Full text of Commercial and Financial Chronicle : June 3, 1954, Vol. 179, No. 5330

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<2
ESTABLISHED 1S39

university
MICHIGAN

OF

4-

m

UHKISmM
uiun

Reg. O, 8. Pat. Office

Volume 179

Number 5330

New York 7,

EDITORIAL

The Textile Revolution

We See It

As

t

Price 40

N. Y., Thursday, June 3,1954

Is the world

Economist and President

of easy money
have occurred to
many thoughtful observers of the passing scene. It
is a commonplace that conditions in most of the
^European countries have dramatically improved
during the past two or three years. Not very long
ago current literature was replete with state¬
ments by competent authorities that one of the
major causes in this improvement was a return
to sanity in the matter of fiscal management and
central bank policy. Up until slightly more than
a
year ago most qualified observers rarely tired
of expressing their approval of firmer Federal
Reserve policies in this country. To many it ap¬
peared quite possible that we, that is to say the
whole world, had definitely begun its long trek
entering another

Holding "we are now at the tail-end of the 1953-54
liquidation in textiles and apparel," Mr. Zelomek lists as
reduced; (2) normal

so

(1)

for

coverage

few months.

Lists

as

reason

for reduced dollar volume

of apparel sales:

(1) the weather, and (2) the trend
toward less dressy garments. Reviews developments in
the textile

affected

as

PUBLIC

many

time

are now

we

at the tail-end of the

the

1953-54

the balance of payments

the

upturn

to

,

.i

i'

-

changing character of the synthetics
industry. The important point to be
made in regard to all branches of
the textile-apparel industry is that
the worst has already been seen.
I'd

like

to

summarize

briefly the
behind my pre¬
A. W. Zelomek
diction, first, in terms of the indus¬
try itself and then in terms of busi¬
ness in general.
I shall then go on to develop my reason¬
ing for you.
reasoning

that lies

on

UTILITY
of the

Textile

their

currencies

extent, especially
Germany, Austria and Holland, to lesser extent in Britain also.
How real or lasting is this im¬
provement? It is by no means gen¬
eral. In Europe, a number of coun¬
tries do not participate in the favor¬
able trend:
Finland, Denmark, Ire¬
land, Spain, Italy, Norway, Greece,
Turkey are in acute "dollar dol¬
in

Palyi

Melcbior

Dr.

(Turkey and Japan may resort to devaluation.)
Many "under-developed" areas find themselves losing
vital exports on which they depend; the terms of trade
turned against them—in favor of Europe.
Favorable terms of trade—falling import
stitute

one

Europe's
Lowell

of

drums."

28

page

value

considerable

a

so

(1) A primary factor behind the decline in your indus-

Continued

dollar

hardening. So much so, that under
the leadership of Germany's brave
Minister of Economy,
Dr. Erhard,
the discussion about "plunging" into
convertibility has reached the acute
stage. In fact, foreign exchange and
import controls have been relaxed

although here the

synthetics,
of

may
deviate
slightly from that of the rest of the
industry
because
of
the
rapidly

24

ceedings

so,

and of a number
has greatly improved. Their gold and dollar
have been rising (by $2.6 billion in 1953) and

reserves

can-

page

or

position of most European countries,

liquidation in textiles and apparel.
This applies to production, demand,
and prices in the woolen and wor¬
sted industry and in the cotton in¬
dustry. I believe it also applies to

♦An address

on

the last 18 months

In

apparel industry.

Meanwhile the Chairman of the Board of Gov¬

Continued

of progress.

have

My outlook for the textile industry has been described
a
conservative-optimistic outlook.
I wish to state

that I believe

country the shoe began to pinch,
a good many who had

System has

that

and why

recovery

of others,

it seemed to

of the Federal Reserve

factors

revolution and economic

Europe's

European soft money countries are unable to achieve
a
genuine balance of their international account, Dr.
Palyi concludes the Dollar Gap "reflects the lag of labor
productivity behind pay checks." Holds European prices
in competitive market are too much out of line for export
outlets, and concludes, economic systems, in which the
prospect for individual betterment is replaced by price
and job rigidities, lack incentives, the driving force

inventories have been

excess

consumer needs can¬
(3) textile prices are
reasonable, and (4) new fibers and fabrics will help
sales.
Says low in the general business picture has
almost been reached, and upturn may be expected in a

by that time begun to think they saw signs of a
possible recession on the horizon. Federal Re¬
serve authorities
began to buy governments for
the purpose of cheapening money. Then came a,
reduction in the reserve requirements of member
banks for somewhat the same purpose—and, of
course, to help the Treasury borrow vast sums
at less than it would have to pay in a market left
to its own devices.
More purchases of govern¬
ments, and reductions in the rediscount rate fol¬
lowed, and if reports widely credited in informed
circles are to be trusted, the end i^ not yet.

ernors

After discussing how solid is

be deferred much longer;

not

history in the management of the financial af¬

at least

for his belief:

reasons

fairs of the nations.
Then in this

Copy

By MELCHIOR PALYI

era

This question must

back to sensible observance of the clear lesson of

or

a

Productivity, Competition
And Dollar Shortage

By A. W. ZELOMEK*

International Statistical Bureau, Inc.

madness?

Cents

and

reason,

current

surely

monetary

one,

for

Record-sized

recovery.

by Mr. Zeloniek before the Alumni Association of thje
Institute, Lowell, Mass., May 22, 1954.

prices—con¬

temporary

a

Continued

on

page

26

ISSUE NEXT WEEK—The "Chronicle" of June 10, will feature pro¬
Edison Electric Institute Convention currently in progress at
Atlantic

City, New Jersey.

,

State and
Established

U. S. Government,
:

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Securities

STATE and MUNICIPAL

CALL *

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ON

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Chemical
BANK & TRUST

COMPANY

U. S. Government

—

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^

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Broadway, N. V. 6

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THE NATIONAL CITY BANK

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N. Y.

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OF THE

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OF NEW YORK

Maintained

and

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Canadian Exchanges

t.l.Watson &Co.

SUGAR

Exchange

Exchanges

Amsterdam, Holland

122 Years of Service
to

•

Hollywood, Fla.

RE 2-2820

STREET

NEW YORK 5,

Trade

N. Y. Cotton Exchange

Chicago

OF NEW YORK

Exchs.

Net

99

of

Bonds

Inc.

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*******

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and ,other

Sixty Years of Brokerage Service

* Members

Exchange

Cotton

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All Corporate & Foreign Bonds

MABON

Stock

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Preferred and Common Stocks
*

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Exchange

Stock

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,

Members

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H. Hentz & Co.
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telephone:

MARKETS

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COMMON

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Raw

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Exports—/mports—Futures
50
Dlgby 4-2727




DIRECT

Exchange"

WIRES TO MONTREAL AND

TORONTO

Goodbody & Co.

BROADWAY, N. Y.

BRIDGEPORT

Teletype NY 1-2270

,

Members N. Y. Stock Exchange

MEMBERS NEW YORK STOCK EXCHANGE
115 BROADWAY

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:

NEW

YORK

1 NORTH LA SALLE ST.

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Pomrnox Securities
6rporati07i
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Members New

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1820

2

The

(2426)

Commercial and Financial Chronicle ".*1. Thursday, June 3, 1954
t

The

position and trade in

We

Groups

the following

Security I Like Best

'This-

Week's

Forum;.Parllcipants and

A continuous forum in which, each

week, a different group of experts
advisory field from all sections of the country
participate and give their reasons for favoring a particular security-

v<

Alabama &

Their Selections

in the investment and

Banks and Insurance

Interprovincii!

Line

Pipe

Com¬

Louisiana Securities

pany—Melvin

(The articles contained in this forum

Industrials

Interprovincial Pipe Line Company

120

5

WOrth 4-2300

Teletype NY 1-583 and NY 1-40

Direct

OFFICE:

Wires

84

State

Street

Boston,, Philadelphia,

to

'

Chicago,

and

Cleveland

Houston.

Superior.

market

issues

capacity of the line from Edmon¬

i

d i

n

that

"men

Regina will be increased
from 95,000 barrels a day to 205,-

the
be¬

are

000, Regina to Gretna from 70,000
to 170,000 and Gretna to Superior

separated

ing

the

from

from

BROADWAY, NEW YORK 5

120

Tel. REctor 2-7815

<

Trading Interest In

American'Furniture
Bassett Furniture Industries

investor desir¬

be raised

to

partici¬
pation in the

pared to

100,000

ing

a

of

presents

Since

risk

than

many

ventures, Inter¬
Pipe
Line Company
excellent opportunity

an

achieve
the

this purpose.

spring of
oil

crude

exceeded

fineries

1949 prospec¬

production

area

the

in

of Alberta greatly

the requirements of re¬
the

in

STRADER,TAYLOR & CO., Inc

Provinces.

Prairie

Oil,

controlling

Ltd.,

Lynchburg, Va.
LD 30

perior, Wisconsin. Interprovincial
was a wholly-owned subsidiary of
Imperial until October, 1949, and
cuirently owns one-third of the

outstanding stock.

Grinnell

Corp.

lation

of crude

ment

to

traffic

for

winter

the

Western

for

tanker

move-*

refining centers of
shut-down of lake

about

live

months

presented

season

Parchment

of

sup¬

BOENNING & CO.

op¬

serving

expanding

company

decided to

Superior,- Wisconsin
nia, Ontario at
This

December,

to

Sar-

cost of $69 mil¬

a

line

east

was

1953

completed in

with

initial

an

capacity out of Superior of about
barrels

pacity

station and
of 300,000
five

pump

with

daily

with

stations

capacity

ultimate

an

barrels

additional

ca¬

day

a

sta¬

pump

of

the

system

considerably

pumping

has

been

through

stations

were

otit

added.

of

To increase

and

Edmonton

provide larger deliveries to Su¬
perior another 135-mile loop line
of

24-inch

pipe was laid in 1953
and
a
new
pumping station at
Superior was also placed in op¬
eration.

The

in

Western

40,000

from,

Canadian

consumption

12%.

of over

Potential pro¬

duction of Canadian crude in 1953

equivalent

was

nadian

consumption

14%

to

69%

to

in

duction

of

compared

as

1948, while actual

equalled

44%

beginning

of

pro¬

1953

in

against about 12% in 1948.
the

Ca¬

as

Since

refinery

1948,

will

be

dian

slightly

was

production
indicates

of

such

1953

of

81 million barrels
findings of 380 mil¬

new

In the year-

1953.

figures, it is doubtful

reserve

than

more

ances

end

than 2 billion

more

lion barrels in

if

Cana¬

proven

the

which, after allowing for

barrels

end

of

at

for

made

were

allow¬

small

very

strikes

new

Pembrina, Sturgeon Lake,
Homeglin-Rimbey ,a n d
Smiley.

Canada

of
and

from

mated

have been esti¬

reserves

500

to

1,000

million

barrels and it is also highly prob¬
able
that
Smiley and Sturgeon
will

Lake

both

turn

out

major iields with

reserves

million

After

barrels.

increased

for

is

crude

reserves

believe

to

reason

in

the

at the end of 1954 may

50%

as

rels

greater,

of

or

additional

of 100

allowing
production

crude

there

be

to

that

Dominion

be

as

much

billion bar¬

a

reserves.

awaiting

Interprovincial's
livery
ton,

area

WiHiston
and

Basin

Nortn

of

Montana.

Prairie
far
a

Provinces into
the

as

distance

the

Ontario

as

Toronto

refinery

of

miles; also to

1,700

area,

refinery points in Wisconsin, such
Superior, and the Twin Cities

as

in Minnesota/United States

crude,

notably from parts of the Williston Basin, could conceivably move
east

through

line.

the

Interprovincial

cuts

Crude oil needs in

Quebec,

made

to

able

construction

for

necessary

embark

on

the

another

com¬

siz¬

this
year.
It entails looping 638 miles
of 24- and 26-inch pipe to the or¬
iginal system between Edmonton
program

a

would

1,000 mile line and it

a

that

seem

solution

would

tie-in

a

Recently, it
feeder

line

with

other

pipe lines and tankers.
About

40%

of

the

area

which is not avail¬

able economically to
provincial Pipe Line.
demand
and

in

add to

in

the

Ontario

the Inter¬
Growth of

Prairie

will

Provinces

continue

to

shipments through the In¬
terprovincial line.
However, the

Co., Ltd.

Brokers

111

&

1897

Tokyo—70

Office

Investment

Branches
Bankers

Broadway,N.Y.6 COrtlandt 7-5680

some

that

was announced

pipe

publications

Japanese securities

with

the Interprovincial system at
point along its line.

a

write

Established
Home

sensible

more

a

be

or

current

Yamaichi

the present production rate hardly
warrants

Japan

Securities

potential production is great,

Trading Markets

daily

a

capacity of 31,000 barrels will be
built by Mid-Saskatchewan Pipe

GENERAL

CREDIT, INC.

(Prospectus Available)

Lines, Ltd. to connect the Smiiey
field

in

Saskatchewan

Interprovincial line
bert pump
on

txie

with

station which is located
border

western

katchewan.

The

PANTEX MANUFACTURING

the

the Kerro-

at

of

SANDY HILL IRON & BRASS

Sas¬

Pembina

REEVES SOUNDCRAFT

Pipe

Line

Company, Ltd., recently ob¬
tained permission to build a pipe
the

to

be

five

$13

Pembina

new

Edmonton.

to

expected

and
or

from

to

June

start

1, 1954
within four

completed

months at

million.

oil

John R. Boland & Co.,

Construction

cost of

a

The

30 Broad St., New
B0 9-3242

Inc.

