferrous

metals while the

stocks,
both transport
manufacturing, were, added to
several portfolios. The insurance
stocks

also

were

New

England Fund in their quar¬
terly report to shareholders dated

high

May. 1:

favor

year a

which may

be the precursor of a
trend to be watched in the future.

Frank C. Masterson & Co.
Established
Members

WALL

New

1923

Curb

York

ST.

Teletype NY 1-1140

YORK

HAnover 2-9470

also

was

electrical

marked

South Carolina
Electric & Gas

public utilities, in part re¬
sulting from simplification and
liquidation distributions.
Selling

means

trends

and
a

eco¬

decline

yet been arrested.

The recent passage, however,

the

in the

There was by
nimity of opinion

business
started

occurred

European Recovery Pro¬
providing for an expendi¬

gram

ture of

six

over

bill

tax

concentrated in shares
pf the
building and chemical industries,
and, on an over-all basis, wag not
very heavy.
Excluding the util¬
ities, the number of buying trans¬
actions exceeded sales by 46%%.

first of the
number of indices reflect¬

which has not

was

the

nomic

in¬

transactions

"About

ing important

the

while

equipments

numerable

Exchange

NEW

Buying

Troster9€urrie&Summers

billion, the

new

providing for additional

cash iri the

hands, of the public
approximately w4.8
billion
yearly, and the proposed increase
of

the

United

Members

New

York

Security

Dealers

una¬

the immediate threat of

of the

for

the

was

extreme

re¬

250

Investment

business

NATIONAL BANK

Company.

of INDIA, LIMITED
Bankers

the

Government

Office:

26,

Colony,

India,

Burma,

Kericho,
and

States

Paid-Up
Reserve

Capital——
Fund

Bank

conducts

job

£2,500,000

description
banking and exchange business
every

The

Trusteeships and Executorships
v

who

Houghton.

two

did

groups
an

in taking

perhaps

raise

even

of greater

mo¬

the fact that they aggin

the

position

inflation

threat

considera-

foremost

tion."

are

extremely

velopment
had

were

ently

the

certain

equity positions
first

structure

funds
even

that

lighten

before

the

whether

his

Company,

stockholders

meeting

the

type.

Having

went

out

cash avail¬

and

borrowed

Appliance Company

on page

Alabama &
'

'•;« ' V

•

cision

couplings,
Company is in

Bought-—Sold-—Quoted

econ¬

corporations,

the

growing

Steiner, Rouse & Co.
Members New York Stock Exchange

credit

25 Broad

stringency, and the break in farm
prices, but he added that "the re¬
armament

and.

programs

tion

European
under

now

St.f New York 4, N. Y.

HAnover 2-0700

New Orloans,

relief

Direct wires to

considera¬

NY 1-1557

La.-Birmingham, Ala.
branch offices

our

well result in abruptly
stopping these deflationary tend¬
encies/' Due recognition is given
may

to what Mr.
as

Story aptly describes

general

pany

in which
for

reasons

Joseph McManus &. Co.
Members

described the

was

reversal

New York Stock Exchange

policy

knd; increasing the holdings

New York Curb Exchange

Chicago Stock Exchange

foreign countries,

importantly

pre¬

DIgby 4-3122

* Tele. NY 1-1610

persuad¬

we are

ed that the economy of the coun¬

try would have shown progressive
signs
of
deterioration
in v the

Lonsdale Co.

months to come.... The reversal

Stock

Common

"when issued"

rolls along under such conditions.

Signs of
cession

near-term business

general only

months ago are

re¬

Textron

two

some

being temporarily

Bought

dispelled."
Bulls' Field Day
The

managers

who

have

over

—

Rights

Sold

Quoted

—

Established'1856

been

the

H. Hentz & Co.

last

several

years are presently hav¬
field day and one does not

Members

New York Stock Exchange

position

from

expanded

benefit
aircraft

N. Y. Cotton

Exchange Bldg.

NEW YORK 4, N. Y.
PITTSBURGH

DETROIT

CHICAGO

GENEVA, SWITZERLAND

Book

value

Net current

Current

Price

(6-30-47)

assets

about

Noranda Mines

Pow.

Paper

Class

$19.44

per

United Kingdom 4% '90
British

"A"

Common

Pont, Homsey Co.
Milk

St., Boston 9, Mass.

HAncock 6-8200
N. Y.

Telephone

Teletype BS 424
CAnal 6-8100

Common

Members N.Y. Stock Exchange and Other
Principal Exchanges
115 BROADWAY
NEW YORK 6, N.Y.
7-0100

Cum.

Warrants

Kaiser & Co.

Securities Department

Goodbody & Co.
Telephone BArclay

Pfd. $2.60

Seaboard Finance Co.

South African Mining Shares

MEMBERS

;v ••••

Seaboard Finance Co.
Conv.

Amalgamated Sugar Company

Canadian Securities Department

(6-30-47) $9.60
$8.00

American President Lines, Ltd.

Brown Co.

Abitibi

program.

T.Utvne NY

SAN

LOS

FRANCISCO

DOUGLAS

FRANCISCO STOCK

ANGELES

and other leading exchanges

WE ARE INTERESTED IN

We Maintain Active Markets in U. S.
FUNDS for

Powell River Co., Ltd.

•

39 Broadway, New York 6

"Had It not been for the neces¬
sity of rearming, stock piling and
furnishing vast economic aid to

inquire whether their
break-even point for industry when prognostications
were
based
on
demand really begins to fall off. In faulty
economic reasoning. Fu¬
ture
dispassionate historians of
summarizing general conditions
he, says: "Developments during the present American economic
the latter part of 1947 did not scene, we believe,
however, will

fittings and valves,

Louisiana Securities

Common Stock
Manufacturing complete line of

30)

annual

brought about by the last few
years' inflationary trend, the de¬
cline in liquid resources of many

bother

age

(Continued

un¬

addressed

justments in the country's

trous

of the lever¬

qppre-^

omy

ing

stock fund

To have

elated the temper of Congress

March 17. Referring to
highly liquid-position of the
company,
he -noted the malad¬

ing percentage of earnings realiz¬
able in dividends, and the disas¬

during the period was
Affiliated Fund, a fully invested

Russia

political, economic

pressed markets it made purchases
of $8 million out of this
reserve.
The other trust which
operated

of the raised

with

war

the

battle front.

the

consequences

for

persistently bullish

January 24 notes the
present high cost of living prob¬

of modern propa¬
stimulate uncontrolled

spending

similar vein, Mr. Harold
Story, President of the Wisconsin
In

lem of business, the ever decreas¬

un¬

power

ganda

increasing in intensity
that time/'
-

up to

holders

one

trend, both actual and psycho¬
signs of weakness in logical, tends to snowball as
it

economic

caused

The

factor, which appar¬
date has reversed this

trend, although the degree of its
potency is still non-measurable,

delineated

many

the balanced portfolio
group, had
built up its cash position to al¬

able,

all
and

foreseeable

been

year? Carl Berg in
the annual report of the Russell
Berg Fund presented to stock¬

Fund,

cleverly

The Parker

Weigh

protect, not gamble with the

What
the

advantage of

Wellington

common

involved

favorable economic factors which

$14
million, representing
28% of its assets. During the de¬

£4,000,000
£2,000,000

also undertaken

these

two trusts

OPM

factors

Winter

believes may result in
another postponement of the de¬

most

Kenya
Aden
V

Zanzibar

Subscribed Capital

The

Ceylon,

Kenya, and

Axe

accuracy

early to
the full

potent stimulant to business,

and

market weakness in the first three
months of the year. .

Bishopsgate,

London, E. C.
Branches

and

between
able

Kenya Colony and Uganda
Head

Fund

too

billion dollar annual produc¬

ment is

Incorpo¬
Investors, the Knickerbock¬

rated

still

tion of goods and services. But it
is certain that they will at least

Their outlook is to be contrasted
with the continued extreme
op¬

timism of such trusts

with

measure

period

seemed to indicate that there

Wisconsin

Teletype—NY 1-376-377-378

then

impact of these three recent de¬ equities.
Substantial
purchases
velopments which must be evalu¬ Jiad
been
made
during
the
ated
against
the
un¬
present
interim, particularly in the shares
paralleled level of this country's of oil and
mining stocks.

trenchment taken by the sponsors
of the
Russell
Berg Fund and

Ass'n

these

funds entrusted to them.

picture of cross
appropriations for the .Army, currents." Last
week, under date
Navy and Air Corps will def¬ of May 25, the Investment Com¬
initely cushion the decline in mittee presented a report to the
business and may again postpone
Board of Directors of this com¬

beginning of
review, al¬
weakness during

basis

agement

among the open-

market
major portion

sound

position

managers

change in our country's foreign
policy which your Fund's man¬

recession.

the

conservative

foreseeable

end managers at the
the
quarter under

request

had been foreseen by

months and earlier as being want¬
ing in knowledge, fails to appre¬
ciate the duty incumbent upon the

though

Prospectus

into

months

sive

Investment

excellent

analysis of the
conflicting factors involved
is
presented by the. trustees of the

and

Hoving Corp.

earlier

Conflicting Factors
An

aviation

Aspinook Corp.

retreating
an

percentage-wise 'period? Should one have rebuilt
Several of the larger closed end 'one's equity position in a hurry
funds operated divergently from in late March and early April—
the majority of open-enders, not or now, when a very able Dow
having
re-entered
the
market ■theorist advises "to those who
with their built-up cash reserves have not yet bought, market his¬
at the end of the quarter.
tory - says run, do not walk, to
The petroleum and natural gas ypur favorite broker?"
as

Detroit Int'I Bridge

even

point

coming

Winter

business outlook which concerned
the Fund's management through¬

worse."

managers.

one's

A :
creased their cash balances
than

Exchange

New York Stock

the

lessen the the uncertainties in the

.Was
In his report to stockholders on
there a correct appraisal of the
picture at the time in the early April 15 Mr. Berg explained the
initiation of a program to increase
part of the quarter when port¬
common
stock
holdings by this
folios were placed in a defensive
statesment: "In his speech to Con¬
position? Was it unwise to have
gress on" March 17 the President
protected the funds entrusted to

is to be noted
Bought—-Sold—Qu°ted

investment

the

balance, it

51/2% Pfd.

cov¬

survey

were

ing year.
The ex post facto rea¬
soning which now points to those
who placed portfolios in a defen¬

out most of the

currents

cross

the

The

era

indications

managers
of
investment funds over the preced¬

year. Further ad¬
in today's
vances in .commodity
prices oc¬
markets,;' the
confusion in the
curred, consumer purchasing
minds
of
the
investor, * both
power declined, new capital and
amateur and professional, can be
credit became less plentiful and
appreciated by the opposing forces
more costly to
business, and polit¬
at work in our economy which
conditions
abroad
have caused disagreement among ical
grew

ies'

compan
own

and

money

and $10

from

sales

Teletype NY 1-583

7-5060

BArclay

such

new

money

Broadway, New York 5

Many investment companies purchased stocks in the depressed markets of the first

tained

120

evidence

quarter of the current year.
No stampede to pick up equities was in evidence, however,
and the buying, concentrated for the most part in the open-end group, was largely done
with

New York Hanseatic

World War II

deterioration

non-ferrous metal, aviation and insurance equities,

gas,

these incurable optimists

post

innumerable

Request

that

By HENRY ANSBACIIER LONG

newly acquired funds, in oil and natural

Deb. 1963
Rights

Prospectus

the

plainly lucky. There is little doubt

Analysis of first quarter transactions discloses purchases made chiefly by open-end companies out of

Consolidated Edison*

Buying in First Quarter

STOCK

EXCHANGE

% #.;i
NEW YORK

2-0773

WHITEHA

TELETYPE SF 72

TELETYPE

2-SC15

NY 1-2678

Volume 167
-

'i :"■/wlM

V*; W

&C?'i'vJ*

■

COMMERCIAL

THE

•Number :47Q4;

:>•;

|% jP* Y';

S Measuring

Vo;4-';-

'**':-4 *-''

Newt'^;.rf ri

and

B^Vv'V

: _Co ver

________

CHRONICLE

the Stock Market

By HARRY D. COMER*

AND COMPANY

Members of New York Stock Exchange

Unions' Demands.and Managers'
*

V;!!:,,!''!••'!■ —Elisha F. Friedman___'___'__it___t_ ______ .1
-Cover. "
jTrust Buying in- Firsi QU^rter^Hebry Arisbaelier Lohgtur- *; #!t;!;

Uncontrolled Inflationary Tendencies

—Herbert M. Bratter _

-> ?—

^ 4. ^—-__-'!'.

Statement—Problem Child

The Income

—Earle C. King

of Accountancy

Preparing Children for War—Roger W. Babsorw___^

* *T-*

Reynolds & Co; Uses

•

-.1

Controls Will Create New Shortages
Reserve Ratio for New York and Chicago Banks Again vtr

,*~

Control____.l

SEC

Fred

Cosgrove

•:Hotels•
;

Lifted,

Financial Writers Choose Dickhuth President!.

Preston* Delano

Reportsf First Quarter Decline in. National

Claudius Murchison Says Outlook for Cotton Textile

f SEC Commissioner McEntire Stresses. Necessity of Common

Mutual

Activity—

May

i Our Reporter's Report
—
Our Reporter on Governments_J____——___—
! Prospective Security Offerings—i
—

41
-

—_____

25
46
Utility Securities———___________
f___——
25
Railroad Securities
_J
—14
Securities Salesman's Corner,—_:
18
Securities Now in Registration,—___
——r.— 44
—_

;•

Public

■*

I The State of Trade and Industry.—
Tomorrow's Markets

-1

<•

Published Twice Weekly

Dominion

—48

Other

Bank

$25.00

Reg. U. S. Patent Office

WILLIAM B.
25

Park

COMPANY, Publishers

DANA

tfew York 8, N. Y. *

Place,

REctor 2-9570.

WILLIAM

t)ANA
D.

For

-Other

25, 19424
York, N. Y.,

ary

1879.

'/.-v

•.

Company

;

talk

se¬

part,

own

prefer a

To me,

simpler definition.
market is just

fellow.

other
■

j
■

the

Current Bulletin on Request

FIRST COLONY
CORPORATION
52 Wall St.

New York 5, N. Y.

Tele. NY 1-2425

Tel. IIA 2-8080

volume of production,
dividends, tax rates,
not.
We are prone to
deal in the statistics surrounding
loadings,

and

the
the

what

market

Houdry

to ignore
The end and

and

place

personal factor.

Process

measurement
attempted, deter¬
mination of how people will act.
market

all

the

Psychology, ; particularly

is .the,:, key

psychology,

stock market,

writers,

•: *•

,financial, columnists

copy

tonight a

George Birkins Company
40 Exchange Place, New
WHitehall 4-8957

tainment

;

WALL

STREET

NEW YORK 5, N. Y.

Mr. A. B. C. who

SUGAR

for the: enter¬

Raw—Refined—Liquid

which' it

may provide
illustrate what goes

Exports—Imports—Futures

ph in the minds; of people who
make up the stock market, .When

be¬
Clubs,

York 5,

Tele. NY 1-1404

LAMBORN&CO.,Inc.

in! XYZ-Town, Conn. I shall

read this not only

price of,

•*:

of a letter received some>-

time ago from
lives

I have with me

values.

im^

emotions: in
trend, of stock

0^ human?

determining- the

request "■

investment

foundly impressed, with the.
portance

Corp.

the
•'

are

Circular

mass

•

lis who

Those of

people—

Service

QUOTED

measurements, such as, car-

tical

but more td

Dover

—

interest rates,

*An address by Mr. Comer

fore

SOLD

true-of-all sorts of statis¬

True, when we see a

—

about

response?; The

^popular

same

DIgby 4-2727

privileged to read letters
(Continued^on page 34).. >

you: are

1948,

The

C., Eng¬

% -

//;

Rates

Spencer Trask & Curb Exchange
Co.

Membera New York Stock

25 Broad Street,

Newburger, Loeb & Co.
.

"•'Subscriptions in. United States, U. S.
Possessions, Territories, and Members of
Pan-American Union, $35.00 per year; in

Members

New

Bell

Teletype

Exchange
j
Whitehall4-6330,

Stock

York

15Broad St,N.Y. 5

NY 1-2033

.,4,

of New York

Analyses available on

Exchange

New York 4

"Tel.:
"

HAnover

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Albany

Members New York

135 S. La Salle St., Chicago 3
Tel.: FINancial 2330
. *

Teletype—NY 1-5
-

Boston

Glens Falls'

Bank

!4.>!; Miles Shoes, Inc.

Lawyers Titles $ Guar. Co.

Prudence. Co.

Public National

& Trust Company

PREFERRED STOCKS

N. Y. Title & Mtge. Co.

the post office at New
under" the Act of March

interested in offerings of

High Grade Public Utility andrlndustrial

Mtge. Guar. Co.

-ivB!

•

are

the

Lawyers Mortgage Co.

second-class matter Febru¬

" ,
•
'
Subscription
■

about

when

is—What will people do
tfyese statistics? What will

thing

fluctuations in

exchange,

Bend &

BOUGHT

Market

Stock

people like you, and me, and the

CERTIFICATES

(com¬

'Offices: 135 S.: La Salle St.,
3, 111.
(Telephone: State 0613);

Reentered

particular

Forming

Corporation

•:

TITLE COMPANY

;;\r

Monday

every

\r Drapers' Gardens, London, E.
land, c/o Edwards & Smith.
^.

stock

the

RecordsMonthly,
(Foreign postage extra.)

oL the

owning

year.

Publications

account

two minds

price at which

curity."

Earnings Record — Monthly,
year.
(Foreign postage extra.)

seller, after pos¬

Pover, N. H.* May 24*

plete statistical issue — market quotation
records, corporation news, bank clearings,
state and'city news! etc.).
Chicago

rate

appeared:: in
a
statistical
While I also reject this

comes nearer to the truth as
what happens in a stock mar¬

dom

remittances for for¬
eign subscriptions and advertisements must
be made in New. York funds,;
s ;

(genera! news and ad¬

and

issue)

per

per.

Metal

Business Manager

Thursday, June 3, 1948

-Every Thursday
vertising

$25.00

the

SEIBERT, President;

RIGGS,

Monthly

completely disagree as to the wis¬

Quotation

year.

Note—On

to 9576

HERBERT D. SEIBERT, Editor & Publisher
-

and
per

happen.'

view, once
publication of

exact
,

$42.00 per year.

Other

! FINANCIAL CHRONICLE
J

$38.00

Canada,

Countries,

COMMERCIAL and

The

■

■; rv- > ;■

•..

opposite views as to the value Occupy a' peculiar wantage point
represented
at
the
prevailing in this, respect.
Our fan mail
price, come together by proxy, one keeps us continuously aware of
purchasing what, the other sells. the human factor. Anyone who
Thus,
each
market transaction
bas had the opportunity to study
where opinion motivates the sale,
the
stock
market, from these
far from representing an agree¬
"ring-side seats" must be pro¬
ment is seen merely to reflect the

—______

The following definition, which
is decidedly at variance with the
;

much
-V

hap¬

I disagree that it is a place
disagree that those things

described

—

(Walter Whyte Says)_

Washington and You___>___

things

sibly examining the stock to be
transacted, possibly not, but in
either event arriving at exactly

;

16
^ 14
22
5

;

the

Mass Psychology-rKey. tQ,

ket.
j "The stock market is a place

—_——

Observations—A. Wilfred

should

__r__

aim

—_—

Bankers____

certain

where buyer and

Funds

News About Banks and

stock market is

explanation because it emphasizes
the idea of a place, I believe this

S. Pressure for Sterling

NSTA Notes

iNews—Carlisle ,Bargeron—

for

sion of other stocks or of money,

definition

this

note

Broadway

; v

tential holders now in the posses¬

pne

—

_____—

Business

meeting

2-4500—*120

market and

world

the

flashed, to

1908

Bell SyBtem Teletype N. Y. 1-714

benefit .of all interested parties,
including present holders or po¬

_______

Coming Events in the Investment Field™
Dealer-Broker—^Investment Recommendations

Indications

based

from the

news

Securities

price

and also

Devaluation"

effect

where

service.

Regular Features

As We See It (Editorial)
—
Cover
^ Bank and Insurance Stocks—.^—,.:-,—^^12
Business Man's Bookshelf^-.^..!.
____^_
.20

REctor
'• *

earnings per share we are pre¬
senting the cold statistics. Marketwise, however, the important,

the

;

From Washington Ahead of the

will

Classical

Financing

Einzig—"British Resent U.

atest

party selling."

You

pen,

Industry

■

Canadian

where

place

.j_l—^4

Established

Members N. Y. Security Dealers Assn.

all .statistics;

prices are
merely the<-evidence- of activities
of people. The price itself is the
Like-

stock
is
a

value,

fact,; all * over? the
^:.'":•.

world;

•

states that the

they,

J.K.Rice,Jr.&€o.

the

other

„Is. F$yatable Despite Recent i^rice, Reductions--.!
B
24, *'
y: San Francisco "Tapeworm!' Again ■ Issued—;'2d#;
Ormcnd Rambo Honored by King of Sweden.—-.!—^-—-— 25
Stock Utility

the

over

j Again,

d i

upon

all

(ninds—one party buying and the

^Bank' Assets
Edwin; L* Beck Reports on Annual Spring. Outing
San Francisco Security Traders Associations

com-

agreement

Statistical/Association Elects New, Officers .t_«_ 22""
Mills E. Case, Noted Mathematician, Is Dead*.-—.-,-.^—. 22
What Is That, Mr. President? (Bioxed)— 23

real

is;

Kingan Com. & Pfd.
Ui S. Finishing Com. & Pfd.

stock

The

mechanism.

Corp.

Dorset Fabrics

through

modern

our

however*

country,

buyer
and!
seller
come
;
>
together and, after carefully ex¬
amining the stock to be trans¬
acted and arriving at a mutual

Nationalization 21

of : people

minds

—

with:

place

American

"r*

fol-

Harry D. Comer

Walter S. Tower Outlines Prospects of Steel Industry

medium

;he

together

brought

Deen

market,;

the;

Federal Water & Gas

buyers and sellers who have

exchange;

market,

Debentures^-i^_,_^w-_--T--_--.__BJwy--- 20

R. E. Woodruff Attacks Unions' Bid for Sail

est

something

}: "T h e

t__-t_t:{_!_ttt_t..._

'^V.-:FIC' Banks.;-Place

agree:

Residential

Texas Gas Trans. Corp.

point of the lat¬

current/ meeting

Analyze^ Consumer finances-—19.v
Controls.

■

classical

yv.hieh I
pletely

Wants

exchange,

what

VL3W

yj JBusiness Optimism;

5 Federal Reserve Board

classical

EU>nds_iu_l^^t11fig* )owing

t;. 18
yJPiirchasing Agents, Headed by RoberL C.; Swan ton, Report "
-

bonds

king-size

Tennessee Gas Trans. Co.

60 for General Motors on the
ticker .tape we say that 60 is the

«,

' Financing

and

get

STREET, NEW YORK

ay,

the market is.,

r._i_.__

NASD Protests. Exemption ,o£ Wbrld Bank

iview

statement
*

and

Telephone: WHitehall 4-6551

in a bull murMt and that accumulated demand
for stocks will be felt in higher prices,

present

15
The
s^/'. t

-y Wilbur Blair Counsel of CleY®ia^dd Reserves. L
: Lee
Thompson Smith Proposes New- Scheme. ojf-Construction
.

Commercial Television__.__L__i.'_lt..,lL 11 {>
Leo Wolman-_______t-it__t;-_t 14

Boeschenstein Says

From

99 WALL

we are

I Raised 2%
^
Senate Group Approves Removing World Bank Bonds....

stocks

Street

bills

Obsolete Securities Dept.

just about in line with commodity prices.

the;outset it would probably, be helpful to define what we are
going to discuss this evening. We pre going to talk about the stock
market—about its past, present and future.
Just what is the stock
.l_l_ .131v:■>
market? Let us try to clarify what'we mean by the Stock Market.
--2®
jv Fir st;,,ylet
j,
: :
'. ■ '.'
" ■

Budget Is Key to Inflation:

obsolete

Wall

dollar

.,,

1;::i'f

■

pre sent .stocks are

]

International Affairs and Effects—A. W. Zelomek___,

Concludes

: 8

f;;

The Coal Situation—H. A. Glover.

and at,

Economic Uncertainties and Real Estate Loans—E. E. Agger- ;

your

compares present stock market levels with those of 1946. Con¬
tends ris.'ng commodity prices do not necessarily spell bull markets

With the Times,

„

OUT OF US
Take

and

;

Free Gold Markets Change

YOU GET MORE

psychology is key to stock market, Mr. Comer points

mass

{

\\~rX>* Emmerf
4ft.

Holding

out it is peopls who make this market, and its price trend really ]'
reflects what people have been thinking and doing.Reviews diffi- ;
culties and errors in constructing market averages and describes
various formulas. Analyzes factors influencing stock! market cycles 4

Street Should Take the: Offensive—Lawrence - Lief dr_ _ _ _•

■'■'I

;

Measuring the Stock Market—Harry D; Comer__!_______
;Tbe, Economic Outlook—Delbert J. Duncan
_

;

(2415)

• ;••••■ •• •• :
Manager,-Research Department, Paine, Webber, Jackson & Curtisi

JV Should We Subsidize Housing:?—Melchior Palyi_!>^__'____Cover^\The Uncommon Man*—Enders M. Voorhees

FINANCIAL

C. E.

Unterberg & Co.

Members N. Y.

Security Dealers Ass'n
New York 6, N. Y.

61 Broadway,
Telephone

BOwling Green 9-3565
NY 1-1660

Teletype

Schenectady

•-

Worcester

request

(2416)

THE

COMMERCIAL

FINANCIAL

CHRONICLE

Thursday, June 3, 1948

The Economic Outlook
By DELBERT J. DUNCAN*

■

.•.!

Professor of

XvX/'.*

The Offensive

Marketing & Research, Cornell University

Professor Duncan, noting numerous uncertainties in economic outlook, analyzes factors for and
against " ;
business expansion. Holds, although inflationary trends are dominant, deflationary and
stability factors

are

present and

By LAWRENCE LEIF

forceful than commonly believed. Estimates physical output of goods and servby slight margin, and foresees greater promotional efforts by retail stores.

are more

Mr.

ices in 1948 will exceed 1947,

This address

might well be given in one sentence—in view of the numerous uncer¬
tainties which now confront us and the impossibility of judging the future effects of
signifi¬
cant developments now taking place, it is impossible to appraise the economic outlook with
fundamentals

In
other words,
the
economic
accuracy.

"normal"

al¬

horizon,

fact,

therefore, all I
brief re¬

upon our economy.

\ supply

and

stabilize

ent level

dynamic nature of our
particularly retailing, is
familiar to all of us. Consequently,
The

the

contract

pres¬

of business activity.

fact

advisable

hands of

watch

the

and

becomes

war"

clearer.
in

now

lion

one

ment

year

not

drouth

the

advances

the£. coal

business

others.
that

were

becoming

ap¬

parent. The sharp break in

modity prices

increasing

few

com¬

months

ago,
consumer resistance to

the

.seemed
Was

that

for

holds

countries, prin¬

South

America.

expecting

exports

our

American

services

non-ERP

One

drop in
the expectation

can¬

not

buy from us as freely as
they did in 1947 because of de¬
pletion of their gold and dollar
resources.

fall

been

are

made

and

"nego¬

process

Present

indications are
adjustments will

industries.

many

Money

"saved"

reduction

will

the

sharply

government employees and

cut goes to

large

part

this

working families, it

employees.

for

Last

were $28.7 billion. First quarter
expenditures are at a rate of
about $30 billion and for the
year they will likely exceed $35
billion. Already we are moving

over-all
full

confidence

employment

rates

are

generated

and

high

wage

considerable

tance in this connection.

impor¬
Although

the results of this confidence have
not

been reflected to any
marked degree in retail sales, it is
important to note that the con¬
yet

fidence of retailers has been evi¬

denced

clearly.

the foreign

tailers

situation, large re¬
were
finding their sup¬
increasingly
desirous
of

making prompt

deliveries

commitments

order,

were

all

that

-turning
hand, and

expect that something will al¬
ways* happen to offset the read¬

rapidly

moments, appear to have re| Versed this downward trend. But
it is unreasonable for
businessmen

actively concerned
about
their
inventories.
The
change in psychology effected (1)
by the President's defense recom¬

interesting to note, however,

that personal savings

increasing

and

will

are

likely

now

far

justment period that must come ;; 6Xceed~ those of 1947.
or
later. When such a period
(d) "'Governmental

into

goods

the retailers themselves

coming

were

be¬

sdoner

will

come, I am unable- to
say!
But I do feel
very strongly that
retailers would be most unwise
to

cpntinue to expect unusual de¬ i'i habilitation
purposes, while
velopments to "bail them out" of
ly a relatively small part of

their

difficulties or to place too
much reliance upon
governmental
appropriations to supply the pur¬

chasing
We

power of their customers.
need to return to the

basic

*An

address

by Prof. Duncan
Controllers' Congress of
National Retail
Dry Goods

before
tlie

Association, Chicago, 111., May 26,

mendations

expenditures for the European Recov¬
ery Program. An appropriation
of $5.3 billion for relief
and reon¬
our

$245 billion economy, neverthe¬
less is

having, and will continue

have, an important effect on
general business activity in this
country.
Through
increasing
demand

for4 certain commodities,
it
increases: employment; 'and
purchasing power./vY

Of interest in connection with
the ERP
program
is the fact
that in 1947 our net

foreign in¬

lec¬

raised
Lawrence Leif

groups than
be found regarding any
business or industry.
can

the

no ax

tions that they are fair gaime

rise

its

out

and

—

funds

have

the

—

and

the

apparent

willingness of Congress to meet or
even
exceed
them, (2) by the
speedy enactment of ERP—and the
consequent retardation of the de¬
cline in the prices of farm prod¬

ucts, and (3) by the added threat
of scarcity in certain raw mate¬
rials caused by the proposed addi¬
tions to the defense budget, is
sig¬
nificant.

Not

only has this change
in psychology been reflected in in¬
dustries most
an

directly affected by

increase in government spend¬

ing, but to others as well. Witness,
for example, the stiffening in tone
of the market for worsteds and for
(Continued

on page

27),V'-V

needed

for

expansion

which also result in

individual, who we be¬
fair-minded, would hear

sides of

the necessary

secure

and

improving the

standard of living of the Ameri¬
can individual.

American

both

utility

companies to

program of showing their side of
the story so that, at least, the
lieve

American

ties. The insurance
companies, in
the main, furnish the funds
which
allow
for example — our

that

begin

strata

every

economy invest a very substantial
portion of their funds in securi¬

whole, would

defense

industries.

policyholders scattered through¬

huge quantities.

One would think, therefore,

portion of the capital*
go into conservative
grade investments. Also,
t a

The insurance companies
which,
millions
and
millions
of

very

the industry

have

vulnerable to any of the
propaganda which they receive in
:

will

successful

our

average

about "Wall Street" and its func¬
are

now

looking
financial and physi¬

for

world

high
large amount of capital is used to
develop new ventures which have
been forerunners of so'
many of

other

individual
grind, such as some
politician or the left-wing radical,
still has so many misconceptions
Even

with

where

substantial

given by

Banks, fire insurance companies
and

the

story and thus,
opportunity of judging

other

institutions

also

are

large organizations which furnish
funds so that large industries
may

whether all the unfavorable state¬

ments that they

receive

cerning "Wall Street";

which

the necessary funds with
to provide for further ex¬

pansion.
that

all

without

goes

these

substantial

funds
in

increase

saying

result

employ¬

ment which

naturally, affects our
whole economy on the favorable
side.
Where
the

"Wall

most

Street"

abuse

vides- funds

receives

where

pro¬

into what is
considered the "speculative ven¬
ture."? NatuarUy, in the develop¬
ment

new

companies and

new

industries,

try. After all, it would

capital has been lost
but it must be realized that in the

with

development

financial

community

and

indus¬

seem that
being made to
show its side of the story, that
one Would think that, perhaps, the
industry is guilty of the very
many
charges which is levied
against it.

effort

economy,

effort along these
conducting a program of
advertising in various newspapers
and
magazines throughout the
country. However, even this pro¬

not

layman.*
Outside

many

proved

justification.
these

resulted

are

may

later, real
However,

investments have

making substantial
fortunes for many who invested
their .funds in speculative ven¬

tures.
After
life

all,

span,

it
that

has

been

the

our

automobile

of this

one

lone

effort

developed from a trick gadget,
from a novelty, from a
visionary

impracticability to one of our
largest industries and one of the
mainstays of our economy. -

and

probably a few other organi¬
zations, very little is being done
by the financial community to
secure the good will of the gen¬
eral

American public. From all
indications, therefore, the leaders
in not

ideas

has

by the New York Stock Exchange

in this

have,

economic

some

does not reach the average

industrial

our /
new

commercially productive and

lines by

gram

many

brought forth, which after the ex¬
penditure of funds, may not prove

I The Stock Exchange has been
making

Prior to the President's speech

is expected that
they will spend,
rather than save most of
it. It

few

primary functions of
"Wall Street" is to
bring together
those with funds for
investment
and those
seeking such funds/A

have heard con¬
are true.
Those, naturally, who have an ax
to grind would only be interested
in harboring their own ideas and
again
toward
an
unbalanced
beliefs
regarding
this
much
budget and tax cuts of this year
maligned industry. Yet, strangely
may well be followed by a sub.-enough, seldom is seen, in news¬
r
stantial increase next year.
papers or heard over the radio
(2) Closely related to the factor or by means of individual discus¬
Of purchasing power in the will¬
sion, any real organized effort to
ingness of consumers to spend show the other side of the ledger.
their income.
The psychological This further weakens the position
effect of the tax "savings" and the
of those who would defend the

merchandise

withholdings,

con¬

increases

pay

year
total government pur¬
chases of goods and services

and

be¬

of the international crisis,
the number of

pliers

since

increased

increase in

templated
'government

in¬

1948, taxes
$4.8 billion.

cause

through

Federal

such

(e) Governmental purchases
of goods and services this year

Since this reduction will reduce
the
amount
of

•

trouble

detail in

early

come-tax rates. For
have been cut some

Developments in re¬
weeks, however,
which I

shall refer to in

tight

Wage rates will probably con¬
tinue upward throughout the
year though not as fast as for¬

the

ahead.

cent

have

place

'(c)

activity, and
foreign demand

indicate

labor

very

Only time can tell the
outcome. (More on this
later.)

of .industrial

decline

the

econ¬

merly.

prevailing prices based partly on
expectation; of further declines,
the rise in
inventories, the curtail¬
ment

present

some

become

upward

take

re¬
.

adjustment

the

industries

tiations"

iminers, and government purchases
European relief. Again this
evidences of

will

mid-summer

various

dor

year

High-wage rates and the
probability that they will be¬
come
even
higher.
Numerous

wages

Despite the return
women to the labor

(b)

important grainproducing states, the granting of

increased

com¬

and remain tight for some time.

Spring,
changed
the
picture.
Among those developments were
'the

in the

because

market

Later

result, of
* '

•'

high cost of living,
omists
anticipate

which

be " foreseen

even

many

forces

move¬

however,

ing months.

was

recessionary
activity.

1947. This enorm.ous in^
is, or will be, ^the

expand

run

there

and

for

the

world

One of the

papers, maga¬
zine
articles,
and

and

whole

cal rehabilitation.

news¬

tures

the

toward

indus¬

status

have

activities

try

give

that the non-ERP countries

(a) The present high Aeyel of
employment, now approximateing 60 million, and expected to

between

business

developments,
could

ago

the

payments—income is

several causes:

ef¬
fects cannot yet be determined.
About

demand

reason

over

come

tion and although at the moment
those of inflation appear to be

evidence of

—

it will probably exceed $190 bil¬
lion. This would be some $15 bil¬

forces of inflation and defla¬

.gaining ground, the longer

trial

about

the

rank

the

this* country would not have de¬
veloped to its present high indus¬

doings,

and

not

living and physical
well-being. Without "Wall Street,"

discus¬

sions

would

nation

standard

articles

the

leading

ad-,

and

buy them
calling it foreign

.Hence,

it is.

will

verse

money

and

cipally

running at an annual rate of
$185 billion as compared
$183.7
billion during the
fourth quarter of 1947. For 1948,

under

find

probably give
surplus
exports

Some

pic¬
"tug of

process

from

now

and courageous action as the

the

1947

which

consumers.

nontax

/ "

<&-

opin¬
than any

try., You

expenditures will rise accordY ingly.
In
this
connection, a
major problem is the extent to

with

closely, to prepare;1 to meet any
contingency, and to take prompt
ture

—

shall

But

1947. "

more,,

other indus¬

away, net foreign invest¬
ment will drop but government

the

power

the

.investment.

Disposable personal — that is,
personal income less personal tax

horizon

economic

present

regarding X
Wants corporations to
simplify

our

ion,

services

't them

existing circumstances, therefore,
to

purchasing
and potential

present

in the stock market indicates what
mean.

factor

tremendous

picture as we see it today. Any
development of importance on the
political front, any marked change
in our foreign policy — with its
explosive possibilities—either ac¬
ceptance or rejection of a third
round of wage increases by labor
and industry, can change that pic¬
ture quickly. The recent upsurge
<

goods

crystal-ball gazing is based on the

countries

(1) Perhaps the most important
demand

and

ifaway instead of lending foreign

Some Basic Factors of Demand

give full recognition to
that .any
attempt
at

must

billion

most

economy,

the

goods

men¬

also be considered as the
factors encouraging an expansion
of the high level of business ac¬
tivity, and
factors
tending
to

supply in the present situation and
indicate
their
probable
effects

excess of our

ably ' run 'somewhere between
$9 and $10 billion, compared to
r$l 1.3

few moments ago. These

take action

concerns to

accurate information

their reports to shareholders.

dered

national income

imports in 1948 will prob¬

over

may

and

demand

of the basic factors

some

demand

tioned

impor¬
tant factors of
more

Duncan

exports

1948

examine

the

view

there

With this brief prologue, let us

matter of

accounting. The net

fidence.

attempt

shall

both investment houses and industrial

refuting charge* and spreading
-

demogogic attacks von Wall Street, ! J

functions of securities markets*

drop will

problems with firmness and con¬

view

this

that

is urgent
need on our part for valor—for
strength of mind and spirit that
will unable us to meet our daily

still not clear.

Delbert

thereto,

justed

months ago, is

what

Granted

governmental activities must be
carefully and that retail
policies and practices must be ad¬

few

was

merchan¬

forgotten

have
means.

Wherever demagogues and
politicians gather, wherever left-wing
vestment was $8.7 billion. This
|radicals gather and wherever in general uninformed" individuals
will probably drop
sharply in
gather for a discussion, "Wall Street" is fair bait for
the derogatory
1948, perhaps as much as 60and vitriolic discussion.
"Wall Street," as an industry, has been slan¬
70%, but much of the

watched

though not so
obscure as it

dising.

retail

Leif, calling attention

urges

'any degree of$>

V;,'"./';' -1; "f;';;'

: Head of Investment Research Dept., R. H. Johnson & Co.

industry
making

are

being remiss

organized effort
to show their side of the story
and show up the many falsehoods
and

written

that

have

adverse

been

made

statements

concerning

"Wall Street."

Y'/V

It may surprise
many jto.knovf
that in the 1920's there were over
200

biles

different
in

makes

existence.

remember

such

All

cars

automo¬

the

can

Au¬

burn, Maxwell, Moon, Pierce Ar¬
Paige, Stutz, Essex, Marmon,
Stanley and many others which

row,

have

disappeared from the

scene.

one

After all, regardless of the story
hears from the demagogue,

Today, the automobile is an ab¬
solute necessity in the American
mode of living but ""without the

politicians and the left-wing
radical, "Wall Street" does per¬

necessary speculative funds, some
30 odd years ago,
the

form

would not have reached its
pres¬
ent status where it furnishes em¬

some

essential function which

reaches
every

right into the home of
working man. Without the

functions and the jobs performed

by "Wall Street," our high stand¬
ard of living would not be what

industry

ployment directly and indirectly
to
many
millions
of
workers
throughout the United States and
.

(Continued

page

23)

(2417)

Paul Rowen Member of
U

Steel

The
'

;

State of Trade

Securities Exchg. Com.

Electric Output

°<Mr (

Production

Carloadings
^

Paul

Retail Trade

been

Commodity Price Index

By A. WILFRED MAY

Food Price Index

.Securities

the

Rowen

sworn

has

Boston

member

Exchange

and.

Auto Production

and Industry

Business Failures

■

Mr. Hoover and the Behavior of His Country

Simple justice toward
ample

;

(

individual furnishes

cruelly maligned

lor giving the factual truths about Herbert Hoover's
President of the United States.; But the story far transcends

reason

deeds

Over-all industrial production the past week moved into slightly}
this orbit. :For not only should the facts of those crucial times be
higher ground.- Prom a comparative standpoint, it is noted that out-i
-set straight for the historical record in politics
put in most lines a week.ago, reflects a favorable showing when
and finance, but they have important permanent
matched with results obtained in the corresponding week of 1947. In
;implications regarding: (1) the strength of our
the week most producers were able to obtain an adequate supply of:
.... democratic processes in the face of political dem a-I
praw materials and along with that favorable aspect deliveries were}
goguery; (2) central planning; and (3) the presprompt.
V'} 'J •
V '
••
ent-day niche of "public relations" in the Amer¬
} ; 0f great importance on -the labor front was the settlement
ican political scene.
*
reached on Tuesday of last week between General Motors Corporation
And as well as by the more serious students,
and the United Automobile Workers' CIO, wherein General Motors
the real Hoover record and principles should be
agreed to an adjustable 11-cent-an-hour wage increase.
■ ,
;
understood by those many later-infuriated capi¬
This action was followed late on Friday, by the Chrysler Cor¬
"

talists who, voted for Mr. Roosevelt in 1932i in
.the hope that he would bale them out of their
crash-stricken predicaments.

poration which granted to its UAW plant workers a flat 13-cent
hourly wage increase, thus ending its 17-day strike.; The increase
will boost Chrysler's average hourly wage for production workers
Salaried employee's pay was raised about 9%, with a floor
month. On Wednesday, Ford announced that it will begin
contract negotiations with the UAW on June 14.
•}
;
v, ;
S >
While industry is at present and will continue to be confronted
within the coming months with new wage demands, it is felt in some
to

opportunity has just been interestingly
as
authoritatively provided by Eugene

This

$1.63.

as-

of $20 a

well

book just off the press, written
under
the significant caption.
"Our Unknown
Ex-President: A Portrait of Herbert Hoover.'"u
Lyons in

A. Wilfred May

new

filling the1 vacancy
the
resignation pf

Commission,
created

James

Caffrey last December!

19$0j

His term will expire June 5,

nominated
for

McEntire

Richard

bePri

has

President Truman
five-year term as a

new

Fortunately no political or ideological hack member of the Commission.
was chosen as author,' and while the product is most timely at this
1948 wage pattern for other industries.
■u'
v'.
pre-election time, it cannot possibly - be termed campaign pamphle.eering. In the early nineteen-thirties Mr. Lyons was known as
}
A perusal of the Federal Reserve Board's 1948 survey of con¬ a
"pink Liberal," a rabid "anti-reactionary" who felt that the mortal
sumer finances reveals that indebtedness is on the upturn and that
sin was not to be wrong but to be Right. Self-described as one of
more merchandise is
being purchased on a credit basis today than "the
pack howling at Hoover's heels and at the 'Hoover depression',"
was true of a year ago.
It added, that "further substantial increase
Schafer, Miller & Co., 15 Broad
as publicity director cf the American Labor Party in 1936, he actively
in the volume of mortgage credit" will have to take place to permit
Street, New York City, members
helped to swing New York State behind Roosevelt.
people to buy the new homes they desire. The survey further reveals
of the New York Exchange, an¬
that somewhat more than 1,000,000 of the 48,400,000 spenders ques¬
nounce
that Bertram W. Meaden
.Killing Some Fictions About New Deal Financial Reform
f
tioned said they wanted to buy new homes this year, and that they
Although Mr. Lyons is not essentially a financial writer, he has has become associated with them
wanted to pay 1947 prices for them.
'
a
customer's
broker.
Mr.
been able to explode some generally accepted fictions about the as
During 1947/ about 2,500,000 of the 48,400,000 consumers surNew Deal's alleged great deeds in pioneering the country's financial Meaden, who retired as a lieu¬
commander after twelve
veyed disappeared from the $3,000-and-under income group and
reforms. He cites the documentary evidence showing that far from tenant
the same number were reported added to the $5,000-and-above /■};'
service
with ther Royal
initiating financial reforms, Governor Roosevelt and the Democratic years
bracket.
'■■
leaders in a Democratic Congress actually opposed President Hoover's Navy, was a destroyer command¬
er
during World War II.
/
;
Though, about 50% of the consumers questioned reported higher proposals therefor.
»;
1
r,
,l

will set the

quarters that the settlement made by General Motors

;

Bertram Meaden With;

Schafer, Milter & Go.

1947 than in 1946, "a considerable number of these"

incomes during

felt they were worse off financially because of "the higher cost of
living," while about 30% of the total showed little change in income
with 20 % reporting decreases.
f
Demand for durable goods other than autos also will continue in
*1948 about as heavy as in 1947. These include such things as furni¬
ture, refrigerators, radios, washing machines and similar appliances,:
the survey notes. During 1947 about 17,000,000 spenders bought these
durable goods. About 9,000,000 of these consumers used instalment
"credit for their buying, nearly twice the number buying on credit
.

in 1946,

have forgotten

1933 and 1934 securities acts.

„

Although business failures fell in April to 404 from the

The Wall Street orgy assuredly took place in his State of New
York., But Governor Roosevelt, despite the precedent of the famed

postwar

Hughes-insurance investigation of 1908, from 1929-1932 persistently
the matter with state machinery. Because of the
absence «of a Federal corporation law and the unconstitutionality of
inclusive nationwide legislation, the resulting securities laws have

refused -to explore

months;>In 1939,} for instance, ^me 1^31 businesses failcsi
April.
i
The Failure Index, which relates the number of failures to the
number of concerns in operation, dropped to 17 per 10,000 businesses
-from the preceding month's rate i of 20.
prewar

worked out

New

the

Exchanges,

Philadelphia ' Stock
that

has

associated with them

become

Manager."""}'

Sales

Lodge

Henry

Lodge is making his head¬

Mr.

quarters at the New York office,
44

Wall

Street.;

•

!in the belief of "this
r

Demagoguery Tersus Democracy-

justified subject for long-term worry,
possibility of our country's democratic forces being
crippled by self-interested political action. Charles Michelson, the
1930's archetype of our present-day
public relations "engineers,"
is described by Mr. Lyons in documentary detail. He is showii to
have, been a shrewd designer of demagogic slogans, ,who even
boasted frankly and cynically to his political adversaries of, his
below-the-belt "distortions." He is pictured as a conductor of smear

graduation

The total dollar volume of retail trade was moderately above
the levels of both the previous week and the corresponding week a
gifts.

slightly during the week and

moderately above the level of the similar week of last
There was a moderate increase in orders for some fall mer¬
chandise, while re-orders for spring and summer goods were sub¬

remained
year.

stantial.
STEEL OPERATIONS SCHEDULED AT

members

New
Brothers,
York and

and

Buckley

columnist, is the

encouraged the consumer buying
Sporting goods and summer apparel were

year ago.
Wholesale dollar volume increased

Philadelphia

firm

J■
.

Warm weather in many areas

sought along with merchandise suitable for wedding and

'<The
York

incompletely, inconsistently, and discriminatorily.

Henry Lodge Sales Mgr.
ForBuckley Bros.

announces

high of 477 reached in March, they were more numerous than in any
other April since 1942, according to Dun & Bradstreet, Inc.
Only
about one-third as many concerns failed, however, as in comparable

of seasonal merchandise.

that President Hoover took action
along these lines in the 1929 aftermath by unsuccessfully ordering
an
investigation of short-selling practices (which then really were
important) in 1930; by starting a Congressional inquiry into banking
in 1931; by initiating the Congressional investigation into securities
practices in April 1932 (Sen. Res. 84) under the Chairmanship of
Senator; Norbeck and prosecuted by the Philadelphia criminal lawyer,
Gray; and most importantly by initiating the epochal Pecora investi¬
gation which lasted from January 1933 to mid-1934 and produced the
Most people

SLIGHTLY LOWER RATE

and

our President in his struggle,
greatest depressipu in his country's
V;vr,'-::v
-':w- v !>;*'}}
But not only by the opposition party's political machine, but
most Congressmen also, was their nation's, crisis used, as the

to strip prestige

seeking

from

against. terrific odds, with the
history.

Many steel, officials believe ;the only salvation for the basing means for
selfishly (feathering political nests. Thus the legislature,
point system m steel as now practiced 4s legislation." .The; Cement the cornerstone of our democracy, laid itself open to the subsequent
Decision is so plain in its wording about basing points that there is
long-term impairment of its prestige in the public's mind. How such
110 hope in that quarter.
Additional evidence in the past week in¬
dicates that no matter what the outcome of the present hearings of
*"Our Unknown Ex-President: A portrait of Herbert Hoover.
the Federal Trade Commission against steel, the industry will fight
6y Eugene Lyons; '33T pageS.: Doubleday, $2.95. :
•.
. " V
for retaining the present method of selling steel, states "The Iron
'*
(Continued pn page46),
5
•
Age," national metalworking weekly, in its / current " summary of
the steel trade. "
! T
;* v One thing appears certain this week, the trader magazine adds,
j&nd that is the basing point question is now, and will be, the most

International Petroleum

HART SMITH & CO
52 WILLIAM ST.,

■

Railway

Imperial Oil, Ltd.

}

mills, who turned out millions of ghost-written words and operated
wholly in the spirit of a high-powered shyster salesman tearing
down a competing product. The effect cf the ruthless Jouett ShouseMichelson tactics was to keep unloosed a relentless offensive on,

sr.

FOR CURRENT WEEK

Canadian Pacific

•

HAnerer 2-tMt

N. Y. 5

Bell Teletype NY 1-395

}

Toronto

Montreal

V»w York

t-f

Royal Bank of Scotland
Incorporated by Royal Charter

1727

; /

f.o.b. mill system were

user

steel

area

states

"(Continued

on page

33)

;.
'

LONDON OFFICES t
3 Bishopsgate,

8 West
T-ri.

Cross, S. W. /

Burlington Gardens, W. /

;

$4 New Bond Street,

Bought——Sold—Quote J

E. C. 2

Smithfield, E. C. /

49 Charing

Dravo Corp.

Universal Matchr

■

might be able to get about half of

the magazine. But for the other half he
might find it necessary to go hundreds of miles—if, in fact, he could
'get the steel at all.
The expense of getting that half might more
than offset any advantage of being in a steel center. If he is too far
irom his own consuming market it may be to his disadvantage to be
close to a steel mill area. This, say many steel people, is why the
requirements,

Time Inci

The steel

r..

his

Scotland

hit.- J J :

Branch*» throughout

Uarco

installed, it is-certain that the

V, Pittsburgh-Youngstown-Cleveland area would be hardest
-

OFFICE—Edinburfh

linportant factor in steel discussions. The greater Pittsburgh district,
When taken together with Cleveland and Youngstown, constitutes
more than 43% of total capacity in the steel industry and most stu'dents of distribution are certain that this much capacity is far in
!excess of consumption in that area alone, under so-called normal

^conditions.

HEAD

W. I

TOTAL ASSETS
:

; FREDEDMS H. HATCH & CO., IN0.

„

;

£141,823,667
Associated

Banks:

...

1888

Established

Glyn Mills & Co.
MEMBERS
63

Wall Street,

SECURITY

New York 5, N. Y.

DEALERS

ASSOCIATION

• • «

Bell Teletype NY 1-897

Williams Deacon's

Bank, Ltd.

THE

(2418)

COMMERCIAL

FINANCIAL

CHRONICLE

Uncontrolled Inflationary Tendencies

xs*' > '*;

By D. EMMERT BRUMBAUGH *

From

'0]mhingtonr§§:§^

t'
of Banking, Commonwealth f*>f Pennsylvania

Secretary

Thursday •: June 3;; 1948

$r.' f -*1

Ahead

oftheiMews

huge national debt and unbalanced budget as inflationary/! !
lias/ created inflationary spiral--'
By CARLISLE BARGERON
and blames high taxes for retarding incentive and restricting flow of venture capital. Attacks encroach- ,
merits of government In business and profligate leading of government credit agencies. .Says add;/J,-; Several weeks ago your correspondent wrote from Fort Worth,'
Texas, that the so-called Southern revolt was serious, and could not ;
tional reserves for banks would have adverse effe:t on country banks and urges government economy, f
be
-Prominent state bank supervisor points to

laughed off.
At the time, I didn't intend to convey the impres1- J
sion, and if I did, I shouldn't have, that Truman would be denied
't/V :/
:the
D emo..//j.'*

One of the greatest

threats tolhe liberty and freedom of the American people is the
gaunt specter of inflation which threatens our economic security. If we fail to curb the in-i
flationary spiral by a clear concept of its caus j and cure, we are destined to travel the road
i

;

government to cope with a world¬
wide depression.
: \, ; . >. /

re-|

This

I Deficit Spending

world¬

wide

demor¬

nation

Our
era

since

bureaucratic

are

recognized

saviour

the

role

real

any other nation on earth, an ac¬
complishment we owe to the spirit
enterprise. ' Yet we have
achieved this position in world af¬

fairs with only 6%

remembered

fad.

of life than

the

We have had

our

the

time, there

same

increase

sponding

was no corre¬

production

because we had in the
hobd of ten

million

neighbpr-

unemployed.

In the

involved in

became

war

every

growing pains

globe.

From

corner

the. fiscal

vear;1933

day, our national debt is approxi¬

have

struggle

reaped the rich

re¬

liberty and freedom. It

is to preserve these cherished
pos¬
sessions that we resolve to meet

the

challenge to our economic
security in fighting the fires of
inflation that

were

kindled in the

early thirties when

We needed

were

told

mately $253 billion, on which the
annual interest is $5Vz" billion.
VDuring the past' 16 years the
policy has been to "tax and tax,
spend and spend, elect and elect."
As a result, we witnessed the cre¬
ation
of
a
multitude
of alpha¬
betical agencies that were not con¬
fined to Washington but which

philosophy of

new

extended

their

activities,

?■. *An address by Mr. Brumbaugh

every

before the Annual Convention of

The effect

was

the

from

cross-roads

Pennsylvania Bankers Asso¬
ciation, Atlantic City, N. J., May

$1, 1948*

;•
•'

,vl

into

hahilet. and city in America,

Court

inake

and

hold

will

economy are conscious of the in¬
herent evils of a huge public debt

The facts

unbalanced budget. Econ¬

the

Supreme

friends,

that

are

namely

South,

did

requirements,

economy

the

This increase

Court

any

that

.But you may rest assured
appear

officeholders

Controls,

appear¬

contesting group of dele¬

they will

the

from

soon,

whom

Truman

]

It will not be an easy
thing for
them to do, to contest the dele¬

a ;tnan or

would

delegates have
themselves to walk out

Trumany there has not

still

gates who

are committed against
civil rights program, because

think

the

but

it is without doubt, rank and file;

publicity necessary to him
you
don't understand
the
Present
'Supreme Court whicl

is absolutely essential. Re¬
ports indicate that in two years
the annual budget may reach the
staggering sum of 50 billion dol¬

lars.

Supreme

where the

gates.

appreciate the publicity. You

wonder. Of course, why

govern-]

ment

But

convention

rump

long before

him/ or rather the •

nomination.

their

intention of seeking the

Democratic

they will,
they go off

when

put

pledged

debt-redu&hgpay/ slightest

work

managers

assumed

fellows

There is this interesting
excep-^
tion to the rule.
So far, in the

in Federal expenditures .1| :«■.
publicity,, died down, he had toic
necessity " in achieving the bbjec-] Trumdn that tie had
not
the
ments.

/'v'/r

recognized at the convention.

pub*,

Cork

the talk About,

omy

tive of annual

1912.

in the light, not of
bolters, but of those who were not

Democratic

Corcoran, to
keep his name before the public.
,

it is

these

race

subject'

Truman

the

it out

from'

his security on

^^J

is! receiving the attention of Con-' licity-minded
gress and that all segments of our! Toimmy jhe

and

That

convention, they will not walk
out.; They will not have gotten

the

Bargeron

*>i-\

some

inflationary;

seated.

unpopular in the South. But that
they will appear seems certain. >

Roosevelt made.

The

Anyhow, getting back to Trurr^in
tion.

predicated

the possibility, of approval of
social legislation and an
expected

on,,

and

and the Democratic nomina¬
There, is not i the slightes:

dpubt that he Will get it.
sheerest

bunk,

fact

that

they will

Truman

appear,

virtue

their

support, will get a
mous''; nomination, does

It is the

minish

"unani¬
not di¬

the slightest the harm
protesting Southern dele¬
gates will accomplish.
Whether
European Recovery Program of
West is with a view to his findinr
or not they have another conven¬
economic aid is expected to be
out
whether
he
can
make
the
tion, they will make the South's
supplemented by a request for]
grade and if he finds in the nega., dissension manifest, and this will
military aid to European nations.].
•five, he wRl; relihqiiish, the nOmiN certainly be harmful to Truman's
Thus, we have a clear outline
nation.
Unless there were down- candidacy.
of the relationship of the national
^v
rtght
h o stile demonstration'
Oh, but the Southern States will
budget to the public debt as un¬
against him, which there won't all vote for Truman on Election
controlled inflationary
tendencies, be, he could not
possibly find 0u» Day, you say. What seems to be
since both of them are bound" to
any such thing as this.
lost sight of is that Truman has
reflect the cost of our foreign
aid,
already lost two Southern States
/ In 4932, Herbert Hoover thouglY.
programs.
Inflation
in
Europe
will have an unfavorable effect up until two days before the elec¬ in the Electoral College and pos4
on' the host of foreign /aid unless tions, that he: would be reelected; sibly a third.
Regardless of what

increase

the

cotet

our

re¬

armament program. Then too,

the:

say,

have

commentators

some

that the

said, that hif

"non-political" swing through the

■

the

to move

democracy

America

the5 nation's capital.

accomplished

i
increased;

the

sacrifices
wards

Carlisle

were

to the fiscal year 1941 the public
debt increased to $58 billion; To¬

for

in, in order to be able to walk out,

Doug-

pulled

With! a budget, of nearly $40'
compelled to borrow
hundreds of: billions! of dollars, billion, which may be greatly in-j
creased by our foreign aid pro¬
more to finance our military op¬
gram
and our national defense:
erations in
and

years.

worth the

billion,

will not

happened in the fight be-!
Teddy Roosevelt and Wil- '

liam Howard Taft in

being

than the desire of his close

through the eventful years of our
development as a nation. Yet the
were

/"Bill"
f1

threat that must be controlled. It'

billion. At

$252

any

V So
on
the «face of this, the
Southerners will not "bolt" 'the

about

talk

is good to know that the

fore

conveniences

they have received in

preceding 5,000

tween

being /'draft¬

upon

The public debt which

at the

ed";; to head
/him off.
The

Washing¬
popular hut costly,

|:
delegation com¬
from the South opposed to

Truman

Continued talk

the

group

is what

has seemingly died down.
I
never
had
any
more
substance

fiscal year 1933 our pub¬
population and 6% of its area; lic debt was
$22 Vz pilliom The
Through the genius of American
policy of deficit spending was
industry and the skill and knowl4 maintained from 1933 to 1941 be¬

of the comforts and

dependence

ing

from $22 V2 billion in 1933 to

of the world's

edge of free labor, we have given
to the people of the world more

that

which

of Eisenhower

transplanted
to
the
millions to the extent

ton' became

that

should

was

minds

projects,

amazed

Ordinarily,

foolish

billion in 1933 to $66%

than

of free

idea

kindred

ut¬

and

during the period of 1933 to 1939,
bank deposits and currency out¬
side banks increased from $42 Vz

be-

wealth

400%

over

WPA

This

/frankly

The ^nd, with millions of citizens on;

years.

Stassen,
seated.

terly

deficit spending, made
grants of Federal aid to
and' political
subdivisions';

states

pri¬

come the pos-r

have

centralized
the pepple.

new

and

en¬

in circulation, due
marily to deficit financing.

because

ing

direct

money

this

earned

over

and

has

that

waste

"increase

human

We have

race.

sessor

fof

volume

upon

spending

imposing

philosophy of govern-'
supported by deficit financ¬

ment

in circulation
the world increased from $5% billion in 1933
the
eco-j to more than $28 billion today,

nomic

;////'/

dured

nations

most

Brumbaugh

embarked

deficit

alizing effects
we

and

form of government on

would

have

states

nomi-

nation.

•

.'"

Such
suit

cratic

-' economic

ruin.

Holds Administration's..wage policy

threats that must be controlled.

This was
invading
the

——

take

pleasure in announcing that

mr.

the /various

Justin Jacobs

and

Certified, Public Accountant

associated with

now

1us

of bur

Security Dealers

Members Illinois Security Dealers

Broadway
j

Chicago

St. Louis

Bldg.

/^O^^er/there:

Los Angeles

hominatiqh" hf

control

that

Frank

it "has

Ginberg

element

one

the

possibility

ing you of control ".
On the

announces the formation of

creased

left

depriv¬

;

BROAD

STREET,

NEW YORK

Telephone

mist

Teletype:

WHITEHALL 3-1580

N Y

1-2952

in
to transact a

general business
in,.,

-j '

investment securities

Richard

TRADING

industrial

event, it

STEIN, MANAGER

efficiency

not

at¬

Such

contended, would
quire sizeable wage boosts in
der

•

DEPARTMENT-JOHN

Heflebower

tended by price declines.

sumer

June 1. 1948

pertinent: "At the end of the war
there was widespread expectation
that after physical reconversion
we would experience a
rapid rise

Then

there is Vir¬

votes;''-

State

This

electoral,/not delegate
/ ;> *: \
,•

In the meantime, I think one of
the funniest things in the world
has

happened to the Eisenhower

backers. He has been
I

have

been

assured

hero whom*

could

sweep

the country on either ticket.

Arthur,

delegation going to Phtladelphis
for, the Democratic National Con-

convention.

been

fied

man

the

other

who

Mac^-

hand,

has

would be crucir

the; GIs.; Why?

;

Well,

there

seems

have been quite a

vention in July, that is opposed tc;
relationship between in-j
propaganda built up against him^
Truman, will be seated. The cre¬
wages
and
the Navy had/a7 part of it even
inflationary
dentials committee

in the postwar world,
following analysis by econo¬

the

another II

Southern/

/What will happen is that

wilb take

pressures

Frank Ginberg & Co.

for

vote

instructions from the

Democratic

harmonious and unanimous thing

free;,

19 votes.

await

re-

President

bolting the convention, .is .no
the proper one.
They won't bolt
Nobody else will bolt. It 4s likeb
to be, insofar as the convention
hail itself -is* concerned,- a verj

ling all the various elements, and

not

aire:^t?ertSiri .irt-v ginia in which* the electors must

which I used, about the

inflation without control¬

pledged

Rights platform. These two States

ers

1942, Leon Henderson had -said:
"My position is that you cannot

electors

Truman
in
November, or
any
other candidate running on a Civil

/^^fete'kpressl<m/beiiig: used /and

by individuals for their
Previously on May - If,'

work."

happens at the Democratic con¬
vention, Alabama
and
South
Carolina, have already voted for

total

escapable mechanics about^^ the

from spiralling upward, -^ve' must
•stabilize
the
remowefattqn;.^re¬
ceived

Kansas City

the ji/

froin those around him.

speech on Sept. 7, 1942
"To keep the cost ofliyin^

said:

Direct Private Wire Service
New York

was

inflation

Assn.

'CHICAGO 4

he realized

up :then; What hanpened^ just
What^^/developed in his; hdind/ lft

widely recognized during the war.
President Roosevelt. in hisianti-

Assn.

Board ttf Trade

NEW YORK 4

time: say

was

Inflationary Wage Rises

anti-inflationary policy

and

STRAUSS BROS. Inc.
York

the

condi-

anybody's guess. It is also a cinch
The need for wage control as ah that he ckme:
to; the conclusion
integral part of the price-control
himself/^gainst > what ; he/henrd

Investment Research Department

Members New

inflationary

'•1
^

manager

Those/who/wehe close* to; him-ai

nations Oan/restrain

remedy

••

was

forestall

deficit

spending.

Actual

re-;
or¬

con¬

events

have shown that wages have been
boosted in advance of increases

jn cutout

per

fore, higher

man

wages

(Continued

hour.

There¬

brought
page

corre-

32)/

•

of that/

And

car* *

the. Truman forces*

will control* the credentials com¬

mittee/

during the war.
A part of this
propaganda has been that he ran
the bonus marchers out of Wash¬

ington back in the '30s.

Every; convention;

Republican

Well

and Democrat

alike, have contest¬
ing
delegations
fro m,
several
States.
The fight before the cre¬
dentials committee for recognition
is one of the first tests of power
at

convention.v

the

there

Republican

will

come

convention

contesting

delegations from several States. It
will

power
and

one

the

first

tests

between Taft and Dewey,

perhaps,

some

instances

few

weeks

•

vv-

ago

:"3

how

had

run

them

out.

printed photographs of MacArthur
riding up Pennsylvania Avenue
that

memorable

day

head"of his "troops."

-y

on
.

sir,

muckraking magazine decided to
dig up and teli the story again oil

the

So
help
me /goodness,
who
develops to be riding right at his
side, just as menacing, but Dwight

Eisenhower, who at the time
a

was

Major and MacArthur's aide.

•

Volume

167-Number 4704-

Free Gold Markets

THE

COMMERCIAL

FINANCIAL

(2419)

CHRONICLE

Economic Uncertainties

Change With

And Real Estate Loans

are

pleased

the consolidation with us

to announce

of the business of

I *

ENYART, VAN CAMP & CO., INC.

MR. CHARLES E.

and the election of

}

;

EN1VART, Vice President

MR. OWEN V. VAN

CAM?,Vice President

MR. JEAN A. HORACEK, Aw/. Treasurer

VTeanfiounce theopening vf a

HOUSTON OFFICE
i

;

Announce the Election of

CONRAD P. NONGARD

As Vice President, Director

ALLEN

ROBERT R. HARMON
'

'f* *

* i../

•

.»

•

."*

As'

COMPANY

ALLEN

FLOYD

and, Salesmanager

WALKER

Secretary, Director and" Manager of Trading . Department

Assistant-Manager

Effective

of June 2, 1948

Shields ft Company.
MEMBER,

Members New "York Slock

NATIONAL

SECURITIES DEALERS

ASSOCIATION OP

Exchange
650

SOUTH

GRAND

AVENUE

j LOS ANGELES 14,
.

CHICAGO
'

•'rn-m
'

7301

—

Teletype L A 727

Esperson Building

Ilotis tun2,,Texas

June 2, 1948

Telephone Michigan

SPONSORS FOR THE
'

"THE

SUNDAY

LAST 12

OPEN

EVENINGS,
Station

9:10

KLAC,

YEARS OF

FORUM"
TO

570

10:00

Kc.

P.M.

CALIFORNIA

(2420)

THE

COMMERCIAL

CHRONICLE

FINANCIAL

#>*..

-.tM,

■

The Coal Situation

Dealer-Broker Investment

By H. A. GLOVER*

Vice-President in Charge of Sales, Island Creek Coal Sales Company

Recommendations and Literature

Asserting it is conceded that U. S. and world mast rely more on coal for heat and power, Mr. Glover
outlines expansion of the industry.
Points out high cost of opening up of new mines and sees need for
$600 million for new plant and equipment in next three years.
Denies coal industry is earning "con¬
siderable profits/' pointing to but 2% earned on investment in 1946.
Says higher miners' earnings are
partially offset by greater output due to mechanization, while coal prices are kept down by competition
with other fuels.
Scores monopoly of coal miners union.
Never in the world's

history has there been

great, as insistent, and

prolonged
a demand for bituminous coal as there is
today.
This, of course, is an outgrowth of World
War II.
Coal producers of the United States have generally kept pace with this demand
as

and the United

States

only

will

the

part

^mand

ae-

new
and most of it

-that

impossM

;ble to
all

supply

require¬

ments

with
H. .A.

the kind, qual¬

Glover

ity and size of
coal desired

/ Our

needed.

primary

interest here

IS,

of course, in coal for consumption
in the United States and the Do¬

minion of Canada, which has al-

been

.ways

market;
this

part of

but

natural

our

consider

cannot

intelligently

without

the

time giving some thought to

same

the demand for coal for

overseas

export, which is still urgent and
*An

address by Mr. Glover at
Convention, of the
National Association of Purchas¬

the

ing Agents, New York City, May
31, 1948.

year

petitive standpoint.

tf,

Dan River Mills

and

coal

falter J. Connolly & Co., Inc.

Tele. LY 83

LD 33

Trading Markets

for

mines

new

Boston & Maine Prior Pfd.

years

that

Holding Pfd.

cars

within

trend

and Power.,

in
;

Building Industry
1424

are

Street

Report —
Co.,
Inc.,
Northwest, Wash
—

and

streetv

supply

coal

.(Continued. OA page

Oil

-Casualty^ Insurance

notes of

current

interest

43)~;

American Water Works Co., Inc.
—Memorandum—A. M. Kidder &

Co., 1
N. Y;

Wall

Street, New York 5,
I

4 Bank

of Manhattan

Company-

Circular—Laird, Bissell & Meeds,
120

'-.

Broadway, New York 5, N. Y.
V'••; 4 V>.;•
;
-4 -• ';;
&- Son,. Inc.- —^ Outlo^c-i-

Bird

Chace,
Whiteside,
Warren
&
Sears, ' Inc.] 24 * Federal v Street,

Boston/Mass^
Black

Hills Power &

Light Co.

Analysis—Amott, Baker, & Col,
Inc., 150 Broadway, New York t,
N. Y.

Burnham

Corporation—-Analy¬

sis—William

L. Burton &

New York 5,

Hartford

N. Y.

Price

Earnings Ratios and Yields

123

pany—Memorandum—Sutro Bros.

Public

Cleveland Cliffs Iron Company
—

Retail

Also

dum

Television —Discussion of

Exploration Company

available

memoran¬

Portsmouth Steel Corpo¬

ration.

growth

possibilities—Joseph FaCo., 29 Broadway, New
Dee Stores—Circular—Henry P.
York 6, N. Y.
Rosenfeld
Co., 37, Wall Street,
roll

New York 6, N. Y.
TelevisionFacts—Discussionof
the industry—Leason- & Co.;-Inc.,-

Street, Chicago:

V.T,4[

Allen

DuMont

Laboratories,

Detroit A1 uminum & Brass Cor¬

poration

—

Statistical

memoran¬

dum

;Baker, : Sirriorids »'.& Cor.^
Buhl. Building, Detroit 26/ MichJ ^ <

Domestic- Credit Corporation

detailed

vWesteritt^Cahadiatt Oib

issue—James Richardson & Sons,-

-imation of this company, and"

NORTHWEST MINING
SECURITIES ;r

;

For Immediate Execution

Consider H. Willetf > 4

Murphy Chair Company
Reliance

Varnish

Quotes call TWX Sp-43

Exchange

A.M.,

Pac.

other

from

10:45

hours.

Co.

Std.

Time:

Orders]
Floor i:

11:30'

Sp-82

:-y

at *

■■'

ita River Oil

< Continued ^on page 47)

;We

ma iritain a

Exploration
mon

stock

position iiitOil

Company
and

•

STANDARD SECURITIES
CORPORATION

BANKERS BOND co;
Incorporated

Members Standard Stock
-

;

•

Brokers

1st

Floor, Kentucky Home Life Bide.
LOUISVILLE 2, KENTUCKY

jLcng

,
.

Distance 238-9

Bell Tele. LS 186

1
-

Spokane"

Dealers

Branches

and

't
•

Yakima, Wn.

•

Bought '0 iSold 0 j Qubteil

I,...
j

Comstock & Co.
231 So. La Salle St.
'x"

Dearborn

Teletype CG 955

V$t

Approximate Market 6%

CHICAGO 4, ILL.

■.Mill

COMMON STOCEMf

I'"/

Underwriters
at-'

;

Exchange

Peyton Building, Spokane

Kellogg, Idaho

•

pjik!

Power&

r.'

com¬

invite 2 your

inquiries.

4
1501

v/
"

Corporation; is

|npw ^available • to:^interested
Investment Bankers.
/ *

—

'1948

i its controlled affiliate Wich-.

American Air Filter

Co., 25

Broad Street, New York 4, N: Y.
Also available is an analysis Of

of earnings Phillips-Screw Co. "
1947—Laird,
Meeds, 120 Broadway,
C. I. T. Financial —k SurveyNew York 5, N. Y.
Abraham & Co., 120 Broadway,
Bissell

♦Al^/availableVis /an ;rinalya$ -of

i tirr, giving 4ip Hq .date.infor-/
>*>4

American Turf Ass'n

insurance issues.'

4 4 * Common -Stock.

/
I ?A

SPOKANE, WASH.

of "News and Views" contain¬

Stocks—Comparison

39 South La Salle

LOUISVILLE

Also available is the current is¬
sue

of principal issues for

3. 111...

Louis'Stock-Exchange,

American Insurance Company-^Summary and anlysis—DempseyTegeler & Co., 210 West Seventh
Street, Los Angeles 14, Calif.

ing

Included in the report are brief

Fire

Walnut Street, Philadelphia
2, Pa.

analyses of Certainteed Products
Corp., Ferre Enamel Corp., and

proof conclusive
capital expendi¬

enormous

St.Louis !,Mo#
^Members Bt.

Toronto,

Memorandum
Goodbody &
Merchandising—Review
Co., 115 Broadway, New York 6,
—Hirsch & Co., 25 Broad
Street,
N. Y.
from two to three New York 4, N. Y.

jYou may rask *why, with v 620

mere

behind is

adequate

Light

ington 5, D. C^

the highest possible quality..

INVESTMENT SECURITIES

WOrth 4-2463

West,

•

Philadelphia Bonds.

are being made, by the coal
industry in order to * insure you

England Lime Common

Electric

Mitchell-Hoffman

tures

Stix & Co.

Street, Boston

analysis of
Industry
and

are

Construction

the

fact that
equipment and
the development of

the

However,
material

MYTON HAIGNEY &C0„ Inc.;

.;/•

—

available

Also

for bituminous

pit

and

manufacturers

Private New York Telephone—

and

mine into operation.

new

S09 ouvc

Street,

—

Tele. BS 128'

Boston Terminal Co.
3%s, 1947

King

Ont., Canada.

Staats

& Co., 120 Broadway, New York
Utility Common
J
K
Stocks—Stroud & Company, Inc., 5, N. Y.
up for two or three years and we
123 South Broad Street, Philadel¬
are unable to obtain even reason¬
Chilton Company—Detailed
phia 9, Pa.
ably accurate estimates of deliv¬
Boenning & Co.,
Also available are a valuation Memorandum
ery dates.
For these reasons it
and appraisal of Railroad Equip¬ 1606 Walnut Street, Philadelphia
requires a minimum of two to
ment Certificates and of City of 3, Pa.
three years to construct and get

Lynchburg, Va.

Federal Street, Boston 10

demand

Insurance Companies
Ten-year record of earnings and
facilities to be develother data—Conning & Co., and
Calgary & Edmonton Corp., Ltd.
oped as rapidly as the$r could have
Analysis—Oppenheimer, Vander
been before the war because of Ballard, 50 Lewis Street, Hartford
Broeck & Co., 40 Exchange Place,
delays
in
obtaining deliveries 4, Conn.
New York 5, N. Y.
from companies from whom we
Also available are data on the
Market Outlook—Memorandum
buy
machinery,
materials
and
Fresnillo Company.
Stanley Heller & Co., 30 Pine
supplies. Before the war we could
expect delivery of cutting ma¬ Street, New York 5, N. Y.
chines,
drills,
motors,
loading
Champion Paper & Fibre Com^

ST. LOUIS

possi¬

V;
Co., 640
American Gas & Electric—Leaf¬
Spring Street, Los Angeles
let
14, Calif.,i..
Moyer & Company, 153B

—

90 days. Today the manufac¬
turers of such equipment are sold

feett, Horner &
Mason, Inc.

Traded in Round Lots V '

75 Federal

growth

South

Boston Edison

1948—Discussion of

new

machines

RR.

Prior Preferred

New

last

good quality and appro¬
size, all of them do not
represent additional capacity. Old
mines
are
becoming" exhausted
and part of the new construction
is for replacement purposes.
Furthermore, we cannot expect
these

Bassett Furniture Ind.
,

Boston Railroad

industry

priate

demands.
that this

American Furniture Co.

B<m

TEL HUbbard 2-3790

position

bilities—Wm.

coal

-/ /
preparing

to: take, care of these
It
is highly
essential

the

meet

The coal industry is

HIIIIIIIIIIIIIIIIIIIIUIUIIIIIHIIIIljilU'

Maine

coal

produced 620 million tons of

bituminous

sound from an economic and com¬

Trading'Markets

the

—

firms mentioned will be pleased
the following literature:

interested parties

—

LYNCHBURG

Boston

While

«.

;

BOSTON

Banks
asset

send

Paraffine Companies, Inc.
probably
schools and hospitals has been, came nearer supplying its custom¬
Canadian
Chartered
Bank
and
still - is,
very
strong—the ers with their needs than any other
Shares—Booklet—Cochran, Mur¬
railroad
consumption has been major industry—j-the requirements
ray & Hay, Dominion Bank Build¬
far
above any prewar period— of the present arid future are such
ing, Toronto, Ont., Canada. 5
the intensive industrial develop¬ that we must have more mines
increased < and
ment in the Dominion of Canada and
;improved
Commercial
Refrigeration In¬
is now creating a very urgent de¬ cleaning and preparation/ plants
dustry — Memorandum—Barclay
mand for bituminous coal from if we are to give you and;.other
Investment Co;, 39 South La Salle
the United States.
It is now gen¬ American and foreign consumers
Street, Chicago 3, 111. >-;W+ V//
erally recognized that all of these the quantity and quality needed.
Also available* is a memoran¬
Many companies; are now en¬
strong demands will last for years
dum on Sherer Gillett Company.
gaged in planning and construct¬
to come,.{
'
It is generally conceded that the ing new mines and pew surface ►4 Common Stocks With
Outstand¬
facilities embracing" the latest arid
United
States
and
the
world
List of
most effective cleaning and siz¬ ing Dividend Records
must for centuries to come rely
stocks which have paid dividends
ing equipment,* much of which
more greatly upon coal than upon
for 30 years or longer—Newburghas been developed in ? ther last
any other source of heat, light and
five years. While these new facil- er, Loeb & Co., 15 Broad Street,
power, and this cannot possibly
ities will in tiipri be adequate to New;York-5,' N/Y4
be true unless the use of coal is

Annual

night.

grown tremendously. The demand
for coal for the heating of homes,

it-has

-been

especially for steel and

coal,

able

few years will not disappear over

for

ly and so un¬
expected ly-

tities of coal you need. The diffi¬
culties you have had in the past

other industrial purposes and for
the generation of electricity, have

quick¬

came so

producers, are going
to
furnish
you,
as

after the cessa¬
the requirements

expected

tion of the war,

be accelerated if we, as

program

purchasing
agents, with the quality and quan¬

mally

It is understood that the

growth

of having the decline
requirements that was nor¬

this

time

some

Instead

able

Part

been

to do so.

for

come.

the world that
has

continue

Thursday, June 3/ 1948

V-1;

—

Members:

225

EAST

MASON

PHONES—Daly 5392

Chicago Stock

ST.

Chicago: Stale 0933

Exchange

MILWAUKEE
1

"IV",:"

(2) /

01
v;

Teletype MI 48S

I'.hr

■I

Number 4704

Volume 167

THE COMMERCIAL & FINANCIAL CHRONICLE
firmly

British Resent U. S. Pressure for

convinced

there is no need for

ever

that

devaluation

subsidies would be impracticable

is considered

at the

the

belief

that

some

highly

the

present stage. Even though

Conservative

Opposition de¬
devaluation
than good.
mands it, in all probability a Con¬
servative Government would be
Apart from anything else, it would
nullify the effects of the official as reluctant to initiate a vicious
policy aiming at stabilizing wages spiral of rising prices, wages and
By PAUL EINZIG
and prices, policy which is at last costs as the Socialist Government
LONDON, ENG.—There is evidence of growing resentment in making some progress. It is argued is. Apart from anything else, the
the British press, and of growing concern in British official circles,
in London that British prices are country could not afford a serieS
owing to what is described here as American efforts to force Britain much lower than American prices, of strikes which would be inevit¬
to devalue sterling.
These efforts consist of a series of public state¬ and that sterling is, if anything, able if prices started rising rapid¬
ments by offi~—
:
—r*, undervalued in relation to the dol¬ ly.
The coal and steel output is
cial or au- demand for a devaluation of ster¬
lar rather than over-valued. To this creeping up gradually, and Brit¬
th or itative ling aims at forcing the British
ain's
salvation
argument the American answer is
depends on the
American Government's hand. But this end that the
British price level- is continuance of this rise. A sharp
quarters about could only be achieved at the cost purely artificial, owing to the relapse
due
to wages
disputes
the need for a
of
aggravating deliberately the existence of large food subsidies would be a major disaster,
devaluation of economic difficulties of Britain. which
keeps costs and prices be¬ i; There is, an impression here
the currencies At a moment when Britain's re¬ low their natural
level; and that that American opinion is not ade¬
jf countries in covery is of vital importance from
should the subsidies be removed
quately enlightened by the British
receipt of the point of view of the economic and prices allowed to find their
information service in the United
E R P
aid
and political stability of Western
normal level, they would be much
States
about
the
strong
case
Sterling is not Europe, such a policy would en¬ higher than American prices.
specifically tail very grave risks.
against a devaluation of sterling
Be that as it may, it is widely
sterling, and that

would do

harm

Sterling

(2421)

American

"
9

highly perplexing is
has

writers

been

voiced

responsible
and

eminent

politicians, that Britain, by keep¬
ing up the value of sterling, se¬
of

form

some

cures

advantages.

unjustified

has
ever
explained what these alleged ad¬
vantages consist of. On. the con¬

trary, if,

Nobody

acting on American ad¬

vice, sterling were to be deliber¬
ately undervalued compared with
its purchasing power parities, then
American exporters would have a
obvious legitimate grievance
against Britain on the ground that

very

British exporters
the

low

pound

are

exchange

their

cut

enabled by
of

the

prices.

value

doubt the interests affected would

m e

ntioned,

but,

seeing
the lira

that

ave

agreed that the removal of food

existing

circumstances.

What

gress

statements

already

sterling. This, at any rate, is the
popular interpretation. :
;
There can be no doubt that such

long way towards
undermining confidence in ster¬
ling. For they convey the impres¬
sion that it is the official policy
statements go a

of the United

Government

States

press

disregard insistent demands of

the British Government
to
devalue
sterling, whether it
considers this necessary or not.
And since it is generally assumed
that in existing - conditions the
British Government can ill afford
that

kind

if5 they

from

come,

Washington, it is widely believed
that sooner' Or later London will

yield to- the pressure:;) c'
anticipation

the

effects

The

bf' a devaluation thus \aroused by
the
American £ statements
are
:imanifold.VV"'V'-:',-'77
,7-'7 V;>
;
(1) It tends to depreciate the
.

Jpound irt free .markets and black
This ; again

markets.

detrimental

the

existence

wide

the unofficial rate.
to

the

increase

aggravates
the

effect

discount

also tends

turnover

the

black markets.

(2)

to induce many
advantage of the

tends

Britons to

take

loopholes in the exchange
restrictions and send capital out

many

the country
sterling area.

and

out

the

It deters foreign countries
sterling in pay¬

(3)
from
ment

for

pluses
As

export

temporary

payments difficulties tends to be¬

aggravated.
(4) Foreign importers prefer to
.

hold back their orders for British

box plant in the

five huge paper

world.

machines, each more than a block

with

strip of paper 19 feet wide;

Drawing its wood supply from

buy cheaper after the devalu¬

of Southern pine, the

Many Britons are induced
against a devaluation of
sterling by buying real property,

plant was completed in-1936.

and any kinds of com¬

jewelry,

modities that

tends to

are

cause

obtainable. This
further increase

of prices.
It is assumed here that official
circles
aware

even

Washington

fully

are

of the above facts. In fact,

plant has been steadily

fifth paper

addition of

machine, the company completed a

two-year, expansion program.
In adding paper box

carloads

$9,500,000

consumed every

of pulpwood are

day in the Savannah paper mill,

into

per year.

costing, delivered,

The plant uses approximately

tion is its large scale

complete integration,

processed

board.

400,000 tons of paper and paper

company's

of the outstanding features of the

One

opera¬

forest conservation program

conducted throughout Georgia, ;
v

The company employs 4,500

with

people at Savannah
Including

annual payroll of $12,000,000.

the operations of
ern

making to Its other opera¬

tions, the company achieved

140

cities,

the

$63,511,527,

its three other plants in North¬

company's sales

amount

highest previous sales figure.

1947

cent

per
•

totalled

above

the

;*• •

- *

Y O R

not make formal repre¬

sentations
believed
contact

Washington, it is
officials in

with

their

American

the

embarrassment

statements.

American

advertisement in the series published for more

table Securities

op¬

caused

than 10 years by Equi¬
industrial and commercial concerns
welcome opportunities to contribute to the further
by supplying capital funds to sound enterprises.

This is another

British

that

Corporation featuring outstanding

in the Southern states.

posite numbers did draw attention
the

corrugated,paper box

plant which covers four acres, and an
a

bags and paper boxes.

though the British Govern¬

ment did

Since that time the*

expanded. With the open¬

ing last fall of a huge new

making of pulp, paper, paper

the

700,000 cords of wood a year, which are

the vast areas

first unit of the Savannah

ation of sterling.

(5)

Equator 22 times

through

itself

The annual output of its

long, woiild circle the earth at the

goods, in the hope of being able

to hedge

largest

integrated pulp, paper, paper hag and paper

their trade with Britain.

come

operates in Savannah, Georgia, the

sur¬

result the British balance of

of its activities from the pine log

controlling all

accepting

economic

by
An

Equitable will

development of

the South

article

published recently by Mr.
in the "HeraldTribune" seems to indicate that
Walter Lippmann

well-informed

American

circles

NEW

NASHVILLE
DA

realize the mischievous effects of

KNOX V! LLE

the

EQUITABLE

BIRMINGHAM

of such a
subject. Why, then, it is asked, is

the

public

United

discussion
States

Government

NEW

ORLEANS

ME M

pursuing this strange course of
financial diplomacy?
The
question of a devaluation of the
pound is a matter that should be

P H

open

discussed behind closed doors.

Rightly or wrongly the impres¬
sion is gaining ground in London
that the publicity of the American

322

HARTFORD
CHATTANOOGA
G REENSBORO
AND

Securities

Corporation

BROWNLEE O. CURREY.

UNION STREET, NASHVILLE 3, TENN.

JACKSON. MISS.

President,
TWO WALL

Con¬

to voice their grievance.

it is obvious that
aim primarily at

been devalued,
the

are

franc

French

Einzlf

circles

official

the

and
Dr. Paul

British

spokesmen

American Press, and

the

influential

find

then

STREET, NEW YORK 5, N. Y.

(2422)

THE

COMMERCIAL

FINANCIAL

CHRONICLE

quarter
1

Pennsylvania Brevities

Portsmouth Steel Corporation
Gruen Watch Co.