York 4

Teletype NY 1.4487

about

connection

of

this line at Edmonton would pro¬

vide another substantial
crude

and

permit

either west

its

source

of

NEW ENGLAND

movement

the Trans Moun¬

over

LIME CO.

tain

system or east through the
Interprovincial system as demand
•

dictates.
An

future
was
ern

factor

important
traffic

of

affecting
Interprovincial

the decision by Great North¬
Oil Company to construct a

by

mid-1955.

It will

Fosterton

obtained by a 150-

area

either

Clearbrook

perior

where

station

another

will

Su¬

or

pipe

to

the

the

company

$92

million

The

pu¬

under

a

flie

with

contract

ATOMIC ENERGY COMMISSION.
•

Company
four

earned

years.

$11.40

Dividends

in

past

paid

same

period $2.25.

the

Memorandum

request

on

Dayton Haigney & Go.
Incorporated

Sarnia

extension,
in excess of

spent
the

on

wholly owned

St. Paul.

near

Financing
Prior

a

line

transport it to

refinery

Nelco Metals Inc.,

cium

op¬

mile feeder line to Regina through
the
Interprovincial
system
to

com¬

ATOMIC

rity magnesium and metallic cal¬

Canadian crude from the

on

the

in

subsidiary, manufactures high

St. Paul, Minn., with a crude
capacity of 20,000 B/D to be com¬

pleted

metallurgical

engaged

ENERGY program.
•

of

erate

A chemical and
pany

$25 million refinery 14 miles south

original

line.

75

FEDERAL

BOSTON

10,

STREET

MASS.

Superior to Sarnia line cost

about $69 million or about $5 mil¬

lion

less

and

another $12

than

estimated

the

cost

million was ex¬
pended on the original system to
permit increased deliveries to Su¬

Over-the-Counter

perior and to provide year-round

supply to Sarnia.

The Sarnia

tension

served by

offices

One cf the

dispose of this
1,000 mile line to util¬

lion bonds and 1,439,552

are

on

supply in the Minneapolis
and Chicago area.
Wr.Le the iuture

our

to

the Maritime Provinces and Brit¬

refinery ca¬
pacity in the Dominion is in the

pany

ideas

ish

Columbia

for

Interprovincial's
through trie Canadian

de¬

through

branch

our

Call

ize this

new

economic

east

in

Dakota

extends from Edmon¬

Alberta,

to

that

large supply of crude
pipe line outlet is the

a

company

Montreal

throughout the territory have
it

It is believed

day.
Another

as

Pembina

Direct iwires

Inierprovmciai

Opportunities

a

is

estimate

reserves

is

Investment

line

increase

Birmingham, Ala.
Mobile, Ala.

Canadian crude of 100,000 barrels

field

the

NY 1-1557

New Orleans, La. -

portion of additional

a

general area.

capacity has risen 90% and by the
1954

region

Stock Exchange

St., New York 6, N. T.

HAnover 2-0700

States

Detroit,

Cleveland

American

Rector

the Michigan-Minnesota area may
contain
a
potential demand for

end

of

to

Nemjfgrk Stock Exchange

Members

requirements of refineries in that

in¬

280,000 B/D to over

B/D in 1953, an increase
78% with an average growth

500,000

the constant increase in consump¬

25 Broad St., New York
4, N. Y.




po¬

tion
Members New York Stock Exchange

Tele. NY 1-3222

discoveries

increasing

reserves

P&onos HA 2-9766

time

one

and
looping lines. In 1952 a 100-mile
looping line of 16-inch pipe was
completed and five new pumping

Circular

by

222,000 B/D and

creased from

the original construction,

capacity

additional

Write for

over

Potential Markets

increased

UNILEVER

to

production

tions

Since

Philadelphia 3, Pa.

the

and

lay 643 miles of 30-inch pipe from

100,000

Keyes Fibre Co.

Canada

portunity -of
markets, the

lion.

Kalamazoo Vegetable

barrels

to

B/D to 345,000 B/D. In the mean¬

The

loading docks and term¬
inal facilities at
Superior, Wis¬
consin permitted winter accumu¬

in

Southern Advance Bag & Paper

B/D

tential

Expansion of System

TWX LY 77

Continuing Interest in

million

increased

have

barrels

107%.

ply, financial and technical prob¬
lems.
Consequently, in view of
the rapid growth of oil reserves

A

000

rate

the

supply

may

crude is
re¬

the end
of 1953.
During the same period
actual production rose from 33,-

of

Alberta, organized Interpro¬
vincial
Pipe Line Company to
construct and operate 1,127 miles
of pipe
line to move crude oil
from
Jtiedwater, Alberta, to Su¬

Canada
million

475

2,000

about 70% of tjie proven reserves

Ontario,

The

area.

eventually

many

recoverable

the

1948

of

serves

from

in

the

United

central

and

appears

Members

19

only a snort distance nom oarnia

line

completed.

was

Consumption

i 1

Canadian

provincial

the

portion of this basin.

While

Life Insurance Co. of Va.

it

com¬

as

at the end

B/D

Canadian Production and
Fels

Melvin

Camp Manufacturing
Dan River Mills

138,000 B/D

devel¬

o

in

marketing

ca¬

Sarnia line will

new

when

1953

The

159,000.

to

pacity of the

Commonwealth Natural Gas
*

70,000

boys." For the

Imperial

Exchange

to

ton

-

lie

and

After the completion of the 1954

Edmonton

Stock Exchange

to

construction program, the original

tive

Stock

line

the

In

York

the

on

the

of

specu¬

to

Members

pipe

sector

of

other

ffiCpONNELL & Co.

26-inch

highly

with
relatively
less

Since 1917

of

and

action

industry

Rights & Scrip

pipe between

The

although

Edmonton

STEINER,ROUS^jNk).

—

consists of

Toledo

Caandian

New

354 miles of 24-inch

stocks

lower

opment of the

Specialists in

by the end

The program

miles

future

American

line, to be completed

Bought—Sold—Quoted

Com¬

Stanley Helier, Senior
Partner, Stanley Heller & Co.,
New YorK Ciiy. (Page 27)

one of which
the new Sarnia

on

Glass

—

American

cate

York

Broadway, New

BOSTON

stations,

pany

larger established companies was
less apparent.

would

Exchange

BArclay 7-5660

pumping

will be located

Libby-Owens-I crd

generally
the
reduction in market value of the

oil

trended

lative

1920

Member

Stock

Superior and nine additional

large potential demand

Canadian

Corporation

to

Regina. 100 miles
paralleling company's system be¬
tween Regina and Gretna, and 184

have

New York Hanseatic

American

and

of 1954.

Utilities

Feis, Analyst, F.
S. Smif here & Co., New
x'orK
City. (Page \t)

be, nor
offer to, sell the securities discussed.)

Analyst, F. S. Sinitliers & Co., N. Y. C.
Members, N. Y. Stork Exchange and
American Stock Exchange

Pipe Lines

Established

as an

FELS

MELVIN

Natural Gas

Associate

they to be regarded,

are

intended

not

are

was

financed

ex¬

by $60 mil¬

shares of
capital stock which were offered
to

stockholders

(Canadian).

At

at

the

$18

a

end

i

of

Quotation Services
for 40 Years

share

1953

the capitalization consisted of $130
million of First Mortgage
lateral

Trust

bonds

and

shares of capital stock.
construction

program

and Col¬

National Quotation Bureau
Incorporated

5,039,832

Established

will

cost

46 Front Street
CHICAGO

Continued

on

1913

The 1954

page

21

New York 4,N.Y.
SAN

FRANCISCO

Volume. L7&> Number 533G T: ; The Commercial and Financial Chronicle-

(2427)

3

r

Whyt Do Yon Think?

,

,»

■

INDEX

■

Add"

/

on
a

\\

Another gToup of letters to Editor given today in* connection
with the views expressed by Dr. Carl Wiegand in paper pub¬
lished in "Chronicle" of April 8. Dr. Wiegand presented a

Page

^

-

Cover

The Textile Revolution—A. W.

Cover

Zelomek_

Importance of Steel Industry and Its Obligation to Investors
T.

Steel—Clifford F.

1946" and contended that while full employment "at any
price
might be good politics for short time," it would turn U. S. into
a regimented
society and seriously weaken our economic system

Kennedy

below

present

some

of the letters received in
tion

with

connec¬

U.

Dr.

Carl
Wiegand's
Employment and Its

"Full

paper

HON.

more-

Dangers" which appeared in the
"Chronicle" of April 8, other com¬
munications on the subject having
appeared in

our

issues of

I

PAUL

S.

H.

wish

that

I

Dr.

Of Mines and Porcupines—Ira

9

from

had

the economic

on

consequences

ployment

simply
I

em¬

Dr.

his

views

___/_

The letters

well

as

previously published

those

given today, in
view, constitute an important
contribution to a more thorough
as

pre¬

considered

attention

statements

HON.

Secretary

Relative

Dr.

to

of

Wiegand's

ticle, the President

ar¬

has endorsed

the principles of The Employment

Act of 1946

on

Economic

of

Douglas

will

the

ing

"full"

-in

note

stand

Rather,
"substantially" full

for

we

the

of

sure

that

the

and

deserve

rifice

of

vency

or

absorb

these

workers.

and

an

want

of

levels

em¬

We

do

of

business.

not

that

argue

should

ment

ever-rising

these

objec¬

freedom,

our

sac¬

sol¬

Wiegand's article)

3

V )

Request

r

more

Then, we
important»to

human

budget than
the national budget, and we point
to

1931-33

Some
to

of

forget

saying
needs

as

that

many

"What

are

want those times

point.

inclined

people were
this country

dictator.".

a

in

case

critics

our

then,
is

a

IBA Approves Use of Photo Off-Sets of Bond Legal Opinions-

19

Spokane Stock Exchange Officials Differ With Admiral
Ramsey on Silver Purchase Act

22

C. E. Buchholzer Expects Air

Shull

G.

Return to

Gold

'.

Standard?

40 Exchange PL, N. Y. 5
Teletype NY 1-1825 & NY 1-1826

Gulf

Pan American

Regular Features

and

We

Sulphur

Standard Sulphur

(Editorial)

Insurance

Sulphur

Mexican Gulf Sulphur
24

Bank

more

23

___:

Puerto Rico Lists 33 Tax Exempt Products

Business

in

securities

HA 2-0270

Argument for

an

23

See It

markets

22

Sees Burgess Statement

Marriner S. Eccles Urges Compromise Policy Toward
Communism

As We

trading

over-the-counter

Conditioning Industry to Reach

$4 Billion Mark in 1958_
Frederick

____

250

Singer, Bean
& MACKIE, Inc.

18

__

_____Cover

Stocks__

23

Man's Bookshelf

Bought

—

Sold

44

Canadian Securities

*

Coming Events in Investment
Dealer-Broker

Investment

___!

Field

8

Recommendations

Einzig—"Pressure for Sterling

8

Convertibility"-

BURNHAM AND COMPANY

24

Members New York Stock Exchange

16

govern-r

create

is

the

*

"Disappointing"

main tain

than

From Washington Ahead of the News—Carlisle
Bargeron

purchasing
by public works, except in

power

don't

again.

Indications of Current Business Activity-

35

Mutual

30

Funds

r

—

-

JOHN F. REILLY,
Unlisted

Manager

Trading Dept.

*

NSTA

cy

^

Notes

8

5 News About Banks and
Observations—A.

Bankers

Wilfred

22

May___

Telephone

Teletype

<

NY 1-3370

>

21
42

:

Public Utility Securities.
Railroad Securities

Street, New York 5

Dlgby 4-1680

5

Our Reporter on Governments.
Our Reporter's Report.

15 Broad

31

Keta Gas & Oil

26

_____;

We do say that government can
release

purchasing power by cut¬
excise taxes,
by reducing
personal income taxes, and by ad¬
justing its interest-credit policies
ting

to

I believe, with

that

have

We

rate, and the best testimony
point is the annual plant

it

agree

on

to

that

balance

people

gigantic
infla-r

necessary

believe

all

a

and

advancing and

an

nomic

high

our

our

sustain

to

have

program

progressive economy

Economic

in

20

Jules Backman Terms Seasonal Business Pickup

some

annually.
I
it follows at

that

must

we

public works
tion

force

believe

investment

be realized without

can

labor

Council

Administration

•
..

Prospectus

coming

are

dent's

American

President,

tives

the

the

can

some

and

year,

of emergency.

standard of living.
the

into

a

workers

new

periods

we

ployment

million

700,000

on

its affairs are such
as to help the free,
private, com¬
petitive, enterprise system realize
its fullest
potential.
am

2

some

stituted

conducting

I

em¬

been creating markets at an enorT

Eco¬
Report
to Congress,
Arthur Larson
his
Budget
Message,
his
legislative program and the daily
actions

of

mous

Presi¬

...

18

We

em¬

ployment.

No.

suggest that

ELECTRIC COMPANY

17

,

underlin¬

employment.

c o n

the

PYRAMID*

oni "Full Employment and Its
Dangers" (More letters to Editor relative to Dr. Carl

.

re-

I

15

Life Insurance Investments

Additional Commentaries

you

"maximum" production
and employment.
We do not say

that

Advisers.