Central Illinois Public Service Co.
Seminole Oil & Gas
Data

Request

BUCKLEY SECURITIES

New York 5

General

System

Philadelphia, New

York

between

and Los

Koppers

Angeles

discussed

fine watches.

(3)

are

Electric, Curtis Pub¬
Crucible Steel, Philco,*

lishing,

PEnnypacker 5-5976 > WHitehall 3-7253
Wire

those

Company,

Pennsyl¬

vania Power & Light, Westing-

house, Radio Corp., Allis Chal¬
Owens-Corning,

mers,

mim

Philadelphia

Alumi-

Co., Pittsburgh Plate

Stocks
Philadelphia Transportation Co.
2039, Pfd. & Common

H.N.NASH&CO.
Chestnut

Street,

Philadelphia 2

Phila. Phone

New York Phone

Locust 7-1477

WHitehall 4-2400

•

Teletype PH 257

American

Boxboard

;

and^

built by the government
during the war at Canonsburg,
Penna.,. and
declared
surplus
property in 1945.
It was far too
large for the peace time purposes
of any one company.
However,
the enterprising
citizens of the
community were able to interest
seven
industrial organizations in
dividing the facilities, thus afford¬
ing employment to 2,700 and pro¬
viding a stabilization of industry.
The companies cooperating
are:
National Can, L. H. Smith, Radio
Corp.
of America,
Continental
Can,
Pennsylvania Transformer
Co., Diamond-Gerard Co. and Na¬
plant

Gisholt Machine

(1) Location: Within

Company

Byllesby & Company

PHILADELPHIA OFFICE

Stock Exchange Bldg. Phila. 2
Telephone
Teletype

and

PH 73

Pennsylvania leads in nine

the

1500 Walnut St. 6-1950

Sq. 5V2-1950

raw

materials

Coal, coal

ings, lace goods, industrial
ice cream, rayon,

Packard Bldg.,

power,

electrical gener-

PHILADELPHIA

mar¬

are

railroad

land

water system of the

Exchange

COrtlandt

City

Elec. Com.
Harshaw Chemical Com.
Ind.

Pub.

Serv.

the Great Lakes at Erie.

(6) Ample supplies of fuel and

Incorporated

f 1500 Walnut

'Phone

Branch: Dime

%/'/;

income

personal
sales

property

tax;
tax;

tax,

and

which

merit

rating system
Pennsylvania em¬

saved

ployers

tax;
no
state personal
excess
profits

nearly

$100,000,000

1945.

(8)

Unexcelled

living

condi¬

tions:

Pennsylvania has two of the
ten largest cities in the country
and

small

than

cities and

towns

other
state;
more
churches^ more colleges and uni¬
>

any

PITTSBURGH
stockholders

voted approval

—

week

Last

Gulf

Oil
Corp.
resolution to

present

San

elected

stated

where

melting

shops

Vice-President

dation

was

not

of the

in¬

St., Philadelphia 2

Tele. PH 677

Barringer,

Vic

resigned.
'

Reuben S.

PHILADELPHIA

of John

—

:..;V

Co.

to act upon a proposed financial
program.
Authorization will be

sought for the creation of a loan
of $3,000,000 with a 15-year ma¬
turity and an option of increasing
the loan to $4,000,000 before June
30, 1949. Restrictions would pro¬
vide
that
working
capital
be
maintained at a minimum of $4,000,000 and that common stock
current

would

assets

the

1947

paid only

least

current liabilities.

are

twice

At the end

fiscal year, Stetson had
assets
of
$11,397,830

current

against current liabilities of $4,462,717.
Proceeds

loan
debt
the

the

$3,000,000
liquidate a bank
$2,070,000 incurred in

acquisition

;

of Mallory

■■

Glass Co., have been reelected,
directors of Pennsylvania R.R.
»\-i

itJ

publications

should

you

reflect

and

new

building

was

modern

hew

increase

operating

erected to

equipment
expenses.

Company with

shares of outstanding

stock.

common

•

With W. E. Burnet Go.
Effective June 30 the Stock Ex¬

change firm of Ward, Gruver &

Coi"; will be dissolved and on
July 1, Sidney F. Ward, member
of the Exchange, Esdras L. Gruver,
and William W. Kennedy will be
admitted to partnership in W. Ei
Burnet
&
Co., 11 Wall Street,
and Curb Exchanges.

know* that

HARDWARE AGE
MOTOR AGE
are

Western Pennsylvania

many

published in Philadelphia by the

Copies

have' maintained

the stock' of this Company
informative memorandum.

•

Issues

years

Request

primary

market

and suggest that you send for

In
our

Priced to Yield Better than 6 Yt %

Free of the Pennsylvania Personal

Property Tax

Direct Wire to New York
City

CHAPLIN

AND

COMPANY

STROUD & COMPANY

Pitts. Stock Exch.

New York Curb Exch.

10th Floor, Peoples Bk.

Bldg.

PITTSBURGH 22, PA.
Grant 3900
Bell

(Assoc.)

61 Broadway
NEW TORK, N. T.

Bowling Green 9*3987
System Teletype—PG 473

ESTABLISHED

Incorporated

Members
N. Y. Stock Exch.

*•'

123 SO. BROAD STREET

NEW YORK 5, N. Y.

PEnnypacker 5-7330

REctor 2-6528-29

Allentown

Pittsburgh

Members

Lancaster

1914

Boenning & Co.

120 BROADWAY

PHILADELPHIA 9, PA.

Members

New

Philadelphia Stock Exchange
York Curb Exchange (Associate)

1606 Walnut Street; Philadelphia 3, Pa.

Scranton

•

Telephone

New York Telephone—COrtlandt
i

PEnnypacker
7-1202

Ward Graver Partners

members of the New York Stock

Valuation; and Appraisal

For

other obligations senior to

IRON AGE

Price-Earnings Ratios1 and Yields on
123 Public Utility Common Stocks.

were

entirely from earnings

CHILTON COMPANY
in

the

sales volume

Funds for the&e additions

the 410,000

•

recently completed.

and reduce

an¬

benefits of the expansion program
initiated in the latter part of 194(5

leave

■>-

Earnings of the Chilton Com¬
pany,
publishers of "Iron Age"
and other nationally-known trade

which will

It is expected that the hous¬

-r

The Chilton Company

house

PHILADELPHIA—The expect
ed 25,000 visitors" to the forthcom¬
ing Republican and Democratic

jack prices.

President oL'

Pennsylvania R.R., C. Jared In-;
gersoll, President of Muskogee
Company, and Harry B. Iliggins,;
President,
Pittsburgh
Plate

Hat

Balance would bo

;

M. W. Clement,

debt

appointment
of
as Assistant

Kilpatrick,

assistant to the Treasurer.

would

CITY OF PHILADELPHIA BONDS
Trading Department Active

special Treasurer and of C. H. Butler

Stetson

stockholders will be held July

dividends

the

announces

John B. Stetson Co.

RAILROAD EQUIPMENT CERTIFICATES

Com¬

director of Curtis*

ises.
Hotels,
restaurants
and
bars have pledged themselves not

Valuation and Appraisal

•

Penn Mutual Life Insurance Ca.

delphia to provide convention fa¬
cilities and m tidying up the prem¬

schedule of prices. Pointing out
the results for
the first

Bldg., Allentown, Pa.

•/,'

Company of North Ameri-;

ance

$10,000,000
in
local cash registers. To insure this
pleasurable return, merchants and
leading citizens have contributed
$500,000 to the two political par¬
ties^ Ah additional i $1,500,000 is
being spent by- the City of Phila¬

the

Na-J

Electric

Pennsylvania

the only way out."

ticipated,

increase being due largely, Mr.
Drake said, to increase in sales
volume
as
well
as
a
higher

been elected

ca,

national conventions will, it is

Earnings for the first quarter
of 1948 were reported at $38,500,000, compared with $19,700,-

Publishing Co., succeeding John*
A. Diemand, President, Insur¬

was

the best solution, but it

trustee

for Banking & Trusts, has

pany

this

believe

«•>

"The

to find

Phila¬

director ,of the

Brandon

proposal," he said.

He is

Association

President.

to spread the necessary re¬
duction over our whole labor

Companies.

way

was

and

tional

"The union refused to consid¬
alternative left

ant

named Chairman of

was

present wages are consid¬

our

of the Thomas Alva Edison Foun¬

erably over going rates.
er

1898

delphia Electric and President in
the board in 1947.

the

career

inspector
for
Edison
Electrig
Light Co., predecessor to Phila¬
delphia Electric.
In 1924, he was?

posal by the company intended to
readjust incentive pay rates in the
machine shops and applying to a
special
group
of
low-skilled

Chicago

Francisco

his business

1938. He

Technology, Mr. Liversidge beganf

that the dispute arose over a pro¬

workers

Educated at Drexel Institute of

employees.
spokesman

company

"Two Will Get Us Ten"

use

with the firm May 25.

versary

10-cents-an-hour wage cut placed
in effect for all

5-0100

Philadelphia

Boston

was

and leaves the

Available Publications

Incorporated

York

steel

Co.

replacements.

that

E. H. Rollins & Sons
1528 Walnut St.,

The

provided

only by prospectus

PEnnypacker

—

Midvale

used for plant improvement and

make

sup¬

space.

Years With

Co. in 1946.

000 in the first 1947 quarter,

SECURITIES

KIngsley 5-1716

Phila. Elec. Co. Common

Bought—Sold—Quoted

the

meeting

(7) Favorable tax structure: No

apart¬
to

Liversidge, Chairman
of the board of Philadelphia Elec-r
trie Co., observed his 50th anni¬

employes, members of the Federal
Labor Union (AFL).
Alex Dever, President of the
union, said the strike followed a

Although Pennsylvania al¬
ready ranks first in the produc¬
of power for industrial use,
electric power companies are cur¬
rently spending over $300,000,000

state

rooms

and

available

Horace P.

tion

state

homes
be

plement hotel

V 50

PHILADELPHIA

plant

power:

;

wil

closed May 26 by a strike of 2,300

force.

Richmond Cedar Wks. Com;
Roberts & Mander Common
*Offered

satis¬

A-!: *

creased authorizations.

Com.

April

over

More than 5,000

private

ments

Strike at Midvale

sippi through Pittsburgh, and into

7-6814

INVESTMENT

Atlantic

increase

year ago.

Missis¬

J. F. Drake, President, told the
meeting that it was^ not intended

STOCK EXCHANGE

'-V

New

11,476 miles of
lines; 41,060 miles
of improved roads and superhigh¬
ways;
266 miles of navigable
waterways
that
feed
into
the
ocean
ports of Philadelphia and
Chester in the east; into the in¬
main

for

April, however, showed

$500,000,000.

Carles A.Taggart&Co.

Nor.

There

products

N. Y. Phone

pH 375

ket:

speed

rate

$400,000,000
and
its
authorized
capital stock from $300,000,000 to

MEMBERS

Philadelphia 2

Teletype

Unsurpassed transportation

(5)

facilities

ing situation will be acute, but
accommodations
are
promised
for all.

■

increase the company's authorized
indebtedness from $200,000,000 to

Samuel K. Phillips & Co.
Stock

basic

needed for production:

Lehigh Valley RR. Annuity 4%
Hershey Creamery Common i\

Philadelphia

efficient workers.

leads the nation: Steel, silk stock¬

Phila. Transportation Issues

Members

are

tar, pig iron, ferro-alloys, sand, versities and
one of the finest pub¬
stone, cement, coke and slate. The lic
school systems in the world.
variety of production is indicated
by these "firsts" among the 50 in¬
Gulf Oil Corp.
dustries in
which Pennsylvania

Cambridge Bldg. 3s 1953
1900 Rittenhouse

radius of

$49,039,000,000 of retail sales

RIttenhouse 6-3717

are

in 1946.

(2)

workers

for increased facilities.

69,000,000 peo¬
ple; 9,635,000 workers in manufac¬
turing industries; 20,065,000 work¬
ers in non-agricultural jobs; $73,486,000,000 of net buying income

Stromberg-Carlson

largest

corporations

Pennsylvania

same

Results

improvement.

factory

ex-

100

lists

500 miles there

Hydraulic Press Mfg.

H. M.

booklet

eight reasons
why industrialists should consider
locating plants in Pennsylvania.

Empire So. Gas.

Warner

interesting
reference
is
$27,000,000 aluminum

The

Botany Mills Com. & Pfds.

companies, over 17,000 manufac¬
turers, large and small, are ac¬
tively in business.:
(4)

tional Metal Products Corp.

Bates Mfg. Co.

i n
America have plants in Pennsyl¬
vania (the booklet lists them): In
addition
to
the 60 "blue chip"

made to the

Bank & Insurance

1421

•

the

manufacturing

Sylvania Electric.

3-6s

Sixty

"not

were

pected to hold at the

■

Philadelphia 2
Private

of the larger corporations.

Among

1948

remainder of 1948 eannot be

i The Department of Commerce, Commonwealth of Pennsylvania,
pointing with pride to the almost $2,000,000,000 of expansion and
modernization programs now underway in the state, has issued a
booklet, "Highlights of Pennsylvania's Current Sensational Indus¬
trial
Growth,"
briefly
setting £
forth the activities and plans of ating machinery and full-jewelled

44 Wall Street

good," Mr. Drake added that the

The Commonwealth Beckons Industry

some

CORPORATION
1420 Walnut St.

Thursday, June 3, 1943

5-8200

Bell System

Teletype PH 30

•1

Volume

167

Number 4704

THE

COMMERCIAL

Stock Exchange firm in its

Philadelphia office telecasts 15 weekly

comprising series of talks by prominent industrialists.

mercial-television.

The

June

over

Commenting
Dorsey. said:
"As far

May 24.
-

official

knew

Feb., 10,,

1948

television

'cold' call reception;
"We have enjoyed the

had not been used by anyone re¬
our

Because of the relative

ness.

elty,

thought it would be

effective
there

than

have

radio

been

—

some

busi¬
nov¬

programs

We reasoned that

audience would

.our

tively

small,

would

appeared

prospects for

Dealers

the

Digest.".

buyers and there is
steady
growth
and
continuing
prospects for material growth in

trade

our

had

value.

numerous

from

ments

the other categories.

outside

favorable

;

people

lune 4, 1948

gressiveness

ter,. pamphlet,

had

paper

our

Country Club,

definitely been
stuffy side for

the

dry

within

and

which

professional

our

should

and

kdMi

chat
for

vision was to obtain the approval
of the New York Stock Exchange,"

requested

received

and

"We

conceived

informal

18,

our

tinues

Lehigh Coal & Naviga¬
tion, the injection of the Panther

ment feature.

"Our
to

policy;* of

keep

Reynolds

background and let

;

our

ner

the

in whatever

he liked

with

suggestions

way

from

our

men

the Druid Hills Golf Club.

John

Board;

William

McShain

Inc.

Phila.

Zoning
Kurtz,,. Presi¬

dent, Pennsylvania Co. for Bank¬
ing & Trusts; F. J. Chesterman,

RR.;

delphia

S.K.F. Industries, Inc.
"One

;

expectations we
had, of course, was that the indi¬
vidual companies would publicize
the

telecast

ployees

through

their

own

their

house

gans or some other way

tainly

Jr.

feel that if

and

em¬

or¬

cer¬

any company

business

the

own

firm,
Henry
T.
Mathews

;

Co., from 1933
1937.

Henry

this

director of the American
ture Mart

Bldg. Corp.

Lane

Cunningham & Co., Inc. A
ber

visitors from

Bond

Club of New
Meeting at Sleepy

Annual

Hargrove & Co.
(Special

June 29, 1948 (New York City)

Bank

New York Stock

Exchange Golf

LONG
B.

The

Financial

Chronicle)

Davis

now

with

Halbert,
& Co., First National
Building. He was previously

Hargrove

with C; E. Abbett & Co.

nament at the Winged' Foot Golf
Club,, Mamaroneck, N. Y.
.

Joins J. Barth Staff
(Special

July 9, 1948 (Cleveland, Ohio) YY

f Cleveland Security Traders As¬

sociation

outing.

summer

Philadelphia Annual

The

Financial

Summer

Chronicle)

.LOS ANGELES, CALIF.—John
A. .Lundigan

has

ated

•Investment Traders Association
July 9,1948 (Philadelphia, Pa.)

announcement

Barth

with

become
&

West Seventh Street He

viously with
C0YY'Y-Y:Y

210

was

pre¬

Edgerton,
/ V'YYhkr

bt/ty>ihese}*kuritie$.

offer to sell or a solicitation of 'an
offering is made only by the Prospectus,

not an

•

'•

"f" ' ■'«'.*

-7 ~*>

Illinois

Dated
>

■

••

'Vir-Y

■

-1'

■.

Mortgage 3% Bonds, Series B
^

June 1, 1948
>.*

•

Bell|Telephone?|]ompany

First

*st

^
A

•

• •

'i\

'i,.

>•*.,.

Due June

iYY-'Y

'•

••' r'\,

1978

v"/"

i ?". Y

num¬

Price

other cities

102%
accrued interest
% and

expected to be present at this
outing.
~

Standard Inv. Co- of Calif.
PASADENA, CALIF. — James
Logan. is engaging in the in¬

....

The

business ;from

vestment
117

East

the

Colorado

firm

Investment

name

Co.

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

offices

Street,

un¬

Standard

California.

HALSEY, STUART & CO. INC.

First Cali¬
Hill

EQUITABLE

Rich¬

SECURITIES CORPORATION

MERRILL LYNCH, PIERCE, FENNER & BEANE

ards & Co,

OTIS & CO.

L. F. ROTHSCHILD & CO.

PHELPS, FENN & CO.

(incorporaiedi

With

Buckley Bros.

WERTHEIM &, CO.
•

(Special to Tub Fwanctm, C8*omci,t)

LONG

Co. *

INCORPORATED

BURR & COMPANY, INC.

BLAIR Sl CO., INC.
.

'•

GRAHAM, PARSONS &. CO.

THE MILWAUKEE COMPANY

has

staff

Wilson &

GREGORY &, SON'
.

BEACH,

R.. Hubbard

'''

SHIELDS &. COMPANY

...

•

CALIF^-Clifjoined the
of Buckley Brothers, Far¬
mers & Merchants Bank Building.
In the past he was with W. Mel
ton

SCHOELLKOPF, HUTTON &, POMEROY, INC.

■

AUCHINCLOSS, PARKER &, RED PATH
June 3. 1948

WILLIAM BLAIR & COMPANY

HIRSCH &. CO.

affili¬

Co.,

$60,000,000
■V'

;

BEACH,. CALIF.—Smith

Association 49th annual golf tour¬

are

Furni¬

y.yY-'Y.'y--Y

With Halbert

Club, ScarborOugh-qp-Hudson, N, Y. ,
:
. );
i

The

tertainment—George H. Kingsley,
Jr. of Singer, Deane & Scribner;
Prizes—Paul

Mathews

has been with Kneeland & Co. for
the past several years and is a

Hollow^. Country

jfiiisuurgn

On.Coast

the

Ciuo

of ; the. SubGolf—Charles N.

are:

was

Transportation
President, Read¬
ing Company; R. R. Monroe, Pres¬
ident, ACF-Brill Motors
Com¬
pany; William L. Batt, President,

(New York City)

Municipal
York

•

formerly
with
Phila¬
fornia Company and
Co.; Re-

velle W. Brown,

Dond

Schmertz & Co.; Dinner and En¬

President, V: Pennsylvania

•;

been

Bond Club of Cleveland spring

June 25, 1948

June 11, 1948 (Pittsburgh; Pa.)

outing.

Louis R. Schmertzi

President, Bell Telephone Co. of
der
Pennsylvania; Martin W. Clement,
Charles E. Ebert, President,

■outing at Country Club:

Fisher of Singer, Peane &, Scribner; La Bocci—Robert L. Johnston
of McKelvy & Co.; Fly .'Casting—

Chamber of Commerce,
Clarence Tolan; Water D. Fuller,
President, Curtis Publishing Com¬
pany; Arthur Kaufmann, Executive
Head of Gimbel Brothers; John
Ballantyne, President*
P h i 1 c o
Corporation; Mark Willcox, Presi¬
dent, Beneficial Saving Fund So¬
ciety; John A. Stevenson, Presi¬
dent, Perin Mutual Life Insurance
0o ; R. V. White, President, Le¬
high 0oal & Navigation Co.; John
of

(Philadelphia, Pa.)

Woodland Golf Club.

program of entertainment,
Clifford Bodell of Young &
is General Chairman of the

Committees

of the caliber of the

Chairman

Mr. Mathews

has

June 25, 1948 (Cleveland, Ohio) V

the sports events., At
there will be a dinner

all

with

them.

Georgia Security Dealers Asso¬
annual outing and dinner

outing;;; Chairmen

delphia

McShain

ciated

fly ' casting„ contest.

p.m.

asso¬

outgoing. President of the Phila¬

and

has

become

■.

-■

^outing at the Elkridge Kennels.

Mathews

June

June 22,1948 (Boston,.Mass.)r
Boston Security Traders Asso¬
ciation: i 29,th Annual Outing at

June il, 1948 (Atlanta, Ga.)

A novel
the benefit of anglers

for

side

from time to time.
In the series
starting with the first One, we
have had

Henry

•until

p.m.

an¬
that

nounce

in the club house to be followed

or com¬

pany

this

7:30

guest play

jup his personal Interests

otreet,

! June; 11,1948 (Baltimore,
Md.)
k Bond Club of Baltimore annual

very popular and
tournament will be

Bocci

will

9:30

i"df..• ■' '..v.'.'•

lune 18, 1948

;

ciation

Prizes will be awarded to the win¬

has been

Co.

event

course,

evenings of

from

CHICAGO, ILL.—Doyle, O'Con¬
& Co., Inc., 135 South LaSalle

■

Mass.)

at the White Bear Yacht Club.

money

feature

live¬
novel entertain¬

Henry T. Mathews With
Boyle, O'Connor & Co.

|
Philadelphia Securities. Associ¬ on La S a 11 e
(Philadelphia,; Pa.)
| r Bond Club of Philadelphia An¬ ation annual outing at Llanerch Street since
Country Club, Llanerch, Pa, •
nual Field Day at the- Philadel4
1922, having
headed his
jpnia Country
-fJune 21, 1948, (Omaha, Neb.)
-

guest was Robert V. White, Presi¬

ly song added

15-18, 1948 (Dallas, Tex.) ,
Security Traders Amq~

National

nor

(Boston.

the

and

Securities Admin¬

June 4, 1948

PITTSBURGH, PA.
E. O. jJune 11-12-13, 1948 {Los Angeles)
i Security Traders Association oi
Dorbritz,
Moore,
Leonard.
& Los
Angeles Annual Spring .party
delphia area and while at some Lynch, President of the Bo;
at Arrowhead Lodge.
,.r <
Club of Pittsburgh, has announc
future date we may change the
that plans have been completed lune ii,s1948,(New Jersey)
scope* we have not sden fit to go
Bond Club of New Jersey An¬
for the annual Spring Outing of
out of the Philadelphia zone.
Ad¬
the Club. The outing will be held nual Field Day at thie Montclaii
mittedly* this format lacks the en¬
tertainment value of many pro¬ at the Chartiers Country Club on Golf Club;
grams,
but we are - constantly Friday, June 11, 1948. As usual,
June 11* 1948 (New York City)
one
of the main events will be
seeking to include entertainment
Corporation Bond Traders Club
Golf
Tournament and,: the
value without too much sacrifice the
of New York Spring Outing and
of level and tone.
For instance, competition for the Bankers Cup
Dinner at the Wingfoot Golf Club,
The outdoor
in one of the programs, when our and other prizes.
bowling game of La Bocci con¬ Mamaroneck, N. Y. '

Valley Miners Octette with

Municipal
Dealers
Outing at the Norwood

nidnight.

Day at the

panel discussion method featuring
of prominence in the Phila-

dent

Country Club.

men

Hollow

;

Louis

Statler

Sleepy Hollow
Country Club,- Scarborough, N. Y.

have obtained good value

Pittsburgh Bond Club
Annual Spring Outing

transcript of each telecast?
,'v

Nov.

in televising 'Lead¬
that care has to be used in what ers in
Industry* on Philco tele¬
we write or say.
The first step vision station WPTZ." '
'
indeed in connection with tele¬

which

;

(St. Louis, Mo.)

1948

istrators at the Multnomah Hotel.

Nebraska Investment, Bankers
"The least J caA say, i§. thai we June 19,1948 (Minneapolis, Minn.)
'Association
annual - frolic
and
are
quite pleased with the rO- | ; Twin City Bond-Club 27 An¬
Field Day at the Omaha Country
action and results to dale and feel nual Golf Tournament and Picnic

be
violated and, of
there are SEC laws and

NASD rules which must be met

Field

have

own

men;

standing

business has and which

not

course,

our

stimulation

organization, for
any advertising we do, of course,
is and should be helpful, to all our

the most part.
There is, of course, a certain dig¬
nity

I think

benefit also in

(New York City)
Bond Club of New York Annual

this

Annual Convention of National
Association

City)

Municipal Bond Club of Bostor
annual, outing
at
the - Countrj
Club, Concord, Mass. To be pre¬
ceded
by parties at' the Hotel

June 4, 1948

pro-

sponsoring

television series'.

magazine, newseven radio has. very

(Los Angeles, Calif.)

annual

Country

Summer

Plum

Hills

Bond Club of Los Angeles first
field day at the Bel-Air

"Brokerage
and
investment
firm advertising whether by let¬

St.

Detroit

17, 1948

Aimual

Avon

at the
v

Toledo

Inverness

July 19-22, 1948 (Portland, Oreg.)

com¬

June

annual

have

York

the

elation Convention.

lune

Country Club.

within .and

„

business

our

(New

(Detroit, Mich.)

Club

Party

Golf Club;

4, 1948 (Connecticut)
Security Traders Association of
at

1948

Club

Club.

(Canada) ;

election.

Bond

Golf

Spring Part)
Country Club.

Outing

14r

June 15, 1948

(Cincinnati, Ohio)
Municipal Bond Dealers Grouj.

Connecticut

Bond

outing

Municipal Forum of New York

June

with dealers as .well as with
institutions
and
individuals, so
that type of promotion through

income

June

annual

at the Kenwood

July 16, 1948 (Toledo, Ohio)

Golf

Bay.

if Cincinnati Annual

busi¬

12,

of Canada 32nd Annual Meeting at
Marioir Richelieu, Murray

^ •

Outing at the Tavistock Country
Club, Haddonfield, N. J.

Investment Dealers Association

Annual

lune 4, 1948
.

"Investment

Buffalo

(Chicago, 111.)

at, Knollwood.

ness

us.

The majority of television receiv¬
ers has gone to better-than-average

Bond Club of Chicago, field day

favorable mention of the telecasts

compara¬

half

least

direct

lune 4, 1948

'
publicity
\

advertising that they /circulated
among security dealers. Likewise,

though

(Buffalo, N. Y.)

Club

as "Variety" and "Bill¬
board," and Standardt& Poor's
Corp. publicized the program in

radio

Field

Outing at Cherry Hill Country
Club, Ridgeway, Ontario.
'V

magazines

4, 1948

Bond

of favorable reviews in such trade

by other brokers and investment
houses.

motely connected with

and

;

Bond

Annual

June 12-16, 1948
June

employee is approached
by one of our men,' he will be
likely to get a much better than

the program, Mr.

started

program

Investment

Spring Outing at the Char-

1948 (Chicago, III.)
Traders Club of Chicago
Party at the Acacia
Country Club. ,

EVENTS
In

(2423)

tiers Country Club.

•

telecasts

programs
were
Station WPTZ up to

CHRONICLE

COMING

George K. Dorsey, Resident Co-Manager of Reynolds & Co.,
Philadelphia office, members of the New York Stock Exchange,
reports that the firm is the first Stock Exchange house to use com¬
weekly

FINANCIAL

nual

Reynolds & Go. Uses Commercial Television
programs,

Wykoff
,

J''.."

THE

(2424)

COMMERCIAL

FINANCIAL

CHRONICLE

Thursday,. June 3, 1948

The Income Statement—Problem

Bank and Insurance Stocks

Child of

By E. A. VAN DEUSEN

Accountancy
/:

By EARLE C. KING*

This Week—Insurance Stocks

Chief Accountant,

According to compilations by Alfred M. Best Co., Inc., total net

Accounting official blames

premium writings of stock fire insurance companies in 1947 exceeded

manner

77/ 7

Securities and Exchange Commission

of issuing corporate income statements for public's confusion about

Asserts conflicting business forecasts have accentuated variety of methods of set¬
ting aside reserves for future contingencies.
Favors "all inclusive" type of income statement over

corporate profits.

$2,000,000,000 for the first time in history, and were greater than the
1946 total by 24.9%, and the 1945 total by 67.3%. (
The comparative totals of premium volume, classified according
to lines, for the years 1945, 1946 and 1947 is as follows:

"current operating

Cites uncertainties in listing non-recurring items.

performance" variety.

Emerson wrote that
TABLE

I
Increase Over
Increase

1946

1945

($000)

662,590

876,554

32.3

1945

1946

1947

($000)

hope

you

I find it

"By necessity, by proclivity, and by delight, we all quote." I
will bear with me in resorting unsparingly to quotation for, in the circumstances,
a
necessity.
In Accounting Research Bulletin No. 8, issued by the American In¬

52.5

15.2

stitute

Ac-7*

Ocean

Marine

118,008

119,087

0.9

1,010,155
167,924

Motor

Vehicle

170,422

267,676

57.1

428,945

Inland

Marine

112,493

147,576

31.2

168,695

14.3

50.0

Commit-

98,787

153,479

55.4

179,210

ft 16.8

81.4

tee

17,399

—0.3

16,165

—7.1

—7.4

Fire

Extended

Coverage

Tornado

17,455

Hail

3,481
;

—

Sprinkler

29.7

4,097

—19.1
1.4

ftft'ft 5,612

27.9

17.9

6,617

■

2,060

3,339

62.1

4,020

282.5

.TOTALS

1,226,025

1,642,599

34.0

50.8
•

3,811
13,293

2,051,605

aid

what

earn

May,

85.0

ftvl4.1:v
230.7

24.9

stated

was

that "over the

1,164.8
67.3

plainly
able

marine, motor vehicle and hail.
•>
In the order of importance, as measured by volume, fire coverage
ranks first, followed by motor vehicle, extended coverage, inland

marine.

be of interest to compare the figures of a selection of
representative stock fire insurance companies, one with the other, and
with the industry totals. In this table, however, no segregation of the
It may

various lines is

given:
7 V -A

>\ i >■

7>V"vv7

TABLE

y ys {■ y

($000)

($300)

36.454

46,369 ft

Boston

Insur..

Insurance

7,194

Insur._

Continental

—

31,836

25,370

Fidelity-Phenix
Fire

Franklin

Great

other

Fire

St.

Fire

S.
f-

of income must be recognized. An

0.65
0.79

15,270

19.7

62.2

0.71

equalization.

36,541

25.1

71.5

1.06

also

17,497

26.2

79.0

0.61

■.

,'•13,871 ft

ance

any '

policy

incom^' has been used indiscrim¬

32.4*

101,206

24.7

65.2

no.96

27.5

114,750

20.7

53.9

a .68

inately and often

56.2.

81.6

i:§7

and

5,543

12.6

—1.0

0.70

77,622
4,872

income

The Committee is
that the term 'net

81,135 :

16.3

...

mindful

95,03^
49,708?

without, precise,

most

7.514

10,318

37.3

11,268

9.2

22,377

28,502

27.4

32,776

15.0

46.5

0.73

Certainly without uni¬
form, definitibn in the financial
press, investment services, annual
reports, prospectuses, contracts re¬
lating to compensation of man¬
agement, bond indentures, pre¬

.' 19,777

28.4

22,097

11.7

43.4

1.27

ferred

24.0

60.7

1.05

and in many other

—•*12.1®

9,083

11.632

28.1

14,112

55.4

1.32

35.4

24,557

28.5

74.0 ..ft

2.22

10,041

19,108
13,835

37.8

19,301 v

39.5

92.2

0.63

21,902

27,714

26.3

38,692

39.6

—

21.3

76.7

1.06

50.0

■

0.56

dividend provisions,

stock

.7'*vs

AVERAGE

29.8

two-year increase of premium volume of the 21
companies listed is 60.7%. Above average increases were made by:
average

Boston, Fidelity-Phenix, Fire Association, Franklin, Great American,
Hgnover, Hartford, Insurance of North America, Phoenix, Providence
Washington, and St. Paul Fire & Marine.
New York Fire reports a shrinkage in volume since 1945, the
only company in the list. A number of companies show a slow-up
in the rate of increase during the second year of the two-year period,
for example: Aetna, Agricultural, Fire Association, Home, Security,

places."

etc.

On the other hand, several companies show the reverse, such
Boston. Continental, Insurance of North America, and others.

J; The last column in Table II shows the ratio of capital and surplus
(policyholders' surplus) as of Dec. 31, 1947 to net premiums written
during the year 1947. The average shows $1.05 per $1.00 of premium
volume. On the assumption that it is sound practice not to permit the
ratio to drop much below one, quite a number of companies in this
list should be candidates for enlarged capitalization in order to ex¬
pand premium volume. On the other hand, this ratio of dollar for
is considered by many as needlessly

dollar
many

of the old

ratios

0.47 for

Certainly

conservative.

line companies must deem it

to judge by such

Agricultural, 0.61 for Hanover, 0.56 for Security of

New Haven, to

cite but a few. It is significant, though, that Agri¬
cultural only expanded its writings in 1947 above 1946 by 1.3%.

Such

Continental, Fidelity-Phenix, Insurance Co.
of North America and Phoenix have sufficient capital to support a
far greater volume of business than they now write.
There is no
companies

lack of caoital funds with these companies, but, relatively

speaking,

they lag in premium volume.

Jf Capital increases
panies

listed,

viz:

Aetna,

Providence Washington
«

and

Springfield

«•

Nebraska litv. Bankers

Bank

which

displays,

it in¬
financial

statements

Request

Investment

Bankers'

Association

Stock

BArclay

Exchange

will be

7-3500

Teletype—NY 1-1248-49

(L. A. Olhhs. Manager
Trading

,the; Omaha

Country: Club

Omaha, Nebraska. Cocktail party

120 BROADWAY. NEW YORK 5. N. Y.

Telephone:

times

all

exercise

great care

1948, at the Omaha Athletic Club.

Harry
rry
Co

drawing

conclu¬

sions from them."

Differing Income Concepts

,R- Gieenway>

is Chairman.

concept.

the period should be re¬
in the income statement,

ported

sets

and

criteria for possible
the statement of

exclusion

from

certain items."
In the same issue of the "Jour¬
nal" the Institute's President; Mr.

This

bulletin

stated

further

that:
"The

question

of what consti¬

tutes

the most practically useful
concept of income for the year is
one

ference

which there is much dif¬

opinion.
On the one
hand, net income is defined ac¬
cording to a strict proprietary
concept by which it is presumed
to be determined by the inclusion
of all items affecting the net in¬
crease
in
proprietorship during
the period except dividend dis¬
tributions and capital transactions.
The

form of presentation which
gives effect to this broad concept
of net income has sometimes been

the

'all-inclusive'
On

'statement.

come

the

Bailey, in an article
Increasing Signifi¬

the

Income

Statement,"

stated, in part, that:
"The bulletin definitely rejects
the all*inelusive statement,
wherein

all

i t

that

e m s

have

passed through the books during
the year have to be treated in
arriving at net income for the
year, and accepts instead the prin¬
ciple that the net income shown
must be as significant as possible
of the operations of the business
for

the year.

bility
the

It places responsi¬

accounants and on
for the determina¬
figure of net income for
the

company

tion of

year."

contrast'to

the foregoing, the

American Accounting Association

of "Accounting
Underlying Corporate
Financial Statements," issued in
June, 1941, took the position that:
"The objective of the income
principle is to develop a series of
income statements which, for the
in

its

statement

Principles

in¬

other

hand, a different concept places
its principal/emphasis upon the
relationship of items to the opera¬
tions, and to the year, excluding
from

the; determination of net
incOmeanymaterial extraordinary

life history of the

include

corporation, will

ail gains and losses.

this end the income statement for
each fiscal

period should show not
only the items affecting current
results, but also any adjustments
for gains or losses which may not
be regarded as strictly applicable
to the operations of the current
period, but which have neverthe¬
less been first recognized in the

period. If net
any meaning
the factors influencing it must be
isolated and given a distinct and
unified expression.
This is pos¬
sible if all gains! and losses are
carried through a single medium
to earned surplus.
It is impos¬
sible if expense charges, losses or
income credits may be carried di¬
rectly to surplus or to surplus

accounts during the
income is to have

This

reserve.

comment

not

does

concept would require the income
statement
to be designated
on

operating reserves cre¬
ated by means of carefully de¬
termined charges to current oper¬
ating expenses. 2
•
"In view of the emphasis given
to .computations of earnings per
share, and to other measures of
corporate performance, a common

what might

yardstick is needed.

not

are

of net income so

that

inferences might

misleading

drawn

therefrom.

This latter

be drawn therefrom.

This latter concept would require
the

income

statement

de-

King

be¬

apply to

fore

address

New

GreenwayT^ertified

York

Public

'York City. May

bv
.

Mr.

precisely at the end

State

Societv

A^untants, New
lT57l948.

costs

quired
year

which

The fact that

of any year

have

been

dissipated during

financial statements in connection

with the sale of securities

their

registration • on an exchange, if,«
in our opinion, they are errone¬
ous or misleading.
It follows that
profit and loss or income state¬
ments
such

filed

with

form

doubt

that

must

there

can

what the

net

in
no

profits

net income for the period cov¬

ered

by the statement

are.

"All-Inclusive" Income
Statement Favored

It is

our

Position—-and both

predecessor.

Mr.

William

my
W-

Werntz, and I have so stated pub¬
licly on several occasions—that
the

"all-inclusive"

ment

this purpose
rent

income

nearly

state¬

accomplishes

than does the "cur¬

operating performance" type
In consequence, the

of statement.

Commission
advise
tion

authorized

the

will

Institute
be

statements

excep¬

financial

with

that

taken

filed

which

misleading, even
though they reflect the applica¬
tion of Bulletin No. 32, and the
aopear

Institute

was

letter of

Dec.

advised

the

1947, addressed
director .of re¬

11,
Institute's

which appeared in .full in
January, 1948, "Journal PIT
Accountancy" immediately follow¬
ing the complete text of 7 Bul¬
search

letin 32.

single statement not
only the best possible measure of

It will be noted that

tion to Bulletin 32

alone

its

exclude

our

was

objec¬

based not

recommendation

certain

determination

items

from

to
the-

net income, but

also upon the permission

extended

excluded

commingle items
with
appropriations

to general
contingency
and
inventory re¬
serves made -from net income.
,

appropriations,

Such

yon

know, have received considerable
attention and have been the sub¬

ject of much discussion not only
within the accounting profession,
but also in corporation reports to
stockholders and in the press.

Research Bulletin
entitled
"Accounting
Treatment
of
General Purpose
Accounting

No.

28,

Contingency
issued

was

stitute
on

which

Reserves,"

by the

American In¬
Committee

of Accountants

Accounting Procedure in July;

1947; contains the following state¬
ment:
:

^577^7:2:

■

"The Committee is

the

therefore^ of
opinion that general contin¬

gency reserves,

such as those cre¬

ated:
(a) for general
contingencies, or

undetermined

(b) for a wide variety of In¬
definite possible future losses, or

in amounts not determined
the basis of any reasonable

(d)
on

ac¬

that

makes it essential to encom¬

pass, within a

1934
the
responsibility rests
squarely upon the Commission
to prohibit the dissemination of

it may not be possible to measure
all

*An

statement

the

Must Be Changed

revised

under consideration.

Factors Affecting Net Income

the evening of June 21,

Dept.)

the significance

OMAHA, NEB.—The Nebraska

Field Day Tuesday, June 22, 1948,

Laird, Bissell & Meeds
Members New York

which, if included, would impair

will hold their annual Frolic and
Circular

Bell

during

make

cumbent upon readers of

items which

offflill: To Hold Annual Frolic
Manhattan Company

performance

It makes the presumption that all
items of profit and loss recognized

the above facts with respect to the
income statement and the income

designated

made during 1947 by three of the com¬

were

Fire & Marine.

!•

operating

Under the Securities Act of 1933
and the Securities Exchange Act

the

opposing philosophies:
all inclusive concept and current

the

as:

states

And "In the committee's view,

| \ The

18,382

"What figure should be re¬
ported as income? This bulletin

cance

objective of income
presentation should be the avoid¬

2.14

61.7

"The

important

2.14

65.4

11.7

single •year.'*
It is my
understanding that this
position remains unchanged in the
Association's

from'

losses

and

always associated with

the transactions of

interested

\
This bulletin was published in
the January, 1948 "Journal of Ac¬
countancy" preceded by the fol¬
lowing editorial comment:

overstatement

gains

now

'.:'

George

also

events not

tions of the period covered by the

entitled

15.405

•-

60.1

38.7

| 14,113

Security Insurance.
Sprfngfield f. & M.,
U.

37.0

41,959

but

—

from ordinary operations,

statement."

dealing with the problem
selecting the most useful form
of income statement, the danger of

41.9

——:

1.20

96.6

was

„

"In

37.1

61,267

Insurance-

50,984

43.8

was

35.5-

74,539 '

Washington—

Paul

16.9

19.2

>29,20 4

4,923

River

12,972
14,144

0.47

36.7

12.757
ft

9.773

42,736

North

0.66

43.9

also stated that:'

49.3

Np. Amer._

Phoenix

32, which
December, 1947, it

30.8

York. Fire——

Prov.

Bulletin No.

54.039

New

14.2

Insurance

Co.

charged against income." This
statement, in substance, ap¬

peared in Bulletins Nos. 23 and 32.

41,314

9,415

Fire

Ins.

same

16,451 ft;

21.303

—

Fire

Home

47.8

1.3

those
arising
directly

King

44.7

——

American

Hartford

Earle

than

from its capital stock transactions;

36,187

Fund

Hanover

16.2

business,

11,370

Association

Firemen's

to Net
Premiums

% %

'ic

—?

income

company was able to
the operating condi¬

understatement

Cap. Funds

1945

53,889

27.2

42.1

12,808
9,837
.37,220
30,251

,9.015 V:

($000) .ft

p<> }' ■.

Agricultural

Incr. Over
1946

1947

Increase

1946

Insurance Uii.

Aetna

Ratio

Written

Dec. 31. 1947

*: /J

Premiums

ft Net Premiums

and

losses

issued in

all
ex¬

penses,

-ft'-.-

' /:/. y

Net

V'7f"> ?•' *■

1945
.

'ft:

'7/-77;7 [::h:

i '">■ r-i

v«

desir¬

that

costs,

ocean

under

Although the total dollar increase of 1947 over 1946 ($409,003,000) was little less than that of 1946 over 1945 ($416,474,000), the
rate of increase was considerably less. This is strikingly so, it will
be observed, in the lines of fire, inland marine, extended coverage
and aircraft. On the other hand, the rate of increase was greater in

and

1941,

years

marine

those primarily

113.7

V 1,051

„•

t i

—

what might be called a
'current
operating
performance
basis, because its chief purpose is
on

others

Earthquake
All

Ac-

—

signed

g
Procedure

17.7

10,094

ft.

7.4

9,959

countants

39.4

42,599

45.5

5,064

4,724
4,388

Aircraft

42.3

151.7

110.8

32,834

30,566

—.

—-1

Riot

41.0

60.2

estimates

costs

losses,

are

of such a nature that

credits

relating

(Continued

on page

charges

such

42)

re-

Volume 167

Number 4704

and it looked

International Affairs and Effects
''V"

By A. W. ZELOMEK*

gratified that

to be said.
economic

There is

and

even

should dominate.
a

that

difficult

Russia is

organization
published
"Foreign
11

and
about

strongly

feel

It is hard to consider them

with the detachment we apply to

business problems, where no ques¬
tion of life and death is involved.
It is

hard to get the same

even

type of information about them as
we can obtain about economic de¬

velopments, since they, frequently
are
the subject of propaganda,

and

misrepresentation
hard

And

theaters

secrecy.

them

discuss

calmly, since there is frequently
a
sharp difference of opinion

made

mainly

He has

had

quite

a success

in benefit

ing
was

measles.

Some
believe

them

that
and

that

That

few

is bound by an
contract, and that his
is over-ambitious, un¬

actors wants to

visiting the earth briefly
another planet.
We shall

from

gain nothing if the earth solves its
problems and shall lose nothing
if it botches them.
We have no

responsibility, no
strong views, and

happy ending,

ourselves about what
should
do. :We are able, for that reason,
to give' die earth's problems the
disinterested
We

are

that

interest

hard for the earth's

achieve.

his financial wing.
considerable

calling

'•

to sum up our

those

terms,

here

Marshall

the

Plan, but Eastern Germany would

indirect benefits unless

get some

East-West barter trade

were

hibited. This problem alone
create

trade

barter

Russian
able

zones

control

•

)

•;

Germany as
a

potential

war econ¬

German government
German army, and will or¬

with

omy,

ganize

campaign

powerful

pression I'believesuch a group of
unearthly visitors would get of
our planet.

Western

able
tiles

saturated with other products, and

competition by build¬

output in other countries includ¬

competitive

Western
economy.
This will be
risky and costly, and we may
a

ing Japan picks up, there would
be these new problems: Either the

German
very

production of heavy goods (po¬
tential munitions) would have to

revive forces that cannot

have to

controlled.

The United States can reduce its

friends.

Under these

state

Germany

been

has

can

any

sort

nessmen
as

Russian

conditions, I do not
Western

long-term

; '

(Continued

on page

Shares,

»-'V;-'-.V.-

The United States,
are

Capital Stock
(Par Value $1 a Share)

Great Brit¬

the chief char¬

acters in this earthly drama.

Their

qualifications for the leading role
differ widely.
Great Britain is an

Price $12.75 a

experienced

old-timer, accustomed by experi¬
ence to a prominent place on the
world stage and eager to play the
lead. But John Bull's age and in¬
firmities are against him and the
difficulties of his home life hand¬

Copies of the Prospectus may
may

icap his professional activities. He
is-on the down grade, but can still
steal

scene

V: v"

be obtained from only such of the

legally offer these Shares iti compliance with
securities laws of thfi respective States,

undersigned as

the

;

if there is the slight¬

est opportunity.

The United States is a handsome
juvenile, who has played mostly
local
engagements.
Uncle Sam
;

speaks well and has a considerable
world following. But he is affected

by stage fright, which sometimes
causes him to stutter or emit dou¬

MORGAN STANLEY & CO.
•"

.V"'-'"-; V'

-iV

;?->y
1

•

r •

SMITH, BARNEY & CO.

■-fate
'

HARRIMAN RIPLEY & CO.
Incorporated
1
.

GOLDMAN, SACHS & CO.

I'M

some

the

steal

other actors
a

scene

^Address by Mr.

the

Convention

Zelomek before
the National

Association of Purchasing
New York

find

Agents,

City, June 2, 1948.

June S, 1948,

v':l"Vv'•
1

*•

;

f KIDDER, PEABODY & CO. 4| DEAN WITTER & CO.

MERRILL LYNCH, PIERCE,

from him,

BLYTH & CO., INC.

ble-talk. He is inexperienced, and

easy

FENNER & BEANE

state

opportunities offered by

fuse the

ex¬

stability.

will consider such

of an offer to buy any of these

German

be formed that will have

transitional. They will not re¬

through

fully by Russia,

ploited

Or the political
depressing the

Most German politicians and busi¬

Germany,

The

advantages.

that

believe

the former would have

which

many
zone

Western

and

up.

further

price of German labor would have
to be accepted.

Economically, there would be
marked competition between
Eastern

stepped

risk

financial burden in Ger¬
many only by forcing the Western
world to absorb huge masses of
German industrial products. This

heavy

would lose

quantities of low-priced tex¬
it has been trying to sell.
foreign
markets
become

When

The United States will be forced

ing

agency
in
the
is already encoun¬

zone

tering resistance to the consider¬

against American policies.
to meet this

now

export-import

The Actors

ain and Russia

quickly appear a sur¬
of the type Germany
allowed to produce. The

North American A viation, Inc.

impressions.
is the im¬

and

Eastern

Europe.

feit of goods

resistance

German

Western

•.

would

Russian
agencies, already estab¬
would. become
selling

South-Eastern

lished,

allowed,

were

of Germany

to take advantage of the

Russian

trading

pro¬

would

dilemma.

1,000,061 Shares
^

have the

there would

Russia will build up its zone of

name-

benefits

direct

inhabitants to
accurately in¬

th£ earth's past his¬
tory. And since our visit is a brief
one, we are willing to risk some
over-simplification when the time
comes

mediate intensification of the cold
war.

Western Germany will

agrarian products and raw ma¬
terials required by the West.
If barter trade were not allowed,

The offer is made only by the Prospectus,

;

industrial producer.

agencies for German industrial
products and buying agencies for

offer to sell nor a solicitation

This announcement is neither an
'

and threatening gestures

formed about

happen.

and

easy
to see what will
We must expect an im¬

believe,

was

There was a

amount

convictions, no
no impulse to

argue among

side.

that Western
totally inadequate
agrarian base. It is not so gener¬
ally recognized that Eastern Ger¬
many, the chief prewar agricul¬
tural area, was also an importantrecognized

stage we can think
better to do. It is, I

nothing

this country or that country

whole flock of minor actors under

in a bitter
tragedy.
None of them can be
sure of what will happen until ne
knows who has the lead.
a

his

line

who had just about run
through his first loan by this time.
Sam
raised; the ante* began to
make outright gifts, and took a

by pretending that we are a group

votes

began

Bull,

where there is get the upper hand. That would
a complete agreement about aims.
allow him to call
the tune ■? to
So 1 shall ask you to cooperate which the others must dance;* It
with me during the next half hour would allow him to cast the others
about means, even

<jf people

de¬

closing a couple of mortgages he
held, which brought two or three
of the minor actors into his orbit;
he even made a few offers to John

scrupulous £nd not to be trusted.
of these

pretty well off at the time, so he
made a thumping loan to old John
Bull.
Ivan
countered
by fore¬

ports that Ivan

Each

mad.

Sam

made

and

while,

with Ivan's manager re¬

manager

would

Ivan,

cided he wouldn't go home for a

that his

performances since that time
are due partly to mismanagement.
But everyone who has tried to do

ironclad

he,

soon

then be boss.

poor

business

would

Sam

home

his

could

he soon found
out that Ivan was lining up some
of
the
lesser
characters telling

the war, when his manager
laid tip with a bad case of

earlier followers

Sam thought they

both relax then, but

play one heroic role dur¬

German

it.

per¬

that could pay their way in.

did

long, long

because at this

•

formances when times were hard,
but has been a flop before audi¬
ences

deal with Ivan. John Bull

time, when Sam and Ivan agreed
to take it away from him and

propa¬

cast

must do something, and

cause

had had the lead for

Western Ger¬

expedi¬
attempting it be¬

Germany

We-are

ency.

;

■ ■

played the poorer neigh¬
and the working class

ganda and mystery plays.

the difference between peace
them.

swankier

the

districts,

important, because they mean

all

Zelomek

for

There is also a human difficulty.
these developments are

home.

But he isn't sure. In fact, he

plan to create a separate

Western

get out of the contest and

would

temperamental actor,

This

John Bull would do with it, he

Germany has

government will fail just as
original intention to ruralize
Germany was a failure.
4

If he could be sure of what Ivan
i

survived.

our

is
suspicious and fearful than
he was a few years ago, when he

borhoods

Because

war,

soon

Many industrial facilities, which
cannot be used elsewhere, have

man

In fact, he would just
not have the lead at all.

everyone.

during the time of the Czars, Ivan

many years.

■■■•■

intention to create

has since

has

just follow his lead, there
would
be
a
happy ending for

some

■

for example,
fly. If everyone

would

comparatively new man¬
agement. A periodic attraction in

this to be true,

because

wouldn't hurt

forced

big frog in the little puddle

suspicion

lot of

production. But a
considerable
labor force, including several mil¬
lion
skilled
laborers,
remains.

Germany

under

I know

find.

was

back home;'

causes

assets, and requisition of current

Only two * definite conclusions
about Germany are possible at the
moment, and - both are negative.
One i§£th&t its present status will
not
remain
unchanged
much
longer. The other is that these
first changes will not solve our
long-term problem. Our present

and fear. Uncle Sam,

Moreover, he is

might like to go back again and

are

against

tip

that he

scene

but sometimes he thinks he

war,

explanation of
what

when it

little homesick.

big-time when local the¬
aters were closed down during the

simple

>■

;

•

close connection between

This

into the

cur¬

affairs,

rent

<S>-

delicate bal¬

There is such

much that is unknown.

lems, and such
ance

politically.

you

political prob¬
a

well

removal of other

dismantlement,

just about brings our
of interplanetary visitors up
on
recent past history.
There is a showdown coming, a
whole series of them, some of
them much more important than
others. The first big one, and one
of the most important of all of
them is ahead in Germany,

have asked me to talk about international developments. Let
immediately that it is difficult to organize a talk of this sort. : There is so much

confess

.mark important landmark economically

about

was

date

and explains problems arising
oat of partitioning of
Germany. Holds sooner or later we will have to reach an agreement with Russia
on
Germany or another major war is inevitable. Warns if Russia is allowed to set up Eastern German
government, future German unification will be a bad risk for U. S.
Holds November elections will
•

if there

group

Mr. Zelomek analyzes international political and economic conditions,

showdown. \

And that

'
Economist, International Statistical Bureau and Fairchild Publications

;

to be

(2425)

COMMERCIAL & FINANCIAL CHRONICLE

THE

39)

•'

COMMERCIAL

FINANCIAL CHRONICLE

Thursday, June 3, 1943

operating ratio is equivalent, be¬
Federal

fore

income

taxes,

than $2 a share on the stock.

obviously takes little in the

way

increased

economies to change the earn¬

ings

operating efficiency

picture

NSTA Kntoc
MM§9 JL XTL JMIOIvij

materially.

Despite
the
poor - start
in the opening
Generally speaking the roads in the northwestern section of the
months of the year, it is currently
country have been making a pretty sorry showing so far in 1948:
being estimated that earnings on
as compared with a year ago.
For one thing, weather conditions in|
-

some

sections of the

first

two

the

the most severe on record during the
year.3>
Some of the roads, notably Chi-:
May 1. Starting in May* but notj
cago, Milwaukee, St. Paul & Paci¬
fully effective in that month,7the
fic and Chicago & North Western,:
company will be benefiting from
were
adversely affected by the the most recent emergency freight;
area were

months- of

bituminous

coal

strike

March

rate

and

April. Finally, there has been
sharp decline in the movement

~of

wheat

carry-over

from

increase.:
will

sons

Finally,
be .with a

soon

fered

spring wheat sections.
For the
country as a whole loadings of
grain and grain products for the
20 weeks through May 15 declined
22.0% from year earlier levels.

with

traffic

and

a share, i On, the
experience, and con¬
sidering the road's strong finan¬
cial status and very conservative

debt

stock

aged issue.

was
the largest decline for
commodity, group; with the
exception of live stock which, in¬

Such

earnings
fairly liberal

disbursement

the year.

Ever since its issuance

later

reorganization

this

able Speculative following.

change in the road's

i very

pro¬

accumulated

73%

its

net

and

92%

the

other

9.6%

come

was

leaving

full

year.

second

this

net

in¬

business
govern-

above,

Chicago

this,

still higher

North

features

Western for the first four months

its

and

are

classic,"

deficit

$2,431,363.

alized

the

1947

1948

alone,

only

compared with $3.46 in

$11.69 in

1945.

share,

share of

$4.50

stock in

men

forced

will

months.

seen

For

causes

receipts
above

from

early

for

2.1%

the

"The
time

April and
through

there

the

necessities

guess that

when

break,

great deal
would
the

and

pro¬

expan¬

'more

other¬
ensumg

great deal more dif¬

various commit¬

outstand¬

ing trip and Convention and the indicated up¬
surge in the securities market could well result
,

in 'SRO.'

"I would like to touch
ters
our

concerning
cash

various mat¬

Association.

your

hand

.;::v:'■:
lightly

Dec.

31,

1947

$16,-

$16,232.96.

Victor

Moslev

'
I
3,700.
We are, however, considering
prospective affiliates and the total membership may well
substantial increase before the year end.

several

show

reported
was

959.49 and as of this date
approximates
Our membership now exceeds
a

"The, various committee chairmen

are

hard at work

their

re¬

spective jobs and efforts will be intensified prior to the convention.
The officers
ous

and

executive

council

members have

functions during the winter months and in

attended

many

numer¬

instances will

visit affiliates to attend

'Outings' and summer parties.
"A large delegation attended an
outstanding dinner held on April
19, 1948 given by the Security Traders Association of New York
and two days later, your National Association had one of its outstand¬
held for the. Commissioners

was

and Staff

NSTA

Officers, • executive council
NSTA and presidents of affiliates.

members, past presidents of the

Approximately 30 representatives
OLtJie National Association were; iiri attendance;YourOfficersate
convinced that beneficial results are
accruing to the securities busi¬
ness through these efforts.
"Another approach was tried for the first time.
Namely, a
fast for various members of
Congress.
We have felt for a
that

break¬
long time

closer

relations

are

necessary and your officers are of the
opinion that this scope of their activities can be greatly broadened.
iWe^ were^fortunate in having as 'Ohd hf bur
guests; Hon, Fred E.^
Busbey* Congressman from Illinois and an active member of our

things that 'happen Association./"

hang together.
key to their behavior is the

For, jf this is

still

NEW
F.

of the

vast

so, then
margin of

benefactions

and

"On May 6,

1948, Congressman Busbey introduced a bill H. R,
change from $10,000 to $15,000 in the salaries, of;
It is the measured opinion of the NSTA officers!
that the various securities acts should either be
repealed or intelli¬
gently administered and one of the primary needs for proper admin-,
6467 providing a

SEC Commissioners.

istration would be to attract well trained and
capable commissioners.
Mr. Busbey is to be congratulated for his

prompt action and well merits
the support of everyone in the securities business.
I would strongly
recommend that individual communications be addressed to
your
Congressmen and to Hon. Fred E. Busbey c/o of the Old

House,

HAVEN,

Balme

with

has

all

this

gov¬

own

investment

business in New, York City.

With" Herrick Waddell Co.
MYERS,

Gradv is

now

FLA.—Johrr

affiliated with Her¬

(Special, to .The

resistible

They

these_ forces likely.

are

are,

aided

course,

and

erage wage of factory employees
starts moving from
$1.30 to $1.40
an

hour, and

COARANTEEP RAILROAD STOCKS-BONDS

"At this stage of

New York 4, N. Y.

>'A

-i

-v

•*

■

+''<itv

u-w.&M v

• -■.

has

Financial

become

connected

with

Graves & Co., Shoreland
Arcade Building.
-

With Bache in Miami Beach
(Special

MIAMI

The

Financial

Chronicle)

team members to compete
against Corporate Bond Traders of New
York June 11 and against a ST ANY team in
July.
The Philadelphia team will be: Russell

Ergood, Stroud & Co.;
Freeman Grant, Dolphin &
Co.; Ned Phillips, Samuel K. Phillips
Co., and Tom Krug, Bioren &' Co.
L.

James B. McFarland, 3rd, H. M.
Byllesby &. Co., and Charle3
Wallingford, Harrison & Co., were named as alternates.

AD LIBBING

many

years

Co.,
was

with

2809

Pierce, Fenner & Beane.
"

Collins

formerly
Merrill
*

advertising committee at

others

who

to resemble the

time wishes any of our mem¬

may read our notes to assume that we mean
who got off on the wrong foot to
step on some*,

man

toes.
The only thing we may do that might be resented in
reporting would be references we might make to the "record."
We mean, naturally, our
advertising results on our coming "Chron-f
icle'V Year- Book as represented by our various affiliates.
While/
speaking of > advertising, we are pleased to inform you that the
y
advertising rates in our coming Year Book will be the same as those
our

the

for

Lynch,

regular

weekly issues of the "Chronicle."

"Chronicle"

issue

BEACH, FLA.—William

Bache

PHILADELPHIA

one's

Chronicle*

FLA.—Harrell M. Fin-

Gordon

Avenue.

influences will begin
themselves felt. Large

•

cher

with

inflationary

cumulative
make

last

bers

F. Snowden has become associated-

j/.vv

movement, the great risk is that
to

MIAMI.

MOSLEY; PresidentJ*

elimination round of golf held at Tavistock
Country Club.
week, Investment Traders Association of Philadelphia selected

for the

man-hour output
more
than it was

remains, little
in. 1939.,( \ ^

yours,

Your

Gordon Graves Staff

cial

insurance, housing,,and edu¬
cation, the more powerful and ir¬

(Special to The Financial Chronicle).

FT.

Very truly

INVESTMENT TRADERS ASSOCIATION

associated

spending. At the present

the

R. VICTOR

CONN.—Gaston

become

Edward

he conducted his

Financial Chronicle)

The

Bradley & Co.,
Dr. Inc., 215 Church Street. In the past

center

(Special

abetted by rising costs, as the av¬

••safe!

ing rises with additional military rick, Waddell & Reed, Iiic*.
appropriations, the program for
foreign aid, and suggested exten¬
Joins

Special Securities

1-1063

and

With E. M. Bradley Co.

sions of Federal
spending for so¬

been

expenditures

these powerful
inflationary trends.
To the extent that
public spend¬

weeks

Bonds

Teletype

the

than

have

full-employment obligatory.

budget of the Federal
Government is the force which is
acting to reinforce and perpetuate

were

Telephone BOwling Green 9-6400

Your officers

along in preparing for

well

are

or this,

said:

ernment

Guaranteed Stocks

23 Broad Street

November, the time is rapidly approach¬
ing when plans must be crystalized and it is not
too early lor each of you to give consideration to

well-known

from

Wolman

Compared with
in

The

thinking, plans and

National Budget to inflation,

thing,

connections

are

in this situation all

feeLng of false

Referring to the relation

May loadings and

year ago,

declines

4.1%

make

"The many

that

production."

war

comparisons
have > been
showing up better. For the first
weeks

Dallas in

It is promoted and rein¬

traffic
two

prices-

follows

ione

into

steady

the great backlog of
civilian demand which inevitably

1948.

sharp im¬

future

will

adjustment
ficult. '

new era, a new

prices,

wholesale

are

policies.

for

Railroad analysts are
generally
-of the opinion that this
provement

...

"fetate 'of af¬ which, to avoid greater calamities Building,( House of Representatives,
Washington, D. C* supporting,
as
its later, must now be pared. This is his action.
manifestations. It is the result of the time when the agencies of
"I want to thank each of
you for the support afforded the local
war; of the methods of war fi¬
government, new and old, should organization and I sincerely trust I will have the pleasure of seeing
nancing, and postwar rfinancial be required to practice austerity." you on the "Convention
Special" or in Dallas in November.
fairs

in earnings will be
necessary from
on if the
company is to show
common

"The

here
its

inside in¬

intensifies the

unpleasant
wise

outlook of too many Americans.

earnings at all available

was a

stock

that colors the

ing. It is obvious, then, that very
sharp year-to-year improvement

any

■■

pleasure to write to you in face of an active and rising
The new highs for the Dow-Jones
averages
with
gains as much, as $3.78 in one day i
make far.
better reading than what we have had for
maijy
a

cated doctrine of

stock outstand¬

common

'Jjyf-X

7Tt is

ing affairs of the yeari^ A dinner:

•

security. Today, again, it is a new
government's budget. It is at this
level of prices, a new level of
point that steps must be taken to
wages, which public policy and
reduce the forces of inflation.
It
collective bargaining have ren¬
is no answer to say that military
dered inviolate, and the complin
expenditures and foreign aid are

1946 and

suspiciously familiar.

lulled

The

approximately

sion

level

out allowance for Federal income

in¬

'/'

government budget which

longs and

numerous

the 1920's it

year-to-year
decline of $3,702,868 in net
oper¬
ating results for the four months
through April is equivalent, with¬
taxes,

£gain

it does come,

its

level

common

over

world's

it sounds

earnings

$0.66

and

over

predecessors.
Not only is the inflation like all
others, but what people say about

operating
deficit was cut to $71,771 but this
was still a far cry from the net
operating income of $1,095,650 re¬
ported in April, 1947.
; > ".

amounted

formation.^ It is

the

become
.

this there is

from

the

For the full year 1947
on
the North Western

But

history. There is
nothing to distinguish this episode

interim

of the

time and the occasion of the turn.

themselves
in

when there was a substantial out
of season movement of wheat and
other grains.
For the month of

April,

Leo Wolman

pointed out. ?, "They have repeated

This was in sharp contrast to net
operating income of $1,271,505 re¬

go
for the

It would be nice also to know the

Prof.

Dr.

of the current year reported a net,
Wolman

operating

of the SEC at the Statler Hotel in
Washington on Wednes¬
under ^conditions that day, April
21, 1948 and I am happy to tell you that in attendance
will continue indefinitely in their were
Commissioners McConnaughey, Hanrahan,
McDonald, McEntire
present direction or under a per¬ and 10
members ©f the SEC staff., -In addition we had Paul Kowen/
manently higher and ascending who has been nominated to
fill the vacancy on the Commission but
price level. That much we know. has not as
yet been confirmed, Ah Invitation -was extended to all

infla¬

tion

operating

causes

this

be, lower

"It is inconceivable that

na¬

"Thfe

facilities

creasingly pressing.

tion.
of

toe

were

and the need

postponed

great
harm will re¬

aggravated
by
the
number
of
specific adverse influences men¬

because costs

promised

and

the visible future may now
undertaken because costs may
in

error

sult to the

stock market.

business

postponed

being made

Reflecting this seasonal pattern,

tioned

serious

projects

high

take

and

■; •

and local governments which were

■

June,

net operating deficit, on
the average, for the five months
-

construction

in la¬

makers

through May.

policy

heed

an¬

operating

accumulated

that

ment

half

period

June
unless

and

income
in
the
four
July
through
October,

the

Contending that current labor policies and their effects are being
unfolded in a setting of obvious and powerful inflation, Dr. Leo
Wolman, Professor of Economics at Columbia University, told the
National Association of Purchasing Agents in New York
City on

bor,

operating
months

NST A

this matter.

seasonal

earnings trend,
with little, if any, earning power,
for the
first quarter
and only;
modest earnings for the full first,
half of the year.
On the average
for the past 10 years the company
has

University Professor 'urges government practice more /
austerity if calamity of continuous inflation is to be avoided.

has

Western

i-y

Columbia
.

MOSLEY

Budget Key to InfIation: WoIman

been particularly hard hit.. Even
under
normal
conditions
the
North

PRESIDENT

tees

packing house
strikes, dipped 24.5%.
Chicago & North Western has

nounced

FROM

Victor Mosley, Stroud & Co.,
Philadelphia, President
has addressed the following letter to the members:

stock

the

months. ; The profit - margin in our business is
has! still too small but perhaps we will all be reward¬
been one of the speculative favor¬
ed for our patience and optimism through the
ites. Should earnings start to im¬ recent
trying months.
■■■', 4
prove sharply, as is expected, the
"With our National Convention to be held in
in

any

fluenced

shares, which have been laggard,
should again attract a consider¬

revenues

result

dividend

seriously

highly lever¬

Based

;

1947 each 1%

This

LETTER

structure,

should

compart-;
period of;'

hampered operations. '
♦
•
The Chicago & North Western
common

reach

basis of past

heavy floods in 1947 which inter¬

the

stock in 1948 will at

common

least

the

take

does

care

not
the

raise

liberal

therefrom that it gives us.
We
ence

feel

are

before
certain

these

notes.

waiting for
announcing our

now

we •

can

the

rates

percentage
-

few

the

:'
to

complete

incorpprate

some

other

NSTA

the

Book-

receipts
\

.....

respond

committee.

:very

our

words,

Year

gross

correspond¬

Thereafter

interesting

items

in^

:
.

Congratulations

are

now

order for

John

O'Kane, Jr., and

•

Volume 167 4 Number 4704
I. Philip Kullman

who

THE; COMMERCIAL &

of John J.

set

HAROLD B. SMITH, Chairman
Vv

v.'
"S$4 '$5 Yearbook Committee, NSTA V. '•
44;4;44' ' 4' 4'::;4'44 44-Collin, .Norton & Co., 4.' -V ■ 4 \,-...
Broadway,'",,:;
4 V'1 4'ryVi
44:V4:4444:H
New York 5, N. Y. 44;H>v v-| • A
;

CLEVELAND SECURITY TRADERS ASSOCIATION
The Cleveland
mer

..outing

HhVV

Security Traders Association will hold their

July 9.

-j

will

which

upon

m
By

built.

jwas

ST ANY.

CHRONICLE

pattern' for

force

our own

by what

do.

respect oh the'part' of

fers trom
not

and

say

Federal Reserve fixes rate at 24%. Rate was increased from
4
to 22% last February.

but what
44

"•

ideology dif¬
judge

and who

4l:4;4rv<;;441

•V
As a further step towards restraining inflationary expansion of
bank credit, the Board of Governors of the
Federal Reserve System
ordered On June 1 an increase of

Randolph Scott Joins 4

2%, effective June 114 in the re¬
requirements of member banks in New York and
Chicago, the
cities, bring-<t>
:—the
legal reserve require¬

serve

two Central Reserve

ing

44Randolph W.

Scott

has

joined

ment to

Inc., 70 Pine
Street, New York City, as man¬

increase

ordered

Reserve

A. W. Benkert & Co.

Shortages

ager of the

destroy
incentive, decrease production, and provide alibis for producers
'

..'

•

■

•

-v.;-: \

•

...

•}

■'4 y

■.

Belief that reinstatement of government controls would
serve
only to intensify shortages was expressed by Harold
Boeschenstein,]
President of Owens-Corning
Fiberglas Corporation, in an address!
before tbe National Associate ^f
Purchasing Agents, in New Yorkj
•City on May K4:444:4444,44.4 444^44 v'4i
21J
"Inevitably and eventually, the
4 Mr.
B o e- management
opportunists
who
schenstein, take advantage of this situation
who was the and
price their goods at all the)

...

first

adminis¬

trator

the

traffic

will

bear, may succeed
only in pricing their goods out
of the market, and the labor lead¬
.

wartime

Con¬

trolled

Mate¬

ers

rials

Plan

ultimate

and

later

Vice

Chair¬

who

have

little

regard

consequences

may

tion

Board,

asserted

that

controls can be
H.

Boeschenstein

justified

I by
able

demands- such

only

-immeasur¬

may

brought by war, or in the case of
.strategic 1 materials that must be
conserved, v

only in pricing workers out
of jobs.

44The

;

demands

that

now

con¬

front us," fie said, "are measur¬
able; We can weigh their
impact
.

with reasonable
accuracy, and we
deal with their impact with¬

can

out broad controls.

"Controls

can

better than

In the

analysis, government controls
administered

hundreds

"Controls would destroy incen¬
tive,: decrease production, pro¬

vide alibis for producers who fail
to serve their customers, and cre¬
ate
'criteria'
by which bureau¬
crats decide how people are going
to share shortages, instead of in-

leasing the supply."
Mr.

Boeschenstein

stated

his

conviction that the European Re¬

Program will not entail ari

covery

increased

Rules

drain

our

economy

in 1948, since aid given under the

^iU jno "more v than re-place other aid to Europe during
the past year.
It will not repre¬
increase

the

and

practices

designed to limit production, wellnamed

'featherbedding',

lignant

and

are a ma¬

contagious

disease

that weakens the entire economic
structure of

our

country and

pe¬

nalizes the opportunity of every¬
one to raise his standard of
living.!
It

can

only unnecessary
prices, waste, :#nd

mean

high

scarcity,
lower

real

slothfulness and

the

Its

wages.

human

nature

appeal

the greed

get

some¬

thing for nothing. I do not believe
there is any future in something
"The
ah

ercise

said.

Pointing

fect of

increased

ing will
for

perhaps in

exports, he

that

the

ef¬

military spend¬

not

good

felt

many

importantly
months, except

opinion

net5 effect

tionary.
:
r
Noting that prices appear to be
leveling off, he warned that un¬
less production of goods increases

increase

great

least

the

creased

;

"The

money

credit

and

prices must go
ratio

extent

same

.circulation

up.

is
.

that

in¬

loosened,
t

•

wages-to-priees-

to-production is out of balance,"
he

observed, "and although most
people with wartime savings plus
higher wages have more dollars

the

birth

banks
A

common

time

same

Car

Sensation.":

Albert

production.

4:'

(Special

'','*4/7'

The

•,

..'Tr

Van Atter

with

Co.,

Financial

Adds

was

■

Stock

Reed,

Herrick*

Inc.

■

(Special

The

ORE.

Co., American Bank Building.
the

past he was with Hess &

Butchart.

Frederick Aldrich Dead

(Special

The

Financial

Stock

Waddell

retired

Inc.,

Reed,

the

Chicago

long illness.

;.;i\

broker

;;4

dren

based

are

rates.
for

the

upon

They
the

This

(Philadelphia Plan)

corre¬

but not

■

prewar

must

young

means

merchandise

grade

Priced

r;,

yield 1.25%

lation,

for

our

new

The-Offering Circular

expanding
must

■'V4"

improved.

«#..*

4Y<r*

married

young

roads

ones

consumer

old

to 2.35%

according to maturity 4T
4|>;444 V:.-4:44 i4;:4>-444;';4

subject to authorization by the Interstate Commerce Commission.
be- obtained in •wiyjStatie in which this announcement is
4 4
circulated from only such of the undersigned and other .dealers as may
44<4'4;.'
lawfullyoffer these securities in such State. « • • •■
.
,

Issuance and sale of these Certificates

For

big markets for

people.
"For all of

are

may

1*4

HALSEY, STUART &, CO. Inc.

4''

r '«

popu¬

R. W. PRESSPRICH

built,

FREEMAN & COMPANY

& CO

Utilities

must expand.
The need for new
housing ; is certain to continue
through many years, with ups and
downs, "but generally on a higher

level than in the past.
The same
is true of many products that go

OTIS & CO.

HORNBLOWER & WEEKS

L. F. ROTHSCHILD &

CO.

(INCORPORATED)

FIRST OP MICHIGAN CORPORATION
4

.4;

'-ifAii"'

:4*~4

-I

'/'I"

•'

'•!

I J

GREGORY &. SON
INCORPORATED

,v'"'

WM. E. POLLOCK

THE ILLINOIS COMPANY

& CO., INC.:

vigorous and grow¬
ing population.". 4
t 4 44
a

young,

To meet the

ress,

Mr.

are

permanent

condi¬

He urged that they be faced
with fortitude and understanding,
to

rekindle

and dividends by endorsement

.Certificates are to be issued under an Agreement dated' as of June 1, 1948, which will
,|p/oy ide for the issuance of $7,110,O0Q "principal amount of Certificates tb be secured by new
standard-gauge railroad equipment estimated to cost not less than $9,500,000.
4; 44

of all age

centers, churches.

manufacturers

with

These

in¬

buildings.
It
means
hospitals, community and

and

'A44:'44'4■44;;'4,;4;44

these

the

$356,000 semi-annuallv from December 1, 1948 to June 1, 1958, inclusive.

To be unconditionally guaranteed as to payment of principal

higb school and college
buildings, and more equipment

recreation

Equipment Trust Certificates

by Chicago, Milwaukee, St, Paul ana Pacific Railroad Company.;

birth

for

j HI f|§

Equipment Trust, Series DD

To be -dated June 1,1948. Principal and semi-annual dividends (June 1 and December 1) payable in Chicago. Defini¬
tive Certificates, with dividend warrants attached, in the denomination of $1,000, registerable as to principal. Aot
•redeemable prior to maturity. These Cmificates are offered when; as and if received byns. Certificates in temporary
ox definitive form will b4 delivered at the office of Halsey, Stuart & Co. Inc., 35 \\ all street, New York, N. Y. The

information contained herein has been carefully compiled from sources considered reliable and, while not guaran-

;

the

spirit of self-re-

Jjune 2. 1948.

teed

as to

completeness
.

or accuracy, «e
..

believe it to be correct as oi this date.

age

He had

investment

15 years ago.

Exchange, died at the

of ^5 after

Gerard of St. Joseph is now with

Herrick,

President

mer

Chronicle)

«.;•

Bruce

—

4 KANSAS CITY, MO.—Glenn D.

Railroad

.»•

•

Chronici.e)

Financial

Chicago, Milwaukee, St. Paul and Pacihc

mature

;

Hferrick, Waddell Adda

Street,

$7,120,000

-, ■

Schumann is with Frank Butchart

Co.,

Exchange.

1012 Baltimore Avenue.

Frederick Clement Aldrich, for¬

in the firm.

;

New

"• ' ::: • 4: -

PORTLAND,

Building, .members; of

Detroit

;

with

-With Frank Butchart Co.

associated
&

■

!•

other changes

past he was manager of the
investment department for R. C.
O'Donnell & Co.

City, effective June 1,
changed to Didrichsen & Co.

There have been

Waddell

NEB.—C.

CITY,'

West, is

Staff

CHriorSicLE)

facilities for chil¬

our

Bell

Chronicle).

Reid

C..

The Financial

Weimer

the

New York

omy.

"Most of

Chronicle)

NEB.—W.

NEBRASKA

re¬

seques¬

MICH.—Richard

Andrew

the

ijCo.

Broad

Financial

has become

Guardian

firnijiame of,F. ,VZ. Did4

richseri

Tiie

4; DETROIT,:

Frank-

Now Didrichsen &

cash

With A. C. Reid & Co.

for both promotions.
4

$100,000,000,

the

(Special

Guenther Law, Inc., is the agency

4- H'

and

additional

Richard T. Van Atter Now

showing of "The Nation's Newest

and prices,

The

LINCOLN,

York..4 4;

Playboy company
display ad that an¬
special; New- York

during the next ten years
than ever before.
Our population
is expanding; so must our econ¬

certainty

pay

tered in reserves,- and thus reduce
available for loans. 4.

stock, while at the

spondingly. We have continued to tions.
increase

been

amount

the

is running
nounces

mean

spectively,

financial-prod¬
display advertising is appear¬
ing in leading New York papers.
Tellier & Company, 42
Broadway,
New York City, as
underwriter,
is placing prospectus-type ads<on
its $20,000,000 speculative
offering
o£ Playboy Motor Car
Corpora¬
tion

will

$400,000,000

twist in

new

uct

States

able-goods

risen

has

children in the United

many more

to spend, the volume of purchas¬

not

Bell Co.

(Special

on foot
to amend the
& Co., Federal Securities Build¬
Reserve Act to require a
ing, have added Leonard T. Water¬
uniform reserve ratio against
de-j

rate

challenge of prog¬
Boeschenstein .said, we
must recognize thdt doubt and un¬

has

There

fcoun¬

Federal

Street, New
trading

during the past
seven years and that is
continuing.
As a result, he said, there will he

the

banks."

movement

Jeilier & Co., .New Angle

children's merchandise, for homes
and home furnishings and -other

over

would not be' immediately infla¬

city banks" and

try

firm's

that has occurred

products it

thai the

classi¬

those

....

few lines, and that

considerable time, he gave it as

his

MICH.-—

ex¬

will be spread

the spending
a

out

Chronicle)

posits for all member banks,- re¬ man to their staff.
department. 4 4">4•;:44gardless of location.
J : 4 »
Mr'. • Meyer was
formerly an
The increased reserve require-1
officer of Kugel, Stone & Co.
Joins Herrick Waddell
1
| ;
i—I
4;4 ments of New York and Chicago

school,

1948 exports

1947

for

"reserve

14% for those classified

4 Philip
R. Meyer has become
associated with Frederic H. Hatch
& Co. Inc., 63 Wall

Mr. Boeschenstein referred to the

likely that

total

Financial

RAPIDS,

day's

restraint in pricing."

groups.

our

The

at the

maximum—20%
fied

Frederic H. Hatch Co.

Turning to the long-range view,

creased

our

improvement and to

process

total

will exceed

(Snecial

GRAND

Reserve

the nation have long been

work," he said,
management's obli¬
gation to find cost-cutting econo¬
mies
through
technology
and

amount of aid, and it seems un¬

Company.

in the

Central

With John R. Schermer Co.

second

Federal

obligation of labor to do

honest

"is linked

program

sent

said,
high real wages
only through high

production.

man¬

PbilipR. Meyer With

York! City,

the

nothing..

dealing*

are

i high

;

formerly

cities rates in less than six months,) Cornelius C. DeKoster has been
a previous order on Feb.
27, hav¬ added to the staff of John R.
ing also increased the ratio from
Schermer & Co., Grand Rapids
20% to 22%. Required bank re¬
National Bank Building.
serves in other cities
throughout

syndicate department

W. Clucas &

24%. 'This is the

Washington bureau,
men
with no specialized knowl¬
edge iOf the problems with which

they

Boeschenstein

possible

are

thousands of ordinary men oper

firmly

Mr.

"but I know that

their administration.

ating from

believe

wages,"

for
suc¬

ceed

man^ of
the
War
Produc¬

for E.

was

customers.

serve

investment trust de¬

partment. He

President of Owens-Corning Tiberglas
Corp. and former Vice-Chairman of War Production
Board, maintains controls would
who fail to

of the

ager.

Create New

20%

sum¬

«y.*i «*■

-V

Reserve Ratio for New York and
Chicago
Banks Again Raised 2%

will

others

those nations whose

country

our

doing

A. W. Benkert & Co. 4
■

(2427)

are

celebrating their 27 years in partnership I liance
O Kane, Jr. &
Co., as of June 1, 1948.
John as you *
T 1
'
know; 1

is President

FINANCIAL

THE

(2428)

COMMERCIAL

FINANCIAL

CHRONICLE
preferreds

Miller & Dodge Admits

Thursday, June 3, 1948
increased.

also

were

The changes in each class of se¬

Miller & Dodge, 30 Broad Street,
New York City, members of the
New York Stock Exchange will

curity is shown in the table below.

Mutual Funds

the

gtdmit Thelma J. Dodge to limited
partnership on July 1.

stock

April and May, the Fund

duced

investments

The

History Repeat?

history repeats, the

and

realize profits on

beginning of

■

.,.

Prospectus

upon

NATIONAL
RESEARCH

360

YEAR PERSPECTIVE OF STOCK PRICES
J"

-i

Convertible
Investment

i—i

$22.30

Total

CORPORATION

Coffin & Burr 1§

1933

1930 1939 I960 1941 1942 1943 1944 >943 1946 1947 1940 1949 1930

1934 1933 1936 1937

Incorporated

The accompanying interesting chart prepared by

Distributors Group indicates the following:

HARTFORD

BANGOR

sceptics of today will say to themselves, "I wish that I had had sense

enough to buy common stocks in 1948."
i

year

Wellington Fund used about

two-thirds of its large reserves in
U. S. Government bonds and cash
at

the

Wellington Report*-

During the first quarter of the

year-end to buy

diver¬

sified list of corporate bonds, pre¬
ferred and common stocks.
The

preferred stocks

were bought at
depressed prices to yield more than
they had in several years.
Most
pf the common stocks and other

Prospectus from your Investment Dealer or

appreciation

s e c u r

100.00%

100.00% 100.00%

ft i

were

e s

bought as the market declined in
late January, February and early
March, when the average yield on
industrial commons was the high¬
est in five years. As a result of
these
investment
changes both
common stocks and
appreciation
securities were substantially in¬
creased

quarter.

the

end

Investment

bonds

on
on

sys¬

all

H. J.

Simonson, Jr.

nual report of
National Securities Series just re¬
leased

of the

shareholders

mutual investment trusts funds.

to shareholders,

Henry J. Simonson, Jr., President
of National Securities & Research
(sponsor and invest¬

Corporation

number

shareholders

30,024 to 34,606.

its outlook for business and

prices, the report fore¬
high level of industrial
activity throughput the year con¬
cluding with the statement: "Ex¬
perience thas demonstrated that
security prices at times are in¬
fluenced more by a predominant
psychological attitude on the part
of the investing public than by
corporate earnings. While the out¬
look for earnings and dividends
is decidedly good for the foresee¬
able future, it is also important
that growing investor confidence
continue over the longer term. As
investor
confidence
grows,
and
there is now evidence of this,"
casts

through

benefit, high¬
lights the an¬

the

Americans

the report says, "stock
be

expected

prices
continue to

Thus

vance.

may

ad¬

conclude that the

ment manager

outlook is

ties

the American investor."

of National Securi¬
points out that the
more
than
34,000
shareholders
collectively are important partici¬
pants, along with management,
labor, government and customers,
Series),

in the

first

the

$48,087,101

Series increased from $40,486,578.58

security

to¬

which

ican

and

thus

affairs of

some

524 Amer¬

business

corporations, and
comprise part of an impor¬

Stating
48%

that

own

women

over

of the outstanding shares of

port's .easy-to-read editorial
tion is designed to make

influence

important
in

exert

munism

free

enterprise process.

generally favorable for

National Securities Series, the re¬

tant ingredient in the capitalistic

the

women

can

fight against Com¬
for the maintenance

and

freedoms.

our

sec¬

clear the

5, N, Y.

ernment

Tnion

Preferred

Stock fund

K, iystone

Prospectus

THE LORDABBETT 6RQUP

upon

|[
j|.

request
mm

flmWESTMEHT COMPANIESm

Custodian

through pay¬
by the customers of
business, the report emphasizes
that thereby when our business
system prospers, everybody, in¬
cluding the customer, prospers.
The report also shows how Na¬
ments

made

Securities

Series

fits

into

According to Mr. Simonson, the

report is beiieved to be the first
attempt

part

the

in¬

any

vestment company to bring home
to its thousands of shareholders
the

interrelationships
between
capital, labor and government and
the importance to them and the
nation as a whole of what hap¬
pens
to
the private enterprise
,

system.
Tn

■

statement released with the

report, Mr. Simonson said: "Con¬
sidering that open- and closed-end;
investment companies collectively
have assets of about $2% billion,
of National Securities owned
by approximately one mil¬
lion shareholders, it is recognized
that through the medium pf an¬
nual and interim reports to share¬
holders, the investment companies,

life is to its shareholders.

INCORPORATED
New York

Chicago

—

New Orleans

Los Angeles

INVESTMENT FUNDS
investing their capital

benefits of

picture and how im¬
portant the American free way of

Lord, Abbett & Co.
Certificates of Participation in

their

the business

■

secure

the business process

tional

MMMNMTx'

28.12

Chemical $4 preferred,
Panhandle Eastern Pipeline, ♦Phil¬

and

...Explaining that management,
employees, stockholders and gov¬

;■

9.75

increased from

inter¬

In his message
*

fNCQff'OHAICO

Fluids

14.36

creased from 7,778,977 to 9,091,374

ests— but

;

HUGH W. LONG & CO.
3TftfcET. NEW YORK

5.46
18.70

i' intelli¬

group

tem

(5) Stock prices are still below their '37 highs, although national
income and industrial earnings are nearly double the '37 figure.
It may well be that a year or two from now, the stock market

lA:

6.45

7.44

28.46

April 30, 1947 to $48,087,101.24
April 30, 1948.
Shares out¬
standing during the period in¬

very

last 15 years.

Investors Inc.

group

ward the pro¬

(3) Recovery of prices to only their trend line would mean a
40-point advance in the index.
(4) Excepting 1942, recent stock yields were the highest in the

Funilaicntal

every

(1) That the only time in the last 15 years when stocks were as tection
and
cheap in relation to earnings as they are today was at their 1942 lows. further im¬
(2) Were stocks today to sell at the same price-earnings ratios
provement of
that they did in the middle '30s or in 1946, the 'Dow" would be close
the
to 300.