•

;

the

in

—

not

of

as

Banking During the Transition Period—Marcus Nadler

-

do

Plan

Graduates—Roger W. Babson

TELEPHONE

BOND and SHARE

•

who be¬

us

lieve—as
Sen. Paul H.

all

which

14

Foreign Economic Policy—Harry A. Bullis

The Struggle for Sound Money—William H. Neal

Re¬

forth

notably on
June
1, 1953,
in
submitting
to Congress
Reorganiza¬
9

12

,

views of those

several occasions,

tion

Banking Center?

a

on

rough criticism, for this attitude.
Our
population
is
increasing

Labor

HYCON

11
as

Our

port which set

"substantially full
ployment." And I have taken

LARSON

ARTHUR

STREET, NEW YORK

Telephone: WHitehall 4-6551

■

riods

Under

Lewis

Declining

FHA and GI Loans

the

Personally, I have always advo¬
cated a
balanced budget and
a
merits.— surplus for debt retirement in
pe¬

it

WALL

en¬

understanding of a subject that
up to now has not received the
EDITOR.

W.

—Deane C. Davis_.

am

the President's

on

our

99

Smutny__ 10

13

June

minority

Wiegand's

paper in particular
or
on
any related phases of the
full employment doctrine.

to

closing

who

one

Obsolete Securities Dept.

Monetary Policy's New Look—E. Sherman Adams

vent it.

of govern¬
ment
inherent in the "Employ¬
ment Act of 1940."
For this rea¬
son, we were very pleased to have
been able
to
publish Dr. Wie¬
gand's comprehensive analysis of
the subject and decided to open
any

.v..

Advertising?

—William A. Lyon__

re-

possible

ever

philosophy

up our columns to
desired to express

—Harold

Is New York

Illinois when¬

implications

of the full

1

♦

fur¬

to

turning

May 6,

The "Chronicle" had previously
received considerable correspond¬
ence

time

cf Senate work and

May 13 and May 20.

and

Illinois

Wiegand's article, but the

pressures

you've got!

DOUGLAS

nish you with, extensive comment
on

4

6

How Much Shall I Allocate to

Senator

to make a sale.
We'll buy all the
junk

6

____

Public Pension Fund Investment Problems—Rudolf
We

TANGO

4

$9 Billion Now in Public Employees' Pension Funds
—Disque D. Deane__
U. Cobleigh____

TAKES TWO TO

and two

Hood

The Administration's^Tax Philosophy—David M.

AND COMPANY

-

Weir

The Next Heat of

thorough analysis of the economic implications of the full
employment philosophy inherent in the "Employment Act of

*

«•

Productivity, Competition and Dollar Shortage
'—Melchior Palyi

—^Ernest

ilCHTfnSItllT

B. S.

Articles and News

,

stimulate

tion

and

purchasing,
employment.

produc¬

Securities Now in Registration.;.,....

Securities

the

days when the Republi¬
cans were arguing for tax
reduc¬
tions, and citing the Andrew Mel¬
lon

tax

reduction programs,

Continued

economic system.

on

.

.

.

and

16

1

Security I Like Best
.

Washington and You
article

*No

this

Standard Uranium

*

Corp.5*

2

The State of Trade and Industry

42

)

Corp.*

Rohr Aircraft

27

You—By Wallace Streete_^_

Uranium-Petroleum

5

44

they

page

Lisbon Uranium

40

Salesman's Corner

The Market
The

In

37

Prospective Security Offerings

Co.*j

Victoreen Instrument Co.

week.
*Prospectus available

Published Twice

The

For many years we
have

specialized in

PREFERRED STOCKS

New York

Stock Exchange

•

' TELETYPE N. Y. 1-5

B.

Park

DANA

Place,

REctor
HERBERT D.

Boston

Manchester, N. H.




•

Edwards

London,

&

E.

C.,

Eng¬

reqeust

Smith.

Copyright 1954 by William B. Dana
Company
Reentered

Chicago

•

Nashville

•

Glens Falls

•

Schenectady

•

Worcester

COMPANY, Publishers

New

2-9570

York 7,
to

second-class

as

matter

Febru¬

25, 1942, at the post, office at New
York, N. Y., under the Act of March 0, 1879.

N.

Y.

Subscription

9576

Subscriptions

SEIBERT, Editor & Publisher

WILLIAM

DANA

SEIBERT,

Thursday,
Every
vertising

Thursday
issue)

Possessions,

June

3,

(general news and ad¬
every Monday (com¬
—
market quotation

corporation news,
state and city news, etc.).

Chicago

Offices:

3,

111.

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Other

1954

issue

records,

Other

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in

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and Members

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St.,

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and

Note—On
the

La

Canada,

Countries,

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of

per

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year.

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funds.

Direct

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i

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(Foreign postage extra.)
of

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year.

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bank clearings,

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Other

and

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•

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<

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?

4

The Commercial and Financial Chronicle,..

(2428)

Thursday, June 3, 1954
i

Importance of Steel Industry
And Its Obligation to Investors
WEIR*

By ERNEST T.

in

types of steel

This is just

a great many
in in¬
dustry as a whole. Our industry's
ability to improve steel-as a raw

has

ployment,

resulted

in

than* ever

capital for its expansion needs, steel
management must recognize obligations to reward investors.

ships,

railroads,
scrapers, home
a p p liances,

mobiles,

sky¬

of

cient

This

serves
one

Management in the steel industry
has

can

think

hardly

been

product that

steel

is

the

Weir

T.

Ernest

not

it is made, we may be
that steel enters into its pro¬

distribution, in many

ways.

:

The

universal

steel in

modern

the

in

•'

raw

facilities

and

which

duction and

held

been

sufficient

material

sure

has

over-cautious

If

way.

has

There

because

back

short-sighted

provision of
materials,-; plants
the

meet

to

application

requirements of the country. The
of the industry has
been one of continuous expansion
which,

of

life demonstrates

talk

I

want

portance of

to

is

that

aspect

one

by everybody.

recog¬

in this

But

emphasize the im¬
other aspects of

some

the

industry which are not so gen¬
erally recognized and one in par¬

ticular which, in my opinion, has
not
been
adequately recognized
within the
The

industry itself.

steel

sential

part

industry
the

of

in

most

The only

has

cases,

the substructure

entire economy
substitute

no

—

es¬

an

foundation—
which

on

our

is based. There is
its

for

production.

The

industry must be prepared to
supply whatever requirement may
exist
In

its

for

addition,

prepared

to

products
it

currently.

must

cover

always

be

unpredictable

increases in those requirements—
up

to and including the demands

of national

emergencies. This state

of preparedness must include

only

the

provision

not

mainte-

and

condition.

*

An

address

Mr. Weir before the
the American Iron
and Steel Institute, New York City, May

27,

by

Meeting

of

1954.

in

And

that

particular

also

our

.

.

of

the

inventory situations of many steel
sonable
age

it

quite

ever

rea¬

a

the

that

question

was

may

is

there

today

consumers

short¬

serious

as

as

have seemed during that

period.
another

in

industry is important
that is not gen¬

way

recognized.

erally

contribution

which

has

the

made

to

manufacturing
end

That
the

is

the

industry

improvement of

methods

and

to

products of all sorts. Natural¬

ly, the buying public is interested
in the final product.
Usually, it
does not see the steel in the
uct

beyond

nor,

has

done

that, what steel
the

make

to

prod¬

product

possible.
As

we

know,

it

has

been

the

constant and successful aim of the

industry

to

develop

better

and

versatile steel at the lowest

possible cost. It is because of this,
instance, that the number of
types of steel available to the

for

consum-

product.

In

an

est

in

industry

can

consistent

this-

carry

benefits.

a

more

successful pro¬

longer,

effort
sustain employment on

basis

is

Every

as

possible.
The steel industry recognizes its
obligation to communities.
Steel
a

good citizens ift

as

fLfl
^%trno
the
cities and towns

represented.

are

and

which

in

They

tbey

actively
in
all

participate
community

under¬

takings.

'

In all of these respects
resnects the
the steel
steel

industry—and
its

that

management

itself

with

really

has

—

understanding and

an

that is appropriate

dependability

the basic importance of the in¬

to

But there is one relation¬

dustry.

ship—an extremely

vital one—in

which

has not

this industry

per¬

ceived and met its obligation. That

,

!

i

■

The

history of steel has

economic

never

The

munity and

the investing

have

we

paid

securities
mand.
fair
not

an

financial

investment.

an

as

market

public

Consequently,
penalty.

a

have

not

de¬

sold at

And

value.

Steel
in

been

not

have

They

com¬

a

they do

today even though they stand
levels somewhat higher than

at

usual.
I do not know of

any

other in¬

behind

investment

much

In

production

the steel in¬

as

At present costs, the cap¬

the

represented by
reserves

and

raw

ma¬

the plant and

produce

a

ton

amounts to

Last Thursday

(Mav 20) taking

the market price of the securities
of

the

10

largest steel companies

Continued

PHILADELPHIA

on

page

32

John B. Stetson Pfd.
Public Service Coordinated

4s, 1990

comparison oj 11 largest Philadelphia Banks

Pocono

Hotels Units

Leeds & Lippincott Units
1

Walnut Apts.

V.T.C.

Pratt Read Co. Common

Members

New York

•

Pittsburgh




•

Alien town

•

9
Lancaster

Phila.-Balt.

Stock Exchange

Pennsylvania Bldg., Philadelphia
•

Atlantic City

past

seven

alone,

years

than 33 million tons of steel-

Teletype
PH 375

N.Y. Phone
COrtlandt 7-6814

old foreman

as an

as

dog's breakfast."

a

to

are

know

of the good

and

the

we

most

ingredients, and if

are

to achieve

cal

composition

desirable

But, if

make

we

the proper chemi-

wherein

items

have

the

been

un-

satis-

factorily
minimized,
then
we
should give these our most serious
attention.
•
,

m<

The Human Elements
I believe the most essential ingredient we charge into each heat
of steel is this item frequently
referred
tudes."

to
as
"employee atti¬
Employees —- all of us,

whatever

assignments—must

our

intense

an

interest

in

the

task at hand. There must exist

attitude

of

cooperation

an

marking,
the:qaatb

making capacity have been added

to our facilities—more than

toward the attainment of clearly

^

added

New

sources

of iron

in

....

lo£,ted

,

mL

tive

be

industry,
most

products from steel.

But the

biggest

ments

of all, un-

news

it

be, is
is that
$5.5 billion were spent in achiev¬
ing these gains. All of us are
as

may

of how much more,

aware

ton-for-

ton, it cost to furnish the last 33
million
ton

of

than

tons

91-million-

the

caoaeity existing

the

at

end

1946.

action

Do

to

We

Go

stand

let's

so

modern,
look

From

which

instill

to

will

company

takes

in

the

employees such ele-

self-reliance, optimism
and
a
high regard for

respective

responsibilities.

The best equipment and the most
modern and efficient plants still

require, and will continue to re¬
quire,
the
un¬
intelligent and
remitting cooperation of all con¬
cerned.

A

group

of employees irr

industry, just as a group
of individuals engaged in any en¬
deavor must work together with

Here

put

the

to

or

on

glasses

3-D

into

still

mark

pair

a

and

make-up

take
of

next heat of steel. Let's add

an

of success toward

assurance

an

accepted goal.
In

the creation of this

essence,

attitude

of

confidence

and

coop¬

eration depends to a large extent
upon

convincing

of

what

is

a

good

for

our

people that

good for the company is
them.

possibilities

The

Pur and opportunities to be gained by

a

few

to
that song which
inspired hie, and no doubt
some of you also, with its leading
question: "Where do we go from
here, boys, where do we go from
new

as

interest
their

that

the steel

Consistent with this

time,

personal be-

a

successful

^aconite has been reached. ^The. positive

believable

;

it has lone been

..

md^VZ
18 Profuc?ng bettef st,eels minds of its
better

and

lighting

*.* nas lonS oeen 3 Persona) be* lief of mine that iri any competi-

and

developed. The pracin mining and process-

tical stage,

and

way

defined objectives.

vasj;

_

being

are

was

like period.
quantities

any

and

have been

ore

verses

increasing this element of em¬
ployee attitudes to our next beat

once

here?"

making

steel,

we

mentary

finitely

'■•f.";-:".";

'■■■■'

;

<„>! lo

In

'

■

in

ele¬

it

consider

can

its

make-up, yet in¬
Varied than its pres¬

more

analysis and physical
properties might indicate. There
are,
for instance, numerous un¬
wanted elements and compounds

to

be

steel

considered

as we

of these

some

of

in

the

heats

elements and

com¬

detrimental

a

to the production
quality product. We all know

the

which

metallurgical

arise when

consumer

is

There

lieve,

Automatic

the

a

residual

Century Nat'l Gas & Oil

•

Cinerama Productions V:

•

C & C

•

Hycon Mfg. Corp.

•

problems

•

•

of

Super Corp.

Magnolia Park Common
Stylon Corp.
Webb & Knapp

or

new issue-

metallurgical

steelmaking

$1.00 Per Share

"MUTUAL INVESTORS

Corporation of

requirements.

the

Firing

•

New York

strong parallel, I be¬

between

Mfg. Corp.

problems

"tramp"
alloys
and
excessive
phosphorous and sulDhur prevent
a
particular heat from meeting
certain

Aeronca

•

are

to

of

•

of

make them. While

fundamentally essen¬
making good steel, some

pounds
tial

now

-Trading Markets-

of

heat

next

our

ent chemical

certain

Samuel K. Phillips & Co.

unrelated and,

the

are

BANK STOCKS

mix¬

or

of mine used to say, "as mixed up

have

the

more

each

minimum of $250.

Maintained in all

PHILADELPHIA

this

of

mood

from

of steel in ingot form

Incorporated

strength

dustry with doubt and misgiving

investment

good

standpoint.

facilities needed to

STROUD & COMPANY

indus¬

progress

have always regarded the steel in¬

been

a

Send for

the

magnificent
progress, there can be no doubt
in anyone's mind that the steel
industry will continue to go for¬
ward. This great industry is in no

terial

,'

and

Where

dustry to the investing public.

ital

Trading Markets

importance

in

is the relationship of the steel in¬

dustry.

.

of

nation.

means

conducted

«.

trial

The Investor Has Been Neglected *

unit of

■

present degree
V

Clifford F. Hood

as

companies live

as-

this
industry to its

more

ing

few of these elements

a

brought

No

improve safety and work¬

made to

con-

tute, vigorous
and intelligent
leadership
fwhich has

Its

gram to

steady

pride
he

siders the

employees.

conditions.

swell

with
when

steel

claim

or

industry,

It makes one's

all

other employee

in the

-heart

industry, as do its pro¬
visions for retirement, insurance

and

is

that

job

ours

steel

and the public.

to

a

member of this Institute and to be tures of elements here this irrornallied with all of you in the great ing. In themselves, they may seem

rates rank among the high¬

wage

so

■

honor to be

an

The steel industry recognizes its

obligations

have con- haps it would be well to consider

I

years,

many

sidered it quite

•

recognize and
obligation to serve

dustry which is required to have

Active

For

plants

own

we

worthwhile

view

national

of

work

on

hopes of making a profit; mast also keep opportunity
Calls for better understanding of our
economy among members of business and industry.

to furtker-tkis aim.

open

conducting this

plants of steel

way

support

experience was the one that
developed after the war
which
was
certainly a highly abnormal

service in

em¬

my

more

General

fully

real steel shortage in

The steel

is

steel

entire history

.

in '

try

or

its

anticipated future needs.

importance of the steel indus¬

nized

never

time when American prog¬

this industry was

steel in

on

some

a

ress

is not depend¬

has acted

regarded it and

so

accordingly.

modern

a

obligation of the steel in¬

be constantly prepared
is in the nature of a public trust.

every

One

day?

of

materials on if necessary—we cari
make the best possible steel for

Steel Industry

dustry to

every-

technology, and refers to possible changes that
with electricity developed by atomic power. Stresses
the indusby, in preserving private enterprise by
tendering a
may occur

with studies of the end product so
that in our production—from raw

out

materials.

Obligations of the

facilities

and

of

finishing that steel into
products but also

raw

are

only in

consumers

in which steel

ent

steel and facili¬

provide complete assurance
continuing supply of suffi¬

a

research and

no

help them with their problems. * Frequently, research starts

many

other products

of

for

there is

to

ers

the full range of
must

containers and
the

ties

raw

We

not

but in .the

*

of facilities for the making

of sufficient

Stresses need of improved employee relations
in accident prevention. Says another
ingredient which will be significant in the next heat of steel is
further progress

and

the increase.

on

engaged

are

companies, and contends, if steel industry is to be a private

nance

entire

substantial- percentage

ployees

industry and obtain

important?
it, what
would the country do for its auto¬

the
r

before and

question thai it is
A

work

Without

on

product develop¬
ment are now being carried on in
the steel industry on a larger scale

this kind.

is.

effects

for the industry.

new-em¬

other

«!

»

After citing recent rapid growth of the American Steel Industry,
Mr. Hood discusses metallurgical and human problems ahead

Research and

public, steel industry managers hayr not perceived and met
obligations. Cites relatively low average earnings of steel

it

President, United States Steel Corporation

many

had

American economy.

their

course

has

an$

beneficial

-Holds, however, in relationt-with the investing

Is the steel industry

By CLIFFORD F. HOOD*

example of

uct*s and thus has created

of steel in
economic progress, points out its responsibility not only for
supplying requirements for its products, that may exist, but in
being prepared to cover unpredictable increases in those re¬
quirements. Calls attention to contributions made by steel
industry in improvement of manufacturing-methods and reduc-

Of

one

nevvtproducts and improved prod-

Prominent steel executive, in stressing importance

tion in costs.

The Next Heat of Steel

than 1,000

more

variations today.

material

Steel Corporation

Chairman of the Board, National

automotive industry has increased
from
11
in 1910 to
162 distinct

*Offering

Circular

on

Request

and

bth^r factors which play

equally- important role in our
industry-wide efforts, and per-

an

GREENFIELD & CO., Inc.
40 Exchange

*An

eral

Steel
1954.

address

Session

of

by Mr. Hood at the Gen¬
the

American

Iron

and

Institute, New York City, May 27,

HA 2-9290

Place, New York 5

Teletype NY 1-2926

Volume 179

Number 5330

The Commercial and Financial Chronicle

...

(2429)

5

of steel

are limited
only by our
vision, and our willingness to
work intently, enthusiastically and
effectively to this end.

Of

course,

body

sound

a

essential

are

mind

to

:/

-J

Steel

r

J

•v.

Prwhittwm

.

Electric Output :*.

and

•

Car loadings

continued

Retail Trade

iV.'i'-

Statedipf^Trade

efficient production, and,- fromTts
earliest beginnings, the steel in¬

Food

andlndiistry

Stock Selection With Less Inhibition

Business Failures

of what criteria

job

might be used to
safety progress, the

our

done

has

been

while

steel

our

seven

essentially

years,

capacity has been

last

increasing, the accident rates have
steadily declined. But of greater
importance, we are reaching that

real

steel

home is
and

industry employee

the job.
It is recognized

had

valuable

number

of

assistance

people

achieving this safety

a

in

areas

one

my

mind is the work

that

stands
of

out

the

above

in

It

fully the constant help
this organization has
given, and I
welcojpne this opportunity to ac¬
knowledge that support publicly.

is

another

and

like

for

the

1953

some

months

two

period.

pickup"

Manufacturers'

over

For their

-

that

the

which

further

notes,

that

factory

.

audience

April

in

sank

to

the
of

of

the

with

a

own

expected,

to

the

of

develop¬

Institutional

them

also

its selections

in the market.
of the year.

setting the stage

are

is

Oil

for the

now

steels

of
the
future.
Higher
strength without sacrificing duc¬
tility, improved toughness of steel
at

low

temperatures,

sistance

to

greater

corrosion

ordinary

both

atmospheres

in

environments,
improved
formabilitv, weldabilit.y and other
special service characteristics, as
research

as

nealing,

the

tribution

burden
time

the

the

and

for

rapid

an¬

and

dis¬

blast

obiectives

open

only

are

of

for

a

in

as

How

gontinue,
broader
Who

they

knows

veloped

in

will make
of iron

the

*

open

vistas

for

when

up

the

and

<

industry.
electricity de¬

funds!-

The

Amerada,

unbelievable
ultimate
steels

in

of

control

at

unheard

of

the
<

a

They

may

course,

all

Continued

Texas

Company,-which

funds.

And the banks




de¬

W t'

**

June

be

are

on

how hot the bar¬

-

-

Their

freedom

banks, directly

strike

as

vantage of the
while

up

to 510,000

have bought many

from

for

well

Blue

the statistical

added,

agency

a

you

can

cars

issues beyond the pale;

---

-----

Chipitis

inhibitions

permits

the

up

minimization

result is not available

risk

of

reiurn

income

from

equities;

factor; which constructive

in the Dow-Jones Average area during the

present state of the market.

record

indicates that the experts,

less conservative

as

prices rise.

while only four were sold; Corn

gomery

like the public, tend to become
different

54

issues

were

bought,

Products, Liggett & Myers, Mont¬

Ward, and Pfizer having been completely eliminated from

the portfolio.
A

University's

Operation

Similarly, recent scrutiny of Cornell University's investment
portfolio and discussion of policy with the Treasurer reveal that
management's
motive.

comparative

and another 3%

ties

include

Statler

freedom

the

from

window-dressing

63% of the total securities is comprised of common stocks,
is placed in medium grade preferreds.

such

imaginative

issues

as

The equi¬

Falstaff Brewing,

Hotels

(unlisted), Marathon, American Chain, Newport News Ship¬

building, United-Carr Fastener, etc.

Among

the preferreds

several convertibles, as Golden State, Republic

McCrory Stores, and Haloid,

are

held.

preferred stock categories show

below cost, with the common stock

a

.

We

are

Incidentally, both the bond
deficiency of market value

portfolio registering

a

30% gain;

1

'

.

pleased to

announce

E. J. GANNON,

gives

now

that

III

associated with

us

the
in

our

General Motors,
a

30.6%

new

declined

high

of

lack
4.6%

of
to

148,-645

Saturday

work,

The

a

consistent 22,000 unit

vehicle output the

pace

Dallas office.

»'

,•

-J

i

cars,

truck
an

the

Continued
,-t

•

"

*

■

SHEARSON, HAMMILL S CO.
Founded in 1902
Members New York Stock

Exchange and other

assembly

estimated

V '

short
on

work

page

29

Organization

leae'ing Stock and Commodity Exchanges

DALLAS

Experience

Fidelity Union Life Bldg.—Riverside 4711
HOUSTON

in

which netted

4

^
'

past

X-

1

V-i":

7J£-year post-war
at 3.2%.-

reporting service added, however, that

,

Motor

141,830 cars and trucks from the nineestablished in the preceding week.
The

week in 1953 netted 113,985 units.
decline last week was entirely

89,000 jobs in May.

Ford

Research

Gulf Bldg—ATwood 7501

Offices in Principal Cities

were

Steel, Brown Mills,'

'

54.3%

the

out of adequate dividend

reserve

a

from

no

divided

or

through the Fund, to realize the ad¬

as

setting

is

program,

of

the six most popular with the

relatively higher

prudently

income

and

a

fund's

management

Standard- Oil of New Jersey

among

Shoe, H. L. Green, and Food Fair .Stores.
■

impressed

Saturday work was scheduled last week,
United States May production count of 493,000 cars.

was

holding to

.t
'

This

-Molybdenum,' Mei^d" Johnson, National Tea, General

sellers

softening of the market during the summer.
pickup in the last quarter, this trade

The

areas

25

soon

Agreement is reached without

moderate

Reflecting

same

page

a

3,108,000.

well play a

on

into equity investment (some

of

month

our

best

threat to their supplies when management
modest counter offer to the huge union demands.

days the month's output schedule is

just around

of

will

low volume of 16,000 cars for the Independents

'

of

Consumers

Co., 11.9% Chrysler Corp. and brought

*

poten¬

velopments, whether in the

month.

thejcriarket tightens will depend

wage

The total

significant part in our efforts to
produce the next heat of steel.
And

much

week

corner.

the

potential

permitting

of

tialities?
These vistas may be

next

"Ward's" said that

duality production of

still

through which

have -nqt- feltconstrained to exhibit

its third-best January-June in history. The
2,962,000 units is exceeded only by the record 3,255,772
of 1953 and the same period of 1950 and 1951, both virtually tied
total

the

and

accuracy

Inc.,

by over one-half of the

those "Favorite Fifty" issues most fre-'

^

industry

auto¬

knows when the miracles of elec¬
us

the

very

The

efficiency in almost every sten of
the steel-making procedure? Who

give

Fund,

directly).

International Paper,

493,000 during May.

mation will make possible greater

will

stocks

among

However, "Ward's" said that because of June's two additional
work

by using hydrogen as
reducing ; agent ;rather than

tronics

are

*

power plants
possible the reduction

when

buying

Domestic automobile production is being pared 6%
during
June, "Ward's Automotive Reports," stated on Friday of last week.
The reduction, which is the first so far this year, calls for a
daily assembly rate of 23,200 cars against 24,700 in May, 24,244
in April and 22.870 in March.

our

knows

Mutual

weekly further notes.

atomic

Who

a

look for

ore

carbon?

Investors

This would be followed by a

efforts

new

the

li

hearth
few of

research

our

still

are

gaining gets,

people in steel.
And

structurals

are

least

makes

research

our

at

with

furnace

reduction

producing

heats—these
the

into

character

of

and

producers, who have been waging an uphill struggle for
not inclined to look a gift horse in the mouth; they'll
take all the strike-hedge buying they can get.
Since production
is now very sensitive to pew business, this might edge the operat¬
ing rate up during the next 30 days, declares "The Iron Age."
Wage negotiations, it notes, may dominate the steel picture

special

well

goods

Steel

in

and

country

business,

re¬

Record

Incidentally, the savings bank institutions' last-quarter sales

These products should go wedd for the remainder
Improvement has recently been noted in plates and
galvanized sheets.

technology

Selection

quently held by the ieading 50 xlosed-end trufft^and -125 mutual

•

Still, individual orders are small and even protective buying
being done cautiously, this trade weekly reports.

devices,

and

May

report for the last.quarter shows that loss than half (twenty)

appliances and

by requests to move up some scheduled
quicker delivery; repeat orders quicker than had been
and a changing attitude of some buyers toward steel

high
quality
refractories
to
the de¬
velopment of improved inspection
research

Stock

State's savings banks, the banks get

$376,000,000 rise

their supplies.
This is evidenced

from

area,

Wilfred

A.

mav

salesmen.

every

sophisticated

more

investment company, exclusively owned

„

come

abreast

far

a

The resulting less inhibition is evidenced in the actual record

■

•

orders for

In

watching the fish-bowl in

The

hiring

reluctant to go into debt to buy things like cars,
furniture."
ri

industry have multiplied so great¬
ly in recent years that it has be¬

ments.

They

the army of doorbell-ringing salesmen of the mutual funds.

The April gain, Officials said, "is good news to mer¬
chants .whose sates have suffered because consumers have been

national debt.

remain

to the popular issues.

has been sold portfolios by

April

$900,000,000.