WALL

6.91

4.92

Monsanto

individual

of
in the stock market.

6.82

41.27%

29.02

$56,689,545

sales
which in¬

gently. — not
Dnly on behalf

Founded 1898

V -L'

—-

1947

47.44%

act

tinue

PORTLAND

Dec. 31,

31,

1948

44.88%

$25,442,428
3,863,570
2,791,355
16,453,052
8,139,140

National Securities Funds Increase

r/.

NEW YORK

$448,000,

share.

March

1948

partici¬
pating in the American business
system to con¬

BOSTON

year

profits

call

ORGANIZED 1931

about 14 cents per

and

the

ranging
from lips Petroleum, Public Service of
$20,000 to $55,000 were realized Colorado, Southern Railway, Sperinclude the following: *Celanese ry Corp., Standard Oil of Califor¬
Corp., Columbia Gas & Electric, nia, Standard Oil of Indiana and
Aircraft.
Dow Chemical, ^Electric Power & ♦United
(*Represents
Light $6 preferred,
*Gulf Oil, reduction in holding.)
~
•

General Distributor

realized net profits of

May 18,

principal

made since April

New England

the

dividual

■

—

Pfds.

Resources

Some

120 BROADWAY, NEW YORK 5. N. Y.

Fund

Seniors
Bonds

U. S. Govt. Bonds and Cash

from

SECURITIES

changes

earlier

1948

AS RELATED TO EARNINGS AND DIVIDENDS

request from

investment dealer,

These

made

May 18,

Appreciate Bonds & Pfds.

your

those

•

major advance
Common Stocks

made in more favored

were

following schedule shows the results of these changes with
resources at the end of 1947, on March 31 and

rise^ in stock prices during the past three

months should prove to be only the

A 15

re¬

other

ments

securities.

the diversification of
eJ

stocks

common

securities considered to have fair¬

By HENRY HUNT

Will

market advanced

ly well discounted earnings and
appreciation possibilities^ Invest¬

SHARES OF CAPITAL STOCK OF

The

report for the fiscal year
ended April 30, 1948, shows that
total assets

of substantial ownerships

because

in .business ' corporations through

their portfolio holdings, can be < a

iHUSVWtHl
COWHHl

BONDS
(Series B1-B2-B3-B-0

PREFERRED STOCKS

dynamic force in bringing about a
realization on) the
part of the
American investor that- profit tin
business

(Series K1-K2)

dependent

upon

correlation of all factors
comprising our business system."
proper

COMMON STOCKS

(Series $ 1-S2-S3-S4)

;

The National

Securities Series

report explains that business be¬
comes

Prospectus from
four local

Tke

nomic

t.B.nt

of Boston
50

Prospectus

Congress Street

your

may

local investment dealer,

Boston 9, Massachusetts

THE

PARKER

BUUibBtoi

for

be obtained from'

to.
•

•

CORPORATION

ONE COURT STREET. BOSTON 8. MASS.

force for social and

eco¬

for all Americans
when all groups participating contribute the necessary ingredients

investment dealer or

Keystone;Company

ness

good

prosperous

and

the
The

best

public interest.

cover

of the report

out the free

National

cled

American busi¬

its resulting operations

carries

enterprise theme with

Securities

Series encir¬

by management, employees.

167

Volume

Number 4704

•

government

stockholders,

and

customers.

COMMERCIAL

THE

;

Senate

FINANCIAL

CHRONICLE

Chairman of the Board of

Bonds From SEC Control
In view of NASD objection to measure, it is admitted

the cold
fighting war, the fol¬
lowing statements in the current
"Readers
Digest" by • Henry J.
Taylor,
internationally
known
journalist and radio analyst, may
be a surprise and d relief:
"(1) By the time Russia is pro¬
ducing atom bombs, the U. S.
with

should have

by Congress will be taken this session

the House Committee

SiiiC,

De-

and

tion

in
of

velopment
the caegory
state and

mu-

"(2) Russia lacks many impor¬
strategic war materials in¬

nicipal bonds,

tant

and

cluding
tungsten,
molybdenum,
tin, antimony and, most of all,

exempt

from

rubber.

registration

those

remove

be made

technical

ations

the

financing

Soviet

ing

Should all go well in the

have

Russia would

1951

well—by

industrial

the

Exchange

capacity that

Commission.

had in 1904!

According

railroad mileage
her vast area, is
ours in 1872.

Russia's

"(4)

today, despite
comparable to

the

warfare, is 60,000,000 tons a year
Last year we produced
by 1951.
270,000 000 tons."
Mr. Taylor
does

believes that Russia

want

not

Act

Exchange Act of 1934 to provide
for the exemption from such acts

principal and interest by the
International Bank of Reconstruc¬
to

that every¬
thing she says today is dedicated
to cracking our economy by over¬
straining our American free en¬
terprise system.
A VDow"

Expert Speaks
W.

Thomas
du

best

Pont

Phelps,
Co.,

followers

known

bulletin

recent

In a
?

all trends in the stock
point upward. To those
who have not yet bought, market
"Now,

history says run, do not walk, to
your favorite broker."
%„{:t ,'
Notes

ton

y * I' x

'■

Hugh W. Long has a new folder

showing how dollar averaging has
worked
using Fundamental In¬
vestors.

has

issued

Securities & Research

bulletin

new

"OR Shares."

its
a

Frank

Ginberg & Go.
Opens in New York if
Frank Ginberg,

only

With
more

will

men

the

three

than

trophies

tee

golf

Wall

200

off

formerly

Bros. Inc., announces the
tion of Frank ,

tournament

•

the

.«•'

;

golf players will be on hand to
compete - for
the
Ex-President's

object

banks

Federal

the

subject to certain
limitations
as
to
amount. The proposed legislation
is necessary in order to remove
difficulties im¬

technical

certain

by those acts which seri¬
ously interfere with the Interna¬
tional Bank's financing operations

posed

limit its effectiveness
in carrying out the purposes for
which it was established."
and thereby

Relation to the European Recovery

this

week

window at 14 Wall Street.

be awarded

to the

(Special

The

Financial

F. Holcomb is

removal

"The

Co.,

210

members

West

tional

the

facilitate

will

marketing

Bank's

and

the

'Snwial

The

Financiai

Securities

International

Act of

initiated

1933

Frank

able

Ginberg

when
ist

"The boara

admit

some

its

later

Mr.

served

•

Co.,

j" JI s/\,

Corporation.

that

(Special

frank

The

BEVERLY

short time
has had to study

the

Chronicle)

Financial

CALIF.—

HILLS,

Henry J. Tenaglia has become
sociated

Co.,

with

Daniel

South

271

members

Beverly

the

New

York

•'

offer to sell or a solicitation of an offer to buy these securities»
offering is made only by the Prospectus,
„
»4
■<
' ,

.-V.

«,

J*.

#'v,\\

•••»<> • '« ■*

•

1 ,\

•"

Narragansett 'Electric Company

First Mortgage Bonds, Series B, 3%, Due 1978

; /

v
v '.y
v.
v-rr
t.'ii'-'.V'''--Lr- ,J.'VV.''v

Dated May 1, 1948

'- :

T Vi**

•'& •>'.>•' ?»

A: tA?..'-:

.'_

•.

z* ***» t' "•.•J"'•

;

' 'A '

£>

7.'

\* r'. s
. i/

'•

try
a

••

•

•
■ / •' ■

.•

Due May 1,1978

•.Price 102.39% and accrued interest

Europe

and

when

long-r
,

I\;

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

,y: 7

vv/VLitc/ /*:: v.;7;."
halsey, stuart & co. inc.

probably will not

large in relation to the entire

European recovery program dur¬

least

ing

program,

the early stages of
nevertheless such

otis&.co.

wm. e.pollock &.co., inc.

(incomporateo)

vide.

economy

fore,

the

interest

both

and effectiveness, there¬

most

desirable

e. m. newton

that

June J, 19M

the illinois company
.

hill & co.

& company

*■'

and

He
previously with Fairman &

The

Drive,

Los Angeles Stock Exchanges.
was

as¬

Reeves

$10,000,000

The

Joins Daniel Reeves Co.

distributors.

and

governors is

thereof have not
been
thoroughly
covered
and
thought out, but with the possible
drastic implications of change of
public policy involved, the board

I \

California

Allen

years

changed to Hautz & Engel.

ago,

assistant to the President of Gen¬

bill, all the implications and

This announcement is not

part

having re¬
to reduce the total amount which
general partner of
S.
Government
would
Hautz. Engel & Andrews, 57 Wil¬ the-. U.
liam Street, New York City, mem¬ otherwise be called upon to pro-;

has been

business

eral Motors

consequences

Spring Stret.

J i} j;<

this

start into the invest¬

ment

association

name

such program,

of themselves, be very
substantial, and they should serve

York Curb Ex¬

admit that

Bank

the

LOS ANGELES, CALIF.—RobL. Collins has been added to

opera¬

loans may,

Andrews

belief

stable conditions ex¬

the

Enget

his

years

were

underwriters

Chronicle »

International Bank

be able to make

Firm Name Is Now :

Unless such

assist in

particularly

in Floyd A. Allen's
expansion
program,

ties and would be free to sell them

Street,

E. F. Hutton &

un-,

Ex¬

another im¬

are

men

^ Before his

passed banks would
not be bound to hold such securi¬

ert

the staff of

distributors.

the bills

E. F. Hutton Co. Adds
•

The two

■;

publicly through
without registration

"Furthermore," adds the state¬
ment, "the administrators of the

Angeles

which the International Bank may

the New

International

the

No. 935, 80th Cong., 2d
pp. 51, 52) has indicated that

it expects the

Los

Chicago

foreign corporations or country's potential business fu¬
foreign governments when guar¬ ture and in the rapid growth and
anteed by the International Bank, business development of South¬
the Dills, by their terms, would ern California.
*
permit this.
-Lr

issues

Chronicle)

Seventh

with

and

extensive

under

Stock Exchange. He was formerly
with Edgerton, Wykoff & Co.
>

European Recovery Program

sess.,

May 20... .u-'

change, the firm

derwriters

business

security

associated

portant step

Interna¬

range development projects can
-Formation
of the be
properly financed on the basis
new firm was previously reported
of sound loa/is.
While the loans
in the "Financial Chronicle" of

bers

was

permitting

experienced for 20

the

banks

with Fairman

the

technical

the

Department.

Mr. Walker,

Bank not to sell

CALIF.—Roy

now

the na¬
Paine,

ministrators

ANGELES,

with
firm

celling in both state and munici¬
understand," says pal financing, he is a member of
the National Association of Se¬
the NASD statement, "that it is
•
;
'
the intention of the present ad¬ curity Traders.

Holcomb With Fairman
LOS

later

and

in them.

"While

player's in the

years

investment

years

national and Reserve banks

to deal

;

The tournament will be divided

(Rept.

with

both

display

served

Webber, Jackson & Curtis in their
Angeles office before accept¬
ing this new appointment with
Floyd A. Allen. • .'itv.

government bonds
with the Bank's

guarantee : and /,; thus

ex¬

into three

723 South

Program

the firm in charge of the Trading

Frank

in the

corporate

for

Los

from

SEC jurisdiction, but does object
the same privilege for foreign

par.

formerly

Continuing, the report says:v;■

tired

tional

not

that may be issued

underwrite

System to deal in and

of the financing of

Hautz &

bonds

own

handicap match play against
The
trophies
will>• be
on

such securities,

the

Bros.

as-

Bank's

Walker,

Nongard

Chicago
does

asso¬

with the
Harris Trust & Savings Banks in

Reserve

prescribed

Strauss

Mr.

much to exempting the

low ; gross, the; Candee Cup, for
low net, and the Christie Cup, for

national banks and State member

formerly with

Co.,

asserts

the

executives.

new

Conrad P. Nongard and

are

executive

obligations.

NASD

World

Cup, which will be awarded for

generally will be severely limited.
The Report of the Senate Com¬
mittee on Foreign Relations on

through out
j the country.
John R. Stein,

deal in these

The

pacity for assisting in the financ¬
ing of the recovery of Europe and
reconstruction
and development

sociated

that

ful, the International Bank's ca¬

dealers

Inc. and Ernst

Day

of Wall Street's outstanding

Grand

South

650

two

Chicago.

Field

the

committee,

marketing operations are success¬

ing in a trad¬
ing service

Billett

announces

golf
some

Allen
L. Raymond

Exchange Commission and thereby
permit
commercial
banks
and
trust companies to underwrite and

Sleepy Hollow Country Club.

William M. Rex, Clark, Dodge &

chairman

They

the

Securities and

Banking

tions in this country.

York

will

ments

Co.,

announced

ciation

registra¬
tion, require¬

CALIF.—Floyd
of Floyd A.

President

Avenue,

the

Friday in

which

Allen,

Allen

bond

of Republican Senator Bricker of Hollow will be available to accom¬
Ohio, is not likely to be taken this modate the large number of play¬
session of Congress, because of the ers.
Aaaa i
.*,*
In addition to the three tro¬
protest filed against it with both
Senate and House Committees by phies, more than a dozen prizes in
the National Association of Securi¬ the form of gift certificates will

forma- Act

City, to tran-*
sact a general
security busi¬
ness specializ¬

£ to

consideration."

LOS ANGELES,
A.

guaranteed
issues, from

stake,

handicap classes: Class
dissenting vote in the A, 0-12; Class B, 13-24; Class C,
Committee, that 25-30. Two golf courses at Sleepy

one

Senate

of¬

Ginberg & Co.,
30 Broad St.,
New

Street

which

whether direct

feature the 24th annual Field Day
of the Bond Club of New York at

ficer in charge of the Investment difficulties imposed by the Secu¬
Research Department of Strauss rities Acts and the National Bank
•

mittee,

during April,

$9,242,000.

National

Senator

ties Dealers.
^

f
During the three months ended
April 30, assets of Investors Stock
Fund
rose
from **$8,153,000
to

the first time

of "The Chronicle" action on
Tobey's bill, which had

issue

Senate

would exempt
World Bonds,

Compete for Trophies

various classes.

crossed

Fund

elsewhere in this

indicated

Sanders*

Assets- of Vance

Bond Club Golfers to

thorough

Floyd A. Alien Adds
Nongard and Walker

May 24 by

the

the matter
investigation

believes

governors

and

well as with the

of the

approved

Banking Com¬

hibition

market

£ v, 7'

amendment

the

National Bank Act to permit

the

inter¬

concludes:

Bank),

World

the

also/for

and

of Francis
of the

preters of the Dow theory.

referred

one

and

(frequently

tion and Development

;

,,v

guaranteed

of securities issued or

does not

and

war

intend to have one, but

"the bill
provides
for
amendment of the Securities
of 1933 and the
Securities
bey,

for oil pro¬
essential in modern

by
To-

Senator

C. W. Tobey

report

Hon.

Stalin's goal

"(5)

duction,

and

curities

deserves

bill

International Bank

in this country."

Commerce,

<8>-

protest¬

passage

oper¬

Se¬

the

with

not all is go¬

Union—and

thus

Interstate

immediate

keting obstacles- which presently
interfere with the

state¬

ing against

mar¬

the

bonds

reasonable effort

every

ment

of Soviet

years

V Through its Chairman, L. R. Billett of Kebbon, McCormick & Co.,
Chicago > investment bankers, the National Association of Securities
Dealers, Inc. has filed both with the Senate Banking Committee and

Tobey of N. H., to amend the Securities Act of 1934, and the National
Bank Act so as to place the bonds of the International Bank for
,/
Reconstruct

atom bomb stocks

pile equal to

action

'7 On May 24, the Senate Committee on Banking and Currency
approved the bill submitted by : its Chairman, Senator Charles W.

production.

"(3)

thorough
Sees banks and trust companies
monopolizing in World Bank direct and guaranteed issues.

investigation and consideration.

;

Governors, L. R. Bitlett, files statement

with Senate and House committees stating matter deserves

To those who believe that Rus¬

war

Group Approves! Removing World Bank NASD Protests Exemption of World

One Men's Opinion

sia is capable of turning

(2429)

mullaney, wells & company
thomas & company

FINANCIAL CHRONICLE

COMMERCIAL

THE

(2430)

Wilbur Blair Counsel

Of Cleveland Reserve
OHIO —George
Chairman of the
directors of the Federal
Bank of Cleveland, has

CLEVELAND,
C.

Proposes New Scheme
Securities Salesman's Corner 1

Brainard,

board

Reserve

announced the

appointment
of

ment

bur

Wil¬

Blair

tary.
The law firm

Squire,

and

Sanders

Oi Construction Financing

By JOHN BUTTON

Lee

Thompson Smith, President of Lawyers Title Corporation of '
New York, would have large scale construction financed in same

back 25 years or so and review the many ups and
occurred in the investment markets, it is quite
obvious that this is a feast or a famine business.
There isn t much
doubt about that.
Then if you will remember some of the men
When you go

downs

whom you have known and who
of selling investment securities it

way as

that have

have made a financial success out
is also obvious that most of these
the bank. Mr. men had one outstanding trait in common—they were-"doers.
As
Blair will con¬ far as the
technique of selling is concerhed there isn't very much
tinue as Sec¬ more to
selling stocks and bonds successfully than selling anything
retary of the else.
Of course, you have to learn a specialized business, but after
bank, with the that has been mastered the same principles of successful salesman¬
title of Coun¬
ship apply as in any other business where merchandising must be
sel and Secre¬
accomplished in order to distribute a product.
* \
:
i
of

counsel

Thursday, June 3, 1948

individual corporations, comprising sound bonds, preferred
stock and speculative common stock.

In an address before the New York Building Congress, Inc., in
New York City on May 19, Lee Thompson Smith, President of the

Lawyers Title Corporation of New York, urged a change in the
methods

ent

its

place the f
"Of
plan used in there
industrial

the

Federal

Reserve

"doer" has its basis in certain fundamental
characteristics of an individual.
Most men who do things well in
the investment business are good planners.
They organize their
This trait of being a

three years ago as assistant sec¬
retary and was promoted to sec¬
retary six months later. He for¬
merly was connected with the law
firm of Manchester, Ford, Bennett
and Powers at Youngstown, Ohio,

that

handy in this business.
You will find that the men who are "doers"
had some pretty lean days just the same as most of us. ; But

have

financing
ugh

ferred

and

stock

"specula¬

tive"

common

stock.
S

Mr.
h

statement

lows:

'"I

Thompson Smith

:-J of
fol¬

his- plan

Lee

have

tracts.

three

and

Blair

Mrs.

children

their

3701

reside

Traynham Road, Shaker Heights,
Ohio.,,

Stafford Hendrix, of Greenwich,

associated

Conn.,
Keister

Co.,

with

Adams,
Street,

Wall

New York City, has been elected
member of the board of direc¬
of the

Mississippi Glass Co.,

manufacturers of several types of

building glass.

The company has

plants in St. Louis, Missouri and

Fullerton,

it is

who knows

man

anything about the history of this

volatile profession of selling securities will ever commit.
people are in an investing frame of mind that Is the time to
get yours.
If you don't you will be the one that will lose out in
highly

Hendrix Elected Director

tors

when

mistake that
*

on.
If there is any time
intelligent to take it easy for a while, it is when busi¬
ness is slow, not when it is good.
The salesman who has a couple
of good months and then begins to take things easy is making a

the fellow who harvests when the feast is

and

Mr,

Calif.

Suggestions For

Retail Investment Dealers

When

the end.

(Someday, if

get sensible and equitable tax legis¬
lation, the government will recognize that security salesmen, deal¬
ers* brokers, etc., should be allowed to average their annual earn¬
ings over a stated period such as seven years, instead of chopping
off our heads when we have one or two good years out of 10 and
then giving no allowance for the inevitable lean years that are also
always with us.)
we ever

So there it is—that is
who have made

the way I have found

financial

dishes

and

tions

the

cated

senior

Compli¬

year.

securities

can

some

Jr.,

WEST POINT MFG. @
Soundly,

entrenched

earned

pany

$9.20

common—1947

dicated
extras.

textile
in

Financial

rate

40
com¬

1947

dividend

the

Bond

$4.90 in¬

$3.00

position

plus

strong.

The common carrying an indicated
yield of 7,/2% plus and priced at
around 4% times earnings, makes

elected

Club

The

Financial

Chronicle)

ANGELES, CALIF.

Seventh

soft

the

oldest

drink

business.

Bevan

field

was

Mr.

their

staff.

Mr.

outstanding

were

Wil¬

IV,

Millard F. West, Auchincloss, Par¬
ker

are

Redpath, Governors.

John

Y. G. Walker, Jr.
associated with the firm

and

now

registered

representatives.

Incorporated

►'

&
,

Co.

St, Boston 10, Mass.

HUbbard 2-0773

Tel. BS 189

fa¬

the

enterprise and
convinced of its great speculative

been

It calls for the

paid in

profit to be
stock dividends.

common

"As you know, large operations

DRILLING

savings

1929

•*"

rea¬

why the SEC would not grant
approval. Such approval would
be of definite value in assuring

through cooperative action. Stock

participation has proven to be the
greatest, most flexible, coopera¬
movement

the * world

has

known. It backs all socialistic

financing.

their

interest

Simpson

Company
&

California Building, Denver 2, Colorado

Interest rates on

Telephone KEyrtone 3101

Bell Teletype DN151

are

down

lowest

conservative

return

first preferred stocks, such is¬
are

Street
.

they receive and though
investments by the savings
in new construction have

the

banks

not been

great

companies',
of

one

the insurance

nevertheless

these

the

real

every¬

depositors

estate

is- also

business.

Tak¬

ing the population figures shown
by the census of 1940, 62% of the
nation is either

policyholder in

the insurance companies or a de¬

positor in
in

not

state savings
banks,
Therefore, why is it

our

both.

possible, with the propaganda
available today, to in¬

facilities

terest the public in this
suggested
form of investment?"

New Shields Branch fii

Houston Under Buck
.

HOUSTON, TEXAS—Shields &

Co.

the opening of an
Esperson Building,
Texas, with James R,

announces

office

the

Houston,

and Robert R.

Harmon

Assistant

Manager.
It is
the

one

first

of¬

fices to be

es¬

tablished
Houston

by a

national

un¬

derwriting
with

house

membership
in
the New;;
Stock

York

Exchange, the

being

floated

Wall

at half those
estate, in spite of all
imposed upon it, re¬
mains among the most attractive
investment propositions today.

rates.

nowadays

Real

restrictions

James

Buck

firm

pointed
out in making the announcement,
citing it as a significant step in
the financial growth and develop¬
both

the

and the

city

The principals of the

office have had previous fi¬

new

nancial

experience

Texas*

1924, Mr. Buck joined Charles W.
Folds

organize Folds, Buck &

In the early 1940s he founded

Co-.

Buck

& Co.,

general securities

business, in Houston. He had pre¬

viously been associated with A. G.
Becker & Co., where he organized
the £ investment

'' in

department

1919, Halsey, Stuart & Co. and the
bond

may never

point.
Whereas
6% and sometimes 8% used to be

sues

B. E.

balance of over $1,200.
also concerned about the

are

ment

over": 7 !

average

They

Southwest.

set-up there is

considered

Established

are

depositors in the
banks in this state with

financial

tate

COMPANY

There

active

require approval for any such
set-up from the SEC.: On a sound

conservative bond issues

OIL

business.

million

department

Trust &

resident

Co.

and

with

vestment

the

was

Harris

formerly

Dallas where

associated
&

the

Savings Bank in Chicago.

Harmon

Mr;

portune for modernizing real es¬

KINNEY-COASTAL OIL COMPANY

request

with

"Furthermore, there
CRESSON CONS. GOLD M. & M. CO.

policy¬

dividend

and, whether they like it or not,
they are definitely in v the real
estate

be another time in history so op¬

KUTZ CANON OIL & GAS CO.

A. G. WOGLOM
49 Federal

miliar

persons

schemes off the map.

MARKETS

•

descriptions

promoters of

project—these

tive

MACKINNIE
Statistical

managers > and

the

Riter* & Co., 40
liam C. Coe, Mackall & Coe, ViceWall Street, investors that here is something
President; Austin Rohrbaugh, New York City, members of the in real estate that, insofar as is
Robinson Rohrbaugh & Lukens, New York Stock Exchange, an¬ humanly possible, can't go sour.
nounce
that Henry H. Williams,
"The
Secretary - Treasurer;
only way for the little
Edgar f; B.
John A. Andresen, Henry G. Riter,
man to stay in this swim would be
Rouse, Robert C. Jones & Co., and

specula-,

tive vehicles.

cover

son

Riter Adds Four to Staff

American

the
major stockholder.
Developments
now
taking place
make Moxie common one of

ers,

the

may

•

Bevan

previously with Conrad, Bruce

PRIMARY TRADING
in

Distillers

tomorrow's

—

expect

motion could be covered by com¬ -Buck as Res.dent Manager
mon stock, reserved for the own¬

ever

names

issue to

high-yield participation
of strong investment appeal. Fi¬
nally, the top quarter of the pro¬

met.

Street, have added Arnold

MOXIE @ 6%
One

stock

servative

Dempsey-Tegeler & Co., 210 West

this stock worthy of investigation.
*

preferred

about one-quarter of the property
value.
This would offer a con¬

ferred stock dividends have

of Johnston, Lemon & Co.

Other officers elected
*

property. It calls for all net earn¬
ings, after bond interest and pre¬

Cramer succeeds Harvey B. Gram,

structure,

refinancing plan

be accomplished.
*

LOS

C.—Fenton
was

Washington at the annual
day at the Manor. Club.

$7 this

earn

however, bars dividends until
recapitalization

President

prognostication

stock could

and

year

egg

paper

warrant

that this

WASHINGTON, D.
Cramer, Ferris & Co.,

and apple
pie
plates,
cups.—-Certain condi-

trays,

(Special

companies

long • shot.
It represents -onequarter of the actual value of the

Washington Bond Club

m 9H
Manufacturers
paper

bonds for money that
absolutely safe in every
sense of the word.
;/
Add to that 50% first mortgage

Dempsey-Tegeler

insurance

who

mtist

G. F. Cramer Heads

life

total of 75 million

holders

success

Adds BeVart
KEYES FIBRE COMMON

"The

have

want these

it anyway. The
:
selling securities first of all attractiveness.
have had brains and they used them, they never became discour¬
"Now, common stock means
aged, and when business was good they worked twice as hard as control, v It is the voting stock. It
when it was not.
Once again investor psychology has turned and means that if the owners wish to
the public is interested in securities, r The men who are going to sell the
property, they merely sell
make a success during the rest of the year will be the "doers"—it their stock.
This common stock
is always, this way;
.
~
,
' /
,
'
would not be 'watered stock* by
men

course

are

ties?

an
an

they have been able to overcome discouragement.
The men who
....4dea which I
have gone ahead in good years and bad are the fellows who have am
suggesting and believe it will
tossed their worries aside and redoubled their efforts when slow
provide «private developers the
markets and investor indifference made the going tough.
There
financing for large scale construc¬
for about six years.,
,»
' / /
is no doubt about it—there are times when it is difficult to interest
tion./ It seems to me that real
During the war, Mr. Blair per¬ security buyers in parting with their cash—but there is always a
estate should shake off some of its
formed legal and administrative certain amount of business to be had even in depressions.
We all feudal
inhibitions, take a page out
duties for the. War Department know
too that the best time to buy securities is when no one wants of the
success story of modern in¬
and was assigned to the Cleveland
them.
It's an old cliche that is repeated so often by almost every¬
dustrial financing and go in for
Ordnance District.
He is a past
one, yet only a few men in the securities business use this most com¬ sound
bonds, first preferred stock
President of the Youngstown Jun¬
pelling argument as an inducement to buy securities during such and
speculative common stock. I
ior Chamber of Commerce and times.. Those who
do, reap a harvest of good will and future re¬ am convinced that
safe, popular
of the Ohio State Junior Cham¬ wards when cash becomes less
wary and markets revive.
and productive building financing
ber of Commerce.
For the last
Another thing I have noticed about the successful salesmen in can be
arranged with an invest¬
eight
years,
he
has
been
a
the investment business whom I have known—and I am talking ment bond
issue, secured by a
member of the faculty of the
about those who have made money out of this business—they re¬ first
mortgage of not more than
Cleveland-Marshall Law School,
double their efforts when business is good.
The man who makes a one-half of the value of the prop¬
where he conducts a class on con¬
real financial success out of a feast or famine type of business is
erty. Any cautious investor would
.

I appreciate that
'bugs' in this sugges¬
tion, one of which probably oc¬
curs
to you as I speak, being of
importance; How to interest the
public in purchasing these securi¬

of bonds, pre¬

in mighty

comes

fir

comb ination

They arrange each day so that they produce the most
the least effort.
They study a plan of campaign. > If they don't

Then there is another attribute of character

thro

work.

Bank

i.e.

with
Dempsey will
find
Wilbur T. Blair
continue
as
business by going after it in one way they use another.
They think
\
v:
v'<
outside coun¬
more than they work—but the kind of thinking they do is the most
sel of the bank.
;0-v--v
constructive aqd productive type of work, v The execution of their
Mr.
Blair
became
associated
plans is only the end result of solid and systematic thinking.
with

pres¬

financing real estate through mortgage loans, and
proposed
in3>—
———

was

Rauscher, Pierce

has

represented; in¬

banking firms in Texas
Southwest,

including

Brown Brothers Harriman & Co.,
Lazard

Freres

Co.

and,

since

the war, Shields & Co.
Other branch offices of Shields
& Co.

are

in Chicago and Boston,

(2431)

Purchasing Agents Report Business Optimism
Business Survey Committee indicates purchasing
agents look for
favorable business conditions throughout 1948, but
reports buying

policy remains predominantly

"hand-to-mouth"

to 90

for commitments.

days basis
,

•

•)

A real

tone of optimism is reflected in the reports of the
Busi-J
Survey Committee of the National Association of Purchasing

ness

Easing

in supply: Acetic acid,
alloy^ tubings copper and
brass rod, small
motors, fuel oil,

incteased*

during

this

month,

the trend

and

could
them

carry

back

Wants Controls Lifted

'copper

glycerine, hand tools, grey iron
castings, nitro fertilizers, oxalic
acid, paipt, paper, propane, rubber
hose, shipping containers, tallow,

On Residential Hotels

tires,
screw
machine
plastic mouldings. ; /

F.-O.

products,
'

Cosgrove, President of Hotel Association of New York City,
residential hotels are squeezed by rising costs and slower sales

says

Employment

•

Agents for May, of which Robert C. Swanton, of Winchester Repeat¬
ing. Arms Co. is Chairman. Says the report: Backlogs of orders have
again

Notes bonds

rooms.

May the trend turned from

New York

below

residential

hotels

remain

par.

March

and April and is pointed
There is still much reduced

New York's residential hotels are being squeezed between rising
costs and slower room sales, according to Fred O. Cosgrove, Presi¬
running time reported, caused by! dent, Hotel Association of New York City, Inc.
ingot, copper fittings, cotton bags;
Operating costs, both
corrugated paperboard, fats and shortages in critical materials re¬ labor and supplies, steadily have advanced while total room sales
sulting from the coal strike cut-! of residential
'
oils, linseed oil, Southern pine;
❖back
on
production.
The
machined parts, magnetos, mer->
de¬
large hotels
supply costs and increased service
strike in the automotive
industry clined.
cury, mersol, wastepaper, building
They
prices, from 1946, to the present
is being felt by parts
suppliers,! rented 93.4%
paper, propane, resins, some ship¬
these permanent room rates only

Decreases

noted:

bras^

Alcohol,

up.

the

February

high

level

condi t ions

continue

improve.

oils-mixed.

May

pro¬

duction

slightly

off

from

April,

showing

ef¬

fects

o'f

coal

Robert C. Swanton

str i k e

the

will

^ which
continue

felt

for

two

'with

consequent temporary lay-;
Overtime is disappearing in-

of their

offs.

first

housing rents.

many

ping containers and cartons, soap,
steel, tallow, turpentine, vegetable

industries.

quarterof 1948

Permanent

Hard to get: Aluminum, anti¬
freeze, ammonia, cadmium, caustic

soda, chromic acid, coal tar prod¬
ucts, coke, conduit,, copper pipe;
lead, better quality hardwoods;

nails,

nickel, better grades
of
crude rubber, steel, rayon
yarn,
nylon, tin, zinc. 777>'!.i7';7;;!V77f

General
same

business

off

little,

about

the

steady., Pro¬
back

orders;

diminishing, prices trending up^
inventories holding
evqn, employ-;
ment

easing,

buying

policy

the

three

months; also production in¬
terruptions caused by other work
stoppages.
''
•'
.

definite

The

action

promote

Reports in 1947, for first time since

f business stabilization through
price reductions; the firm stand
excessive

against

taken

savings

■

The Federal Reserve Board has released
a-summary of the re¬
sults of the 1948 Survey of Consumers
Finances, conducted for the
Board by the Survey Research
Center, University of Michigan. Ac¬
cording to the survey, consumer financial status was still
strong but
.

was

weakening somewhat.

total

Of the<^

number of 48.4 million

spending

sumer

million

units,

about

Commodity Prices

prices

Industrial

incomes above $5,000,

money

with

trend

sumer

steady,

are

stabilize.

The

units

$3,000.

For

there

2.5
1946

had

incomes

consumers

was

rise

con¬

The

conclusion

in this city, reflect a gen¬
easing in transient room sales

rooms

eral

current

residential

Many

survey

occupancy

90%

this time last year.

over

hotels

"The

sale

Permanent

from

rooms

which

transient

Cosgrove in stressing the need for
prices on permanent, accommoda¬
tions
that
will
produce a fair

transients.

remain

rooms

under

facilities

profit

lifted

were

present plight of many
hotels," declared Mr.

residential

kept out of the red until now be¬
cause
their operating
losses on
permanent rooms were offset by
the

Bonds Far Below Face Value

here

the costs of their

ices and

Feb¬

serv¬

supplies, "is reflected in

ruary,

the market quotations of their se¬

the

curities, most of which

showed

the

first

signs of weakening in 1947 in that
fewer spending units held liquid
assets

there

than

the

Cosgrove

of i consumers

below

is that the general financial status

whole

Fred

hotel

rent, controls

con¬

in 1947 than in

while about 2.5 million fewer

fr.

70%

off 6.8%

holding liquid assets and about $3 million -i\
bonds than year before. Foresees consumer !
expenditures for durable goods and houses growing.

had

the balance of 1948.

all

had less

wage

num-

with

demands; the growing realization that aid to Europe and de
fense
preparations cannot have
much disturbing effect on general
business this year, coupled with
the continuing high rate1 of de¬
mand and production, indicate to
the reporting Purchasing Agents
that generally favorable business
conditions may continue through

decline in

was

ho¬

203

ber of spending units

being

there

war,

a comparable apartment
building of the same size showed
that the hotel had approximately
90
employees, exclusive of the
food
and
beverage department,
representing a total payroll of
more than $180,000 a year—while
the
apartment building had "14
employees at a yearly cost of
$28,000.

repre¬

tels with

hotel

which

supplies

with any other form

hotel and

asso¬

sents

Federal Reserve Analyzes Consumer Finances

sales,

according
t o
Cosgrove,
ciation

residential

include

come

housing.
For example, an an¬
alysis of a 315-unit residential-

Mr.

whose

ordinary

Slow¬

room

1947

same

period.

do not

much

facilities

with 96.3%

last month,

increased

rooms

the

compared
in

Canada

duction

at the

1947. And to meet, in part,
heavy increase in operating
costs of all hotels, transient rates
were raised an average of 17%.

end of the year and

Some Lose 32c

substantial increase in

was a

total indebtedness.

Most

consum¬

/ -'

Day

"Fifteen

active

issues

Permanent Rooms

hotels

owned

are

investors.

average

now

New

bond'

mortgage

York

have

residential

market

value,

token ^reduction

made

steel

prices is about balanced by freight

increases.

rate
v

expect these
steel

ency

for

price

and

will

the

items

inflationary

the

believe

slightly

buyers

reductions in

electrical

and

effective brake

influences

However,

tend-

downward

balance of the

year,

pro¬

viding business can hold the line
against higher wage demands and

10%

in total money income.!' Alt

most

50%

siderable

Inventories
•

■

about

the

same

the

ing to safe operating minimums.
few, 4%, have higher stocks
than in
March and
April. The
reasons: production drops, the ef¬
fects of coal and other strikes,
delivery of materials which have
been delayed by strikes, as af¬
fected operators come back into
more normal production. Inven¬
A

tories

continue

receive

the

selective attention required by the

generally cautious buying policy.
&

a:'v

W >•:

;

Buying Policy
The forward commitment range
remains predominantly "hand-tomouth" to 90 days. 91%, the same

reported in April, are main¬
taining that position. Within that
bracket, however, the movement
as

has

been

away

from the shorter

term and into the 90-day category.

A substantial increase in the
;

ber< at
is

;

that

end

the

num-

bracket

reported. While more confiin future business * is ex¬

dence

pressed,

comments

to continued caution
more

strongly

run
as

and

commodities become readily

available and competition steadily
.increases.
*

•

♦.

Specific Commodity Changes

Coal

led

creases.
.

modities
short

the

list

of price inimportant
comreported
up
were
of

Other

of them up¬
ward adjustment of freight rates.
"

:•

range,

Increased

many

were:

1946, but
of

that

felt

these

con¬

con4

because

Aluminum, alka¬

lies, cyanides, concrete, coal, coke,
drop forgings, storage batteries,
hides,
leather,
lumber - mixed,

menthol, paint, pigments,
num, sand, shooks.

plati¬

the

higher cost of living they were
worse
off financially at the end
of the year than at the beginning.
About 30% of all spending units
had substantially the same money
in

1947

20%

Total

picture

past few months. 52% report hold¬

incomes

money

;

ufhits

1946,

and

income

experienced

declines.

The over-all inventory

remains

spending

number

units

sumer

about

than

1947

income

serious work stoppages.

higher

reported
in

all

holdings of personal liquid

assets
(i.e.,
checking
accounts,
savings accounts, or government

bonds)

increased

somewhat

1947, although at a much slower
rate
than
during the previous

Consumer units at higher

year^.

strong

financial

status

employment- and

levels

peak
all

liquid
and

since

income

and

are

widely

uted, and (2) well
of

over

distrib¬

two-thirds

spending

units

still

their

possession

assets

sizable

amounts

have

held

are

people in all income groups.
The

a
(1)

outlook

expenditures

that

for

roorrv.in
York

representative

residentiar

hotels

New

houses,

age

is 320 more

than the

daily permanent

rate.

and

there is no change in pros¬
pective demand for other selected

Hotels' costs and rates.
which

alone

Services,

durable goods.
In addition, it is
possible that immediate consumer

60% of
residential hotels total operating
expenses, now are 100% greater

demand for

than in 1940. Between 15 and 20%

goods

certain types of dur¬

has

increased

further

employees

represent

for

care

the

needed today

are

same

number

due principally to the in¬
auguration of the five-day week
rooms,

Between

1946.

1940

have increased

wages

and

now,

follows:

the

of people holding
savings accounts.

number

checking

The total amount of net

consumers,

continued

to * the

survey

decline in

1947, the
dis-saving (i.e., expenditures in excess of
income) on the part of more than
one-fourth of all spending units
result

and

further

somewhat

saved
The

heavy

smaller

oth^r

amounts

spending

substantial dissaving

reflected

consumer

units.
in 1947

willingness to

Many v consumers
draw on their
liquid assets or to borrow for the
purpose of purchasing consumer
freely.-

spend
were

willing

durable

slackening in the rate of

turnover of such assets.
-

The

survey

reports that in

or¬

der'for spending units to satisfy
their demand for

larly

houses, particu¬

houses,

new

will need to be

tial

increase

mortgage

credit.

account for

the

total

1948, there

further substan¬
the

volume

Since

veterans

approximately half of

housing

demand,

slackening in requests from vet¬
erans

for

mortgage

loans

anticipated.

can

elevator

men

123%.

"Meanwhile
needed

prices of supplies
by residential hotels are

'!"'*;!w'" 7"'-

Number six fuel oil that

gallon

now

costs

Ralph Bloom Dead
Ralph
May

Bloom

24.

Co.,
•

Culbertsori,

Chicago,
'

died

$29,071,558

average

these

and

man

residential

received

1947

most

little

8.68%.

the

owner

woman

—

mortgage bonds
of 4.12%

average

stockholders

nothing

received

their invest¬

ments in such hotels."
!

,7:7

■

: '

•

•••,:•. V

Chas. A. Par cells & Co.
Adds Worcester
>

DETROIT,
Worcester

with

has

Charles

Penobscot

Staff

MICH. —Philip
become

associated

Parcel Is

Co.,
members of
Exchange, ac¬

Building,

shades

that

could

made

prior
Co.

thereto

"When

prices

—

Housing:

residential

their

De¬

listed securities.

Rent

car

motor

CORPORATION
Common

PrUe
Prospectus

Stock

$1
be

may

is a tut m-

P,SS ^SSt of seem^ of
ber of the National A^S ^ un(ler«gntd.
regis

Advances

;

Masonite

$1.72.

laundry up 100%, home
and paper " supplies,
each
up
113%, floor coverings
117%, and linen costs and clean¬
ing supplies each up 166%.
Only

the

partment of the Parcells Co. and
will specialize in

equipment

Granted

with

He will be in the Sales

clude:

Stock

40 a
Window

bought for
Venetian
blinds that were $5.70 now cost
$17.50.
The percentage advances
in
costs
of other
supplies and
services in the last eight years in¬
cost

now

Detroit

was

110.

hotels'

permanent

rates—were frozen

sales

ties

Dealers, or

room

by the

Office of Price Administration in

Olsen

581,030

I Although the public

cording to an announcement just
by the firm. Mr. Worcester
has recently been with Clayton &
Lambert Manufacturing Co. and

up 66%, window washers
maids 97%, package room
108%,
housemen
119%,
telephone
operators
120%, and

rental

their

reduced

89%,

430

goods or' meeting higher

living costs.

of current in¬

out

according

come

saving

buying these goods, and there has
been

hotels

bellboys
porters

the

1946 and was the primary factor
accounting for the smaller num¬
ber of people holding liquid as¬
sets. There was little or no change

these

mortgage indebtedness from $31,-

the

beginning of 1948 purchased continues to rise, how¬ averaging 160% higher than those
than a year earlier. This decline ever, increasingly larger amounts of 1940.
Rice coal that in 1940
extended the tendency noted in of
liquid assets are being used in cost $6 a ton now costs $11.30.
bonds

Between the end of 1943 and

1947

says

bonds, however, is $29,071,-

558.

The faceWalue of

such

aver-

rental

room
-

able

of $19,108,688.

averages

goods
"Residential ^hotels'
operating
the report, will'
costs
have
more
than
doubled
continue
in
expanding volume.
Buying intentions for new cars since 1940, according to a survey
of
New
York
City Residential
still exceed expected production,

and

according to'Amott, Baker & Co.,

$2.97, which ; means," explained
Mr.
Cosgrove, "that total daily
costs
of
producing the average
room

durable

permanent

$2.65, but the operating cost and
expense of these rooms average

•

consumer

levels held a relatively since the
survey, which was taken
large share of the liquid < assets before the proposed increase in
but, as noted in the, first two sur¬ military expenditures.
There is
veys, lower income groups con¬ also a
tendency for a greater pro¬
tinued to have sizable amounts of portion of consumer durable goods
liquid resources to draw upon. to be bought on a credit basis to¬
In 1947, however, for the first
day fhan a year ago and for a
time since the end of the war; somewhat smaller
proportion to
there was
some
decline in
the be
bought through use of accumu¬
number of spending units holding
lated liquid savings. As the vol¬
liquid assets. About three million
ume
of consumer durable goods
fewer spending units had savings
income

"The daily rate of

howevej-, continue; to have

ers,

March, 1943, they were lower than
they had been in 1939.. Then their
average rooms rented for $3.03 a
day against $2.71 a day in 1943.
Meanwhile, in contrast to higher

TELLIER
42

Broadway
Tel.

Hew

Dlgby

co.

York 4,

4-4500

N.Y.

CHRONICLE

FINANCIAL

COMMERCIAL

THE

(2432)

Preparing Children for War

Canadian Securities

By ROGER W. BABSON

Mr.
:

By WILLIAM J. McKAY
The Canadian International Trade Fair, an event unique in
American

best

range,

preciated that the current volume
of trade, great as it is, can still be
expanded as a result of mutual

previous conceptions of the
Dominion as mainly an agricultu¬
ral producer will be rudely shat¬

customer

concessions. Furthermore as a re¬
sult of

tered.

toric

Canada

path

the

his¬

the

follows

trading

great

the

education

for this contingency.

the Dominion would then

and

important practical step to¬
wards a renewed stimulation of

able to bear

international
venture

not conceived in hap¬

was

hazard

fashion,
planned nearly
and the timing
coincide

bold

This

trade.

with

was

first

years

ago,

two

arranged

was

of the

the end

re¬

be solved,

U. S. dollars would

larger share of the

of European-

burden

relief^It is
opportune/therefore to consider
the advisability of early U. S.¬
tariff -discussions

Canadian
the

tterminating

object

the two countries.:

tween

insurance

business

and

ments—George

Since the break¬

S.-British-Cana-

down

dian

the

exchange
foreseen in

has

triangle, Canada
characteristically

and

realistic fashion,

-adopt

the necessity to

economic

independent

Unlike most other

course.

coun¬

and

Others

price $4.50. Ten
$4.00 each.)

tries where economic policies are
dictated b,y force of uncontrol-

able

internal

cir¬

external

and

cumstances, Canada, by virtue of
her

tremendous

latent

resources

her proven capable manage¬
ment, is uniquely situated to pur¬
sue
successfully a predetermined

and

economic

irregular although Western

oil, base-metal, and
of

most

paper

recent

their

issues

gains,

Consolidated? Mining
&
Smelting stock moving into new

with

high ground.
clined
cent

The golds

weaken

spurt

after

were

their

devaluations.

rency

also

rumors

There

measure

dence

only
fort

however

over a

tunate

the

serve

until

gap

rent

long period.

therefore

can

achieved

result of persistent ef¬

as a

tion

of economic indepen¬

that

EC A

cur¬

bridge
the

opera¬

will

program

the

results

immediate
of

the

cur¬

long-term planning begin to

exert their beneficial effect.

most

important

Canadian

current

gram

objective

the

The

economic

establishment

the
pro¬

healthy balance of U. S.-Canadian
trade.

The tariff concessions ob¬

tained

at Geneva are not suffi¬
cient to achieve this
purpose and
Canada • therefore
is
obliged to
seek further U. S.

cooperation in

this

direction.

far

this

Chicago Ex. Entertains
Contest Winners

Du Val's Consensus
Weekly
advisory service giving "total mar¬
ket opinion" in a non-technical,
one-page report—free copy on re¬
—

quest; write to Department P-1100
Du Val's
Investment Consensus,
542

Fifth

Avenue, New York 19,

N. Y.

Economic Reconstruction of Eu¬

The

rope,

Geoffrey Crowther—
College,
Ciaremont.

—

Claremont

Calif.—$2.75.

ment

Contest

tained at

enter¬

Tuesday, June 1.
completed on

contest

May

\ftould

luncheon at the Union

League Club
The

was

14,

and the awards were
the
annual
Junior
Achievement banquet held at the
made

were:

Earl

Slifkin, for the
center; Richard

Dickerson, for the north side bus¬
iness center; and Maraveen Musick
same

time,

six

junior

Krarnp, Edward Poe., Jr., Ronald
Ring, Audrey Jordan,-'James S.
Chrysokos and Herbert Lund. ?;;■
Also
will

present

the

Director

Achievement
P.

Thomas

Executive

luncheon

Pendergast,
of

Junior

and

Chicago; Homer

Carl

Ogren, Vice-

Presidents, and Walter R. Hawes,
Treasurer., of the Exchange.
r. Following the luncheon the boys
and girls will visit the
Exchange.

stitutional

Government, Inc., BarBuilding, New York 17,
N, Y.—Cloth—$4;
holomew

Pattern
"or

Revolt-^-A

for

regaining

pattern
liberalism —

true

E. Read—Joseph D. McInc., 461 Eighth Avenue,
New York 1,' N.'Y.^-IO copies $4.25
(lower rates on larger quantities).

Guire,

.v,-pj jr.

:■

■

Stock Market, The—Basic Guide

for

Investors—Joseph Mindell—B.
C. Forbes & Sons Publishing Co.,
Inc., 120 Fifth Avenue, New York
li, N. Y. /;?•?:? y?/yf

FIG Banks Place Debs.
A successful

offering of two is¬

of debentures of the Federal

sues

Intermediate
made
New

Credit

Banks

was

May 19 by Charles R. Dunn,;
York/fiscal agent for the

banks.

The financing consisted of
$30,083,000 1.45% consolidated de¬

bentures

due

dated

June

1948

and

Nov.

1, 1948, and $53,295,000
consolidated
debentures

1.55%

dated June 1, 1948 and due March

1, 1949. Both issues
par.

;

were placed at
Of the proceeds, $48,855,000

will, be
amount

used
of

retire

debentures

maturing
1,

tures

amount to

amount of

deben¬

be
outstanding
$520,325,000.

will

NEW VORK S.

Jurt

Strauss

engaging in

securities business from offices at
52 Wall
Street, New York

City.

NY-t-1045

VyV

CHICAGO,
chell
La

Salle

ILL.—Remer; Mit¬
Reitzel, Inc., 208 South
Street, announce that

William J.

N. Y.

E. H. Lucas Opens
WORTH 4-24Q0-

Wm. J. Reams Willi

;

FLORENCE, S. C.—E.
engaging in

now

asso¬

ciated with them in their Trading

H. Lucas

securities

from offices in the
Trust Building.
ness

Kearns

busi¬

Florence

Department.

from
the
"Street" for several years, Kearns
was
with Winthrop, Mitchell &
Co.
for
some
years.,
and
prior
Away

thereto with Colvin & Co.

——

scare

with their propaganda;

This is
important
for
thoss
expect to- inherit money or

who

position. A year's training of this
sort would be the very best in¬
that

surance

give

could

children
M ./■'

our

children.

;

possibly

and

grand¬

Get. Some. Mechanical Training
i: Such

year's. training. would
take the place., of a college

not

which

teaches

foundations. I

very

necessary

simply appeal¬

children.

ing that after this formal educa¬

Hence, Mrs.

tion

y™y??:.??y / ;

Babson and I
earnings to help

have devoted

our

the Babson Institute to train men,

College to train

Webber

women,

Utopia College in "the center
country", to train both

and

.of

the

young men and women,

?•;,?

reader knows that the
most important of all investments
are in character, health and edu¬
cation. Everything else, whether
real

lumbering and the other basic in¬
dustries

which

upon

nation

our

depend; ^.Cer¬
should' know more

must

tainly,- they
about

the

their

food,

industries

which

upon,

clothing and shelter
> ?.?:; •";
?y ?. / '?•.

depends.;:-:

bank accounts or
can fade away. This

estate,

not

saying that they will, but
through taxation during peacetime
and confiscation during wartime,
it is constantly

going to be harder
profit from what
money they inherit from us par¬
ents. Therefore, we should keep
our
children in college just as
children

long

completed,
before our
people settle; down, they
take a year of -intensive
training in mechanical work, agri¬
culture, ranching*, oil production,

bonds,

stocks,
is

young

should

ultimately

Every

possibly

can,

and, if

subsidize them in the
so

that

they

get

can

Enyarl Consolidates
Willi First Securities I
CHICAGO, ILL.—First Securi¬
Company of Chicago, mem¬
bers Chicago Stock Exchange; an¬
ties

the

nounce,

them

'consolidation

business

the

with

Enyart,
VanCamp & Co., Inc., and the elec¬
tion

Charles

Owen

and have children.

Enyart ?and

V. VanCamp as Vice-Pres¬

idents

What About Marriage?

and

Jean

Horacek!

Assistant. Treasurer

; We should perhaps change our
The amalgamation of. these two
ideas as to marriage, support of well known securities firms, ac¬
families and education; The pres¬ cording to Leston B. Nay. Presi¬

children

whereby

theory,

should get through college as soon

and not get married
"paddle their own
without any? help / from

possible

until

able

Canoe"

home, may be wrong. Better have
them take a longer time for their
education including an intensive
year's course in Mechanics.
In the Balkan countries, Czech¬
oslovakia, Finland and eastern
Germany, the native young people
have

who

fared

the worst under

Communistic regimes are

the sons

of
well-to-do
people, many of whom have been
liquidated. The poor people are
better off than they ever were;
but the ones who are really suf¬
daughters

the sons and daughters
of the upper middle-classes who
were living a life of more or less
ease.
Their
parents have? been
stripped of their lands, stocks and
bonds. Only those young people
who had been trained to be agri¬

fering

are

culturalists, physicians, dentists,
scientists, engineers, accountants,
mechanics

protected.

many

Importance of

Too

skilled

other

and

workers have been

June 1 and the balance of $35,270,000 is new money.
As of June

*—

with strikes and

Babson

and

Renter, Mitchell Firm

Jurt Strauss in New York

INCORPORATED

atio no f

• c

meantime

TWO WALL STREET '

married

Hargrave, Chairman; F. Joseph 1948, the total

Butler

A. E. AMES & CO.

with the edu-

necessary,
if

the

0 connection

for

the winners of the Junior Achieve¬

achievers who received honorable
mention will also be included at
the luncheon.
They are: Laverne

CANADIAN STOCKS

through 1947—New * York 1 Curb
Exchange, 86 Trinity Place, New
York 6, N.Y.
r
* f "
- ;

Leonard

CHICAGO, ILL.—James E. Day,
President of the Chicago Stock
Exchange, announce May 28 that

for the south side business center.

CORPORATION

in each year; for 10 years or more

threaten

ent

MUNICIPAL

Exhange * on
been paid

have

;

es-

Keys to Prosperity, The—Will-

west side business

PROVINCIAL

/consider

ford I. King—Committee for .Con¬

whereby

market might be offered to gold
producers.

award

GOVERNMENT

the

plan

on May 18.
The winners of the Exchange's

com¬

of freedom in the world

Stevens Hotel

CANADIAN BONDS

dividends

International

.an

It is for¬

the

listing 266

/Curb

York

which

Than ?

issues dealt-in

were

V The goal

New

re¬

discussions with certain European

countries concerning possible

stock

pecially Tfm^
portant to

in¬

the report of ECA

Monetary Fund

course.

for

Decade—Booklet
mon

This

Roger

Dividends

"have not."

copies al

or more

who

those

?t#1

Specialty Stores

Goods Association1

Dry

ri ties,

secu

prestige, priv¬
ileges, etc., to

—Controllers'-Congress of the Na-r
tional Retail Dry Goods. As; ocia-f
tion, New",York, Ny Y.—paper—
$10.00 (to members of the Coh+
Retail

y3>

trollers' Congress and the Nationf

the higher level of the Dominion
bond market in Canada.
Stocks

held

Edition Johrv J. Kavanagh

—1948

knows.

no one

properties, especially

Operating Kefrjits of Depart

ment Stores

m a

obliged

give up much

;
,

sistent firmness of free funds and

were

Merchandising

the

period

eign commerce.

"have"

ciary Publishers, New York City
—Paper—$1.75.'; ?'.•?;*?,'V-\'{■? \ ?"• j
Departmental

•.'."?•■?.

with Russia will materialize,

a war

agreed

mated stage of full

not

Laikin—Fidu-i

be¬

trade

imbalance

chronic

with

and the esti¬ wise both countries face the al¬
peacetime pro¬ ternative of a further drastic limi¬
duction.
Consequently the Cana¬ tation of U. S.-Canadian com¬
dian exhibits are not merely for; merce and the-enforced adoption
show-window
purposes
and ; all- by Canada of ruthless economic
/
•.
i
litems displayed are available for- nationalism. ♦
immediate delivery.
During the week the recent
The staging of the Industrial strong trend in both the external
and internal sections of the bond
Fair at this time is only part of
market was further accentuatedj
Canada's long-range planning for
The internals especially were fa¬
industrial
development and the
extension of the Dominion's for¬ vorably influenced by the per¬
conversion

Death, Taxes and Your Business
—Discussion of survivor purchase

It, however, should be realized that the world is going through: a
great revolution comparable only to the French Revolution of over a
century ago.
Owing to this conflict between ideologies,, those who

balanced trading account

Whether

problem of Canada's shortage

nations of the world and has tak¬
en

is also ap¬

and

in the

and

Thus

may oblige those "who
"have not," stresses value of
and importance of training for a trade as preparation

anrials,

by the Canadian showing
industrial and commercial

Babson, asserting conflict of ideologies

have" to give up much to those who

North

is symbolic of. Canadian progress in industrial
development.
Open to exhibits from all over the world more than
1,500 classifications of goods are represented and an estimated 35,000
buyers will attend.
Foreign buy-^
ers will be particularly impressed
country is concerned Canada is its

Thursday, June 3, 1948

young

dent

houses/;, y;

Enyart#" VanCamp & Co., -Inc.,
organized in 1932 at a time
when local municipal and county
was

governments found it necessary to
meet

payrolls

tion

warrants

salaries.

with tax anticipa¬
in

lieu

cash

Among the first houses

in Chicago to deal

in these

secu¬

rities, they performed a very con¬
structive job in helping, to solve
the

financial

also

difficulties

finance.

government

specialized

Chicago

suburban bank stocks,
Mr.

back

and

yy,•

LaSalle

Enyart's

connections

local

The; firm

Street

successively

to the old Fort Dearborn National

Bank, Merrill, Cox & Co., Curtis
and Sanger and as Vice-President
and director of Otte & Co.
been

member

the

He has

American

Institute of Banking and the Bond

Club

Traders

Chicago

since

k'.r?

1932.

f Mr.

VanCamp is
of

past Presi¬

Illinois

the

Securities

Dealers Association and Chairman

Trade

people

of service to. C' e

scope

clients of both

dent
'

First Securities, will en¬

large the;

are

the

finance

Amateur

committee

Athletic

Union.

the

has

into life inefficiently been
Treasurer
of
the
United
equipped manually. Most of them States'
Olympic Committee since
are helpless in putting a machine
1945.
VanCamp is a member of
together or in operating it or re¬ the Union
League Club of Ghicagb
pairing it. This applies to almost and was
Sports Commissioner for
everything from fixing a type¬
the Century of Progress./ ;?/
writer, to
operating farm ma¬
Mr. Horacek was Treasurer £rfd
chinery. Hence, our college grad¬
uates go out into the world with¬ director and one of the organizers
out the respect of labor. There¬ of Enyart, VanCamp &. Co., Inp.
fore, I believe every young person Prior to 1932, he was financial dis¬
should' spend
a
year
in some
play representative for the Chi¬
going

out

mechanical business

Some readers may be

school.

fortunate

have a mechanically
inclined boy or girl, but I am sure
enough

that many
me

that

cago

readers will agree with
children are too

Daily News for ten

gives labor'leaders the ability to

Enyart,

VanCamp & Co., Inc.'. has moved
to

the

First

Securities

most

helpless, This is one, reason which

years.

The entire personnel of

offices

located

Street, Chicago. "

134

Company
S.

LaSalle

Volume 167

THE

Number 4704

COMMERCIAL. &. FINANCIAL CHRONICLE
leaders demanded 'immediateex-

Attacks Unions' Bid for Rail Nationalization:
R. E.
^

Woodruff, President of Erie Railroad, says it would be
iitg wedge for nationalization of all industry.

!pansion of basic steelmaking fa¬
cilities to, support additional steel
production' oi' at least 10,000,000
tons of ingots.'
Such demands

openr

overlook: the fact that there could

Theproposal

demanding that thegov-

f
of the 21 railroad umons
ernment nationalize the railroads should be

viewed with the greatest

have

been 20 million

tons

"Steel.'during the past 30 months
alarm by all people of the United States, according to R. E. Woodruff,
had production not suffered from
President of the Erie RailroacL "It is an attack: on all American
strikes and work stoppages, di¬
institutions^-——•.

•

and, -i

u e a

7—;•

rected

is:

industry: is

'•

lof

T h e

^compared • with: the7 performance
railroad 'during* World; Wair Iv should ♦ be
proof enough that private operas

by, some

union leaders: /

those

basic

industrial and

9 '

Shulsky, Macko, and Stauffer
•

■

at the

Hotel Astor.

"World

The benefits from

cost.

lars, or an average of $300 for
have each additional ton of Steelmaking
these critical
times, when our gone to employes in higher wages capacity. Ten years ago the aver¬
greatest problem is to defend our and to the shipping ana traveling age investment per ingot ton for
system against the ever-present public in lower costs. These are representative companies was
threats of socialism and commu.- distinct contributions to the na¬ about one-fourth that figure.
;
'• ?
v"■;'//"/'v;
liism, we should be doing every¬ tional welfare.
"This industry
requires huge
"It has been demonstrated re¬ amounts of capital for replace¬
thing
humanly
possible; to ;
strengthen and preserve the prin¬ peatedly that under government ments, improvements, growth. It
ciples of private ownership of all operation all initiative is lost. Our cannot attract or generate capital
industry.
high standard of living is the re¬ without adequate profits.
If its
The
railroads
of
the
United sult of initiative and freedom of costs
get out of proper relation
States and one railroad in Canada opportunity. Through the invest¬ to
its capital, a moderate shrink¬
are
the last remaining railroads ment of private cap*tal and the
age in volume of business could
in the world that are not govern¬ re-investment of earnings in im¬
easily wipe out profits and create
ment-owned
or
controlled, Mr. provements
and modernization, the sort of condition which is
Woodruff stated. Because of this American industry has been able
typical of the jungle.
For some
private ownership, the American to increase its efficiency and pay
the

knell

death

enterprise

system.

this

railroads provide a superior serv¬
ice at lower cost to the public
than; any

world

country of the
though the pay enve¬

other

even

lope ■/ of, the ^average American
rdilroad employe is far ' greater
than railroad workers elsewhere.

^; "We have already had one sad
experience with complete govern¬
ment operation of the railroads
during the first Worjd War," said
Mr.1 Woodruff.

"That experience,

Outlines
■H^t;

lower

increased

efficiency

higher wages to employes. With¬
out this investment in better, tools

"Wall

realize the folly

the world

government ownership of in¬

dustry/'

„

Prospects of Steel Industry
prospects of the iron and steel

expan¬

part

that

conditional

process,

welcome

factors cannot be

of his address,
Mr.5 Tower

than

stated:

un¬

other

remedy:
:
:
"Substantial

"With

all

the talk about

shortage of pig
iron land
of
steel

products

arid clamor for

expansion o f
capacity,
the
question 7 of

could

slow

have

and

possibly remote
\

tonnages of steel
been added even to

year's high output, if enough
good quality scrap had been avail-'
able to permit maximum use of
ingot capacity. Scrap continues to
be a limiting factor for current
last

production:
"Ore supply,

seas

and

home.

measure

national

urer

B. Stauffet of

"Herald Trib¬

une,"

will

appear,

untilv a

supply

prolonged

Secrer

tary,

recent

meeting

and

York "Journal:——

——

News," London..

contributor

magazines.

various

•

The Association
1938

formed in

was

of business and
financial writers at leading New
York dailies, wire services and
by

group

other

certain

President

was

H. Eugene

dent

principal

Board of Gov-

Diclchuth

now

elected to the

.'■■■//;

Thomas E.

T.
E.
Applegate, Associate Press; Al¬
fred
F.
Connors, United Press
Association^ Inc.; Robert Denver
of the "World Telegram"; George
E.
Shea, Jr. of "Barron's" and
Thomas O. Waage of "Jpurnal of
■

nors:

Commerce."

first
Elliott V. Bell, then

New; York State Superinten¬
of Banks and one of the
.

advisors,
Dewey.

Governor

Every year since, its formation,
except during the war years, the
has
staged a show

Association
known

"The Financial Follies,"

the New York counterpart of the

Washington Gridiron dinners;

by members satirize and lampoon
current

five
+

wrote

han¬

Its

news.

skits/acted, written and produced

Mr. Dickhuth has been associ¬
ated with the "Herald Tribune"
for

publications

economic

dling

Thefollow-

years.
Before that he
m
n.
for- McClure
Newspaper

and

events

leading fig-

of the national

ures

...

This

scene.
,

„

Syndicate and during the war he Years show is scheduled
was United
States correspondent i 19 at the Hotel Astor,

for Nov.

are

■I;

in¬

defense

Telephone. Relay

about

Ys actual size.

Steelmakers,

double-barrelled

When you drop a nickel in a pay station
and dial a call —or dial from borne, or

dealt with

The

such.

It has heard

threat of permanent gov¬
control.
Although one
grant for the moment that
threat must have

duction

and

the idea

out

should

elsewhere."

—an

;

electrical switch that works

it,v' V.

lifetime.(:"■;■ -If

be exercised by government even
in these peace times,

cisely what we seek to prevent

relays leap into service when yqu
telephone, opening and closing circuity.
They operate millions of times in their

which

quarters that
mandatory controls over steel pro¬

press

These

some

distribution

-4'V

wink. You prob¬
ably don't know it exists. But you
couldn't make a telephone call with¬

come

Unthinking or irresponsible
the ominous fact is that
it was not generally decried. And
there may
be kinship between
in

far faster than you can

persons,

threats

telephone

1000

many

into action.

relay is the little device illustrated

above

from

persists

the open
ernment

such

—as

relays

I" •;f-... •'.'

•

Bell

Telephone Laboratories designed
relay and some of the Laboratories'
best scientific minds are spending all
their time improving it •: >

this

reports, a
labor union

•

with the New York "Times' and

"According to

■

is correspondent for "Com¬
merce,* Bombay, Union of India;

irigf/we ;e

Is it worth while to

talent

small

assign such great

device?

7: i>j V.'

'r...
^

Here is the

answer:

There

)

are more

•

than

100,000,000 relays in the Bell System

BELL TELEPHONE

and

LABORATORIES

they represent one dollar out of
six spent for equipment in dial
telephone exchanges.
^// / ; *

every

| A

great

working

research organization,
to

bring

you

the best

telephone service at
the lowest possible cost,
I.
possible

scrap

"Herald^

office

such

of the New

of the "Financial

has/ been referred to as semipublic? property', aqd as haying the
status of a 'public utility,' to be

any

* *

the New York

•

easing of

.arid'Fred

"Within the year your industry

may

* #

—;—1—

was

elected Treas¬

con¬

'
l'
i ' "If there is a crisis confronting
the other part the civilized world, there is also
of the metallics equation, presents a
Walter S. Tower
crisis confronting American in¬
raw
materials
a
somewhat similar problem. ; I
looks like the
dustry, and your industry in par-,
do not refer to the debatable point ticular.
most
Wearing the garb of re¬
immediate
and ; pressing
about estimated life of high-grade
covery programs and the insignia
problem*. Annual steelmaking ca¬
open-pit Lake ores. V That is a ■of preparedness1, relentless plan¬
pacity as of Jan, 1, 1948, Was above
separate problem, of a different ners >seek' powers to dictate to
5J4 million tons of ingots, v More
sort.
I refer only to apparent
capacity is being completed this
industry.
For the efficiency of
physical limitations on bringing
ye&rr'and still more is planned to
down the Lakes enough ore to private management they would
be available in 1949. By the end
substitute the- bungling of bu¬
of next year, therefore, steelmak¬ keep any more, possibly even ex¬
isting, furnaces, working at full reaucracy. Industry cannot afford
ing. capacity in this country Will
capacity. To remove such limita¬
top 36 million tons. But in spite
idly to watch little controls grown
tions will require expansion of
of increased capacity, there is real
into complete government direc¬
doubt whether the available sup¬ mines, of terminal handling facil¬
ities, of lake shipping and storage, tion of business. National plan¬
ply of metallics would have per¬
all involving heavy capital in¬ ners are the first
step toward eco¬
mitted, production, of more Than
vestment and considerable time
SO million tons of steel in 1948,
nomic dictators. / f
>
for completion.
Had there been no coal strike.
"Unless the people of this coun¬
"Basic
problems
like
these,
,4*A11 of you know the story of
however, are passed over lightly, try have enough sense to: recog¬
scrap, in tight supply and highnize the danger and the-courage
or wholly ignored by those noisy
priced for many months/ in spite
of theorists, who would to stop the process while there
of diligent efforts to help improve groups
have 10 to 20 million more tons
is still time, then we shall have
the position. Furthermore, there
of capacity created some Friday
seems little chance that any fun¬
succumbed, in this country to pre¬
by Federal fiat.
V

damental

Street

therefore,
problem
in keeping costs under close con¬
trol and protecting profits, which
alone permit private enterprise to
have

survive.

purposely^
holding
back period of slack industry permits
obsolescence
to
generate scrap
production
faster than it is consumed. And,
and 1
sion.

full

of the

Journal";

machinery by the millions Of creased costs of raw materials, of
investors from all walks of life,
wages
and
purchased
services.
America would soon find itsfelf Yet
they are expected to main¬
reduced to the status of an in¬ tain
plant facilities to meet every
ferior nation.
We need only to demand of steel
consuming indus¬
look around us at other nations tries, of economic recovery over¬

In reviewing the problems and

the

sumers

'Presi¬

and

industry/ Walter S. Tower, President of the American Iron and Steel
Institute', at the Annual Convention of the organization in New York
City pn May 27, stoutly refuted allegations that the industry /was
/

strange reason, steelmakers
expected to pass on to

not

Macko

sound

ejected

Vice

free

dents Charles

■

the

otherofficers elected by Association.!

Samuel Shulsky
was

capital: needs

are

American"^

Would

•

He succeeds Robert Denver of the New York

Telegram."

operation.

/4'

fribune," was elected President of the New; York Financial Writers';
Association at the annual meeting of the organization held May 27;

tidn is far superior to government

oiir:

■*

II. Eugene'Dickhuth, financial writer att the'New York

l/l -v

'"The question4 ofr

Financial Writers Choose Dickhuih President

same

tramps close on* the heels of raw.
materialsin the procession of
Even thougn the go.vr
social activity eriament found it necessary to in- problems wbirii marches on the
Steelteakeri FeW other industries
thatnationai- crease, freight rates 110% during
eall ifor IsuOh heavy capital re¬
ization as pro¬ its, periodof operation; the; gov¬
quirements/as 'does; steelmaking/
posed by these ernment lost $2 miriion a day.. In
With the problem made all the
unions
Would the last war under private opera¬
morO difficult by current inflated
have
far- tion/and management; there rwas
costs of - construction and equip¬
reaching e f- no: increase in freight rates and
ment.- ,v'■».'■•*" 'V/;..
/
the railroads paid $4 million ;a
fects
on
*4Take >" for example the pro¬
American lite day to the Federal Government
as we know it iiV taxes, In others words,; the tax¬
grams: Of improvement ana .'ex¬
t o d.a y,"< Mr. payers benefited to the extent of pansion which have been Under
Robert E. Woodruff
Woo dru f f $6 million a day or over $2 billion way. since fighting stopped.'
Iri
dollars a year under private man¬ the aggregate they are expected
/I. I: .=
''j-stated. :
■:
;
,•
•: ■ when completed to add some im¬
Continuing* his statement, Mr. agement. 4Woodruff pointed out that nation"Despite tremendous increases portant finishing facilities and
alization of the railroads would: in operating expenses since World about 5 million tons of annual
be the opening wedge for the na¬ War
I,
railroad efficiency ; has ingot capacity.
Estimated total
tionalization of all industry and given the public a better service cost exceeds 1:% billions of dol¬

mmim

(2433)

BELL

Design changes by Bell Telephone Labo¬
already saved millions of
dollars in cost and greatly improved
telephone service. It is this kind of re¬
search/especially in a time of rising
costs, that helps keep your Bell System
telephone service low in price.
ratories have

TELEPHONE

SYSTEM

(2434)

THE

COMMERCIAL

Anglo Bank for over 19 years. He
appointed an Assistant Cash¬

member of the Bankers Club and

Brooklyn Club.
'

■

News About Banks

v.,%

was

m-;':

Plans to increase the capital of
Buffalo
Industrial
Bank
of

NEW

Buffalo,

Bankers

and

OFFICERS, ETC.

REVISED

$300,000

from

has

were

that Gerald

Darhansoff, formerly

Chemical

Bank

officer

Peoples

Chemi¬

became

cal Safe

Deposit Company in 1926.

Benjamin

that

the
was

Company of New York ap¬

Shriver, James P. Tobey, Leonard
Scully and Charles W. Buek

Assistant Secretaries.

Mr. Andre-

formerly Assistant
retary of the Company.
sen

Sec¬

was

I"--'York

New

Hazleton

>■■■

ac¬

of
Darhansoff

>.i*

South

the

vices
Assistant Vice-President at its

main

has

office,

Vice-President

elected

been

of the

Bank.

The

the

Sterling

Bank

National
of

Company

New

"Ledger."

l-"'"

•'

National

Belmont

its

rency.

the

•

was

made known
with

accordance

the

Department on May 19. au¬
thorized the Sterling to operate
ing

quarters

Bank

the

Boulevard

branch.

•;

Gordon

Vice-President

"The Directors of The Standard

South Africa, Ltd. have
recommend to share¬

holders

Assistant

the

Bankers

■

Trust Company of New

York

elected

the

President

was

New

York

Chapter of Robert Morris
Associates, a national association

of bank credit men, at the annual

General

annual

Meet¬

Trust

Other

Company

officers

1948-1949

of New

York.

elected ' for

term

First

were:

the

Vice-

for

20%

year

1948 to

appropri¬
ate
£ 125,000
to
writing down
bank
premises and
£250,000 to
Officers

Pension

Fund

balance

forward

carrying
£201,998.

Bank's investments stand in books
than

less

market

value

Mdrch 31 last and all other usual

Fund

tnereby increasing

Reserve

Transfer
from

Fund

books

to :.£

Trust

which

known

"Times-

that

states

member

Mr.
well-

family of Texas bankers

associated in the field

The

same

since

added

paper

1858.

that

for

will'

duties at the Mercantile

new

Bank

May 2t.

' *

ap¬

Vice-President,

Marine

Bank of San Francisco
the
was

ard

succeeding
late Andrew W. gVnderson, it
announced on May 27 by AllA. Calkins, President.
Mr.

Goodfriend

Trust Company; Leslie

has

been

with

the

Vice-President,

Hayes,

Fidelity

Union

Trust Company of Newark; Rob¬
ert G. Norwood, Assistant Vice-

President, Central Hanover

close of business

Chapter chooses

Company; Paul R. Vervoort, r Assistant
Vice-President,
Commercial
Trust
-

National

Bank

Company of New

York.

continuing for one
S. Allen Pippitt, Second
Vice-President, the Chase Na¬

year are:

tional

Bank;' Herbert

mann,

New

Vice-President,

York;" Clarence

Evers-

Bank

Lud¬

low, Vice-President, Empire Trust
Company;
Charles
G.
Young,
Assistant

Vice-President, Bank

the Manhattan Company. Y.'Y

'':

•

N. Baxter
the

Safe

of New York

election

Bank

at 22nd

announces

Wandell

Frances

formerly Vice-President

Boos,

and Sec¬

retary
was
elected
Executive
Vice-President and Secretary and
Edward F. McGinley was elected

moted to Assistant

Branch since
has

and

main

posters

other

coun¬

displays, set up in the
banking room, are accom¬
by

formation

travel

literature., Inr

is- also

available

interested in

mountain

The.

hibition will continue to
>

Wallace
elected

for

nearby beach

resorts.

Ex¬

July 15,

H. ' Sloat

has

•;

been

trustee of the Brooklyn
Savings Bank of Brooklyn, N. Y.

Gilbert

Barrett, President. The Brooklyn
"Eagle" of May 30 noted that Mr.
Sloat

Vice-President

retary
of
Company,

the

which

1912, and is

and

Brooklyn
he

Director

Director. Mr. Livingston, retir¬
retary of the Brooklyn
ing President, joined the staff of Deposit Company. He

Sec¬

Trust

joined

three

for

the

will

succeed

ager

since his return from service

years

the

foreign theater of ; war.
Weinberg, Frank Co. will be mem¬
.

bers

and

York

Association

will

continue

business

and

their

rendering

SecurityNASD,previous

brokerage

seivice to dealers and

banks.

"£ CASE

MILLS

Well-Known Bond MathematicianPasses Away

Mills E, Case, mathematical

Director

and

the -New

Dealers

the

new
Goldendale
Allan J. Crumb, Man'ager

au¬

thority in bonds, died last week
at 77 years of age on his farm in
Woodstock, N. Y., where he lived
after

his

re¬

tirement from

Wall Street.

Mr,

Case

had

ful

career

event¬

Assistant Manager at Goldendale.

both the Gov¬

Ur6an

ernment

Schmitt,

Assistant

now

and

Cashier in the Ilwaco Branch> wiH

financial

succeed Mr. Crumb:"

worlds.

associated
old

the

Wil-x

firm. of

Salomon

liam
&

officers Brush; Lubm,Lewis

Co.

its

and

successor

firms; Blair &

mail

ballot for the elec-

Sociology,

Professor of

Co-r

University, also Director
Bureau of Applied Social Re¬

B a

Mills

and

By-

unanimously adopted.
by the Com¬

was

prepared

was

Structure of which Dr.

Walker

Teachers'

Chairman.

was

Case

k- amer-,•

Corporation of this city.

ica-Blair

Mr. Case was Secretary to the
New York Police Department in

Mayor
John
Purroy
Mitchell's
Administration, also assistant to
Colonel
Leonard P. Ayres,: Di¬
rector

Constitution

new

•

Under

the

Brush

Isador Lubin

<•

/fi'

■

President

July. 1, 1948, as
V

■

Waite -tS.

—

the

for

officers

Chapter

Brush,

Manager, Financial and Business
Analysis Bureau of the Consoli¬
dated

Inc.

Edison

Co.

and

New

Isador

and

Social

Division

Statistics,

National Defense, i*
the First World War and later to
Council

the
he

Board,

Industries

War

came

when

back to William Salomon

& Co. ' Besides his Wall

Street ex-,

perience,:he was Statistician with
the
Public
Service Commission

the

,"V"

Robert

fx t

}

.X'

J-i

Lewis,
Statistician, Research Dept.
—

Federal

Reserve

New York. I ir-v^
-

■

Secretary
of

dent of this

seventh

mittee

the

outgoing Presi¬

Chapter, Helen Slade.

the
who

new
was

Treasurer—Alfred

Bank

not

required to

•

After

the

••

p-.

Cahen, Tex¬

Executive

Com¬

mittee (at large)—Robert W. Bur¬

Safe

gess,

Chief

Economist,

the

business

cluded,
of

meeting
a

7;;'.

■

proceedings

had

been

thoroughgoing

opinion-polling

was

Western

Electric Co., Inc.; Paul F. Lazars-

con¬

analysis

presented

by Elmo Roper. Mr. Roper pointed
out

the

fallacies

the

political

field, .with particular emphasis
the

practical

19li

Mr. Case took

authorship

great pride in his

"Explanations

the

and Rules for the Solution of

ficult

Bond

in the text matter of

and

Dif¬

Problems" published j

Wan DykeV

books published by The

Financial

The bond world came to

Mr.

Case

last

the

regardv

word

working out puzzling bond yield

problems

and

professional

his

correspondence with bond houses,

banking
ance

and insur¬

institutions,

companies covered the en¬

tire country.

psychological factors.

Sterling, Courtney Formed
i

Tackaberry & Co» -

"LOS

A N G E L E

S,; CALIF.—

JACKSONVILLE,

FLA.—Ster¬

ling, , Courtney & Ewing, Inc.,has been formed with offices in
the Barnett Bank Building to eii-

Dewey T. .Tackaberry, 3871 WilBoulevard,
is now
doing
! gage in the securities business.
business as Tackaberry & Co.

shire

bond basis

decimal

Press of New York.

tile Economist, Dun &
Bradstreet,
Inc.
■ v.:v!.-:•.
Members

mem¬

Executive Com¬

and

methods

calculations at New York Univer¬

"run" for office.

1907 to 1912 and lecturer on

statistical

Com¬

member

Incidentally, she is the only
ber

from

sity, 1908 to.
The

Constitution,

Lubin,

Council,

United Nations.
•

six

but

this Committee is, under the new

j
—

Member, Economic
Employment
Commission;

Senior

the

officers

Executive

States

Economic
..

York,

comprise

the

elected

•

h Vice-President
United

structure,

new

newly

directors

mittee.
S.

Sec¬

Manager; -at'
He has been Cashiei

years

members

and

also

admission

folio Manager during the past two

Kennewick

the First Na¬
tional Bank in Browning, Mont.
William F. Skillern, now Vice-

and

City
is

the

announced

with

Ellensburg.

;

Waite

The

panied

associated

been

Assistant

Pacot "- as

foregoing

ex¬

featuring
drcamed-of
beauty
spots to visit in America, Canada,
and

' Mr.:

G/ Keitsch

College

part

The

and

Wail Street firms since 1923, acted
in the capacity of Security Port-,

region as a banker for 30 years
J.

Helen

year, beginning
follows:
'

October; 1945.

development

Laws

plays,

tries.

Mr.

Man¬

search.

tion

Mexico, Holland

Manager.
Assistant

of the N B of C Ellensburg

ager

hibition consists of dioramas dis¬

kodachromes

been

Pacot1 has

This

the

event.

him

succeed

elected

was

lumbia

Street, New York. Be¬

annual

Vice-President,

Eddie. Pacot

and

feld,

ap¬

advisory capacity. At Ken¬
E. C. Tweet. was pro¬

■■

Savings, 4th Ave-<
on

time

newick,

Nominations announced the results of

depositors and the general pub¬
these exhibitions have be¬

the

Mooney,

Bank will remain for

Statistical Association held at the Russell Sage Foundation in New
York City May 27, Meredith B.
Givens, Chairman of the Committee
on

Co.

meeting of the New York Chapter of the American Co., Inc.; and

lic,

Deposit Com¬

Vice- President,
as
President succeeding Stephen M.
Livingston who has reached re¬
age.

for

of the interest

cause

formerly

tirement

The

those

Jackson, Chairman of

Chemical

pany

,,The Third Annual Travel Ex¬
hibition, which is free to the pub-f
lie, is now being conducted at

come

-Governors

Keefhaver, President of the Pio¬
neer

and Cahen.
At the annual

Weinberg |

approval of the Comptroller of
general partnership effective June
Currency-.* This becomes the
1 of Harry Frank. Mr. Frank, who
28th office of. the $350 million Na¬
tional Bank of Commerce.
A. C. has; been associated with various

with

New York

Samuel

the

mittee

nue

Trust

Frank

•A
was

Harry Frank

May 29 pursuant

American Statistical Association Elects

pointed Assistant Secretary.

Bank

amount

Midland
M.

the

was

be ' closed

Swenson

Branch

Assistant Vice-President Branch.
Manager of the Mission office of the Coulee City Branch of N B
of the Anglo California National of G since July
1946, will be

Company;,

Harold

and

July 7 to 20, both dates in¬

and

bank

became effective at the

B of C

pointed

Governors elected for two-year
terms
were:
Daniel
P.
Adams,

Commerce

Bank

Conversion

Pioneer Bank, will become Man¬

was
appointed
Assistant
Secretary, ficer,
Bowman,
Manager Vice-President; Allen C. Duncan
Credit Department, Federal Re¬ and Edward F. Mitchell were
ap¬
serve
Bank.
YY YYvYy.it. pointed Assistant Trust Officers

Curtis

National
Seattle..

President

Harry Goodfriend has been

5,000,000.

President, John T. Degnan, Assist-, clusive."
ant
Vice-President, New
York
Trust Co.; Second
'At a meeting of the Board of
Vice-President,
Stephen Van Rensselaer,: Assist¬ Directors of City Bank Farmers
ant Vice-President, First National Trust Company of New
York, held
Bank; Treasurer, Talbot Babcock, on June 1, Howard B. MacAdams,
Assistant Vice-President,
Bank-, formerly an Assistant Trust Of¬
crs

Herald,"
Jester

Brown, President it is

learned from the Dallas

his

York

the Commercial National Bank

May 22

and
necessary
provisions have
of the Chapter held inbeen made.
Directors have de¬
City on May 27. Mr.
Woodward succeeds Paul R. Ver- cided to transfer £1,000,000 from
voort, Assistant Vice-President of Contingencies Account to Reserve
&

announced

was

the past three years Mr.. Jester,
July 28 next
has served as Vice-President of
payment of final dividend of nine
the Colonial Trust Co. of New
shillings per share together with
York, handling that bank's Texas
bonus of four shillings per share
both payable in British currency interests, residing in Pallas and
and subject to income tax at nine making only about three trips a
year to New York.
He assumed
shillings in pound making total

be held

ing to

meeting
New

Mercan¬

tile National Bank of Dallas, Texas

Milton

the

distribution

the

operations of this
Bank for the year ended March
31, 1948:
—
garding

ended March 31

Woodward,

from

•

the

Branch

May 27.

Goldendale

Vice-President

Kennewick

been elected

Bank

plans the ;New York State Bank¬

the

ad¬

were

the

capital

John C. Jester has

and

Maxwell.

by the Office
of the Cur¬

Comptroller

Wash,

by Andrew Price, Chairman, and
Carlson,
President
oi

'•

May 13 from $200,000 to $250,000 through the sale of $50,000
new stock, according to the
May

r.:

resolved to

acquire the business of the Boule¬
Bank, at Forrest Hills, Long

June

Weinberg,

name

announced on

the

staff

Bank

Goldendale,

of,

sion

announces

following

cablegram

vard

Island, N. Y.

York

Ltd.

firm

the

promotions including expan¬

staff

appearing in

Chicago, 111. increased

bank's Head Office in London, re¬

Completion of arrangements by
Trust

Africa,

receipt of the

Acquisition of the Pioneer State

Bank

ad¬

Press

Wall Street of The Standard Bank
Gerald

Wein¬

and is active in civic affairs.

May 24,

Philadelphia

Agency

affili¬

17 "Bulletin" issued

;

The

and

87 years of age.

pointed Helmut Andresen, Assist¬
and Robert C.

Associated

vices from

Board of Trustees of United States

Trust

the

Co.

died

concerns

cording

and

Pa.

Bank

Ilazleton,

Construction

ated

Trust

ant Vice-President

Weinberg

Savings

Dick

President,
May 27 the

Strong,

announced

Co.

Samuel

berg & Co. announces the change

ing, a Director of the Executives
•i Arthur E. Dick President of the Association of San Francisco and

and

1905

the

depart¬

of Bank¬

Institute

American

the

relations

„

announces

member

public

approved by the
ment.
He is First Vice-President
Banking Depart¬
of the San Francisco Chapter of
May 18.

$400,000
ment on

Sterling: National Bank & Trust

been

bank's

Weinberg, Frank Co.
Formed in N. Y. City

New York State

CAPITALIZATIONS

Company of New York

During the past two years

year.

the
'

Assistant Vice-

President at the beginning of this

CONSOLIDATIONS
NEW BRANCHES

1946 and

ier in

1948

Thursday,: June 3,

CHRONICLE

FINANCIAL

Volume

THE

Number 4704

167

COMMERCIAL

FINANCIAL

CHRONICLE

Wall Street Should Take the Offensive

What Is

That, Ms. President?
•

(Continued from
has
of

increased

our

.V be regulated and controlled. Even
standard if it were possible to do, would it

page

high

living.
The

situation

same

holds

true

the

beginning

is, today

because

where

the

vested principal.

radio,

means

also, ..have

their

command

the

urge

of in¬

pre¬

Industry's side of the picture
but, on the whole have been ne- j
glectful of their opportunity.
[,

evolution

same

.Many companies
this

field

occurred.

that

started
with

endeavor

When

very young

ven¬

ture funds, have disappeared from
the scene:, and there is only a

our

still

nies
are

reaches

inost

upon

promising of

venture

believe

speculative

After

without

the

are

real

now

profitable

funds.

the
the
our

There¬

the

regu¬

control. of

venture,

the

security

other markets,

wheat,
of

and

these

tion

etc.,

are

capitalist
our

various

action that has

even

market
such as
a
vital

system. We
power to see
func¬

political

adverse

effect

their usefulness will have

upon

<~J

4)lf

Yet ho real organized effort is

Those who

1-!