■

difficult

worry

other categories of

are

than, for example, that vast public which

one

Steel consumers are stepping up their orders to keep from
getting caught with their inventories down in event of a strike, *
states
"The Iron Age,", national metalworking
stepchildren comprising the^weekly, this week. >
So far Jhis strikerhedge buying is-only a minor part of Lie
eyer-growing
b o m b * family; ■
atomic power
potentialities; auto-' unarjkei.. .But it -has increased noticeably since management and,
tnatiftn*
tFio
<?-oncicfnv
nninn
cfartpH /liw'TKQinff
ho thp
hioopst
"nopltafp"' ftf
union
started
mation; the
discussing what
what may be
transistor; the solar
the biggest
."package"
of
demands ever presented.
battery; the development of emis¬
And it will keep growing until a new
sion spectroscopy for the deter¬
wage agreement is reached, or the union strikes, says this trade
mination of trace elements; super¬
magazine.
'"v;,"-■ ■"
sonic flight; guided
Protective buying was noticed first in tinplate several weeks
missiles; radio
astronomy; color television and
ago.
Since then some automotive buyers have started building
magnetic propulsion, to say
their sheet and strip inventories from 30 to 45 days.
And various
nothing of flying saucers and the
other steel buyers are now showing reawakened concern over

increasingly

escape

they function is

/its

our

scrutiny and consequent

undoubtedly influenced by the realization

are

4n April, 1953.
But it -reversed the trend in the first three months
this year-when consumer indebtedness of this kind decreased by

living today in an
age of vast and complex develop¬
ments. To mention just a
few, we
might name nuclear physics and^

in

stocks.

common

fiduciaries, have manifested considerable less

March, but lagged behind ship¬

Reserve Board reported, cc This compared

ingredient

are

technicalities

offer the invest¬

we now

guilt factors than

tendency to

Layoffs ran at the highest April rate
years—slightly above the March pace, it asserts.
Consumer purchases made
through installment credit in¬
creased in April for the first time this year.
Installment credit
outstanding edged -up-$9,000,000 during the month, the Federal

heat of steel and 'that
the item of research and techy

The

conclusion, although

our

investing agents, far less conscious

of the public's
over

were

bookings in

a

banks, which for the past two years have been

"moderately

only

were

the

■

with

legally permitted to purchase

early spring improved seasonally in
no general upturn,
the United States

Retail sales in April

in

ing experience of the New York State savings

compiling such statistics.

the. next

oology. We

in

concentration

cited- the

we

motivated by the "legitimization" of possible

as

operating conversely,
-

in five

which will play an
increasingly
significant role in the quality of
as

Consistent

lowest rate for the month since 1930 when the Government started

estimate

There

Wednesday of
However, it con¬

on

week

ments.

impossible to

New Vistas—New Opportunities

the

"experienced

Safety Council under the
able leadership of Ned Dearborn.
be next to

March

below"

Na¬

tional

It would

activities

pansion of 9% from March to April."

progress, but

the

effort

from

and

ended

week

some lines,
but there was
Department of Labor currently reports following a survey, of eco¬
nomic indicators. Industrial production in April, it
noted, was un¬
changed from March, after adjustment for seasonal factors.
Out¬
lays for new construction
showed "about the usual seasonal ex¬

have

we

period

preceding.
about 10% below last year's output.

Business

on

that

the

Expansion in lumbering, construction and other out-door work as
well as the exhaustion of some
unemployment rights reduced the
volume of filing for benefits in these two weeks.

safety

as

the

for
of

May 15, decreased 6% from that of the previous week.
Continued claims also decreased 3% from ithe preceding period.

rapidly becoming
important to the

as

that

last

space

stocks by the various classes of experts who act in

fiduciary manner;
subsequent loss.

whole remained

as a

New claims for unemployment insurance benefits in the week

safety, as a
mind, is having an effect
off the job as
well—safety on the
highway, in the community and
the

unchanged
from

Blue Chip

ended

desirable stage where

in

week

tinued at

state of

as

production for the nation

niuusuiai

xotax

this

In

J

excellent

an

During the past

one.

By A. WILFRED MAY

Price, Index

Auto Production

dustry has considered safety as *a_
must
in steelmaking. Regardless
measure

•

•

'

Commodity Price Index

Imagination

*

6

The Commercial and Financial. Chronicle...

(2430)

be additional

ex¬

$ 9 Billion Now in Public

tend maturities and get theistruc* J

The Administration's

ture of the debt into better

Philosophy

shape.

Must Increase Debt Limit

<

Tax

opportunities to

Employees' Pension Funds

Necessary borrowing in the sec¬
half of the

ond

By DAVID M. KENNEDY*

calendar

current

By DISQUE D. DEANE*

•

to meet Government expenitures will put the public debt
above the $275 billion debt limit.
It
will
be
absolutely necessary
year

Secretary of the Treasury

to the

Assistant

Treasury official, in pointing out the two-fold policy of tax
calls attention to continua¬

reduction and revision of tax laws,
tion of Federal deficit and the

for the debt limit to

prospective need for additional

before

The

for
Congress to increase the debt limit." Says aim is to extend
Federal borrowing

of

maturities

which makes it "absolutely

the

debt

national

Refers to current

themselves.

necessary

tion

opportunities present
money and low interest

to

policy

increased

be

pursue

have

flexible

a

to

credit

promote

The

Administration's

0f

rapidly as justiby reduction of Government

changes will benefit millions of
individuals. The bill provides for
an extension of the corporate tax
rate at 52% rather than permit-

tion

spending; and
(2) revision of

ting it to go down to 47%. This
will bring in $1.2 billion this year,

the money market.

tax

or

is

taxes

of

lied

two-fold:

tax

(1)

phi-

Reduc-

as

laws

give
of

to

millions

taxpayers

relief

from

hardships and
inequities, and
to

lessen

re-

strictions
which
tax

present

law

poses

im-

the

on

growth

3 n

expansion
t h
David

M.

country's

e

economic

Kennedy

d

of

sys-

tern

Substantial cuts in Government

spending have made possible total anticipated reductions in taxes
this

of $7.4

year

billion

ing the tax revision
the

fore

Senate

mittee).

bill

(includbe¬

now

Finance

Com¬

reduction

made

in

any

in history.

year

Individual

income

taxes

were

the

cover

en-

tire cost of the tax revision bill.

aid small business.. These benefits will help new businesses to
get started and will encourage exr
isting businesses to expand,
ernize and to create more and t>ettcr jobs which only sn expanding

provide
]This tax
revision will be most helpful during the present period of transition to less spending by the Goveconomy

can

erament.

demand

reduction

tax

must

necessarily wait until further

reductions in Government spending

be passed along to the tax-

payers.

Government

spending is continBudget expendi-

uing to be cut.

1953 under in-

the existing

credit

for

heavy demand

credit

for

a

against

supply in the market
in-

an

interest rates,

in

Beginning in the spring of last
in view of the tightness in
market

and

business conSns,

general

the

Federal

monev

Reserve
der

continuing to operate

un-

flexible credit policy,.began

a

adding

reserve to meet expected,
demands for credit.
Later it bethe obioctivG of thG Fcdcrsl

CcHtig

0rder to
from

provide

credit

a

tend

activity.

to stimulate

these

In

home

builders

states

and

and

purchasers,

individuals.

These

changes in direction of credit pol-

at

consistent with—not

the

by

Federal

Reserve

are

reversal

a

or

Congress in the

retreat from—the views expressed

past Administration tor fiscal 1954.

hy two Congressional Committees,
the Patman Committee and the
Douglas Committee.
Confidence
in the value of the dollar has returned,

uals

will

ual

further

reduce

taxes

income

milhon

If

billion

we

dollar

individ-

by

individ-

about

reduction

taxes will be passed

$800

that

assume

the

excise

in

along to

con-

sumers, individuals would receive
a
total benefit of tax reductions

this year of nearly $5 billion. Corporutions will receive tax reductions of over $2
billion, principally
through elimination of the excess
proiits

tax.

^

in

spending is

the

°+i
the

re-

money saved
f Pe0P*e

1

#

i

form of additional tax cuts.

VvlU Permi_t the Public to
S?fin
SaIe addltl02?al billions
cnl V h*3?
Government
spend it for them.
It will
.

help

make

from

ernment

to

taxes

and

im-

an

nnmie-tt

u

bill

b®~

noyr

fenaYe

•

1S

t

r

h°,

SjL
S21&
'just growed."
of

tax
...

many

last

It is

legislation

hodgepodge}

enacted

Our tax

years.

years

mittees

have

ovei
over

laws

were

and

1876.

Congressional
both

recognized

aS

MfceToiWy.

a

completely rewritten in

For

political
the

parties

need

to

retard

growth.

The

whole purpose of the present bill
to reform our tax
structure to

is

the

benefit

of

businesses and

individuals

our

and

economy.

f

,

As

the

result

of

changes,

duction

in

billion

by

the

7I~~
tlie^

will

tax
aa

an estimated re-

totaling

effected

revision
u

\a

$1.4

this

bill.
v

year

These
a

x.

DeUware8BanLrsr^A«»itatiU

mington, Del., May

the

-m

Rhs

estimated deficit

excise

billion.

When

for

receipts

net

the

counts,

will

taxes

13,

increase

Fianigan, Magrane

about $4

to

trust

budget

1954

on

Frederic

ac-

is

ap-

a

cash

basis.

of

H.

Dillon,

William

Brandi,

Read

&

Co.

Inc.,

46

the

election

of

Peter

caiendar

cash.

new

Tax

corporate

tax

T

...

,

.

.

.

<

■

1954.




September

T

.

.

7-year

9-month
.

7/

2Vz%

bonds

,

_

and
,,

cbd 10n in^° 4-year 9-month

1'8 % notes.
Debt

is be-

'

t

WH-

,«'•/<»

Disque D. Deane

ann

during the following

year.

It

is, therefore, easy to understand
why public employee retirement
im-

portant place beside other savings
our nation, and their
comparative importance will be
even more significant in the future,
Public retirement funds

small

are

when compared to corporate pension funds which are now twice

and have

large

twice

the

net

annual, growth.

Yet public funds
quite significant when compared to the huge life insurance

are

companies, who with $79 billion ot
assets or about ten times the size
of

public

times

funds,

more

new

have

four

only

to invest

money

banks, we find that savbanks have only 40% more
money to invest annually, al-

are

Jnree times

lunds.
funds

the

ot

size

public

,

Much of the information in this

report concerning the
of

investment

public funds

bulletin,

"A

ob-

was

Survey

The information

based

answered

ol

that

for

172 question-

on

out

of

284

ques-

However, only
replies received were

the

of

pionigan

M

™ne

John

anb

Vice

as

S

Presidents

Magthe

of

as Vice-Presidents of the

suits should be

sistance

has

Magrane

been

con-

nected with DiU
Read & Co.
Inc., in the buying department,
since September, 1947, except for
a

period

of

and

year

a

durjng which time he
Economic

ECA Mission

half,

a

served as

Analyst

with

to the United

the most
under-

the

King-

in2

greeted toward promoting dom in London. He is a graduate
economic stability,; with neither 0f Princeton University and
inflation nor deflation.
Recent served in the Naval Air Corps as
issues of Treasury tax bills and a Lieutenant (j.g.) during World

agement.

of tremendous

those

to

concerned

Mr.

is

ever

taken in the field of public retirement funds and the tabulated re-

John Magrane

Peter Fianigan

rights in the

1942, membership

percentage

has

funds

with

of

you

who

public fund

the

coverage

membership
years.
This

15

next

figure has been adjusted

aVerage

include the additional

to

govern-

mental

employees needed to

for the

normal population growth

0f

the

country

provide

the

number

of

needed

personnel
increased

municipal
the
citizens

the

their government to

expect
vide.

additional
service

to

that

needs

care

addition

in

and

necessary
state
and

pro-

These

projections of public
funcj membership are most important in estimating the present
and

future

Qne

assets

potential

fre-

question

discussed

qUenRy

funds,

these

of

jmportant

is:

what is the

effect

dampening

on

pukRC Pension fund growth, if the
^rencj
j

continues

godal

Qf

ive

fowan.ces?
eiection
and

/Securit
j

if

or

the

al-

future

an

by existing state

sys{ems

Sodal

b

majorityy

broaden-

benefits to

retirement

in

js made

municipal

ered

the

for

Hli

more

to be cov-

In the

Security?

the

0f

experiences to
date where social Security coverage

Was

obtained

public

for

em-

pi0yees, the existing retirement
system was retained as a supplemental

The immediate

fund.

em-

phasis for Social Security activity
should be for the broadening of
time

and

those

full-

public

em-

include

to

coverage

part-time

pi0yees who

not

are

r|ch field, for

covered

now

by any existing system.

This is a

recently as October? 1952) 746.000 public employees
(or about one in every six)
had n0 coverage at all. Expressed
in another way at that time, 12%
of state emplovees. 32% of local
employees and 17% of school empi0yees were not covered by a
retirement system of some kind,
as

as¬

Assets

One-hundred-twenty-four

sur-

the

vey is used in conjunction with
the 1952 Union Securities Survey

/\

$4,960,489,212

of Public

Tnis

Funds and

as

in employee

during

are

man-

When the M.F.O.A.

increase

of

rate

continue

not

more

or

funds have recently taken an

as

vested

members

is
getting closer to the saturation
point. However, we can expect an
average annual increase of 100,000

over

billion by

$44

nonactive

Since

include

would

than

This

survey.
This project
comprehensive study

an

management policy

will m be

2,479,984

was

which

public ^retirement

will

sufficiently complete and
comparable to be included in the

.