7A4>k..

^1.

all

time

high and this
a large measure

achievement is to
due

the

efforts

Wall

Street

[banking- and investment houses in
.securing, the
necessary
funds
: needed
by old and well estab¬
lished companies as well as those
companies recently organized. A
tfeW short years ago Kaiser Frazer,
for example, was not even in ex¬
istence.
Today, as a result of ven¬
ture funds

invested in the

com¬

pany, Kaiser Frazer is

giving di¬
employment to approximately
15,000 and indirect employment

rect

* /

ceive

of securities
receptive to re¬
"or hear from

owners

[literature

other

what

sources

Many other

That

axe to grind to spread falsehbod6
that will be accepted by those who
do not know and have not been
informed

exactly

to what the

functions of Wall Street consist of.
A survey made

bring forth the

mailed

out

holders

imagination

million

show

subject.

nual

the

statements

treatment

Many of these

of
an¬

written

are

stodgy manner and
highly technical fashion. The

re¬

rarely

reads

these

balance
O

nistic

great

and

Finance

any group

ing such hy

corporations

the

reaching

majority

thus

will

exists

any

this

highly

undesirable

situation.

.The

rency

try,

A' study of

publications

many

these

reveals

being of the working

man

that

progress

the

long
the

run,

and the

one

expense

cannot

the

comr

total assets

Maryland Bankers

their

expand

securing
abled

operations,

of these

has

these companies to

operations which
the

funds

The

also resulted in

additional

jnany

employment
thousands of people,

duced

;

the

cost

en¬

expand

many

of
re¬

products

and

further

Standard of
v

increased

'high

our

living.

We could go on and on enu¬
industry after industry

merating

where speculative funds were in¬
vested

and

which, in their final
evolution, resulted in the com¬
plete development of many large
'industries

which

mainstay of
omy.
:

our

[

are

now

American

[

speculative

New

all this

going

efforts being
Stock

York

perhaps, by

on,

outside

made by the

Exchange/and

few others in iso¬
lated cases, one sees no organized
effort by the industry to defend
itself from many of these baseless
charges.
Any degree A of effort
a

made in this direction would find

followers and believers./ Af¬
all, millions of Americans are

many
ter

owners

securities of

the

com¬

panies that go to make
can

up Ameri¬
industry and if the industry's

side of the story were told in sim¬
ple, everyday layman's language,,
/: we know it would do a great deal

econ¬

With
of the

the

However, we have heard at one
"time or another demands that the

placement

ledger.

the

funds

to counteract the harmful and orr

ganized efforts of the detractors of
"Wall Street."

long, long

Ass'n Elects Officers

National

banks

Preston Delano.

$3,500,000,000,
nearly 4%, I
than

The

Dec.

31,

banks

the United

5%,

1947,

since June.
and

call,
but were $1,500,000,000, or
nearly 2%,

rijf.

re¬

5,018 [active

The

1948

which
000.000

was

December,

but

$2,120,000-

(including cash

of collection) of
and reserves with

process

Reserve

062,000,000,

banks

$11,-

total of nearly $20,-

000,000,000, decreased more
$2,000,000 000 since Dec. 31.

■

$1,087,000 000, balances

$7,774,000,000,

12,

nearly $78,500,000,000,
a decrease of $3,800,-

since

were

with other banks

Delano

April

held

Cash of

Federal

banks

$144,000,000 over
figure, and other

decrease of $36,000,000.

items in
Preston

30, 1947.
deposits
were

000,
-

December

securities

national

increase

the

ported by the

June

Obligations of States

political subdivisions held in

April amounted to $3,173,000 000,
an

b ovet he

banks

December, and .a" de¬
$2,500,000,000, or 6%,

crease

amount

obligations

Government of

which was a de¬
of $1,870,000,000, or nearly

since

the date of the

held

States

$37,000,000,000,
crease

year

<S>-

re¬

the
active

5,011

this

The returns from the call covered the 5,014
The assets were

ported by
banks

United States and possessions.

less

April

$85,000,000,000,. .according to Comptroller of the Cur¬

active banks in the

side^of

same

mean¬

seem to us to assert that we must insist
the acceptance by all other nations of our con¬

coun¬

other industry. And yet very little
company are definitely related and
organized effort is being made to

correct

[

the

amounted

working population in the

the

Comptroller of Currency Delano reports assets of $85 billion on
April 12 or about ^Vz billion below Dec. 31, 1947, but $1%
b '/b ;
billion over figure of June 30, 1947.

Or¬

employees/

to -their

much in

National Bank Assets Off in First Quarter

issue

weekly ;br[*monthly ^
gans"

talk

be¬

many

help wondering if the President—

can not

Of course, peace on that basis is

the; average laymern

[ Also,

" /■".

cepts of social and economic welfare and justice.

large number of

b.[.

rXead-

ily absorbed and accepted

in the world is im¬

They

propa¬

less

than

/r.

ganda which is being steadily dis¬

seminated, would not be

Truman

—

upon

commu¬

adverse

President

that peace

have ever stopped to consider the real
ing of what they say.
r

believe

deal of the

other

and

see

all the others who

; way

literature which
goes
to stock¬
holders in. everyday language so
that they would be more readable
we

and

If corporations would write
up
their
balance
sheets
and
other

understandable,

;

plemented on a basis of the rights of the individual,
of the rights of men and women
everywhere to :
freedom of worship, freedom from fear, freedom
from want. Let us not forget that this Unknown
bSoldier died for just those things." — President

sheets.'

and

[b;Truman.bbb:.b[•

sult is that the average stockhold¬

that, on the
facts; that is
whole, a good many industrial or¬
knowledge of
ganizations
are
and
more
performing
a
misconceptions
con¬
cerning the field of Brokerage good job in showing how the well
is

there

very

United

;

,•

4'We must

se¬

.lack

same

that

'["[■■[,

survey of the balance
and other literature which

curities

the

always stood and al¬
will stand lot peace in the

ways

sheets

that

world.r'
;•

..Yet,

foreign policy.

our

means

States has

mode of life.

our

Without
the
industry
which other.
But, on the whole, these
brought these funds and new in¬ ""House Organs"'are not
utilizing
panics recently formed with ven¬
dustries
together,
this
country
ture
jto the utmost, the possibilities in¬
capital expect to furnish would not be the
great country
large scale employment. There are that it is
herent in the publications that
today.
However, the
many examples, too numerous to
demagogue, the politician and the reach doy/n to everybne in a cor¬
mention, of new companies that* left
wing radical
have
always
have been organized in recent
poration.
been careful never to show the
Too long has 'industry and fi¬
years with venture capital which
other side of the picture.
They
is furnishing a great deal of emr
have
only
been
interested
in nance' been on the defensive and
ployment and daily increasing our
shewing; "Wall Street" as a soul¬ we,[ therefore, believe that "Wall
standard of living.
Some of these less
octopus,
a
heartless
and Street" and
industry, which can
companies may
not
make
the
greedy industry which is devoted
reach into the homes of the ma¬
grade.
However, many will grow, toward
crushing the American
become well established and will
jority [ of stockholders and work¬
working man..
become important units in our in¬
Only recently, a would-be can¬ ing people, could do a better job
dustrial- economy; •
didate for a high Federal elective of- advertising the favorable as¬
Highly regarded companies such office received nationwide pub¬
pects of our capitalistic system.
as
American Telephone & Tele¬
licity because of his mention of
graph Co., General Electric, Gen¬ "Wall Street" in a
highly deroga¬
eral Motors, American Airlines,
tory manner. -/Every day, poli¬
National Gypsum, Socony Vacuum
ticians in high places and of high
Oil and many others have come
repute mention "Wall Street" but
to "Wall Street" looking for funds
not
oni: the
credit

to many others.

platform of

"Wall Street"

and

atti active

the world.

We want peace founded on jus¬
tice.
That is the fundamental

■

V ; "We want peace in

capitalistic

our

please.

as we

the

and

•»

/Therefore,
would

government

being of

|f Industrial employment today is

system:

well

economy

that

economic set up.

our

perpetuation

markets

eco¬

being made to bring-these facts,
furnished the funds which enabled
the
favorable
facts, before the
the company, to make this
prog- ! American
people so that with both
ress
in
the mam
have already
j sides of the story available they
been
compensated
by enhance- may then
judge the truth. Efforts
ment of their original investment
should be made to clear up the
and future prospects appear
high¬ so-called mysteries of the work¬
ly favorable for a further en¬
ings of Wall Street for after all
hancement of invested principal.
it is very easy for those with an
n

industrial

this

definitely unfavorable effect

stage

so-

; American

our

properly,1 for "any

upon

operations

prospect.

the

should, do all in
that

funds

all,

function

provided by venture capital. The
.company has now reached

and

cotton,

our new

example, Dumont Labora¬

where

well

nomic

status

system

hamlet,[

possible, is not desirable.

tories, one of the pioneers in the
"rapidly growing "television indus¬
try would not have reached its
present

every

that

called

industries.
For

lation

over

one

railroad

into

fore,

million
television
sets
will be sold and the television in¬

the

have

command

many

dustry is looked

por¬

investment, but /to¬

present high standard of living if
ii
did not have available at its

one-half

direct-and finan- i

Industry, in general, have
are doing to increase our
economic existence. This country
standards of living and make more
would
not
have
attained
its

by the

now

their

please, to worship as we
please, and to control our own

adult1

done and

invested in companies

1948, it is estimated that

population has

country's

speculators lost

city
and
state
throughout
country.
The railroads are
very sinews and arteries of

of these compa¬
wayside but we
reaching a stage where

fell

but

the

cial interest in the

that

operating in this field of endeavor.

Naturally,

States

rendered for the freedom of

women

Thus,1

the \bulk

our

day

its

were

United

only by

security holders has increased;

foreign
Undoubtedly) many in¬

tion

infancy, was only
able to reach its present stage as
\'a result of the speculative funds
which

building,

and

freedom of the individual; and
for the right to live in peace as
we choose to live, to think what

from 8 million in 1929 to over 20'
million at the present time.

vestors

home and it is an
which also has furnished

employment indirectly and direct¬
ly to many Americans throughout
the country.
'•
[
The television industry, which
is

the

upon,

from speculators in many

every

railroad

countries.-

fraction
left.
However,
country has reached a stage
/where.there is a radio in prac¬

'industry

furnished not

were

people

minute

men

the world

the world, for the

It is estimated that the number

States

United

nation embarked

program

funds

.this

tically

the

over

today meetings such as this
being held to commemorate the service which

are

sent

-the

"All

America

for profit, for the increase

of the radio and television indus¬

try.

desirable?

Corporations

(2435)

than

The

unimpaired capital stock of
on April 12,
1948 was
$1,800,000,000, including $25,000,000 of preferred stock.
Surplus
ures
are
demand deposits' of in¬
was
$2,420,000,000, undivided
dividuals, partnerships, and cor¬
profits $962 000,000, and reserves
porations of $45,134,000,000, which
$357,000,000. Total capital accounts
decreased
$2,945,000,000, or 6%,
of $5,539,000,000 were $117,000,000,
since December, and time deposits
increase of more than

$1,000,000,-

June of last year.
In¬
cluded in the current deposit fig¬
000

since

individuals,

corporations
which

partnerships, and
$18,767,000,000,

increased

$3,000,000.

De¬

the

banks

2%,

last.:
United

BALTIMORE, MD.—At the con¬
cluding session of its 52nd annual

than
■

States

December

'[/■;'
Government

f
se¬

posits of the United States Gov¬
curities were 43.51% of total as¬
ernment
of $1,526,000,000
were
City $627,000,000 more than in Decem¬ sets on April 12, and loans and
•the Maryland Bankers Association ber.
Deposits of States and po¬ discounts were 25.69%. The per¬
elected officers to serve during litical subdivisions of $4907,000,centage of capital accounts to total
the 1948-49 term:
000 showed an increase of $181,i
President— Norman
B. Boyle, 000,000, while deposits of banks deposits was 7.06%.
Secretary-Treasurer, Westminster totaling $7,035,000,000 were $1,Savings Bank, Westminster.
377,000,000, or 16%, less than in
Vice-President— W.-R. Huey, December. Postal savings deposits Four Join Crowell, Weedon
(Special to The Financial Chronicle)
j
President, First National Bank, were $2,803,000, and certified
PASADENA, CALIF. —Ray J.
Chestertown.
;
and
cashiers' checks were
$1,Fritz, Robert J. Gillette, Edwin
\
Treasurer — Pierre N. LeBrun,
095,000,000. [,
E. Morgan, and William H. Stitt
President, Cecil National Bank,
Loans and discounts on April 12 have
become
associated
with
Port Deposit.
were
$21,816,000,000, an increase Crowell, Weedon & Co., 650 South
ti Secretary — Matthias F. Reese,
Secretary - Manager,
Baltimore of $336,000,000, or VA%, since De¬ Spring Street, Los Angeles, mem¬
bers
of the Los Angeles Stock
Clearing House, Baltimore.
!, •
cember, and an increase of $3,000,Exchange. All were formerly with
r
Assistant Secretary—William B.
000,000, or 16%, since June of last Reagan & Co., Inc., of which Mr.
Elliott, Assistant Manager, Balti¬
convention

held

Atlantic

•

Clearing House, Baltimore.

year.

Fritz

was

officer.

the Annual Spring Outing of the
San Francisco Security Traders Association

Lights

was

; ' if

should be definitely upward. Cot¬
ton textiles will share in the in¬

is quite

Although
ECA
funds
tentatively • allocated to textiles
are
limited, this does not have
bearish implications because the
crease.

ham and eggs, toast, little cakes,
coffee, etc. No wonder he smiles so pretty!
r
a

man.

put away fruit juice,

.;>r ;■■■•

■

Shafft, Snook & Cahn, and Earl Thomas, Dean Witter & Co., Di¬
#

Seals vs. Oakies to Have Later Play-off—The baseball diamond at
the Lodge, unfortunately, was not ready and the long-awaited softball
game between Walt Vicinio (Blyth & Co.) "Oakies" and Ken Donald's
(First California Co.) "Trained Seals" had to be deferred to a later
date.
r
;:■■■■ ■,
■ ■
:•

ket

Xv/Xr.;/

Francisco, looked like

■

permit
in

much

the

mar¬

heavier

usual

private

channels.

Davidson, San
white suit.
•

real medico in his snow

will

transactions

v.-.-..

Old Doc—Hodge H. Davidson, Bailey, Selland &

rectors.

people, and HOW.
ft

Collins L. Macrae,

are

He general easing of the dollar

Diplomat—Charles B. Harkins of Blyth & Co. is the name.
knows how to handle

Wulff, Hansen & Co., President; J. B. McMahon, Merrill Lynch,
Pierce, Fenner & Beane, Vice-President; Walter J. Vicino, Blyth &
Co., Inc., Secretary-Treasurer, and Houston Hill, Jr., J. S. Strauss &
Co., Thomas W. Price, McAndrew & Co., Inc., Conrad O. Shafft,

Breakfast for two?—Tom Price & McAndrew & Co., Inc.,

Hoglah^l, Brush, Slocumb & Co. made arrangements for rooms and
transportation, and James M. Stewart, Wilson, Johnson & Higgins,
charge of golf.

European Recovery
will, take care Of that

Program

had by all attending.

Officers and directors of the Association

of, the

lime at Golf—Clifton W. Morrill, Walston, Hoffman &
problem. Within the next two or
Goodwin, after 18 holes says you must pay up to Walter Schag, First
three months the export curve
California Co. Else how do you think I can pay off my house?

Emmet Whitaker, Davis, Skaggs & Co., was General Chairman.
K. Donald, First California was in charge of baseball; "Sandy"

tion

♦

tit

FRANCISCO, CALIF.-—The annual spring

enjoyable time

was

■'

Happy

outing of the
San Francisco Security Traders Association was held May 22nd and
23rd at the Northwood Lodge, Monte Rio. The Committee in charge
of events and arrangements did a yeoman job in seeing that a most

■

The full-scale inaugura¬

ometer.

Beane, is your man—call him and confirm it. <

r';

By Edwin L. Beck, the Chronicle's Roving Reporter
SAN

been misleading as a business bar¬

Pierce, Fenner

of Merrill Lynch,

Sweet Tenor—Bert MCMahon

Side

Thursday, June 3, 1943

& FINANCIAL CHRONICLE

COMMERCIAL

THE

(2436)

"Income from travel is running
high. In European nations visited
Minneapolis Boy Makes Good in S. F.—Jim Powell, Harris, by Americans sales of American,
Upham & Co., now in the San Francisco office, making friends fast. goods are increasing. Among them
are England, France and Belgium
A big hello to you Twin City boys, says Jim.
which bought considerably more
*
*
ft
%

r'.-XXi

cotton textiles from

in the first

Bartender's Friend?—Earl Thomas, Dean Witter & Co., was help¬
ing the bartender during the rush before dinner. Pocketing lots of quarter than in the same period a
In the •first quarter,
the money left on the bar. The bartender looked at Earl and said, year ago.
despite slowing down in demand*
"Hey, stop stealing all the dough on the boss; can't yc>u leave some
for me?"

X-X

Picture

master

amounted to more
250,000,000 yards.
If this
maintained, exports this
year will top one billion yards.
our

'
ft

rate

Snapper—Louis J. Spuller, Jr., Elworthy & Co., is a

at the

exports

than

-;V-'--Xv.'V-x",;=;;

art of taking

pictures. He acted as the "Chronicle's"
"I see nowhere in our economic
Davies photographer for all pictures at this party.
set-up
any
signs of
weakness
Mejia; Art Perenon, Wm. R. Staats Co.; Ted Baker, Dean Witter ''Xx-Xr.'XXX'XvX-xx:1.;x; .\r.:
t,
;X,:x * X;'-CXX'rX-": X:X- -'-.XX/XX-;::X. ^
& Co.; Hodge Davidson, Bailey, Selland & Davidson; Sandy Hogland,
which have more than local and
Sweet Music—Armando Etiopf accordion, and Mac McCarty, bass
Brush, Slocumb & Co.; Ken Donald; Joe Kessler, Irving Lundborg & fiddle. These two
passing significance. On the other
smiling boys sing and play in a unique way! They
Scheduled to represent the "Seals" were Tony Richman,

■

Co.;

Elmer Weir, Brush, Slocumb & Co.; Bob Healy, Davies &
Mejia; A1 Hewitt, First California Co., and Tom Price, McAndrew
& Co.

much in demand at all "San Francisco" affairs and the Bond
traders won't consider any other boys for their parties
but Armando and Mac.
are

very

Club

and

Members

of the "Oakies" team were Forrest Moran, Conrad,
Co.; Jack Sullivan, First California Co.; Rudy Sandell,
Shuman, Agnew & Co.; Jim Stewart, Wilson, Higgins & Johnson;
Bart McMahon, Merrill Lynch, Pierce, Fenner & Beane; Walt Vicino,
Blyth & Co., Inc.; Jack Egan, First California Co.; Cliff Morrill,
Walstoii, Hoffman & Goodwin; Jack Quinn Stone & Youngberg;
Chick Hawkins, Blyth & Co., Inc.; Bill Belknap, Walston, Hoffman
& Goodwin, and Joe Talbot, Hannaford & Talbot. Jack Buick, Amer¬
ican Trust Co., was to have umpired the game.

Bruce

Fire Builder—Richard R. O'Neil, Oscar Craft & Co., Los
Ask Jack

Angeles.

Egan, First California Company, how Dick let him freeze.

Thanks

hand,
eral

still

removed

far

redwood forests on the romantic Russian River.

the company.

Outlook for Cotton Textile
Favorable

Free Coffee & Soup, Boys!—William G. Hyde, a Vice-President
& Co., Inc. of New York, has a beautiful, new
coffee

machine

(stands six feet high and two wide) in the back office
(room 333) in the Russ Building. Here's your hot coffee (5c) rich
and refreshing.
It also makes hot soup. Knapway Devices, Inc.,
Kansas City, Mo., put it out, but Hyde furnishes the 5c.1
♦

»!«

exists

cumb &

Co., and J. Earle May (Palo Alto)—played

textile prices have

cotton

some

South Carolina Cotton Manu¬

s o u n

piano

been

notable, but

and

inevitable

made and there is

operations.

year—bring it next year, "F. A.," please.

satisfaction
strained

"Within the

past

several

weeks, ..t h

Whispering Pals!—Believe it

trade

not—Bob Bourne, Conrad, Bruce

has

& Co., and John Francis ("Pete") Finnegan, Hannaford & Talbot.
•it

:jt

girls.

re¬

nu¬

price

cases

cause

the

been
for great

gradual,

re¬

which

manner

transition is

has

the

being made in those

where it is desirable.

"Recent

T. Murchison

stated.

though
Have

been

have been

side

some

these

"Al¬

revisions

upward, the majority
definitely on the down¬

and

prosperous

oper¬

On the contrary, one may,

without straining

few

analysis,

"We

have

conclude

that

through

gone

these

periods of general questioning be¬
only to find that our founda¬

fore

tions

were

thought.
dustrial

firmer

than

22 offices

America's

throughout

fastest-

California

growing

has resumed

and

market

currently the rate of national in¬

is to be expected, the great num¬
ber of such revisions occurring
within

short

condition

time

market

creates

dullness

which both sellers and
be hesitant in

buyers may
making large com¬

come

peak.

tries,

is probably at a new high
In the construction indus¬

activities

Nevada

tive industries

mitments.

hind

"Inasmuch
volved
rumors

First California Company
UNDERWRITERS

Member Los
Private Wire$

300

•

Between San Franeitco, Lot

Montgomery Street

SAN FRANCISCO 20

San Dieyo

San Jose

Bedlands

Glendale

Monrovia

Layuna Beach,
■

Teletype LA 533

Lony Beach

Santa Ana

Spring Street

Sacramento.

Monterey

Fresno

Beverly Bills

Santa Rosa

Reno, Nevada

IJapa

Stockton

Pasadena
Ventura

Las Vegas, Nevada

the interests in¬

naturally

and

conflicting,

propaganda

examine
are

add

ward

the

factors

in .the

market

anew

basic

situation. The

LOS ANGELES 13

Teletype SF 431 and 432
Oakland

uncertainty.
During such a
period there is no recourse except
which

Angelet and New York

510 South

are

the

DISTRIBUTORS

Angeles Stock Exchange

are

consumption.

At least temporarily,
tendency is to test more fully
the forces of supply and demand.

mere

fact of down¬

price revisions in particular

broadening,

are

both in industrial construction and
in home building. f The automo¬

the

their

vstill badly be¬

efforts

overtake

signs of
weakness
hitherto • apparent
in
certain specialty fields, * such as
radios and gadgets, will be itiore
than offset in the coming months
by the tremendous, expansion pro¬
grams in aircraft and other mili¬
tary equipment.
The rise in in¬
terest rate is a matter primarily
The

few

government policy and in no
respect indicates a tightening of

instances may mean nothing more
than^ a- disappearance of
sharp

the credit situation.

scarcities and the resumption of a
healthy - competitive
situation.
Certainly no one in the textile
industry has been foolish enough
to suppose that we would con¬

and renewed interest in the flo¬

tinue to have

sellers' market in¬

definitely. Mental preparation for

for

has been
1948 Nominating

the Association of

body & Co.; Lawrence J. Moran,
Nicholas FNovak, Drysdale & Co.; Ralph C_
Runyon,; Mallory, Adee & Co.;
Michael
Sommerfield,
Hayden,
Stone & Co.; E. Frederick Uhrbrock, Jr., Vilas & Hickey; John
Lowther, Eastman, Dillon & Co.;
Henry Parmelee, Cohu & Co/, Wal¬
Smith Barney & Co.;

Stewart,

Goodbody

Co.;

Paul Morton, Peter P. McDermott
&

Co.; Bill Clift, Reynolds & Co.;
M. Travers, Baker, Weeks &
Harden; John Tucker, Fahnestock.
& Co.; Harry Corbett, Gude Winmill & Co.; Thomas Bowes, Bache
A.

Co.; John Hart, E. F. Hutton &
Co.; John Gordohn, Steiner, Rouse
Co.; Harold. Strohm. Stillman,
& Co.

The renewed

strength in the securities markets
tation of new capital issues are
strong evidence of an improved
psychology and adequate invest¬
ment funds. •-,/

■

A Iternates

The
upon

—

;

Arthur

•

"The decline
in our exports
during the past few months has

Committee

Messing,
Alexander
I
be

will

voted

at the Association's quarterly

June 16 at 4 p.m. at
Restaurant, 56 Broad
Street, New York City. J
meeting

Schwartz'

The general trend of in¬
production

its upward course since April and

for a

Comm.!

slate

the TIerzfeld ■$ &
Stern;
Foldes, Abraham & Co.

reductions have been notabtei As

Covering

following

Customers Brokers: Raymond JKane, Wm. M. Rosenbaum & Co.;
Emery I. Karman, Josepthal &
Co.; Robert Lamont, Kidder, Pea-

at all his busi¬

instances the

and

•

Maynard & Co.; Sol Fink, Hirsch

ations.

Mr.

Murchison

Slate for Nom.

present offers buying opportuni¬
ties which will be temporary.

try, ''
Dr.

of > sound

the

indus¬

time

ness

cotton

the

developments, there¬
fore, do not indicate in the slight¬
est any threat to the maintenance

revisions in

textile

A Dancing Man!—Houston Hill, Jr., J. S. Strauss &
Co., still
leads the hit parade with his dancing. He is really good—look him

up,

merous x

:jt

!jt

been

ports

Sporty Clothes—George G. Kammerer, J. S. Strauss & Co., is a
fine fellow to know if you get in town without a wardrobe of
sport
clothes. He will always have some fd loan you!, NO CHARGE. Xft

press

filled with

change

be
are

Customers Brokers Get

lace
the

p r osperous

violin-playing this
\

threat exists

main-<S>

the

tenance

music.
No Fiddling—The boys missed F. A. Baker's

sign

facturers Association at Asheville, N. C., on May 29 that reductions in

Brush, Slo¬

some sweet

Sees

operations.

told members at the annual meeting of

Piano Solos—Ernest E. Blum and Elmer L. Weir of

prosperous

Claudius T. Murchison, President of the Cotton Textile Institute,

Youth!—"Sandy" Hogland, Brush, Slocumb & Co., and
Harry L. Schmid of Wm. D. James Co. (Sacramento) are horsemen
of note. They rode like Paul Revere.
J
•
.2

and

sound

economic weakness.

V'<

■,

Such

Despite Recent Price Reductions

Claudius T. Murchison, President of Cotton Textile Institute, tells
annual gathering of South Carolina Cotton Manufacturers no threat

Blair

to
we

——■

Committee

Industry Termed

from

drawn up

opinion,

when fear should have any place
whatever in our business calcu¬

lations."

Bishop, managers of
Northwood Lodge, Monte Rio, Sonoma County, California, to the
cooks, waitresses, and staff, we say thanks for making us so happy
and contented over the glorious weekend at the Lodge, amid majestic

continues

Million!—To Mr. & Mrs. Cliff A.

Something Has Been Added—Robert L. Smith—O. L. E.—Oldest
,

basic

strong.

The

living employee of Hill Richards & Co.'s 1 Montgomery Street office,
started April 1, 1931 and is still trying to figure who got fooled, he

factor which is gen¬

every

and

Members of the 1947 Nominat¬

ing

Committee

which

presented

the slate are:
-

H. E. Broadfoot,

Hayden, Stone

Co., Chairman, and Arthur JHansen, Francis I. DUPont & Co.,
Secretary, and also composed
William

Cogswell, Fahnestock^

Co.; Walter E, Hoskins, Eastman,

Milton Leeds, Per¬
shing & Co.; Ralph '"A. Rotnem,
Harris, Upham & Co.; Frank A.
Saline, James M. Leopold & Co^;
John J. Tuffy„ Stokes, Hoyt & Co*
and Kenneth Ward, of Delafield
Dillon & Co.;

& Delafield.

i/»:r

Kehoe, Randle, Mgrs.
Of Stern Chicago Office
ILL.-Effective
Kehoe and Foster S.
Randle, Jr. became co-Managers
of the Chicago office of Stern
CHICAGO,

June 1, John

Brothers

the Board

Co. in

Trade

Building. Mr. Kehoe was
formerly with the Northern Trust
Co.; Mr. Randle was with First
Corp,.. > i
*
i'

Boston

Volume

COMMERCIAL

THE

Number 4704

167

& FINANCIAL

CHRONICLE

(2437)

Power. Middle West should

Our

Reporter

Governments

soon

the

holders.

A firm tone is in evidence in the government market with dis¬
plays of strength being noted from time to time in specific issues and
groups.
The partially-exempt obligations have been giving a
good account of themselves, as have the 2s due 1952/54 and the 2V4S
>

due

Activity has picked

up,

even

be attributed to professional operations.

may

less

continue

income

issues

the

dominate

market

their

though part of thi$
Investors nonethe¬

the

into

from

movement

low

higher return obligations.
Demand ap¬
widespread, with large and small institutions
engaged in making switches or new investments.
Inquiries do
be

pears

to be confined to any particular

seem

section of the country,

in need of tax protection..

are

Purchases

of top-grade state and municipal bonds were made by these
in the recent past, but they are now back in the

market since it is indicated

the

Treasuries look

to them now, all things considered.
welcomed

these

Profit-taking

purchasers,

the

government
attractive

Price weakness would be

buying

buy¬

partially-exempts

has

opportunities.

minor,

rather

been

showing that the limited supply of these obligations is in strong
hands.

the

curities in

■

...

■

> ■■

1942.

has

realized

that

SELLING

Central Banks last week

The

disposed of $15,650,000 of govern¬
ment bonds with all of these coming due in more than five years.
This is part of the stabilization operation that will be continued in
order to keep the market for the higher income obligations within
.

limits.

Although it is

not

indicated

what

Federal, reports coming from certain quarters

issues
are

sold

were

be the effect

that the principal elimination was in the 2V4S due 1956/59, followed

by the 2V2S due Sept. 15, 1967/72, which
smaller amounts.

disposed of in much
There have been fairly large inquiries in the

market for these two securities.

were

GOOD DEMAND
The

eligible taxable 2s have been in demand, with investors
taking on varying amounts of all maturities from the '49/51s up to
and including the '52/54s.
The largest commitments evidently are
being made in the '52/54s with buyers being attracted by the present
yield and the prospects of price stability.
They appear to be as¬
suming that the inflation spiral will not worsen enough to bring about
changes in short-term rates, at least until after the election next
.

fall.

Some hold that

to consider

will be need

will

longer than

the

both

rates.

selected

new corpor¬

both buyers and sellers in the government market.

are

Commitments

there

that before

modifications in near-term

Savings banks in addition to taking
ate issues

being

are

eligible and

made

the

longer

maturities of

talized

gradually
did not

Congress

limits

each

of adjacent

group

that

see

subsidiaries

the

financial

somewhat

Commonwealth

making

now

have

seem

slated

ing

limited

Service

and

amounts

withdrawals

some

the

that

shorter
are

proceeds evidently finding

maturities

meet

demands

being made by depositors, with the
outlet in the equity market. . . .

SUPPLY

and

New

investors

the

opinion that the market for
government bonds would broaden considerably and activity step
up if the supply of Treasury securities were increased.
Investors
are

and

traders

cautious

about

commitments, because in
this makes them subject
to wide price movements.
Good-sized switch orders in more
instances than one are being held in abeyance because the securities
that are being sought appear to be in short supply.
are

making

issues the market is very thin and

certain

...

It
out

be that the monetary authorities will

may

securities

gations

time goes along, so that the

be obtained by investors.

can

Such

fit to

see

the

with

Common Slock
construction

Writing in the June 3 issue of. the "Public Utilities Fortnightly,**
McEntire of the Securities and Exchange

Commission, called attention to the magnitude of the electrical indus¬
try's construction program and the necessity of financing a substan¬
tial part of the f?
cost
through this year, despite the dull markets
issue

needed obli-

...

It would

add

the

orderliness

the

mar-

ket.

Raising of reserve requirements of member banks in. New York
City and Chicago by the Federal Reserve Board from 22% to 24%
came as a surprise and brought in some liquidation of "short" as well
as a minor quoting down of the long bonds.
Volume was very
light.
It is indicated the larger requirements will be met by
...

...

sales of short-term securities and

weakness

obligations.
A

the

"longs"

would

smaller takings of bills.
Any
bring important buying into these
.

general change in

requirements of member banks is
not looked for in the financial district for a long time to come
despite the Federal Reserve Board's recent presentation of needed
modifications, before the Joint Economic Committee of the Con¬
reserve

addition, several new hold¬
ing companies have been created
(taking advantage of the grand¬
father clause):
•
Southern
& Southern

Texas
Power &

Co.

•

the

System)

Utilities

joyed

marked

stock

struction

pro¬

ible.

gram calls for
installation of
5

SAN

FRANCISCO,

CALIF.—

The San Francisco Bond Club has

again issued their humorous news¬
paper "The San Francisco Tape^
-worm."

It has

of the

"Tapeworm"

seen

believed.
Editor

Benjamin
Inc.

.Inc.,

was

Brindley, Blair & Co.,

A. E. Ponting, Blyth & Co.,
was- manager,;,

and

Elmer

Booth, R; H. Moulton & Co., and
/Lester

Empey,

American

Trust

Rambo Honored

King of Sweden

million

kilowatts

B. McEntire

latter

kilo¬
in

the

years

1951,

ending

informed

indicate that for
total new ca¬

estimates already
this

and

1948

million

period

pacity of between 20 and 23 mil¬
lion
kilowatts will be required.

—

justments:

tive interest of certain stockhold¬
er

Commissioner

were

special correspondents.

respons¬

McEntire

states:

"The

longer-term
financial,
strength of the industry is, to my
mind, wholly inconsistent with,
the injection or preservation of
needless leverage in a public util¬
ity common stock." The objective
should rather be a capitalization.
".

with sufficient equity to in¬

the

sure

full liberty in

company

at $700 million
leaving approximately

year,

per

be raised an¬

sonable

The emphasis,

assurance.

fact,

should

over^'

strengthening the financial struc¬
in

ture

terms of

in order to cope

today's markets

with the vicissi¬

tudes and demands of tomorrow.**

the

exhaustion

reserve

capa¬

„;/

Gas Improvement

United

"The continued

needs

struction
,

Light & Railways
American Light & Traction
American & Foreign Power

duration

prospect
ance

■

/■".

■

growth of con¬
and the longer

of the program

now

emphasize the

import¬

strong

common

stock

position. As the program has be¬
come
increasingly long range it
has cut the ground from under
/
those
who advocate 'temporary'

W. P. Johnson Is
Admitted to

Partnership

Wentworth P. Johnson, for the

past
the

Vice-President

years

Irving Trust Co., has been adk-

mitted to partnership in the New
York
Stock
Exchange
firm of

Neuberger & Berman, 160 Broad^
way,

New York City.
to March,

1940

From
Johnson

was

1948 Mr.

charge

the

office at 48th

Irving Trust Co.'s

Street and Rockefeller Plaza.
is also

director of Edo Aircraft

Corp., Long Island.
H.

Ralph

Levy

;

•

and Philip A.

Straus have also been

admitted to

partnership in the firm.
Admission
to

the

firm

ported

May 20.,,

.;C

the new partners

was

previously

re¬

"Chronicle"

the

;

of
,'

PHILADELPHIA, PA.—Ormond
pressure of construction
Rambo, Jr., Vice-President and probably
continue in existence has eased." The article urges
director, Rambo, Close & Kerner, with three principal interests— strongly that the expansion pro¬
&
Foreign
Power,
has
been
named
Knight, First American
gram be soundly financed as its
Class, Royal Order of the North United Gas and Ebasco. Philadel¬ proceeds.
J. G. White & Co., Inc., 37 Wall
';///'■ / /'
Star. The honor was conferred by phia Company will probably re¬
During 1947 investors absorbed Street, New York City, announces
Gustave V, King of Sweden, in main
(it
is
uncertain as yet
that John A. Doody has become
almost $300 million of utility com¬
recognition of Mr. Rambo's out¬ whether it must give up its gas
associated with the firm's municj*.
mon stocks, about % as a result of
standing work in furthering the and transit interests); it might
holding company divestment and pal bond department. For the past
cultural relations between Swe¬ eventually be merged with the top
six
years Mr.
Doody has been
V3 as new issues for cash; ap¬
den and the United States. Mr. companies, Standard Gas & Elec¬
50 million dollars connected with the New York of¬
Rambo is President of the Ameri¬ tric and Standard Power & Light. proximately
of
new
utility common
stocks fice of The Ranson-Davidson Co.,
can
Swedish Historical Founda¬ Public Service of New Jersey will
—~
•' •••
v
have been sold for cash thus far .Inc.
tion;
'•
' disappear July 1, being replaced

John A. DooJf

With

J. G. While & Co. Inc.

•

Co.,

is frequently

groups

ible for management's reluctance
to offer additional common stock,

and $2J/2 billion. Cash
available from internal sources is
tween

foresee.

North Amercian Company

United

common

financing is entirely feas¬
Recognizing that specula¬

Capital expenditures of as much
as
$10 billion are envisioned, or
annual cash requirements of be¬

Corporation
Long Island Lighting
5
relaxation of conservative financ¬
Cities Service (will continue as
ing practices, expecting to regain
oil-gas system).
an adequate base of common stock
Electric
Bond
&
Share
will when the

that

assurance

en¬

give

and

success

(proposed

General Public Utilities
United

common,

have

stockholders

additional financing and to permit
it to face contingencies with rea¬

1.3 billion dollars to

Light System)

West Penn Electric

'Tapeworm'
Again Issued

(American

added

con¬

The
following
holding
com¬
city, the high load factor and the
panies have accomplished a great
prospects for even large energy
deal of their integration programs,
requirements indicate that the end
and the systems may be permitted
of this expansion is difficult to
to continue subject to some ad¬

San Fran.

the

McEntire,

utility

estimated roughly

;

Co.

subsidiaries in that area.

_
This one is certainly loaded with "political
banks that would bear the brunt of the change

legislation.C*

(Commonwealth

Offerings of

stock

sub- nually in the money market dur¬
ing this four-year period.
holding company in Electric Pow¬
"Most significantly," Mr. McEn¬
er & Light System).
•
tire points out, "the industry apAmerican Power & Light has
years to face a long period of
also considered using one of its
large-scale expansion rather than
operating companies in the north¬ a finite four-year program, as
west as a holding company if it is
was
assumed
a
year
ago.
The
unable to merge its two principal
tightness in the power situation,

dynamite" 'i
have been
known in the past to go to work on their Congressional Represent¬
atives, when their interests are about to be affected by proposed
gress

and

this period.

and

Service

Power

which have characterized much of

Commissioner

Richard

"ALMNO"

SURPRISE!

Public

com-

stock.

four

Light).

development

According

number of hold¬

Community

common

Commissioner Richard B.

watts

Southwestern

growth of

stock position of utility companies.

mon

Gas & Electric

Utility Financing

needs, and emphasizes importance of strong

re¬

England Gas & Electric
England Electric System

(formerly

let

should help to iron out the bulges that are appearing in certain

obligations.

New

are

Commissioner Richard B. McEntire points out continued

American Gas & Electric

INADEQUATE

Dealers

with

SEC Member Stresses Necessity of

inter¬

companies,
the integration
of which are virtually

Columbia

from

manage

holding companies would
a
single state commis¬
sion, and would -help to provide
equity financing and engineering
counsel
during
the
period
of
heavy construction. In any event/
the holding
company
will con¬
tinue to play an important role in
the utility industry.

England Pub¬
Niagara Hudson

completed:

Perhaps

created

Such

Power & Light, New
lic

time

and fi¬
groups in individual states.

nance

which

disappear

will

ones

time

American Power & Light, Electric

programs

new

states, to

excesses

will, therefore, be quite
respectable quota of holding
companies
remaining
after ■■ the

to¬

progress

Others

dissolution.

permitted systems to retain im¬
portant transit and gas properties
—although its policies have been
inconsistent in this respect.
now

Southern

rapid

ward

expected, and in some cases it has

There

American

deal

spect to the territorial extent of
certain
systems than had been

tap

the Commis¬

system

were

liberal

awaiting

sion's perusal.

dicated its views.

The SEC has been

period.

the company
six
dissolution,

although
are

SEC has finished its job.

1929

alive,

Company's status remains a little
indefinite; it would like to retain
in the system all its utilities as
well as its important coal subsid¬
iary, but the SEC has not yet in¬

ably practicable, to simplify the
capital structure of the holding
company, and to bring the finan¬
cial and accounting structure of
the whole system up to satisfac¬
tory standards.
1 ■
'
'
Z
The SEC has proceeded to do
this and while there may be justi¬
fied
criticism over the "tough¬
ness" of some accounting and fi¬
nancial policies, the Commission
has certainly succeeded in wiping
out

SEC to keep

plans

Gas, in recapi¬

North

form.

connected where this was reason¬

issues, since income continues to be
important to these institutions.
Liquidation is going on in

Service Electric &

become

to legislate the

territorial

RESERVE

remain la

But

Public

utility hold¬
ing company out of existence. It
provided the "grandfather clause,"
giving exemption not merely to a
legitimate holding company, but
also to a "grandfather" holding
company
superimposed
thereon
(the third generation being of
course
an
operating company),
Congress did, however, give the
SEC large powers to "police" the
holding companies—to reduce the

tially-exempt obligations, the demand is still sizable, especially
from institutions that

Hydro-

like to

director recently appealed

and

mean

Despite the betterment that has taken place in prices of par¬

ers

rather

not

would

existence—a class "A" stockhold¬

Utility Holding Company Act was passed by Con¬
gress in 1935 and during the early 1940s it was widely assumed that
the SEC would destroy nearly all the holding companies through
forced liquidation.
Issuance of the "death sentences" seemed to
bear out this opinion, with a re-f*sulting bear market in utility se¬ by its operating subsidiary, Public

The

1956/59.

Holding Company

about

stock¬

International

Electric

Survival of the

decide

common

courts

participation of the

By JOHN T. CHIPPENDALE, JR.

com¬

plete its liquidation this year, and
North American Light & Power as

■

(2438)

housing advocates claim that their

(Continued from first page)
threat

pression,
about

while

inflation

current

the

decade

old

and

still

dollars

Billions

level.

pacity

Federal

tions and in loans

mitments

which

extend

That

is the

and

Federal

ized

and

economic

part in

structure.

bolshevik,

time

same

her

often

ernment
It

in
is

business

government

When it
ask for
ness..

comes

Public housing

••

■

means

subsidized

housing—housing which

rents for

less

than its market value. The
idea being that rather than to deal
-with the poor and ill-housed fami¬
lies through
temporary relief and

support, it is preferable to build
houses for them and

new

■V loss

occur

.t.i]

take a
the operation. It does not

anyone—oh

yes,

it does

but only to Marxists
to
clamor for nationalized
automo¬
bile production, for
public food

occur,

growing,

for

governmental

clothing manufacture.

The same
argument could be used for
cars,
or
steaks, or winter overcoats:
that poor
people cannot afford

enough of them,

not

"decent"

ones;

;
>

therefore, the government
should start automobile plants,

cattle ranches, and what
have you,
the output to be
sold at a dis¬
count to the selected
poor.
11

But who

supposed
•,

are

the poor who are
the recipients of

public housing? The
original leg¬
islation
the U. S.
Housing Act
of 1937
requires the tenants to
be from "families in
the lowest
income group." Local
—

housing

au¬

thorities have
interpreted this as
maximum
incomes of

meaning

anywhere from $1,200 to
$3,000
per year for admittance
and have
permitted
their

tenants

occupancy

(with

continue

mild

ad¬

monishments) with incomes from
$5,000 to $13,000. All in
all,

families

in public

the

throughout the country
housing have an average

income of about $2,200
today. Now
then, there are at least 20,000,000

families in the United States with
no
more income
than that, thus
qualifying for a nice new home.

government

homes

are

homes

that
the

;

ex¬

ownership

manifold

One,

for

blighted

and

tre¬

entirely

current

dis¬
con¬

areas

cities
or

which

have

ask

for

subsidies. At any rate,
over-popu¬
centers are the ones to be

lated

better

housing,

work

less

qualify for
it has actually

ject

housing would be fair, even in
theory, is to provide a poorer
quality of housing to each lower
income

group.

Naturally,

the

dealist government housers would
their hands of any plan to

wash

provide

exists in the poorer
neighborhoods.
As a matter of
now

fact, there is

way

to build

stop its proponents

standards

not

destroy the ability of all but the

incumbent

"Congressional Record"

homes of their

own.

from lower wage areas. The result
would be to accelerate the
process
of metropolitan

dent reasons.

indeed

require,

subsidized

inflationary effects of

public

housing

should be obvious.

The

must be stated

any

enter

allowances

the

nopolistic
course

ier

cial

are

eas¬

handle, react better to

direction

so¬

special bonds guar¬
the Treasury. In either
impetus would f be

Q$se, a new
added to the

monetary

inflation

edly the figure is actually higher
because Congressional investiga¬

locations^;

Supose

we would

proceed with
on the level

tors

if ound

between

marked

the

differences

actual

earnings

tenants and

the incomes listed

the

project

official

employer of

records.

of
in

The

Chicago tenant who
listed his annual income as $1,250
revealed

the

tenant's

actual

re¬

ceipts to be $3,275. A Dallas,
Texas, tenant was found to be
earning 2Vz times the amount
shown

ex¬

of
propaganda
pam¬
prepared
on
the
subject
has never
been
one
that

phlets
there

failed

"after"

show

"before"

and

staged

government records

which his rent

was

based.

pictures with
carefully
slum scenes arranged

pages

and

were

thousands

the

better

tion.

course

rehousing of slum dwellers. Of the

mo¬

rehabilitation, 'Milch has already reached such
housekeepers and prop-4 dimensions as to call for severe
erty^ guardians, and in general control. Instead of controlling in¬
enable the public housing officials
flation, we would pour oil on the
are

pected, the public has generally
tolerated government
housing be¬
cause
it considered
it to
be a
slum clearance
program, for the

spe¬

already

spite of these developments,

which

of the building trades flour¬

issuing

application

VII
In

construction

organized

groups,

the

housing.

competi¬

necessarily would raise
costs and therefore prices more
than proportionately.
It is com¬
mon experience that where politi¬
favors

for government

program

tion field

cal

the

employees and tenants in the
Diego project. In Atlanta,
Georgia, the amount of union dues

tion
of
public authorities with
private enterprise in the construc¬

cial

party. * The '

San

The

members

housing.

major

political

of June 9,
1947, describes the compulsory
political campaign contributions

Consequently,

and

Pittsburgh, Pennsylvania, 80%
the
public housing .tenanats

happen" to

own

and more people would ask,

anteed by

Middle income tenants

concentration, to
To say that public housing is
increase population
density and
from
a
social point of view a
create more
housing bottlenecks
in
the
already blighted areas, sterile enterprise, is to put it mild¬
while depleting rural
It does not and cannot im¬
regions and ly.
small towns, thus
aggravating the prove inequities in the housing
very problems which are supposed situation. What is more, it creates
new
to be solved. In small
inequities, and as a matter
towns, on
the other hand, a
housing surplus of fact, it tends to make impos¬
a
may arise, and at any rate, real sible
lasting solution of the
estate values would fall. Indus¬ housing situation.
trial

opposite

oji

shining

new

photographs

government

units

filled with

smiling tenants. How¬
actual practice, from the

ever, in

-payer

otherwise, for evi¬

rents offers

unparalleled

richest American families to

additionally, given the high
tion.
The result is that the
pro
ijlevel of Federal and local taxes.
ects serve selected grdups 6r*tffe:
The choice would be between in¬
middle class, not the^poor.
It creasing the direct national debt,
could

Ir»

projects

opportunity for
patronage and political favoritism.

fron^erests.

tenant

public housing

hous¬

experimenting. They simply avoid
And who would pay for largethe whole problem of social
fata j scale public housing? It is out of
ness
by ' setting their own arbir^the question to burden the taxtrary

pro¬

people.

ing units at subsidized

ish. Certainly, a protracted public
Unfortunately,
the
fact
thgt jjiousing program will not dislo¬
public housing is patently unfafct cate entrenched
monopolistic innot

poor

tenants often have maid service.
The selection of tenants for

45-year-old house.

did

the

what

housing

housing of lesser stand¬ field, compromises with and

ard than

for

In final effect, we are sup¬
posed to finance a minority of
privileged home owners so as to

accomplished,

if ever, the $700
$800 families are cheated, and
so the dilemma is endless.
The only way in which
public

particularly

Southern

grow.

When this is

and

af¬

can

conspicuous parked around
is supposed to

and similar services which do not

then, say the theorists, build
public housing to take care

tenants

clotnes, good service,
recreation,
good
meeting

rooms, and good automobiles. The
model cars are

for the maintenance of schools

favored, having as a rule the to turn in better
"progress" re¬ fire of a rising monetary volume
worst
housing conditions. Now ports to their
Washington su¬ and of sky-rocketing costs of liv¬
then, one factor inhibiting im¬
periors.
Having
claimed
that" ing. •
migration into those centers is
public
housing
would ; reduce
housing shortage.
VI
Providing crime and disease, the masters of
dwellings, say, in Chicago, Los the
Public housing officials frankly
program
naturally did not
Angeles and Buffalo, would have care to fill
the
projects with admit that 20-40% of their tenants
the
effect
of
attracting people groups subject to social deteriora¬ have^'ex^ss incomes." Undoubt¬

just

government in busi¬

y.v

American

implications of vastly

provided

business.
we

all

public housing should be erected?
If the procedure is followed that
is usual today, subsidies will be

undesir¬

housing,

By what process of selection
will the government decide where

was

subject to

another
to

sideration.

the doors for

opens

program,

cussion, is worth most serious

political malpractices if not out¬
right corruption. Government in
one

mendous.

than

inefficient,

un¬

overlooked

not, public
opinion is guided by ;such and
similar
"logic." We know very
well, or most of us do, that gov¬
able.

home to every family

The

it for granted that she would be¬
have as if she were not bolshevik.
More

only. In other words,
a whole
century to

year

panding

bolshevik, we
the time, but we took

knew it all

incentive:

happened.

all

would be owned and operated by
the government.

Europe's

Russia

negative

and earn less so

of the $600 families.

and

possibly build
housing units than

part of it, were to b'e at¬
tempted, and to say nothing of the
prospect that at the end one-half

to be de-industrial¬

the

restored

construction

flation-provoking

see

was

the

income,
aside the fact that the
cost of producing the homes would
sky-rocket further if such an in¬

fabric. Or, take our foreign policy.

Germany

necessary

provide
than

leaving

prices fall, too —
jewel of that epistomological

the

to
more

der the official minimum

posing
prices simultaneously. The idea of
combatting inflation and guar¬
anteeing farm prices simultan¬
eously—to have more money to
is

ca¬

public

give

have

and

limited

discouraging to the man whose
income is just a little loo high to
qualify.
It would
result in a

units

produced several
field, such as pro¬
higher wages and lower

spend

our

it would take

classics in the

who

man

Government hous¬

we could not

even

Congress

500,000 a year. Even the TaftWagner bill, the largest ever con¬
sidered, figures on 125,000 new

the

well

$600?

the

our

national Administration

makes

than

kinds,

minds are
organized. Call it natural opti¬
mism or wishful thinking, we like
to live by the precept of eating
our cake and having it, too.
Our
way

last decade of this century.
v

and

1,500,000
homes a year, plus the need for
essential
industrial,
municipal,

com¬

into

not

produce

labor force for

dona¬

involving

materials

already been spent,
highly controversial
Taft-Ellender-Wagner
bill
now
pending in Congress should be¬
come
law, the
spending spree
really will get under way. That
bill proposes to pour out at least
billions

could

wanted to. Given

the

seven

housed

those

good

late

But

have

but

that

see

good

directly
the
individual
ing, of course, is better housing benefit
In other words, as
adding that much more (physically) than that which a home owner.
to our
already astronomical na¬ $600 income can command. Every¬ public housing progresses, the tax
tional debt.
1
;
■ •'
one
can
on
see
that this is highly burden
private homes will

New

local

rates of

all of the existing govern¬
housing.

carry

imagine

life
is
being
breathed into it by public spend¬
ing on
both
the Federal
and
the

most of them cost that at

building wages.
At today's cost, the total outlay
would amount to between $150
and $200 billions (not mentioning
special
tax
provisions).
Just

contradictory
motiva¬
tions, all deeply imbedded in the
popular mind, feed the Federal
Public Housing program which is
growing.

—

pre-war

These

now

ter

cupy

ment

very conservatively, that
dwelling unit costs $6,000

only

and prices.

wages

But
then
we
are
confronted
with the question: should the man
who earns less than $500 be bet¬

Suppose,

worried

are

ford

their proportionate
burderi
for
utility expenses, a
very controversial claim. At any
rate, public housing is exempt
from municipal taxes and certain¬
ly does not participate in such
expenditures of local authorities

each

to
combat
the
future
unemployment and de¬

activity

tenants

Should We Subsidize

beginning

very
ance

the
;

the

ideal has been

slum

clear¬

relegated to

background.

The Housing Act requires the
elimination of one slum
•

dwelling

for every public
housing unit con¬
structed. * Three
loopholes have
negated the Congressional intention; First of all, the slum dwell¬

ing eliminated
site

chosen

Just

how

destined
counted

houses,

already

elimination
of

course

the

reconstruction.

many

for

normal

need not be

for

events

the
were

by the public housers

eliminated

under

this

program

will

never
be known.
Secondly,
the repair of a substandard
dwell¬

ing was held to constitute slum
elimination. Finally, the public
housers

could

declare

local

housing shortage and waive this
requirement "temporarily."
;., t
All

jects

told, 11 of the first 41
under

eliminate

the

USHA

pro¬

did

not

single slum house and

nine

more
resulted
in
tearing
down fewer than 50
per project.
A classic
example of the pseudo-

slum-elimination by public hous¬
ing can be found in Savannah,
Georgia, where the slum dwell¬
ings on a proposed public housing

site

were

sold, put on rollers, and
prevalence of high in¬ moved
across the street where the
Taft-Wagner planning. The comes in government housing due
former
and
structure would be at the obvious result
occupants continued
to
(disregarding the to "present eviction difficulties? live in
them.
mercy of bureaucratic or
arbitrary social
implications
discussed This is more of an excuse than an
Nor has the lot of thie slum oc¬
decisions—or else a Planning Au¬
above) would be two-fold. .Evi¬ explanation. Most of the projects
cupants
improved.
In
thority would be needed to decide dently, labor and materials would
Omaha,
are continuing to
admit families Nebraska
who is going to live
and Atlanta,
Georgia, it
where, and have to be drawn into public whose incomes are definitely not
was found that not a
what industry would be
single family
located housing projects, and so much less in the lower levels. New York low
in what area.
living in the area rebuilt with
would
be
available for private rent subsidized
projects are ac¬ public funds
was admitted to the
hou sing.*; Public
III
construction cepting today families with in¬
finished housing project.
In At¬
would
either : compete
with comes as high as $3,600*; and $2,However, let us take a look at
lanta, it .was simply a case of
the private and would have to of¬
some
000 to $3,000 limitations are con¬
social aspects of a
major
arithmetic.: Surveys showed the
fer higher prices, raising the cost
home
sidered normal in most of the big
building program carried
slum dwellers to" be
level all around; or else, a system
paying, a
out at public
cities. One look at the national
expense.
Obviously, of
governmental allocation would income statistics shows that there monthly rent, of* from $2.50!:tp
at any time
only a few of the po¬
$3.50 per room.
The minimum
have to be introduced,
tential tenant candidates could
giving the are millions of families with in¬
get
government housing rental was set
public authorities priority over comes substantially) helow $2,000
consideration.
How :, should
one
at $5.50 per
room, double what
private
constructors.
In
either which are being overlooked in
select the tenants?
Should the
the site occupants could afford
(in
homes and apartments be auc¬ case, the net result is bound to be favor of the higher income familess homes for those who are not
les. (Exactly the same thing hap¬ spite of all subsidy!). In Youiigstioned out to the
highest bidder?
town, Ohio, the city building in¬
subsidized. The more people in
Of course
pened in
the pre-Hitler* public
not, for the highest bid¬
spector made a careful survey of
the $1,500 bracket, as an
der can
example, housing projects of Germany and
get satisfactory private
a
proposed public housing \site
housing for himself. Should they would be supplied with homes, the Austria.):
and found that of the 160 families
less those in the $1,600
be given
Occupants ; of public housing
bracket,
away to the most needy?
in the area only two "qualified"
and above, would be able to build
The
represent almost every social, eco¬
easiest
way
to
find
the
as public
for
housing tenants.
*.
themselves.
most needy would be to start
Housing would nomic and occupational level. City
at
tend to become the privilege of
employees, bank personnel, rail¬ v Not only has the practice of
the bottom and work
up the in¬
clearing slums with low rent proj¬
the selected few who cannot af¬ road
workers, lawyers, firemen,
come scale as far as the
ects failed, but the theory itself
available ford tO buy it.
bookkeepers, plant foremen, and
deeply affected. In other words,
our
whole economic
geography

public housing, say,

the

of the

government

housing

tend. This would

would

mean

some

ex¬
an¬

A second consequence should be

equally evident.
As

nual

income figure under $500 to¬
day because according to official

statistics, there
lies in that

are

bracket

enough fami¬
alone to

oc¬

lic

homes

expense,

\::
are

■

•/'

built

pub¬

proportionately

larger share in the cost of munici¬
pal services devolves

vately

owned

the pri¬

homes.

Public

is now considered unworkable. As
hundreds of other professions are
Senator McCarthy, Vice-Chairman
reported in public housing. Only
of the Joint Congressional Com¬
a
casual observation is
necessary
mittee on Housing, has said, "Our

*The New York City
Housing Author¬
ity has just voted the income limit of
$3,984 annually for veterans entitled to

public
$16

housing
room.

monthly

rental

studies

show

clearance
are

separate

found

clearly-; that

and

that

low

rent

problems.

most

slum

housing
We

have

areas

are

Volume

not

167

Number 4704

THE

even
suitable for housing of
kind and should be devoted to

any

commercial,
Uses."

industrial

public

(boldface ours.)

"
matter of fact, slum clear¬

.; As

ance

could

have

never

far, attached to the
of public
housing.

advanced

strings

apron

was

buying
paying

a hat to get the feather,
$5,000-$10,000 for a new
housing unit, to accomplish the

destruction of

slum

one

dwelling.
have been the public's own

It may

negligence that it

learned to

never

separate slum clearance from low
rent

housing, but

ihg

official

effort to

public hous-

has

ever

exerted

clarify the issue.

^ V

'v.;

VIII

Public housing can build houses
—at

high

costs—but
accomplish the social
of

clearing

slums

cannot

housing for families
income classes.

COMMERCIAL

in the

tation of the
more

and

voted

subsidized

failure

its

and

de¬

are

housing, the

will

apparent

effort

social

its

economic

draw¬

•*

•

in the increased amount of buying

credit, both on the installment
£lan and through regular charge
'/accounts. According to recent estimates
of/government agencies,
on

•

'purchases

credit

1947. This is

;

the

fact

not

••

relaxed

until

late

last

already

year.

principle., of

private

that

lower

resistance points" is the ob¬

sumer

retailers

many

planning their operations for Fall.
(5) There is ample evidence
that: in
many
lines
supply is

catching, ■ or has caught,

In fact,

formed

believe

rent

with

Auto tires and radios are

good examples.

backlogs of orders
industries, and the
publicized predictions of govern¬
mental
agencies,
notably
the
Treasury Department, that prices
will continue to rise, are all on
the inflationary side.
'

are

concerning consumer
"Get prices below con¬

demand.

important

many

prices

tory and /profitable sales volume
despite the improved outlook in

jective

expectation that vacation travel
this year will exceed all records,
in

retailers

sources

price

reductions

result of the return of

petition

sellers

among

in¬

some

that

cur¬

the

are

real

and

com¬

that

when such reductions are passed
along to final users of the prod¬
ucts they will contribute
mate¬
rially to price stabilization.

Tending to Stabilize

Factors

(6)

Contract Our Economy

Now, let
of

some

the

fluences

turn

that

and examine

important

in¬

factor

considerable

importance is the inventory sit¬
uation.
During the first quarter
of

this

business inventories
some
$4
billion.
In

year

increased

March

the

alone

increase

was

tending stabi
ing concern in some cases.
A
?- lize
or-contract the present level $1.44 billion, with retailers' stocks
rising $947 million.
This latter
(4) A fourth factor related to. of business activity.
demand
is the attempts
of or¬
(1) There is evidence of in¬ increase, however, was primarily
ganized labor to receive a third creased consumer resistance to among dealers in lumber, build¬
round of wage increases, referred
present prices and some price ad¬ ing materials, and hardware. • ' De¬
and
clothing
stores
to before in connection with pur¬
justments downward have already partment
are

caus¬

are

chasing power. Despite the grow¬
ing evidence* of resistance to such
demands, it is highly probable
that. Upward
adjustments will
constitute the pattern in the next

taken place, The sharp break in
commodity prices in, February

few' * months. * But

while they hoped for lower prices
And this skepticism was shared,

strikes

some

have been lost

recently and labor
less confident of
public support than formerly. The
leaders

outcome of the
-'

that

Motors

telling

the whole industrial sys¬

tem.
:
'

(5)

Prospects
in

year

bright that

are

1948 will prove to

tive

home

But the

ness

many

future.

housing problem involves
elements and its solution
may be far off. If such activity

•

does

occur

substantial

it should
demand

tion materials

result in

for construc¬

well

doubt

confidence in the stability of busi¬

^negotiations will- have
on

consumers

a very ac¬

General

/work stoppage, and. the soft-coal
effect

all

most

stability of the price level for
goods and; to delay purchases

construction.

Chrysler situation,

threatened

caused

the

likewise, by retailers themselves.
A spirit of caution in buying com¬
mitments prevailed generally. A
rather disappointing Easter busi¬
ness added strength to their fears
and they adhered rather closely
to a "middle-of-the-road" policy.
During the past two or three
weeks, however, this attitude has
been changed to one of increasing

appear

for home

activity
For

in the foreseeable
example, there
is

showed

than sea¬
happen
during the remainder of 1948 is

sonal

slightly

rise.

What

will

It would be

difficult to estimate.

reasonable

past five months and

well

the attitudes of bankers

themselves regarding credit ex¬
tension, is another factor of im7
portance. A governmental budget
of some $40 billion a year cannot
but have

tremendous

influence

our entire economy. Let us all
fervently hope that the time has

•not

come

when

such

will

continue

budget with
complacency. If we do, our econ¬
omy will undergo a significant
change and the results will not all
■} be good. While an increase in
a

turning of

requirements or customer demand
is less than expected, the threat¬
ened scarcities may not develop
and #. management
may p{ act
promptly to stop accumulation of
inventories.

The normal growth in our
labor force, as well as its elas¬
(7)

ticity,

are

ordering

quantity. It is too early to judge
whether

crease

Assuming

this

case

goods in
will

move

some

expand

into other lines but indications

are

aging

production, two encour¬
factors deserve mention.

might.
One is the normal annual increase
(2) A broad program sponsored in our labor force of about 700,by the government is now being 000, and the other is the "elastic"
conducted to increase the sale of nature of our
working force. Re¬
U.
S.
Security Bonds
and
to tailers, fori example, can draw
siphon off some of the purchasing increasingly upon part-time em¬
power
of consumers. Timed to ployees, those with physical han¬
coincide with deductions in with¬
dicaps, those who have retired.
holdings from wages and salaries Effects of the proposed draft, of
because of the new income-tax
course, should be considered also
law,

the

bond

drive

meeting

in connection with our labor force.

with favorable response. Retailers
have given support to this move.

(8) In the opinion of some ob¬
servers, our economy is flexible
Closely associated with, or
enough to absorb reasonable addi¬
perhaps more correctly a part of,
tional
defense appropriations
bank loans may be a relatively consumer
resistance
to
h i g h
without further, inflation. As the
small factor in the over-all infla- prices is the
significant amount of Council of Economic Advisers has
jtionary potential, it i$ a -matter to trading down that has taken place
stated, that ERP will involve an
"be watched with care. And, al¬ in recent months.
This is evi¬
export surplus in 1948 "at least
though the extension of reason¬ denced by the increased volume
$2 billion 1 below the level the
able credit is essential to the pres¬ of basement store business
in re¬
council
contemplated (in Oc¬
ervation
and.
enlargement
of lation to that of the main store, by
tober) and found to be safe.
.
business activity, in periods such the shift of consumer
purchases This leaves room for the safe ab¬
/ as the present, loans should be from independent stores to chain
scrutinized with increasing cau¬ stores in their search for lower sorption of a defense program of
considerable magnitude
(and)
tion. ; •}
r
'
" 4 p. ' «
prices
which,
incidentally, >• is in terms of its general impact
; (7)
In addition to the fadtors causing dry-goods jobbers con¬
upon the economy
would seem
mentioned, there are numerous siderable concern, and by the de¬
to be something the country could
others to which only brief refer¬ cline in sales of luxury and semireadily take in its stride."
ence may be made. The enormous
luxury merchandise. Further evi¬
(9) The outlook for supplies —
'

(3)

bottle-necks,
larger pro¬

portion of current production into
current

consumption
as
inven¬
tories reach the saturation point.
On balance, inflationary factors
>

and those
and

tending toward stability

deflation

ascendant.
is

outlook

unequal
although
now in the

are

situation

demand

far

the supply

that

the

total

physical

of goods and services in

that

exceed

There
of

1947

to be

appears

shortage

any

output

1948 will

4-6%.

by
no

prospect

capital

credit

necessary
to
conduct
a
larger dollar and physical volume

business. In my judgment, a
conservative estimate is that there

will

moderate

rise

the

price level during the remainder
of the year assuming (1) that the
cold war does not turn into a hot

■

•

amount of money in circulation—•
•

some

$29

decline
creases

pect

in
in

billion
recent

but

with

weeks,

some

the in¬

dence

unit

crease

supplied by the decline
transactions, and the in¬

in merchandise returns.

both agricultural and

industrial —
is good. Our domestic crop out¬

our

defense

pro¬

is not substantially enlarged
beyond what is now contemplated.
My guess is that the wholesale
price level in December, 1948 will
be very

little

than 5% above

that of December, 1947<
Some

Responsibilities

meat

pros-

prices,

doubtful

consumer

the will increase to the

income

point where

lines

the

during

what he

this

sion, may I bffer
for

believe

will

period

it.

makes

conclu¬

few

sugges¬

consideration?

your

they constitute important
on
a

policy. There

your part.
middle-of-the-

still many

are

can

secured.

lower-priced

operate

increase

the

and

number

unit transactions.

(5) There is evidence that the
buying public has taken care of
its

most

needs

urgent

house¬

hold

equipment, home furnishings

and

probably

attention
the

apparel

will

and

turned

that

m6re

purchase of automobiles as
supply increases — assuming

the

strikes and shortages of

raw

terials do not prevent such

ma¬

in¬

Consequently, greater pro¬
effort
will
likely be

crease.

motional

necessary

store lines.

fact

retail
continue, of
important part of

income

consumer

the

move

that

by
large

five

despite

easing; of

prices,

about

above

20%

is shown

sales

chains,

grocery

many

Food will

to get

course,

some

are
running
last year."

(6)

Prepare now to meet your
personnel problems for this fall
and

winter.

the

expands,
problems

gram

these

defense

well

pro-,

might,

likely

are

serious and only careful

advance

planning will ease their solution.
All logical sources of
supply of
employees should be investigated
and

the

content

and

training

courses

late this

summer

and

should

methods of

be established

early fall for

present

agreed

employees
/

upon.

(7) Finally,*exchange ideas and
experiences with
executives
of

comparable
nature

methods

stores

regarding the
problems; and
solving them. In my

present

retailers

part,

present emergency
distinct challenge to

American

during the past two months and
at this time there are no signs of
any decline during the remainder
of the
year.
But the retailer's

road

given

should

stockturn

represents

The retail picture has improved

business

judgment the

Retailer in the Present Situation

business

men

such

are

whom

important
leadership miust

'v Business

not fail in the present
emergency
and
if
retailers
will
make the
most of their accumulated knowl¬

edge
and
experience,
exercise
the sound judgment of which
they
are
capable, and reveal the im¬
agination
and
foresight
upon
which so many of our
leading es¬
tablishments have been built, one

but

can

look

confidence

and

the

future

with

optimism.

uncertainties—present and poten¬
tial

—

the

situation

the safest

seems

course

and

this

to pursue.

Although such a policy may pre¬
vent you from "making a killing"
if certain conditions develop, it
will also prevent your taking a
loss

other

conditions

come

pass.

(2) Maintain reasonable caution
in your buying commitments. Do
not enter into speculative buying
practices!
The present inventory
situation

should

make

such

but there is
danger that some, over-awed by
the size of appropriations for de¬
fense, may be tempted to "take a
gamble." Your buying activities
in the jmonths immediately ahead
warning

will

unnecessary

determine

and

when

visors will be established.

(3)

well-balanced stocks of merchan¬
dise.

There is need for improved

stock

control, for making prompt

price adjustments

items

unac¬

ceptable to customers at present
prices, and for revising model
stock plans to place less emphasis
on higher-priced lines.

7(4) Get

your

ent

consumer

Too

many

Bond Club Field Day
A

prices below pres¬
resistance

comprehensive

with

gram,

sports pro¬
wide choice of events

participants and
spectators
alike, has been arranged for the
Annual

Field

Day of the Bond
New York, it was an¬
yesterday by C. L. Morse,
Jr., Hemphill, Noyes & Co., Chair¬
man of the Field Day Committee.
The
outing, to be held at the
Sleepy
Hollow
Country
Club,
Scarborough, N. Y., on June 4, is
Club

nounced

expected

attract

hun¬

several

members of the Bond Club.

dred
An

all-day
to

open

golf

all

Clark,

that

vided into three

the

Co.,

Chairman

committee,

golf

announced

tops

William M. Rex,

Dodge

the

tournament

members

sports schedule.

this

has

will

di¬

handicap classes

and that two courses will be avail¬

able

accommodate

the

large

number of golfers who will com¬

A hole-in-one will give all

pete.

players

equal chance to dem¬

onstrate their best shots.

To enliven interest in soft

points.

have been
priced out of the market. Shoe
prices are a case in point. Price
adjustments involve more than
regrouping of your present stocks.
They also include close coopera¬
tion with suppliers to obtain goods
that can be sold at prices accept¬
able to consumers.
While there
will be resistance on the part of
consumers

for

increased attention to

Pay

Sports Program for

the

standby machinery for price and
rationing controls recommended
by the Council of Economic Ad¬

special

duced

feature

the

ball,

game

intro¬

this

will

year.

Gardiner H. Rome, Stone & Web¬
ster Securities Corp.

the

Chairman of

Committee,

Baseball

sued a call to

has

is¬

soft ball players to

form teams for this event.

;

some

cause

suppliers to this move be¬
of continued high raw ma¬
and

look is favorable and that for Eu¬

terial

particularly improved. In¬
creasing imports reflect the
growth " in / production
abroad.

labor; costs

substantial

rope

freight rates, the

of. higher

emphasis

gram

results

Better-balanced stocks with added

new

(2) that

one, and

desired

concerned, no impor¬
tant shortages should develop ex¬
cept in the metal trades. My guess

through effective cooperation
the

believed

The

bright and

not

are

commonly

responsibilities
7(1) Stick to

that it

and the

likely increase still further. If, on
other hand, supplies increase
than defense and foreign

the

faster

that /there is no im¬
portant slack in our labor force at
present to meet the scheduled in¬

V (6)

materials and fewer

tions

medium-priced

Government; fiscal; policy,

training and experience,
and
the
gradual subsidence of
labor
unrest, increased flow of

a tapering
off.v But, if business men become
convinced that we are entering a
period of scarcity, inventories wil"

expect

should offset to some ex¬
evidence that many large furni¬ tent at least the expected tight¬
ture retailers are
ending their ening of the labor situation I
cautious
buying policies of the referred to a few minutes ago.

furnishings
and
appliances.
In
April, incidentally 70% of stores
"reporting to NRFA showed sales
Increases, 30% declines.
'
.

longer

inflationary trends

partly to
Regulation W was

But collections

ment installed at record-breaking
rates over the
past two years,

income.

attributed

that

electrical

and

Moreover,* it- has convinced

will

1948

likely exceed the $3.2 billion

•

steel

tate

the tremendous

(3) Further evidence of demand

though a
Effects of price

even

growth in the labor force,
increased output per man hour—
because of better plant and equip¬
some

recent weeks

inflation, impairing real es¬
values, and scrapping
the

(Continued from page 4)

weakness.

reductions

sta¬

cost

home ownership.

long ago had shown signs of

bilizing
factor
temporary one.

tnany

Moreover, barring serious strikes,
industrial production in this coun¬
try should continue to rise gradu¬
ally and steadily as a result of

needed-this fall to insure satisfac¬

The Economic Outlook
hot

consumers

goods should prove to

(2439)

likely prospect. We will learn
public housing is unwise, if
not disastrous, but we may have
to
learn
it
the
hard
way—by
spending many billions, fostering
a

that

American

certain cotton constructions which

reductions

lines of industrial and

■•■v :
; 'v / >'' goods cannot be appraised at this
However, given the lack of clear time,
but
recent favorable
re¬
thinking on the subject and the sponse by consumers' to promoshrewd ability of pressure groups tional events has demonstrated the
and sentimentalists to exploit the
underlying strength of purchasing
public,
further
experimentation power at ^levels somewhat be¬
along the same unsuccessful lines neath "current ; market ; prices.

providing

•

trading

backs.

objectives

and

(4) Price

CHRONICLE

FINANCIAL

any extensive return to
will take place.

limi¬

available. The

means

money

low

This failure is not

accidental. Nor is it due to

some

fields
house

well

backlogs

qrder
such

textiles

furnishings,

Other

championship

in
and

only

sports

events

include

tennis tournament for the doubles

horseshoe

of the

Bond Club,

pitching contest and

diving and swimming exhibitions

by aquatic champions.

COMMERCIAL

THE

(2440)

FINANCIAL

CHRONICLE

Thursday, June 3, 1948

they supported him year after year, and in four Presi¬ rationing, priorities and alloca- *
tions were developed in our econ-'
campaigns in which he was in each case overwhelm¬
omy as never before.
Tragically,
ingly returned to office. President Truman, not "on the the most important survivals of
cuff," but in numerous very formal gnd often repeated the free enterprise system were,
The" healthy
official statements, has placed his seal of approval upon all in black markets.
and
stimulating aspects of the'
the essentials. of the New Deal regardless of his attitude
normal operation of free enter¬
toward its former personnel.
He has no such magic political prise were all but submerged.
touch as his predecessor, and it is certain that substantial
Where Are We Now?
elements in his party would like to "ditch" him, but, of
And where are we now?. Mil-;
course, it is logically impossible for his party to repudiate
itary operations against our erst-;;
him without repudiating itself. Without more ado, it may
while enemies have ceased, but a
be said that regardless of its platform, and without reference new enemy, a former ally, has'
to its candidate, the Democratic party must either come arisen ominously on the horizon. "
The hopes centered in the United;
before the public as an exponent of the New Deal or else
Nations organization have been all V
as a self-confessed blunderer asking for re-election on the
but shattered.
A so-called "cold
basis of its repentahce for past transgressions,
war" involving enormous expend¬
v
but

As We See It
r

;

dential

(Continued from first page)

paigns
the

those in Oregon, and the apparent attitude of

people of

basic

number of the Southern States, the really

critical issues of the

day are hardly controlling.
Hand-shaking, "baby-kissing," the willingness of can* didates to assume all sorts of silly postures and to appear
:
in shirt sleeves (or less), and much more of the same;r
r

order often

seem

of much

influence in determining

the choice of rank and file voters in the

primaries. The
President is being coached, so it is said, in speaking "off
the cuff," because this is believed to give him and his
utterances a
"homespun" attractiveness which they
V otherwise lack.
;',4: '/ '"V.7/,
v'
■

Not Unusual

There is very little that is much out of
all this. It is for that reason, perhaps, that it

the ordinary in
does not appear
strange or inappropriate to the casual observer. f-Yet we
cannot escape something more than a passing regret that
in the critical world situation
existing today, we have not
proved able to approach what ought to be the time of
prayerful choosing on a plane of greater realism, intelli¬
gence and dispassion.
We boast much of our "two-party
system." We are fond of telling ourselves and the world

The opposition is, however, in no such position. On
the other hand, it does have a record of indecision,
lack of cohesion, and an apparent inability as a party

to make up

or what .it would do if
It without much doubt has
New Deal leanings, but how extensively so and in what
particulars it remains difficult to say. It would be little

placed

exhibited

Deal

"one-party system"' recently
Czechoslovakia, and the multi-party system

number of countries

impotent in recent

obliged to wonder in what
party system."

It is true,

7 has its

sense we

that each of the major parties

patron saints before whom knees

are

catch-phrases,

the slogans, the cliches, of the two leading parties also
differ somewhat.

By such

means

it would probably not '

especially difficult to distinguish party platforms in
years even if party and political names Were
blotted out, but if one had to choose between them on

the basis of

C recent

been

how

much

discussion has been

virtually

enterprise have hot been, and,
practically,
cannot
be, 4; fully

scope

it
may
be, none the less disturbs
that basic equality of bargaining
power which is one of the funda¬

porate device,

heard

about

what

each

major parties will promise for the next four
A few, mostly oblique,' references here and there;
nothing more. -..The naive soul without kuowledge of how

years?
these

things work out in actual practice might suggest that
choosing candidates, the parties would ipso facto select
least in a general
way the attitudes they wish to take on

the broader

issues of the
day. It could be said, too, that
the rank and file, in
showing preferences for one candidate
over
the others, give an indication of their
views upon

public questions.

;
*

assumptions of the free
enterprise .! system.
Monopolistic
power
in
markets
repeatedly
raises its ugly head. Competitors
will neglect their moral obligation
to stand behind the integrity of

the

market

';
^

such

/■

matters

—

perhaps the
but it is by no

most

glaring example in
the only one.

recent

traffic

The

aimed

come

party

understand how the Democratic

before the people except in defense of the
New Deal in its
entirety. It is, of course, well known that
large sections, of the party have never been ih
can come

with much that President Roosevelt

sympathy

was

doing in their

the

corner,

inter¬
move¬

promote,

not

economic

our

become

society

;

this

extent

some

name,

the

such

event

eco¬

be simply one

governmental'pol¬
all private business cal¬

The

too

'urgent

was

in¬

necessities

with

public health and
with adequate high¬
with postal service and in¬

forces

conserva¬

has

led

direct

into

government

the economic process. Such inter¬
vention has given rise to impor¬
tant

questions
which

about

public

there

policy

has

been

marked difference of opinion.
It
has not, however, disturbed the
basic fundamentals of the system.

war

that

has

all

but

wrecked the system of free enter¬

prise!

Modern

war

Moloch into whose
we

pour

both life

hand

one

purely

resort

background in our thinking the
basic facts of our present eco¬

gov¬

nomic and financial situation
be

easily summarized.

can

They are, j

perhaps, generally familiar to thi3

Re¬

company.

peacetime,

The to

inflation.

over

$23 billion and it continues

Money in
price disturbances then steadily to increase.
necessitate
further
regulation circulation has expanded "during
the same period from about fourthrough price controls, rationing,
priorities, allocations, etc., all of billions to over $28 billion. More¬
which in the end spell the doom over about $24 of these $28 bil¬
lion represent notes issued by the
of the free market.
Reserve
banks, against
The corrosive effect of war on Federal
which only a 25% gold reserve is
system of free enterprise has
continuously operative since required. The money of business 4
World War I.
Early in that con¬ is, however, the bank check, based
flict the international gold stand¬ on deposits rather than hand to

the

broke

rapacious

and

treasure.

di¬

nomic

controls

hand money.
Bank deposits about
1900 stood
approximately at $3
billion.
They expanded rapidly

completely, and
external

In¬
eco¬

thereafter, with a slight decline in
1920 and 1921, until they reached

applied by
belligerents, ' and ' Were
modified, • rather
than

the

all

were

^ peak; of $51^
billions in 1929.
They dropped to below $37 bil¬
They were back to
hostilities and the establishment lions in 1933.
of an unstable peace. During the the $50 billion mark by 1939. Then
inter-war period, the war destruc¬ followed the enormous war exIn December - 1945.. ,a
tion of capital, the undermining paniion.
of
$148.9
billions j,was
of
the
middle-classes, the sur¬ peak
reached.
Through
the
partial
viving problems of reparations,
of
the
government
and
of
intergovernmental debts liquidation
debt this was brought down to
and the intensification of inter¬
national
rivalries simply
multi¬ $138.8 billion by January of 1947.

merely

eliminated,

the

cessation

Since then, however, the expan¬
difficulties which the
sion of loans to private business
originated.
Monetary
has reversed the decline and total
manipulation and inflation, des¬
deposits today of all our banks are
perate
fiscal
expedients,
and
trade and exchange controls con¬ reported to stand close to the $150
billion level.
*
;
tinuously bedeviled the interna¬
What is even more striking is
tional
situation
as
well
the
as

the

plies

itself

war

domestic

economies

countries

the

etricious
ties

only

most

all

the

and

inflationary potential in our
and credit system.-: In the-'place, as already indicated,*;
we are steadily adding to our basic;
gold reserves. We buy all the gold;
offered at $35 per ounce. The ef-.
feet of this is correspondingly to *
add to both 5 member-bank,1 and?
Federal Reserve bank, reserves..
During the past year something;
like 2%!-billion was added to our

had

money

frist

mer¬

prosperity of the twen¬
followed

by the
collapse in our
Monetary experimenta¬

disastrous

history.

deficit

program

reform"

and 'the

involved in the

of "relief,
did

little, to get
Strange

financing

measures

recovery

little,

back

but
on

may seem,

and

only

our

economy

tion.

level

eral

1941

prices

its 1926 position.
In
World
War

did

billions to

get
we

back

simply

upon Ossa in the fur¬
distortion
of our economic

were

Our

"war

expenditures
Despite an un¬

fantastic.

precedented expansion of taxation

verted from human want satisfac-

some

heaped

national debt of

$280 billion.

Price controls,

■

Conservatively' esti¬
added

our

Excess
banks

dollars.

piled Pelion
ther

ber

gen¬

-.'JS
II

tial.

opera¬

our

this

mated

it took the

fulltime

Not until

stock.

gold

feet.

Nazis and World War II to restore
our

•

the

world.

boom

postwar

our

tion to wholesale destruction.

The

well

ternal

hungry mouth system.'.

The factors of production are

down

since been restored.

never

series of

resources,
with
and other great so¬

objectives

objec¬

resulting

tion,

intervention

controlling

In 16 years our gold stock has
pecuniary controls proves impos¬
sible. The inadequacy of taxation increased from some four billions

tion' Of ~ natural

cial

the

With this frame of reference as

upon

flood control

specifically to the forthcoming campaign and
to

officer

with, the freedom of

fere

ways,

Current Example
To

the mechanical lights, are

even

tercommunication, with

history,

with

ized

demand

war

the side of demand.

liance

has

education,

in 1932

desiccation

further

tives of government.

controls of supply and
other to balancing opera¬

the

ard

associated

means

election, it is difficult

Anti-monopoly

evitable.

pains to
than purely formal: >

system of free enterprise and a
corresponding reflowering of state

icy and

the

tions

laws,

the

of the tools of

and urgency of

leads

regulations governing the stand¬
of
competition,
like pure
food and drug laws, and other leg¬
islation aimed at the preservation
of a reasonable equality of bar¬
gaining power are all completely
in harmony with the philosophy
of the system of free enterprise.
ards

tendency of governments to
participate as players in the game.

£'ve the pledges of his party more
approval or deference. The Roosevelt record

has

become in¬

The disturbing element has been

to any

the candidate is often at

intervention

the

say nothing
sizable group of voters.
Unfortunately, platform pledges have likewise become
a sort of
mumbling to which no meaning can unequivocally be attached. What is more, no particular pains is
taken to be certain that candidates
and platforms match
up, and when they do — so far as it is
possible to judge

own

Disturbing Element

toward

been

degree

some

gent necessity;

Possibly it would be unkind to say that
most of them, have been only too careful that

that would be unwelcome

their

interpret and apply them, became
a
reasonable and, indeed, an ur¬

of the candidates believe about
many of the vital issues
of the day.

their positions not be-made clear
and unmistakable.
has long been one of our cannons
of good politics
avoid such unequivocal commitments
and to

complicated
rules of the game, and umpires to

only the most naive observer could possibly
take much stock in such assertions. In the first
place,
it would be quite
impossible to determine what many

evitable.

ment.

;

But

they,

mental

has
>■

necessary

Governmental

yet

either of the

ernmental

:
upon us,

tends

World War III, then we can count

and Real Estate Loans

thus
are

moment,
sadly mixed

culations will have to be harmon¬

ice

What Do They Stand For?

party convention dates

controls.

situation

world

Economic Uncertainties

selfish ends.

The

stu¬

of private enterprise and

socialism.

constantly endeavoring to use
political power to bend the serv¬

an easy one.

the

nomic control will

their products, and various groups

fundamentals, the task would often have

governmental

are

anything but

have

system

assurance. T

realized. The very use of the cor¬

orthodoxy in this matter. More than one "Democrat" in recent years has attempted, not always without
a
certain measure of success, to catch some of the |
reflected glory of "Teddy" Roosevelt. The

it has

(Continued from page 7)
•

former

abandoned.

therefore,

something else the precise nature of which
way of determining with any great degree of

J tached to such things as this, and, in any event, there
has been a tendency in recent years to
drop some of the
?

and

bended

and the like.

;

the Continent

of us have often been
really do have a "two-

course,

again.

many

all occasions, particularly at national conventions
Not much meaning, however, can be at-

upon

own

Yet

years;

•

its mind what it is

power

well

rearmament program athome
may
easily necessitate a
complete revival of wartime con-.'
trols, the more irritating of which,
although by no means all of them,
were
5 comparatively
recently

short of tragic if the electorate is again this autumn
obliged to go to the polls and choose between the New

how much better it is than the

which has rendered

abroad

iture

pendous

fifteen

about

inflationary poten--

reserves
are1

On this

superstructure

of the

almost
a

mem¬

billion

further credit

about

lions could be erected;

six

bil¬

The Fed¬

eral Reserve banks have reserves
of

over

50%—enough,

the 25%

basis, to issue another $23;
$24 billion in notes and to addanother $19 or $20 billion to their
deposit liabilities. Assuming that
reserve
or

member
about

banks

would

command

$17 billion of such deposits

Volume

167

Number 4704

THE

COMMERCIAL

FINANCIAL

CHRONICLE
\

they could further expand their
deposit credits about a hundred
billion dollars.

tory

tributions

Of course, we are

will

other

actually take place but an¬
period of deficit financing

distributed

billion

annum.