*?.the tw? m?ior
op?ratl0nts f Jfr thls
-blh
,10n ol debt was extended into

assets

125

,

billion and
during December nearly $18 billion of obligations mature—a totoal of $25 billion that wiil have
be refinanced during the last
half of the calendar yetr.

growtn

deemed

$7

over

rate of

The

funds

doubled, increasing
from
1,500,000 members at that
time to 3,500,000 in June, 1953.

tionnaires mailed.

f
'

in

time

approximately 70%

or

212,486

more

ntage

their

naires

re-

pay-

men{s

an

this

At

perce

survey was

low in the last half of

up

sets.

membership

who still had

additional $1.3
billion of as¬

-

covered

survey

systems.

part

as

included.

not

are

total

the

some

funds
add

ments."

reflecting the Mills plan

year,

speed

these

of

Public Employee Retirement Systems on
the Subject of Invest-

the TreasUry will need about
are

employees

ciation

Treasury financing needs for the
baiance 0f this fiscal year,

biRion of

$9 billion, and
during the en¬
suing twelve¬
month period,

recently published
Municipal Finance Officers Asso-

refunding of over $7 billion of
maturing obligations takes care of

employees,

whose

tained from the

bie

ceipts

employees

will have assets of
approximately

policies

of 4-year 9-month 1%% notes and

yeai>i

public

though their $27.0 billion of assets

Street, New York City,

announces

tbe iast baR

realyear,

you

this

M.F.O.A.

new

President

of higher investment yields to
Looks for larger investment in

public employee retirement funds

mgs

The recent $2 billion cash issue

jn

of

of

savings

V.-Ps.

allowance is made

from

30

each year than the public pension
funds. Comparing public funds to

Presi-

budget for fiscal 1955. The

CUf

the October,

funds

by

analyzed

cirwv

70%

reported
on

the

of

1953.
had
the previous

June

30,

of

assets

sample

of

M.F.

assets

1952, United States Department of

grown

Commerce "Compendium of State
and Municipal Finance" a fairly
accurate total picture of the fi-

Assuming that this percentage rate of growth was applicable
for the year 1952-53 for all public

nances
can

of public retirement funds

be obtained.

bv 16.4% over

year.

funds

and

the

the

that

assuming

for

serves

non-active

re-

mem¬

.

medium term obligations have
added to the liquidity of commercial banks and have left funds
and

literally hun-

revenue

be

in

available at. financial institutions

^

Extends Corporate Rate

dreds of

the

in

re¬

our
tax laws and eliminate
provisions that work hardship on
millions of individuals, reduce in-

and

estimated

com¬

vise

centive

billion

A deficit of $3 bil-

year.

was

dent's

$9y2

In addition, during August and

uMi

™

revision

nnt

...

ijon

high level of Gov-

expenditures
the economy.

on

of

previous

"fi3
i,an' orderfy ?lansi~ the
the

without causing too severe

pact

V2 billion, compared with

deficit

new

jobs for the people who
previously received their income
from Government
spending.
It

tL n

about $3
a

proximately in balance

As Government

<^IJcef.

The budget deficit in the current

fiSCal year ending June 30 will be

June

on

institutions in

everv

col'trrto businesses^

of the

area

declined,

available in

now

that

economic

circumstances

interest rates have
rredit is

climate

a

standpoint

submitted

on

that

ment

provisions of the tax revision bill

hardships

ize

billion will be available for invest-

a condition
jn the money mar-

reduced by $3 billion. The various

reducing

need

ReseerveetoTaintain

icy

to the

Sees

0£ acfjve

ease

-

securities of American business.
I wonder how
many

will

year,

tures for fiscal 1955 are estimated

$12 billion less than the budget

tighten

The force of

restrictive and caused

crease

would

Farther

can

large

was

The provisions of the bill providing more flexible depreciation
allowances and partial
^r0.iy?
double taxation on dividends will

This is the largest total

dollar tax

nearly enough to

1952 and early

fiationary conditions, the Federal
Reserve, as they should, let the

advisers.

as

afford savings to taxpayers.

icy in operation. In the latter part
losophy

men

,

sta¬

economic growth.
We
this flexible credit pol¬

seen

Corporation

prised under such funds, and about $9 billion is already in
their reserves. Sees a growing problem in the investment of
their funds, and advocates use of
professional investment

continues

Reserve

Securities

Asserting public employees' pension funds have become big
business, Mr. Deafte estimates 3,500,000 persons are now com¬

adjourns.

designed

bility and

and asserts "confidence in the dollar has returned."

rates,

Federal

Union

be free under this Administra¬

to

when

easy

Congress

Thursday, June 3, 1954

other

lenders for

investment

War II.

with

1940

*n the mortgage, municipal and

0f

corporate markets.

he served

•

When appropriate opportunities

present

themselves, the Treasury

will continue to direct its financ-

toward extending the maturi-

ties of the debt

In the balance

of this calendar year

there should

has

been

con-

the

buying department of Dillon, Read & Co. Inc.
since

ice

except

for

period

a

about five years during which

time of

in

Membership
State

Magrane
nected

bers

with the Navy.

his
1946

Lieutenant

discharge
he

held

At the

from
the

Commander.

serv-

rank
He

is

of

funds

and

on

the

Municipal retirement
30, 1953, totally or

June

partially
persons or

covered

some

3,500,000

81% of the total 4,300,-

000 eligible public employees.

percentage of

coverage

than the widely

is

This

higher

used Department

of Commerce estimate of 4,500,000

a

*An

address

by

the Harvard Graduate School of

before the
Annual Conference of the Municipal Finance Officers, San
Francisco, Calif., May

Business Administration.

25,

graduate of Harvard College and

1954.

Mr.

Deane

not

were

national

substantial,

for the

growth

then
year

would have been $1.1 billion and

total

assets

June

on

30,

1953,

would have been $7.8 billion. This
would

be

an

annual

growth* for

approximately $325
employee member,

that

year

per

average

This

figure should not be consid-

ered

a

of

constantj

as

it contains a

large element for the funding
"

past

.

pension

..

,

of

....J

liabilities.

Continued

on

FOT 6X—
page

34

Volume 179

Number 5330

...

The Commercial and Financial Chronicle

(2431)

NEW ISSUES

$30,000,000
Los

Los

Angeles City School District

Angeles City High School District

n

Los

t

■

Angeles County, California

2V2% Bonds, Election 1952, Series C

ISSUES, AMOUNTS,
MATURITIES

AND

YIELDS OR PRICES

$10,000,000
Los

Angeles City School District
$20,000,000

Los

Dated

July 1,1954

Due

Angeles City High School District

July 1, 1955-79, inch

High
School

School

Diatrict

Yield

District

Due

$800,000

1955

or

Price

'

Principal and semi-annual interest (January 1 and July 1) payable at the office
of the Treasurer of Los Angeles County in Los
Angeles, California, or at any
of the fiscal agencies of Los Angeles
County in New York, N. Y., or Chicago,
Illinois, at the option of the holder. First coupon (annual) payable July 1,
1955. Coupon bonds in denomination of SI,000
registerable only as tp both

These

opinion of counsel, interest payable by the Districts upon
their bonds is
exempt from all present Federal and State of Cali¬
fornia personal income taxes under existing statutes, regulations

be

court

decisions.

trust

are

1958

1.25%

1959

1.40%

800,000

I960

1.50%

legal and binding obligations of the issuing district and will

400,000

800,000

'1961

1.60%

400,000

800,000

1962

1.70%

400,000

800,000

1963

1.80%

be levied without

400,000

800,000

1964

1.85%

all of the taxable property,

400,000

800,000

1965

1.95%

400,000

800,000

1966

two

payable, both principal and interest, from ad valorem

limitation

now

enforced,

as to rate or amount

•

certain personal

upon

may

taxes

in the issuing district.

property,

400,000

400,000

These bonds
received

funds and for other funds which may be invested in bonds
are
legal investments for savings banks, and are eligible as
security for deposits of public moneys in California.

which

The Chase National Bank

by

are

offered when,

and subject

us

as

and if issued and

approval of legality

to

Los

The National

Smith, Barney & Co.

American Trust

Harris Trust and Savings Bank

*

Drexel & Co.

R. H. Moulton & Company

Company

California Bank
1*1

Mercantile Trust Company

ot

C. J. Devine & Co.

1970
1971

2.40%

400,000

800,000

1972

2.45%

800,000

Wertheim ft Co.

Company

1974

100

1975

2.55%

400,000

800,000

1976

400,000

800,000

1977

2.65%

400,000

800,000

1978

2.70%

400,000

800,000

1979

2.70%

William Blair &

Company

Gregory ft Son

Bear, Stearns & Co.,

Dean Witter & Co.

Company

Georgia

A. M. Kidder ft Co.

Heller, Bruce & Co.

L. F. Rothschild & Co.

Francis I. duPont ft Co.

Chas. E

Bacon, Stevenson ft Co.

/

Weigold & Co.

Incorporated

G. H. Walker ft Co.

Roosevelt ft Cross
Incorporated

E. F. Hutton ft Company

Dominick
Dominick ft Dominick

Coffin ft Burr

'

Ira Haupt ft

J. C. Bradford ft Co.

Byrne and Phelps

Kean, Taylor ft Co.

Provident Savings Bank ft Trust Company

Wm. J. Mericka ft Co.

Field, Richards ft Co.

Company

Lyons ft Shafto
1

Townsend, Dabney and Tyson
G. C. Haas ft Co.

Incorporated

Foster ft Marshall

Incorporated

R. H. Johnson ft Co.

National State Bank

I Newhard, Cook ft Co.

Raffensperger, Hughes ft Co.

Breed ft Harrison, Inc.

Northwestern National Bank
of

Kenower, MacArthur ft Co.
Burns, Corbett ft Pickard, Inc.
i,•

'

•'

\

Stone ft Youngberg
Stokes ft Co.

Doll ft

Isphording, Inc.

H. E. Work ft Co.

The First National Bank

Shelby Cullom Davis ft Co.
American Securities

Irving Lundborg ft Co.

Corporation

V'r

Blunt Ellis ft Simmons

Stroud ft

Tilney and Company

Company

Incorporated

First National Bank of Minneapolis

■■■;:«

McDonald-Moore ft Co.

Barcus, Kindred ft Co.

Stern, Frank, Meyer ft Fox

Piper, Jaifray ft Hopwood

Thornton, Mohr ft Farish

Wachovia Bank and Trust

Company

|

Stubbs, Smith ft Lombardo, Inc.

i

Cruttenden ft Co.

Ellis ft Co. ;

The First National Bank

Minneapolis

Kalman ft Company, Inc.

Company

City, Mo.

Wood, Gundy ft Co., Inc.

of Memphis

Lawson, Levy ft Williams

A. G. Edwards ft Sons

Incorporated

Tripp ft Co., Inc.

Commerce Trust

Newark

Third National Bank in Nashville

'

<•'

Hill Richards ft Co.

Shearson, Hammill ft Co.

Kansas

The National City Bank
of Cleveland

Ginther, Johnston ft Co.

Incorporated

ft Co.

Co.

R. S. Dickson ft Company

"

Incorporated

Van Alstyne, Noel ft Co.

■'»

Julien Collins ft

John Nuveen & Co.

Laurence M. Marks ft Co.

Schoellkopf, Hutlon ft Pomeroy, Inc.

'

Kaiser ft Co.

Seattle-First National Bank

of los Angeles

'

City, Mo.

Wm. E. Pollock ft Co., Inc.

The Northern Trust Company

Security-First National Bank

William R. Staats & Co.

Incorporated

R. D. White ft

Company

(Incorporated)

Trust Company of

F. S. Smithers ft Co.

New York Hanseatic Corporation

Blyth ft Co., Inc.

el New York

The First National Bank

Incorporated

Hirsch ft Co.

Guaranty Trust Company

«f Portland, Oregon

Laidlaw ft Co.

W.H. Morton ft Co.

Andrews ft Wells, Inc.

2.60%

Angtltt

City National Bank ft Trust Co.
Kansas

100

800,000

800,000

Incorporated

The Illinois

1973

400,000

Chemical Bank ft Trust

St. Loois

Clark, Dodge & Co.

2.35%

Chicago

Merrill Lynch, Pierce, Fenner ft Beane

Equitable Securities Corporation

J. Barth & Co.

Reynolds & Co.

2.30%

800,000
800,000

J. P. Morgan & Co.

Continental Illinois National Bank and Trust Company
■

Glore, Forgan & Co.

,v

The Philadelphia National Bank

1969

800,000

400,000

'

R. W. Pressprich ft Co.

2.15%
2.25%

Incorporated

San Francisco

.

Lazard Freres & Co.

1967
1968

400,000

400,000

Angeles, California.

Bankers Trust Company

City Bank

2.05%

800,000

800,000

400,000

by Messrs. O'Melveny & Myers, Attorneys,

•f Ntw York

The First Boston Corporation

•

400,000

are

likewise legal investments in California for

Bank of America N. T. ft S. A.

1.10%

800,000

legal investments in New York
for trust funds and savings banks and in California for savings
banks, subject to the legal imitations upon the amount of a bank's
investment, and

400,000

.95%

1957

/

800,000

except
We believe that these bonds

distinct districts. The

1956

800,000

800,000

;

400,000

which, under the laws

'

400,000
400,000

issues of

separate

bonds of each issue in the

In the

400,000

pur¬

.80%

opinion of counsel will constitute

comprise

poses,

the

$400,000

be issued under the provisions of Division 3,

to

Chapter 17, California Education Code, for various school

principal and interest.

and

bonds,

Fahey, Clark ft Co.

.

The First Cleveland

Corporation

of Saint Paul

Rodman ft Renshaw

Glickenhaus ft Lembo

Wagenseller ft Durst, Inc.