Rates and

per

the

unfortunate

prac-

maintenance

artificially low
During the war the

were

Treasury succeeded in persuad/ ing the Board of Governors of the

being

banks

from the member

add

means
serves

lant to inflation/

ruling

that

accounts

:
;

the

were

was

;

and

of
Treasury and the Federal
Reserve System to maintain the
price of long-term bonds on a
both the

...2y2% yield basis. The importance
of government

•

bonds in the capi-

tal market is such that

yield

low fixed

depressing effect
'the yield of others.

for

Consumer Credit b

;

J fe/Consumed eredit is4 also'•

short,

during the
W

the

war

Board

was

i about

Loan

almost

expiration

controls

led

Board.

year-

over

$11.8

most

helpful agencies
people
to acquire

notorious

World
fallen

War
behind

that

ever

construction

the

growing

need for

The

trend

defi*

xitely upward.
The

awarding

during only

residential

contracts

100.
years

1932,

Utilizing the index number

relative

of the Bureau of Labor Statistics,
/ which is calculated on the basis oi

number

above

During

level of prices is familiar to most
:

us.

the

Z.1926 prices as 100, the average for
1947 was 151.8 but that grew out
,

low of 141.5 in January and a

•high/of
January

^number

went

163.2

this
to

December.
year
a

the index
high of

new

jl65.6. Since then there has been
.

decline in foods and in farm prod¬
ucts, and, of smaller proportions,
ip. textiles, in hides and leather

-and in

few other categories. The

^overran index

number

April
24, was, 163.6. Fuel and lighting
materials, metals and metal prod¬
ucts, / building
materials
and

hpuse-furnishing
./tended further
Production

have,
on.

in
:

goods

have

upward..
and

employment
of course, boomed steadily

Gross
the

national

last

quarter

product rose
of 1947 to a

stupendous annual rate of $240.9
Allowing the usual deducr

billion.

tions for replacement, etc., this
yielded a net national Income
r?te of $212.3 billion. Deducting
.

further

corporate

profits,

inven¬

were

1941.

hectic
and

rearmament

the
depression
1933 and 1934 the
index
numbers
were

their

twice

peak

what

climbed

only
to fall to 82, 40, 16 and 26 in the
war
years
-42 to '45* Familiar
government aids caused a jump to
143

1946.

There

was

decline

142 in 1947, but there has been
further advance this year.

to
a

which

they

1929

Congress will

and

con¬

well

additional

other

Preserve

and

made
by
during the year,
exceeding the 1946 total by 6%."
Now, perhaps, we may consider
were

perhaps

Housing

Administration

secondary market
and

mortgages
provisions in

all

are

such

Eccles,

for

liberal

FHA Title II

loans,

inflationary.
these," said

"should

re¬

any

help to

the

thrift.
trine

institutions

than

not

circum¬

improve¬

quality of the mort¬

before.

"with

ing

out

own

The
American
Association has worked

voluntary control plan of its
is
conscientiously striv¬

and

ing for its acceptance.
Bankers
point out that commercial bank

They have

sources.

from

But to

Lee Wiggins., stressed
significance of govern- i investments
,

out

which

the'

out of line
no

our

dealings.
not

are

gambler

about

saw

type.

They
help¬
word, to the

//'•/!;... /'

maintain
(Net
of

this time every
association

minimum

than

net
liquidity of no
of total savings accounts.
is defined
as
the
total
government bonds
less ad¬

15%

liquidity

cash

and

vances

borrowed

total

appropriate

free enterprise economy.
On the lending side circumspec¬

ings

Appraisals

essen¬

time

rather

true
a

that

prewar

selves

shall

short-time

doubtless

never

back

price level. We shall
the end, find our¬
new plateau
at least

50% higher than the prewar level.
real

estate,

especially

elastic demand."

This

while

the

call

resi¬

means

"in¬
that

hand, if prices
low, people will not want two

are

homes

other,

one

rather

than

one,

if the available

homes

inadequate

total

desperation

heads.

get

the

supply of
a

will
panic

roof

over

is something like
condition which pre¬
vails today and which has brought
this

latter

enormous

estate

values.

would

wise, however, who
on

have

increase

the' indefinite

would

seen

real
un¬

bank

continuance' of

today's scale of real estate values.

Luckily, most of

times

they

position
and

assets

10%

Twin

have

that
earn¬

reserves

least

period

minimum

of-at

reasonable

reserve

held.)

from

program

obtain

time

of assets.

City Bond Club

To Hold Picnic
/

MINNEAPOLIS, MINN. ~ The
Twin City Bond Club will hold its
27th annual golf tournament and
picnic

June

the

White

Bear Yacht Club.

Tennis, bridge,
swimming and boating will also
be featured.
Fee for non-golfing
members, $6, for golfing mem¬
bers, $8, and for guests $20/:"
•

Members

the

Picnic

Com¬

mittee

are:

Merrill

Lynch, Pierce, Febner &

people

bid up rents and values in
their

all

reserve

savings

recommends

amount

within

than

sufficient

.ree

property for
mortgage-lending purposes must
of necessity be based
on
long¬
considerations.

advance

money,

by borrowers for taxes and
insurance, and loans in process expressed
payments

also

are

percentage
committee

conservation

Those

Savings and loan

association

and

anxi¬

normally of the ir¬

The

'prosperous

eco¬

but there seems to

for immediate

cause

each

pres¬

national

and

make

can

diffi¬

relatively weak position.

.ess

ing needs, the more directly sav¬
ings and loan institutions can de¬
pend upon their clients saving,
the bigger is the contribution
they

the

forecasting at the

J:
Research Committee of the
New
Jersey Savings and Loan League recom-

meet home-lend¬

despite rent control

Secretary

strong

protection of assets.

recognition

mends that at

They dropped steadily for the
weekly-report to member banks

the great

these imply for the
mind of management and

wise!"

comes

from

peak of $14,161 billion on
this year to $14,333
April 14th.
They also
point out that the total loans and

withdrawals

will doubtless heed that old

investment

ourselves prepared to ask "Where
do we go from here?"
In a speech
at New Orleans last month Under-

the

System/ The

panic

juncture in

ful

coop¬

governmental control of rents but

will-

that

responsible

can

loans have in fact been
declining.

billion

against

ultimate

men

than their

these associations

January 21

Bank

of accounts acts

their

Sav¬

They

economic jargon

community.

Bankers

value

system represents, after all, a co¬
operative safeguard.
The-insur¬

in the purest

are

But

compared

Loan

the

concerned with it must,
therefore,
be
cautious and
circumspcet in

dollar withdrawn

dential real-estate, is peculiar. It
is characterized by what in our

advocacy of greater control
primary and secondary re¬

reserves and

ety. However, real estate as Un¬
dersecretary" Wiggins fears, is in

Every

His

Home

apostles of

are

gages"

or an increase in the return
them to make them more "at¬
tractive"
as

recognize

the whole sys¬
a part?
On

inflationary tide.

probably,

the

good

Inventories may be
excessive, labor demands may be
confusing, corporate profits may
be
unduly high, and some ele¬
ments of the price structure
may

inflationary because it

"the

also

ent

Credit extended by
that system to its members is also

drying
ment in

are

strong liquid position.*
Finally wise management

culties of

are

ever

save.

early 30's." In answer to the com¬
plaint that mortgage money is
as

get

nomic affairs.

these
we

middlemen.

clients

tial.

solution

erative agency in the Home Loan

Government
lending or
subsidies on a large enough scale
to
protect the real estate and

Mr. Eccles suggests

only concern
about : the
whole transaction is that of selfWise management will
also
remember
that
the
best
storm-doors for savings and loan

pressed

We must preach that doc¬
more fervor and con¬

the

tion

well/ It

itself

interest.

!//:///•/

preserve

dollar saved is

possible

allow

whose

with

viction

Otherwise, the

It will not

into
competitive
scramble
for mortgage
loans, especially by
paying commissions to outsiders

the

savings
do, not only to safe¬
province but also

hand

one

only

direct

the

wild

peace of

stable

available would

not

dyke

own

tem of which

served to cushion deflation should
it later develop.
measure

ap¬

moment,
collapse^ -so

to future stresses

ance

barricad¬

are

preponderantly

for Title VI Federal

"Although payments on loans serves with the object of restrain¬
large, the associations' ing bank credit expansion does
mortgage holdings increased by not, however,
appeal to the bank¬

new

.our

new

money

that

jueyond

value

will

degree

Thrift!

can

men

sense

continued

"More than $3.8 billion of

light

what

normally lend

Marriner

look

conditions of the

that

eye

firmly

Bank System.

ord lending volume for construc¬
tion and other purposes.!

the

and loan

Eccles, in his testimony, told the
Senate Banking Committee that
the legislation aimed at
supplying

Says the release:

$1.7 billion to $9 billion on Dec.
31, 1947, following a year of rec¬

Governors

monetary

people to go into debt
beyond what they can afford to
only today but with an

-controls

the

the free market and

System all

controls.

remember

must

with all
was success-:

ings institutions

cil and the Board of
of the Federal Reserve

the

pay—not

of the worst

some

from

President, his Economic Coun¬

will

does that of real estate.

program
it would mean the restriction

ful
of

and

inflation, to

tinue to make possible.
In view of these
probabilities

other investment."

loans

that such

the

In this connection another
quo¬
tation from the Home Loan Bank
Board's recent release is relevant.

mortgage

might forestall
evils

which we
ing the front door.

building
is
also
holding at a high level and will
be kept up, it is
believed, by the
certainty of favorable mortgage
terms

broad

program

will

housing market from a serious
13, 11 and, 12. By 1941 the index collapse such as developed in the
had

While

against

Home

"Measures

construction

impact of all this

year "and

Governor

the

ized.

enforced

business

and

money

fatal corrosion of the system of. The Home Loan Bank is also "an
free enterprise. In short,' we run. ever present help" for its mem¬
the risk of letting slip in at the bers should trouble
actually arise.
We started
back
door
the
out
totalitarianism
with an
ex¬

consumers

pay.

Reduction

recovery,

Business

that from 1919 to 1946

million.

too.

housing by the American
Using
Federal
Reserve
Board figures, based on the 19231925 average as
100, it is disclosed
public.

the four years from 1925
to. 1928
inclusive did the index number

advocate

the

yet

finally completed.
step."

stockpiling on the
other, will
greatly restrict if not completely
eliminate the possibility - of fur¬
ther reducing
the public debt..
Then, should deficit financing be¬

guard

379

looks

have

times

1947, the amount outstanding reached a new peak of $13,-

pean

last

six

the Board "to

enabling

has

end of

and

de¬

will not bid rates for
savings that
in the long run it cannot
afiord to

the one hand,
heavy expenditures for Euro¬

and

stances

"Resources of

Business

Consumers' Money

even

encourage

revenues

expected to reach almost $19 bil¬
lion, some $2.5 billion more than

savings and loan associa¬

says

shall

assets

has

completely in times of trouble

loan

total estimated

since

renewal of expansion until, at the*

Bank

homes.

$10

the

Possibilities

figures
billion. In

$1.2
increased

they

the

one

the

v
These comforting
developments
are further reinforced
by figures
recently released by thejSome

under Regulation
of Governors of

billion

rose

1940

♦Our associations have also been

held down

Debt

the

management will
vernacular "watch
its

praisals
National

spending for new
plant and equipment this year is

savings and

billion—we

necessity for deficit financing.
:

$0.2

billion."

billion. By 1943 it had receded to
a war low of $5,334 million. The

•

From

savings declined.

Ih-

the Federal Reserve System. From
1933 to 1941 it had grown from

present.

$254

again be confronted by

while other forms of
liquid

over

•

flationary force. It

put

1947,"

art

been

ing

Unfortunately, however,
been reduced./
Many:

Be this as it may it would seem
reasonable to hold that diminish¬

program
It is hard

have

billion

and related institutions in
the nation climbed
by 16% during

distortions

conservative

their savings.
buying on the

tions

?;.

the

1947

end
$

token

associations

all

these securities is bound

to exercise

billion

indebtedness

but it is the announced policy

taxes

steady increase
beginning of the war

the

down

short-terms bills

certificates

taxation.

the

drawing
same

from

Latterly money rates have been
hardening and the Treasury has
on

associations

Wise

next year

ciations showed

make

lifted its rate

;

economic

60 million mark is made for

was given a new
fillip. Yet savings and loan asso¬

possible a fur¬
ther expansion of credit. ///:////

the

than

not

off government debt.

pay

this

instalment plan

govern-

i ment bonds, but the over-all ef¬
fect

By the

logical enough because behind the
accounts

are

without

exempted from the statutory
reserve
requirements. This was
war-loan

the

1948.
People were ' not earning
enough to meet this rise in costs

banks

were

students believe that
argued
by some, is due to the rapid rise despite a fine record of debt re¬
in the cost of
living—a rise of. payment during the last few years
67.2% between 1940 and
February, —-namely a reduction from $280

war-loan

member

men we

restraint

pressure

that, with labor already
fully employed (indeed a new
peak of employment of well over

discloses a decline of $32.4
billion in liquid
savings from 1944
to 1947. This
decline, it is

„

Treasury

1944.

banker

to believe

liquidation
funct

developing governmental

usually result from infla¬
The huge expenditures for
individual savings tion.
by the Commerce European recovery and an ex¬
com¬

Treasury
itself in using
Treasury surpluses

which

This

re-

it supplied an added stimu*

and

declined

$62,855

steady

policies might not lead to further
inflationary advances in prices,

annual

April
Yet, as others have point¬
ed out, this drop
may be due less

question

thereafter

level

Another / technical
expedient
that had the same effect was the

their lawful

reach

14 last.

! they might wish to sell. Of course,
\ the. main
purpose of this was to
r
help finance the war, but by en/ abling the member banks
by this
/

sfcrious

(2441)

bank

Spring), and with production
come
necessary, there would be
so
many lines already at the
a restimulation of
the inflationary
estimated maximum, it is hard to
boom.
/ ■//">4 ••/';// • / • /■; /■/
believe, I sayj that we can expect
!
Should
this
be
the
outcome
wealth./ For the year 1947 the Com¬ an .over-all output of goods to
mission estimates total individual keep pace with the probable ex¬ Congress, at present most reluc¬
tant to
re-introduce abandoned
savings of all kinds as $34.2 billon' pansion of effective demand.
would
doubtless
be
This probable expansion of de¬ controls,
of which only $3.9 billion were
forced to change its mind/ Mon¬
liquid savings, j Gross savings in mand might, to some extent, have
etary, as well" as other economic
1944 were $49 billion of which been offset by absorption of
gen¬
controls, would then be author¬
$41.3 billions were liquid savings. eral
purchasing power through

banks any government bonds that

at par

over

anchor

but

year

whether

by the Securities and
Exchange Commission. These in¬
clude, besides liquid savings, the
acquisition of durable forms of

take

•

published

rates

gov¬

Will There Be More Inflation?

personal
an

all too
poignantly what happened
stood, for the report¬ during the Great
Depression. Real
ing member banks, at $63,528 bil¬ estate values
melted away.
Many
lion in
February, 1947. It rose to savings and loan associations col¬
$65,532 billion in January of this
lapsed, and in some cases the

windward.

interested in the com¬
prehensive" estimates of savings

Reserve

for

regarded

superstructure

credit grows

own

necessary,
the side of

panding .! rearmament
require new billions.

even

;
As, an adjunct of this policy
} must also be mentioned the will*
-

spent

As savings and loan

The Treasury was anxious,

ingness of the

if
on

whole

from

the

measures,

lion

terest charges the Treasury had to

money

His

apart

pared with the high of $35.6 bil¬

one per centum in the
rate made a difference of
billions in the annual, in¬

keep

this

all

use

computed
Department as $10.9 billion

money

people

was

ference of

therefore,

that,

would,
weight

its

appraisal of

stabilization if any serious down¬
were threatened.
That may

Apparently, personal

the estimate of

along with an "easy-money''
^ policy.-. Naturally, with a govern¬
ment debt of $280
billion, a dif¬

meet.

throw

savings rate of $11.2 billion. How¬
ever, for the whole year of 1947,

■

specific

any

future.

was

ernment,

consumption. This left

Reserve System as well as all the
bank supervisory authorities to

$2.8

rate

economic

any

being
of $205.8

was

taxes and related payments were
being made at a rate of $22.1 bil¬
lion
per
annum.
$172.5 billion

did

money?

tices associated with. the infla¬
tionary
process
has
been
the
money rates.

the

policy in

judgment

Inflation

»■

the

Use of Consumer's Income

How

One

:>*

mental

turn
;

Interest

for

the last quarter of 1947

by the Federal government would
certainly start us down this road.
Low

adjustment, con¬
social
insurance,

etc., the Department of Commerce
figured that personal income for

not assuming that such expansion

valuation

" William

W.5 Lewis,

Beano, Chairman; Harry C. Piper,

Jr.,

Piper,

Jaffray

&' Hop wood;

George V. Jackish, Merrill Lynch,
Pierce,
E.

Fenner

Beane; Joseph

Masek, Charles A. Fuller Co.;

John

Middlemist,

Piper,

Jaf¬

fray & Hopwood; Bert A. Turner,
Kalman

Co.;1 Guy M. Phillips,

Caldwell-Phillips Co.; I. D. Ow*en,
Allison-Williams

cBt/and

ChaHes

remember j R. Bennett, J. M. Dain & Co.

COMMERCIAL

THE

(2440)

CHRONICLE

FINANCIAL

Thursday, June 3, 1948

they supported him year after year, and in four Presi¬ rationing, priorities and alloca¬
tions were developed in our econ¬
campaigns in Which he was in each case overwhelm¬
omy as never before.
Tragically,
ingly returned to office.- President Truman, not "on the the most important survivals of
cuff," but in numerous very formal and often repeated the free enterprise system were
The "v healthy
official statements, has placed his seal of approval upon all in black " markets.
and
stimulating aspects of the
the essentials; of the New Deal regardless of his attitude
normal operation of free enter¬
toward its former personnel.
He has no such magic political prise were all but submerged.
touch as his predecessor, and it is certain that substantial
t
Where Are We Now?
elements in his party would like to "ditch" him, but, of
•"And where are we now?; Mil-,
course, it is logically impossible for his party to repudiate
itary operations against our erst¬
him without repudiating itself. Without more ado, it may while enemies have
ceased, but a
be said that regardless of its platform, and without reference new enemy, a former ally, has
to its candidate, the Democratic party must either come arisen ominously on the horizon.
The hopes centered in the United
before the public as an exponent of the New Deal or else
Nations organization have been alli
as a self-confessed blunderer asking for re-election on the
but shattered.
A so-called "cold
basis of its repentance for past transgressions.
war" involving enormous expend¬
but

As We See It
(Continued from first page)

;

dential

Vj':,

;

1" paigns as those in Oregon, and the apparent attitude of
*; the people of a number of the Southern States, the really

;

critical issues of the day are hardly controlling.
Hand-shaking, "baby-kissing," the willingness of can- •
' didates to assume all sorts of silly postures and to appear,
in shirt sleeves (or less), and much more of the
same^
••/* order often seem of much more influence in determining.,
;
the choice of rank and file voters in the primaries. The
V President is being coached, so it is said, in speaking "off the cuff," because this is believed to give him and his
utterances a
"homespun" attractiveness which they

basic

;

otherwise lack.

;

: :

;

•

Not Unusual

;Y. 1; v;/
;
little that is much out of the ordinary in

There is very
all this. It is for that reason,

perhaps, that it does not appear
strange or inappropriate to the casual observer. Yet we
cannot

the

which has rendered

to make up

have

it does
an

such position. On

placed

again.

power

home

It without

;

It is true, of
has its

;

catch some of the J
Y reflected glory of "Teddy" Roosevelt. The catch-phrases,
the slogans, the cliches, of the two leading parties also ;
differ somewhat. By such means it would
probably not
measure

success,

especially difficult to distinguish party platforms in
recent years even if
party and political names Were

\
'

blotted out, but if

one

had to choose between them

the basis of

fundamentals, the task would often have
anything but an easy one.
•

been

the

market

their

own

\
'
Governmental intervention

What Do They Stand For?
The party convention dates are
virtually upon us, yet
how much discussion has been heard about what each or
either of the
major parties will

promise for the next four

ends.

thus

has

in¬
laws,

become

degree

some

evitable.

Anti-monopoly

regulations governing the stand¬
of
competition,
like pure
laws, and other leg¬
islation aimed at the preservation
of a reasonable equality of bar¬

ards

A few, mostly oblique, references here and there;
nothing more., ;The naive soul without knowledge of how
these things work out in actual
practice might suggest that
in choosing candidates, the
parties would ipso facto select

food and drug

at least in

years?

general

way the attitudes they wish to take on
issues of the day.
It could be said, too, that

the rank and file, in showing preferences for one candidate
over
the others,
give an indication of their views upon
..public questions.
^
'
*

gaining power are all completely
in harmony with the philosophy
the

only the most naive observer could possibly
take much stock in such assertions. In the first place,
it would be quite
impossible to determine what many
of the candidates believe about

they,

lights, are
to inter¬
fere with, the freedom of move¬
aimed

ment.

many of the vital issues
Possibly it would be unkind to say that
most of them, have been only too careful that;

their positions not be;made clear and
unmistakable.
has long been one of our cannons of

good politics to

avoid such unequivocal commitments and to
say
that would be unwelcome to
any

sizable

group

nothing
of voters.

Unfortunately, platform pledges have likewise become
sort of mumbling to which no
meaning can unequivocally be attached. What is more, no particular pains is?
a

;

taken to be certain that candidates and
up,

and when they do

such
,

:
f

matters

—

far

platforms match

it is possible to judge
the candidate is often at no pains to
—

give the pledges of his party more than purely formal
approval or deference. The Roosevelt record in 1932

is perhaps the
but it is by

most glaring example in recent history,
the only one.

no means

Current Example

•

■':

To come
specifically to the forthcoming campaign and
election, it is difficult to understand how the Democratic

party

promote,

not

economic

our

become

society

complicated
rules of the game, and umpires to

before the people except in defense of the
New Deal in its
entirety. It is, of course, well known that
large sections, of the party have never been in sympathy
with much, that President Roosevelt was
can come

doing in their

name,

interpret and apply them, became
a
reasonable and, indeed, an ur¬
gent necessity, *

day.

the corner,

the mechanical

even

has

of the

of free enterprise.

system

traffic officer at

The

But

count

can

desiccation

the

such

event

eco¬

will be simply one

governmental'pol¬
all private business cal¬

and

ized

Disturbing Element
The disturbing element has been
the tendency of governments to

participate
To

some

players in the game.

extent

evitable. ? The

this

too

urgent

was

in¬

necessities

associated with public

leads

the

demand

war

hand

one

gov¬

ernmental

controls of supply and
other to balancing opera¬

the

tions

the side of demand.

liance

Re¬

peacetime,

purely

upon

pecuniary

controls

sible.

inadequacy of taxation

The

forces

resort

controlling

objec¬

With this frame of reference as

and urgency of

scope

with, the

tives of government.

(Continued from page 7)
enterprise have not been, and,
practically, cannot
be, - fully
realized. The very use of the cor¬
porate device, as necessary as it
may
be, none the less disturbs
that basic equality of bargaining
power which is one of the funda¬
mental assumptions of the free
enterprise
system.
Monopolistic
power : in
markets
repeatedly
raises its ugly head. Competitors
will neglect their moral obligation
to stand behind the integrity of
their products, and various groups
are constantly endeavoring to use
political power to bend the serv¬

.'I

icy

and Real Estate Loans

selfish

toward

III, then we

of the tools of

Economic Uncertainties

ice

the broader

tends

situation

further

socialism.

the like.

certain

'moment,
therefore, we have a sadly mixed
system of private enterprise and
governmental
controls.
If
the

culations will have to be harmon¬

recently

the

nomic control

course,

all occasions, particularly at national conventions
Not much meaning, however, can be at¬
tached to such things as this, and, in any event, there
has been a tendency in recent years to drop some of the
former orthodoxy in this matter. More than one "Demo%
crat" in recent years has attempted, not always without
and

comparatively

system of free enterprise and a
corresponding reflowering of state

upon

world

assurance.

that each of the major parties %
patron saints before whom knees are bended

own

were

abandoned.

•;/

stu¬

program

ma.y

World War

;

the Continent

impotent in recent years. Yet many of us have often been
obliged to wonder in what sense we really do have a "twoparty system."

at
easily necessitate a
complete revival of wartime con-,
trols, the more irritating of which,
although by no means all of therri,

record of indecision,
apparent inability as a party

its mind what it is

well

rearmament

pendous

what ^it would do if
much doubt has
New Deal leanings, but how extensively so and in what
particulars it remains difficult to say. It would be little
short of tragic if the electorate is again this autumn
obliged to go to the polls and choose between the New
Deal and something else the precise nature of which
it has no way of determining with any great degree of

number of countries

hand,

lack of cohesion, and

than a passing regret that
In the critical world situation existing today, we have not
proved able to approach what ought to be the time of
prayerful choosing on a plane of greater realism, intelli¬
gence and dispassion.
We boast much of our "two-party
system." We are fond of telling ourselves and the world
how much better it is than the "one-party system" recently
.exhibited in Czechoslovakia, and the multi-party system
something

escape

other

abroad

iture

The opposition is, however,

proves

nomic and financial situation
be

The

can

easily summarized.

They are,
perhaps, generally familiar to this
company.
In

impos¬

inflation.

background in our,thinking the
basic facts of our present eco¬

years

over

gold stock has

our

increased from

some

four billions

$23 billion and it continues

price disturbances then steadily to increase.
Money in
further
regulation circulation has expanded during
the same period from about four
through price controls, rationing,
priorities, allocations, etc., all of billions to over $28 billion. More¬
which in the end spell the doom over about $24 of these $28 bil¬
lion represent notes issued by the
of the free market.
Reserve
banks, against
The corrosive effect of war on Federal
the system of free enterprise has which only a 25% gold reserve is
The money of business
been continuously operative since required.
World War I.
Early in that con¬ is, however, the bank check, based
on
deposits rather than hand to
flict the international gold stand¬
Bank deposits about
ard broke down completely, and hand money.
1900 stood approximately at $8
has never since been restored. In¬
billion.
They expanded rapidly
ternal as
well as external eco¬
nomic controls were applied by thereafter, with a slight decline in
1920 and 1921, until they reached
all
the
belligerents, " and * • Were
resulting

necessitate

peak of $51^ billions in 1929.
They dropped to below $37 bil¬
They were back to
hostilities and the establishment lions in 1933.
of an unstable peace. During the the $50 billion mark by 1939. Then
inter-war period, the war destruc¬ followed the enormous war ex¬
In
December ,1945 ; .a
tion of capital, the undermining pansion.
of
$148.9
billions ji was
of
the
middle-classes, the sur¬ peak
reached.
Through
the
partial
viving problems of reparations,
of
the
government
and
of
intergovernmental debts liquidation
debt this was brought down to
and the intensification of inter¬
$138.8 billion by January of 1947.
national
rivalries
simply multi¬
Since then, however, the expan¬
plies the difficulties which the
sion of loans to private business
war
itself originated.
Monetary
has reversed the decline and total
manipulation and inflation, des¬
deposits today of all our banks are
perate
fiscal
expedients,
and
trade and exchange controls con¬ reported to stand close to the $150
billion level.
.;"yf0.
tinuously bedeviled the interna¬
What is even more striking is
tional situation
as
well
as
the
domestic
economies
of
all
the the inflationary potential in our/

merely
modified,
rather? than
eliminated, by the cessation of

countries

the

world.

boom

postwar

our

the

and

had
mer-

and credit system.
In the ;
place, as already indicated, <

money

frist

prosperity of the twen- we are steadily adding to our basic.
to be followed by the gold reserves. We buy all the gold
disastrous collapse in our offered at $35 per ounce. The ef-;

health and
education, with adequate high¬
ways, with postal service and in¬

etricious

tercommunication, with

history.

feet

tion,

add

tion

natural " resources,
with
control and other great so¬

flood

cial

conserva¬

objectives

intervention

has

led

direct

government

into

ties

only

most

Monetary experimenta¬
deficit financing and the

series of
program

reform"

involved in the

measures

of "relief, recovery and
did

little,

back

but

only

the economic process. Such inter¬
vention has given rise to impor¬

little, to get
Strange as it

tant

Nazis and World War II to restore

questions

about

which

public

there

policy

has

been

marked difference of opinion.
It
has not, however, disturbed the
basic fundamentals of the system.
It

war

that ' has

all

but

our

may seem,

eral

Not until

our

1941 did

opera¬

our

level

its 1926
In

feet.

it took the

fulltime

economy

tion.

gen¬

of prices get back
position.
ir - ;.

•

World

War

simply
Ossa in the fur¬
we

wrecked the system of free enter¬

piled Pelion

prise!

rapacious
Moloch into whose hungry mouth
we
pour both life and treasure.

ther

The factors

precedented expansion of taxation

Modern

war

of production are di¬

system.were

verted from human want satisfac-

tion to wholesale destruction.

some

The

upon

distortion

Our

of
war

fantastic. ;

heaped

our

economic

expenditures

Despite

un¬

national debt of

$280 billion.

Price controls,

this

both

Federal

correspondingly to t
member-bank, • and

Reserve

bank,

reserves.*

During the past year something
like 2%

gold

billion
this

billions to

tial.
ber

Conservatively

stock.

mated

dollars.

added

our

Excess
banks

added to our

was

about

•

6sti-*

fifteen

inflationary potent

reserves

On this

superstructure

of the

almost

are

mem¬

billion

further credit

about

lions could be erected.

six

bil¬

The Fed¬

eral Reserve banks have reserves;
of

over

reserve
or

50%—enough, on the 25%
basis, to issue another' $23

$24 billion in notes and to add

another $19 or $20 billion to their

deposit liabilities.
member

banks

Assuming that

would

command

about $17 billion of such deposits

Volume 167

Number 4704

THE

they could further expand their
deposit credits about a hundred
billion dollars.

Of course,

tory

valuation
tributions
for

are

adjustment, con¬
social
insurance,

mental

the

etc., the Department of Commerce
figured that personal income for

not

assuming that such expansion
will actually take place but an¬
other period of deficit
financing
by the Federal government would

certainly start

COMMERCIAL

the last quarter of-1947
distributed at the rate
billion

per

annum.

Interest
of

the

unfortunate

associated

tionary

process

maintenance

prac¬

$205.8

lion

$2.8

made

the

billions

in¬

charges the Treasury had to
The Treasury was anxious,
therefore, .to keep money rates
low. • /
//y-:.<v
vW'As an adjunct of this policy

prehensive/ estimates

published

wealth.,

the
l

main

add

their lawful

the

re¬

the

as $34.2 bil'ion
$8.9 * billion were
Gross savings in

Peoplewere

banks

not

tal market is such that

yield

these securities is bound

to exercise

depressing effect

the yield of

the

tions

and related institutions in
the nation climbed by 16%
during

others,

1947,"
end

>Consumer Credit )rv■

::i

i,• r

during the
W

the

was

held down

Governors

billion

almost

expiration

controls

led

ing reached

peak of $13,trend is defi¬

The

nitely upward.

fallen

the four

1947
1

prices

100, the average for

151.8

but that grew out
low of 141.5 in January and a
was

high of
January
(number

163.2

this

went

December.
year
a

the

new

index

high

;1;65.6. Since then there has been

of
a

decline in foods and in farm prod¬

notorious

War

behind

the

inclusive
of

the

did

100.

the

awarding

few other categories. The
over7all index number on April

.24,

,163.6.

was

Fuel

and

lighting

.materials, metals and metal prod¬
ucts,
building
materials
and
.

bpuse-furnishing
..tended, further

«jv Production
have, of
on/;

course,

Gross

the

;

last

goods

have

upward.
.
\,s .
and
employment

boomed

national

steadily

product
quarter of 1947

rose

stupendous annual rate of $240.9
billion.

Allowing the usual deduc¬
tions for replacement, etc., this
yielded a net national income
rate

further

$212.3

billion.

Deducting
inven¬

corporate profits,

■

ever

growing

1925

index

1928

number

residential

contracts

above

During
the
depression
1932, 1933 and 1934 the
index

numbers

were

13, 11 and 12, By 1941 the index
number

had

climbed

only
to fall to 82, 40, 16 and 26 in the
war

years

'42

'45.

government aids caused
143 in 1946. There was

Familiar
a
a

jump to
decline

142 in 1947, but there has been
further advance this year.

to
a

In this connection another
quo¬
tation from the Home Loan Bank

ucts, .and, of smaller proportions, Board's recent release
in,textiles, in hides and leather Says the release:
.and in

acquire

that

construction

from

years

relative

>1926

$11.8

1925 average as 100, it is disclosed
that from 1919 to 1946
during only

Utilizing the index number

year-

housing by the American
Using
Federal
Reserve
Board figures, based on the 1923-

years

us.

people

construction

The

of the Bureau of Labor Statistics,
which is calculated on the basis oi

•

World

impact of all this on the
level of prices is familiar to most

: m

over

need for

new

million.

public.

renewal of expansion until, at theend of 1947, the amount outstand¬

379

enabling

has

$10

reduced.

conservative students believe that

despite

fine record of debt

re¬

payment during the last few years
a
reduction from $280
billion to $254 billion—we shall

-—namely

is relevant.

"Although payments on loans
continued large, the associations'
mortgage holdings increased by

theitf peak in'
Home
building

were

exceeding the 1946 total by 6%."
Now, perhaps, we may consider
ourselves prepared to ask "Where
do we go from here?"
In a speech
at New Orleans last month Under-

Secretary
the

Lee Wiggins, stressed
great significance of govern¬
,

today but with
to future stresses as well:

will

1941,

any

this

the

whole

outcome

/ In
the

view

these

ized//While
enforced

cil and the Board of
of the Federal Reserve

might forestall
evils

additional

Eccles, in his testimony, told the
Senate Banking Committee that
the legislation aimed at
supplying
new

for Title VI

money

Housing Administration
secondary
and

market

FHA

for

liberal

Title II

"Measures

are

such

Federal

loans,

mortgages

provisions

all

inflationary.

• <

help to

the

degree, dyke

perhaps

trine

from

than

the

subsidies
to

protect

housing

real

market

collapse such
early 30's." In
plaint

that

drying

estate

from/a

serious

developed in the
to the

answer

mortgage

not

inflationary tide.

can

than their

But

from

comes

investment

meet home-lend¬

ing needs, the more directly sav¬
ings and loan institutions can de¬

pend/upon their clients saving,
bigger is the contribution they
make

to
a
prosperous
and
free enterprise economy.
On the lending side circumspec¬
and

tial.

conservation

Appraisals of

improve¬

quality of the mort¬

or an increase in the return
them to make them more "at¬
tractive" v as
compared
"with
other investment."

His

time

rather

than

that

homes

mem¬

actually arise.

out

with

ex¬

ments of the

price structure

be out of line but there

ety,

cause

for

may

seems

immediate anxi¬

However, real estate

Un¬

dersecretary* Wiggins fears, is in
relatively weak position. Those

concerned with it

cautious

their

dealings.

men

not

are

must, therefore,
circumspcet in

and

responsible

Savings and loan

normally of the ir¬

gambler

type.

They

will doubtless heed that old
help¬
ful
saw
about
"a word to the
wise!"

///'"^//"/;- :>/

*;/

Research Committee of the New
Jersey Savings and Loan League recom¬

mends

that at

maintain

(Net
of

this time every- association

minimum

than

.ess

net
liquidity of no
of total savings accounts.
is defined as
the
total

15%

liquidity

cash

and

government

and

vances

borrowed

payments

bonds

less

for

ad¬

advance

money,

borrowers

taxes

and

insurance, and loans in process expressed
a
percentage of total savings held.>

The

committee

also

association

each

ings

appropriate

sufficient

all

.ree

times

reserve

total

reserve

they

position
and

assets

within

recommends

amount

have

that
earn¬

reserves

least

program

period

minimum

of-at

reasonable

10% of

from

obtain

time

assets.

never

back

This

means

that

rather

than

one,

Twin City Bond Club
To Hold Picnic
/

MINNEAPOLIS, MINN. — The
City Bond Club will hold its

Twin
27th

annual

picnic

golf tournament and

June

10 at the White
Bear Yacht Club. Tennis, bridge,
on

swimming and boating will also
be featured.
Fee for non-golfing
members, $6, lor golfing mem¬
bers, $8, and for guests $20/:"
V

the

Members

the

Picnic

Com¬

are/" William

Merrill

Lynch/ Pierce,

Beane, Chairman; Harry C. Piper,

desperation
their

bank

the

help" for its

started

mittee

this

heads.

latter

get
is

panic

roof

over

Jr.,

something like

condition

which

despite rent control
an

enormous

estate

values.

have

increase
He

would

pre¬

Pierce,
E.

the' indefinite

real
un¬

remember

Fenner

Kalman

Beane;

Joseph

Middlemist, Piper, Jaf¬
&

Co.; Guy M. Phillips,

Caldwell-Phillips Co.; I. D. OvJen,

continuance* of

Luckily, most of

Hopwood;

fray & Hopwood; Bert A. Turner,

Alii son-Williams

today's scale of real estate values.
■

Jaffray &

Fervner &

Masek, Charles A. Fuller Co.;

John

seen

wise,, however, who would, bank
on

Piper,

W. ' Lewis,

George V. Jackish, Merrill Lynch,

vails today and which has brought
governmental control of rents but

peak of $14,761 billion on
January 21 this year to $14,333
billion on April 14th.
They also
point out that the total loans and
which

present

bid up rents and values in

imply for the

other, if the available supply of
homes is inadequate people will

loans have in fact been
declining.
They dropped steadily for the
weekly-report to member banks

out

time

on
the one hand, if prices
low, people will not want two

are

voluntary control plan of its

investments

doubtless

while

and is
conscientiously striv¬
ing for its acceptance.
Bankers

from

for

prewar

not, however, appeal to the bank¬
ing community.
The
American
Bankers Association has worked

commercial

short

shall

elastic demand."

that

essen¬

property

mortgage-lending purposes must
necessity be based on long¬

advocacy of greater control
of
primary and secondary re¬
serves with the
object of restrain¬
ing bank credit expansion does

out

are

price level. We shall
the end, find our¬
selves on a new plateau at least
50% higher than the prewar level.
But
real estate, especially resi¬
dential real-estate, is peculiar. It
is characterized by what in our
economic jargon we call an "in¬

gages"

point

strong

Inventories may be
excessive, labor demands may be
confusing, corporate profits may
be unduly
high, and some ele¬

Sav¬

They

inflationary because it

probably,

these

withdrawals!

nomic affairs.

in the purest

are

middlemen.

sources.

the

panic

pressed recognition of the diffi¬
culties of
forecasting at the pres¬
ent juncture in our
national eco¬

dollar withdrawn

preponderantly

true

ment in "the

The -insur¬
as

ultimate

before.- Every

ever

considerations.

com¬

money

solution

the

and

Mr. Eccles suggests

possible

large enough scale

the

safeguard.

bers should trouble

the whole sys¬
are a part?
On

clients save.
They have a coop¬
erative agency in the Home Loan
Bank System. Credit extended
by
that system to its members is also

tion

protection of assets.
The Home Loan Bank is also "an

preserve

ings institutions

Otherwise, the
lending

value

accounts acts

against

ever

hand we are apostles of
We must preach that doc¬
with more fervor and con¬

viction

only

Government

the

Bank

with all that

stable

direct

ance

one

thrift.

Eccles, "should be re¬
served to cushion deflation should
it later
develop.
available would be

Loan

operative

controls

the

measure

best

peace of mind of management and

can

these,"

will

the

said

Governor

that

of the free market and

sense

is that of self-

management

program was success¬
ful it would mean the restriction

normally lend

Marriner

Wise

recognize

Home

Governors

monetary

transaction

of the worst

some

inflation, to- the

that such

System all

other controls.

Coun¬

scramble

loans, especially by

System/ The
broad and firmly, system represents, after all, a co¬

program

dollar saved is

probabilities

President, his Economic

into

get

competitive

remember

also

etary, as well* as other economic
controls, would then be author¬

tem of which

con¬

strong liquid position/*
Finally wise management wfli

also

which Congress will
tinue to make possible.

itself

commissions to outsiders
only concern about/the

interest.
also

would / doubtless
be:
change its mind.' Mon¬

controls,;
forced to

terms

allow

for mortgage

/.:,' /.

can

Congress, at present most reluc¬ storm-doors for savings and loan
tant to
re-introduce abandoned' institutions are good reserves and

and

at a high level and will
kept up, it is believed/by the
certainty of favorable mortgage

wild

whose

1929

not

paying

■':■•///;•/' /

debt

afford

will

there would be
restimulation of the inflationary
;

to go into

they

eye

necessary,

own

$3.8 billion of new
mortgage loans were made by
these associations during the
year,

what

pay—not only

out

"More than

beyond

and

come

Should

moment,
collapse^ so

value

completely in times of trouble as
does that of real estate. It will
not

tion and other

;

conditions of the

that

encourage people

fatal corrosion of the system of
again be confronted by
free enterprise. In short, we run.
the necessity for deficit
financing.; the risk of
letting slip in at the
back
door
the
totalitarianism
More Business and More
against/which we 'are barricad¬
/.Consumers' Money
ing the front door.
It looks as if consumers will
///;/::////
have, more
money, and business V
' '// Preserve Thrift! /;.//./ ///•
too.
Business spending for new
plant and equipment this year is
In the light of these circum¬
expected to reach almost $19 bil¬ stances what can we as savings
and loan men do, not only to safe¬
lion, some $2.5 billion more than
last year - and twice - what'
they guard.our own province but also

$1.7 billion to $9 billion on Dec.
31, 1947, following a year of rec¬
ord lending volume for construc¬

purposes/;;/

long run it cannot afiord to
It will remember that ap¬
praisals must look jneyond the

greatly restrict if not completely
eliminate the possibility of fur¬
ther reducing - the
public debt.
Then, should deficit financing be¬

boom.

the

in the

hectic

pean

yet
,

pay.

and

recovery,; rearmament
stockpiling on
the
other,

even

step."
It
savings that

will not bid rates for

next year

well

since

billion. By 1943 it had receded to
a war low of $5,334 million.
The

however,
Many

have- been

advocate

homes.

the Federal Reserve System. From
1933 to 1941 it had grown from
about

the Board "to

estimated

the

Treasury

Be this

.overfall

billion,"

under Regulation

war

Board

says

total

has

finally completed.

management will
vernacular "watch its

Possibilities

Spring), and with production

'Our associations have also been
one of the most
helpful agencies

^ 1 Consumed .Credit is;
also ' an- In¬

flationary force. It

savings and loan .associa¬

than
the

associations

been

Wise

.:/ National Debt Reduction

million mark is made for

/Thesecomforting developments holding

all

not

The

taxes

are

low fixed

funct

Treasury surpluses
off government debt.

pay

distortions

might, to some extent, have
been offset by
absorption of gen¬
eral
purchasing power through
taxation. Unfortunately,

earning

further reinforced by figures
recently released by the JHome
Loan Bank Board. "Resources of

restraint

pressure

prices,

mand

enough to meet this rise in costs
exempted from the statutory: without
drawing on their savings.
reserve
requirements. This was By .the same
token buying on the
logical'enough because behind the instalment
plan was given a new
war-loan accounts were govern.fillip. Yet savings and loan asso¬
; ment
bonds, but the over-all ef- ciations showed a
steady increase
fect was to make possible a fur¬
from the beginning of the war
ther expansion of credit.
down to the present.
From $0.2
;'
Latterly money rates have been billion
put in savings and loan
hardening and the Treasury-has associations in 1940
the figures
;JLifted its rate on short-terms bills for 1947 rose
to $1.2 billion.- In
;and certificates of indebtedness
short, they increased six times
but it is the announced policy of
over while other forms of
liquid,
both the Treasury and the Federal
savings declined.
Reserve System to maintain the

.price of long-term bonds on a
,21/2% yield- basis. The importance
of government bonds in the capi¬

output of goods to
keep pace with the probable ex¬
pansion of effective demand.
,//
*./ This probable expansion of de-r

economic

were

advances

the

this

and

member

developing governmental

the

estate values

melted away. Many
savings and loan associations col¬
lapsed, and in some cases the
liquidation of the assets of de¬

itself in using

For the year 1947 the Com¬

only
savings.

banker

steady

program
It is hard

savings

Securities

declined

poignantly what happened

it supplied an added, stimu-; to
1947. This decline, it is
argued,
iant to inflation/
1
* "
by some, is due to the rapid rise
U}: Another / technical
expedient in the cost of
living—a rise of.
that had the same effect was the
67.2% between 1940 and
February,
ruling that Treasury war-loan 1948.
accounts

question

thereafter

level

during the Great Depression. Real

as it may it would seem
usually result from infla-reasonable to hold that diminish¬
huge expenditures for
ing revenues on the one hand,
European recovery and an ex¬
and heavy expenditures for Euro¬
panding / rearmament

were
$49 billion of which
$41.3 billions were liquid savings.
This discloses a decline of
$32.4
billion in liquid savings from 1944

serves

which

1944

help finance the war, but by enabling the member banks by this
means

which

liquid

was

tion.

savings of all kinds

course,

of this

purpose

serious

inflationary

mission estimates total individual

take over at par from the member
banks any government bonds that

they might wish to sell. Of

anchor

all too

$62,855 on April
Yet, as others have point¬
ed out, this drop
may be due less

Exchange Commission. These in-> in so many lines already at the
elude, besides liquid savings, the estimated maximum, it is hard to
acquisition of durable forms ' of believe, I say, that we can expect

must also be mentioned the will¬
banks

bank

14 last.

pared with the high of $35.6 bil¬ require new billions.
lion in 1944.
-"r
/ to believe that, with labor already
As savings and loan men we are fully
employed (indeed a new
even more interested in
the com¬ peak of employment of well over

difference of

ingness of the Reserve

reach

and

computed by the Commerce
Department as $10.9 billion com¬

the

annual

but

year

policies might not lead to further

was

terest

meet.

•\

ever, for the whole year of 1947,
the estimate of individual
savings

money rate

regarded

whether

annual

Will There Be More
Inflation?

$172.5 billion
spent for personal

being

gov¬

necessary,
the side of

windward/

this

annum.

consumption. This left

along with an "easy-money"
policy.* Naturally, with a govern¬
ment debt of $280
billion, a dif¬
per centum in

.all

savings rate of $11.2 billion. How¬

one

Apparently, personal

per

were

Reserve System as well as all the
bank .supervisory authorities
to

use

stood, for the report¬
ing member banks, at $63,528 bil¬
lion in
February, 1947. It rose to
$65,532 billion in January of this

from

the

measures,

(2441)

superstructure

credit grows

own

apart

may

taxes and related payments were
a rate of $22.1 bil¬

artificially " low
During the war the

Treasury succeeded in persuad¬
ing the Board of Governors of the

ference

people

His

whole

stabilization if any serious down¬
turn were threatened.
That

being made at

money rates.

did

money?

with. the infla¬
has
been
the

that,

would,
throw its
weight

Inflation

How

..;One

tices

Rates and

future.

was

specific

any

Use of Consumer's Income
Low

economic

CHRONICLE

any appraisal of

ernment

down this road.

FINANCIAL

policy in

judgment

being

was

cb.J&nd

Chafles

R, Bennett, J. M. Dain & Co.

(2442)

THE

Trust
acquiescing to such present and
possible
future
non-productive
but temporarily stimulating ap¬
propriations,
time

tion
one

while at the same
the 1948 tax reduc¬

given
the real clue—the potential of
would

measure,

have

uncontrollable inflation.

two funds sold a total
of 10,000 Atlantic Refining, an¬
other bought a small Jot of this
company.

Natural gas companies have met

passing

with

increasing

Heavy Buying of Oils

four

portfolios while

two and

If such is the actual underlying

driving force behind the market
today, it should not be hard to un¬
the

derstand
for the

marked

preference

oil and mining industries.

The prices of most stocks among
the petroleum shares have had a
notable

increase,

there

some

however, and
questioning as to
the stability of the price structure
over a longer period for the prod¬
uct itself, due to the improbability
of continued demand at present
high levels. Gulf of Pennsylvania
was

the

outstanding favorite, al¬

acceptance

over

the last two years.
Northern Na¬
tural Gas became a new addition
dated Natural

Consoli¬

newcomer

increase to holdings of
Panhandle Eastern, and

third.

Texas

was

Eastern Transmission

were

each purchased by two funds and
Tennessee Gas and Transmission
was

to the

added

It is

three
of the

America

about

and

Securities'

funds

latter.

There

commitments

new

block

lines.

Eureka

only

Mining & Smelt¬

Over

there

ment

of the chief developments was

was

lightened

Jersey, which
portfolios

four

from

fifth.

Su¬

purchase

cash

perior, Creole, Ohio Oil and Pantepec
were
also
disposed
of

portfolio.

newly
ings of

St.

Joseph Lead was
introduced into the hold¬

another

two

companies

trust

added

and
to

The

interest

cost of

and

the

$2% mil¬

block of 2000 Con¬

solidated Vultee
another.

was

last

panies

the

transport
in

com¬

demand.

half,

these

part of the invest¬

two

Quarterly Periods December 1947 and March

were

new

ac¬

Two

Casualty and Surety, Aetna
Insurance of Conn., Boston Insur¬

Co.,

ance

Fireman's

Newark, G r e a t
Insurance,
National

Fire, Northwestern National Life
and Phoenix Insurance.

Opinion

the

companies,

Credit and C. I. T.
divided

although

two

large

fi¬

Commercial
Financial, was
following the

Invest. Bonds &

American Business Shares.#.

Axe-Houghton Fund
Axe-Houghton "B"

_i_.

Commonwealth

Investment
Howard Balanced-

Eaton &

500

Johnston

D?c.

9.4*

131

Per Cent

-End of-

Nesbett

Putnam

Affiliated Fund

Auto-Lite.

Thompson Prod¬

number

contrast ? to

was

11,200

the

shares.

preference

General
Motors," opinion
evenly divided on Chrysler,

was

three funds buying and the same
number selling. f? ;• 'I

large electrical equip¬
companies were favored by
purchasers.
Besides
large con¬
sumer
demand
for
appliances
there is a heavy backlog of
public
utility
business.
Four
trusts
made

21.0

8.0

14.2-

78.0

75.8

23.0

63.5

bought

Westinghouse and three
purchases of General Elec¬
latter totaling J23,80O;

the
shares.

65.4

68.2

67.4

North American Bought

66.0

70.0

>,
•

;

Many of the acquisitions in the|
utility field were the result -ot:

12.0

67.7

74.3

18.8

60.9

62.5

stock

22.4

17.2

73.6

78.5

plification

897

10.0

8.3

35.1

30.9

<;;V 54.9

10.4

8.3

20.7

18.0

5,661

19.9

23.5

15.3

11.7

64.8

614

47.6

47.0

17.2

A' 15.6 -;l/,

35.2

t
5,051
1,111

14.8

21.5

46.5

818

28.1

22.9

34.0

18.4

10.1

ftkh, :

7.4

791

196

7,653

dividends paid out in sim¬
and
liquidation
of'

60.8

these

64.8

37.4

holding

73.7

68.9

63.7

53.9

2.5

885

600

648

lumbia Gas and Electric

49.0

set
ups
and
detailed in the footnotes

company

are

the

by tw o companies Who made
commitments

36.0

97.5

64,400 shares; mention has previ¬
ously been made of the popular¬
ity of gas properties. Six com¬
panies made purchases of North

None

92.6

90.0

American

10.1

13.5

1.1

1.0

88.8

85.5

15.6

8,082

6.5

6.8

ularly

80.6

13.8

?/& 0.8

priced at

13.0

'5®

•

0.6

new

56.3

2.5

12.9

liked

was

35.1

10.0

•

Co-.'

accompanying table.

77.6

V.V-:

86.2

the

whose

stock

attractive
a

amount

partic-.

because

value well

the.

below

Knickerbocker Fund

Investment

6.1

89.5

89.3

able under the

None

85.1

85.9

125

8.8

3.5

gram.

8.1

88.4

82.8

1,563

5.6

5.5

None

94.4

94.5

604

9.2

5.8

1.6

1.8

edly influenced four trusts in their
purchases
of
Virginia
Electric*

v',;1 3,355

89.2

92.4

5.3

5.0

None

Power and three

None

94.7

95.0

776

10.9

14.2

None

tions of Cincinnati Gas and Elec¬

None

89.1

85.8

tric.

1.1

0.4

93.5

95.8

blocks

None

97.8

528

:;175

—-

Investors

6.0

None

603

Loomis-Sayles Mutual Fund
Loomis-Sayles Second Fund
Massachusetts

4.6

14.1

3,531

—

of America

worth of

4.5
14.9

987

Investors

85.6

2,308

1,540

Trust Fund

329

Investors Management Fund

332

5.4 S

112

8.4.

3.8

2.2

687

Fund

694

16.0

9.0

7.5

1,280
9,566

Trust

1,576

16.5

18.0

9.0

8.0

Investors

98.6

75.0

74.5

76.5

74.0

,•

9,458

4.7

None

95.3

4.4

mm. 5

4.1

4.3

91.5

93.2

•*

American

Street

chased

stock

3.3

5.6

None

S6.7

94.4

22.8

25.3

Penn

5.9

5.6

111 71.3

69.1

9.5

14.5

3.7

Wisconsin

4.1

86.8

0.6

0.1

86.5

7.2

7.6

62.6

Investment Corp
Wall Street Investing Corp

3,335

12.9

21.7

179

30.2

35.5

10,976

.12,464

17.1

19.4

None

198

203

19.8

19.9

None

78.2

56.9

None
-

82.9

80.6

None

80.2

80.1

Closed-End Companies:

Ridge Corp.
Capital Administration

1,844
—

4,863

446

4,689
Public Service.

Shareholders

3o0

•

Industries

Tri-Continental Coro.
UU. S. & Foreign Securities.

6.2

5,446

3.2

§8.4

6.5

15.0

None

0.4

8.5

None

13.0

:
••

390

800

16.3

I®-'- §8.3

•

506

1.081

13,773

20,136

1.799

.1,007

1,103

§5.3 Mil
-

§0.1

14.4

2.223

1,349
1,634

7.5

21.3

§22.7

7.7

§4.2

8.4

§4.7 <1

6.7

:§4.1

",1

§4.4

90.6

6.8

85.2

7.5

-i

Seven

Electric

Works

9.2

6.6

1,282

1,176

3.8

3.5

None

2,751

8.5

7.6

None

tunds

sold

Power;*'four

while

was

similar

equities of, Mid¬

Corporation.;

•

slightly increased
interest
displayed in the rail group,

84.6

91.5
86.2

purchasers.

76.0

liked

Atlantic

Coast

Line

finding four

Rock

Island

was

74.1

2.7

87.2

-6.6
:
..

England

same num¬

agements also completely disposed
46,000
shares
of
American

Water

92.5
::

New

87.0
,•

7.7

84.8

70.7

by three managements, al¬
though some of these shares were

87.5

86.6

received

88.7

ganization. Two

82.1

88.9

•

and

making complete eliminations
from their portfolios.
Two man¬

80.4

under

96.2

96.5

were

made

91.5

92:4

same

time

Investment bonds and preferred stocks:
Moody's Aaa through Pa for bonds; Fitch's AAA
through BB and approximate equivalents
.Dollar amount not reported on this date.
^No interim reoorts issued to stockholders on this date.
§Percent gross cash
and governments as reported by
company.
^Portfolio exclusive of securities in subsidiary or associated
companies.

Electric.

dle West
'

3.5

§18.2

3.3

;

3,132
for preferreds.

number unloaded

Blue

purchased

Power

holdings of West'

148

2,022

campanies

Electric System and the
ber acquired new

978

81.4

in acquisi¬

Dayton

pro¬

undoubt¬

Light, partially through the exer¬
cise of rights.
Three trusts pur¬

716

157

Sovereign Investors

Two

645

simplification

Generous yields

101

,„i.

Republic Investors

Lehman Corp.
National Bond

underlying assets realiz-,

574

New England Fund-

Selected

were

2,337

Investment Co.

General

19.2

Capital Corp
-Incorporated Investors

General

commitments

new

shown

19.4

Fundamental

State

total

tric;

7.4

General

Selected

also

equipment in marked
disfavor, four funds disposing of

629

Eaton & Howard Stock

National

pur¬

Libbey-Owens-Ford

3,368
13,756

Fidelity Fund

Mutual

buy¬

car

be cut off en-;
least
suffer even

only

4.3

Street Investing
Bullock Fund

First Mutual

ucts.

the

13.7

Broad

Delaware Fund

potential

may

Two trust liked

89.5

Open-End Stock Funds:

Dividend

individual

4,597

scares

made in the shares of Eaton Man¬

18.7

Fund

Wellington Fund
.Wisconsin Investment Co.—.

war

well thought of by three manage¬
ments.
Bendix was the favorite

4.0

1,149

Berg Fund
Scudder Stevens & Clafk—.

favor

total of 40,to their,

backlog of orders

fear they

19.9

Russell

ers

425

Fund

George

the

has increased

70.4

20.0

found
a

added

was

Recurring

and

487

Fund

Securities-Income
Nation-Wide Securities

;

mand

Mutual

National

portfolios.

89.4

13.0

12.9

was^

National

supposedly have reawakened de¬

3.2

24.6

11.8

22.6

Motors

funds and

500

3.3

16.4

269

General
with six

March

23.3

1,305

stock

anty.

69.0

10.0

4,306

City by one management and an¬
other acquired 800 shares of Guar¬

20.2

11.6

250

the

Dec.

5.6

1,043

A small investment

made

March

13.2

•

addition to another

new

portfolio.

20.4

7.3

3,701

Fully Administered Shares.
General Investors Trust„_J.

;

577

Grade Bonds & Pfds.

-End of-

March

10.6

567

Com. Stks. plus Lower

Per Cent"

D-e,c-

block of 10,000 Bankers
7,000 shares of Chase

and

became

The two

Preferred Stocks

management

ment

1948

—End of

bought

acquisitions

new

Casualty,! ufacturing and Electric

Continental

American

Per Cent

March

the

was

commercial

Another

funds

Aetna

Net Cash & Govts.

End of

made

stock.

Trust

the

only presented by men¬ among the parts makers, three;
the scattered individual trust buying a total of 9,000 shares.
purchases many of which were Borg Warner was added to the
new commitments.
Included were holdings of two companies, While

Net Cash & Govts.

Dec.

Boston

tioning

Thousands of Dollars

Open-End Balanced Funds

its

insurance

Balance Between Gash and Investments of 52 Investment
Companies
End of

among

ture, is

picked up by

also

were

interest
the

and

indications

companies; this period wit¬

nance

year

added to their holdings of Conti¬
nental Insurance.
The true pic¬

favorite

bought tirely or at
into the American Insurance Co. longer delays than today in
of
Studebaker : was'
Newark, and a like number chasing.

group expended a
dollars in the pur¬

million

been

quisitions.

same

chasers while

still

the

was

ard Accident Insurance were pur¬
chased
by
three managements

realized for the

third

Bell Aircraft at

lion.

other cleaned this stock out of its

Wright
among

nesses
such
interest gaining in
importance. 7,300 shares of Stand¬

large part of its gen¬
eral portfolio securities by First
York
Corporation and employ¬
a

and eliminated

have

survey,

though
purchases
were
stimu¬
Leading the metals, Kennecott
chase of 87,500 shares of Fairchild
through exercise of rights. returned as an old-time favorite.
United Aircraft was the
Nine trusts bought Phillips and
Nine trusts made purchases and, of Engine.
favorite
five of these made new commit¬
among
the diversified
these, three were new commit¬
ments. Continental was third in
ments.
Phelps Dodge was also funds, four of them adding the
stock of this leading manufacturer
preference while Texas and Hum¬ well liked, six companies adding
to their portfolios. Boeing was in¬
ble were bought by four and two to their
portfolios, although half
creased among the holdings of two
companies respectively.
Barns- that number also disposed of it.
trusts and a third acquired it as
dall was sold by three trusts on Homestake was the
only marked
profit taking after its rather sub¬ preference among the gold mining a new commitment. Douglas also
found favor with two manage¬
stantial rise.
Like v reasons ap¬
equities; although one fund made
Sperry found two pur¬
parently
dictated
the
sale
of a new commitment in Dome, an¬ ments.
New

Curtiss
company

lated

15,000

600 shares.

half

Standard

acquired a
Northwest Air¬

of Consolidated

ment of the

quarter, they were
bought.
The First Na¬

Bank

banking institutions, but only tWo

another

either the
transport or manufacturer groups
in
pronounced
disfavor.
Two
trusts disposed of a total of 57,-

one

tional

trusts

while

Corp., Mclntyre Porcupine, New
Jersey Zinc and Newmont Min¬
ing. Two companies sold the stock

the sale of

the

lines

individual

were

made

end

heavily

aggregate purchases
of 48,700 shares of American Air¬

Smelting and Nickel. Three trusts
bought and four sold the former
while two bought and one sold the

companies included in this

International

Foreign

liked

Among the few non-diversified

Securities' holdings were 32.4% of
its total, State Street's 31.9%, and
S.

of United and Eastern were favorites,
by five managements buying the for¬
Two
divi¬ mer and four the latter.

well

revitalized

one-third

29.5%.

also

United Aircraft Favored

cash in stocks of oil and gas com¬

Thursday, June 3/1948

Aluminum

held.

was

four managers.
There was a
sion of opinion on both American

list of another.

total amount of their port¬

panies.

CHRONICLE

ing of Canada. ;v|,/

folios of diversified securities and

already

interesting to observe that
trusts held

FINANCIAL

Buying in First Quarter

Although

(Continued from page 2)

COMMERCIAL

companies
held

of
an

the

plan of

new

number

the

lightened

previously

commitments.

Individual

scattered purchases

•

■}

acquisitions

Atchison

equal

reor-

were

made in

Volume

THE

Number 4704

167

Stores

'New York Central, Norfolk and
'Western, Northern Pacific, Penn¬
sylvania, Southern Pacific, - and
Gulf, Mobile and Ohio.
Opinion

divided

was

■

ment

road

equipments met with divided

action.

■

was the' only road
by three funds. Rail-

sold

Three

managements

sold

number of

Brake while four made

/of

Superheater.

there "

were

Opinion

Manufacturing,

Divided

Ward

Buyersv outweighed

sellers

individual

number with six purchases of
Montgomery Ward offsetting four
sales. Opinion was even closer on
Sears, there being five buyers to

Two

four venders of the stock.

;

Three

shares of Electric Boat,
is a 1,000 share lot of

entirely
to

both

purchases,

acquisitions, appear
the naval defense pro¬

new

point

of 10,000
the other
Newport
News Shipbuilding and Drydock.
One is

grams.

Feder-

ated
Department
Stores
was
slightly
favored
while
Allied

which

two

commitments.

new

companies also bought shares of
National Supply and two more in¬
creased holdings of Allis Chalmers.

^nd Sears

concentrated

few

purchases. Five trusts bought Joy
made

//i'

even

over-all

purchases

like number

picture on the
shares of machinery and indus¬
trial
equipment
manufacturers,

(trusts bought Westinghouse Air
-

the

out

Transportation
was
/unloaded by three more. On the
same

trusts

Four

vidual transactions tended to

New York Air Brake and General

/American

other hand, the

steels.

tered

only

CHRONICLE

FINANCIAL

selling

cen¬

was

industries.

few

Johns-Manville

the most

was

un¬

popular
among
the
building
stocks, four trusts decreasing their
holdings and two more making
complete
eliminations.
United
States

Gypsum

ings and three more completely
liquidating shares formerly held.
Three funds reduced equities of
American Cyanamid and two dis¬

Jas. H.
Jas.

given, to purchases although slight
preferences were shown for Com¬

zer

Simmons.

Three

and

Owens

Attention

agements

Two*man¬

also f sold

Pittsburgh

bers

was

transactions
the investment companies
first quarter and that is
of

the

reduced the number of shares held

in the tobacco shares. The indus¬

member firms

forecasts point,
is
headed for lower earnings in ad¬

Sherwin

Williams.

Two

trusts

bought Weyerhaeuser Timber and
like

number

small

lots

the

try,

the

dition to which

Carbide Liquidated

Union Carbide
disfavor
two

trusts

the

was

greatest

chemical

group,

decreasing their hold¬

through the organization, six

them

housekeeping upsets. Amer¬
ican
Tobacco
was
completely
eliminated from the holdings of
three

funds

its

and

number

No, of

No. of

No.,of

No. of

the

with

Trusts

v/';2

J. I. Case Co..
-1/5 Auto A Auto Parts:
/
5,600

40,500
1-3,300

Yiv<

2(1)
5(2)

None

Borg Warner ..—A—,
General Motors

1 m

700

2,000
Libbey-Owens-Ford Glass— -_i." •' 11,200

4(3)

3(1)
2(1)

American Airlines

48,700
150,444
4,600

Eastern Airlines

None

/.fKv/

mmM- V/!" ///

Canada Dry

6,000
5,000

■' t

'■■■■

Ginger Ale

v.'W;

None

1(1)

900

—

Radiator

2(2)

None

Middle West Corp.———-—~- 15,500

t 2(2)

Wisconsin Electric Power——

15,604

f 7(4)

54,200

3,300

56,900

60,000

None

Pittburgh Plate Glass-i
Sherwin-Williams

3,000

2(1)

None

1,500

None

Sirnmons Co.

9,500

2(1)
4(2}

None

Trane

5(2)

4,500

Paramount Pictures

1(1)

600

2(1)
5(3>

None

Twentieth Century-Fox

■:

-----------------

050

United States

3,800

Gypsum

s,'

' >

None

None
None
4J900

■

18,000
1,000
2,400

Kodak
Interchemical Corp.
Monsanto Chemical

None

Eastman

7,000.

None -;
None
Union Carbide
.', - Containers and Glass:
3
3(1) |- 2,000
Continental Can
-y

None

Owens Illinois Glass—

None

2,700

§&* Eleetrical Equipment:
General Electric
Westinghouse Electric

23,800

5,350

/4 I

2,500
—3,200

None
None

4(1)
3(2)

9,500
a

3.200

7,312 *

3(2)

u v

None

(Newark).

None
None

Continental Insurance Co
First National Bank of Boston..
Standard Accident Insurance Co.
Marine Midland Corp.

2,000

2C2)

Amer. Insurance Co.

■

Food Products:

4(1)

7,100

2^00

5(3):

9(3)

6(1),

Aluminum

3(2)

3(2}

None

4
'

None

4(4) s

■2(1}

1(1)

Oil3—

Humble Oil & Refining

None

.—

6,800

Northern Natural Gas

3,100

Panhandle Eastern Pipe Line— /

None

13,200
9£00

None
None

None

500

3(1)

3(3)

have

6,000

None

1(1)
4

4(1}
2(1)

1,500

2(1)

American Tobacco "B".

500

None

7,300

5(3)

7,700

^ International Silver

Shellmar Products Corp

700

Purchases in

Received

dividend

Received

dividend

Received

2(1}

—

None

Increase

Increase in part attributable to stock dividend.
Received as 5% stock dividend.

American.

2 r;;

None
None
None

formerly with
has also

Co.

re¬

Exchange

Weekly Firm Changes
The New York Stock Exchange
has announced the following firm

changes:
E.

William

Nulty retired from

April 30.
Karl

from

retired

Herzer

part effected through exercise of rights.

;

Clement

Newbold,

31.
limited

partner in W. H. Newbold's Son
become a general part¬
ner effective July
1.

& Co., will

Nelson,

member

the

Exchange, died on May 21*
John A. Guion, partner in
Scholle Brothers, died on May 20.

dividend on United Light & Railways.

dividend

in part

American Gas & Electric.
Middle West Corp.

Bowling Concluded

Public Service of Indiana.

resulting from liquidating dividend on North

Includes shares received under plan

of reorganization.

trusts but purchases or sales of
trusts sponsored by one management group are treated as a unit.
For example, the several trusts sponsored by Calvin Bullock are
considered as having the weight of one manager. Overseas Securities,
American General Corp., and First York Corp. included in addition
to companies listed in companion table.
NOTE—This survey covers 55

PHILADELPHIA, PA. —E. H.
Rollins & Sons' keglers, cham¬
pions

'
#

Abbett

Palen

1(1)

F. S. Moseley & Co. on May

Tobaccos:

None

New York Stock

600

Burlington Mills

None

cently joined the organization.

6,300

States Steel

3(1)

None

appointed Vice-Presi¬

been

F. J. McKeadney,

None

4(1)

5,700

American Viscose

None

Gulf

United

None

associated with the firm. All

formerly connected with R.
Co., Los Angeles. Mil¬
ton C. Brittain and R. F. Ruth, III

Miscellaneous:

Robert B.

partnership in Dreyfus & Co. on

None

1(1>

1,100
1.000
5.500

F. Ruth &

100
1,300
10,000

Republic Steel

1,000

4(1)
None

4,450

5.500

Textiles:

89,825
-

None

19(5)

were

Youngstown Sheet & Tube

4(1)

None

3(1)

19,300

National Steel

None
None

—

Goodyear Tire & Rubber

3,000

3,300

—■

—...

3,700

2(2)

Street, announce that on the 1st
June, 1948, R. F. Ruth, III,
Sheahan, Frank S. Halvorsen and Albert O. Nelson be¬
of

Steels:

Union Baq and Paper
Petroleum and Natural Gas:
Consolidated Natural Gas——
3(2)
7,400
Continental. Oil
15,100
6(1)

CALIF.—John

634 South Spring

Rubber and Tires:

None

Machines1—

None

Stores..

3(1) '

None

Mueller Brass

Paper and Printing:

None

Department

Allied Stores

None

9.100
Internat'l Business
8,282.6 Remington Rand2

B. Dunbar & Co.,

None

Montgomery Ward

200
1,925

Smelting, Canada

!Offiee Equipment:
4 /

Federated

1,900
10,225

Consol. Min. &

4,100

LOS ANGELES,

3 '

dent.

None

MOO

Metal Fabricators:
1

Announce Additions

Retail Trade:

6(2)

2(1}

700
None

Copper

Dodge
St. Joseph Lead

None

800

4,100

Co. of America

Phelps

7,900

None

Zkfr!, 1,600

None

None
700
None

Homestake Mining
Kennecott

■

Metals and Mining:

16,250
1,200
23,300
7,600

None

3,600

;

4(2)
3(1)

John B. Dunbar & Co.

came

Superheater
Westinghouse Air Brake.
General American Transport
New York Air Brake—,

None
5,000

Standard Brands
Machinery and Industrial Equipment:
2
10*500
Allis Chalmers——————
5(2)
4,900
Joy Manufacturing Co—.——3(2)
5,50ft
National Supply
—
,

1,000

Union Pacific

500

None
1,600

Chicago, Rock Island & Pacific

None

5,000

3(1)

Atlantic Coast Line

4,800
44,500

2(1)

Jr., Blewer,
Registration

Glynn,
Glynn.

fee is $20.

None

Railroad Equipment:

Financial, Banking and Insurance
2

there

and dinner at the
Norwood Hills Country Club. Restervations- should be made with
golf

Heitner

None

June

17.

Joseph

8(1)

Railroads:

7,100- ,Commercial Solvents
6,100 r Pfizer (Chas.)
25
American Cyanamid

None

3(1)

Radio and Amusement:

Chemicals:

2(2)
W * 2(1)
H

6,610

None

June

will

3(2)

3(3)

None

Co.

None

25,300
31,283

program

the Stack Club,
Edgewater Club

and dinner at the

None

10,850 r

The

18.

and

cocktail party at

None
r

annual

planned will include luncheon at
the
Missouri
Athletic
Club,
a

None

None /

None

27,500

None

MO.—The

LOUIS,

June

None
:

6(2) t

1,375

3(1)
6(1)
10(1)
4(4)

Johns-Manville

None

■

Gulf States UtiUties-.^^—None
Indiana Gas & Water Co?
None
New England Electric System..
None
North American Co
: 20,200
Potomac Electric Power6
67,352
Virginia Electric Power
None
West Penn Electric Co
None
American Water Works & Elec.46,000

None

Municipal
Dealers' Annual Outing
ST.

None

3^S-

—

Cincinnati Gas & Electric
Columbia Gas & Electric
Dayton Power & Lights

2(2)

in¬

outing of the St. Louis Municipal
Group will be held on

t 3(2)

Central Illinois Public Service6

17,500

Weyerhaeuser Timber Co

6,200
1,740

although

does

Dealers

;

180,350

2(1)

American

3(2)

;

3(2)

4,700
29,700

2(1)

5(1)

4(4)
'

4(2)

2,500

2(1)

1,400
15 £00
8,400
1,000

2(f);

2,300
7,500

i'mm

None

—

Pepsi Cola
-—
Building Construction and Equipment:

Pantepec

None

United Aircraft

Curtiss-W right

Beverages:-

None

Standard Oil of New Jersey

securities

SI. Louis

-2(1)

57,600

1-;

3,300

—

None1

3(1)
3(1)'

Ohio Oil

1,100

from the

supervise individual
vestment portfolios.
*

None

19,700
64,400
13,803

;

United Airlines

15,300
16,900

None

2,000

-—

Sperry Corp.-,—/

Superior Oil
| Public Utilities:
<
"
11
14,184
American Light & Traction 4
5(2)
2,764
Atlantic City Electric5

None

...

Barnsdall Oil

None

3(2)

None

18,600

^;5(1)
A -4(1)

None

None
None

Boeing Airplane
Douglas Aircraft

2,400

None

Bell Aircraft

6,400

f / 4-

None

;

writing and having

18,100

•

ten

policy of con¬

for sale and no salesmen,

Creole Petroleum

2(1)
.1(1)

Jas. H. Oliphant & Co.
outset established

No. of

None

None*

than

each, and 31% for more than

Trusts

None

Aviation:

for

Shares
Phillips Petroleum
None
Texas Company 4—•; 7,000
Texas Eastern Tr'smission Corp,
None
Texas Pacific Coal and Oil Co..
5,500

800

40%

employees,

Among

its activities to the com¬
mission business, doing no under¬

None

■

Studebaker Corp.

None

than 25

served

No. of

54,800
29,300

None

Bendix Aviation

9,000

3(2)
2

None

dealt

have

fining

;

24,800
4,125

None

1,100

9(5)
4(1)

for

years

Sold

firm

have

No. of

Trusts

Agricultural Equipment:

No. of

A large

were

decreased in two other portfolios.

—Bought—

;<?

Trusts.Shares

customers

the

with

having, been

firm for 30 years or more.

20 years.

-Sold-

I7;—Bought— '
•

is going through one of its recur¬

Changes in Common Slock Holdings of 39 Investment Management Groups

eliminating the stock from their portfolios.

partners of the firm came

rent

American Radiator.

(Dec. 31, 1947-March 31, 1948)

1898

according to Floyd

Mundy, partner.

All

when the Stock Exchange had 382

certain member

retaining

now

carried

name

same

for

Transactions in which buyers exceed sellers—or sellers exceed buyers—by two or more management groups.
Issues more heavily
sold are in italics. Numerals (1) (2) (3) (4) indicate number of managements making entirely new purchases of an issue, or completely

;

firms

only

Plate Glass, two decreased shares
in Trane, and the same number

among

The firm is one

ing of the firm.

group

Ex¬

this year observing

are

the 50th anniversary of the found¬

was

directed

leading

other

and

changes,

should

Co.,

the New York Stock Ex¬

change

years.

;

Oliphant

both Dow and DuPont.

last

one

Opinion

Company.

divided

Glass.

attention

mercial Solvents and Charles Pfi¬

companies reduced their stock in
Illinois

Little

agements.

Broadway, New York City, mem¬

each sold by two man¬

were

Oliphant Go.

Celebrates 50 Years

posed of 18,000 shares of Eastman
Kodak. Interchemical and Mon¬
santo

(2443)

was
completely
by three funds and
decreased
by two others. Four
companies
also
lessened
their

disposed

block

Concentrated

three

no agree¬

disposed of Republic. On the other
hand, three funds bought National
and three more increased holdings
of Youngstown Sheet and Tube.
Although many scattered indi¬

Union Pacific

the

sold U. S. Steel and

Northern,

Great

lightened
There was

was

portofolios.

COMMERCIAL

Class "A" division
Bankers and
League, defeated Gerstthe

of the Philadelphia
Brokers

topthe
play-off last week. Hecker

ley, Sunstein & Co.'s timber
piers, Class "B" champs, in
final

& Co. and Paul &
ners-up

sions.

Co. were run-

in their respective
,

"•

divi¬

■•A,

COMMERCIAL

THE

(2444)

FINANCIAL

CHRONICLE
Committee

Uncontrolled Inflationary Tendencies
(Continued from page 6)
sponding
cost
increases which
Jhave been quite generally reflect¬
ed in selling prices."
—
The real difficulty began with
President
Truman's
wage-price

he announced on
This policy was so

which

policy
.

Aug. 18, 1945.

controversial that when it was re¬
vised
\a
;

intense, it too, had
to be abandoned. For weeks after,
there were bewildering promises
of a pew wage-price policy which
was
described
as
a
policy that
that grew

'meant

not

"break"

but

only a

line.. Bernard
Baruch summed up the situation
when he said: "Stop bunking the
in

"bulge"

30, 1945, it caused
Administration circles

Oct.

rift

the

public by saying wage increases
can
be granted
without an in¬
crease
in price levels." On specific questions, the Administra¬
tion

confused. The Reconver¬

was

sion Director testified that he, be¬
lieved lit

would

involve

ma¬

increase in the cost of liv¬

terial

ing.
The Federal Reserve Board
Chairman predicted that it would
cause
living costs to go up 40%
above

levels,

prewar

10%

higher than they were. The Eco¬
nomic Stabilizer disputed this pre-

H diction, testifying that he "hoped"
She increase

would

"no

mental

increase

wages without increasing produc¬
tion is inflationary.

Another menacing influence is
reflected in high taxes paid by

corporations and individuals. It is
contended

by some that excess
purchasing
power
should
be
siphoned off through high taxes.
From the standpoint of the indi¬

vidual, it means
incentive to work
his

occupation

for the remark frequently

reason

heard, that to miss a day's work
not important as the income

receive

will

collector

tax

that

■

•

have

been

cessive taxation also restricts the
flow

venture

essential
of

capital which is

promoting the needs

industry.
So burdensome has taxation be¬

with

come

that

out

cents

every

recent

tax

reduction

law

in-

present

the

negotiations in the coal
Government labor and

7 industry.
economic
not

test, due

specialists

report

strike has been

one

won

that
this

While the public anxiously
developments, the Ford
Motor Co. gained nationwide, no-

tyear.

watches

tice

its

request to

the United

Auto Workers to take

•'

budget

Government
1949

the

for

contains
of

come

mated

United

the

States

fiscal

year

estimated

$2,982,000,000
of

expenses

and

in¬

esti¬

$3,677,000,000

for

wholly owned and related un¬
incorporated credit agencies.: 7
The

accomplish an objective of
public security." The request was

credit

a bomb-shell in labor
circles, with
Chrysler employes on strike and
coal miners seeking a new
wage

contract.

The Ford Co. in its ap¬
peal to the United Auto Workers
warned
r

the

wage cut

—"to
*

the national fiscal structure.
This is indicated by the fact that
upon

that

^'continued

rise

will bring an end to
period of high employment."
wages

Labor rejects the

the

theory almost

participation of the Federal

Government

the

agricultural

structure of the country is
carried out through a complicated

system
credit

agencies.

The

farm-

system is comprised of the
Credit
Administration,- a

Farm
non

incorporated governmental
supervisory agency, and 51 corpo¬
rations; for operating purposes, the
credit

divided

districts

into

one

farm-

which

in¬

•

situation is illustrated by the fact
that in 1946 one of the land banks

paid

ricultural

has

paid by the United States
Treasury (out of funds supplied
by taxpayers) on the public debt
incurred

supply such capital.
Furthermore, the entire earnings

the

directly

tal.'

indirectly from

of free government capi¬
of the results of this

use

One

20% dividend to its stock¬

holders.

which is another form of sub¬

sidy paid by the Treasury
terest on the public debt.

in¬
The

banks for cooperatives, for ex¬
ample, had $178,500,000 free gov¬
ernment capital at June 30, 1946,
and

over

$54,000,000 invested in
Treasury bonds and certifi¬

cates.

Approximately two-thirds

the

accumulated

earnings

these banks to June 30, 1946 came
from such investments and from

profits realized through trading in
U. S. Treasury securities on the
open market.
The

Production-Credit

Corpo¬
have no

rations, although they
lending powers, held at June 30,
1946,
$101,250,000
free
governcapital and held nearly $70,000,000
long-term U. S. Treasury bonds.

These corporations receive almost
all
their
gross
income, out of
which

they

and to June

lated

over

their

pay

or are

intended to become, wholly

interest

cost

must

added

the

be absorbed by
to

factured
"

correspondingly

Otherwise

the

cost

in¬

increase

assumed, the subsidy
represented by free capital sup¬
plied in 1946 would approximate
$3,150,000 for the banks for co¬
operatives and $2,000,000 for the
Production
The

Credit

subsidy

terest

Corporations.
represented by in¬

investments

excess

free

government capital in U. S.
Treasury bonds, including profit
from- trading in such
securities,
was
nearly $1,250,000 and over
$4,350,000 respectively.
/

The U. S. Treasury-bonds held
investments

the

also

are

lending agencies

used

collateral

for loans from commercial banks

public

thereby

issues

debentures,
affecting the

favorably

cost of funds from

those

sources.

Another

important subsidy is
contributions,
or
liability
therefor, made by the government

the

industry

the

manu¬

product resulting in

increase in price to the

consumer.

In this connection, it is significant
*

to note that Great Britain with

labor

Government

has

found

necessary

freeze

both

wages

and prices because of .the funda¬

corpo¬

production-credit

and

bank

for

corporation

cooperatives—48

corporations in
all.
The
other
three corporations are in Wash¬

ington, D. C. They are the Federal
Farm Mortgage
Corporation (the
land banks act as
agents for Fed¬
eral Farm
Mortgage Corporation),
the Regional Agricultural Credit
Corporation and the Central Bank
for
ment

Cooperatives.
subsidizes

the

The

govern¬

farm

credit

system in various ways which

are

in which the Farm Credit

Administration is operated is due
its prominence

in the field of

credit-banking and the direct sub¬
it

sidies

en j oys

time when

Civil

Service

retirement

" payrolls,
this cost is
approximately $600,000
annually.
^
owned,

The

based

1946

government also pays the

employes'
office

compensation,

space

and

cost

other

expenses
for the benefit of the farm-credit

system for which the government
receives

reimbursement.

essential curbs

inflation.

significant to note that
loans made by Production Credit
Associations have
increased
in
amount about 50% since the end

House

of lack of time, and the
knowledge that they are by law
required to adhere to certain pro¬

visions.

Yet

there

restrictions

lending
sane

government

agency

course

should

any

following

action

that

would

require adhering to sound bank¬
ing
rules
in
determining the

eligibility of the borrower from
standpoint of character, ca¬
pacity and capital.
\
the

If government

lending agencies
exempt from the A.B.A. plan
voluntary credit control, it

are

is not alone unfair to the

banking

profession but to business in gen¬
eral

and

will

prove

detriment

the

effort being made to halt
inflationary spiral. It is par¬
ticularly unfair to country banks

the

which

especially affected by

are

the operations of the Farm Credit
Administration and its far

flung

activities.
While

credit
that

are

control,
the

the subject of

opinion
special
or

proposed'

secondary
reserve
requirement
(which would apply to non-mem¬
ber

commercial

banks

members) will have

well

adverse

effect upon the

banking industry,
particularly the smaller, so-called
"country banks." The special re¬

posits and

up to 10% against time
savings deposits, in addition to

the regular reserves, would in all

probability force
country banks to

many

dump

our

longer

of the year

1945. These Associa¬
referred to as "P.C.A's,"
have become increasingly inde¬
pendent of the Production Credil
Corporations. The Class A non¬
voting stock of the Associations
which was held by the Corpora¬

term

tions,

compel therm to liquidate sound
and necessary loans. The forced

tions at the end of 1939, amounted

would

to $75,369,875;

earnings

at the end of 1945

reduced in amount

was

some

$20,000,000; and at the end of 1946
it had been reduced to $46,033,615
and

was.:

end

further

1947

reduced

the

government

disposition

yielding

wnich

securities

loans

necessarily higher in¬

than

come

short-term

would

have

drastically :

securities,
be
held,

curtail

the

many
banks whose
points have become
very high because of
spiralling
wages,
taxes
and
maintenance

break-even

costs.

special

$34,917,800.

opinion

the

that

proposal

reserve

would

have the effect of greatly weaken¬

Huge Cost of" Government
As

nation

four times

spending

are

much

ing

did

the pre-war period

fact

that

nually

now

cost

our

all

govern¬

about $50 billion an¬

than

or more

spend for

The

taxpayers of America
paying for bureaucratic

private

our

and

the

ization

trend

banking
toward

system,

national¬

banking would be

ac¬

celerated.

Incidentally,
I
am
relieved from reports I

greatly
have

heard

that

proposal

serve

the

has

special
little

re¬
no

chance of passage.

In voicing my thoughts, I am
tempted to tell you a story that

of the favorite yarns

one

of Dr»
Hopkins
who
meeting. At

fumbling, and colossal waste that

Isaiah Bowman of Johns

has

concerning

billions

added

dollars

gentlemen

two

the swollen public debt. We need

went

to be informed of the true condi¬

the end

tion of

arguing,
one
asked
"Well, now, what do

fiscal affairs instead of

our

being

shocked

occasionally
by
newspaper reports of thousands of
bushels
of
potatoes
being de¬
stroyed by the government or of
the
negligent manner in which
surplus war material has been

disposed of.
through its tax
dollars is striving., to .put., the na¬
tion on its feet and it is a sad
commentary To

realize, .that

our

government is actively competing
with

private

business

tax dollars for that
■£' With

And

and fusing

purpose.

further reference to these

various government lending agen¬
and their impact on the fi¬

political

the

hour and

second

"Hell, I didn't
I

other:

think?""

you

said:

here to think,
r

trying to make

half of

the

gentleman

come

to holler.";

came

con¬

tribution to your program without

hollering.