-

Seasongood ft Mayer

Fred D. Blake ft Co.

Magnus & Company

Dempsey-Tegeler ft Co.
Bohmer-Reinhart ft Co.

1
-

■
.

The Weil, Roth ft

Irving Co.

The Continental Bank and Trust

Company

Ryan, Sutherland ft Co.

Sheridan Bogan Paul ft Co., Inc.

Salt Lake City, Utah

Hannahs, Ballin ft Lee
J. A. Overton ft Co.
June 2, 1954




H. V. Sattley ft Co., Inc.

Walter, Woody ft Heimerdinger
Arthur L.

Wright ft Co., Inc.

E.

Ray Allen ft Company, Inc.
;

Eldridge E. Quinlan Co., Inc.

Newburger, Loeb ft Co.

-

I

Henry Dahlberg and Company
The First of Arizona Company
C. N. White ft Co.

Zahner and

Company

Soden Investment

Company

Redfield ft Co.

7

8

The Commercial and Financial Chronicle

(2432)

...

Thursday, June 3, 1954

COMING

Dealer-Broker Investment

EVENTS
In

Recommendations & Literature
It

is

Investment

June 4, 1954

understood that the firms mentioned will he pleased
to send interested parties the following literature:

NSTA

|

Field

(Baltimore, Md.)

Bond Club of Baltimore annual

outing and golf tournament at the

Elkridge Club.

Graham

Energy—Discussion in current issue of "Gleanings"—
du Pont & Co., 1 Wall Stret, New York 5, N. Y.
in the same issue are a group of selected Portfolios.
firm also has a list of stocks which appear to be lag¬

Atomic

June 4,

Francis I
Also
The

gards in the current

of

Fire

phase.

June 4, 1954

annual

Bond

New York 5, N. Y.

rities

City Bank Stocks

York

and

York

—

Annual

June 10, 1954

summer

Convention at

Bond

performance over a 13-year period —
Quotation Bureau, Inc., 46 Front Street,' New

Pierre A.

Crockett

Gordon

Kosterma®

Club

of Los Angeles

field

nual

day
Country Club.

the

at

an¬

Wilshire

4, N. Y.

Banks—Stroud & Company
Broad Street, Philadelphia 9, Pa.
Public

Utility

Common

Saxton & Co.,

Incorporated,

June 11, 1954

South

123

Municipal

figures—G.

Stocks—Comparative

June

discussions

and

current foreign

of Investment Trusts in

of Philadelphia summer outing at

Whitemarsh Country

Japanese Economy

American

Co.,

Machine

»

Metals

&

•

Production

—

Memorandum

McDonnell

—

Also

available

Columbia Broadcasting System and Southern

Co.

i

Smelting and Flintkote Company.

Witt

Mines

Limited

—

Descriptive

bulletin

Wall

Steel

Hotel.

Club

He'7sr &

—

Analysis

—

(New Jersey)

Mueller Brass Co.

June

3, Tenn.

Wiliam

—

Gartley & Associates, Inc., 68

Street, New York 5, N. Y.

on

Monroe Auto

England

Also available is

bul¬

a

24,

New

of

1954

sociation

Co.—Analysis—Dayton
Inc., 75 Inderal Street, Boston 10, Mass.

Haigney

&

the

Co.,

35th

South

Hingham,

Continued

on

page

43

Tune

Traders

annual

Shore

As¬

outing

Country

at

Club,

24-25, 1954

(Cincinnati, O.)

Spring party.

fune 25, 1954

pleased to

are

announce

Municipal

that

/

(New York City)

period

as

our

of June

Organization

Leo

JtomttYa; Securities
Co., I'trt.

Materia| and Consultation

74

N.

1*.

Security Dealers Association

Trinity Place, New York 6, N. Y.




without

376
61

F.

A. Fuller,
Wayne

Schoettler,

Girard

Traders

ASSOCIATION OF NEW YORK, INC.

Association

of

New

York,

Inc.

Bowling

■

■

.

Points:

;

(Capt.), Nieman, Gannon, Tisch, Greenberg

Donadio

(Capt.),

Craig,

Gronick,

Bies,

Demaye

_

(Capt.), Jacobs, Topol, Weissman, H. Frankel

(Capt.), Fredericks, Murphy, Weseman, Mewing—

(Capt.),

-

_

Clemence, Montanye, Whiting—

Gavin,

Serlen

(Capt.), Rogers, Gold, Krumholz, Gersten

Kaiser

(Capt.), Hunt,

Bean

.

-

-

Werkmeister, Swenson, Ghegan„

_

(Capt.), Bass, Valentine, Eiger, Bradley

_

(Capt.), Pollack, Cohen, Smith, Strauss, Define—

Growney

Hunter

_

(Capt.), Corby, Siegel, Voccolli, Lienhardt—_

(Capt.),

M.

Meyer, Frankel, Wechsler,

_

King

-

(Capt.), Brown, Alexander, Farrell, Barker

_

52

51

50%
50

48%

43%,
40

34
33

30%

26%
26

on

-

1.

O'Connor & Company; W.

Company;

Co.; Leonard J. Wolf, A. G. Becker & Co., Inc.

Team:

obligation

5

200 Point Club

Japanese Stocks and Bonds
NY

&

League standing final, 2nd half, is as follows:

Meyer

Members:

1954-55

which goes into

Fund

N.A.S.D.

Broker and Dealer

"•

Gratuity

Co.; Thompson M. Wakeley, A. C. Allyn & Company,

Security

Krisam

Troster, Singer & Co.

Fuller

SECURITY TRADERS

Manson

J

—

Doyle,

Doyle,

A.

Ernst &

N.

1, 1954

instituted

newly

Jnc.; W. W. Cruttenden, Cruttenden & Company; Raymond Hofer,

Leone

Member

2-

Glore, Forgan & Co.

McGregor,

1, 1954:

J.

Hummer &

Klein

v.

the

effect June

Burian

joined

J.

following have been appointed trustees for the

of

j

Bullet, Hickey & Company, Inc.

William

Transportation:

Club
)f New York
annual
outing at
^ock Spring Club, West Orange,
Bondwomen's

JOHN P. GERMAIN
has

Incorporated.

Roy B. Sundell, Julien Collins & Company.
John D. Kipp, A. G. Becker & Company, Inc.

Mass.

Cincinnati Municipal Bond Deal-.
;rs

Club of

Do.yle, Doyle, O'Connor & Company;

Madary, Geyer & Co.,

A.

William

(Boston, Mass.)

Securities

Boston

Equipment Co.

Lime

We

Co-Chairmen: J. Robert
Harold

Baseball: Frank H.

"Syndicats"
5th
anniversary
outing at the
Echo Lake
Country Club, Westfield, N. J.

and

Traders

Joseph T. Fuller, William A. Fuller & Company.

Chairman:

June 18, 1954 (New York City)

Stanley

Co.* 30 Pine Street, New York 5, N. Y.

Bulletin

Bond

Clubhouse:

Jersey an¬
the Rock Spring
Club, West Orange, N. J.

Miss r;sippi Valley Gas Company —
Analysis — Equitable Secu¬
rities Corporation, 322 Union Street, Nashville
—

the

Plans for the day are, under the directidn of the follow¬

The

Company

of

Day

nual field day at

Company—Analysis—Bond, Richman & Co., 37
Glass

■

INC.

ing committee chairmen:.

Golf:

Bond

■

Field

Annual

28th

26, 1954.

—

Keyser

■

i

BOND TRADERS CLUB OF CHICAGO,

Chicago will be held at Nordic Hills Country Club, Saturday, June

(Minneapolis,

Street, New York 5, N. Y.

Libbcy-Owens-Ford

letin

1954

City Bond Club 33rd an¬
nual
outing White Bear Yacht
Club
preceded by a cocktail
party
June
16 at the Nicollet

Conklin

W.

Yacht

Minn.).

Manly, 11 West 42nd Street,, New York 36, N. Y.
I.a'robe

17,

June 18, 1954
—

golf

and

Bear

Twin

.

Organization, 100 Broadway, New York 5, N. Y.
Elmridge

day

The

Oil Company — Analysis — H, Hentz & Co., 60
Street, New York 4, N. Y. In the same bulletin are
analyses cf Pure Oil Company and Standard Oil of Ohio.;

Incorporated—Bulletin—de

field

Hecht, Jr., Dempsey-Tegeler & Co., Los Angeles,
t
Smither & Co., Portland, Ore.
Laurence B. Carroll, Burke & MadDonald, Kansas City, Mo.
James Dean, J. W. Tindall & Co., Atlanta.
John J. D'Arcy, F. L. Putnam & Co., Boston.
Pierre A. Kosterman, Zilka,

Club, June 17.
June

Beaver

Industries

16;

White

Continental

Eastern

June

let

are

on

American

(Minneapolis,

City Bond Club annual
picnic cocktail party, Hotel Nicol¬

&

Corp.—Analysis^-J. A. Hogle & Co., 50
Broadway, New York 4, N.- Y, Also in the same circular are
on

1954

Twin

Associated Dry Goods
data

John J. D'Arcy

Dean

Vice-Chairman, Crockett & Co.* Houston.

A. Gordon Crockett,

16-17,

Minn.)

•

120 Broadway, New York 5, N. Y.

memoranda

James B.

Carroll

John C.

June

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

B.

Laurence

Club, White-

marsh, Pa.

trade.

Rails With Appreciation Possibilities—Discussion of five issues
—Cohu & Co., 1

(Philadelphia, Pa.)

11, 1954

Investment Traders Association

6, N. Y.

and

New

of

Country Club and Beacb
Club, Rye, N. Y.

A.

Inc., 70 Pine Street, New York 5, N. Y.

Co., Ltd., 61 Broadway,
Also in the same issue are analyses of
the Electric Wire and Cable Industry and Spinning Industry
York

Club

York 21st annual outing at West¬

Investors Beacon—Nomura Securities
New

(New York City)
Bond

chester

Pulp Industry in Japan—Analysis in current issue of Nomura's

2400

A.

June 11,1954 (Los Angeles, Calif.)

market

phia

HA

Walker-

Graham

(Chicago, III.)

Investment Analysts Society of
Chicago annual meeting.

Philadelphia Bank Stocks—Comparison of 11 largest Philadel¬

New

Detroit

of

Jasper Park Lodge.

parison between the listed industrial stocks used in the DowJones Averages and the 35 over-the-qounter industrial stocks
used in the National Quotation Bureau Averages, both as to
National

'

Investment Dealers' Association

Over-the-Counter Index—Folder showing an up-to-date com¬

yield

Club

of Canada

Analysis — Laird, Bissell &
Meeds, 120 Broadway, New York 5, N. Y.

New

*'

Country Club.

120 Broadway, New York 5, N. Y.

& Co.,

3ptb
Sleepy
Scarbor¬

Club,

June 9-12, 1954 (Canada)

Appreciation—Discussion of tqn issues—Sutro Bros.

For

York

the

at

.

Investment Opportunities in

Isues

day

party at the Grosse lie Golf and

York 5, N. Y. ; /
Japan—Circular—Yamaichi Secu¬
Co., Ltd., Ill Broadway, New York 7, N. Y.

Inc., 14 Wall Street, New

following members of his Committee:

has appointed the

June 8, 1954 (Detroit, Mich.)

Stocks—Annual comparative analysis—Blyth & Co.,

Insurance

New

of

field

Country
ough, N. Y.
v

Comparison—

Earnings—Annual

Insurance

Walker, of Joseph McManus & Co., New York, as
the Membership Committee of the NSTA for 1954,

(New York City)

Club

Hollow

Bulletin—The Nikko Securities Co. Ltd.,
Marunouchi, Chiyoda-ku, Tokyo, Japan.

Casualty

&

Bond

For Japanese Stocks—In current issue

Laird, Bissell & Meeds, 120 Broadway,

of

Club, Lake Forest, 111.

Stock

Weekly

Chairman

Club of Chicago 41st an¬
field day at the Knollwood

nual

Market—Analysis—New York Hanseatic Corporation, 120
Broadway, New York 5, N. Y.

4, 1-chome,

(Chicago, III.)

1954

Bond

Bond

Earnings Performance

;•

NSTA MEMBERSHIP COMMITTEE

Jack

Manson

(Twice)-—222

I'

Point Club

Joe Donadio

Roy Klein

Brokdway, New York 6, N. Y.
Tel.:

BOwIing
Head

Green 9-0187

Office

Tokyo

Final Winners:

Klein, Fredericks, Murphy, Weseman, Mewing.

Bowling Dinner tonight, June 3, at the Antlers

i

<66

Volume 179

Number 5330

...

The Commercial and Financial Chronicle

Of Mines and Porcupines

management, metal

Nickel; 15,000 Interna¬
Petroleum;. 33,076 Standard
California; 81,400 Standard
of New Jersey; 4,000 shares apiece
of U. S., and Youngstown
Steel;
plus $5 million in Canadian gov¬

and metal shares

ores

the bulwarks of investment

and progress; and many
so
far
as
to

safety

trusts

go

1

^

tinguished integrated oil enter¬
prise with an especial flair for
finding oil; and a big acreage for
exploration in .Canada (through
its

holdings in Hudson's Bay Oil
Gas). The Continental shares,

three

four

hun¬

alluded to above, represent actu¬

dred securities

ally 5.4% of outstanding common.

as

for

&

vehicle,

a

Finally, there is

arriving at

that

more

This

selection

confined
much

to

while
have
Ira U.

-quite decent
results by directing

Cobleigh

dough

their

of Mr.