Free enterprise

"As

•

Nation, if

•

we are

to earn¬

estly and sincerely seek a solu¬
problem of inflation, it
is going to require real thought
and not mere lip service. It has
been
my
endeavor
to
identify
some of the pitfalls which, if un-.
heeeded,' will ■ lead
us V further
along the inflationary road.
tion to the

cies

nancial

structure

ment and

the

are striving in the field of private
banking to comply wholeheartedly

with the

A.B.A.

untary control

of vol¬
credit. While

program

over

Summary

govern¬

business conditions, we

77*77/;;: 77

Summarizing

briefly, we must
have economy in government for^
cnly through such action can we
break
the
shackles
forged by
taxation, for our taxes pay the

am
in full sympathy with the
objectives of the A.B.A. program

economy, we

will be able through

and

active support,

lower

taxes

I feel that the program should be
extended to every sector of the

badly

needed

credit field, including all govern¬
ment lending agencies and every

stand

other

the

giving it

loaning agency in
private credit. Only

by
enlisting
credit-lending
nation

type of

field

this

the

because

of up to 25% against demand de¬

debt

full fruits

1949,

various other forms of credit ex¬
tended
by government agencies

budget and reduction of the public

the

year

detail on the subject
mortgages, G.I. loans or

serve requirement to hold cash or
short-term government securities

at a

concerned with

are

considering the government
corporations appronriation bill for
fiscal

balanced

are

per

annum

Administration and the 51 corpo¬
rations supervised by it.
As to
the
land
banks, now privately

„

accom¬

My purpose in explaining the
manner

food.

privately-owned;

rations—a Federal land bank, a
Federal intermediate credit bank,

creased.

ment is

now,

out

'•

Legislation is needed
plish this purpose."

credit.

credit associations which

employes of the Farm Credit

pro¬

with

interests

for the func¬
tions of government. This huge
cost is further emphasized by the

disability fund with respect to

unless

surplus earnings from this form of
subsidy.7 Furthermore, this subSidy, as well as the free capital
subsidy, is extended through the
corporations to the production-

the

•

fiscal

expenses,

are

touched

of F.H.A.

the

30, 1946 had accumu¬
$151/2 million dollars

and

affecting prices

take

taxpayers of any program, are to

cludes Puerto Rico.
At each dis¬
trict office there are four

duction

r
received

•

■universally accepted,
that
you
cannot adjust prices upward with*

failing

consequences

compensate for the

Nation

However,

place in jeopardy the lifeblood of
country—its
financial
and
well-being.
Therefore, the
Committee is of the opinion that
the Congress should require the
farm-credit system to pay for all
costs incurred by the government
for the benefit of the system. Only
in this way will the actual costs
of operating-The system be dis¬
closed, thereby showing whether
interest rates charged borrowers
are/ economically sound and in*
forming the Congress as to the ac¬
tual cost, if any, incurred by the
government in order to supply ag¬

return

The

real

;;

Typically in the farm-credit
individuals finds
its way to the tax coffers of the system, the corporations receive
free capital in excess of their
nation.
In addition, approximate¬
needs.
The excess is invested in
ly 20 cents of every dollar spent
U. S. Treasury bonds, the interest
in retail stores goes.for taxes.

the

$314,000,000.
■
The government

dollar earned by

enacted

the

earned

expanding facilities. Ex¬

ac¬

notice of all of the expenses to the

ment

standpoint of indus¬

the country.

increased

was

try, the burden of taxation retards
the replacement of needed equip¬

the

questions

the farm-credit structure and

tivities of

first established

were

the land banks (nearly $130,000,000 at June 30, 1946) became
the property of private interests,
although to a considerable extent

From

public is thoroughly aroused to
evidenced by the
the fact that wasteful
government
March, six million
policies maintain high taxes, we
man-days were lost against 725,can hope for a revision in our tax
000 in February, due principally
laws.
to the dispute over pensions in the
coal industry.
The situation' is
Government In Business
-explained as being the result of a
While on the subject of taxes,
general opinion last fall that the
it is pertinent to point out the
request for a third round of wage
encroachment of the government
increases would find industry
in the field of private business.
agreeable when .major wage con¬
In 1921, there were 19 government
tracts expired,
in February com¬
corporations in existence. Today
modity prices decreased and the the
number has increased to
86,
cost of living began to show signs
the majority of which are engaged
of leveling off.
Corporation sales in
business
activities, including
as
a
result did not increase as
production, transportation, power,
easily and quickly. Corporations
housing, insurance and banking.
decided to resist wage increases as
The increase in the number of
inflationary and countered with
the announcement by some indus¬ government ^corporations
up
to
1945 has been accompanied
tries of reduction in prices.
by a
The situation is becoming tense correspondingly greater influence
lately,

that

they

much less.

Strikes

when

interest

the

government should participate in
t

amounts are
some
cannot be

in 1917 which later

is often

and

judgment

pass

of whether or to what extent the

The

but

Appropriations said:

it is of the opinion that the ex¬
accurately determined. The prin- !
cipal subsidy arises out of the pense to the government of its
supplying of large sums of free participation in all fields of en¬
capital.
The land banks for ex-j deavor should be fully realized by
ample had $9,000,000 such capital; the Congress and the people. The

■

fact

agencies.

full week at

crease

ing

"The Committee does not seek to

clearly disclosed in the finan¬
statements of the participat-

cial

decreasing the

by the 80th Congress is
During the past year, wage dis¬ a
healthy sign since it reflects the
putes have caused industrial un¬ fact that the
subject of taxation is
rest, as witnessed recently in the
receiving attention that has been
meat-packing,
automobile -and
long overdue.
Taxes are not as
railroad industries.
Negotiations
fully understood by the Ameri¬
'! on wages are in progress in the
can people as
they should be, due
; coal mining industry with respect to the
fact that they are often
to the wage contract in the bitu¬
indirectly applied on the theory
minous coal industry which exthat they are not noticeable and
pires June 30. The action in the if
so, should be accepted as a pre¬
coal and automobile industries on
mium
paid for the blessing of
wages will develop the pattern to
being an American. > This false
be followed by labor in 1948 in
philosophy
is
becoming
more
seeking wage increases.
widely understood and when the
.

not

substantial

High Taxes

than half of that, say, 5%."

that

facts

Thursday, June 3, 1948

can

every

agency- of

authority in the
hope to enjoy the

of such

connection,

program.

have

In
not

cost

our

government.

capital
will also

economy.

true

funds

venture

better chance of

objective of
and

With

release

realizing

balanced budg¬

reduction

the

public

debt. It is realized that increased

appropriations

for

the

rearma¬

ment program and

the uncertainty
of the needs of the European Re¬
covery Program and other forms
of

foreign aid, will require

to-

Volume

THE

Number 4704

167

However, if
well as

"tighten our belts."

the nations of Europe as

States

United

the

flation,

curb

can

in¬

aid will mean sound
every dollar spent since

it will not be decreased in dollar
volume at home
i

abroad,

achieve

labor.

own

fields

government

that

should be within the realm of free

enterprise. Thomas A Edison cor¬

rectly summed

such

danger

from

oly,
goes

shift

monopoly
private monop¬

public

than there is in

for when the government
into business, it can always
its

losses

the

It
bers

must

been

said

their

and

for

chief

privately

Federal Trade

some

legal

favor

counsel

junking

Commission

entire

the

basing

point

important national factors it

look at their "price

Demand

than they

taxpayers.

Steel Institute announced

Tues¬

0.8 points, or

politics

with

and mo

Tot

gets

ever

one

of capacity for
rate

300 tons

city

the words of the immortal Lincoln

speech to

group

Sunday school children in New

;

York

City

long

.President. Here

before

was
two sentences

are

that speak volumes: "You children

always thank God that

have

been

born

you

country

".where, if you will lead a decent,
'f clean life, trust God, and work

hard, you can rise. The only
things that will limit you are your
industry, your character, and your
'brains." Since Lincoln's day, we

■'

;have a more sinister threat to our
; unity because it stems from foreign shores and from an* alien
..philosophy that would make all

•

men

the slaves of the

There is

fcan

national

salvation lies
God

and

State,

foreign panacea that

our

cure

ills.

in a deep

faith in

double-barreled

dose

old-fashioned American¬
ism, which includes hard work to
production, a spirit of
patience and unselfishness, and, if
need be of patriotic self-denial,
by prudent saving of our income,
to curtail demands that may add
fuel

our

the

fires

inflation.

jjbas been truly said that "the love
God

sharpens

the

tools

ijustice; it is the love of freedom
<that

sharpens

pur

produce." God grant

incentive
we

economic security, so that future

enjoy the bless¬
their forefathers

may

ings of living, as
idid, in a nation that, under God,
has become a world symbol as a

respecter and preserver of the hu¬
man

dignity of mankind,

■

—

J. B. McFarland 3rd
With H. M. Byllesby
PHILADELPHIA, PA.—H. M.
Byllesby & Co., Stock Exchange
Build.ng, announce the associa¬

tion with them in the trading de¬

partment of James B. McFarland,
3rd.

Mr. McFarland

formerly
with the Philadelphia office of
First Boston Corp. The facilities
of Byllesby's Philadelphia office
trading department have recently

WyckoffWifh
Buckley Bros, in Phila.
PHILADELPHIA,

PA.

—

The

Philadelphia and New York firm
Buckley Brothers, members of
the New York and Philadelphia
Stock Exchanges, announces fet
George H. Wyckoff has become
of

associated

with

them

the

Philadelphia
Street.

Mr.

office,

1420

Walnut

Wyckoff "was

for¬

merly with A. Webster Dougherty
& Co.

/ ;V.

showing

small gain

Mill demand continued to lag with limited inquir¬

forward shipment.

Consumption of cotton during April as reported by the Census
Bureau amounted to 830,000 bales, or somewhat less than had been,

This compared with 879,000 bales in March and 882,000
last year. Total consumption of the staple during the
months of the current season was placed at 7,131,000 bales,

anticipated.

bales in April

Vcl-%T-^ T;--;^

first nine

compared with 7,810,000 bales during the corresponding period a

3.7% ABOVE PRECEDING WEEK

ago.
Textile markets were characterized as slow with prices
showing easiness in some constructions.
year

troubles in both the railroad and coal industries.

There

was

considerable increase in activity in the Boston raw

wool market last week with
wool tops and wools.

strengthening prices noted for both

:•,!

;

In the West,

demand for half-blood staple wools continued brisk

progressively higher prices. All but

few choice lots in Texas and

to have been sold on a contract
Reports from foreign primary sources indicated all markets

the Territory States were reported

;

The amount of electrical energy

and

SLIGHT DECLINE

SHOWS

ELECTRIC PRODUCTION AGAIN

basis.

industry for the week ended May<29 was 5,076,025,000
kwh., according to the Edison Electric Institute. This was 9,387,000
kwh. below the output for the preceding week.
Production for the
May 29 week was, however 646,916,000 kwh., or 14.6%, in excess of
that for the week ended May 31, 1947 (which included Memorial Day)
when output totaled 4,429,109,000 kwh. and was the 21st consecutive
week that over 5,000,000,000 kwh. were turned out.
In the electric power

the

homes

nation's

RETAIL AND WHOLESALE TRADE MODERATELY HIGHER

FOR WEEK AND YEAR

approach of graduations and vacations stimulated the de¬
of seasonal merchandise. Numerous consumers
sought wedding gift specialties.
;::v!
.Vy,
*/.
V •' ,
The

mand for many types

Retail dollar volume

along with increased(electrification of
an unprecedented(demand'for elec¬

v/as

ports in its current trade summary.

and farms, has created

****

•V

•

Considerable resistance to high prices remained evident and

tricity and this demand can be fulfilled, according to authorities in
the industry, With power plants operating at peak output for several

consumers

continued to stress quality along with many requests

i,|ifor:credit.''r

S.'

years.

Wednesday of last

in the period ended on

moderately above the levels of both the preceding week
and the corresponding week a year ago, Dun & Bradstreet, Inc., re¬
week

industry of the country, postwar expansion

industries

active with competition keen and prices on the upgrade,

very

distributed by the electric light

power

apparel increased moderately. Promo¬
tions of medium-priced cotton dresses and beach-wear attracted very
favorable attention.
Light-weight blouses, scarfs and hosiery con¬
tinued to sell well and cotton petticoats remained among the more
The demand for summer

OUTPUT ADVANCES

AUTO

Production of
rose

last

week

FURTHER THE PAST WEEK

and trucks in the United States and Canada

cars

units from 91,138 (revised)
according to "Ward's Automotive Reports."

estimated 92,105

units the previous week,

popular lingerie. Men's light-weight suits, slacks and sport jackets
were
steadily purchased
along with straw
hats and summer
,

Output

it was

7.9,315 units and, in the like week of 1941,

a year ago was

106,395 units.

■<

accessories.

This week's output consisted of 61,340 cars and 26,608

trucks made

in the United States and 2,480 cars and 1,677 trucks made in Canada.

Commenting that • "the industrial scene now is charged with
optimism," it stated that "June, with its 22 working days, could be
500,000-unit month."
FAILURES

LATEST

WEEK

Cheaper meat cute and meat and butter substitutes were

BUSINESS

slight increase in retail food volume. Mild weather
in many areas stimulated the demand for picnic specialties. Fresh
fruits and vegetables continued to sell well along with poultry and
dairy products.
v;
,•.■v.'."?'£ (' •■,•'•:
There was

quently requested.
Sustained

HIGHEST

warm

fre¬

weather in some areas resulted in a

decline in the purchasing

SINCE EARLY MARCH

of bakery products.

' •

moderate
"

decline, commercial and industrial failures
increased in the week ending May 27 from 92 to 112, the highest
leveL since early March, reports Dun & Bradstreet, Inc., Concerns
failing joutnumbered the 72 in the comparable week of 1947 and
the 18 in 1946. In fact, more casualties occurred than in the same
week of any of the last five years, but" they were less than half
as high as in prewar 1939 when 249 occurred.

furniture continued to sell well as did summer
curtains and slip-covers. The response to promotions of dishes and
pottery was favorable. However, there was a moderate decline in the
demand for paints and cleaning preparations. Garden equipment and
tools were steadily purchased, though dealers in tires and automobile
accessories reported a slight decrease in volume. •
^
.

involving liabilities of $5,000 or more predominated,
totalling 91 against 78 in the preceding week and 63 in the cor¬
responding week a year ago.

of last week

After

two-week

:;t

(

One-third

week's

the

casualties

were

concentrated

6 to

\' g

tailers continued to seek goods

the

now

stands at

.TREND>Ci 1

The total
the week

Commodities
sugar, cocoa,

wheat,

corn,

that

moved

higher

last

potatoes, rice, steers, and hogs.

were

"
lard, butter,

Declines included flour,

oats, barley, cheese, cottonseed oil and lambs.

was

ments

increased
with

basis, as taken from
the week ended May 22, 1948,

date by

index for

by 7% from the like period of last year.

increase of 8% (revised) in the preceding

weeks ended May

further slight rise

MOVEMENT

irregular.

22, 1948, sales increased by 7% and for

6%.

May 25, comparing with 284.84 a week earlier, and with

corresponding date a year ago.
Wheat prices were

254.56 on the

the year to

;

age-wise over

in the Dun & Bradstreet daily

The index finished at 285.30 on

This compared

week. For the four

active with sales

reflecting a sharp increase percentthat of the like week of last year.

volume for department stores

According

commodity price index although individual price move¬

continued

-g'

Department store sales on a country-wide

Retail trade in New York a week ago was

There

promotions were
stressed by most buyers.
dollar volume of wholesale trade increased slightly duriBg
and remained moderately above the level prevailing in the

the Federal Reserve Board's

Feb.; 24 and

''
week

COMMODITY PRICE INDEX CONTINUES UPWARD

wholesale

g>V

for current stock replacement. Offer¬

corresponding week a year ago.

level about midway between the Jan. 13

high of $7.28 and the low point of $6.61 touched on
March 9.

somewhat, many re¬

eagerly purchased. Prompt deliveries were

A further mild rise lifted the Dun & Bradstreet wholesale food

year ago.

' -:••■

While orders for fall merchandise increased

ings of specially priced merchandise for seasonal

FOOD PRICES LEVEt SHOWS CONTINUED UPWARD

j] ^

fol¬
Middle West,
10; South, 5 to 9; Northwest, 9 to 13; Southwest, 10 to 14, and...

g Pacific Coast, 2 to 6. gg/gggv gg

States.^,:

Middle Atlantic

Regional estimates exceeded those of a year ago by the

lowing percentages: New England, 4 to 8; East and

casualties
rising from 29 to 45, almost three times the 19 reported in the
; comparable week of 1947.. Thirty-eight manufacturers failed, up
,

was

corresponding week a year ago.

Retailing had the largest increase in failures, with

ended on Wednesday
estimated to be from 7 to 11% above that of the

Retail volume for the country in the period

from 30 last week and 31 a year ago.

Lawn and porch

Failures

Mu¬

nicipal Bond Department of their

While

week.

last

irregular

ies reported for both prompt and

price index for May 25 to $6.94, from $6.01 a week previous. The cur¬
rent figure represents an increase of 15.3% over the $6.02 recorded a

G. H.

were

from heavy

for the week.

1,730,400 tons of

was

been expanded. '

markets

Sales of cotton in the ten spot markets showed a

Loadings for the week ended May 22, 1948, totaled 879,158 cars,
according to the Association of American Railroads. This was an
increase of 31,755 cars or 3.7% above the preceding week.
They
represented a decrease of 11,447 cars or 1.3% below the correspond¬
ing week in 1947 but an increase of 307,685 cars or 53.8% above the
same ::week
in 1946 .when coal loadings were reduced by labor

;

decrease of

97.0% of the old capa¬
average week in 1940,

from $3 to $4 per hundredweight over a week ago.
lard showed improvement and prices averaged

liquidation prompted by reports that the
purchases of the staple for the time being and
favorable weather and crop news regarding the new crop.
)

will meet
the challenge to our form of gov¬
ernment and the threat to our
generations

CAR LOADINGS RISE

Our

of good

^increase

tons,

year.

top

Choice

lower grades

last February:

ECA would halt all

and 1,281,210 tons for the

the highest prewar

great Emancipator ut¬

must

month ago, 1,697,400

one year ago

strength.

marked

cash

resulted

ness

steel ingots and castings as against 1,744,800 tons last week, 1,640,-

going on." Thomas A. Edison's
thoughts
are
synonymous
with

tered

was

A month ago the indicated
• V;V/ ""T'

This week's operating rate is equivalent to

chance to find out what is actually

which the

the week beginning May 31, 1948,

0.8%, from last week.
91.0%. ;
'T'/T'' i ■

showed

highest prices since

rose

for

Cotton

operating rate of steel companies having

the

markets

strength at times, values moved downward at the close with spotprices at New York showing a net drop of 62 points for the week, in.
contrast with the rising trend of the two previous weeks. The easi¬

sooner

thought, this trade authority concludes.

The American Iron and

was

slightly higher.

Because auto wages

cutting-no wage increase" experiment

good

firm to slightly higher.

ings prices

be that U. S. Steel will have

may

Hogs made steady advances in the week despite liberal market¬

As if the steel industry did -not have enough to worry about, the
Motors wage settlement has isolated their attempt to stay

prevent the third round of wage increases.

moderately during the week

increased

continued

concessions by some mills.

were

General
or

flour

Northwest

steers sold

are

wheat futures

and

Livestock

fight will be made. That is why many steel officials be¬
lieve that "chaos," as they see it, can only be prevented by legis¬
lation supporting the present method of selling steel.'
■;

though

requisite of business. It just mixes

•

of price

As long as the Supreme Court ruling on the basing point stands
realistic to think that the system is out the window—even

94% of the steel-making capacity of the industry will be 96.0%

business

wheat

wheat in the

mem¬

day of this week

little

tone largely due to reports

parts of the West and Southwest.

Government buying
volume. Seeding of spring
reported virtually completed with the
crop off to a good start as the result of generally favorable moisture
conditions.
Cash corn showed strength until the latter part of the
week when prices eased as the result of more liberal receipts and.
optimistic early season reports on the crop. Domestic flour bookings
remained slow with most bakers continuing to hold off despite reports

that they have not

steel

but volume remained below that of a year ago.

into business, for it never makes
ends meet and that is the first

Sales

;

The government never really goes

(2445)

of good rains over

system, "The Iron Age," states.

situation

when he said: "There is far more

CHRONICLE

basing point system with its major basing point areas and its freight
absorption works to the advantage of the consumer, as well as the
producer.
'

cannot

goal with the added
competing with our

our

obstacle

(Continued from page 5)

enterprise is our
salvation if we will permit it full
expression.
It
can
be
attained
through our industrial genius and
skilled

FINANCIAL

week but later developed an easier

American free

our

The State of Trade and Industry

our

value for

COMMERCIAL

store sales in New

increased 8%
a

the Federal

Reserve

Board's

index, department
1948,

York City for the weekly period to May 22,

above the same period last year.

increase in the preceding week.

steady and firm in the early part of the .'m MSy 22, 1948, sales increased by 7%;

This compared wit|i

For the four weeks ended

and for the year to date by 5%,

THE

(2446)

COMMERCIAL

FINANCIAL

CHRONICLE

Thursday, June 3,, 1948

comparisons—over
a
span
of
years—sometimes
great
inaccu¬
racies creep into some of the av¬
average,
one
that
will
:
truly erages.," O-1 ■
measure the swings in the
An
market,
outstanding
example
of
particularly over long periods of wide error in measuring the mar¬
time. The major difficulty lies in
ket is the
Dow-Jones industrial

people

(Continued from page 3)
like

this

are

grass

the

roots

stock market.

into

down

getting

you

successful in

ter

I did not write you
you
for your
replying to my let¬

sorry

thank

you

Ray. Oil. I
weeks
ago,

Sun

regarding

wrote

few

perhaps you might remem¬
ber,
I
hope.
So
it
is
now
10:30 p.m., and just going to hit
the hay as I get up at 5:15 a.m. I
work for
company (21 miles
from my home) anyway, all of a
sudden it popped into my mind
that I had clean forgotten to write
you and thank you for your kind¬
ness
in replying to my letter. I
have watched the sun ray long
time. I bought it first for about
12, and
I set a stop loss order in, but set
it too high, and first thing I know
got sold out. So had to buy it
back again at 11 and 12. It's just
hunch

mine

that

have

enough patience that is to say for
couple years I might have
while.
something worth
(Don't
you think??? I am not gready but
next

have

will

plan, and hope this

some

enable

realize

it.

mistake of thinking that the
market is
an
impersonal

affair,

warehouse
draw

But

and

from

funds

when

sort

from

away

where

things
are
happening,
allthough I
subscribe
to
Wall
Street

Journal

azine. It is

write
no

and

Forbes

Mag¬

keep

you

Where

The

Have

trend

field

average

bankruptcies,

We Been?

the

most

useful

way

measuring what people did in the
market in the past under
varying
conditions
and
circumstances.

Average pirces are used in order
to get a centralized view on
given
dates.

That

method
trees

order

Perhaps
would

new

stocks,

in¬

new

be to

what

individual

order

reveal

doing.

the

forest.

statement

that

say

statistical

through

see

better

people
what

here

average

the

crowd

The

compilation
of
market
averages is a science in itself, a

branch of statistics

frequently re¬
the making of "index

set

perfect stock market

12.11

16.67

superable

War

problems.

stock

only

Take,
of

market

for
a

Hence,
average

„■

example,

100%

the

13.92
1920

and

issue selling
share.

fact,,

at, say, $100 per
Ex-dividend,
the
stock
price will be $50, and unless some
adjustment is made in computing

needed

its

further
to

rise

80%

Jones

life

1928

to me,

and

wife for all the

given

alltho

me,

repay

happiness she has
it

really too
much for me to
carry, but if I
should kick off, she will not have
to worry too much. I am now 46
of

but

age

look

34-35.

have always lived hard clean life.

Anyway, Mr. Comer, I don't think
you are interested in this, but I

making

substitutions in the list of stocks
comprising the average.
Since
September 1928, there Jiave been

just

wanted

imagine

you

who

try

what

and

ing

that

divisors

period

the

15.1

here in

following lightly. ; It is

"*2c

;

error

i2.2

that

can

cause

the
a

sort

lot

error

of trouble—

misinterpretation of what people
are
doing (and will do) in the

13.6

11.36

13.3

10.98

stitutions

am.

would appreciate it if from time
to time as time goes
by, would or
tbuld let me know what
you

goes on in the Sun

tion,

even

think

Ray Oil situa¬

takes

couple

years, and when you or if you
say

should
pay

sell,

then I
whatever

you

will,

and

I'll

think

you

fair, after I sell it.
"Well, sir. Guess it's time to hit
the hay, so will
say goodnite, and
again I thank

you.

best

family
Xmas, and the Happiest

New Year of your life.

"Hope
about

some time you

you

;

will think

about

and

The

une,"

New

market.

11.76
1

York

11.44

"Herald

was

Trib¬

C."

are

great

humility, realizing that after

all

the stock market is
just people.

People who buy and people who
People who wish they had
bought, people who wish they had
sell.

sold

earlier.

volves

Each

both.

market.

Sometimes
money

market

transaction in¬

Money going into
Money coming out!

may

taken

can

only

if and

forget
out

when

that

the divisor is 15.
railroad

stock

comprised

nearly

that

group

per

visor

The Dow-Jones

average, which is
20
issues, -moves

point-for-point,
is

now

its

di¬

15.32.)

The New York "Times" method
of

adjusting for

idend

100% stock div¬

multiply the price of
stock
by two, hence¬

new

forth.

result of accumulated

adjustments

now

of
this !sort,
the
multiplies the price

of Air Reduction

by nine in com¬
daily stock price av¬
Also, duPont is multiplied
by seven; American Can by six,

puting

brought face to
face with the fears and
hopes of a
small
stockholder.
This
is
the
genuine article. It is letters like
this that make one
approach the
stock market in a
spirit of

the

erages.

yours,

"A. B.

Here

stock

its

International

respectfully

the

other

aver¬

Measurement of percentage

average

age

went

would

about

American

Harvester

Tobacco

by four,
two. The

"Times"

realizes the desirability
getting rid of these multipliers,
and has a program of "carefully
thought out substitutions, to elim¬
inate some of the multipliers
by
switching to another security of
of

equivalent

value."

zero,

hang out

the

among stocks compris¬
ing the Dow-Jones group.
Standard & Poor's Corporation
avoids such errors; that company's
price indexes are highly accurate
in measuring percentage
changes

below

best

the

1929

measure

top.
the

This

the

markets

aver¬

limb,

59.

that the

for-point with the stocks as this
average
includes 15 issues and

darn
says,

final

ages.

The New York
has
has a series of
share.
are computed at
(At present the Dow-Jones util¬
ity stock average moves point-! month, including

your

goodnite.

"I remain

means

only 35 cents

"Times"

daily work, and push the
thing up. So as the limey
cherio

the

wish you and all
your

the

other way around, when the Dow
Industrial average moves

typical

«.

#wr

'!'•

i"1*

avV'r>"' 14'

.5,

erages. •vis;''*""

For my own part,

able

been

yet

scratch

the

I have

surface

never

than

the

vast

amount of material available here

example
a
stock

Stock Exchange
averages which
the end of each

extent of movement

the time element.

mainly for these two
in

ward

measuring the

market is too great to be dismissed

have been used, in suc¬
; -•> :

cession:

aim¬

100 points too high.

some

The

for the

were

po¬
changes in the market is impos¬
sition in 1946 relative to 1929.
say, one point per share, the Dow- sible
through using the "HeraldJones
average
would
And
here £ is
report
a
Tribune" data.
where
people
If each stock in
rise of almost three
points (2.84 the "Herald-Tribune's"
again come into our measurement
composite
points, to be exact).- Stated the
Standard & Poor's indexes give

moved

quickly by proportionate

changes in the stock-market

Hence, observers waiting
381 level to be crossed

changes in the divisor.

rise,

point, it

followed

would

15.71

For this reason, at
present, if each
in the average should

one

surprisingly
few
excep¬
tions, the primary changes in the
intensity of sidereal radiation are

that

1946

In this case, the error
caused by faulty adjustments
to allow for stock splits and sub¬

various

stock

down

political

—

happen

the

It is claimed that

high.

ures one

which

average

14.8

.b.y Dowthe average

emotional

Using these fig¬ on earth. As yet, I have no need
naturally conclude of resorting to Astrology or star¬
prices of industrial
includes this
gazing. There is still lots of work
stock, an unreal decline would be stocks
(particularly
the
Dow- to be done in
trying to analyze
reflected in the average.
Jones
30
industrials) were far why
people respond or fail to re¬
from their all-time high.
There
Appari spond as they do to the many de¬
are
several
statistical
ently many people who bought
methods of making such
velopments affecting investment
adjust¬
stocks in 1929 still had very largj
ment.
The
Dow-Jones
sentiment.
\ ' *
''
method,
; '
' . T
losses. That conclusion, however,
for a number of years
(since Sep¬
was far from correct.
Careful an*
; Stock Market Cycles
V
tember, 1928) has been to change
alysis of the position of stocks
the divisor used in
In going back over the market's
computing the
used
in
the
average
in
1946
average, so as to give the same
history, one is impressed by the
that
they
were
much fact that average
result using the new stock price showed
prices tend to
closer to their 1929 top.
as would have been
In fact swing up and down, more or less
provided by the attainment of
figure 275 in in cycles. However, the
using the old stock pr&e and the
rhythm
the average would have marked
previously-used divisor. The same
of market cycles is not regular,
duplicate of the
1929
method is followed when
high. either
an

compiling its stock av¬
compiling
erages makes adjustments neces¬
and the constant divisor was 20.
sitated by stock
splits, etc., by a
September 10,
1928, a constant still different method
I am just a little
through
guy. Ex-sailer. divisor
(12.7) was used* for the adding a constant.
£jver long periods of time, in gaug¬
Herein lies the
Have had my ups and
downs, but first time, without
any
multi¬ near-fatal defect in these aver¬ ing what people are doing in the
since 1938 been
married, and have pliers.
market.
The 1929 high in that
ages. Unfortunately, the total ac¬
the best wife any man could ever
The present divisor is 10.55. In
organizations weekly index of 354
cumulated dead-wood inherent in
have in this world. My own little
industrials was roundly 198 (base,
computing the Dow-Jones Indus¬ these constants has
home. Have $12,000 in
risen to
a
insurance, trial average the sum of the
1935-39 equals
100).
The 1946
30 point where it
just in case anything should ever
nearly invalidates
stock prices is divided
high was 163, or only about 18%
by 10.55.: the usefulness of the

miracle will happen that I might
see it go to 25 or 30. When I see
that then I'll belive in mirackles.

tic and

"with

was

the market back

carry

1929

14.2

used

were

mar¬

15.74

10.47

Between

of the

measure

15.46

10.77

multipliers

II this

records

and economic."

high of 381. After World

10.38

11.18

14.65

" the
were

got up to 212.50 inrMay 1946.
On the face of if, this
average in¬
dicated that prices were a long
way from their former highs; in

prob¬

stock dividend

record

ket

can

approximation.

9.85

11.7

16.02

prices

showed

"* \

12.7

striking correlation with
of human expression
1929- —ranging from the sexual, artis¬
the

in the general stock market.
that time the Dow Average

dustries, etc., present almost in¬

Difficultiesin Constructing
Market Averages: It is
impossible
to

highest

records of sidereal radiation

bear

the

peering

the
period
September
1929

over

1946.

able

seen

lem

average prices at
transactions occurred rep¬

which
resents

deeply appreciative for
doing so. This 500 shares I

everything I have, and I
am sticking it out come hell and
high water. I sure pray some

actually discontinuous.
dividends,
stock
splits,
changes in capitalization, mergers,

own

continuity

Stock

best

the right track.

us on

business with you, and believe

funds

Constantly remembering that

really swell of you to
allthough I have done

me,

stocks

deposit

numbers."

far

with¬

sell

attaining

which

market is just people will help to

that

too

which

buy.

ferred to

inexhaustible

when

which

1 got to have faith. I allso realize

com¬

$8.00 then it went

lose

are

mar¬

stock
'■>

money

not

measuring the

mon

"Dear Sir:

must

ket, We must not make the

v'.-v
"Sunday, Dec. 14

sooner

sight of this fact if

the

"XYZ Town, Conn.

kindness

willing to put

are

market.

lates with the surge of human im-,
pulses, is "reflected in the under¬
lying
wave
of
stock
market
prices." It is said that "The avail¬

„

Measuring the Stock Market

the

market

less,

once

tablished
ward
some

movement

for

usually

carries
direction

same

on¬

for

This feature of priceis the basis for what
"Bull"

call

that

direction

same

analysts.)
Neverthe¬
a
broad trend is es¬

the

time.

(It is

reasons

"Bear" markets.

markets

and

Study of the

ac¬

tion of the market itself is

ably

the

whether

best' way
we

falling phase.
of

one

are

rising

it may,
thing we may be certain—*

the

market

est

measure

Be that

prohdetermine

provides
of

the

the speedi¬
public's re¬

to known ;• developments
public's fears and hopes
concerning
prospective happen¬
ings. Understanding public psy¬
chology, (that is, understanding
what people will do in the mar¬
ket) is more difficult than fore¬
sponse

and

the

economic - or
political
example, it is one
thing to work out a forecast of
increasing business activity and

casting
trends.

J For

yet quite another thing to
late

that

estimate

into

trans¬

forecast

consideration to the fact that peo¬ of what people will do about it—
ple at all times hold more dollars what the stock market trend will
worth of one stock than another. be.

Total
of

market value

the

hands

Stock

Prices

and

Industrial

people is worked out for each

Production—Normally in peace¬
part of time there is a fairly close rela¬
all issues listed.
the overall
average.
(Moreover, tionship between the trend of the
The Associated Press also
pub¬ each and every stock in the D-J
stock
market and
the Business
lishes daily stock market averages
average is found among the 354
Cycle as measured by the volume
(30 industrials, 15 rails, 15 util¬ issues
comprising
Standard
& of industrial production. Expand.ities, and 60 combined stocks). Poor's
weekly index.)
ing industrial activity provides a
In explaining how the AP aver¬
Using, these
weighted
index background for a, rising stock
ages are compiled, the Associated
numbers we are able to trace ac¬ market. The market has a reputa-r
Press states, as follows: "When a
curately the trend of the market tion
of
foreseeing
changes
in
stock split-up, stock
dividend, or through the years. We are able business and in
performing its
substitution occurs, the combina¬
to see what the investing public's function
of
trying
to discount
tion of addition and
multiplica¬ reaction has been to the economic
coming events the market fre¬
tion used to arrive at the aver¬
and political developments at var¬
quently moves upward early in
age is done in reverse, to deter¬
ious times in the past, and right the business
cycle. Also the mar—
mine what divisor should be used
up to today's close in the market. ket
has^ been given credit for an¬
to maintain
continuity of the in¬ The stock market
indexes may be ticipating
coming ; declines ■■ in
dex."
(Apparently, the AP ad¬ said to record the
Examination
of
^financial pulse business.
past
justment method is like that used
of the public at all times. : And
performance shows that it is cus¬
by Dow-Jones.)
? ' ?>•'-' '*
the record of
pastij>erformance is tomary for stocks to top out a
Standard & Poor's Corp. uses an the
only
basis upon which
to little ahead of business but usur
entirely different method in com¬ diagnose
the * present
situation. ally only a month or two earlierpiling its daily stock price in¬ And, of course,
a^thorough under¬
Analysis of 10 important tops
dexes.
Fundamentally, the S. & P. standing of bothi tlie past and the
in stocks in this century, up to
indexes include a weighting fac¬
present is necessary in order to
World War II shows that stocks
tor,
wherein
-each
stock a is visualize the futufe.
There is no
topped out 1.1 months ahead of
weighted according to the num¬ other basis on this
planet,
business.
1
'
'' '<
'
:
ber of shares
;■*
outstanding.
Fol¬
I understand that some market
lowed
In 1899 the bull market high
since
1926, this methoc
prophets refuse Jto-;be restricted to
was * registered
in
September:1
automatically adjusts for stock
stock

before it becomes

such a "small" field as this earth
be
substituting
dividends and stock splits.
Business
kept
on
rising
until
The of ours.
They search among the
selling at 125 for another previ¬ net result is that S. & P. indexes
January, 1900. Hence the lead of
stars for clues
tbjcthe future be¬ stocks over business was 4 months.
ously split five-for-one, now sell¬ reflect changes in total
market
havior of
the ' stock
market.
I
ing at 25, thereby eliminating the valuation of the stock issues in¬
In 1903 stocks saw their crest
have received literature describ¬
use of five as a
cluded.
multiplier.
in- February, but industry
ing
a
new
market forecasting
con-j
The New York "Sun"
tinued to expand its output until'
For day-to-day or short-term service said to
daily av¬
be
based
upon
erage of 20 industrials has been purposes it does not
the following April, a 2-months
make very Sidereal
Radiation,
which
is
compiled on an arithmetical av¬ much
lead by stocks.
difference
1
which
of
the stated to be natural
v
"
rays eman¬
erage basis since 1939. The "Sun's" leading
In 1906 both series apexed ip
averages is used in meas
ating from the depths of outer
method is to adjust by
changing uring the market—in trying to de¬ space. In this
brochure, the pro¬ the same month, January.,;.
*;
multipliers, using the same plan termine what people are
doing moters claim that the intensity of
In
1909, -November was the
as the New York "Times."
However, in .picking long-term sidereal radiation, which corre¬ month of peak prices in stocks.
would

„

Volume 167

Business

Number 4704

topped

just

THE

month

one

name

later.

top

its

bull

market

reached

What

height in September, 1912, but

after it has

even

curred.

The

have

COMMERCIAL

said

oc¬

■

here refers

to normal peacetime
relationships^
The situation is thrown all out of

the business cycle (industrial
pro¬
duction) moved on upward until

gear

January, 1913,

lor

■ward.

4 months after-;;
"/

v.-.

later

bull

markets,

stocks

duction,
cycle

had

three
its

seen

months.

Busi^-

that year. But the momentum oi
tne greatest bull market in his¬
to

all-time heights in
of that year.
;

War

served

stood

stocks

flict,

the

fact

ness

that

are

late.

the

month

statistics

Year

in Stocks

/
'

*Based

atrial

four

April,

months

after

Meanwhile, indus¬
new

four

stock

can

warfare.

market

swing that

started

destined

was

up¬
con-

Lead of Stocks.

Production*

Over Production

4 Months

•

December

January (1913)

(lag) 3

January (1920)
April [

•

"
"

November

•,

;

•

/>■

June

M&reh

May,

1946

stock

prices averaged almost 3J/2
limes their early 1933 .level. By
that
time,
however,
industrial
production had receded drastically

earnings is
ebb.

to be at

seen

low

In periods of real optimism,
other 'hand,
stocks will

the

sell at relatively higher ratios to
earnings.
(October, ; ■ Historically, the ratio of price
1943) and had registered its post¬ to earnings has varied
widely not
war low
(February, 1946).
only as among different stocks
from

the wartime peak

In other words, close parallelism

and

of the stock market and the busi¬

faith

market

and

force

dividends

prices

Industrial

Standard

below

the

now

the

groups

also, in the

given

case

time

general

but

aver¬

cycle ended in the Autumn age, over a period of time. Thirty
1939, when the war started. In | years ago, in 1918, the stocks then
the nearly 9 years since that time comprising the Dow-Jones indus¬

(the dollar)

the

"levelage" ^factors, style factors,
After all, the price-earnings
ratio is merely the arithmetical
result of dividing the price
by the
earnings, after price has. been

'^price-earnings

ratio." For ex¬
they say that stock "A"
is selling at 5 times its
earnings
per share, while stock "B" in the
same
industry may be priced at
10 times its earnings (or its esti¬
mated earnings). Hence, "A" is

etc.

ample,

than

stock

be priced lower
stock

sold

earn¬

"B."
8

Vv:'

prices had surrendered twoof

their

prewar

scored

followed by
slightly
penetrating the accelerated trend(2)

stocks

reacting

and

line of commodities.

Incidentally the
ity

price-level

until

October

after

Pearl

1926

commod¬

not

was

restored

1942, nearly

Harbor.

Long

Again — if
times earnings

useful

"fight inflation."

broad

net

decline

During the 4 years
1926-1929, commodity prices were
unusually steady, having a maxi¬
mum range from
high to low of
only about 10%.1:
'"'f' '
A big downswing in
commodity
prices, however, is likely to be
depressing on stock values. The
experience of 1920-1921 is the out¬
standing case in point. In that

determined

play

of all

forces.

result

demand
*

inter¬

and

supply

that the stock market had

failed

respond to

dispel

such notions.

any

our

present

it is

inflation.

prices

Industrial profits in the aggre¬
gate have risen each year since

this country had just reached their
lowest point in Federal Reserve

1932,

stocks refused to

years.

Yet

budge. This

re¬

Deflation

had

plunged

prices of farm products to levels
since 1897, with cotton at

seen

5*/2 cents

earlier

fusal indicated lack of confidence

cents

are,

the part of people. It is true,
however, that stocks this Spring

cents

being

are

to why the market has

the

topside.

on
a
high plane.
Re¬
peated
forecasts
of
Depression
have been proved to be false and

have lost their appeal.
aid

Rearmament

Europe

business.

Program and
stimulant to

(3) Slowing down of the wageprice spiral which threatened to

profits.

squeeze

(4)

Lessening of fear that

war

is inevitable.

(5) Political trend; coming vic¬
tory for the Republicans.
Reduced

It seems to
for

income

taxes

that the

for

reasons

expecting total business activ¬

Now, of

course,

ity to

matter of history that most

The

pound and wheat 44 %

bushel.

Bull Market?

Rubber

was

2V2

what

people

rising earnings
purchasing stocks and lifting
prices, confidence in those

to find
quality
slocks. In comparison with the low
now

are

medium

easy

fair

1 On

whole

third

the

New

Deal's

adjusted basis the market

(402
of

its

stocks)
1929

now

high level.

only

one-

ac¬

tions in

1946):

story.
Now^ for the
in 20 years, the tax
being lightened on peo¬
ple who can afford to risk their

"Under

yesterday's
since

the

Dow

Theory,

action

market

bull

has

means that a
been under way

May, 1947, but does not
either the duration or

the stock market than is

generally realized.
increase

part of

weekly)

The

trading range of 23
the
Industrials
and
about 12 points in the rails, in
which they had moved for about
18

If it

months.
this

that

can

vigorous

assumed

expression

majority opinion is likely to be
right, then it is reasonable to ex¬
pect that the market will continue
to rise."

own

view is, "Yes,
Tf

are

had

been doubts before about the

ma¬

Bull

Market."

there

new

invest

and

incentive
in

American

industry
will, provide
much
capital to create new and
better jobs.
For
many
individuals,
the
lowering of effective taxes on
capital gains is an important de¬
needed

of the narrow

points

only

the

savings.

(financial

burden is

save

"Barron's"

pay

workers

time

first

extent of the trend." '

two days later said, " ,. . it is true
that stocks now have broken out

The resultant

take-home

million

some

guarantee

rived effect
Inasmuch

the

new

law.

tax

capital gains

be
merged with ordinary net income,

they

under

come

duced

the

can

newly

re¬

rates, made still lower by

the

extension of the community
property principle.
The profit incentive is the most
effective spur to individual enter¬
prise. The reduction of taxes on

jority opinion of buyers and sell¬

profits in stocks is bringing back
into the market people who had

ers, those
resolved.

decided

spoken.
lifted out
the

doubts have now been
The [people
have
The
on

market

has finally

the topside of one of

longest and
indecision

narrowest

zones

record.

Daily

volume of trading with prices ris¬

adjustments, however, the
price-earnings ratio is a valuable
proper

Conceived

portant in influencing people's

First, I want to quote the Wall
Street "Journal" of May 15 (the
day after new high prices were
seen for the period since Autumn

pound.

recent reduction of income

taxes is probably much more im¬
Are We Now in

are doing in the stock mar¬
ket about earnings. If people re¬

has been any difference in method
of
computing
earnings.
After

continue

(6)

fuse to respond to

ability of earnings. They may be
partially invalidated where there

and

way

1948.

ing recently swelled to the larg¬
in over eight years or since
v/ere priced lowest in
many years, "reflation"
policy,
a
national September, 1939.
Pessimism has
in relation to earnings. They are
spending
program
was
pushed given
way
to optimism.
This
still very cheap on
for years with the avowed aim of demonstrated willingness of peo¬
earnings, as
the rise from 1948 low prices in
restoring the 1926 general price- ple to pay attention to favorable
the
stock
market
is now only
level, a level proclaimed by Ad¬ earnings, dividends,' high rate of
about 18%
(based on 402 stock ministration
advisers
as
being business activity, evidences that
composite average).
more
nearly just to debtors and labor unions will be brought un¬
> Are Stocks Cheap on Divi¬ creditors than any other. Average der sensible restraint, and other
dends?: Dividend returns of 6% prices in 1926 were said to repre- bullish elements of the domestic

stock

the

mentioned

kets.

enormous

commodity

not

out

before

March, 1933* marked the start of

by far the largest in 20

date. These comparisons
of course, very crude. They
depend upon the true compar¬

the upward

force of inflation. A brief review
of history should serve to

Wholesale

stated

earnings, it is obviously cheaper
on
earnings than it was at the

measure

swung

a year

5%.

history*

with Russia

this, the government had reversed
its objective and had started to

only 43% of
Adjusted figures

actual

about

except 1938 and 1942. Last
year's expansion in earnings was

forth

remain close to peacetime
high
rates - are
overwhelming.
analysis.
However, in of the "weapons", used were in¬ During the first quarter of this
interpreting; technical market effective; many were positively year, the Department of Com¬
movement the unadjusted figures
merce reports, the total value of
harmful.
•
J-;-/' :v
are more
widely used. The reason
Recent months have seen what goods and services in this coun¬
for this is that most people have
appears to be the beginning of try reached an annual rate of $244
a nasty habit of
remembering the another repetition of these pre¬ billion, a new high. In view of
actual prices they paid for their
war and wartime sequences.
With the enormous backlogs of demand
stocks. They think in terms of
commodities flattening out, once in key
industries, the continua¬
dollars. They habitually measure
again it is the stock market that tion of employment and personal
their profits or losses in dollars—
is moving upward.
At present, spending at near record levels
not in terms of the cost of
living stocks are just about in line with seem assured. The basic automo¬
or of
commodity prices.
commodities on the inflationary bile and housing industries are
Is Inflation Bullish on Stocks?: rise
of
this
century.
Common perhaps the best examples of un¬
Rising commodity prices do not stocks of all kinds combined are filled
demand.
Physical
needs
necessarily spell bull markets in up 207% since March 1933; com¬ here are sufficient for years of
common stocks. In fact the
biggest modities, 167%.
On this basis, operation at boom levels.
bull market of all time, that of the it is seen that
(1) common stocks •; From a stock market point of
late 1920s, occurred without bene¬ on the Whole have served as
good view,, it must be granted that the
fit of any rise in the
commodity hedges against inflation over this rather clear signs that the organ¬
price-level.
From
1926
low
to span of 15 years, and (2) most of ized labor monopolies would not
1929 high, the typical industrial that
time
stocks
have
actually be allowed to go unbridled have
stock
rose
about
140%.
Mean¬ outdistanced (and preceded) the served to re-kindle faith in the
while, wholesale commodity prices deterioration
future
of
of
the
the
dollar
as
American
enter¬
(U.S.B.L.S. all-commodity index) measured by the commodity mar- prise system.

couple of years ago, and is now
priced at only 5 times current

felt

explanations

offered

(2)

repeated in 1942-48, with (1)

economic

tool.

months

Where Are We Going?

Various

;

slackened their pace,

it is found that

/ V:"'.

being

stocks soaring while commodities

now

said

advance

commodities.

was

Statis¬

stock prices are

net

dou¬

Thereafter, the 1933-42 pattern

figure

from the Bureau of Labor

resemblance, one to the other, trials sold at about 3 times earn¬
has been purely coincidental, as ings. By 1926 the common multi¬
the fiction writer
says in referring plier had risen to 10. In 1929, it
to the names of characters in his Reached a top of about 25, at the
high
prices
of
that
story,
year
and
Actual return of peace or con¬ slumped to about 10 at the panic
low prices of that year.
fidence in a prolonged period of
The multiple of current annual
peace would go a long way toward
post-World War I period, com¬
Restoring the time-honored rela¬ earnings which a stock commands modities slumped some
40% from
in the market place at any given
tionship
between
the
business
the middle of 1920 to the middle
cycle and the market cycle* Given dtime is, of course, influenced by of 1921. Stocks had turned
down
a
wide variety of factors. These
peace, current stock prices will
late in 1919 and also fell about
include, among others, rate of in¬
prove to have been very low in
40% before levelling and revers¬
terest on high-grade bonds, phase
relation to industrial activity,
ing.
'
of ' general
business cycle, esti¬
mated trend of
In some of the published com¬
Where Are We Now?"
company's earn¬ (
ments about the inflation which
Are stocks cheap on Earnings?: ings, degree of "seasoning," finan¬
has plagued our economy for a
cial and trade position of
company,
Security analysts make consider¬
number of years, it is frequently
asset ! value,
dividend
able use of a tool
policy,
any

ings

power

official

rod

their

than

advance;
yet
stocks
stood
only
slightly
under the inflationary trendline

comparisons

purchasing
the

few

itself

accumu¬

come

higher prices.

commodity prices
Meanwhile, com¬

had

stocks

thirds

of the dollar has fallen 40%. That

make

The

should

stock

351

based upon market quotations
in terms of dollars. Since
Septem¬

1929,

stocks

indica¬

highs

are

percentage

the

outbreak

trend.

for

awaiting

about

Market,

postwar

these

general

119%.

only 30% below the historical
highs of 1929.
course,

the

back

before, the fact of the
With* war under way abroad, break-out is the important thing
and increased world demand for —not the reasons later assigned
American goods, commodity prices for people's actions.
Among the
steepened the slope of their rise, more
acceptable
reasons
after
gaining some 30% in the next 30 the fact) are these:
months. By April, 1942, however,
(1) Evidence that business will

measure

index
are

inauguration

until

Deal

bled,

now

ber,

the

mon

reached almost exactly two
years
ago. Moreover, these
stocks are

over

the

had risen 25%.

attractive

Poor's

issues, stock prices
15%

later,

Using the best

the

demand

held

was

the European War some six years

Present Levels Compared With
1946:

oscillations,
tions

New

will be lower. What people

doing about these

are

lated

From

Hence, yields available to late

up.

comers

which

lower.

continuity of such
dividends, they will push money
into the

altitude

the

long-term debts had been con¬
tracted
through the years than
any other zone, either higher or

the

ness

called

sent

rates)

(2447)

■

January

;

September

interest

their 1929 highs.i
of this sort are

Cleveland Trust Co mpany-s index of American Indus-

years.

other types of

(low

attractive indeed. Here,
again, the personal factor con¬
trols. If sufficient people regain
are

stocks to allow for this deteriora¬
tion in the value of our
measuring

all-out

Activity.

'finue

stocks

There¬

—.March

half years.

with

September

1937,-—

and

January (1900)
April
M

1923_ -v——-—March

1929-

securities

rising confidence in
victory over Nazism, the Ameri¬

after,

November

1919-—--..—-.—November

that

movement

highs, under the ''forced

draft"

-0 ;n

■

yields available

CHRONICLE

tics; it is based upon Wholesale
Commodity Prices. If we adjust

1909_______—November J,;

con¬

turned

Cyclical Peaks in Industrial Production

1899^^-^.w-^^i.-Scptember
1903—JL..1—_ .February
1906—_-_»---__January

<1912-x-___„^^
l, 1916
i

ulti¬

would

market

Bull Market Top Cyclical Peak

3'
^ J-

vs.

stock

Harbor.

all-time

small that considerable

double

trial production had soared to

One cannot be

Bull Market Tops

States

to last two

Pearl

guessing is necessary in trying to
;

the

1942,some

two months later*
usually
the • month-tomonth changes in the business in¬
so

market

than

Stocks finally bottomed in

■

because

are

United

was

two
were

sure even one or

dex

stock

faded, and, as more
Investors concluded that

downward

busi¬

right up to date; it would be dif¬
ficult, if not impossible, to rec¬
ognize a top during the month in
which it occurred.

industrial

mately be dragged into the

mentioned

reports from

always

Even

the

and

World

both

soon

and more

First

should

outbreak

1939,

at levels

1939

the

all

1933.
spurt in stocks in the Autumn

of the ob¬

coming business trends.- Several
cufficulties come into the picture.
of

business

their status in March,

use

relationship

operations

September

practice, during peacetime it

is difficult to make

American

the

ever,

upward

the

was

FINANCIAL

important factor
climb. Both business and stocks
in determining the future trend of
suffered relapses in 1937-38. How-: stock
prices.
■*

high in June of

tory carried quotations

scraping bottom in 1933.
At the same time,
average prices
(stock)
began a
long
upward

case, the year 1929, stocks lagged
ness

As measured by volume of
pro¬

topped out not more than two
months ahead of business. In one
business

by war. Take World War II,
example.

est

picture, is a welcome development
although long delayed. During the
many months of narrow trading

the

risk

was

worth

not

while when Uncle Sam took such
a

big slice

tax

I believe

formerly.

reduction

was

the

last

straw

tipping the balance of people's
opinions to the buying side in

stocks recently,.

;

Also, and perhaps of equal im¬
portance, I would name the polit¬
ical trend
is

and

the fact that

Presidential

Election
urement

Year

the

1948

year.

Patterns:
stock

Meas¬

market's

performance in presidential elec¬
tion years reveals some very in¬

teresting and useful information.
First of all, it should be noted that

regardless of whether the Repub¬
lican

the Democratic candidate

(Continued

on page

36)

(2448)

THE

FINANCIAL

COMMERCIAL

CHRONICLE

The Uncommon Man

Measuring the Stock Market
(Continued from

i
ning to open up. American indus¬
35)
Is to win, the market normally try is assuming new world leader¬
moves
upward during the active ship.
•
campaign period. As shown in my ,' I expect people to continue to
chart, there is an advance from express their growing faith in our
June (time of nomination) to the enterprise system,
which is the
election time.
(These comments envy of the entire world. I expect
are
based upon the average ex¬ American stock
prices to rise sub¬
perience in the last 11 elections, stantially from here. A topping
that is, in all elections starting of the 1929
high for the Indus¬

with the

page

the labor

about

shortage
Alfred

(Continued from first page)
problem and the
materials. Chairman abandon the underlying funda- ward and the compulsion of cornSloan, Jr., of General mentals, This is so true that down petition to discover and
perform

Motors last week declared that his
company has enough business in
sight to enable it to operate at
capacity for the next two years
and perhaps longer, if it can ob¬

sufficient materials.

tain

indicated

He also

likelihood

the

in 1904 when Teddy
over
Alton
B.

one

trial group seems a rather likely liberal dividend policies.
goal. These stocks (as measured
Petroleum
Stocks
have
been
•Parker.)
•
•,
■
by Standard & Poor's index-of prominent leaders in the advance
The rise during the campaign 354
issues) are now oply 30% be¬ from last
Spring's lows. Although
period has been 15% in Repub¬ low the highs of 1929. Stated the
some
profit-taking may have to
lican years and 9% in Democratic other way
around, a rise of 42% be absorbed, especially in those
years.
from here
would
duplicate the issues which have risen almost
The year 1948 to date has fol¬ highs of 19 years ago.
vertically, these stocks as a group
lowed
Analysts who follow the Dow still
pretty well
the
normal
appear cheap, at only five or
pattern for years when the Re¬ Theory tell
me
that
historical six times
earnings. And the de¬
publican candidate turned out to patterns
warrant
expecting
a
mand for oil is expected to hold
be victorious. A 5% dip into Feb¬ much larger advance. Measuring
up well far into the'future.
levels
like
the
ruary
has been followed by a from
present,
Retail
Trade
(Department
still
sharper recovery, carrying where the Industrials and Rails
Stores) is bound to benefit from
-on into May
(up 7% from Janu¬ have "confirmed" on another in
the continued high rate of em¬
ary). Based on the historical pat¬ pointing to a major advance, they
ployment of American workers
tern as measured in the chart, a show that the
average (median)
and high national income.
-good advance in stock prices is rise in the past 11 bull markets
the normal expectancy into next has amounted to about
Lastly, I want to suggest that
78%. That
Roosevelt

Thursday, June 3, 1948

won

through
and

history both friends

our

foes

have

feared

little understand

Pall. Moreover, it will probably
I be accentuated this year and carry
on beyond the election when the

Republican candidate is voted into
office, as now seems fairly well
assured.

Historically,
can

•of

of Republi¬

years

victories have also been years

increasing activity in business.

Industrial

production

physical

output)

(volume of

has

expanded

23% during Republican years

over

is almost twice the rise needed to

the

restore the 1929

rise during the Presi¬
dential camaign period, while the

Right here I would stress
figure mentioned

be only
subject to
revision as we go along and ob¬
serve what people
do. How long
any

estimate.

make

can

pend

picture.

the

stock

market

expansion

23%

industrial

production this year, however,

swing, and

and
guess

now

that

top is in sight this side of the
Fall of 1949.
Stock
If

Groups in

the

present

Best

Position:

interpretation

correct, the stock groups now in
strongest
market v position
are
operating so close to its capacity
mostly those representing durable
that further gains in productive
goods industries.
These are the
volume will have to be small un¬
ones subject to the widest
cyclical
til such time as our plants them¬
influences.
They can be., counted
selves can be expanded.
Anyhow, upon to benefit most from booms
it
is
comforting to know that (and
contrariwise, to -suffer most
business should improve in the
from depressions). In this classi¬
Our

industrial

second-half

machine

this

1948.

now

election

year

How

Far

Rise?:

Will

knows the
do

not

Prices

this

is the 64
question.
Nobody

answer now.

know.

sure

Only time

will

tell. It all depends on what
do. We can study what

people
they have
the past under as nearly

done in

similar

tind.

circumstances

Then,

market

knowing
is

now

projection

where

what

the

make

can

people

can

^Psychological and technical in¬
point definitely

up¬

ward at this time. I have said that
we are in a bull market. I will
go

further

even

opinion that
may

prove

most

and

entering what
the

"explosive"

the

express

we are

final

phase

and

the

•great bull market of the 1940s.
\

The

price

pattern,

by the market

average since

1942,

is very much like that of the
big
bull
market of
the
1920s. The

abrupt
crest

reaction

from

the

1926

(which marked the all-time
up to that time)
compares

;bigh
Closely

market

year

lifted

topside of

later that the

clearly put

constricted

now

pre¬

appear

dynamic
up for
the time lost during the
past cou¬
ple of years.
In

partly

the

final

the

market

make

stages

steels

often

outstanding leadership.
that will be the

may

assume

early

will

their future is
wise

last.

However,

bright market-

market

area

the

can, and then freely exchange in
the markets the fruits of their ef¬

government.

much

participate

have

ma¬

largest

Office

duplicating

its

seems

position

the

middle of 1927.
The

economic

background,

course, is never exactly the same
in any two bull markets.

However,

with the favorable trends we have
discussed in business and

politics

and with stocks

cheap

on earn¬

ings, and with plenty of dividend
increases ahead, there is
probably
a
sounder basis for

expecting

big rise in
was

^Equipment

stocks

now

than there

in the summer
of
1927.
Population has grown
rapidly. World markets are beginyears ago,

stocks

higher.

look

V-V V

Another

industry especially

favored
the

for the period ahead is
Building Materials and Con¬

struction

quire

group.

These

patience

may

will

take

than

The

many

years

present

facilities

ments

and

company

Industry

ap¬

years

have

lagged behind the general
People have worried a.: lot

ahead.

with

improve¬

planned

now

mated

by the
for the

subsidiary

1948 through 1950

years

cost

are

esti¬

about

$23,322,000,
of labor,
equipment and materials.
based

The

present

new

prices

bonds

costs

are

ranging

scaled

example,

redeemable

from

105.89%

from

102.40%

Madison,

in the
tenth
Federalist
Paper foresaw
that possibility but hoped it would
not happen.
Ben Franklin told
the people they had a representa¬
tive republic and hoped—but did
not

predict—they

The

historian, Lord Macaulay, in

famous

letter

could
H.

These .stocks

it.

keep

company's business, con¬
ducted entirely within the State
of
Rhode
Island, is principally
that of the generation, purchase
and sale of electricity for light,
heat, power, resale and other pur¬

Randall

1857, asserted the system could

not endure. William Graham Sum¬

Classes Owe to Each

Other," that
the phrase "The Forgotten Man"
was stolen; but its definition was
reversed in

thor

turn

horror.

over

And

make its

way to

au¬

his grave with

then

also

can

re¬

member that Karl Marx and Hit¬

and

predicted the

American-type

for

the

Uncommon Man

op¬

common

man

instead

of a predetermined and

cog

chine.

the

repeat that
of and for

land

ours

artificial

Halsey,
associates

Uncommon

Men as long as—but only so long
as—those men understand and re¬

Stuart &

Co.

Inc.

and

the award

$356,000

semi-annually

1, 1948 to June 1, 1958,

inclusive. The certificates,

issued

under the Philadelphia plan, were

immediately re-offered, subject to

different kind of land.

one

this

But

will

issued

to provide for not exceeding 75%
of the cost, estimated at
new,

$9,500,000,

all steel, standard-guage

consisting of

senger

train

cars,

electric

motor

cars,

two

pas¬

diesel-

yourselves to be men of that
You have had the ambition,

prove

sort

the determination and the oppor¬
tunity to develop your particular
talents and skills and today you

receive proof of your accomplish¬
You have perfected your¬

ment.

selves

for

service

and

perform¬

in specialized occupations.

ance

ULl

gondola

involved

sacrifice

self-sufficiency.

duced from the land most of that
which
it consumed.
Each man

his

own

customer and
trades"

all

tool

own

much removed
We

Ours is

what

are

from

those times;;
for each other

produce

now

instead

provider, his
own "jack

his

worker.

.directly for ourselves.
exchange economy. But

concerns

about

this

the opportunity it affords for loss

that broad insight and balanced;
judgment about basic truths that
of

it is the Uncommon Man's respon-

sibiHty

to achieve and retain if
is to remain a land of and for

ours

Uncommon Men. Let

illustrate*

Inter-Group Grievances

•

As each individual becomes spe¬

cialized there is

diminishing need

America—of

its

the

majestic

rise

productivity — a rise which
living scales more than they

the

miner
extent

they

the

savings;

others

have

been

for dinner.
The miner'
provided coal that was

open

himself

into coke

turned

another

which

another

ore

used

was

mined by

corner

of the

Both of them used tools
provided out; of the savings of

country.
other

the

ore

steel

with j which

and

groups,

Involved

the

realize

which

wife

invoked to provide the can of peas

tory

advent

to the

are

example,
his

and

efforts

and

tools

the

for

wonder,

coal

the

important the

functioning of ; all
production also becomes diri},;; J,1.;*

had advanced throughout all his¬

prior

of how

contributions of others

to make steel out of

This is all to the good because
it is part of the glorious
story of

fashioned

was

that went

also

American Republic—a rise to pre¬

into
the

were

into

the

cam

farmer's

efforts and his

viously undreamed health, wealth
and

security—a

rise

the

burdens

production

American

that

born

class restriction

servitude.

the

shifted

from

into

rigid

predetermined

contrary,

savings in the form*
also were those of tin

miners

the

world;

other

side

were

also

the

behind

tools

and

the

printing of the label;
behind

those

boats

and

that

With

the

productive

all

peas

these

the

specialization
but we can do

velop whatever capacities he

and

paper

moved

to bring
miner's table.

the

efforts

also were
trains, trucks

the

things

stealing

tools;

from
others,
is
placed
on
his
chaice of occupation and initiative
in pursuing it.
He is free to de¬

all

sesses.

free

products

appeal,

final

Customer

tary

and

offer

the court

that

the

pos¬

services

is,

volun¬

competitive

continuously judged by all; his
neighbors interested in buying or
selling it.
Those markets, when
free

monopoly and political
dictation, are the most democratic
thing in America.
The individ¬

right to appeal through them
the combined judgment of all

his neighbors is a most significant
bulwark of economic justice and
individual independence.
man's

his

Bar the

right competitively to sell
services or products un¬

own

hindered

the

presence

all

all live better;

only in terms of unending team*,
play and tool providing.
It i3
too
easy
to forget the im¬

portance of the other fellow's con-*
tribution.

King

nation's

his

markets,
where the worth of his product is

As interest,

knowledge and

ap-

preciation of the other's part irt
the team play becomes dim in the1
light of one's own preoccupation,
then it is quite natural to belittle *•
the other fellow's contribution and
to ennoble one's

it
or

easy

From there1

own.

step

pretending

believing that the other felloW!

gets paid too much and one's self
is not paid enough.
Being re-J
from each
other," for example, the employe thinks his
wage is too low and the owner's
profit is too big,, and vice versa;
mote

while

the

customer

thinks

both

get too much and the price is too"

high.

The

politician

sides

with

others, and he becomes enslaved

the

to whomever will hand him

ing them something for nothing, to

liv¬

ing dole, demanding abject obedi¬

two business

50-ton

most

co-ordinated

ence

1,000

the

In
pioneer days the family or small
community
itself
directly • pro¬

lowed and encouraged to develop.
You who graduate (today thereby

and..
V

make

has

of individual

realization

authorization, at prices to yield
from 1.25% to 2.35%, according to

cars

equal to

their native inequalities.

of
special aptitudes and
tahmts which in America he is al¬

ual's

certificates

get its

ing about them lags, the knowl-"
edge about them diminishes. The

sessed

The

expertly

can

pos¬

Let

explain briefly.

The Uncommon Man is

each

thing but

sist the temptation to turn it into
a

Interstate Commerce Commission

maturity.

where

one

the course of earning a living
to; know what other people iri
other lines of activity are con-'
tributing. As the interest in know-;

won

each Dec.

cars.

and

can

others

equivalent in everything else.; It
is the place, one of the few on
earth, where all men are born free

regulated
all-powerful State ma¬

than

theit vast mutual benefit.
land

better

was

ner,
writing in the 1880's, had
similar doubts. Incidentally it was
from
his
classic, "What Social

minor extent, the the backs of men to the machinery
Such achievement
purchase and sale they devised.
gas for general use. comes partly from the fact that

and to

Halsey Stuarl Offers,
Milwaukee Equipments

lifted

equipment

Automobile

to have at least two excel¬

lent

list.

construction rprogram.
New
construction and reconstruction of
ent

some

satisfy it.
pears

fi¬

in part the company's pres¬

nance

re¬

others; however, the accumulated
demand for housing is so
great
that

used

turing

the

now

Equipment

backlog of orders in a quarter of
a
century, or since 1923. Even the

market

will

Proceeds

yester¬
day, June 1 of $7,120,000 Chicago,
Milwaukee, St. Paul & Pacific RR.
equipment trust series DD, 2%
equipment trust certificates, ma-r

like the market's recent
perform¬
ance. On a time
scale,

therefore,

competitive

sale June I on a bid of 101.85.

the

and

For

forts to

can

produces

Prophecies of Doom

limit, short of coercing

its

should

now

the

Railroad

companies

;;v

use

and gas appliances are
sold by the company incidental to
such business.
'• 'h

Farm Machinery, stocks in
par¬
ticular have outlined a favorable

the

ac¬

Award

won

was

and

Electric

Before

with vigor.

chinery.

interest.

bonds

exhausted

has

these

1978 at 102.39%

due

manufacture,

Closely related to the steels are
the machinery groups/ Farm Ma¬
chinery, Industrial Machinery and

force,

crued

poses,

industry-wise
and
marketwise) that they must be
given a high rating now.

Equipment.

offer¬

The

(both

bull

are

ing publicly today (June 3) $10,000,000 The Narragansett Electric
Co. first mortgage bonds, series B,

away.

market

Inc. and

100%.

The longer they re¬
frain from soaring the
longer the
bull

associated underwriters

the

Co.

people

many

they

lose them, and that
liberty would be per¬
manently replaced by dictatorial
would

portunity

Halsey, Stuart &

doing those things

they

ler both hated

Halsey Stuart Markets
Narragansett El, Bonds

because

concentrate

individual

destruction of

prices

scheme of things for the steels to
blow
off
most
of
their
steam

right

W^shington^^^

to 100% and at special redemption

I believe

this time.

case

little

in 20 years a Republican Admin¬

istration at

bull

the

than

They

out

market
pattern;
suggesting
an
sharp setback early extension of their rise. High
and rigid wage scales are
1946.
forcing
Then, it : was

with

suffered

stand

the threshold of

advance,

Railroad

outlined

can

reasonably be expected to do.
dications do

fication the Steels

dominantly.

Average

doubt,

million-dollar
I

people
are
getting
ready to elect for the first time

international

to be over-optimistic. In fact, that
would be a practical impossibility.

up¬

developments in

new

domestic

American

projec¬

the speed of the

upon

have

Here again we

tentative

Perhaps one or two years,
even
longer.
Much will de¬

business

and

only

tions.

the

fairly clear. To expect

can

It must be

will the rise last?

and only 7% in Democratic years.
Here
the
correlation
between

aeems

that

Utilities should

Electric

good

peaks.

ductive

cherish the

fundamentals of their country that

the most useful service of which
he is capable.
America is so pro¬

claimed

that the people in America would

in exchange.

sup¬

plies to each the prospect of

re¬

voters, promis¬

paid for by bigger taxes

numerous

King Customer, who is each and

every one or us as consumers

more numerous

voters.

less

Everybody for¬

that / everybody is in some
simultaneously customer*
capitalist and worker; and that in
gets

measure

Volume

167

beating each other over the head
they

in reality beating them¬

are

selves down.

immoral
moral

and

insulting: It is im¬
it would destroy

because

individual

man's

Specialized production or serv-

COMMERCIAL

THE

Number 4704

independence

dignity; it is insulting because

cieties

in it a
ridicule and scorn
he instantly would have dissolved
that one into logical absurdity by

doctors,

lawyers^ man¬

accountants,
economists,
statisticians, investors, engineers,
scientists and so on.
This is good
because-it spreads knowledge of
better ways to do things among
those engaged in similar arts. But
agers,

also

bad

vates the natural

what

other

because

aggra¬

contribute

understanding.
real if you
talk only to those of a
similar
fancy and soon you are likely to
find
yourselves organized ' into
monopolies or pressure groups to
get something for nothing from
Fancied

common

wrongs

other

the

who is

fellow

getting

little.
1

seem

assumed

much for

too

V
other

One

the

of spe¬

division of

would

economists

the

Job

consequence

cialization—or

labor,

One other queer

neer's

notion would, I

hilarity—the idea that the

community
living.

owes everyone

With

saying, "Okay, let's all stop work¬
ing and, instead, just collect from
each other the livings we owe to
other."

each

Let

all

ours

Men

Uncommon

is the

because

individual freedom

have

men

and

Destruction

repeat that

develop their particular aptitudes
and to exchange the

fruits of their

exertion with each other in
free

kets

mar¬

of fraud,

coercion, mo¬
nopoly abuse and government dic¬
tation.

short

the possible seeds of

into

people

its own de¬
segregates

because

specialized

tions, indifferent to

occupa¬

ignorant of

Expenditures is a characteristic—
and

one

necessary

high-level

producing,

But its

-country.

that fear of

a mass

consuming
is

consequence

loss

—

job is

per¬

haps the most continuously domi¬

indeed good
is when they
promote or prevent action un¬
checked by knowledge that evil

undermining

force

Judgment.:

good

;

Resulting Peculiar NotionsJ:

Out of all this have come some

.notions that would seem funny
that

sonal

early pioneer in close per¬
touch, with the combined

working, saving, tool
providing and consuming. Take,
for
example, the phrase,1 "The
: right to work"—often interpreted
nowadays as a right to get paid
processes of

-without

working.

sought 4 no
him

The

labor

hard

pioneer

to work."

"right

was

something

meted out to criminals as a pun¬
ishment.

But

knew

was

•confronted with dire necessity to
if

work
true

today

*'right";

was

to live.

then.

It is

It is not a
obligation—to
>

'One's self and to others.
:,

the

take

.-anti-social

notion
be

today.

are

•

beings

human

fear:

Take

thrifty,

is
that

incapable

fear

It was not until fear of
falling off the edge of the world
was overcome
that
Columbus

progress. *

could

discover America.

When trans¬

Envy is natural.
into

muted

its

emulation

conse¬

is good; but envy is evil if
it
promotes
the "wrong-to-berich"—that is, for the other fel¬
low to be rich—philosophy.
Greed,
too,
is
quite human.
More politely we call it ambition.
Like envy it is good when promot¬
ing production, but evil when jus¬
tifying in monopoly or taxation
the
"He's got it,
let's take it"
quence

Lust for power

He knew—and he

hnew*that even the squirrel knew
that- only by saving for the

fellow
man.

also

over

often

too

hu¬

Power, rather than service,

prize for
labor
leaders and
politicians strive. I
find no good in it and much dan¬
ger.
Once loosed, power feeds on
is

too

the

frequently
business

which

itself—and

leaders,

Hitler is the

result.

©nlyf, with better fools could he It set terms of office so as to get
produce more goods and have a people out of office before they

ifoetter. Jiving.

iSuch

fool

Nor would he be
to provide tools out

could

become

exercise

entrenched

power.

•

the

It originally

'Pf his sacrifice > and thrift that provided that taxes on people had
ijneant no profit to him in their use to' be equal to everybody so that
the tax power could not be used
•or their rental. That would indeed
.

|iaye been
/Hit is

selected
collective Paul.

legally

sinful waste.

true today as it was then

with

companies

life

insurance

which

by them have
help provide the
American
tools
of
production.
Nevertheless,
profit
has
been
been invested to

labeled

sin, propagandized as
blamed for inflation,
represented
as
virtually stolen
from employes' pay and, on the
as

force of such
to

falsehoods, subjected
confiscatory tax¬

doubled-up,

use

Such

the

"hokum"—if

word—is

may

the

worth

Un¬

Mark's

investigation lest
the innocent be injured and the
unwary be irrevocably despoiled
common

of their

birthright.!

pay

rob

Peter to

and

where

-Tools

from.

things that

they

came

all

those

include

to fashion the

men use

thrift

the

source

simul¬

Stockholders

versus

Employees

ask

you

tion:

resources.

another

you

received

from.

know of

any

risk

rea¬

and

risk.

save

to buy tools of

money

The wagon

he wanted.

wagon

became the farmer's too—his cap¬

ital. It belonged to

the farmer, not
to its builder, because it was the
farmer who endured the sacrifice
in

not

consuming the equivalent
The builder

of what he produced.

got the equivalent of the wagon
pioneer's food

he had built in the

was

Tools come from
than one con¬
They are the fruit of selfgiven.

producing
sumes.

denial and sacrifice added to ex¬
ertion.

There

is ;

source

tools, and hence of multiplied pro¬
than

perous
well-being. J It requires
self-denial i and sacrifice; V it is

undertaken

never

in the

except

hope of benefiting thereby; it will
not
be
undertaken
if
benefit
therefrom is denied.

Only Tools Create Jobs1
The fact is, of course, that

those

through their savings, pro¬
tools of production are
the workingman's greatest friend
who,

vide

the

—so

much

that

without that

friend workingmen by

the millions
desti¬

would die of starvation and

tution

the nation sank back to¬

ward barbarism.

Russia

when

Millions

communism

placed capitalism there.
think

moment: Do you

died
re¬

Stop and
know of

any way

in which

preferred

the

550 for less

For each dollar the

common

ices needed to conduct the busi¬

this yielding to

communist propa¬
sinful? It
is high time that someone told
the truth about profits in a loud
tone of voice:
;

$1.23

not

are

they

evil;

are

positive good in the land. They

are

for thrift,

payment

come.'

self-sac¬

rifice, energy and insight in as¬
sembling the tools of production
for providing the good things of
life.
They are the fuel that fires
the

give

for

pay

times

the Multiplier

men

produce 10?

cap
much

without

them, with the tool providers get¬
ting but l/20th toi l/10th of the
multiplied production.
That jie
America the hope of profit has
been extended as an inducement

Without profits,
jobs, for who

jobs.

would

there

would

With tools

and better goods

and better

in production. Ther
not paid to stockholders;

Tools

of progress towards
and more

engines

was

the cost of the

cover

it, plus previous savings, was spent
to buy new and better tools that
will
provide more
and
better
products and jobs in the days tn

About Profits

tools used

and

ness

that profits are

ganda

work .that

yielded no benefit to the payer?
Let the worker—either directly

those able and willing to pro¬

vide

guaranteed, while greater produc¬

there
or

tools

the
of its

one

are

production

greatest blessings. That
others who in ignorance

undermine

would

envy

that

profit incentive to provide tools
of production is America's great¬
est tragedy, or grimest comedy, if

prefer to look at it that way.
Sharpening up the tragedy, or
comedy, is the fact that it is the;

you
,

least

who

and

efficient
most

need

job-creating

tools

to insure their

thrifty

least

abundance of

production,

being among those

hired; yet they are often the loud¬
est in demanding that profits be
taxed
away
or
transferred * to
them.
The ill-housed, ill-clothed
and

ill-nourished

can

better

tion of wanted and worthy prod¬

housed, better clothed and better
ucts is foreshadowed. :V;■
nourished only as more and better
Profit is the proof of the worth¬ tools of production come into ex¬
But if provision of tools
iness of production; loss is the istence.
proof of its unworthiness, of the is prevented they will be the first
wasie of the energy and thrift that to die in destitution.
provided wrong tools of produc¬
or of the job-destroying ra¬

>,
■V-;v;.y ■ The Challenge
America is the land of and for
of tax gatherers or of Uncommon Men not only because
workers employed in their opera¬
it affords free choice and oppor¬
tion.
The greater' the profit the
tunity for people to become expert
greater the incentive for expand¬ in their chosen occupations, but
ing production and progress, while
also, as we now see, because it
loss is the proof that progress has
has mechanisms
and incentives
A

tion,

pacity

stopped.
It is not profit that is for providing the tools of produc¬
evil; it is the enemies of profit tion that the skilled must operate
are
evil for if they prevail if their skill is to have full frui¬
millions must die as a spreading
tion in abundant production..
dearth of tools blights capacity for
Neither men nor machines could

who

V,.

survival production,

Who Gets What

possibly

together

get
tools

tool users
production the

lion's

the

do the job alone.

neither will be present on

V/hen tool owners and

is consumed or, con¬

and hence of wealth aha of pros¬

basis

received

employees got
$19.78, nearly 20 times as much*
use if he did not expect to get a
either directly in wages, or in
profit out of it? I do not. Would
you yourselves sink your savings provisions for their pensions and
The government
in a company that you thought social security.
would pay you little or no divi¬ got in taxes three times as much,
All
dend?
Would you so much as as the common stockholders.
give up steak dinners to buy the. the rest of the money from cus¬
tools of your own craft unless you tomers, except $1.23 for each dol¬
thought you could make more lar to the common stockholder,
money by doing it?
So why all went to buy materials and serv¬

duction, except that more be pro¬

versely, that something be saved
out of whatever is produced. Sav¬
ing is the sole source of tools,

in dividends?.

with $1

same

stockholder got, our

production for the other fellow to

or
through his government—con¬
lithographer's press, the fiscate the profit of his employer
carpenter's planer, the plumber's and the reason for his hiring dis¬
truck, the mechanic's wrenches, appears with loss to the worker
the painter's ladders, the welder's in
wages tenfold the profit con¬
generator, the machinist's lathe as fiscated.
Buyers, in democratic
well as the factory's giant press,
murket-place decision, determine
its stock of materials
and the
the worth of the product.
If its
working capital—cash savings— worth yields no profit in its pro¬
required to give them life.
I as¬ duction, then the cost of its pro¬
sure you, and I think
all of you
duction must contract4 or its pro¬
will agree with me, that the tools
duction cease and the workers be
of production are what lift-men
idle or seek other occupation.
If
from
barbarism
to
civilization, profit is covered within worth
from scampering through forests
then wbrkers' continued employ-*
to find edible nuts to the comforts
ment is by that, and by that alone,

the

stockholder

pro¬

stockholder, the

common

taker,

why any one
would voluntarily make sacrifices

clude the

and security of American living.
Where do tools come from?
Go

required $46 of sales to

vide the

ques¬

in all this world

son

Profits

might start by considering

duction

■

self-sustaining
There
are
two
specialized productive job can be created ex¬
taneously of security and of the
tools of progress.
It is even more groups
between
whom \ under¬ cept by someone spending his sav¬
ings to buy-tools that men may
true because the individual's own standing and cooperation are es¬
thrift plus his willingness to work pecially important but between use to produce the marketable
goods to cover their continuing
at what King Customer says he is whom, in recent years, misunder¬
worth are his only means, short of standing
and •antagonism have Wage? I do not. Even the lowly
living on charity, of surviving in been greatly promoted, perhaps job of digging requires the em¬
ployer to spend savings for a
a
land of single-source incomes. deliberately, by those of commu¬
steel
production—
The spending preachment is both nist leanings.
I refer to the own¬ shovel. For
that

Let

V,.

the importance of the tools of pro¬

Incentive to Provide Tools

Tools and Their Origin

duced

the other

irainy day could he hope to survive This was well known to the
itr, His thrift was his social se- Founding Fathers and is why the
«curity.
He also knew that only Constitution separated" the powers
through thrifty could he acquire of government and bristles with
1 better tools of production and that prohibitions upon their ' exercise.
>

banks

the race
back to the pioneer farmer: By
would long since have become ex¬
tinct.
He who fears not a fall denying himself part of the food
from the cliff's top is likely-to be he had raised or by working harder
a
dead man at its bottom. C But to produce more than he needed he
fear based on ignorance obstructs was able to pay another to build
were

morality of the robber.
that

.-spending is the way to prosperity.
I suspect that the pioneer would
have thought such a notion to be
immoral then and even more im¬
moral

They

results.

nant fear in America and an emo¬

tional

every

They range from tiny
and infinitely delicate laboratory
devices
through
power
plants,
mines, railways, steamships, ware¬
houses, theatres and stores to the
common implements such as ham¬
mers, saws and other tools we op¬
erate with our hands. They in¬

necessary.

Steel

year

ices he chose to buy from it.

Nearly

and

least

one

is not
stock¬
holder
is
also
a
worker;
and
nearly every worker is also, di¬
rectly or indirectly, a capitalist.
He either has savings invested in
bonds or stocks, or he has savings
That

groups.

quite true.

good things of life out of natural

human.

market—at

would nowadays be re¬
on the average to create
new job.

specialized

the contributions of other groups.

organizes selfishness, fortifies
call it—is worth noting.
It is its
it with ignorance and galvanizes it
Aggravation of men's fears. Under with fear. It sets
groups at each
specialization people do not them¬ other's throats. It sets them com¬
selves directly consume what they
peting for political power or for
produce: The welder cannot house,
government intervention to en¬
clothe or feed himself with the
force through taxation, subsidy or
bondings his torch has made. The
monopoly privilege the winner's
printer cannot eat his words— theft of others' wealth.
It-is a
though, at that, he may sometimes
situation ripe for any one who
be bidden to do so.
Nor is nour¬
wants to do so to whip up fear,
ishment provided directly by ad¬
envy, greed, lust for power and,
justing a carburetor.
Each man
betting on the natural indifference
gets a money income for his ex¬ of
groups toward each other, to
pert accomplishment and
then fortify his emotional oratory with
■uses that money for many consum¬
half-truths or downright lies.
ing and saving purposes.
SingleEmotions versus Understanding
$0urce income for multi-purpose
Such
emotions
are
perfectly

mine

from,

King Customer about $2 billion in
exchange for the goods and serv¬

miracle. But it carries

cor¬

$20,000
quired

been little

The result has

(2449)

porations and to the employes of
corporations.
I said they were

ation.

compulsion

competitive

that is stockholders,

CHRONICLE

enormous,

;

Seeds

Possible

land

struction

Fear of Loss of

.■!<

men

suspect, have provoked that pio¬

production and thus multiplies
mutual grievance rather than en¬
courages

assumes

telligence than squirrels.

misconception of

groups

that

have less in¬

also, quite naturally, throws
those similarly engaged together
and so we have trade unions, labor
unions, industry associations, farm
organizations, and all kinds of so¬
ice

ers,

FINANCIAL

the

And

the job

without pay. Full cooperation and
from monopoly or coer¬

freedom

cion between

tool

owners

and tool

the employees get the

work

and

lion's

users
are necessary if
the wellThis is nigh miraculous progress of the
something that Communists and past is to be repeated in the fu¬
others who seek power out of pop¬ ture.
-v.;
'C. '■
ular
ignorance
by
stirring up
Here then is the challenge to
Not only
envy, discontent and strife would the Uncommon Man.
like to keep secret.
But I believe must he be high-grade in his
that the truth, as always, will chosen activity; but also he must
ultimately prevail. A recent sur-r be broad gauge in his understand¬
vey shows that about 94% of the ing
of the nation's interlocking
work
energy
behind American activities which result in his own
production is mechanical energy, and everybody else's well-being.
that is, from the tools, leaving Especially must he be on guard
about' 6% for human energy. Last against his own perfectly natural
year
the dividend \ payments to prejudices which arise from pre¬
corporate owners, which consti¬ occupation with his own trade to

the

pay.

tute their only
to

ultimate incentive

supply tools, were between $6

and $7

billion,; but the payments

employees were over $100 bil¬
lion. The employees got over 93%
and the owners less than 7% of
to

the cash

payments.
U. S.

can

see

Steel

how this works by

looking at the figures of one com¬
pany.-

Naturally I choose the fig¬

ures' of U.

S. Steel/

h&# Over 200,000

Ui-S. Steel

stockholders and

nearly 300,000 employee^"many of
whom

are

also stockholders.

Last

the exclusion of

knowledge about

contributions and compensa¬
tions of others. He would be wise
to search always for the facts and
the

to their misrepre¬
power-lusting lead¬
ers
seeking to play on his emo¬
tions and prejudices. It would, in
short, be well to remember that
eternal
vigilance is really and
truly the price of that liberty
which enables all men in America
to make the most of their uncom¬
mon abilities and
so makes ours
a land of and for Uncommon Men*
the truth, alert

sentation

THE

of the 59

In the case
advice now is
to take your loss. In Douglas
you took an actual profit of
about 9 points in half your

Markets

lot at

Caution

Lockheed
intends

week

another

those

affairs

doo

15 with

you

wages make

certain

G. L. Martin

have

pay

increased

costs.

in at 15

acting like it was on the start¬ with a stop • at 18!/4. As it
ing line. All it needed was looks now it may break the
somebody to yell "go!" and stop before you read this.
isn't
away it would go. That was Profit
large but it's
last week.
Now it looks like something.,
if '
1 if
^ '
something is in the way. The

unstable,

are

therefore directly increase
prices.
A >vage increase

selling

suffer

even

balance

sheets.

When, prices rise most companies,
to continue in business must bor¬
row

either at the banks or
through bond issues. Thus a new

money

action of last week has been
almost

United

completely nullified in 15,
where

a zone

Aircraft

stop

sell half at that
just a suspicion. price your profit will be about
If you're looking for reasons 12
points. If you buy it back
why I'm now looking for a re¬ at 25 your average price will
versal, you'd better look else¬ be 20. Stop the whole thing
where. I make my interpreta¬ at 24.
•
'
tions
or crystal gazing, if

also

advice

into one of those dull whole lot and no repurchase.
///// * ■'//*
*
punctuated by little
More next Thursday.
dips and rallies in*various
groups. But even if that was
—Walter Whyte
the outlook, we are holding
>. [The views
expressed In this
too may stocks to sit placidly article do not
necessarily at any
time coincide with those of the
and await developments.

may go

affairs

•

They are presented as
those of the author only.]
task

for

"forgetting" certain
stocks. If it is any satisfaction
to the gentleman from Flor¬
ida, I hang my head in shame.

Wil¬
liam Ahern has been added to the

staff of Southern Securities
Corp.,

asks

about

Consolidated

Vultee.

Stock was bought at
stopped out at 14 and
bought back at 121/2. It's now
about 11, which means a loss.
(See column, April 22.)
I'd

Joins Southern Securities;
(Special

The

Financial

SAVANNAH,

Chronicle*

Liberty Bank Building.

(Special

The

Financial

CHICAGO,
Coutts

with

now

and

Monroe Street.

airplane manufacturing
companies are no longer act¬
ing well. Frankly I think I
overstayed the market.
The

at 61

for half the

lot

and

(Special

from

October

yield

Co.

The

1948-April

1956

Pont

Street.

Co., 200
He

was

South

previously

Paine, Webber Firm

(Special

The

CHICAGO,
Downes
with

was

become

Webber,

associated

Jackson

La Salle Street.

(Associate)

Francisco Stock Exchange

COrtlandt
Private

Wires

Teletype NY 1-928
to

Ban Francisco

Monterey

—

Principal Offices

—

Santa Barbara

Oakland

—

Sacramento

Fresno

has

made

decline

and

Unionization

rates practically
Whenbselling prices

depression
War

the

wage

inflexible.

(Special

LOS

costs

remain

invited.

rigid,

After

the

cost

The

Financial

one

an¬
<

group

prices for

In 1945 unions obtained
wage
increases to check the expected
creases

Now

they demand in¬

to overcome inflation.

But,
paradoxically, in both cases, and
for' opposite
reasons,/wage in¬
creases are urged.
Union wages

in terms of cost of

living

are con¬

wages

(d) Ultimately labor pays the
penalty. Raising wage rates causes
to

market.

price

itself

Domestic

out

J.
McDonald
Jr.
is
with
King Merritt & Co., Inc., Cham¬
ber of

buy. Thus; unorgan¬
ized labor suffers in order to
give

Commerce Building.

LOS
Nuveen

The

Financial

suffers

also,

recessions

fixed wage rates, under

declining
selling prices and cost of living,
would give increased
purchasing
power solely to union labor.
But
then

the

number

employed

must

remain

union

men

decline. / Hourly

high

but

weekly

decline for most and dis¬
for some.

The

system

free

enter¬

Even

bank¬

rupt corporation must pay wages.
Then

claims

for

taxes,

merely
residue, if any, left after satis¬
fying all claims.
But profits are
necessary
to
make
the
system
work, even in Russia.
the

What

Are

Another

the

Arguments

General

for

Wage Increase?

(a) The cost of living argument

August,
month,

war

1948,
1939, the last pre¬
shows that weekly

ing,

have

to their staff.

added

Lois

basis of prewar

round' of

wage
now.

(b)

not

The profit argument is fal¬

lacious..
ness

increases

the

activity

1947, busi¬

year

was

peak.

It is

unsound economics and erroneous

government offi¬

semi-depression when the unem¬
ployed averaged 8 million and
when

dollars

chasing
levels
other

pur¬

are

not

indices

wages,

income, physical produc¬

and

volume of currency and
debits! Taking 1929 figures

bank
as

greater

Besides, at peak
merely profits, but

economic

national
tion

had

power.

base

figures for

100,. then equivalent
1947

would

divi¬

dends

117, profits 207, national
income 232, wages 260, gross farm
income 251, and net cash farm
receipts over 300.

"real"
about

income

30%
is

not

169%
of

above
true

high. Thus

the

union

labor

levels.

prewar

for

most

other

in the community—teach¬
civil servants, veterans, their

book¬

Indeed,

cash is necessary to carry the same
number of physical units of in¬

ventory.

Worse still, on this fic¬
titious book profit, taxes must be
paid in cash. As a result, for most

The
wages

unions

purchasing

that

high

means

high

argue

for themselves
power

for everybody.

Again, this is obviously

fallacy.

the

truly, the accountant should

facts
sep¬

the
operating profit from
inventory profit.
In fact, the
inventory profit could well turn
an

inventory loss.
frequently in the past.
Again profits
cause

plant

preciation

It did

overstated be¬

obsolescence

is from

wornout

50%

so
:

is understated.

replacement
ery

are

the dollar

balance
has

accounts

sheet,

different

places beset

were

de¬

90%

higher

confusioq

property insured in prewar

quate

cannot

rebuilt

number of current

same

dollars.

When

machine

for replacement in

pay

current dollars.

? '(d)

The cost of living has in¬

creased

Using;

for

the

corporation

also.

index of

1936*1940,
100%, then for the average of
1947, consumers' goods rose to.
159%, wholesale prices of building
an

materials

197%

and construe-:
221%. ' Such a rise
construction costs greatly in¬

tion
in

costs

creases the sums
required for new,
plant and equipment. To absorb

the

annual

growth

the

labor

force, to increase the efficiency of
labor and thus
potentially to raise:
wages for the
long term, it is;
important that corporations re~
tain

enough

plants

funds

modernize!

and

equipment.
Despite,
higher prices, corporations must,in part, expand and modernize out
of

internal

namely,"

resources,

depreciation

reserves

undis-*

and

Iributed profits.
(e)

Profits

•

are

not

high in

re-:

lation

to sales or to investment.;
percentage of profits to
sales;
for all corporations in 1947 is es-'
The

timated at 7.1%
of

the

1936.
U.

less than 7.6%.

prosperous

The

prewar

year.

annual

report of the
Steel Corporation gives the'

percentage of net income to sales !
for

the

years

back

1902.

This

unique and valuable informa-;
tion furnished by no other com- pany. The averages show a steady $
decline

13.0%

from

16.7%- in 1902-10;/
1911-20; 10.0% in 1921-/

1946-47.

in 1936-40 and
Since

both

5.9% iny

sales and

in-

represented in dollars |
of
about
the
same
purchasing {
power, this ratio gives a true pic- v
are

ture. Postwar and pre-war
were

profits }

about the same: percentage 4

of Sales.

'•

•This conclusion is confirmed by
the percent return on the invest¬

ment, which
7.2%

6.4% in 1902-10;
in 1921-3P;

was

in 1911-20; 5.4%

;
1

3.8% in 1936-40, and 6.5% in 1946- /
1947.

But

the

current;

1946-47

income

depreciated

dollars

whereas the investment is in pre¬
war

better dollars.

dollar

would

about 4%
index

and

wholesale
dexes

Corrected for

depreciation, the 6.50% of

1946-47

Cost of

machin¬

This

wears out, its book
value stated
in fewer prewar dollars is inade-i

arate

the

into

the

dollars

with the

come

and

But they do
not provide the cash out of which
to pay increased
wages, because
the increase in profits is tied
up
in
merchandise.

present

you

tricks

with words.

under certain condi¬
For example, in the case of a

SO; 5.7%

prices rise

number

inventory / increases
keeping profits rise.

teriorates.

now

that

semantic

But present profits are fictitious.
When prices rise, the value of the

companies, the cash. position de¬

living

widows and pensioners.

Christ<

for

Chronicle)

Co., Van Nuys Build¬

man

the

accounting

ers,

ANGELES, CALIF.—John
&

and cost of living, another

cials to compare profits in de¬
preciated dollars of a boom year
with the average profits of
pre¬
war years.
These were times, of

This

Joins John Nuveen Staff
(Special

time.

justifiable

the

consumers can¬

not afford to

groups

all

numbers—

exact,

as you can

same

poorer

living.

now

manifest

wages are now 220% and the cost

Chronicle)

play

different times.

the union

for

wages

increase

were

siderably above the prewar level
and are practically at the
high for

1812,

is fallacious. A comparison of data
in a recent month, March,

ANGELES, CALIF.—Carl¬

they

Wage

man's wage is

one

man's

sheet

about

vagueness

cause

the Civil War, and
World
War I,
indeed, after all
wars, prices declined, sometimes

with

New York 5. N. Y.

7-4150

constitute

wages

argest item of cost.

Graham, Par¬

& Co.

Chicago Board of Trade
14 Wall Street

Besides,
other

balance

demands for wage increases.

increase of

the

Feb.

rationalizes

deflation.

formerly with Francis I.

du Pont & Co. and
sons

Chronicle)

ILL. —William

has

Paine,

Financial

isle

New York Stock Exchange
Curb Exchange

York

San

merely

causes

merchandise creditors, etc. Profits
have no claim.
They are

Schwabacher & Co.
New

bust" cycle.

costs.

But

and

reflect several different kinds of
dollars. We used to think there was

all.

(e)

Thomson & McKinnon.

count

tions:

The economy is dislocated.
Depressions are caused by rising

(c)

Chronicle)

With King Merritt & Co.

the "boom and

appear

1.35%-2.65%

Members

inflation, tend

to
tighten
interest
rates,
and
hasten subsequent deflation.
Wage
increases
would thus aggravate

rates

Financial

Curtis, 209 South

Due each October 1, and April 1,

credit

the dollar of sales.

Illinois Central R. R.
/

the

worsen

would

Joins

Certificates

West

previously

was

meanings at different

1945:-"Full

Guaranteed

profits.

prewar

good

increases

wage

CHICAGO, ILL.—John R. Molloy has joined the staff of Francis
Salle

214% Equipment Trust

prise is prevented from function¬
ing. Wages are a first claim on

with

fraction

Allyn

100

Inc.,
He

F. I. du Pont Co. Adds

61 and got

round

wages

repurchase at 59. It broke the
within

on the
basis of construction costs. These
the figures to
compare with

fire,

labor

Graham, Parsons & Co. and

F. Childs

same

thing applies to Doug¬
las, bought at 52, with a stop

Company,

with

Allyn

terials; and to $5.5 billion

statement

whose "real" income is far greater
than in 1939. But even organized

Chronicle)

ILL.—-Ronald

exception of
the

the

are

the

was

unique benefits to organized labor

Coutts With A. C.

like to point out that with the

two stocks

Nov.

6, 1947: "Is CIO Demand for
Practicable in Steel?"~*-Editor.

labor

GA.—John

12,

one or

articles

accounting develops
semantic fallacies. / In .the
income

sharply.

Chronicle.

billion

BLS

depreciates,

So much for the air stocks.
The

Anaconda,
"why?"
Avco, Bethlehem, Caterpillar
*
*
$
and Dresser,
as
given last
It is possible that instead of week, still applies.
Except
a
real reaction the market that stops are now for the

mentioned

Ad¬

Consumers' In¬
dex; to $6.0 billion on the whole¬
sale price index for
building ma¬

But when

10,

Employment, Flexible Costs and
May 8, 1947: "Wage Adjustments. Down

Employment Bill—Aims and Methods"; and

A reader took

Aug.

the

with them

War

Profits"; on
Up, Could Mitigate Depression's Evils."; It

"Post

and

—

you prefer—from the market.
And the market doesn't say

previous issues of the "Chronicle,"

1944:

halt is open to at 2714. If
you

than

could

by Mr. Friedman

bought at

about 29, has

now

$17.7 to $7.6

basis

The recommendation of a flexible
wage, related
to the cost of
living, was discussed

not

the

out.

wear

from

that

machines

will

when

inventory appreciation and
inadequate plant depreciation
charges and deflating to prewar
prices, profits for 1947 decline

raise

Farm wages and

misleading

workers

available

shrink

would

wages

Therefore,

for

Rising selling prices create non¬
recurring and factitious profits
and

for some, therefore, means a rise
in the cost of living for all. Per¬
sons
with fixed or less flexible

incomes. would

public

Rising

war.

justed for these changes, profits
substantially.
Corrected

reductions

Thus inflation is aggravated. The
subsequent deflation becomes
more painful.

than 5.7%

general

the

tools

present

un¬

parity
prices
then
must
rise.
Thereupon cost of food rises again,
leading to new wage increases.

averaging

The

harmed.

industrial costs.

the

cover

increase

wages

came

(b)

aged 3.7% of the national income,
of total wage bill.
Ob¬
viously, even if dividends were
wiped out, the consumer would

would

market

and

costs

and 5.7%

You bought

When

the

correspondingly raised.

Otherwise
have

it difficult to deter¬

costs;

before

should be

in price are checked and retarded.

of the national income. But
dividends in the last decade aver¬

(it's

stop at 21.

tails

70%

• If it
it has to

Is it honest

win,

(a) The consumer would suffer.
Wages constitute somewhat under

poser.

"Heads I

govern¬

pensioners,
are hard pressed already.
Besides,
threats
of
continuously
rising

and

What Results Would Follow?

'///;//'/y'y

if.

play

charges for depreciation of assets

Many, such
employees and

mine

should be

across

whoop-dethe

with

deficit

than

creased.

ment

lose"?

it breaks 21 sell it all.

looked

about 2214).

now

it at

Last

moving

establish itself

advised.

now

if.

Thursday, June 3, 1948

if others' wages generally are in¬

because

company
has a
cannot afford to pay.

buy back the half

now

down

gone

the

5714.

Groups
like
oils,
farm
equipments and motors look
higher, but others, including
market,
starting
to
point
down.

living has

the whole lot

FINANCIAL CHRONICLE

(Continued from first page)

your average price
will be 55. But the stop for

By WALTER WHYT£=

Unions'Demands and Managers' Policy

If you

lot.

Whyle

Says—
=

figure.

of Vultee

Tomorrow's

Walter

COMMERCIAL

equivalent

the B.L.S: consumers' :about

and

the *

construction

in- *

combined.

3.25%

This

return ;■

,;VoIume 167

THE. COMMERCIAL & FINANCIAL

Nuraber 4704

CHRONICLE

equals about the return in the
semi-depressed years 1936-40.

continue to employ workers. Thus
these undistributed profits in a

the standard of living" underwrit¬
ten < by General Motors may have

to
prewar
years,
shrank
in
relation
to
The U. S. Steel Annual
for 1947 showed an in¬

to be abandoned

between

trusteed

are

sense

for

the

uted profits create more jobs and
help to lower costs.
surplus and
(i) The public needs to be enthe increase in the' number of ligntened.
Both by articles and
employees.
by advertisements in the newspa¬
(h) The workers must be taught pers and magazines, the managers
between wages and dividends and

the

reinvested

economics and

accounting of

1946-47

less than the 18.5% of

relatively

1936-37

prosperous
years
the 17.8% of the good

1921-25.

years

*:<■*.!-i; *

But

tributed

1947 is

estimated

for 1941-47 was

rates

54% and for 1922-1929 about 35%.
Dividend policy is now cautious.

average

the

For

1947,

year

the

amount

retained in the business was 155%

profits

of the amount

not.

They represent
bookkeeping accounts. However,
are

dividends

comparison

Therefore the

cash.

are

should

between

cash dividends and cash wages.
*

(f)

Dividends

relatively

are

small compared to wages..
Over

Figures

long period of years are
published by the U. S. Steel Cor¬
poration. From 1902 to 1947, em¬
a

ployment costs (wages, social in¬
surance,
etc.)
averaged
$370.1
million annually.
Dividends on
common
stock
averaged
$26.3
million,

thereof

the

and

undistributed earnings, reinvested
in the
business averaged $24.0

jmillion

6.5% thereof,

ful about the continuance of

1902,

the

figures avails
relative

tp; wages and that at present the
jratio of dividends to wages is
lower than in former periods of
bigh business activity. In the Na?
tional : Income ; Account
of
the
Commerce Department, dividends

3.0% of the national income

In 1946-47 against 5.7% in 1936-40.

jpividends

were

compensation
years
1946-47

5.0% of employee
in
the
postwar

and

8.7%

the

pressing

Gross farm income is $34.6 billion
compared to the previous peak
of $13.8 billions in 1929.
The in¬

holders

bulk

farm

prices
It

sumer?

did

Why

sugar.

wages can be raised substantially
without raising selling prices. A

protect the con¬
in the case of

not

cotton?

for

wheat

and

farmers'

the

across

material and

raw

finished goods industries, without

raising selling,prices, would result
in deficits, would threaten bank¬
ruptcy, and thus would cause un¬
employment. Yet dividends must

Over' decades,

times,

even in

have

wages

Steel

dhe

and

Corporation

from

1902

1947 shows that the wage rate per
hour rose 7.75 times. The number

times.

week declined

rose

times.

The number of em¬
1.70 times. And pro¬

ployees

rose

duction

increased

ate this trend.
Labor

2.62

times.

■

In¬

should

wage

inflation

could

Thus the pres¬

increases
be

and for

checked.

The

aggressive role in the
game now is "Heads I win, tailg
1

win."

The

role

consumer's

victim in the game now is "Heads
I lose, tails I lose." Farmers have

obligations

well

rights. And

have rights, too, as well
the obligation to pay taxes for

with

cooperate

management in increasing output
and in lowering unit costs.

income,

only of the consumers' goods but
also

of'

and

materials

raw

steel, how small

are

coal

dividends

compared to wages, why investors

ceive
the

equipment must

re¬

return to attract funds to

business

and

how

labor

union

rates,

policy

wage

would

leaders

labor's gains.

our country. Here is a task
calling for high industrial states¬
manship. And American business

The

the

number

companies.

workers

since
many

American

The

Tele¬

phone & Telegraph Company now
has 663,000 employees and 738,000
stockholders.

General

Motors

present

can

not

trade.

pation in transitory institutions
or
governments. They will look
Eastward for
Under this

political

final solution.

plan,, economic and

warfare

between

the

United States and Russia will be
intensified. Costs of maintaining
partition will mount rapidly. Eu¬
ropean recovery will be handi¬
capped. Open warfare within a
relatively limited period of time

will be difficult to avoid.

con¬

The next de¬

pression could thereby be post¬
poned and mitigated.
A short¬
sighted policy may achieve mo¬
mentary
gains,
sometimes, but
only at the cost of long-term
losses.

the rise

in wages, a cost-of-living bonus
should be granted. When the cost
of

living

that

declines,

should decline.

bonus

A flexible wage-

supplement moving down as well
had 375,700 employees and
as
up
with the cost of living
436,500
stockholders.
Of y these
would lend resiliency and stability
stockholders, 34% own 10 shares
1947

less

less.

about
own

and

92%

100 shares

own

In most other

90%

less

these

than

the
100

teachers,

public

businessmen.

shares.
are

Many
retired

servants,

For

these

and
small

holders the cost of living has also

risen, but dividends have lagged
behind wages.
Compare the in¬
come

of these small stockholders

With the. wages of men now de¬
manding a third increase.
Steep
taxes graduated up to 90% apply
to big holders.
.

(g) Undistributed earnings

can¬

not. be paid out in wages or divi¬
dends.

The

companies

stockholders

to the whole economic system.

surplus .of

profits

Britain,

several^ industries

(e) In this period of rapidlychanging price levels, accounting

debunk

numbers.

Only thus can

out of the question. We
shall have to reach an agreement
on

Germany.

It is probably not too strong, to

that lack of such an agreement
Germany within the next few
years would indicate that another
on

the

much

near

too

future.

strong,

claim that such

would

the balance

available

for expan¬

sion, modernization and for divi¬
dends to stockholders who furnish

the tools of production.

substantial

Motors is the first large

nies

organized pressure
little people are

These

groups.
and

however,

associations.
was

This

recom¬

recently submitted

The obstacles to such

would be able to control

unified

owners

their

of the compa¬

voice

should

other

most

Western

European

countries.
An essential condition for unifi¬

cation,
be

therefore,

would have to

sufficient degree of internal

strength and stability to act as a
guarantee against Russian domi¬

nation*, without

Germany's "war

potential" being made so great as
to alienate her Western European

The

and

shorten

hours,

create jobs for the annual crop of
new

workers, and to give work
to
machinery industries.
From
undistributed
profits
come
re¬
serves
against current assets to
enable

the

company

weather

stay in business and then to

Germany.

But

when it is reached,
reached; and what it is.

how it is

has

Russia

plans

set tip

national German "unity" govern¬
ment in Berlin. She has. organized
German

and a German
She. has seized
about 80% of all German securi¬

army

secret police force.

ties, which were held in Berlin,
a fact that confuses the ownership
of German businesses and creates

favorable condition for groups

by political

guided

rather

than

economic motives.

States

to unification of
some time from now,

agree

Germany

German

Eastern

Russia's

after

United

the

therefore

should

government has been set up, and
because some later Congress re¬
belled at the steady increase of
costs in Western Germany, the

agreement would almost certainly
be

for

risk

bad

United

the

States. Such an agreement will be

advantageous only if the United
States take* forceful leadership
in making it so.

small stockholders should be

pared.

com¬

This objection could
met

Corporation.

and

Germany Only the Beginning

Germany is not even the most
important problem. It is simply
one
of several important prob¬
lems, and I have talked about it
length because it has the great¬
est urgency. I shall be very brief
about the Near East and the Far

East.

V':\

Why is it that Russia, despite all
the sabor rattling, supports the
United States view on Palestine?
It is easy to say

that the

reason

would
Great
Britain than for the Arabs. But

is because an Arab defeat

neighbors.

possibly be

by limitations on the extent
nature

rates

bad for the United States

depends

If
agree¬

plant. Such reinvestment makes
it possible for the company to
build larger and more efficient
plants, to increase productivity
and to lower costs, to raise wage

curtain splitting Europe

center

ownership,. She has established
trading monopolies in Eastern and
Southeastern Europe that will be

expressions, to avoid bankruptcy,

dividends is reinvested in

the

that support the principle of state

German recovery,
(g) Stockholders must be edu¬
(c) Instead of a fixed increase cated, if the management is to which would also be desirable
in
wage
rates, some companies enlist their aid through their ef¬
from the viewpoint of Benelux
pay a flexible profit-sharing sup¬
fective organization.
Such edu¬
if not Great Britain; and assur¬
plement,
related
to
dividends. cation requires full annual reports
When profits
disappear, profit- giving considerable detail over ance to Russia of supplies from
sharing ceases and costs decline. long periods of time, such as, for current German production. Rus¬
True, the supplement is small example, the U. S. Steel Corpo¬
sia also has it within her power
compared to the weekly wages? ration
furnishes.
Furthermore,
because total dividends are small the annual and quarterly reports to strengthen her own security
compared to total wages. Thus can illustrate, as do those of the by establishing buffer zones in
workers
learn elementary eco¬ General
Motors or Standard Oil Central Europe, an area which she
nomics and accounting of business.
Company, for example, how the now controls and which will be¬
The unique obligatory and inflex¬
ible "annual improvement factor system of free enterprise worksi come an increasing drain oh her

above

iron

would
indicate
that
another
major
war
had been
avoided. Agreement on Germany
is probably necessary in order to
prevent another major war, but
Germany

to adopt the policy of
rising cost of living
\ (b) Russia, on the other hand*
tying wages to the movements of cuts their "real income" also. Rep¬
the
cost-of-living
index.
The resentatives of such small stock¬ would probably seek assurance
writers
has
been
urging
this holders' organizations should be that a unified Germany would not
later become the military spear¬
policy for several years in public asked to participate at the wage
articles
(cited
above)
and
in hearings. There the annual in¬ head of an anti-Russian drive
private reports to companies and come of workers and such typical backed by the West.
heard.

mendation

or to a compromise solution.
The latter cannot be" found with

agreement on

Germany through the Communist
by labor leaders and Party only if it were backed by a
government
officials
about the Russian-controlled secret police.
current high level of profits. The The
Communist Party is probably
term profit is a misnomer;; It is less
popular in: Germany than in

powerful

trade

many will have to lead either to
war

both

made

American companies. But General

to the General Motors

hard questions to answer.
The East-West struggle in Geri

now seems

businessmen refute misstatements

years.
This policy is also
followed by many relatively small

company

be good or bad from the viewpoint
of the United States?
These are

:.>■

American

agreement on German
unification be reached?
Would it

it would not be sufficient.

shoe, railroad and metal(f) Stockholders should be or¬
working, have had sliding scale ganized*
particularly the
little
provisions in union contracts for fellows; They need defense against
many

Great Dangers

good'

later, I believe, we
shall have to do something that
or

with Russia

East-West

whether the compromise would be

Agreement With Russia
Sooner

reached

Will

free-price

has exceeded

1939

leaders dare not be found wanting.

(Continued from page 13)

Plan, but they will
risk their futures by partici¬

ment are many and substantial,
analysis must be used to reveal
ceiling the truth. The accounts should be probably more so from the view¬
implies a free-price floor. The translated into the same kind of point of the United States than
J
Dividends are not confined to
from the viewpoint of Russia:
present pegged-priee floor im¬ 1948 dollars
throughout the books.
the few. Eliminating duplications,
plies a pegged-price ceiling. Both Otherwise the
(a) The strategic position of the
reports are ficti¬
there are about 10 million stock¬
floor and ceiling prices should be tious. A 1939
dollar on 1948 books United States would suffer a fatal
holders. : The estimates vary up treated alike. Free both or peg
is., an imposterv in disguise.
In blow if a unified Germany became
to 15 million. But the number of
both. The worker then is treated
gemantics
the
experts
debunk attached to the Eastern Sphere.
members; in
organized f labor as equitably as the farmer.
words.
By an analogous process, : As a counter to this objection; it
unions is about 12 million.
The
■;Sc (b) Where the cost of living the economist-accountants must can be pointed out that Russia
number of stockholders exceeds

be high enough to attract capital

td< industry for expansion..

conflict

ture of

major war had become inevitable

serve

agitators, and propagandists

the Marshall

conservative

less

the system of free enterprise. For
on this depends the political fu¬

say

Piecework

have

workers
and

have been charging. Each corpo¬
ration must do that-job not only
in its own interest, but to preserve

undistrib¬

in¬
centive bonuses to time workers,
have lowered costs sensationally.

warded:

and

common

than

International Affairs and Effects

Labor

consumers

farm subsidies.

national

how upward spiraling wages raise
the cost and selling prices not

0.56

weekly earnings

per

The

of the

pre-union

been

greatly
working week
markedly shortened, only because
labor costs per unit were reduced
by inventors, engineers, and man¬
agers.
The record of the U. S.
raised

the

in plant and

deflated for price rises, is has not only rights, but also cor¬
heavy tax on every worker's responding obligations. Union re¬
family. But the farm bloc is now strictions on production should
contented
and
quiet. The gov¬ be removed. "Feather-bedding" is
ernment put a floor under farm an economic
evil, penalizing its
prices
to
protect
the
farmer. perpetrators, not
merely the con¬
Should it not put a ceiling over sumers.
Effort
should
be
re¬

for

wages

* v'-

--r

and

Jv?'

wage

and dividends, how stock¬

wages

ers

special report to work¬
must explain how wages get

crease,

sure

15%

telligent labor policy can acceler¬

(a) The cost of food has risen.

corn

board, including

policy

costs

rates can be in¬
creased if output isjncreased. But
productivity now is still at the
prewar levels of nine years ago.

4.33

policies?

Analysis?

prewar years 1936-40. These fig¬
ures
refute
the
argument that

rise of

Again,

equally
their wage

prudent

This

unit

consumer.

profits. Should not labor of hours

small

are

hours.

raise

rent high

What Solution Is Indicated by the

able support the above conclusion
that dividends

yirere

cur-

per

only by raising wage
hour, but' by working

would
selling
prices or the cost of living to the
not

leaders

•

paid in dividends.

Such conservative dividend pol¬
icy reflects the management's fear
about
the
next depression and
prudence in strengthening com¬
pany finances. This should benefit
not merely the stockholders, but
also the workers and the general
public. Caution is also shown in
the present prices of stocks. They
are low in
relation to yield and
low in relation to earnings.
Investors apparently also are doubt¬

Though figures for American
industry as a whole do not date
back

not

61%, the

wages and profits are not
comparable. Wages- are cash, but

do so,

must show the interdependence of

business. A

•

the

significant data about the relation

real

during years of
benefit of workers and consumers,' depression and
profits
deficits, as 1932 or'
as well as the owners.
1938. But a flexible wage-supple¬
wages.
In the decade of the 1920s, divi¬ ment tied to dividends,, like the
Report
Eastman Kodak plan seems more
crease over 1941,. in sales of 30%,
dends paid out constituted about
in
employment costs of 43.8% 65% of earnings, but in the period realistic arid practical and has
and in profits of 9.5%.
Further? 1941-47 the average was 46% and promise of permanence.
more, its ratio of net income to for the year 1947 it was 39%. The
(d)} Workers who- wish to in¬
employment costs, was 13.4% in percentage of earnings not dis¬ crease, their weekly ineomes can

Compared

(2451)

defeat

worse;

for

why does Russia want a defeat
for Great Britain?
The

I believe, is that

answer,

Russia hopes to transform a de¬
feat for Great Britain in the Near
East into
for

general defeat

States

in other

Palestine

and the

United

the

three

cents

per

hour to raise

analysis

could

present

the

economy

unless some agreement i

areas.

■■

■

Except

for

question of Sterling* bloc

Great

ences,

Britain

along with United States
She has had to,

economic

most—financial
assistance.

turned down the deal
her

Russia

gone

policies.

if she was to get

what she needed
and

prefer¬

has

year—that
rights
page 40)

Moscow last

would respect her

(Continued on

She

offered to

COMMERCIAL

THE

(2452)

CHRONICLE

FINANCIAL

Free Gold Markets

International Affairs and Effects

*
•

(Continued from page 39)

wishful

U. S. ought to devalue the dollar.
would help it begins to hurt? Will he be a
Eventually this was done, to the
to keep the United States out of far-sighted statesman? Or will he
69%
profit of those who held
that
area.
Since
then
Great vote with one hand on his pocket
their capital temporarily abroad.
Britain has lost her outpost in book. Answer those questions for
In the case of silver, in which
me and I will make a more defi¬
Egypt, and is now threatened with
large public speculation developed
nite guess about the future.
the loss of her whole stake in

in the Near East if she

countries.

the Arab

Great Britain, Russia can claim,
is paying a heavy political price
for the economic
help she has

And

States.

the United
threatening her

from

getting

been

political loss, as Rus¬
sia did when she proposed bilat¬
eral conversations with the United
States, Russia invites Britain to
listen more carefully to the next
with further

that Moscow

deal

decide to

may

is just as bad a

The Near East

Germany, but it is not

critical.

ftiis moment as

v f

comment applies to
the Far East. Here I shall make
The

same

just two points.

(1) In Korea, we have been
putting our democratic wares on
display, side by side with what
Russia pretends to offer. And I
am ashamed to say that this coun¬

technical skill
prides itself next on its selling
ability, has come out a bad last in
try, which after its

don't believe that

contest.

this

planning could
program better

years of careful
-have produced a

friends
enemies.

calculated to weaken our
and strengthen our
'

(2) Moreover, we just seem to
realizing that Korea is the
main
food
supply source
for
be

Japan,

which is

reason

outpost by

our

occupation. Man¬
the main raw material

our

churia was

base, but it is too late to do any¬

thing about that. So what happens
to
our
plans for Japanese re¬

covery? About the time they are
completed, they have to be cut
back. They have to be revised and
modified because the possibilities
of economic recovery have been

the results of our polit¬
have to provide
a
much bigger place 'for China
than was intended originally.'f"
limited by

ical action. They

will

up a

China

Eastern

Far

predict

much

hear

building
in

venture

have

will

that we
about

heavy industry base
a major part of our

policy before
passed.

months have

many

all,

let

you

warn

against assuming that something
will be done merely because it
ought to be done. There is every
reason
to hope that the United
States will do
do

insure

everything it must
its

but there is

peaceful

future;

to believe

reason

that it will do this, or to base our
conclusions

that it will.

That is
but

don't

avoided if

the

awful
see

assumption

;

thing to

how

say,

can

to be honest. If

are

failed to admit that the United
States might make

mistakes, that

there might be another war,
that

would

there is

when

breaks

out,

be saying that
international problem.

there

anything

postwar record to
too

simply

Nor

and

might again be relatively

unprepared
we

much

cause

the

to feel

about

assurance

the

longer term future. These prob¬
lems

could

have

the

economic
work

worked

out.

industrial strength

and

resources

them

out.

But

necessary
I

have

ply

displayed

dollars

than

com¬

pelled to point out that until
we

now

greater sup¬
we

have

diplomatic skill.

cheap. Spending them has
real anguish for

caused

taxpayers. But

Charles

bullion at

the

Re¬

Silver

na¬

1934

don't see

been

Otherwise,

scare.

why there should have

Why

hence

abroad,

Market"?

have been
establishing ' in
the

arguments

for

United

Gold

States

free

market

for

taken seriously

found

ments:

audience.

•

a market would bring
that
"immediately the

(1) Such

Let's be realistic about defense

about

expenditures. We have heard of
value of every currency would be
some mighty comprehensive blue¬
determined" and checked daily. yj
prints. We know that these blue¬
(2) • It would make available to
prints exist. But when i and to
what extent will they be put into the producer "the premium mar¬
effect? Anyone who stops to think ket now closed to him by a set
knows that Russia, and the trend of silly restrictions.";
'

question
made

much

the

satisfied

with

what

for

fiscal

know

(4) "It would stop the inflow of
a bet¬
ter
distribution
throughout the

now.

Don't

1949.

that it won't be cut

that she is

bet

again beyond
willing to bet

will start

con¬

vertibility factors of gold to cur¬
rency would re-open the arteries

essential to
establishment of world peace."

present defense budget will

stick

4; (3) "The establishment, of

mo¬

the

for

this

who

men

Let's

States,
or more

answer

will the
the blueprints,

ment
The

United

the

probably do

influence

income

will

invite

totally unprepared

trade,

first

the

gold to the U. S. and start

the world."
had free gold
willing to have
the
gold-value of their monies
jumping around from day to day
If

all

is the agitation for a free
1933, notably by

any

gold market in
Committee

the

of ECA

cases

including

countries,
"free

China,

mittee for the

Gold

Free

effect

mean

should

f that

fill

ECA

dollars

additional

the

drain occasioned by the purchase
of
f

gold from America at premium

prices.2

Related to the foregoing is Mr.

O'Donnell's third point.

countries

markets and

were

the

Nation.

States.")

Establishment of

Market

the

memorandum

United
pre¬

pared at the time carefully listed
under 10 headings the cases for'
and

against

free gold market
the case against

say,

disregarded by the Commit¬

tee.

the

gold market" plan would in

for

(The latter even evolved a "Com¬

was

In the

only a
public speakers were
the
"Commercial
and
Financial
when they stated
Chronicle" of March 18, 1948, we
that United States industry would
find a paper of Mr. Neil O'Donbe 40% mobilized for war by May
nell,
executive
Vice-President
1 and 70% mobilized by Sept. 1.
of
the
Idaho
Maryland- Mines
Such talk was either completely
Corp., a gold-mining company.
irresponsible nonsense or outright
Mr.. O'Donnell gives four argu¬
propaganda, but it nevertheless
forget, it is

weeks since

arguments which all too soon be¬
came dated.
As good an example

Needless to

construction.

than

newly-mined domestic and newlyfew
imported gold.
For .instance, in

Don't

"Free

Various
made

where the danger
would presumably be greater.
little

metals—gold, silver and nickelhave sought Mint markets with

Historical Footnote
What

the

were

Nation's

the

Committee

for

arguments for

free

gold market in 1933?
And
how do they stack up under the
conditions of today, 15 years later?
Judge for yourself from the fol¬
lowing very condensed summa¬
tion by the

Roundabout Reasoning

writer:

;

"A free gold market would

(1)

■

much hysteria here and so

through United States history pro¬
ducers of monetary and coinage

apply their meagre resources to¬

Senate

document.

interests

newly-mined gold rather than

for

Hoarders

Russia? I won't make a
little historical reason for assum¬
that, but I know that the
stop-Russia-with-dollars idea had ing that, once a substantial invest¬
ment
interest
in " gold
bullion
a
lot of influence, just as it did
comes into being in this country
when Greece and Turkey needed
(under such proposals as that of
money. In fact, I believe that im¬
McCarran and Engle)
good old
pulse, and the timing of defense
Uncle Sam will be asked to buy
appropriations, and the fact that
out the speculators at a handsome
1948 is an election year, had a lot
to do with the intensity of the profit to them.i
war

to per¬

to
obtain
a
profit which can be
brought
back
to X the
United
States, This is equivalent to rec^
ommending that hard-pressed for¬
eign countries with correspond¬
ingly weak currencies; pay
American sellers premium prices

guess on

recent

gold

very likely to become less plaus¬
ible with the passage of time. All

ward industrial and economic re¬

published
There

un¬

"dollar

and

controls

American

mit

"fair" price; and

List

extreme
suppose

weakness

movement

this
too was done; again to the hand¬
some profit of such speculators as
the radio priest himself, as shown

believed

was

shortage" that the governments of
countries where today some gold
is
finding
buyers at premium
prices
will waive
all capital-

tionalize private holdings of silver

and how many
that it

Program,

covery

provide
American
businessmen
Unless Mr. O'Donnell includes
and the public with regular quo¬
gold movements in "the arteries of tations of the
gold value of dollar
trade," it seems that the devotion
currency
and would thus make
of foreign countries' foreign-ex¬
possible quick and easy revalua¬
change resources to the purchase

would have

goods,

effect the

opposite from that Mr. O Donneli
It would diminish the vol¬

states.

One

could hardly argue that the earn¬

ing of larger profits by American
gold mines, as a result of the free
trading
in
newly-mined, gold,,
would result in the United States

buying more from abroad than it
otherwise would buy. The whole
mercantilist history of this coun¬

the

gold.": (Note

thisr i broad

tween

and

the

difference be¬
1933 proposal,

limited McCarran-'

Engle proposal.)
-

of world trade in goods.

ume

commodities in terms of *

tions

of gold from this or other coun¬
tries, when what they all want is

a;;

(2): "The establishment? of a1
free gold market would greatly
facilitate the increase of American

commodity

< ■

required 1 by

prices,

critical' economic

the

conditions

cial

three

than

finanA,*

and

prevailing
years ;?

after

ex¬

tremely;' severe business" depres¬
sion." %ry y:

(getting rid i; (3) A free gold market would
is the pleasant course encourage foreign gold producers
while to accept imports of foreign and hoarders to send their goldt
(Compare this 1933 argu¬
goods (real wealth) is' by and here.

try is that exporting
of

goods)

large distasteful to the American

ment with Mr. O'Donnell's fourth

electorate.

point, cited above.)

for

Mr.

O'Donnell's

fourth

point, for the reasons given above
inflowing foreign gold would seek
alternative foreign markets only

A free gold market here

(5)

would divert gold from consump¬
tion in the arts.

(6) A free market for gold
unlikely to come would draw to itself old gold
time soon. These jewelry, plate, coins, and other *

under conditions

into

being any
countries, where blackmarket
premiums
for
limited
amounts of gold exist, make those
that

are

markets

black

legal

and

(The

hoards.

bill

would

McCarran

Engle

deliberately feed gold

hoards.)

free,

(7) A free gold market "would
week, Mr. O'Don¬
which decision the writer cannot
permit business accounts to be
Don't bet on sustained indus¬ nell's first point might be valid: al¬
see them
taking for a long time
readily kept in gold as a protect
trial mobilization during peace¬ though one may raise the question
to come; and that the countries
tion
against
foreign exchange
time. Maybe it would be the best whether it is the value of a cur¬
which have been responsible for
fluctuations; in fact, it would per¬
policy. But there will be many rency in terms of gold, f or in our
gold inflow would be willing mit the
development of gold bank¬
temptations to cut the defense and terms of other currencies which is to sell their
gold at premiums in
ing."
(This has reference to the.
foreign budgets, and these temp¬ important for world traders. But terms of currencies not
freelydual system of keeping, business
tations will grow stronger if there we must note that the argument
convertible and without the power
accounts during and following the
is any drop in income. Even a falls down at the very first test,
to buy the goods the gold sellers
for the advocates do not propose
Civil War in this country.) 'yAAAy,A\
state of international crisis loses
want. E.g., when Argentina sends
its
force
if
it
continues
long that even the U. S. dollar's gold
(8) A free gold market in the
value be determined by free mar¬ gold here for sale, it is to buy
enough to become normal.
would encourage
American goods Argentina wants. United i States
ket forces, since as we have seen
Don't bet that there won't be
repatriation of American refugee
there would be a $35-an-oz. floor What would Argentina be able to
an agreement with Russia on Ger¬
capital abroad.
..
under the' price of gold and the
buy with the same gold sold at
many within the next year or two.
:
(9) A free gold market would
entire U. S. gold stock would be
a
premium in India,, unless the be of material assistance to official
Don't bet that lERP^Will con¬
unavailable for Treasury sale in
tinue as now planned. Our present
movement of capital from India to exchange-control operations. (My*
the United States, excepting to the
foreign policy is based on United arts at
n
the United States were unimpeded Gutt, see here!) «
for

and

now.

week

States

omies,

$35

financing of deficit
and that is not a

sound foundation.

■'

•■

econ¬

very

market"
the

would

sponsors5

if; the "free
the way
the McCarran-

oz.,

operate

Engle
bill
obviously
think
it
Finally, don't forget that this is would. J
an election year. I know that pur¬
Mr. O'Donnell's second point is,
chasing agents are the last ones to of course, the basic purpose of
believe everything they hear or the
free-market a proposal
ad¬
read. But there is so strong a feel¬ vanced in
mining circles. But the
ing that foreign policy should be proposal seems not to have been
kept out of politics that all of

inclined to believe statements

are

foreign affairs that

question if they

would

made about

were

domestic affairs. It is regrettable
but

true

been in

that foreign

policy has

politics,^ and that it will

stay there at least until November.
That
tant

course

What will the taxpayer
say when

sea

carefully thought through. Would
not
the f advent ; of
substantial
amounts of gold from this coun¬
try tend to diminish or eradicate
the premium prices obtainable to¬
day in foreign countries on for¬
eign black or "parallel" markets?
Those

markets generally are be¬
lieved to be limited in volume, as

impor¬

compared with the volume of for¬

landmark economically as

politically.
for business

of iuture

It
a

marks

the

well charted

activity and

uncertainty;

eign-exchange business otherwise
going on.

1 Cf.

articles

the

writer

the

of Political Economy, University
Chicago, Oct. & Dec. 1938, The Silver
Episode; and August 1941,.The Commit¬
tee
for the Nation:' A Case History in
Monetary Propaganda.

Journal
of

(10) A free gold market would

by exchange and export controls?
Why doesn't Argentina today sell

in premium markets?

gold

answer

is obvious.

to is that
to

get

higher

Treasury.
abroad.

Nut

to boil down

price,

they

and

getting

cannot
it

from

be "a step

ican
■

look
the

So they turn their eyei

The arguments which, to

in reforming ths Amer¬

gold standard."
noted

randum

already,

the

memo-

Com¬
gave the
1933
arguments
both
for
and
against these 10 points. The ar¬
guments are reproduced here now
only to show how times change
and how impossible it is to con¬
mittee

great inflation-poten¬

atN home,

forward

seems

The

gold miners would like

view of the

tial

Kernel of the

The

What it all

prepared

for

ceive of

the

for

Nation

set of conditions which

gold and silver producers cannot
use

arguments

for

higher

price for their products.

them, may sound good today are

With Pacific
precisely to stop the drain of
the private purchase of gold
for hoarding in China and elsewhere that
the" International
Monetarv
Fund
has
2 It

date, in fact, is

borderline between

this situation will not last
forever.

cast for it

European

was

nomic

the notorious
Sun¬
discourses of Father
Coughlin, it was de¬

radio

manded that the Government

would stop

So far these dollars have been

because

aganda
day

are

ERP.

about

How many votes were

war

.'.v I should like to sum up by
drawing
some
conclusions and
making some recommendations.
of

realistic

Let's

that Russia

they

But

activity.

business

that unless you are

Conclusions

First

subject to many uncertainties. It
is easy to say that we should fol¬
low certain policies, but hard to
say that we will.

because

offer.

mess

level

mate

the

thinking

prevailing conditions of eco¬

der

under the stimulus of such prop¬

ulti¬
of defense spending
substantial effect on

The future of ERP and the

Change With the Times

doubtless

(Continued from page 7)

Thursday, June 3, 1943

dollars

(Special

for

sought to stamp out the Black Market
in gold.
If feeding the demand for pre¬
mium-price
gold
for hoarding
were
a
desirable
policy,
foreign ' governments
would- today be using their gold for that
purpose.

The

Company ;

Financial

Chronicle)

•

LOS ANGELES,
B.

CALIF.—John

Hogan, Jr. is with Pacific Com¬

pany

California*: 623

South

Hope Street, members of the Los
Angeles Stock Exchange.

A :

Volume 167'• Number

4704

COMMERCIAL & FINANCIAL CHRONICLE

THE

(24531

Indications of Current Business
The

following statistical tabulations

shown in first column

are

IRON

STEEL

AND

Indicated steel operations
Equivalent to—

INSTITUTE:
—June

Ago

Latest,

Crude oil output—daily average

(hhis.)

-May 22
22

__*_

*—

17,249,000

2,129,000

9,284,000

unfinished

gasoline

(bbls.) at
*
Gas oil and distillate fuel oil
Residual fuel oil (bbls.) at.

(bbls.)

..May 22
-May 22

5,015,000

Mixed

—

14,885,00(1
37,333,000

54,452,000

domestic

therms)

3,124,745

2,539,553

2,731,091

202,306

247,514

2,726,603
2,368,287
206,814

90,085

146,140

151,502

179,889,000
167,593,000

166,596,000
155,224,000

163,193,000
152,160,000

12,268,000

11,344,000

10,953,000

(M therms)

—

;■

—

11,422,000

49,572,000

output

879,158

847,403,...

852,309

698,067

693,864'

697,419

(bbls.)—

output

ENGINEERING* CONSTRUCTION,

RECORD:

•

■; _•

Total

Private

(bbls.)

—

construction

INC.—Month

(bbls.).,

__May 27

99,513,000
90,390,000

May 27

70,636,000

construction—

„

19,754,000-

33,189,000

66,553,000

27,433,000

5,756,000

9,966,000

;

...

——;

—-—

47,851,000

55,015,000

May 27

service

—

(U.

BUREAU

'Bituminous coal and

lignite

.Pennsylvania anthracite
Beehive coke

;;

MINES):

•

Total

•

number

Wholesale

May 22

(tons)——

—May 22

1,183,000

—May 22

—

—,

—

11,558,000

*13,250,000,
1,206,000

13,670,000
148,500

1,162,000
63,700

1,084,600

Total

GOAL
•-

—..——

-2,629,000

—

Electric output

(In

5,085,412

5,076,025

f -

r- f

Y'-.Vj'w ;r^::

'Y,.-';7

IRON-AGE'• COMPOSITE:1
4

INDUSTRIAL)—DUN

Finished • steel -(per flC)
Pig iron

(per gross

106

112

gross ton)

(net tons)**

Europe

3.24454c

♦3.24454c

3.27585c

:■ $40.53

$40.11

(net

$40.66

$40.33

$30.42

tons)

CREDIT

Total

————

604,367

•412,423

527,540

377,861

345,617'

397,306'

•/

■

PRICES

Electrolytic

M, J.

copper—.

•*

millions

THE

;

Straits tin

Lead

(New

Lead

.May
..May
—May
-May

21.200c

!„

21.425C

21.525C

21.450c

94.000c

-94.000c

80.000c

17.500c

15.600c

17.300c

14.800c

.May 26

—

12.000c

10.500c

COTTON

;

$13,596

;

—

1,363

—

•

.June

—il-

——

101.53

100.87

113.12

112.37

118.00

••■■•'

117.40

118.00

11602

116.02
112.37

122.50

115.63

112.56

1
1

111.81

Railroad
Public

In consuming establishment as of Apr. 30
public storage as of Apr. 30
*

COTTON

107.09:

111.62

114.27

114.08

113.89

118.6C

117.00

116.80

116.22.-

103.70

June

•:

April.
EDISON

.June

1;V:.

2.99

.June

■X-v:'

2.44

2.20

3.00

2.75

—

.June

1
1

3.03

3.04.V "

2.80

i,.

2.53

June

2.85.

.June

•

;

2.63

place

April

82,077

21,708,000

21,808,000

23,807,000

23,763,000

23.907.60D

21,694,000

21,708,000
11,005,000

21,804,590

10,667,000
475

492

428

2.84

2.81

omitted)-!

19,903,528

17,771,930

$557,697,800

38,899,580

38,747,518

$313,073,500
36,590,165-

ultimate customers at March 31
EARNINGS

AND

HOURS—

WEEKLY AVERAGE ESTIMATE —U. S.
DEPT.

2.61

19,969,400
$354,599,500

—-

customers—month of

LABOR

—

Month

Earnings—

2.72

All

April:

manufacturing

Durable

416.2

425.0

426.4

393.8

HOUrSr-^-

100:"

GROUPS—1935-39=

Farm

■

and

oils—

products-,..

Cotton

301.8

*~~.

265.9

266.1

254.4

358.9

264.4

^.-^.May 29

237.9

Textiles——

———.—

-——May 29 '
--.May 29

214.2

177.1

215;2-

215.5

165.2

■?' 164.9

Building materials__-'_--^^--i.-^--;-----—
—^,—1 —.—.'.May 29
Chemicals and drugs-May 29
u
———_—„•_•—-_1
Fertilizer materia^—-,—May 29
—

:? 227.3

—...

May 29

143.8

—

——May 29

-.'V'

155.8

i:35'

INSURANCE—Month

LIFE

April

•:.;.

$1,242,718

$1,269,13*

200,987

225,202

167.13R

369,386

342,917

$1,857,503

1 $1,810,837

438,082

492,013

308,071
128,963

349998

$1,287,130

Ordinary
Industrial

—t

i
-

Group

r-js--'—-—

136.1

359,906

143.7

Total

134.6

*138.9

125.3

196.8

•

223.3

223.13

128.0

4 219.3

143.8
*138.9

139.4-

157.4

136.3

158.6

May 29 *

—

;

yv: 1.219

11.216

^^fAJl«roup«^c()^ined._—.j—

*$1,291

:•

1.357

39.8

'•

$1,290

————-

(000's.omitted).

188.2

"Pertilizers——r—«x_—I——„——
'parmV-machhiery'-j.^_—J—J.--..——

;; .'—

39.5

PURCHASES—INSTITUTE

INSURANCE

;

149.4

232.8

-i.'

•;

214.6

LIFE

157.6

232.9

Metals.
r

177.2

172.2

175.2

228.6

■

226.2

228.6

256.2

257.1
228.6

■.

.—-.May 29

commodities

manufacturing

*40.8

40.4/

268.1

265.2

263.4

May 29

—

Miscellaneous

—,-**

Durable goods J**i—
Non-durable goods ———

343.2

May 29

Livestock

All

245.6

361.5

*40.3

40.0

—

Hourly earnings—

215.6
215.9

358.5

PUClS-

•

May 29

———

;.,Grains •

235.4
269.7

237.7

279.2

—May 29

i'**-.

——

238.0

May 29

—

*48.58

Non-durable goods—*—-

29
Fats

*55.36

48.C1

•

manufacturing
Durable goods ——:

COMMOD-

-WHOLESALE

FERTILIZER ASSOCIATION

INDEX

54.81

goods——-.
goods

s$52.07

$51.56

j*.

——*—

All

ITY

10,242,721

ultimate consumers—

(000's

—,,

Number

•

3.20

2.96

sales

March

Non-durable

NATIONAL

290,611

21,694,000

:/•• .Marchiv

3.08

2.95

2.80

June 1
MGODY'SCOMMODITYINDEX————-.^——4—JunCl

,,65,441

INSTITUTE:

from ultimate

FACTORY

'2.83

3.24

2.94

3 07

3,35

;3.24

•v.-*

2.87

3.04

3.34

1-:

.June

2.78

2.75

2.85

.June

»'

64,126

ELECTRIC

Revenue

2.39

2.39
'

Aaa

—

mcnth
.June

103,751295,070

(DEPT. OF COMMERCE)

spindles

Kilowatt-hour

MOODY'S BOND YIELD DAILY AVERAGES:

Average corporate—

97,459
280,544
70,345

120.84

Group

882,390
2,504,402
2,117,197

Spinning spindles active on April 30——
Active spindle "hours (000s omitted), April
Average spindle hours per spindle in place,

108.70

106.62

.June

Group

106.74

SPINNING

Spinning

109.42

.June

Group—

Industrials

878,714
2T,286,114
3,676,735

2,860,277

116.41

105.00

June

Utilities

829,730
2,195,881

OF COM¬

120.43

■V;:

;

DEPT.

—

3,275

RUNNING BALES—

—

Month of April——
consuming establishments as of Apr.- 30
public storage as of Apr. SO—
—
Cotton spindles active as of Apr. 30

117.00

.June

;

•Baa

2,691

;

Linters-^-Uonsumed

.104.51

113.31

.June

yW-,

—

101.56

.June

Aaa

'-:Aa~*—-

LINTERS

1.0S0

2,673

—

——

Bonds—

Average corporate
-

—

loans

753

1.619

6,501

4,586
2,762
2,423

;

——

./v/i:

Govt.

AND

MERCE

MOODY'S BOND PRICES DAILY AVERAGES:
U. S.

—

$10,631

$13,399

1,476
1,665
6,736
3,259

Lint—Consumed Month of April—
v

at_

loans

Single-payment

23.675c

130,234

*18

;

————.

—J—

Charge accounts

22.300c

*66,738

BOARD

..May 26

(St. Louis) at(East St. Louis)

Zinc

Instalment

u—

York)

FEDERAL

April:

credit

consumer

Automobile

;

SYSTEM—Estimated short-term

Instalment sale credit

QUOTATIONS);

Domestic reilnery at
Export refinery at_i

;
»

(E.. &

23 ;

226,483

——

Other

METAL

.«

OUTSTANDING

GOVERNORS

credit

$38.15

$40.66

;

2.85664c

$40.53

(net tons)
!

Asia, - (net tons) j--l—
Africa, (net. tons)

> RESERVE

—May 25

Central America

Scrap steel (per

America

South

CONSUMER

May 25

—J_.
and

;

■
1

$16,080,000

Pennsylvania anthracite (net

FBlCEsX XX:fX:/Xf'XX#XXX
li^^.*i.May 25

ton)

March:

•■

BRAD-

^''STREET^ INC.^" .;—,—----May 27

$17,481,000

247,000'

l,015,000t

MINES)—
* !*-•

4,429,109

5,042,352

1,883,000

"$15,296,000

(BUREAU

r :

.May 29

AND

3,714,000
957,000

liabilities

To North

kwh.)_.

000

(COMMERCIAL

2,476,000
1,662,000

——

tdns)

EDISON ELECTRIC INSTITUTE:

FAILURES

277

$11,822,000

1,684,000

1,472,000

liabilities c——2,.

U. S. exports of

277

296

293

295

23.

477

$7,057,000

—

liabilities—-:

EXPORTS

Month

DEPARTMENT! STORE SALES INDEX—FEDERAL RESERVE SYSv V 'TEM—1935-39
AVERAGE=11HL-—
May 22

jB4[i
-

134,701

-XX -,y.-X'

■

12,770,001

*141,900

$9,243,000

404

——

Manufacturing liabilities.

Commercial service liabilities
-

■

39,037,000

(tons)

(tons)—,

v/v./::/

117

194

-i———i**v'
-

number

13*

175

—

._T__:

number

Construction

OUTPUT

1,289,000

BRAD STREET

Retail liabilities
COAL

179,891,000

575.000

—

number.—1/—

Commercial

$72,226,000

114,404,000

17,747,000
64,981,000

Retail

$183,253,000
i,
68,849.000

$82,728,000

Federal

X'-V;'

$189,803,000

181,813,000

11,275,000

,2.

April:

Wholesale number
Construction

May 27

;

9,263,000
6,146,000

193,262,000

—

stock

BUSINESS FAILURES—DUN

■':

.:J

'State and municipal
•

-VA

NEWS-

6,288,000

5,966,000

Indicated consumption—domestic and export

649,980

■

construction.

Public
.

ENGINEERING

80,000

8,682,000

Manufacturing number
CIVIL

28,000
8,354.000

28,000

oil imports (bbls.)———±1
Refined products imports (bbls.)—

890,805

**-_May 22

(bbls.)
(bbls.)——

output

Crude

33,481,000
44,652,000

May 22

(bbls. of 42 gal—;

gasoline

Benzol

97,062,000

12,481,000
34,237,000

production

crude oil

AMERICAN RAILROADS:

Revenue freight loaded (number of cars)
Revenue freight rec'd from connections (number of cars)

2,831,944

therms)-——

each)

Domestid

-Decrease—all
OF

sales

gas

Ions

5,611,00(

8,345,00c

111,128.000

52,930,000

therms)*

of March:

Total

2,089.00C

,■,

ASSOCIATION

(M
gas

AMERICAN PETROLEUM INSTITUTE—Month

15,227,000

8,877,000

108,385,000
14,065,000
36,267,000

-May 22

(bbls.)

106,934,000-

Ago

sales

gas

Natural

-May 22

■

„

Year

Month

For Month

—

5,024,850

5,517,000
16,515,000
2,452,000
6,831,000

2,253,000
6,800,000
9,002,000

7,106,000

.May 22

5,415,400

5,422,600
5,640,000
17,141,000

5,439,200
5,587,000

-May
-May
-May
-May

terminals, In transit and In pipe lines-

and

sales

gas

Natural

gallons each).
^
.

(bbls.).

Kerosine

Manufactured

Gas oil and distillate fuel oil
output (bbls.)
Residual fuel oil output (bbls.)
1
Btocks at refineries, at bulk
Finished

April:

Total

1,697,40c

1,640,300

1,744,800

1,730,400

X/'-1'■

(bbls. of 42

Crude runs to stills—daily average
Gasoline output (bbls.),

—June

Month

AMERICAN GAS ASSOCIATION

97.0

91.0

96.8

96.0

AMERICAN PETROLEUM INSTITUTE:

Kerosine output

Year

Ago

Week

(percent of capacity)

Steel ingots and castings produced (net tons)—

Month

Week

Latest t

AMERICAN

Activity

production and otherTigures; for the latest week or month available (dates
either for the week or month ended on that date, or, in cases of quotations, are as of that date) J
cover

•

FACTORY

VEHICLE

MOTOR

$1,796,174i

SALES ' FROM

V.- PLANTS

;

IN' U. 8, (AUTOMOBILE MANU*
'FACTURERS> ASSOCIATION! ^ Month of

<-vr <
number

.••5:•.!Aprih.
Total

v' f*•. *
vehicles.—
:—,

423,399

Orders received (tonSl—-„—™__
/

production

(tans)__J__r..—

Percentage«p^ac t iy ity
■>

■

•

-i—May 22

—.—_—

Unfilled orders (tons), at———"v

-—;-May 22
—.May 22

TT*

■■...

—May 22;

——

f' Vt"

.y;/

' V'

155,789

100

181,067

188,745

170,701
189,359

190,294

DRUG -REPORTER

INDEX- -1926-36

PRICE

--^AVIRAGB—IOO-

•

—May 28

—

146.9

■■t.r*."

■

-..'.'vi""
■

,'t! '•■X

'■<-

1.46.8

*.>>•

'W1;,

MERCE)—Month oft>January:

145.0

/■

s ■' y. ;•

,•

'rt''

r-'f"

'.-7

>*■

Alii immmodftfes-——^—•.—

--May 22

Parm

Hides and leather

187.9

178.9 i

188.6

J8U:0 .;.i

.148.6
133.7

.May 22

156.6
196.6

135.6

144.7'

.—May 22

121.4

121.2

166.4

138.3
104.3

157.2

141.8

195.3

177,0
126.0

AREAS

144.4

129.4

BOARD-r-Month of March

122.2

116.5

Softwood

"Raw

.May 22
.May 22

articles-

Bemi-manufactured

Manufactured

products.:.—All commodities other than farm products—J,—i,
All' commoaities other than farm products and foods
•Revised-figure...*

-•

••

178.6
152.5

—May 22

materials—

REAL

ESTATE
OF

158.7

cords)———

FINANCING
U.

—

946,507" '

,796,077

Mutual

152.5

153.7

142.6

158.9

142.1

Miscellaneous

157.8

158.0

158.0.1

149.0

11,7744
i! 109,396"
t

- •

■j;

*11/526/'a*
*109,108

;

767,1721

- r

10,811
95,10#

Avail.

Savings Banks

"• •1,613,486

,1,566,664
240,253

*1.370,467

Not Avail*

*243,019

Not Avail*

$252,290

$270,724

228,489

204,388

45,383

33,169

Not

NON-FARM

(000's omitted):

-_*-*———

—1_*—

Individuals

159.0

143.2

*893,794

'*(728,^60;

HOME LOAN, BANK

companies
Trust Companies

160.3

—May 22.
'

(In

Savings and Loan Associations—-*-.

177.8

177.7

;:May 22

1,766,06#
>892,983

i".j *1,742,888

•1,863,754,

$296,509
80,974

(in" cords )*—.:_-_**i--iii'-*

Hardwood*

Banks and

-1.650

1,806'917*

148.2

Insurance

Special groups—

1,048

136.5

134.4

144.7

177.2

-----

195.9

—May 22
.—-May 22

pounds r

160.3

187.1

Wet

: .106,984

(tons. of 2,00Q pounds)—
machine board output r(tons rof 2,000

132.6r

>■[;

156.5

—May 22

Miscellaneous, commodities——i——

133.4

—

.148.1

.—May 22

146.9

180.4

189.2
177.2

May 22

materials-————^—
Metal and metal products—
Building* materials—i-—i.—
.i—
Chemicals and allied products.
Housefurnlshings goods—
\—

163.6
188.9

—May 22

products——„

Puei *and; lighting

j:'.

/;v

—May 22

rf'^!' Textile- products———
r

163.5

.--#.May 22

.productsJi—___—.

-POOdS^———'—
V

163^

314,765*

140,606
1,409
'

V Paperboard output

Output of aU types^of (paper .(tops of 2^)00
pounds)
Paper' output (tonsr of 2,000 pounds)——-

144.8

PAPERBOARD (DEPT. OF COM¬

PAPER AND

■

WHOLESALE "iPRICES~U.:'S. DEPT. OF LABOR—1926=100:'
"•
"

j Number of pascenger cars_-_*'_——,
/ .Number -of motor, trucks.
■■ r Number- of motor
coaches

(>*
r

:!lol
,,507,171

393,044 ;
}

148,740

179,001
.

385,907
V'"
.

OIL, H PAINT*. AND

-*.100—

363,959

lending Institutions—r—

171,571
132,515

65,853

50,955
229,862
.

39,961

150,461

157,803

115,713-

109,371

140.4

132.2

'<*

$955,441 (

drojtal >*1-^-**-*
*Revised

figure.

fIncrease all stocks

<bbls.).

$826,874

$858,675

THE

(2454)

FINANCIAL CHRONICLE

COMMERCIAL

siderably limited, however, for it
will be noted that no two foot¬

The Income Statement—Problem

notes

For

Child of
(Continued from page 12)
should

serves

not

the

into

enter

determination of net income."

Research Buidealt with inventory reserves and which was
issued in October, 1947, the fol¬
lowing position was taken:
In

Accounting

letin No. 31, which

"The Committee is therefore of

the

that

opinion
such

serves,

(a)

for

tory losses
hand

inventory

re¬

those created:

possible future inven¬
on inventories not on

contracted for, or

(b) without regard to any spe¬
cific loss reasonably related to
the

operations of the current pe¬

'Accountancyp|iffill

•

relating to such reserves
into

enter

not

the

deter-

mination of net income and

that

they should not be used to relieve

Opposes Allowing for Excessive
Construction Costs
-

And in December 1947 the Com-

fmittee

Accounting Procedure
in
its
Accounting - Research
Bulletin No. 33, entitled "Depre¬
ciation and High Costs," expressed

the

view

"It would

that

not

in¬

the usefulness of reported
corporate income figures if some

crease

companies

charged

depreciation
appraised values while others

on,

adhered

cost.

The

committee

believes, therefore that considera¬
tion

radical

cepted

changes

ac¬

accounting procedure

should not be undertaken, at least
until a stable price level would

make
as

practicable for business

whole to make the

the

change at

time.

same

"The committee disapproves im-

excessive

•

abnormal

costs

oc¬

casioned by current price levels."
It

«'

is, of

no secret that
amoyunts of reported
corporation-profits in 1947 were

the
in

higher than

general

fore.

course,

dollar

And

Dec.

the following:
"Before

derstand that die absence of foot¬

$10,000,000

deducting

economist

need

one

financial

not' be

provision for inventory price de¬
cline reserve";
"After provision of $1,415,000 in
1947
and $1,558,000 in 1946 for
possible inventory price declines";
"After
provision of $4,500,000
porations to try to present all the for inventory decline";
"After special reserve appropria¬
fact3 to their stockholders. Invest¬
ment analysts, bankers and some tion totaling $525,000";
"After reserve appropriations"
income accounts
carefully to determine for them¬ (no amount shown); £
"After $6,000,000 provision for
selves whether each item/; in" it;
and"those: not in it, Would ^lter contingencies";
"After giving effect,to $13,798,-.
the actual net income.
Barron's

doubt

particular
indicates that no unusual

company

others will check

474 restoration of reserves";

non-recurring items, explaining
their true significance. But for the

"Includes reserve credit of

call

will

its

readers

attention

stockholder, the 'net in¬
and 'dollars per sharef is

come'

$190,-

certifying

"Includes

accountant

from

reserves";

"After giving effect to $6,255,341
It should be observed that the gaip on sale of property";,
"Includes $1,896,317 profit on
stockholders reports of most in¬
dustrial companies are not subject sale of capital assets";'
"After $441,000 for anticipated
to'the jurisdiction of the Commis¬
loss under retirement plan;** - ^: 8
sion, and therefore, these reports
On other daysv/the?/follbwmg
provide a free medium for ex¬
footnotes appeared:
rperimentation in form and con¬
'*After ^50,000" v ittvehtory^i^
tent assuming, of course, that di¬
vergencies between statements in¬
"After an appropriation of $1,cluded in such reports and those
filed with us are not so great as 126186 for. research and advertis-.
to raise questions as to the pro¬ ing";
i
the

one

figure of interest."

priety of certification of both sets

pers

and other financial publica¬
and obviously can only

tions are,

be, free to comment upon finan-.
cial data in the light of

their

own

corporation having securities listed
on

national securities exchange

readers

income

satisfy themselves

was

considered

that

there

plant

to the net income and

conditions

the year

statements

has

done

If the

so.

are

question

this point.

cepted accounting principles un¬
derlying the preparation of income
-

the

profit and loss statements?

issued

for the year,

another

was»ap¬

large industrial
accounting

the

pany

com¬

firm

same

stated that;
"The

■) en*

corporation included iri

its

duction in determining net income
for the year 1947, a special pro¬

vision for depreciation of $3,500,based

the

tee

basis

1941, the "income account"
Pr ."statement", is define^ as:
May

t'Au account or- statement which
shows the principal elements, pos¬

and property replace¬

being in addition,
computed onr ^he

amount

increased

'greatly

ment costs, this

Procedure

>;
'
in conformity with
p t e d accounting

plicable to the 'accounts for 1947
of

000

by the American

Accounting

results of

company

certificate which

In a

Institute of Accountants' Commit¬
on

operations of the

In~Accounting Research Bulletin construction

No* 91

statements of
surplus present fairly

the consolidated

costs and expenses, and as a de¬

But what are the generally ac¬

opinion, subject to the

comments in the preceding para¬

generally a c c e
it principles ..."

prepared in ac¬
cordance with generally accepted
accounting principles there should
no

1947.

our

is the function of independent ac¬
countants to determine whether

management

relatively large
and
the eco¬
existing during

investment

nomic

graph,

recog¬

charge to be justified in view of
the company's

income and

can

been

yet

conforming
to accepted accounting principles,
we,
nevertheless, believe the

to whether

reflect "the actual net in¬
come??
It is management's re¬
sponsibility to prepare such state¬

not

technically

statements

they

ments

has

"In

But why should it be necessary
for

transferred

$100,233

income

nized

circumstances exist?

705";

average

conceptions £ of
significant
dis¬
closure. ' Furthermore,
unless a

expert to

notes with respect to

be-

ever

ventory price decline," another to

amount and others combine two
21, 18 of tention to unusual or extraordi¬
the Committee nary circumstances affecting the types of items in one amount.
Furthermore,
no
mention
is
on
Accounting Procedure of the reported net income. On April 1
made in these notes of items which
American Institute of Accountants the digest covered the reports of
now
show a veering toward the 49 companies, 15 of which were may have been carried direct to
'current
operating > performance' the subject of footnotes including surplus. And is the reader to un¬

released

bulletin

mediate write down of plant cost by independent accountants as fair
by charges against current income presentations of the data involved;
in amounts believed to represent It follows, of course, that newspa¬

■v

alike.
"in¬

the 21 members of

the income account of any year."

exception

...

should

exactly
refers

one

where

taken to certain principles
applied
the income statement it was
difficult to determine what the

type of

♦

worded

are

example

stances

"possible inventory price declines" the applicable generally accepted
*
!
feature
of
the "Wall Street and still another simply to "in¬ accounting principles to be.
countants Debate What Should Go a
-For example, the
ventory reserve." How is one to
Into
following
Net Income; They * Decide Journal" headed "Digest of Earn¬
know
from .these
explanations paragraphs appeared in the cer¬
This digest, in
Everything but . .
which ap¬ ings Reports."
whether the inventory loss re¬ tificate pertaining to the financial
peared in the Dec. 22, 1947 issue columnar form, shows the "Net
statements
for
1947
of
Income" and "Earnings per Com. served against has actually taken
a
of "Barron's National Business and
large
industrial company:
"
Financial Weekly,"' This article Share" for the years 1947 and 1946 place in the current accounting
of
from
15
to
40
corporations period, or definitely is to be ex¬
stated in part that "Once insistent
"During the year, a reserve for
that a corporation's statement of daily. Similar data are shown for pected in a subsequent accounting property replacement and/or ex¬
'net income' should recognize all those companies which have made period or is . merely an indefinite cessive-cost of new facilities was
contingency? Also several of the provided by a charge to operations
items of profit and loss during the interim reports. At the bottom of
notes refer to appropriations or
of $2,000,000.
While provisions
period covered, accountants are the digest are footnotes identified
provisions
without stating any for such reserves by charges to
weakening on that opinion. In a by various symbols directing at¬

income statement as op¬
(c) for the purpose of reducing posed to the 'all inclusive' form.
The bulletin seems to try to
inventories other than to a basis
Essentially the con¬
which is in accordance with gen¬ straddle ^
erally accepted accounting prin¬ flict lies between two views . . .
But whatever conclusions the ac¬
ciples
countants reach on just what does
are of such a nature that charges
constitute 'income,' it is up to cor¬
or credits
riod,

Thursday, June 3, 1948

cost

accordance

with

generally accepted accounting
principles on which the provis:ons for depreciation have hereto^e been

y i,'

opinion, subject to the
exception noted in the preceding
paragraph, the •. ; V statements
"Includes credit adjustment of
of
profit and loss " and surplus
net income or loss of the account¬
$224,445";
present fairly
.
♦
the consoli¬
*
"After giving effect I to $564,996 ing unit.". /
dated results of their operations
This definition, which coincides for the year in
recovery of prior year's loss on
conformity with
with Rule 5-03 of this Commis¬
dredging contract";
generally a c c e p t e d accounting
"Exclusive of $1,050,000 restora¬ sion's Regulation
S-X, promul¬ ^itUJVipleS . . ."
:
tion of contingency reserve.
y
In¬ gated about, a year before the* is¬
cluding £ this^ reserve net
waa suance of Bulletin 9, seems to de¬ :'v • It: is •,indeed unfortunate thiat* a
equal to $5.17 [instead of $3.78] scribe- pretty clearly the'Compo¬ great number of the income stale-.
"In

itive and. negative, in the deriva¬
tion of income or loss, the claims
against income, and the resulting

our

•

share" *

sition

■«

income

the

statement.

"Includes $200,000 transfer fronfc And I should expect that the final
item on such a statement would be
reserve for plant reconversion";

mentSvcurrentlv being made hublie are so

equivocal as to require
or
clarification ^be¬

explanation

"After deducting $600,000 provi¬ the net income for the period cov¬
yond that contained in the state¬
that the economic future has filed a registration statement
sion for possible inventory losses ered by the statement.
ments themselves.
Does this situ¬
industry is cloudy to say the recently pursuant to the Securities
least.
With some "experts" con- Act of 1933 in connection with the and for replacement of plant fa-However, the Accounting Pro¬ ation not indicate the necessity
the establishment: of more
cedure Committee's Bulletins 28, for
tending that business in general, sale of securities, or has filed fi¬
"After deducting $300,000 for
and prices in particular, will con¬ nancial statements or its report to
31, 32 and 33 contravene Bulletin definite and more substantive ac¬
and
equipment
replace¬ 9 and our Rule 5-03 in that they counting principles Governing the
tinue as at present for an indefi¬ stockholders in connection with a? plant
determination of net, income and
1
nite
period;
others ' predicting proxy solicitation, we have , no ments";
permit the showing on the income
"Before appropriation of $1,even more business and still
statement of items having no part the preparation of income state¬
high¬ definitive basis for passing upon
er
prices; and still others taking the merits of that corporation's 800,000 for replacement of facili-: in; the determination of net in¬ ments: principles which tndv may
be said to be the generally ac¬
the "position that our economy is current accounting practices until ties at current cost. After deduct¬ come.
ing this reserve the common share
cepted acoount'ng Principles 'and
<: due for a nosedive, if not tomor¬ its annual report is filed with us.
It seems to me that under these
from
which
departure mav'?be
row
then within the very near This filing is not due until 120 earnings were equal to $5.35 [in¬
circumstances the principles un¬
poirm**r°pt fp bvv+be certifying
stead of $6.06]";
future, it is small, wonder that days after the close of the corpo¬
derlying the preparation of in¬
"Profit before provision for de~:
accountant only at the risk
im¬
come statements are at best con¬
J corporation officials, charged with ration's fiscal year so that, except
pairment of professional stand¬
income taxes" (no
the making of current profits and in those relatively few instances pletion and
tradictory and, in so far as the
amounts shown);
ing?
>
:
the retaining of such part of those in which a corporation's fiscal
determination of "the actual net
"After provision of $278,093 for
profits as is necessary to keep year ended prior to Dec. 31, 1947,
income" is concerned, are non¬
V Tt chculd be understood that the
?, the business moving
have resorted and in a very few'cases where a employees' profit-sharing and re¬ existent.
|
j' ' ..1,1
views: I have' expressed 'are/hot
*
to various and sundry ways to re¬ corporation
v '
.
whose
fiscal
year tirement"; 1
Notwithstanding this;unsatisfac"Includes $110 319 profit on sale
flect in their financial statements ended on Dec. 31, 1947, filed be¬
necessarily fhose of the Commis¬
tory situation, some of the pub¬
the accomplishment of thisT pur- fore the close of the 120 day pe¬ of treasury stock."
sion. except,, of course, to the ex¬
lished income statements to which
v pose.
It seems apparent that in this
:
;
riod, we did not have available
tent that reference has been made
I have referred were prepared in
And certainly an apparent lack for examination the bulk of 1947 Digest
of
Earnings • the
"Wall a manner which
complied with to published opinions, rules' and
of agreement among accountants corporate annual
reports
(some Street Journal,'V like Barron's, is the
; foregoing ;, definition £ con-;
regulations.*
*
as tr; just which elements should
2,500 or more) until the first of attempting to "call its readers' at¬ tained in Bulletin 9 and the
pro¬
and which should not enter into this month—just a few days ag04 tention
tor non-recurring
items,: visions Of Rule; 5-03 of
Regulation
/
the determination of profits and
I have emphasized this situation explaining their true significance
S-X and others failed to comply With: Paine, Webber
i./.Qr—Hal t-O
: as
to
the
circumstances
under
because I- think the public gen¬ so that, as stated in the Barron's
therewith, yet: the independent
which an appropriation* to a re¬
LOS
article, "investment analysts, bank¬ accountants'
ANGELES,
CALIF,
erally does not realize that the
certificates
applic¬
ers and some others [may] check
serve
should
be
treated
as
a
reports of corporation earnings for
able to a large majority of both Leslie W. Sachs is now with Paine,
**
I"'v
*
charge against profits or a reser¬ 1947 currently appearing, or com¬ income accounts carefully to de¬ types of these statements;-Con¬
Webber, Jackson & Curtis,? 626
termine for themselves whether
vation or "earmarking" of surplus mented
tained the usual statement in the
on, in the public press or
South
Spring i Street s tie was
cannot be expected to allay man¬
in statistical services may be dif¬ each item in it, and those not in
opinion paragraph that "In our
formerly with C. E. Abbett & Co.
agement's disinclination to accept ferent in some important respects it, would alter the actual net in¬
opinion the
v statements of
come.''
as realistic profits determined in
[Underscoring supplied;] profit and loss and surplus present
from
those£ subsequently
filed
accordance with accepted account¬ with us. And some of them can¬ j Surely this: is a
constructive fairly T "v .' the results of operaWith Denault & Co; V *
ing principles which contemplate not but be different if they are purpose and a necessary function ^tiohs^'foff the year in conformity
'SDecial to The Financial Chronicle!'
adherence to cost and the match¬ to meet our- conception of com¬ of Jinancial publications if = tbekinr* "with* generally accepted account- ■Z
SAN FRANCISCO, CALIF —
ing of expired actual costs against pletely informative and non-mis¬ formation conveyed to its readers: ring principles. * .,." * . X.iJiSy T/-J

realize
of

•

-»

•

"■

■■

•

■

Alonzo

revenues.

•

leading statements.

is interesting

connection
tained in

the

•

comments

con¬

article entitled "Ac¬

through financial statements is in¬
complete

to note in this
;

Non-Recurring Items

I have been much interested in

incomprehensible* v:

The extent to which
pose

Arid, in

some

those few

this^purrr //./rThis :.kuUfctin

identified • as
''^Sp^cial'^ bulletin and is entitled ^Report

Swallow

affiliated -with

has

Denault

bedome
&

Co.,

,was

is accomplished seems cony^ '-nf;Committee,ontTerminolGgy.',V.J-

in-

'
r

in¬

Russ

Building. He

previously

was

With. Mason -Brothers.

V
'V3;
■

f|v"

Volume

167

Number 4704

THE COMMERCIAL

FINANCIAL CHRONICLE

settle

ficult to

gaining
V-*.

(Continued from

^.million

tons

page

reserves

bituminous

books

coal

production in 11 months in 1947,
> additional capacity is neeaed. To
answer this,
let us break down
Vthis figure and see where the coal
1;

■| .}<

mined

py t

strip

excellent;quality and, when

day do

than 40%

prop¬

erly prepared, compares favorably

With

;
'

underground

;

from

the

same

mined

/of

seams. /

Some

contain in cash more
the

coal

mining is greatly envied by
foreigners who cannot approacn

fully three times
did

quality, high
moisture;;and low in heat
value, and received no preparaA

? and

just 10

not hear their voices in the same

ish ^cousin

those; who

times
the British miner.

sizing

nections and without tippies, pro-

ducing

•

few -tons Or

strong l

few Jiutt-;

money

Ored tons per day, largely loaded
as mine-run coal and

plants

V, Into trucks

put

was

that

into

back

facilities in

and

more
new

1947. than

left after paying the current
essential
expenses / and : normal
dividends and" that many compa¬
was

dumped;. into railroad cars over
Generally speaking, this is
Y»bt the type, of coal/you gentlenies have entirely exhausted "re¬
^ment-desire to-buy.
It did. help, serves which
might have "been
sv^nd./is .still helping^ alleviatem used for
that purpose/ This is title
critical shortage' of coalboth'at
Sri other industries as
>famps.

indicates

well.

g}home and abroad, but it needs to
/Jbo replaced

by better coal

Our

from

the

industry needs to (spend in
two

ftext

three years' a

^modern plants and where it can minimum of $500 or' $600 million
;^be ^^roperly cleaned and sized for for new plant and

equipment. In
s
these
amounts may seem small to you,
but when you recognize that over
the past 20 years the bituminous
coal industry has operated at

the particular use of specific con¬

these

sumers/ ///
the

remaining

400

;

million

days

of. b i 11J o n

?1<tons, coming from. deep mines,
^.approximately 100 million tons
^jbame from small mines with -considerable loss, and
Incapacity under 200,000 tons per 1947, the best year of
without

modern

tipples,
.-Cleaning or sizing plants^- I want
to make it clear that a substantial

_;year
.

time,
six lor,

^proportion
.excellent

of this

for

many

is good

seven,

much

but

industry,
thousand

companies,

group

S}preparation it does not have the

these

several of the individual

this
today, you will realize that
amounts seem very
large

companies

Jj'^rom the standpoint of size-and

life¬
comprising

probably earned less than half

coal,

purposes,

the

even
our

represented

I;elasticity/;necessary to meet the to- us.
;
i
/
^diversified requirements of a wide //!ihentiori this bmly to
J range of burning equipment in a that money is going
;to fee needed
jjwide variety of plants. • — /i - ,
by the coal industry, in' the hfe'xt
':■*/
May I say at this point that no few years in much
greater Quan¬
r

^producing district has

monopoly

tities thaft ever before

-good coal and good prepara¬ to continue to
All have some good coal future as we

tion?

serve

have

if wft; are

you

in the

past.

bitu¬

much

conditions

from intermittent operations than

ictth^ftlajor industry in the

any
"At"

,Ww-w-qgrhfi'•

■■■,;

country, -v
.

.vThe.',£s\i7^gs of coal* miners in

this

; cbuntry;
.are
extraordinary.
For example, the average weekly
earnings
in
January,
1948,
amounted to $75.91 industry-wide,

including part-time work account
absenteeism
Tens

and

Shortages.

car

thousands

coal miners

bituminous

$400 to $500 and

earn

$800 to $900 per month.

some even

But the final
payoff on our
iftechanical t>fbductivityl. is "this:
In 1 1936
in this country some
477,000 miners produced 439 mil¬
lion tons of bituminofts coal.
In
.

1947, after a span of 11 years,
399,000 miners produced 620 mil
lion

tons

were

bituminous coal and

strike

for

four

weeks.

much

effi¬

for mechanized

ciency except for two vital obser¬
vations: (First) Instead of divid¬
ing the benefit of progress through
mechanization among the public,
have

been

forced

turn

they

become

(Second) You as
sumers

of bituminous coal have a

vital stake in our expansion pro¬

and our ability to progress

gram

ex-

"Shausted.
-

in
v

12 out of the past 20 years the
ink

reliable

for which
statistics, the

year

industry earned 2% on its
investment, while manufacturing

However, the records show that

red

have

last

coal

(coal industry as
v

the

and

whole has been
depreciation

the

and" industrial ' concerns

8% .
-

We are

earned

justly proud of the ad¬

the

come

in the future

rescue

has in

the

past.
/
(2) In the future as in the past
the industry will fully meet its
over-all
responsibilities
to -the
as

national

economy, whether, in a
national emergency or at peace.

hibited

make their
Washington,
then Congress will act and not
otherwise.. Unless this is done, we
must
expect strikes which will
not only vitally affect every citi¬
zen of the United States, but will

cesses

endanger, our whoje form of gov¬

statements

ernment.

are

law

and
in

heard

demands

The best example of

what must
be expected if these monopolies
are to
continue can be, found in
Great Britain today. Great Britain
had
been
drifting
toward na¬
tionalization through restrictions
in trade and commerce caused by
monopolies, cartels and strikes
over the past 25 years. The Brit¬

in the

in which coal may be "used,
industry will find some way
of generally maintaining its com¬
petitive position in the markets

the

it has in the past.
5
should also like to point out
two conditions upon which these

are
predicated. They
just as vital to your welfare
they are to ours. The first is
that Congress should in the very

future

near

all

make

and, second, that free
American enterprise must be ef¬

fectively maintained

industry

well

in the coal
all bthCr in¬

dustries.
In

conclusion I

should

ish economy

say that I have had

and

was being throttled
partially destroyed by short¬
of coal. Actual nationalization

age

has intensified this situation. The

British

Empire is now

second

third rate power, largely as the
result of exchanging the freedom
or

of the individual

monopolies

unlawful,

intention
debating the relative value of

coal and oil
fuels.

in the markets

as.

have

nothing but the,
greatest of respect and admiration
lor the splendid manner in which
the oil industry has done and is

predict with confidence that
production, preparation and
distribution 1\ of bituminous
coal
the

coal

will

continue

mendous strides in

for

the

make

tre¬

next few

that the demand will call
and more refinements in

years

illegal in this country. Monopolies
always have existed and always
will

exist

even,

realize

Americans

the

that

lives and business the

our

less

nation will be.
This will apply to coal operators,
our

prosperous

miners land

coal

people alike,,
v

....

What price trends

pected ?i Coal
will

never

the

does

have

markets.
it

unless

our

where

permitted,

yes,

upon

you

sure

with me/that.thig is a
healthy condition and our na¬
tional economy can best be served
agree

by having it continue.

satis¬

competitive

Halsey Stuart Offers

other
fuels.
involve three
things: (1) delivered cost of coal,
(2) delivered cost of other fuels
and
(3) relative efficiency with ■"../ Halsey Stuart & Co. Inc. and as¬
which the various fuels can be sociates are offering publicly to¬
with

Competitive

costs

Illinois Tel. Bernls

'
/, /v/....;
.
When and if the present spiral
of inflation begins to level , off,

utilized.,

undoubtedly, coal prices will level
off. When and if through amend¬
ments to the Labor-Management
Act and the Anti-Monopoly laws
restore

basis for
labor-management relations, con¬
tinued steady operation of the
mines will convert the present
sellers' market to a buyers' mar¬
we

proper

are

unavoidable and dif¬

Bell

(June 3) $60,000,000 Illinois
Telephone Co. First Mort¬

gage

3% bonds, Series B, due June

day

1, 1978 at 102.75% and accrued in¬
The group was awarded

terest. 1

bonds at competitive

the

its bid

sale on

102.2099.

proceeds will be applied to¬
repayment of advances from
American
Telephone and Tele¬
Net

ward

Co., its parent. The ad¬
Which totaled approxi¬
mately $100,000,000 on May 31,
industries, //v-1 -///';■/
'
1948, were obtained in conform¬
The coal industry has been un¬
ity with an established practice o£
der pressure for seven years and
the company, which it expects to
constant straining for production
continue, of borrowing from th^
as you well know in your business,
parent, as need therefor arises,
is an expensive method of operat¬
for
general corporate purposes,
ing. When we can obtain cars,
including
extensions,
additions
our
mines are working as imany
and improvements to its telephone
days per week as they did during
plant.
It is now engaged in the
the war
we are paying just as
much overtime and at a higher largest construction program in its
ket.

The

same

true

—

rate

the miners' take-home pay

—

is not

only the highest in history,
highest of any major in¬

dustry in the world.

Most other

industries

able

have

been

proportion
time payments.

out

large

another

This is

that

cut

of over¬
■

of saying

way

general industry, includ¬
industry, strikes a
balance
between
supply

the coal

ing

closer
and

demand,

increase

our

can

efficiency

expect to
and im¬

costs in order to main¬
competitive position in
the markets. Incidentally, we shall
prove our

tain

also

our

hope

able

reduce

to you through a re¬
duction in the prices you charge

our

history.
#

prices

for

things

buy from you.

people

thoughare

the

fer 389,995

shares of its Common

Stock pro rata to

subscription
1948

the

shareholders for

par,

apply

f ■:■

also intends to of¬

before July 1,

$100 per share, and

proceeds from the

sale of such shares toward'repay¬
ment of advances from

the parent

then outstanding.

/ The
at

bonds

will

redeemable

prices scaled from 105.75%

interest

100%;

plus

each case.

Following

accrued

sale

the

new

bonds, the company's outstanding

capitalization will consist of $110,-

Conclusions
Even

\/; y///:/

The Company

the

but

American

faced with many un¬

V./-

graph

vances,

other

"encouraged, by laws of the

land. Strikes;brought on and made
effective by absolute labor mo¬

nopolies

depend

resourcefulness.
will

prosper

render

will

ingenuity, initiative and

own

■

should be ex¬
not now and
monopoly, in

cannot

able

prices for

competitive

markets

mon'

■

Price Trends 'Z/iV

dis¬

equivalent service, The measure
of our participation in the com¬

// -.'l;/

•:

■

public

American

the

cannot entirely

coal

minous

place oil. There is a place in the
markets for both of us just so long
as
we
both properly serve/the

factory service at costs which are

it rapidly.

1946,

emer¬

people wake up and
recognize these facts and demand
these
monopolies be pro¬

that

all

the miners
buyers and con

of the savings over to

as.

national

(3) It will continue to progress
technology of coal miniftg,
preparation and utilization.
(4)
Although
there
may
be
changes in the forms and pro¬

What is the solution? When the

the miners and the mine owners

*.'/..vX,=r. JvV.*' public,'the-miners and the proIn ho other; Way can
ducers./?31sese strikes cannot be
operate -your plants at -the //1;
//ICoariridfti^^/Farm^
eliminated by*wishful thinking on
highest efficiency* ; ■ < ;
•*
You might say td nie that the
the part of the coal operator or
ski Let mei again remind you here Coal industry has earned consid¬
the public.
lothat we Cannot develop these fa¬ erable profit in the last several
cilities quickly and economically, years. My answer would be that K-Prior to NRA in 1933 we did not
/because you are- not able to sup¬ it has earned a profit: for the past have national strikes in the coal
ply us quickly and economically eight years; but not a considerable industry. When strikes did occur,
they were confined to certain dis¬
"'The materials and equipment we
profit:"As a matter 6f fact, in The
l/need to buy from you..Y/S/Y Y eight years ending with 1946, tricts and regions, while other
there was not a'.'single year in producing fields continued to op¬
X IVhere Must the Money tJonie
erate, thus preventing a national
which the net profit per ton was
From? ;/
calamity even though the strikes
as great as. 10 cents perton which
were costly to the miners and op¬
"Where is the money coming we
pay to the United Mine Work¬
from for all of these new plants? ers of America Welfare and Re¬ erators in the striking districts
to
the
consuming
public
""Assuming the average life of a tirement Fund under our present and
dependent-upon them for coal.
/ mine as 20 years, it should follow
contract.
Such
profits are not
Before that time all monopolies
PThat at the end of that time we sufficient to
complete the neces¬
f!should have set up sufficient re¬ sary expansion program, although affecting the public welfare were
serve to
depreciate fully the orig- a goodly portion has been plowed illegal. However, Congress and
the Courts changed the laws and
J. inal capital cost of the mines now back into the
properties. Speak¬
working "out " and have 1 money ing of profits, I might observe that labor monopolies are no. longer
mines

case

government interference we have

tons.

you-

lion

old

(1)

gency when other fuels have to
go to war, bituminous coal will

doing its job. Oil cannot entirely

enough in the bank to replace the

„

displace bituminous Coal and bitu¬

say

and a constant increase in effi¬
ing the war and the underground such
expansion and the time re¬
//development that has been exciency; in its* use.
quired are greafer/i thaft ;/at: any
/ -hausted, you gentlemen and the
time in history
Regularity of Supply
Ss/country-at4arge must recognize
It is tothe; interest of Voucgefe
Since-heat, light and power are
j the fact that the bituminous coal
tlemen; and the-American 1 public essential to our everyday life,
y industry does have a tremendous that
/this /moneyX bfcavailable/ao all of its would like to be assured
.jpb.ahead to provide facilities for
that these expenditures can be.
That^we; will continue to have a
/. .mining and preparing an adequate
made,- becauseneitherourcoun^ regular
supply of coals and other
^/supply of coals of the highest
tiy nor 1 /afty other counti^. 1 c^in/
e/quality aftd the particular sizes live well and prosper without/an fneter±uiinterrupted by strikes or
"other/emergencies. This is desir"and - burning ~ characteristics 1, to
adequite supply of the right kind able"tromt the standpoint of the
meet your individual plant' re¬

coal.

in-

coal

and free enter¬

—

mo¬

the fu¬

see

prise for a socialistic state. It is
of the highest
importance that

financed

well

bituminous

mechanization of
mining was -a big reason why
78,000 fewer men mined 181 mil¬

This

^hnd some hot so good, as described There is probably "more heed for; the preparation of coal for the
market
that we shall see a
j above.
. 1
y
expansion of facilities today than
continuation of improvement in
d, I'am giving you these -figures ever before, in the
history of the
Jjtq show ■ you that with a large coal industry, which unfortunately burning equipment and processes
.iiumbey- of mines worked but dur¬
involving the consumption of coal
comes at a time when the cost of

quirements.

organized,
nopolies.

highly

the

control

American

underw present

hear the voices

they

manner

?;On account of its utter depen¬
dence upon railroad car supply
and difficult labor conditions, bi¬
tuminous mines probably suffer

for

American

three

imately

develop

mining/ cleaning and
coal;
therefore, '"approxi¬
'£,tion at all; The available acreages mately 85% of this cost must be
'i |n many cases were so low as to •financed - in some/other manner.
prohibit the construction of ade¬ Even if the
money could be bor¬
quate-cleaning and preparation rowed from banks, which is im¬
facilites. For this reason only one-'
probable, it would not be sound
; naif to two-thirds of this coal was business to start; these mines off
handled Through modern
cleaning under any such burden of capital
and sizing plants.'
>
" " v " '.
investment unless a large portion
,^'V Between 75 and 80 million tons of it could be
paid out of earn¬
were mined from so-called "snowings in the next three or- four
:
bird"; mines—temporary -underyears.
v
ground mines, without rail con¬
The best information we have

The

minous coal miner is paid approx¬

mine-with modern equip¬

new

ment

ago

produced 1.2 tons per

shift.

man

asNt

much

years

only positive action by Con¬
labor monopolies
unlawful."
Everyone
condemns
monopolies except those who reap
the benefits of them, but unfor¬
tunately those who condemn them
are
unorganized. Congress does

For example, in
the American underground
bituminous miner produced
5.8
tons per man shift, while* his Brit¬

1947

original cost of
?•?

standards.

otir

But that is not all! "It now costs

was
in ash

inferior

to¬

the mines now working out//*

coal

coal stripped, however,

■;

not

accounts

mining and cleaning.
Tne
mechanical efficiency of American

today,

the

dustry I am convinced the follow¬
ing statements are justified:

gress can make

laws will not per¬

reserve

situation

the

now,

ical

certainties
ture

understand

vances we hav6 made in mechan¬

generally Speaking, the industry's
depreciation

toe

increasing depreciation re¬
in profitable years to make
the lack /of casn reserves in
unprofitable, years.
Therefore,

tons

by collective bar¬

processes.

the

oft

mining

methods/. Some of this coal is

ink

dollars

serves

' t.-v;

...

Approximately 125 million

yvere

from.

red
of

mit;

came

were

instead

Dank. ,The tax

<(2455)

000,000 in funded debt and 1,949,
976 shares of common stock.

•:

uf.*

Air Lanes,

Huntington, W. Va.

•

June
stock.

Corp., Springfield,

Mass*
filed 535,882 shares of class B ($1 par) common

Bosch

($25

debtedness

par); $4,000,000 of 3^^ certificates of in-f
cumulative; and $1,000,000 of 1^2% loai^

certificates cumulative.
the

No underwriting. Offering—To
public. Common may be bought only by patrons and(

members. Price—At fUce amount/; Proceeds—For

Century Steel Corp., Hollydale, Calif.
Nov. 10 filed 4,000 shares ($100 par) common. Under-;
writing—None. Shares will be sold at par by directors./.
Proceeds—To purchase rolling mill, equipment and for
working capital..,
;
'• ???
"■?'??

life insurance company.

/ American

stock

placed privately. Common stock will be offered to
stockholders through subscription rights and to
common and preferred stockholders through subscrip¬
tion privileges. Proceeds—For a construction program
and repair of flood damages,
.
y
?

»i

Thursday, June 3,1948

PREVIOUS ISSUE

common

May 19 (letter of notification) 58,000 shares of class A
tornmon stock. Price—$5 per. share. No underwriter. To
organize

SINCE

to be

Inc., Portland, Me.

Alico Investment Co.#

ADDITIONS

INDICATES

April 26 (letter of notification) 10,000 shares of preferred
stock and 10,000 shares of common.
Price—Preferred,
$10 per share and common 1 cent. For plant and equip¬
ment costs and working capital; Underwriter—Frederick
C. Adams & Co;,. Boston.
'/?
?9
?: -'91.>:.
•

CHRONICLE

Now

Securities
•

»k«AUn»^)M-awnryi

COMMERCIAL & FINANCIAL

THE

(2456)

? fition of additional office and plant facilities.

Underwriter—Name to

tures.

be filed by

amendment,

;

Church-Craft Pictures, Inc., St. Louis,

tions.

Mo.

transportation and industrial cooperatives, and
$2,200,000 in loan to Solel Boneh, Ltd., for public works.

tive

•
Arapahoe Basin, inc., Denver, Colo. 9
May 25 (letter of notification) 25,000 shares of 6% pre-?
ferred stock. Price--$ 1.25 per share. No underwriting.
To construct a winter sports resort.

underwriter.

Cincinnati

March

record

held,

basis

one

flights expire 5

new

p.m.,

Electric Co.,

Gas

Cincinnati

gan Stanley & Co.; W. C.
I Inc. and The First Boston
•:

bond with 1,000 common shares. Underwriter
Cunningham & Co., Pittsburgh. To receive cur-J
rent obligations, working capital, etc.
?
$1,000

„

Corp. (jointly); Union Secur-

Proceeds—Construction program.

(jointly).

Inc., Chattanooga, Tenn.
•
9
April 14 (letter of notification) 75,000 shares of class B
common stock
(no par) of which 45,000 will be offered'
to the public at $1 each.
For additional working capital,
machinery and equipment.
i

Corp.; Lehman Brothers; Merrill Lynch, Pierce,
Fenner & Beane; Glore, Forgan & Co. and White, Weld
Clinton

per

Dixie Fasteners,

Langley & Co.; Blyth & Co.,

ities

& Co.

;;

City,:

—S. K.

Probable bidders: Halsey, Stuart & Co. Inc.; Mor¬

ding.

Co., Virginia

Nevada ■"'9??;':;^??:'?;;9^.:?w ?-/ ■/ ■?./????-?:•
j
May 14 (letter of notification) $100,000 first lien sinking?
fund convertible 5% bonds due 1953 and 300,000- com~j
mon
shares reserved for conversion of bonds. -Price—.}

stock '(par $100) and 6,565 shares of
Price, par for each class. No
To produce Bible Story films.
(par $10).

May 21 filed $15,000,000 first mortgage bonds, due 1978.
Underwriters — To be determined by competitive bid¬

Bankers Fire & Marine

stockholders

stock

;?-9,???^i;999',?/^/9'?:?; ?':'?;

'•/

Dayton Consolidated Mines

preferred

common

share for each two

loans to

May 27 (letter of notification) 749 shares of 5% cumula¬

Insurance Co., •
Birmingham, Ala.
April 27 (letter of notification) 25,845 shares of common
stock.
Price—$8.
Offered—Offered for subscription to

Co., Jackson, Mich....
t
May, 18 filed, 200,000 shares of cumulative(no par) pre-*
ferred stock.: Underwriters — To be determined under;
competitive bidding. 1 Probable bidders: Harriman Rip-,

ley Sc. Co. and The First Boston Corp. (jointly); Morgans
Challenger Airlines Co., Salt Lake City, Utah ?
Stanley & Co.; White! Weld & Co. and Shields & Co?
March 1 filed 600,000 shares ($1 par) common stock, of;
(jointly). Proceeds—To acquire property; construct and?
which 400,000 are being sold for the company and 200,- ;
expand facilities.
:
V?
'
000 for the account of Claude Neon, Inc. Underwriting
•
Continental Engineering Co., Carrizozo, N. Mex«
—None.
Price—$2 a share. Proceeds—For, equipment
May 24 (letter, of notification) '100,000 shares common
purchase and general funds.
.
(par 50c). Price—50c per share., No underwriters/ TO
*e
Champion Shoe Machinery Co., St. Louis, Mo.>
develop a mining prospect. V
9
?
May 26 (letter of notification) 10,000 shares of common
•
Cove Mining Co., Boise, Idaho".V?Z;-"-""■ (
stock and 200 shares of preferred stock. Price for com¬
mon $3.50 per share, and for preferred
May 27 (letter of notification) 250,000 shares Common';
$30 per share.
stock (10c par). No underwriting.
Underwriter—Edward D. Jones & Co. f
For mining opera¬

tf any is used.
Proceeds — $5,000,000 in mortgage loans
for construction of housing; in Palestine, $2,500,000 in

Consumers. Power

;

petitive bidding. Probable bidders: Glore, Forgan & Co.
and Lehman Brothers (jointly); Blyth & Co.; Inc., and
Merrill Lynch, Pierce, Fenner & Beane (jointly). The
Attorney General (successor to the Alien Property Cus-,
todian) as holder of the stock, directed the sale,

acqui-

Underwriters—Names to he determined by com¬

Ampal-Anterican Palestine Trading Corp., N* Y.
April 7 filed §-10,000,000 10-year 3% sinking fund deben¬

Machine Co.
Equitable Gas Co., Pittsburgh, Pa. (6/8)
(letter of notification) 10,000 shares of stock / May 6 filed $14,000,000 first mortgage bonds, due 1973;
to be sold at $5ys each (market price), for selling stock- 9 Underwriters—Names to be determined by competitive?•
Barlow & Seelig Manufacturing Co., Ripon, Wis.
holder. Underwriter—Charles E. Bailey & Co., Detroit.;
bidding. Probable bidders: Halsey, Stuart & Co., Inc.;'
May 24 (letter of notification) 8,820 shares ($1 par)?
The First Boston Corp.; Kuhn, Loeb & Co. and Smith/
Columbia Television, Inc./
common
stock. - Price—$8 per share;
Underwriters—
McMaster Hutchinson & Co. and Charles W. Brew &'Co.
May 18 (letter of notification) 100,000 shares of pre-? Barney & Co. (jointly); W. C. Langley & Co. and Glore,
Forgan & Co. (jointly); Harriman Ripley & Co.; White;5
ferred stock and 100,000 shares of common stock.
Price
•
Beneficial Industrial'Loan Corp., Wilmington,?
Weld & Co.
Proceeds—$14,000,000 of proceeds, plus
—$3 per unit of one share of each. Underwriter—H. B.
? ■. Delaware • (6/16), ;
?V?/
563,000 shares of new common stock, will be delivered
BUrr & Co. is exclusive selling agent. The selling agree¬
May 27 filed 100,000 shares (no par) cumulative pre¬
to the Philadelphia Co. in exchange for natural gas
ment requires Burr to sell 40,000 units within 90 days,
ferred stock and an unspecified number of shares of ($10'
properties now under lease, outstanding capital stock of?
an additional 30,000 units 180 days thereafter and a furpar) common 3tock with scrip certificates to cover the
ther 30,000 units within 210 days thereafter. * Proceeds—'f Equitable, notes and other claims owed to the Phiia-&
conversion by July 1, 1958.
Underwriter — Eastman*
delphia Co. and to the Pittsburgh and West Virginia-Will be used to manufacture television sets, purchase
Dillon & Co., New York.
Price and dividend rate by
Gas Co. Expected about June 8; '
~9
#■
amendment.1 - Proceeds—General - funds?- Business—In-' j test and production. equipment for plant;
?••
•
Eureka, Inc., Central City,- Colo.
Commonwealth Lead-Mining-Co;, Salt Lake
dustrial loans.
:" ?
\
9v?v'9"??9?.?99?? ??? ■;'??
May 28 (letter of notification) 100,000 shares of capita^
99c -'V;:City,
•
Utah';y'•???"•''-;9/c-9-9?/://^///
Berry (D. N.) Co., Denver, Colo.
stock (par $1). Price, par. No underwriter. For mining
May 27 filed 2,000,000 shares of non-assessable common
May 27 (letter of notification) 133,000 shares of common
stock (100 par). ; Offering—1,303,733 shares are to.be >?0Pera"9Ps*
stock. Underwriter—John G. Perry & Co. For working
•
First Thrift Investors, Los Angeles, Calif; >9
offered in exchange for a like number of shares of Utah
capital."
.■
:/9???:v/99;::May 28 (letter of notification) 10,000 shares ($10 par)
Ophir Mines Co. on a share-for-share basis plus one cent
•
Borderminster Exploration Co. Ltd.,/
Ottawa,
preferred stock. Price—$10 per share. No underwriteri
per share to be paid Commonwealth by Utah Ophir
99.9 Canada.v\.
9
;9 v;99/r9"/91/ 99999::9v/ •? 9; stockholders
To purchase shares of the common capital stock of the
accepting the offer.? Underwriting—None.?
June 2 filed 500,000 common shares ($1 par). Under¬
Proceeds
First Thrift of Los Angeles at $150 per share. ,
For
exploration and development work.
writer—Mark Daniels & Co. Price—40c per share Cana¬
Buriness—Minin g.
Fission Mines Ltd., Toronto, Canada
dian funds. Proceeds—For exploration of
properties.
Consolidated Edison Co* of N. Y., Inc. (6/9)
April 16 filed 200,000 shares of -treasury stock. Under¬
•
Carr-Consolidated Biscuit Co.,
Wilkes-Barre,
March 1 filed $57,382,600 of 3% convertible debentures, •- writer—Mark Daniels & Co., Toronto. Price—$1 a share.
Pennsylvania 9?/9/99
Proceeds—For mining and business costs, v
due 1963.' Convertible into common stock at $25.
/
•,
Offer¬
May 26 (letter of notification) 15,000 shares of qommon
ing—Common stockholders of record May 20 are given
Fitzsimmons Stores, Ltd., Los Angeles# Calif.
stock, to be sold in open market for account of Jasper
right to subscribe for debentures in ratio of $5 of deben¬
Feb. 2 filed 10,000 shares of 6% cumulative first pre¬
B. Carr.
Underwriting, none,
y
; *
tures for each share held.
Rights expire June 8. Un¬
ferred stock ($100 par).
Underwriting—Officers, direc¬
Central Maine Power Co.
derwriters
Unsubscribed debentures underwritten by
tors and employees of the company will offer the stock
Nov, 10 filed 160,000 shares ($10 par) common. Under¬
Halsey, Stuart & Co, Inc. and associates. The issue was
to friends and associates.
Priced—$100 per share.
Pro¬
awarded May 18, the underwriters paying $1,000 the
writing—Company called for competitive bids Dec. 8,
ceeds—To retire 7% preferred stock. Business: "Supdir
1947 and only one bid, that of
underwriting privilege.
Proceeds—To redeem 273,566
Blyth & Co., Inc. and
Markets" in Los Angeles, Riverside, Colton and San Ber*
shares of outstanding $5 cumulative preferred stock and
Kidder, Peabody & C6. was submitted and was rejected
nardino County.
'
•
?
to reimburse treasury for expansion expenditures, &c.
by the company.
They bid $13.75, less $1.75 under«>
Writing commission. Now expected on negotiated basis
Fleet Oil Corp., Ada, Okla. (6/15)
//
Consolidated Vultee Aircraft Corp.
i
•
through Blyth & Co., Inc. Offering—To be offered to 6%
May, 1948 (letter of notification) 296,000 shares of
May 5 filed 1,159,849 shares ($1 par) common stock.
preferred and common stockholders for subscription on
Underwriter — Aetna Secur¬
Offering—Stockholders of record May 28 are given / common stock (par 5c).)
the basis of one-half share of new common for each
ities Corp., New York.
the right under a firm subscription to subscribe for the
pre¬
Price—$1 per share.
Drilling
ferred share and one-tenth share of new common for
and equipping additional oil wells, development of prop*
stock at rate of one new share for each share held at $9
each common share held.
Price by amendment.
Pro¬
per share/ Rights expire June 14. In addition stockhold- : erties and working capital..
j?
ceeds—For construction and repayment of bank loans;
ers will be given the right to make contingent
subscrip¬
Florida Power & Light Co. (6/8)
^
Central Power & Light Co.
tions for any shares not subscribed for by exercise of
•
9
May 6 filed $11,000,000 first mortgage bonds, due 1978.:
Nov. 21 filed 40,000 shares ($100 par) cumulative
firm subscription, subject to allotment.
Atlas Corp.,
pre¬
Underwriters—Name!to tie determined by competitive?
ferred. Underwriters—Lehman
holder of 11.4 % • of outstanding consolidated stock, will
Brothers; Glore, Forgan
bidding.
Probable- bidders: Halsey, Stuart & Co9lric.;; exercise-its
& Co., Dewar, Robertson
Pancoasti: Proceeds—For
subscription rights to purchase enough stock
to. assure i Consolidated, a/return, of, $7,000,000 from the.... The .First Boston Corp.; Harriman Ripley & Cb.;* Leh-property additions and expenses,. iOn-April 15, SEG da¬
man? Brothers;; Drexel & Co.' Proceeds-^-To i-pay off
llied effectiveness of ■ registration statement.-:
stock offering., Underwriting-—None*? Proceeds—Added
;>■, V ;; -9,
June 30.

writing.

increase

'V?'9

capital and surplus.,. No under¬

::??/:'?:':?9?-v99?

' V

(Mich.)

April 15

•

—

•

-'"

Central' Vermont: Public

Service Corp.

March 30 filed $1,500,000 Series E first
mortgage bonds.
and an undetermined number of common
-shares (iio-

par).

Underwriters of common—Coffin4Burr;

Bonds

port
x

planeis.?./ ?'.

.-v?:'-■?■';;

Consumers Cooperative

•/

■,

Bank & Trust Co.. New:York, and to

r//

■

meeticohstntetidii*

Bids—Bids for purchase pf bonds will be*received'

costs.

Assoc., Kansas City.

??. ?'■: Missouri
?
;:9:'.''9; 9..;
OcL 16 filed. $1,000,000 4% non-cumulative

HahoveF/

$4,000,006 in indebtedness owing to the Central

to general funds for manufacture. of commerciaL trans-

by the company at Room 2033, No. 2 Rector' St., Nevf

York,

to 12 noon (EDT), on June 8.

common"

i
'i

/
'

pacific coast
.9?;,:-';:?/■■■'■?// :?■/?": '-A

N D

9 9

■*

•'

f-'
'•«.

y
'

w
^

■

Direct Private Wires

&10

Dean Witter

New York
.

;•

Boston'

Private Wires

;

Pittsburgh

Chicago

Offices in other Principal Cities

14 WALL

9'
•

SAN FRANCISCO

* /
*

San Francisco Stock Exchange
Los Angeles Stock Exchange

STREET, NEW YORK ?

LOS ANGELES

• •

v&l

HONOLULU

CO-

f0o»4e49

>'9!!si.c* Esch"nl'L^'-

BROKERS
AtEDB.

■/

and BpStO*

\
Bos'*0*1

Telephone BArclay ^T-4300

«OOV.

;

Co.

MEMBERS

New York Stdc& Exchange
Honolulu Stock Exchange

19,111

g.vy.yy.M

hawaiian securities : 1
-"? ?:?1

U,r',**y' ?.'+

ckG°

Chv

Volume 167

COMMERCIAL

THE

Number 4704

FINANCIAL

CHRONICLE

(2457)

$i00).

.Underwriters—Names will be determined by
competitive bidding. Probable, bidders: Halsey, Stuart
& Co. Inc. (bonds only); The First Boston.Corp.; Kuhn,
Loeb & Co.; Salomon Bros. & Hutzler and Union Secur¬
ities Corp. (jointly); Lehman Brothers; Glsre, Forgan &
Co. and W. C. Langley & Co. (jointly); Shields & Co.,
White, Weld & Co. and Central Republic Co. (jointly).
Proceeds
To acquire and construct additional prop¬
erty and retire $3,860,000 of 1%% notes issued for in¬
terim financing. Bids are expected to be opened June 14,

NEW ISSUE CALENDAR
June

1948

Equitable Gas

JBonds

Florida Power &

Light Corp., Noon (EDT)_-Bonds

Interstate Telephone Co._

;!;

-.____Preferred

—

Kansas City Southern Ry., Noon

June 9,

—

(EDT)-_«1-Bonds

9
Keller & Co., Inc., Boston, Mass.
May 28 (letter of notification) 9,300 shares Of cumula¬
tive participating preferred- stock and $200,000 of 20year 5xk% debentures, due 1968. Underwriter—General
Stock & Bond Corp.
For working capital and other

1948'

Consolidated Edison Co. of New York, Inc.—Debs.

Pennsylvania RR/, Noon (EDT)—Equip. Tr. Ctls.
June

C-;v'

;;;.

10, 1948

corporate purposes,

•

Chicago Rock Island & Pacific RR.,
1
;
11:30 a.m. (CDT)
__Equip. Trust Ctfs.

'•

•

Kerr-McGee

Kansas

June 14,

Bonds and Pfd.

MontanarDakota Utilities Co.—..Common

;
i;

June 15, 1948

;

Fleet-: Oil

Industries,

Brothers

man

Straus. &

Blosser.

Proceeds—Com¬

pany will use part of proceeds to retire its secured short
term notes and remainder will be used to finance busi¬

expansion, etc.

ness

-Common

Corp

;

Kool-Aid Bottling Co., Inc. of

Wisconsin

June

16, 1948

/.Wy//':v;

Kerr McGee

and

V-

.'*//■■■

June 21, 1948

Southern Natural Gas Co.—

Underwrit¬
preferred and
two of common will be sold for $100.
Proceeds—T6
build, furnish and tool a factory and apply close to $500,000 to working capital.
\

June 22, 1948
Phila. Baltimore &

Flotill

Washington RR._—:——Bonds

Products, Inc., Stockton, Calif.

Pacific

<par $iy.
Underwriter — Floyd D, Cerf Co., Chicago.
IPrice—preferred $10; common $6.
Proceeds — Stock¬
holders will sell 260,000 preferred shares and 250,000
common shares and company 125,000 preferred shares

one

Fraser Products Co.,

Detroit, Mich. :
100,000 shares ($1 par) common.
Under¬
Campbell, McCarty & Co., and Keane & Co.,
hoth Detroit.
Price—$5.25 per share.
Proceeds—The
shares are being sold by 14 stockholders who will re¬
ceive proceeds.
Registration statement effective Jan. 16.
f t;

Oct.

writers

Golden

Leaf,

Inc., Aspen,

Colo.

writer.

Funds,

stock fund.

;mon

worth

tion

10c per

♦

erect and operate a

-^00-ton

per

bleached sulphate pulp mill with

day capacity.

International

Proceeds—To

Asbestos

Co.,

Ltd.,

Sherbrooke,

fey; 1 r Quebec
Jan. 30. filed

♦

1,500,000 shares

($1

par)

common

stock.

^Underwriter—Paul E. Frechette, Hartford, Conn., is the

l£J. Si authorized agent and principal underwriter. Price
$1 each. Proceeds—To construct milling plant and
{purchase equipment.
Interstate Telephone Co.

(6/8)

3May 20 filed 9,238 shares of cumulative preferred stock
(no par).
Underwriters — Paine, Webber, Jackson &
•Curtis and Stone & Webster Securities Corp., New York;
"Murphy Favre, Inc. and Paine-Rice & Co., Spokane.
"Pri^e, by amendment. Proceeds—To pay a demand note
"to jGbneral Telephone Corp. (parent); repay a $100,000
Uank loan, and reimburse the treasury for capital ex¬
♦

penditures.
♦

„

Manufacturing Co.
fev:
June 1 filed 51,500 shares of common stock (par $1),
©f which 36.200 shares are being sold by Adams Express
Co. and 15,300 shares by American International Corp.
.Underwriters—Hallgarten & Co. and R. W. Pressprich
&*co.
V
Joy

(Mo.) Power & Light Col (6/14)
May 14 filed $12,000,000 first mortgage bonds due 1978
and 80,000 shares o£ cumulative preferred stock (par
?"

;

Kansas City

Segal Lock &

common

unsubscribed

Sierra

Blair

tion notes.

Co.,
Price—

Utilities Co.

Southern

finance future

Standard Oil Co.

North

danadian

Oils

Limited, Calgary, Alberta

March 11

filed 903,572 shares (no par) common stock.
Price—70 cents each.
Underwriter—F. H. Winter & Co.,
New

York.

company

Proceeds—875,000 shares being sold by
and 28,572 by stockholders. Proceeds for pur-

..cfcf.se of property and drilling.;

v---:

(New Jersey)

Underwriting—Norm. Purpose—To gain control of Inter¬
national, a, Canadian corporation. y,
Standard

construction.

(6/21)

May 11 filed 1,265,255 shares ($25 par) capital stock.
Offering—To be offered holders of no par value com¬
mon stock, of .International; Petroleum Co., Ltd., at the
rate of three Standard shares for 20 International shares.

Era Homes, Inc., Las Vegas, Nev.
(letter of notification) 300,000 shares capital
(par $1). Price—$1 per share. No underwriter.

Co.

Supply Co., Inc.
Farmingdale, N. J.
May 24 (letter of notification) 1,000 shares $5.50 cumula¬
tive preferred stock (par $100). Price, par. Underwriter
—Fidelity Securities & Investment Co., Inc., Asbury
Park, N. J.
Working capital.

Co.
May 28 filed $90,000,000 refunding bonds series F, dup
July 1, 1981.
Underwriters—To be sold through com¬
petitive bidding.
Probable bidders; Morgan Stanley &
Co.; Halsey, Stuart & Co. Inc.
Proceeds—To reimburse
the treasury for capital expenditures already made, to
retire bank loans incurred in plant expansion and to

Gas

Squankuni Feed &

New

construction*

Natural

•

New York Telephone

IT.

about June 21.

•

On May 15 company asked California P.

May 19 filed $28,000,000 first mortgage pipe line sinking
fund bonds. Due 1968. Underwriting—Names to be. de»
termined by competitive bidding. Probable bidders in¬
clude: Blyth & Co., Inc. and Kidder, Peabody &. Cowl
(jointly); Halsey, Stuart & Co. Inc.; The First Boston:
Corp.
Proceeds—$14,000,000 will be applied to the
payment (exclusive of accrued interest) of 1%% notes
due 1956; balance for construction purposes.
Expected

• /Nevada
Exploration Co., Las Vegas, Nev.: :
'
May 25 (letter of notification) 65,000 shares common
stock ($1 par).
Price—$1 per share. No underwriter.
For testing and drilling oil wells.
5-

stock

Co.

Power

amount of bonds to be issued.

•

(6/14-18)

Pacific

Commission for a 60-day extension of time in which tat
issUe the securities due to a possible revision of the

May 18 filed 150,000 shares ($5 par) common stock. Un¬
derwriters—Blyth & Co., Ino., and Merrill Lynch, Pierce,
Fenner & Beane, New York.
Price, by amendment. Pro¬
ceeds—To be used in expanding electric and gas utility
property.

For

Inc.

060 to. National Shawmut Bank of Boston for construc¬

Machinery Co., Missoula, Mont.
. (letter of notification) 250 shares of 6% pre¬
ferred stock ($100 par). Price, par. No underwriter. To
increase working capital.

•

Hardware Co.,

1978.
bid¬
ding. Probable bidders include: Halsey, Stuart & Co.
Inc.; Blyth & Co., Inc.; Stone & Webster Securities Corp.
Proceeds—Construction costs and the payment of $650,-

May

Hudson Falls^

March 26 filed $3,500,000 first mortgage bonds, due
Underwriters—To- be determined by competitive

stock.

(letter of notification) 329,400 shares. Price—
share. No underwriter. For mining operations.

Montana-Dakota

Brass Works,

15-year 6% convertible sinking fund debentures, due 1963. Underwriter—Floyd D.
Cerf Co., Inc.
Price—95"(flat). r' Offering—Offered to*
stockholders of record May 4 on basis of one $100 deben¬
ture for each 100 shares held.
Rights expire May 28.
Proceeds—For repayment of two notes and general cor¬
porate purposes.

Miller

For working capital.

lron &

(letter of notification) 59,000 shares class Ac
participating preferred stock (par $4), Price—$5 per
share.
Underwriter—John L. Nolan, Inc., Glens Falls^
N. Y. Working capital.
:
■.

i
•

R, L.

April 12

/iv Mid-Continent Airlines, Inc., Kansas City, Mo.
May 19 (letter of notification) 6,000 shares of common
stock ($1 par).
Price—Market ($8 to $9). Underwriters
—Kitchen & Murphy. Chicago.
For working capital.
May

—

New York

business/ when net

Lucky Park Mines, Inc., Seattle, Wash.

May 14

■

preferred and 10 shares of common stock.

Sandy Hill

Houston Coal Mining Co.,

W. Bennett & Co.

stock of record

•

Underwriter

For working capital.

Reiter-Foster Oil Corp., New York
(letter of notification) 180,000 shares (50c par)'
common
stock.
Price—80 cents.
Underwriter—Frank

Inc., and Maxwell, Marshall & Co., New York.
$3 per share. Proceeds—To be applied to the purchase
price for an existing textile firm known as Lonsdale
Co., a Textron subsidiary.
;
;

charge of 8V2% of.the offering price (or about 9.12%

Price—25 cents.

stock.

common

Underwriters —For

Jan. 16

May 24 of Textron, Inc., at rate of one new share for
one held. Rights expire 3 p.m. (EDT) June 10.
An

Underwriter and Investment Advisor

common

additional 100,000 shares are offered to officers, certain
directors and employees of the newly organized company.

Management Corp., Denver.
Price — Net
value of class of shares plus a maximum distribu¬

Allen

Hughes and Co., Denver.

each

Hedgecock Brick Co., Inc., Martinsville, Va.
iMay 28 (letter of notification $200,000 common stock
<par $5). No underwriter. For construction.

•

begin
,

Offering—Offered to holders of

Inc., Denver, Colo.
shares of H-C7 High Grade Com-

Anchorage, Alaska
/May 21 (letter of notification) 100,000 shares of non¬
assessable common.
Price—$1 per share. Underwriters
—George Tucker, Ralph Peterson and Rosetta Tucker.
/For working capital to get strip coal properties in operration. y:;Y,///y /y/Y/YY;/Y.;/;/>/Yy//'/:/.//
/v''/v' ///
:
Idaho-Montana Pulp & Paper Co., Poison, Mont.
..May 17 filed 100,000 shares of 4% cumulative preferred
.-stock ($100 par) and 500,000 shares ($10 par) common
; stock.
Underwriter — Tom G. Taylor & Co., Missoula,
//Mont.
Price—$300 per unit, consisting of two shares of

—.To

Penn

March 24 filed $2,000,000

Co., Providence, R. I.
April 26 filed 1,132,631 shares ($1 par)

Proceeds

Powder River Oil Co., Denver, Colo.
May 11 (letter of notification) 400,000 shares (100 par)

Mining Associates, Inc., Boise, Idaho

$100,000.

Potomac

Lonsdale

•#

held. Proceeds—To reimburse company^ treas*

Loansj Inc., Arlington, Va.
^
May 24 (letter of notification)' $250,000 6% registered
debenture
bonds.
Price, par.
Underwriter—Carl J.
Bliedung.
i

mining operations.

remainder.

—Hamilton
••asset

For

sharp" for each six shares of preferred

new

„

•

Lewis Management Co., New York. Price—$5 for each of
the first 20,000 shares; net asset value plus 22/2% for the

„

Hamilton

■

Lewis (John H.) Fund, Inc., New .York City /fe.
May 20 filed 200,000 shares of capital stock. Management

Gray Manufacturing Co., New York
/May 27 (letter of notification) 2,000 shares of capital
:Stock ($5 par).
Price—$13.75 per share. Underwriters
-^Vernon L. Haag and John W. Wibel (1,000 shares
♦each).
••

May 24 (letter of notification) 2,000,000 shares of com¬
mon capital stock.
Price—5 cents per share. No under¬

May 26 (letter of notification) 280 shares of common
^stdck. Price—$100 per share. No underwriter. To con¬
struct and operate a tavern.
,':
'f
,
-

.June 1 filed 2,000,000

'Leviathan

Telephone Co., San Fran/

Telegraph

Broadcasting Co., Allentown, Pa.'
May 13 (letter of notification) 12,000 shares of class A
common- (par
$10): and 2,000 shares of common stock
(par $10). Underwriter—Converse, Pokorny & Co.,-A1A
lentown, Pa. Offering—In units of six class A shares
and one common, at $70 per unit.
Building televisiori
station, etc.
:

Legend Gold Mines, Ltd., Toronto, Canada
27, 1947, filed 300,000 shares ($1 par) common
stock.
Underwriting — To be supplied by amendmenv
Price—50 cents a share. Proceeds—To develop mining
•

Calif., Sheboygan^

properties.

filed

—

Corp., Los Angeles
May 21 filed 450,227 shares ($10 par) capital stock. Urt*
derwriting—None. Offering—To be offered by the own*
er, J. Paul Getty, President of the Company, from time
to time on the floor of the New York Stock Exchange1,
or "to specific persons, firms or corporations," in sales
outside thp Exchange.
^

June

75,000 common shares. Company's proceeds will be
cased for general corporate purposes. Effective May 5.///
end

stock.

common,

Price—10

Pacific Western

Langsenkamp (F. H.) Co., Indianapolis, Ind.
May 19 (letter of notification) $250,000 of 5% sinking
fund debentures, due 1950.
Price—$100. Underwriter—
City Securities Corp., Indianapolis.
To pay bank loans
and increase working capital.

March 6 filed 385,000 shares of 60 cent convertible pre¬
ferred stock (par $5) and 325,000 shares of common stock

named.

May 28 filed 601,262 shares ($100 par) common stock*
Underwriting, rro^e.
Offering—Tor be offered for sub*
scription at $100 jper share by stockholders on the basis

Lamston
(M. H.), Inc., New York
May 17 (letter of notification) 7,060 shares of 6% cumu¬
lative preferred stock (par $25) and 7,060 common stock
purchase warrants. Price—$25 per unit of one preferred
share and one warrant.
Underwriters—Childs, Jeffries
& Thorndike, Inc., Aetna Securities Corp. and Syle &
Co., New York. Statement may be withdrawn.

;

————Bonds

20,000 shdres ($1 par)

ing—None

Underwriter—Heronymus & Co., Sheboygan, Wis. Pro¬
ceeds—To open and equip bottling plants in California
cities.
Price—$1 per share.
'

Oil Industries, Inc.———Common

Nuera Products Co., Denver, Colo.
May 10 filed 100,000 shares ($10 par) preferred stock,

March 22 filed 1,500,000 shares ($1 par) common stock.

Beneficial Industrial Loan Corp.———Preferred
8

Mines, Ltd,

Proceeds foy exploration and development.

Chesapeake & Ohio Ry., Noon (EDT)-Eq.Tr.Ctfs.

Gold

liry fotf additions, etc.

(6/16-17)

and

Inca

March 10 filed 666,667 shares of common stock (par
$1).
Underwriter—Transamerica Mining Co., Ltd., Toronto.;

common

Inc., Oklahoma

May 28 filed 300,000 shares ($1 par) common stock, of
which 200,000 shares is in behalf of the company and 100,000 shares for selling stockholders.
Underwriters—Leh- '

1948

City Power & Light Co.

Okla.

City,

Oil

North

Tube

Co., Detroit

May 14 filed 136,667 shares of Class B common stock
(par $1).
Underwriting—None;
Offering—Offered to
Class B common shareholders of record June 10, in the
ratio of one share of new stock for each three shares held,
$3 per share;
Rights expire 3 p.m., June 25. Fort.
Industry Co., owner of 122,757 shares of Standard Tube
stock, expects to buy'$250,000 of the new stock, with
the purchase price to be credited against the $250,000
at

loan

previously made by Fort Industry to Standard.

Steak 'n Shake,

Inc., Bloomington, III.
feb. 2 filed 40,000 shares of 50c cumulative convertible
participating preferred stock, ($1 par) and 160,000
shares (50c par) common stock, of which 40,000 will bes
Sold and the remainder reserved for conversion. Under4
writer—White & Co., St. Louis, Mo. Price—$8 for the.
preferred stock and $2.50 for. the common. This stock
I.-

(Continued

on page

46)

.'-I:

.'»V

(2458)

FINANCIAL,; CHRONICLE

COMMERCIAL &

THE

Offered for subscription by

offered by stockholders who are members of

•

Oil

Sun

Co.,

Philadelphia

equipment for drilling.

stock purchase plan for its employees and

May 28 filed a
for employees

Wichita

of its subsidiaries. Employees of one year
or more service are eligible
to participate in the plan,
effective July 1, in which 10,000 memberships will be

•

Triplex Corp. of America,

Chicago, III.

•

**'.■'

jVf;- . «

•

28 company requested

11 •

Ry.

y
from

approval

(Inc.); Salomon -Bros. fcjiutzler.

\ Co.

the

):'

did

ICG

Chicago Rock Island & Pacific RR.

(6/tD )

Finance Co., Newark, N. J. ;
(letter of notification) $225,000 6% cumulative

purchase of $4,590,000 equipment trust Cer-^:
t,.i„ 1, ^ao
i—i
n_.
itificates, dated July 1
1948, due semi-annually Jan. in¬
f,4
11949-July 1, 1963,'Will be received up to 11:30 a.m.1;?

J(CDT) June 10, at office of
'Salle
in

Street

Station,

connection

$5,733,220.

with

company, Room 1136, La^',
Chicago. Proceeds will be used'
purchase of equipment to cost

the

Probable bidders:

Halsey, Stuart & Co. Incf/
Hutzler; Harris, Hall & Co. (Inc.); HariRipley & Co., and Lehman Brothers (jointly). ' 1 i

Salomon Bros; &

;

riman

preferred

Uintah

Corp., Denver

Minerals

notification/ ou,uu0 shares of non¬
assessable common stock (par 100) half at 25 cents and
half at 40 cents.
Underwriter—Forbes and Co., Denver.
To drill mining claims.

(letter'of

price—$1,000 each.

Rubber Reclaiming Co.,

' '

-V

* i|

t ?

aw'

;

sale of 75,000 shares of convertible preference

stock (par
Probable underwriters, if exemption is granted:
William R. Staats Co.; Pacific Co. of California; Wals$20).

"production warrant" permitting the holder to buy a
proportionate share of the company's output
Under¬
writing—None.
Proceeds—To provide capital for the
purchase and operation of a plant with an annual pro¬
ductive capacity of 4,000,000 pounds of viscose filament
rayon and 8,000,000 pounds of viscose staple fiber.
S.

California Electric Power* Co.

•

ton; Hoffman & Goodwin,

Company has asked the California P; XJ, Commission for
exemption from competitive bidding of the proposed

stock,
Each share is to be accompanied by

filed

Rayon Corp., New York City
,*•
9,950 shares (no par) common

United
March

Prospective Offerings

•

Central Maine Power Co;

Kansas

b,
City Southern Ry. (6/8)
purchase of $14,000,000 first mortgage bonds,?
series B, due June 1, 1968 will be received by company
at 25 Broad St., New York, up to noon (EDT) June 8:t.
Probable bidders: Kuhn, Loeb & Co.; Halsey, Stuart <&
Co. Inc.; The First Boston Corp.; White, Weld & Co„*;
Harriman Ripley & Co, and Glore, Porgak & Co. (j
oint^ t
Bids

Zonolite Co., Chicago, III.

May 24 (letter of. notification). .32,000. shares common
Underwriter—Wm. C. Roney & Co. Price
by amendment.
,
.
'
-

and

stock

stock (par $1 >.

Vz share of common stock
$10 per unit. No underwriter. To pay obligations
company and for expansion of sales.

•

Bids for the

debentures, due in 20 years.
Price—$100 per
Underwriter, none* Obtain funds to make small
loans of $300 or less.
^

(letter of notification) 15,000 shares ($10 par)
cumulative
5%
preferred stock and 7,500 shares of
common stock.
Offering—To be offered in units of one

May

North Western

unit.

May 21

' ''ti- %'f-

equipment trust certificates, its first equipH:
ment trust of 1948.; Proceeds will-be use a to meet 80 %
fi
of the cost of 1,000 box cars, and 500 hopper cars.
Prob-/!
able bidders: Halsey, Stuart & Co. Inc.; Hairis, Hall &

deferred

Inc.

1948"

$5,340,000

Workers

June

ments.

May

Co.,

Building Material

■*

Chicago

Underwriter—Prescott, Wright, Snider Co., Kansas City,
Mo. For working capital.
.
'

Canada
April 2 filed 800,000 shares (par $1) preferred stock.
Underwriter—Mark Daniels & Co., Toronto, Canada.
Price—60 cents a share. Proceeds—For mine develop¬
•

■

•

Ariz.

(letter of notification) 1,050 shares of 6% preferred stock ($100 par) to be offered at par, and 2,605
shares ($20 par) common stock to be offered at $25.

Mines, Ltd., Toronto,

Gold

Lake

(Kan.)

(Inc.); Salomon Bros. & Hutzler..

i,.." i

May 19

offered.
Tabor

Western States Oil Co., Phoenix,

1.;:v,;v':

porate purposes.

& Co.

April 8 (letter of notification) 300,000 shares of common
stock (par $1). Trice—$1 per share. Underwriter—Ari¬
zona Securities Co., Phoenix, Ariz.
To buy oil leases and

General cor¬

option to purchase 101,112 shares.

plant facihties. % /

May 24 (letter of notification) 250 common shares (par
$10). Price—$16.50 per share. Underwriter—J. W. Gould
& Co., New York.
Proceeds to selling stockholder. *

May 2d (letter ol notification) 110,000 shares of common
stock (par 15c). ' Price—$1.50 per share.
Underwriter
—Wm. O. Duntze, 60 Wall St., New York.
The under¬
writer has a firm obligation to purchase 8,888 shares
and

new

Upson Co., Lockport, N. Y.

Philadelphia

Corp. of America,

Steriiseat

•

Complete

expire June 22.

the Belt family.

Thursday. Juno 3.

$3,500,000 of equipment trust certificates. The certificates ::
will mature from July 1, 1949 to July 1, 1958.; Probable
>[
bidders include: Halsey, Stuart & Co. Inel* Harris, Hair!'

Thalmann & Co.- Offering—
stockholders at par. Rights

Underwriter—Ladenburg,

(Continued from page 45)
is being

•j

for

fiy>-

Pennsylvania RR. <6/8),
\
'Company will receive bids up to noon (EDT). June 9!:
at office of Geo. H. Pabst, Vice-President,'Room
1811
Broad Street Station, Philadelphia, for the purchase of
;
$11,055,000 equipment trust certificates, series U, to be/.;
dated

July

and to mature $737,000 annually/
Probable bidders: Halsey, Stuart &
Co. Inc.; The Firsts/Boston" Corp/' Salomoh' Brosrr&k
Hutzler; Harriman Ripley & Co., Inc. and Lehman Bros/
(jointly).
"
■
:
July

1948,

1, 1949-1963.

May 28 William F. Wyman, President, stated company
will sell a new bond issue of approximately $5,000,000
before July 31.
The issue will be offered by negotiated
sale.'

Inc., New York

•

May 25 (letter of notification) $300,000 \lk% subordinated
convertible debentures, due June 1, 1962;' Price, par.

company will

noon

at 3400 Terminal Tower* Cleveland,-

Baltimore &

Washington RR.,

^
A

May?~29 it was reported that this company, a subsidiary
of Pennsylvania RR. probably will send out invitations,

(6/15)

receive bids until

Philadelphia
(6/22)

■

Chesapeake &.Ohio Ry.

The

•

(F.DT)

Jun°

June 9 for bids to be received about June 22 for

507,000 in bonds.

for the sale of

$17,v'

*
L'*;.

Board member
Crissinger: "As, to the effects of these Reserve policies upon the
United States, it means inflation with inevitable collapse which will
bring the greatest calamities upon OPT farmers, our workers, and
Schacht in the following manner ta Federal Reserve

Observations/
',.V

(Continued from page 5)

political sabotaging was intensified to the n-th degree in an election
campaign year,-extending even to-the nation s delicate credit and
appropriation mechanism, is well-documented by Mr. Lyons. Can
our democracy now safely feel that we have
experienced the per¬
manent end of such, politics—in' either kind or degree?
Political Publicity

Another, corollary, of the

history of our Great Depression is the
disadvantages suffered even in the domestic sphere
occasioned by the "open diplomacy with no holds barred" rules in

revelation

lieu of the

secrecy

operations.

The

which dictatorship

governments

clothe

their

necessity

A multitude

statesmanlike

by the

of events clearly itemized by Mr.
Lyons show how

measures

self-interest

crying to be put into effect

and

strategy

politics.

were

The

obstructed

prime

example

of this was the willful if not criminal refusal of
Mr. Roosevelt, when
President-elect from November to
March, to give to the

its

hour

crisis

even

the

normal

assurances

country in
expected from an

incoming Chief Executive, irrespective of whether Mr. Hoover did
or did not have the
depression licked from June or November 1932 on.
Surely the incoming leader's long-continued and
stubbornly clung-to
,'that's-not-my-baby" attitude, and his alternative refusal to make
any replies to his embattled
President, were inexcusable. Let us

Pray, that such
sibilities of

strategic" prostitution of the privileges

our

and respon¬

democracy

may not have set a precedent!
Surely
anti-social behavior was at
least accentuated by the weapon
publicity always available, and used to the full by the Michelsons
and their political bosses.
I of course have no doubt
whatever about

such
of

the relative

advantages of democracy over dictatorship, but I also
over the dire
necessity of self-disciplined abstention
from political demagoguery as the
price of its preservation.

have

"*rStarvation

and

doubts

the

But

probably the most difficult sphere for keeping the planning: (June
3) - 1,000,061
shafes. 'vi'?*
straight is in unemployment and relief. Mr. Lyons demon¬ North American Aviation,
Inc.,-*'
and again how exaggerated, if not made completely capital stock
(par $1) at $12.75. a
out of whole cloth, were the accounts of starvation under Hoover;
share.
The stock represents all of and how unemployment actually increased, rather than decreased,
the • shares of North American" *1
during the long years of New Deal spending. A§ Mr. Lyons tellingly •Aviation
capital; stock-owned by j
asks, if starvation had been existent, why was it not listed by the General Motors Corp. The Avia-j i
Democrats along with their other charges in the 1932 election cam¬ tion
company will receive no part /
paign?
'
•
"
*
'
of the proceeds from the sale;
,

score

strates again

The

democracy is prob¬
ably nowhere more clearly illustrated than in the field of relief
spending. For there the collision with politics is insuperable and
difficuly <jf efficient management; in

a»

constant.
Mr. Lyons convincingly shows how
Hoover's fight to.
keep the necessary spending on a/ decentralized .state-wide basis
constantly ran headlong into the demands of the politically-motivated
to have the

planning.
how

and the Depression years of
plenty of fruitful conclusions about
issue (May 13, 1948) this column showed

ever

credit management

since

The statesmanlike fight tp preserve the Treasury from,political
raiding was completely and cynically abandoned with Mr. Hoover's
departure from the Presidency. We have sometimes been reminded
of Democrats' campaign pledges in their 1932 platform when, after
berating Republican extravagance, subsidies, unbalanced budgets and
high taxes, they saw fit to stake their own claim on governmental
economizing. The most significant point of the later quick reversals
from their pledges is not a, sensational evidencing of political disr,
honesty, or the disillusioning or even bribing of the citizenry; but
surely the epitomized demonstration of the impossibility of con^
sistent and honestly-stated economic planning in the midst of the
brawling of domestic politics.
We may not- see another exhibition of New Dealish Treasuryraiding for many, years to come. But can we possibly feel with any
confidence that, in the absence of the automatic check from required
budget-balancing or gold-coverage,, our Treasury willr be used to
just the right degree and not raided under < stress? Whoever reads
the history of the damning of Hoover and worshipping of Roosevelt
will find such faith extremely difficult.
,

ners
recurrently became
blame- as well as praise

had

Vidual

control.

ability

initiated in

completely misguided,
arising from conditions

Such misconceived

planners

was

and Hoover regimes

1913, the plan¬
with the public's
over

which

they

"score-keeping" about

the indi-

particularly rife during the

Coolidge

H. Parker Willis used to relate
how time and
again in 1927 and 1928 President
Coolidge turned a deaf and bored
ear to the desperate
pleading by bankers and Reserve System officials
to take some remedial action
against expanding credit and the specu¬
lation bubble being blown
up by billions of brokers' loans.
Yet the
afternoon-nap-taking Coolidge went through his
inflating term un¬
scathed, saved only by sixth-sense Yankee horse-sense of

choosing-

tRll°"irUr1' Ironically .it

the holocaustic

the preceding

was Hoover, subsequently castigated for

after-effects, who had inveighed

inflation.

most

heavily against

For

example, already in 1925 Hoover, as
Secretary of Commerce, is quoted by Mr. Lyons as
standing up against
such

leaders

Benjamin

Strong,

Montagu Norman

and

Hjalmar

Tragedy of Baby-Kissing Inability

The characteristic public relations foible of the insatiable glamorhungry American people is also strikingly exemplified in their atti¬
tude

toward

Hoover.

airing of views
to
no

Frank Sinatra's
international affairs probably prefers Babe Ruth

Herbert Hoover

amount

country

Robert Taft

that
as

1,000,061 . shares,
which I
to 29.1% of the 3,435,033
j
outstanding North American Avi- /
ation capital shares, were acquired
by General Motors in 1933 and
:The

amount

1935.

The 3,435,033

swarms

its President. To such

people

only

capital shares

the aviation company's /

represent

appropriating done in Washington..

The

*?non,th? Ne^ Era with
°? the 1920's
1930
furnish
us

nationwide group of
underwriters^
that
is
offering publicly today

Unemployment Fictions

Planning
♦v

N. Amer. Aviation Sfk.
Morgan Stanley & Co. heads

for Congressional leaders keeping some State
matters in confidence was epitomized in the
negotiations attending
Mr. Hoover's unexceptionably statesmanlike
proposal for a year's
moratorium on all inter-government debts.
That vital apple-cart
was all but upset by the violation of sworn
secrecy by a Congressman
whose cooperation had been required.
'
;
•
•
>
:

legitimate business."

Morgan Stanley Offers ?p'f

outstanding - capitalization* }'*
a $2,500,000 short-term
>

other than

bank loan.

^ ^

North

American. Aviation, in-i
corporated in Delawarein 1928»'

is engaged

principally in the de¬
sign, manufacture and sale of
military airplanes and airplane
parts. The Company's business is'/}

virtually

all

derived/ft'om'

.con--/;/'

tracts with the armed services
the

of' ■1}

/United

States / Government J
This
subjects the " company .tachanging
government
policies^;
limitations on profits and other
/*
risks relating to this kind of busi¬
ness. '

;

and de4/- /
velopment
program
has * been'-'1
maintained
by
the / company;/
Among the military airplanes de¬
veloped by the company late in/
An

the

extensive

war

period

design

during

the

postwar-

Mustang'^ k
fighter, the FJ-1 Fury jet fighter,'' ;
are

the P-82 Twin

the B-45 jet bomber, the. P-86
^jet:
fighter, and the XSN2J-1 trainer.; f

wholesomeness, integrity and ability can fill the void In addition to the experimental
; kj
created by a personality lacking flamboyance and melodrama. A
contracts under /which' the. air^//;
man
completely lacking the talent for public relations, without even planes were
developed/the com-"
-i
the

willingness

contrasted
of

our

with

kiss

babies.

successor

who

Hoover
was

just" plodded

along.

When

the greatest political showman

time, who actually made

of course

was

easy

disaster..

our Depression seem like great fun,
to portray: Hoover as the symbol of bleak'
*

but far

so, and dangerous to the future of the Republic,
proclivity for chasing false gods! ••

is the people's

and

bomber - types.*

The

Company

plants-located

Unfortunately, "selling ability" is just as necessary to a successful
American politician today as it ever was. For every voter who has
knowledge of Senator Taft's abilities or views, there are ten others
who know of his lack of political sex appeal as well as the measure¬
ments of Governor Dewey's moustache. Perhaps Mr. Taft is expend¬
able.

pany / has
received : production:
contracts on the foregoing fighter:

almost

•»

three,

Long Beach and
These

—

operates

Los
Angeles,,
Downey,; Calif.,-

entirely on leased land.
plants ' contain
approxi-,

mately .3,712,000. square feet- of
space,
of. which approxi¬
mately two-thirds are leased from
floor

others.

;

Volume

THE

Number 4704

167

has been

COMMERCIAL

definitely removed as a
new financing in the

prospect for
future.

near

holders at the annual meeting on

Tuesday and cited the tremendous
outlay contemplated.
/
V.
But, he stated, the company "is
not, at present, planning to bor¬
money

market addi¬

stock."

tional

————

the

the-moment

admittedly, is one given over
chiefly to professional or insti¬
tutional

investors

marily

and

securities

triple

Also

bonds.

Paso

Electric—Data—Buck¬

available

data

are

soned market

Dry

change
will

tivity
;

broadens

opened

Stock Ex¬

the

out

for

the

Dock,

ac¬

preferred stocks and BAA grade

Also

available

borrowers

baker

City
Corp.

Murray

not

Oil

duction

'. At the moment, it is noted

Water

America,

Sea¬

Delaware, Stude-

Company, Radio Corpo¬
Company,

Inc.,

Pro¬

Federal

buyers remain decidedly choosey
and

repeatedly

come

that

break

Mass.

Federal Enterprises, Inc.

!. actly what they

mean.

—

the

which should

one

fluence

regard
condition and

healthy

serve

Garlock Packing

the part

issues

ter; N. Y.

of bankers to overreach

new

they

;fdr bids^
a

for

up
'

;

ects

T1IE

were

The

came

cropper

when

the

market

then

and

ing

belief

investor

that

will

the

interested

preferred stocks of known

panies
other

provided
terms

The

sale

are

the

Com-

right.

35,000 - shares of
preferred
stock
of
New
York
State Electric & Gas Corp., this
week

was

case

Y.,

Directors

paid the company 100.5399 for
$4.50 dividend rate and on proj¬

reoffering

was

entire

on a

4.358% basis,

reported that virtually the

offering

was

taken

Blosser,

Street, Chicago

business

Dividend

June

checks

29,
be

will

May

27,

holders

have filed
office.

this

Keyes

Fibre — Description—A.
Woglom & Co., Inc., 49 Federal
Street, Boston 10, Mass.
Also
available
is
descriptive
on

turing Co. and Moxie.

j -Next week brings only three
sizeable

utility issue and the other two an
issue, of first mortgage rail bonds
a large equipment trust loan,
i

Tuesday,

Light

bids

Co.

for

Florida
slated

$11,000,000

open

first

day, Kansas City Southern

Railway Co. will sell to bankers
$14,000,000
gage

Directors

per
of
such

business
C.

o'clock

record

EARLE

the

June

M.,

L.OEWS INCORPORATED

•/

1948.

(Incorporated)

Racine, Wis., June 2, 1948.
of $1.75 per share upon the out¬
standing Preferred Stock of this Company has
been
declared
payable July
1,
1948,
and
a
dividend of 40c per share upon the outstanding
$25 par value Common Stock of this Company
has
been
declared
payable July 1,. 1948, to
June

12,

record

the

N. Y.

•;

be mailed.

PETERS,

business

Secretary.

INTERNATIONAL
New

The

Preferred Stock of this Company, payable July

1948, to Stockholders of record at the close
1948. Transfer Books will

femaia open. Checks will be mailed.
EDMUND HOFFMAN, Secretary.

Board

clared

($3.)

per

York,

de¬

day

Stock

HARVESTER

1948.

COMPANY

Dollars

Three

Capital

the

this

dividend

June

has

Directors

quarterly

this

Company for the quarter ending June 30, 1948,
payable on July 1,
1948,
to stockholders of
record

Forming
bulletin

Corporation

the

business

June

1948.

MURRAY, Secretary.

thirty-five cents (35c) per share on the
common stock payable July 15,1948, to stock¬

Preferred Dividend No.

Y.]

($1.75)
of

per

dollar

one

the

C.I.T. FINANCIAL CORPORATION

thirty five cents

Common Stock of this

per

the

quarterly dividend of 50 cents

cash has been declared

new

first

bonds to refinance

Transfer books will not be closed.

July

1948.

CORPORATION,
stockholders

10,

Irving Trust

1948.

Company

The transfer books will not close. Checks will

CARL A. SUNDBERG

be mailed.

Secretary

One Wall Street,

FRED W. HAUTAU, Treasurer.

May 27,1948*

day declared

stockholders
t§)

CHEMICALS

(1 ViVc)

Exploration

Comstock

Salle Street,

Palace

1948, to holders of

7, 1948. The stock transfer

books will remain open.

KENT, Secretary

PLASTICS
-a

Tuv

May 26, 1948

CORPORATION OF AMERICA

Electric

New York 1$, N. Y.

180 Madison Avenue,

Secretary;

^NestPenn

CELANESE

W. F. Colclough, Jr.

Co.

—

Data

THE Boardthe Directors has this day
declared
of following dividends:

—

Co., 231 South L8
Chicago 4, 111.

Company

CANADA DRY

The

Corporation—Memoran¬

Appliance

Company

DIVIDEND NOTICE

the

Dry Ginger

rated, at

—

Incorpo¬

per

dividend

quarterly

$1.0625

Twenty-five

years'

own

new

experience

connection.

situations.

63,

business
fer

Originates

References.

Commercial

July 1, 1948 to stockhold¬
of record at the close of

ers

trading corporation securities, de¬
sires

Chronicle,

Park

both

Common

able

pay¬

June 15,1948.Trans¬
will

not

Checks will be mailed.

closed.
,

Wm.

19,

of $1.75 per share,
payable July 1, 1948 to holders of

for

record at the close of business June
'

14, 1948.
.

cents

^-1.

York 8.

iiik/.imj., ujnjiny

i i"

1/1";"

■ ammaBa

ftf i'iYtiift Vi-.-iYlVini ■

v.y.

1948.

$1.75
the

holders
ness

per

the Class A Stock,
June 30, 1948,
1948, to stock¬

quarter ending

payable

COMMON STOCK

June

30,

Of record at

the close of busi¬

June 18, 1948.
COMMON DIVIDEND

share, payable June
the

30, 1948 to holders of record at
close of business June 14, 1948.

R. O. GILBERT

J. Williams,
V. Pres. & Secretary

New

share (1}4%) on the 6% Cumula¬
tive Preferred Stock, for the quarter
ending August 15, 1948, payable on
1948, to stockholders of
August 16,
record at the close of business on July
per

Box

Financial

Place,

books

Stock;

June 14, 1948,

the current quarter

dividend of $0.15 per share on

the

per

to
of busi-

Electric Company has declared
regular quarterly dividends on the pre¬
ferred stocks of the Company as follows:
■K
$1.75 per share (IH%) on the 7%
Cumulative Preferred Stock and $1.50

regular quarterly dividend for

The

Cumulative Preferred Stock and

trader

of $1.18^
July 1, 1948

quarter

payable

7% SECOND PREFERRED STOCK

the $4.25

ness

Penn

rejgular quarterly dividend for
current

holders of record at the close

1948 declared the

May 25,

regular

WANTED

Ale,

meeting thereof held

FIRST PREFERRED STOCK
84.75 SERIES

share,

The Board of Directors of Can¬

SITUATION

PREFERRED DIVIDENDS
The Board of Directors of The West

next, Standard Oil Co. (N. J.)

the

the Preferred Stock for the

payable July* 1,

ada

Parker

:The following day,

Col <N. X)

TEXTILES

dend of 4Qf per share on the Common
Stock have been declared. Both dividends

dum—Smith, Hague & Co., Penob¬
scot Building, Detroit 26, Mich.

amount.

Standard Oil

record

par

1, 1948, to

close of business June 7, 1948.,

STEPHEN G.

per

Company,

payable July

$10.,

.Common Dividend No. 157

■

quarterly dividend of 75

quarterly dividend
share on the capi¬

tal stock of this

Company

of 20 cents per

Bank Note

Although it contemplates ex¬
penditures
exceeding
a
billion
dollars for expansion this year

May 27,1948

The Board of Directors has this

mort¬

equipment trust serial notes.

New York

(INCORPORATED)

Oil

a prom-

Wednesday,
Pennsylvania Railroad will mar¬
ket
an
issue
of $11,000,000,
of

J. EGER, Secretary

share in

per

Secretary

The

Board of Directors of The West

Penn Electric
a

dividend

the

•"

the Common Stock

It'T«* FINANCIAL

of C.

record at the close of business June

before

by the stock¬

Common Stock

payable

June 10, 1948.

May t1t 1948

one

cents

Company have been de¬
on

outstanding

solit three for

was

GERARD

Dividend

five

seventy

(35(5)

stock

common

holders May 13, 1948.

160

the Preferred Stock and

June 15, 1948. This dividend is equivalent to
one dollar and five cents ($1.05) per share «on
stock

New York 8. N.

30 (larch Street

record June
—

Harvester

Company have declared a quarterly dividend

holders of record at the close of business

First

Colony
Corporation, 52 Wall Street, New
York 5, N. Y.
—

International

•.'..MATTHEW T.

are

Metal

Directors

The

■

analysis of

CHARLES C. MOSKOWITZ,
Vice President & Treasurer

GUARANTY TRUST COMPANY OF NEW YORK

quarter ending June 30, 1948, and a divi¬

Also available is

May 26, 194&

1948.

the

Company—

Boston

/■.;'

dividend

holders

;

Board of Directors has declared a
j. quarterly dividend of 37^0;per share
the outstanding Common Stock of the
Company, payable on June 30th, 1948,
to stockholders of record at the close of
business on June 11th, 1948. Checks will

MORAN, Secretary & Treasurer

I. Case Company

„

EVERYWHERE"

"THEATRES

STOCK
one

F. DUNNING.

Anaconda

and three-quarters per cent was declared on

1948,

the

Mining Company has declared a divi¬
Seventy-five
Cents
(75c)
per
share
Capital Stock of the par value of $50
share, payable June 29, 1948, to holders
of

its

Preferred Dividend No. 169

| issory note of Louisiana &
I Arkansas Ry. Co., for the same

and

dend

suit¬

quarterly dividend of

Power
to

mortgage bonds, due 1978. The
same

;

Executive Vice President and Secretary

issues up for bids, one a

and

PREFERRED

On May 25,

— Bennett,
Spanier &
Co., 105 South La Salle Street,
Chicago 3, III.

Current

Board

/'■'

1948

160

Copper
on

WM.

—Analysis

paratively quiet spell for
SO.

The

No.

by th,e Board of Directors

earnings, payable July 1,
stockholders - of record at the
of
business
June
10, 1948.
past

Broadway

American

Irving Trust Company.

COPPER MINING CO.

DIVIDEND

company

can

Kingsburg Cotton Oil Company

mortgage bonds, sold in competi¬
tive bidding yesterday are out of
the way, underwriters face a com¬
a. week

declared

Casualty

May 27, 1948, a dividend No. 237
twenty-five cents (25c)
per
share

out

West Point Manufac¬

Corpora¬
tion, 100 Broadway, New York 5;

Once the Illinois Bell Telephone
$60,000,000 of series B first

The Yale & Towne Mfg. Co.

was

New York 4, N. Y., May 27,

Maryland

Co.'s

Salle

clared payable July 1, 1948 to holders of rec¬

material

YALE

Co., 231
Street, Chicago 4,

AMERICAN

par

1948.

WILSON, Assistant Treasurer,
Broadway, New York 5, N. Y.

120

25c

stock

111.

1948.

mailed

who

Capital Stock
orders therefor at

able

quarter

Corporation

ord at the close of business

3, in;

Analysis—First
Next Week's Schedule

Oil

Comstock

has
this
day
de¬
Dollars and
Fifty

Two

Preferred

ttya institutions*

River

—

•!*% ANACONDA

AND

per

point. Bank¬

ers

ected

Co.—

and

Wichita

COMPANY

Preferred

Dividends

Furniture

135 South La Salle

ended April 30, 1948, a cash
share on the outstanding
this
corporation has
been
declared payable July 12, 1948, to stockholders
of record at the close of business July 1, 1948.
SIMON OTTINGER, Secretary.
New York, N.
Y., June 2, 1948
the

common

Calif.

Common Dividend No* 92 v

Corporation

DIVIDEND NOTICES

share, being Dividend No. 99
Capital Stock of this Com¬
pany, payable August 2, 1948, out of undivided
net profits for the year ending June 30,
1948,
to
holders
of
said
Preferred Capital
Stock
registered on the books of the Company at the
the

t."

Memorandum—Straus

com¬

yield

— Elworthy & Co.,
Ill
Street, San Francisco 4,

Sutter

AMERICAN LOCOMOTIVE COMPANT

l\.

18,

Plywood

Fleet

■—Analysis

York,

($2.50)

TOPEKA

RAILWAY

dividend

Cents

mailed by Irving Trust Com¬
Disbursing Agent.
JOHN W. HAMILTON, Secretary.
1948

United States

International

111

Weyerhaeuser Timber Company

Compan¬

stale¬

individual

data

are

Oil Corporation.

1948.

Memorandum—

long spell.

| | * But currently things are look| Ing up and it is now the grow-

Board

clared

Houdry Process Corp.—Circular
Birkins
Company, 40
such proj¬
Place, New York 5,
works
some .Exchange

the

back

mated for a

ATCHISON,

SANTA

will

Com¬

Securities Corporation,

Also available

June

Dividend

1948,

—George

A* number-of

•

months

Instrument

Taylor

M.,

Checks
pany,

Broadway, New York 6, N. Y.

DIVIDEND NOTICES

Haloid Co., Stromberg-Carlson

Co.,

Oil

ies, and Todd Co.

is to.dook

now

revival of financing by cor¬
porations via the preferred stock

memoranda

are

route.

;

Manufacturing

of business June 17,

available

Also

"Businesslhah's Market

The tendency

come

Memo¬

randum—George D. B. Bonbrieht
& Co., Powers Building, Roches¬

in¬

against the tendency oh

for

Co.

Westgate-Greenland

South La

Rockwell

Out

hopeful

'But

this

COMPANY

$12.50 par value Capital Stock, payable June
18, .1948 to stockholders of record 3:00 o'clock
P.

May

—Data

lopk—Kneeland & Co., Board of
rade Building, Chicago 4, 111.

3% baiH&rthat *s ex~

Street, New York 5, N'. Y.

cussion—May & Gannon, Inc., 161
Devonshire
Street,
Boston
10,

when

su<dr^ihferests-^ay they won't

Leaflet of highlights—
& Co., Inc., 40 Wall

—

Fitzgerald

For

analysis ol

Companies.

realize

Trust

gel, Inc., amy United Electric Coal

underwriters have

Safety Car Heating & Lighting

Co., Inc.

MINING

;
' DIVIDEND No, 868
The Board of Directors has declared dividend
868
of
fifty cents
($.50)
per
Bhare of

No.

dividend

Gas/ Corporation, Spie¬

Railway,

ration of America,. Southern

| that the so-called professional

DIVIDEND NOTICES
HOMESTAKE

Allied Stores Corp.,

Corp.,

Pure

fdel the urge to rush things to the
detriment of broad situation,

Bank

Also available is

board Oil Co. of

Co.—

circulars

are

Southern

John

Co., 634 South Spring
Street, Los Angeles 14, Calif.

N. Y.

New

Kansas

Electric

—

pany—Statistical

,v,V

Co.—Analysis—C. E. Unterberg &
Co., 61 Broadway, New York 6

-p-y

—

proceeding in what the majority
describe as the right direction, the
silent prayer,, seems to ' be that

••

National

will

Oil

Analysis—Eastman, Dillon & Co.,
15
Broad
Street, New York 5,

such as

bankers

Seminole

District

Empire

| bonds.
^
j' With the investment business

and

Gas.

way

greater

equities

new

Co., and Seminole

Oil & Gas.

Portsmouth Steel Corp., Maryland

Service

Public

But the hope is that as the sea¬

Memorandum

—

Dunbar

Gruen Watch Co., Central Illinois

ley Securities Corp., 1420 Walnut
Street, Philadelphia 2, Pa.

interests pri¬

gilt-edge

double

S v Miles Shoes, Inc.
Salle Street,
.7 £..
Riley Stoker Corporation—Dis¬

La
;•••

data

are

(Continued from page 8)

Co., 120 South
Chicago 3, 111.

market,

the

available

(2459)

Corporation

-Data—Buckley Securities Cor¬
poration,
1420
Walnut
Street,
Philadelphia 2, Pa.
Also

pany

Aetna

%
| Recommendations

stage
where
a
"business man'js investment mar¬
ket", is a real, progpect#f'w"'Vi:^

Steel

—

Dealer-Broker

these days confident that the se¬
curities business at last is ap-:

proaching

■

Portsmouth

Public

;Underwriters and distributors
are
in a bouyant frame of mind

CHRONICLE

—
du Pont, Homsey Co.,
Street, Boston 9, Mass.

31 Milk

Abrams, board chairman,

any

FINANCIAL

outlined expansion plans to share¬

row

circular

Company has also declared
the Common Stock of the

Company in the amount of twenty-five
cents (25^) per share, payable on June
30, 1948, to stockholders of record at
the close of business on June 16, 1948.
H. D, McDowell, Secretary

Thursday, June 3, 1948

(2460)

predicting

BUSINESS BUZZ

facing

that
manufacturers,
spreading consumer re¬

sistance

So, there-would be many strikes.

on.

Now officials

••

•

"•

A y* 'gl

BeWnd-lhe-Scene Interpretation*

not so sure.,

are

V.«

■

Knutson's

business tax
revision, a|ter it passes the House
will languish in the files of the

JL aJ Cf/

of the New Deal

It's the last call for dinner for such

'i/'.

Harold

(Jfi*

-a a

XM.II/U/

from the Nation"* Capital

would resist wage hikes.

Senate- Finance, Committee. The
Chairman of the House Ways and
Means
Committee was hopeful
that his final bill stripped of ma¬

boys as

have managed to hang around, and they know it. So they are snatch¬
ing desperately for that last mouthful or two of favorite projects

terial

tax

reduction/ and free of

excise tax

adjustments, might go
through. However, there are re¬
ported to be some draftsmanship

train comes to a final stop for them in January.
Take, for instance, that little^
mouthful of money to merely start Lished policy, the committee has
a steam electric generating plant disapproved requests made in the
for the Tennessee Valley Author¬ present bill for a steam plant and
before the gravy

flaws in the bill.

•.

The Senate Finance

Commit¬

ity. It is a mere $4 million. What for transmission lines and switch¬
if the plant eventually will cost yards not required for reclamation
the
Appropriations
$54 million? Ridiculous! They are purposes,"
asking for only $4 million now, committee declared.

tee is opposed to approving, any
bill without at least some hear¬

yet that
House Appropriations
Committee,
insensible
to
the

would be

ings. If the committee
hold

TVA

was

sold

mental" project.

"develop¬

supposed

was

to harness the rivers so as to pre¬
vent floods, promote soil conserv¬
ation,
and generally give the
paradise treatment to the valley

Probably one of the most lumi¬
last-minute bids for power
that which came from the

not

was

alter

racy

and loan institutions.

the

savings

character of share-account

that whenever

visiting desert

Interior

the secretary of the
of a Latin American

country

puts

prince

Blair

at the

house, you send him on a free
tour of the Tennessee Valley
the better to see what gov¬
ernment management and gov¬

the

contingent back-stop in the
Treasury, the same as the Fed¬
eral v Deposit
Insurance
Corp.,
which in an emergency can call
on
the Treasury for
up
to $3

/basic

economy

cially

when

do,

can

espe¬

relieved

tions
of

for

for the

intended

for

land is riot
The

have

away

there

million,

would

better chance of getting

with it.
was no

private

they

would

proposal

"You'd

surprised how it keeps rental overhead down!"

sale

„

"
.

New Dealers also tried
again to

get by" the Congress
of

funds for

the

provision

construction

steam

generating plants in connec¬
tion with the power phases of irri¬
gation and reclamation projects.

They got slapped down
'

"Continuing

Needless to say this proposal
raised a storm of protest

and

which has reduced prices dur¬
ing most of the inflationary pe¬
riod—back into the Big Govern¬
ment TVA preserve.
V
/

this

once more.

from •/ other

Federal

not

Instead

most

mind

which

agency

bid

behalf

omnibus
bill.

has
the

This

invited

Thomas

was

Board

talk / in

Me-

Chairman of the

new

come

open

down

hearing

credit control.

McCabe

off,/saying: in

effect

and

about
begged

that

hadn't been around

Jong enough
to make up his mind about this
subject. If Senator Taft wanted
to hold

staff

hearing, there

of them will

New York dk Philadelphia

his

backed

Truman

promise

Vice-Chairman

to
of

name

the

If Mr. Eccles, whose board
term runs until 1958, were to quit

a rare

member of the bank.

needed

little

This, however, is

unusual than

was

now,

new

dollar

look

into.

how it happened.

guess: is'that
a

year

So
«4

will

not

from

now

the Reserve system is ready
a

plan doing

away

after

the

city

and

■

September

hauled

Charles

will

Texas

soon

spring

loan

//;///■: ' / *

Gasr Transmission

Memphis Natural Gas

•

J///

President

Luckman

people to eat less bread, a
proposal all but dropped eventu-

.....

Nevertheless, there is

,/•

•

still

rights

U. S. Finishing

/#/// Dorset Fabrics ■/■//<■//

M. S. Wien & Co.

to get

ally.

Textron Co.

the

uneconomical. He also tried

was

Lonsdale Co.

Washington to energize a food
saving campaign.
Mr. Luckman j
tried to persuade farmers to feed j
less grain to their livestock, which j
they were doing anyway because

ESTABLISHED 1919

Membert H.
40

Y. Security Dealers

Exchange PI., N. Y. 5
;;

Ats'n

HA. 2-878*

Teletype N. Y. 1-1397

vestige of his organization left

in this capital. It's carrying on a
drive

food

for

servation.

year

suade

and

feed

cost

con¬

million

Trading Markets:

The drive has two

run.

i objectives..

Ralston Steel Car

")ne is to try to per¬

farmers to keep the rats

•other

'J reserve

guarantee proposition.

November election.
*

lout

reserve,

World

long way

Mr. Truman would have the

tral

country bank classifications, r

World Bank repeats its word

that

privilege of naming his successor
That privilege is
likely to be offered to Mr. Tru¬
man's
successor,
should
Eccles
hold off leaving Washington until

re¬

could

off.

usual

And, of course, any public

their

people

corn

Oregon Portland Cement

cribs.' The
/

try

buy

food

persuade
which

Riverside Cement A & B

Spokane Portland Cement

cheapest in season./

housing
■>.

Incidentally,

♦

/:/'? / winter

you

along

may

than

about

find that there / Practically all Washington was

meets

the

eye

mid-1949.

thrown off base by the GM "cost
of

living" settlement.

was

announced,

Until this

everybody

LERNER & CO.
Investment Securities

10 Post Oifice

Square, Boston 9, Mass.
Teletype BS If

Telephone Hubbard 1990

was

the

other hand,

the odds are against
passage this year of the proposal
to spend $80 million for subsi¬

for the

HAnover 2-0050

the

war

stockpile.
*

;-:V-

Teletype—NY 1-971
Firm Trading

Empire Steel Corp*

Markets

FOREIGN SECURITIES

Advocates of the draft of men
for the armed services are still

& Co.
•

Susquehanna Mills

All Issues

bill by

allow¬

ing the President to induct

r.ARL MARKS & f-Q. INC.
FOREIGN SECURITIES

men
-

19 to 25 for two years
service*

They become less

sure,

however,

of a safe margin for the
draft

' i

Swiss franc

the

to the vacancy.

with the old arrangement of cen¬

suc¬

expecting approval of

123 South Broad St., Philade'ohia 9,
Pa.:

thru—Montgomery, Scott

this

about uniform

study

was

to recommend

been

both houses inducting

JEC,

Cabe, the

about

President

Last

actually happened

for

proposal

also will fail.

immature

T-E-W

and

public
last-minute

committee

.that Senator Taft, Chairman of /

that

of HHFA,

power

for

—

become trades.

Clear

What

be much before

industry alone.

came

Economic

it still is an
project at this stage.-

production of mar¬
ginal metals and minerals needed

Shoot those tough
inquiries at

eventually

Joint

hearing,

Best

been

plugging with considerable

dies for

IT'S NO BOTHER!
don't

the

expanding the

until

WTe

agencies,

have

the fact that the Fed¬

Marriner Eccles's formal accept¬
beginning to look like
long-estab- 'tlie waiving of the duty upon ance of the
situation
created
imported lead will be continued

Herbert H. Blizzard & Co.

us.

would

from

come

cess

delayed

when
down

eral Reserve system staff study
proposing
uniform
reserves
of
specified percentages for demand,
time, and inter-bank deposits re¬
gardless of the location of the
commercial bank got the attention

that

given serious treatment if it had

the

vote

Eccles

serves

that business

final

Despite

has

—

the

Board.

not

Settlements. Switzer¬
a

money.

deal.

'/■/' ///■:/:

FDIC.

And, of course,
thought of letting

power

Netherlands

Swiss

from week to week.

credit

got-

bonds put with the Bank for In-'

purpose

long-term

has been TVA that it
long
way
toward" breaking
has pushed out all private electric
down the
distinction between
power.
Yet
in
the
Tennessee
the commercial banking system
Valley Empire of the government,
and
a
system
for
attracting
power also is running short of
money for investments in mort¬
•expanding needs.
There is no
gages.
more water power to be tapped.
A distinction between the FDIC
The answer, tough for the public
and the Home Loan Bank Board,
power boys to reach, was steam
power,
It was a tough decision, which nominally supervises the
because it's difficult to connect Savings and Loan Associations, is
up
the- installation
of
steam that the latter is only a part of
power generation, a classic pri¬ an agency set by President Tru¬
vate enterprise, with the excuse man known as the Housing and
that you are spending money to Home Finance Agency.
This is
an overall "coordinating" agency
harness a river system.
in the government housing field
So they asked for permission
which actually sticks a finger into
to
start
a
steam
generating
much HLBB business and de facto
plant, and Mr. Truman's budget
deprives it of any independence
office approved. They figured
similar to that enjoyed
by the
if they set the original ante a
mere

similar

ternational

mortgages into demand de¬

tration

So good

long time, except for

deal

Bank bonds also is still

mobilizing

ex-

■World Bank bonds in other than
are not in the cards

billion.

However, by making institu -

the

positories, the newest Adminis¬

financial worries.

mere

U. S. dollars

area,

ernment operation of a region's

Truman's $40 per head tax
emption if this thing ever
io the Senate floor. It is
likely to.'. / /-/ ;
/.///?-,

;

It was pro¬

Congress that (1)
on call of the Federal Savings and
•of
the
Tennessee
and
all the
Loan Insurance Corporation the
tributaries which could be hooked
Treasury would be obliged to lend
thereon
to
the
program.
You
$750 million to FSLI; (2) that the
must understand, at least if you
Treasury could invest $1 billion in
"believe the New Dealers, that the
the Home Loan Banks; and- (3)
huge production of hydro-electric that
Savings and Loan Associa¬
energy was a mere incidental byr tions could be
empowered to ac¬
product of the whole deal.
cept deposits of public funds, fi¬
The project has grown and
duciary money and the like.
flourished, constantly fertilized
Theoretically the savings and
tby the Treasury. It is so good
loan insurance fund would have
posed

possible,

House, to choke off "demagogic'^
amendments. Thus, lefties right
; away
would
offer
President

bureauc¬

enlarge

and

there

year,

i stacle is that in the Senate it is

nous

Administration housing

this

time left for action '
oh the Senate floor. Another ob-

„

/wonders of TyA, just refuses to
go along.

hearings

were

50 Brood Street
■

SPECIALISTS

Hill, Thompson & Co., Inc.

New York 4, N. Y.

AFFILIATE: CARL MARKS & CO. Inc. CHICAGO

Markets and Situations

for Dealer.

120 Broadway, New York
TeL REctor 2-2020

Tele. NY 1-2660

Volume

COMMERCIAL

THE

Number 4704

167

FINANCIAL

San Francisco Security Traders

Rudy

Sandeil,

Shuman, Agnew & Co.; Art Perenon, Wm. R. Staats Co.;
Wilson, Johnson & Higgins

Bart

McMahon, Merrill Lynch, Pierce, Fenner & Beane;
Walston, Hoffman & Goodwin

Jim Stewart,

Frank

Association

Bowyer, Schwabacher & Co.; George

Kammerer, J. S. Strauss & Co.; Bob

Smith, Hill, Richards & Co.

v.;

Cliff W. Morrill,

Pictorial Insert I

CHRONICLE

Bourne, Conrad, Bruce & Co.; Louis Rich, Schwabacher & Co.; Oliver
(President, Los Angeles Traders' Ass'n), Maxwell, Marshall & Co., Los Angeles

Robert K.
Scott

Larry Pulliam, Weeden & Co., Los Angeles, Executive Council of N.S.T.A.; William
& Co., Los Angeles; William J. Raber, Stewart Scanlon &Co.

Connie Shafft,

Shafft, Snook & Cahn; Walter

Schag, First California Company

Davies, Dempsey-Tegeler

'W v

IBfer
m

^flEl
Sflf

Walter J. Vicino, Blyth &
Van

Co., Inc.; Jack Ford, Douglass,

Der Nallien &

Co., Inc.

Jack Sullivan,

First California Company;

"Pete" Finnegan,

Hannaford & Talbot

Collins Macrae

(President of S. F. Traders'
Wuljf, Hansen & Co.

Ass'n),

Pictorial Insert II

THE

Holds Annual

Pierce

COMMERCIAL

First

California Company; "Cookie" Faulkner,
"Rich" J. Payne, Geyer & Co., Inc.

Wulff, Hansen & Co.;

Richard R. O'Neil, Oscar Kraft & Co., Los Angeles; Jack Egan, First California Co.

CHRONICLE

Thursday, June 3, 1948

Joseph E. Larzelere, H. Irving Lee & Co., San Jose; Edwin L. Beck, "Commercial &
Financial Chronicle"; "Bugs" Moran, Conrad, Bruce & Co.

Garrett
Dempsey-Tegeler & Co., Los Angeles; Emmet K. Whitaker, Davis,
Skaggs & Co.; J. Earle ("Lefty") May, J. Earle May & Co. of Palo Alto

Hewitt,

FINANCIAL

Spring Outing May 22-23, 1948

Harvey J. Franklin, American Trust Co.; Andrew E. Steen, American Trust Co."

Tony Bottari, Wm. R. Staats Co.; Jack Quinn, Stone & Youngberg

Jack

Palmer, Conrad, Bruce & Co., Harry L. Schmid, William D. James Co.
Sacramento; Brooks D. Weber, Davies & Mejia

Frank A. McGinley, Blyth & Co.,
Inc.; John J. O'Reilly, Denault & Co.

•*>

Volume

167

Number 4704

COMMERCIAL

THE

At Northwood

FINANCIAL

Lodge in Sonoma County

Jim

Powell, Harris, Upham & Co.; John E. Buiek, American Trust Co.

"Ernie"

Joe

Talbot, Hannaford & Talbot; Charles B. Kane, Geyer & Co., Inc.

Bill

Hyde, Blair & Co., Inc. of New York; Jack James, Marache, Sims &
Los Angeles

Sandy Hogland, Brush, Slocumb &
Sutro & Co.
,

Co.; Paul E. Isaacs,

Co.,

Blum, Brush, Slocumb & Co.; Louis J. Spuller, Jr., Elworthy & Co.

Miller, Fairman & Co., Los Angeles; Earl Thomas, Dean Witter & Co,

Charles B. Harkins, Blyth & Co., Inc.; Nieland B. Van Arsdale, Blyth
Los Angeles; Joseph C. Kessler, Henry F. Swift & Co.

George H. Earnest, Fewel & Co., Los Angeles; Sam Green,
-

Fictorial Insert III-

CHRONICLE

Pledger & Co., Los Angeles

& Co., Inc.,

Ted Baker, Dean Witter & Co.; Houston Hill, Jr.,
J. S. Strauss
Co.

■

•

I Pictorial

Tom

Jack

£yfi

Traders at the Lodge

Price, McAndrew & Co., Inc.; Dick Abrahamson, Weeden & Co.

Hecht, Dempsey-Tegeler & Co., Los Angeles; Jesse M. Levy, Jr., Lawson,
V

Thursday, June. 3, 1948

THE COMMEBCIAL & FINANCIAL CHRONICLE

Insert IV

;

Matt

*|*

Levy & Williams.

Morton, Jr., Davis, Skaggs & Co.; Elmer L. Weir,
Brush, Slocumb & Co.

;
^

Kenneth H. Sayre, Needham & Co., Palo Alto; Hodge H.

Davidson, Bailey, Selland

& Davidson; Terrence M. Dempsey, Merrill Lynch, Pierce, Fenner & Beane

Armando Etiopi (Accordion), Armando Sport Shop, San
Carlos; "Mac",McCarty (Bass Fiddle), Boots & Saddle,

Belmont, Calif.

Ken Donald, First California Company;
George G. Gumbel, J. Barth & Co.

Full text of Commercial and Financial Chronicle : June 3, 1948, Vol. 167, No. 4704

FRASER