Woolworth, Mr. Ford, Mr.
Chrysler and Mr. Merck.
I Today, however, we'll take the
examine

middle road and

briefly

companies

•

investment

resemble

to

more

trusts, with portfolio diversifica¬
tion
displaying
a
pronounced
metallic luster.

The first of these renowned de¬

velopment and trust organizations
is Newmont

Mining Corp. Whose

shares (sole
capitalization) are listed NYSE
and sell today around 56.
In both metals and oils, New¬
mont

common

h,as

a

king-size slice of some

interesting companies, in
Canada, the United States, South
America, and South Africa. Let's
very

talk

first

metals.

about

ducer

within

the

last

two

of

and

zinc

lead,

together,

copper.

for

accounted

almost

dividend1 in-

Newmont's

of

fake in

weeks

early to be certain, but
timates

eighth

have

placed

interest

of

It's

too

some es¬

the

one-

Newmont

Oil

(three-eighths to Continental and
one-half to Magnolia) as repre¬
senting

2.5

million

barrels

of

Put

this

and you

whole

find

a

deal

of per share net worth at

13/31/54
$57.37. This compares with to¬
day's NYSE price of 56. The div¬

to

dian

minerals

work

in

on

solidly

of

and

Other metal holdings,

dividend

349,038

of market

significance,

Phelps-Dodge,

of

shares

are

27,300 shares of Kennecott Copper

Corp., 51,400 shares of St. Joseph
JLead Co. (an elegant company in
its own right, and in a particu¬
larly favorable position right now

to

due

stockpiling

government

for lead and zinc and
rising prices of same),

program
current

Copper
produc¬
potential from its new Ari¬
zona
operation). Then Newmont
lias a very special situation
in
Its sponsorship
of Sherritt-Gordon, a nickel and copper produc¬
ing venture which should begin
production shortly in Manitoba.
If you follow, and give credence
to the projections of a
number
«of analysts, the future of Sherritt219,870 shares of Magma

(with

vast increase in

a

borders

and Newmont
zreap

on

is

in

handsomely

here lives up to its
mont

has, not

a

the

fantastic,

position to

a

if the mining
billiag. New¬

grub stake, but a

grand stake in this enterprise via
Its

1,122,196 shares of common
and $8,000,000 convertible deben¬
tures

of

The

Sherritt-Gordon.

stock switch

here

The conversion

the marked tab

is quite sweet.

price is $2.50 and
on

Sherritt is $4.

Calculated out, after, and assum¬

ing conversion, NEM will own
38.1% of the Sherritt equity.

metals to petro¬
leum, NEM has 31,600 shares of
Creole Petroleum, 38,362 shares
of El Paso Natural Gas, surely
one
of the blue-chm pipe lines,
Moving

and

of

a

from

real bundle (55

Continental

Oil,

.520 shares)

itself




a

dis¬

selling now (NYSE) about 65 to
yield (ssuming current dividend)
If you like representation in the

If

you.

think

you

gold is due for a
then Mclntyre has a special
ulative

appeal.

If

think

you

«

new

a

1

investment: firm

of Conrad,
Co., and formerly was a

with

20 years.

Seattle

in¬

tute

He

the

bank

for

as¬

over

President of the

was

chapter American Insti¬
Banking, 1933-34; Presi¬

of

dent of Seattle Trust Officers As¬

coffee) is about to break loose sociation, 1937-38; and active for
again, then the metals and min¬ many years in civic and commun¬
erals
represented by either of ity affairs.
;
.
;
these modified trusts,
may serve
Martin O. Nelson, Vice-Presi¬
'

,

you

and

well.

Investment

porcupines is not
as

in

so

mines

unortho¬

it sounds!

dent and

Nelson

and

Wash. —Martin
Melvin

J.

major in the U. S. Army during

University of Washington,

O.

Scoville,

have announced the formation

asso¬

World War II, is a graduate of the

Formed in Seattle
SEATTLE,

Treasurer, has been

ciated with Blyth & Co., Inc. for
the past 21 years.
He served as
a

Nelson, Scoville Go.

of

treasurer

mer

oil

financed

a for¬
University

the

of

Alumni

Association

in civic

and

is

and

active

community affairs.
Verne E. Rolfe, who will repre¬
the

sent

firm

as

ecutive has had

will

group

the

account

an

over

Co., Secretary, r
Harry Berkowitz, Wm. M. RosCo.; Beatrice M. Bougie,
McLaughlin, Reuss & Co.;" John
Carden, R. L. Lafferty & Co.;
Harry S. Courtney," Peter P. Mc¬
enbaum

Dermott

Co.;

E.

John

Stern

&

Deutsch,

Co.;

Edgar
Ehrenthal, Ladenburg Thalmann &
Co.; Martin A. Fendell, Jacques
Coe

&

Co.; Clifford Henry, Hay& Co.; Ernest Hockstuhl, Stokes, Hoyt & Co.; Sam
Minsky, Hardy & Co.; Walter Pen¬
dleton, Jr., | Clark, Dodge & Co.;
den,

Stone

Walter

Petersop, Josephthal & Co.;

Benjamin Powers, Adams & Peck;
John Querni, Edward A. Purcell
& Co.; Edward R. Rimmels, East¬
man, Dillon & Co.; Frank Saline,
Goldman & Co.; Charles Spear,
Jacquin, Stanley & Co,; Gerson
Werner, L. F. Rothschiid & Co.;
Edward Wickman,
& Paine; John J.

Abbott, Proctor
Smith, FahneCo.; George F. Knakel, F.

stock &

I. duPont & Co.

ex¬

30 years ex¬

&

Herbert

Cocktails -'on the club" will fol¬
low

the

business> session, which
Whyte's
Restaurant, 145 Fulton Street. For

perience in banking;-20 years in
Cheney, Washington and 11 years

is scheduled for 4 p.m. at

with

those

the

First

Portland

future

new

present a slate of officers and Ex¬
ecutive Committee members at

McDermott &

sociated

flation, presently marking time
(except perhaps in the price of

This

will

ments in the Northwest.

'

of the Bank of California and

spec¬

elected.

the

oi

Wilstead, Hallgarten & Co., Chair¬
man, and Paul S. Morton; Peter P.

and in¬

trust officer of the Seattle branch

hike,

Thursday,

Nominating Committee

organ¬

Bruce &

the

be

held

be

Nine members

background of long
experience in banking and invest¬

the

chip in a bull market, either
corporations can accom¬

these

;

principal
major

the

news

Melvin J. Scoville, President of
the new firm, was ten years with

4.6%.

of

all

and

of financial

Dalles,

at

National

Medford

In

Oregon.

of

Bank
and

The

he

addition

served

four years
in the State
Banking Department of Washing¬
ton.

cost.

Seattle office of

Latterly

he

was

with

the

Conrad, Bruce &

who

want

to carry on the
inspired by the free
an informal ''Dutch

discussions

libations,
Treat"

dinner:

round-table

perennial
Stocks"

will

follow

discussions

interests
"The

and

on

for

those

"Favorite

—

Averages."

Co.

Mclntyre Porcupine Mines, Ltd.
Next

we

to

move

Porcupine

Mines, Ltd.

cupine here is not

was

Co.,

an

with

stock

and

quill!).

a

no};

started out

good

as

MP,

mounted

(the

police)

gold mine and a
that.
For the

a

Martin

Malvin

Nelson

O.
■'

v'v '

J.

cated in Suite 810,

White Building.

The firm which will function

as

a

lion

brings together the combined ex¬
perience and established practices

Emergency Assistance
$580,000 more to operating

added

ST.

'OV

ended 3/3/54, gold and silver
produced had a value of $5.1 mil¬
and

Central

Joins Hooker & Fay

member

ciation

of

of

the

National

Securities

Operating net, before taxes,
$711,535 which wasn't too
bad considering that1, for the first
time in 40 years, the mine was
closed by a strike lasting from
Sept. 23, 1953 till Jan. 15, 1954. It
was
settled b,y a five cent per

Asso¬

Dealers

(Special

to The Financial Chronicle)

SAN

MATEO, Calif.—Mrs. Alice
Fitzgerald has become affili¬
ated
with
Hooker
&
Fay, 205
D.

Fourth

Avenue.

Mrs.

Fitzgerald

formerly with Shields & Com¬

was

LOUIS, Mo.—Mel F. Cooke

has

become

tral

Republic

Building.
Merrill

He

Company,
was

prior thereto

was

hour wage
year
were

increase.

In the fiscal

ended 3/31/54, total millings
reduced by about 30%.

This

not

been and

announcement

not

are

being offered to the public.

appears as a matter

of record only.

NEW ISSUES

Estimated gold ore reserves are
about

2,600,000 tons (one-third of
to the ton). Lower level
development between 6,000 and
6,500 feet continues to reveal ore

Libby, McNeill & Libby

ounce

an

showings

comparable

achieved

at

with

shallower

those

$15,000,000 Twenty-five Year 3V2% Sinking Fund Debentures

horizons;

due

the capacity of the Mclntyre

and

operation

200,000

deliver

to

ounces

well

pears

a

upwards

year

of gold

demonstrated.

ap¬

$10,000,000 5Vi% Cumulative Preferred Stock

Of

an

dramatic effect.

expects

that,

But

at

no one

least not

($100 Par Value Per Share)

really
in

Wfay 15,1979

of

upping of the world
price of gold from $35 to, say, $50
or
$60 an ounce would have a
course,

Price 100

I

the

immediate future.

Actually, in Mclntyre, the tail
the

wags

dog

(or

should

I

say

porcupine). For company mining
delivered only 88 cents of the $2.93
consolidated net income contained
in the annual report 3/31/54.

rest,

$2.05,

dends

folio

on

of

stemmed

a

ried
had

assorted

of

3/31/53
a

$44,360,000.

000

These

at

market

placement of the above securities has been negotiated by the

i
.

Salomon Bros. & Hutzler

The
divi¬

were

car¬

$17,805,000

but

value

(3/25/54)
They include 100,-

shares of Amerada; 23,152 of

American Metals;

undersigned,

'
i

Members New York Stock Exchange

excellent port¬
securities we'd

very

like to mention.

from

Direct

SIXTY WALL STREET, NEW YORK 5,

Boston

Philadelphia

formerly with

was

Cleveland

June 2, 1954

5,000 shares of

t

N. Y.

Chicago

Man¬

of the wholesale department

gross.

These securities hnve

Cen¬

Security

Lynch, Pierce, Fenner &

Beane and
ager

associated with

for Fusz-Schmelzle & Co.

in Chicago.

pany

Republic Co.

(Special to The Financial Chronicle)

Scoville

i-

Nelson, Scoville & Co., Inc., a new
investment firm, with offices lo¬

at

one

Mel F. Cooke With

Company.

Ontario—(and I didn't write this

piece

Hester R. Leake, cashier,
previously with Grande &
Inc. and Pacific Northwest

Mrs.

Mclntyre
The por¬

animal, but
golden geographical location in

a

tion

Clordon

ization have

you

year

and

hiatus, have been dished out since

eastern

provide

The members of the

These Porcupine shares are

17th.

September meeting. The fol¬
lowing 21 candidates will be of¬
fered
by the 1953 Nominating
Committee, headed by Gerald L.

sources

speculative call, virtually without

very

1953.

with

formation.

ventures,
trust, with
overspin in metals
and oils offers you the sensation
of buying an investment, and get¬
ting a diverse and horizontal
this

lots

connections

has been paid each
year
since
1939, and cash dividends without

Cana¬

many

Wire

will

Brokers
June

1954

to

price

and

stocks

company

access

idend for the past three years was

have

and

markets

of

ings and thin balance sheets

bonds

investment

shares.

valuation

together
estimate

company

mutual

trading

dox

crude oil reserves.

a

'These two South African holdings,

©0%

20,000-acre

a

So far they've brought in
nine wells from one salt dome and

NME

big equity in two rather
unpronounceable companie s—
56.3%
of
O'okiep (Copper Ltd.,
and 28.5% of Tsumeb Corp., pro¬
owns

over

Louisiana

$2.50, roughly a 4.4% yield. When
you consider what meager earn¬

Newmont Mining Corp.

2,658,230

the

corporate

prompt

modate

in

practice

about $67 a share on
only
798,000 capital shares with noth¬
ing ahead. Three dollars or better

blue

Meeting June 17

a general in¬
dealing in all
The next quarterly meeting of
types
of
investment
securities,
of
Customers'
Government and municipal bonds, - the^ Association

of

1917.

Customers' Brokers to
Hold

They will conduct

want?
You've get

market

a

widely

9

the West Coast.

on

will

shore

drilling

in

principals,

correspondents

Petroleum and Continental in off¬

whose

primary interests are in minerals,
but whose corporate setups seem

here

two

vestment

you

investments?

or

both

of

brought in another well.

exclusively into- a single enter¬
prise as in the case, for instance,

eminent

Magnolia

—

stretch.

achieved

two

Oil

partners

tidelands

few individ-

uals

.

competent

corporate
a

Newmont

Company.
company,1: although
quite
has joined up with quite

new,

a

smaller

coterie,

$16

money,

secu¬

totally owned

a

in whieh NEM has
million of its own

company

lodged

stress

a

rity

oil

goal.

Others

Gold

do

.

provide
Or

What

ernments.

the

circles

Oil of

;

It has become quite fashionable
to stress diversification as one of

known for many years in financial

T; 82,500 Bell Telephone
Canada; 13,000 General Electric

tional

couple of companies distinguished by the

a

money,

of

of

ternational

Enterprise Economist

possession of

AT and

(before the 3-1 split); 113,500 In¬

By IRA U. COBLEICH

A metallic look at

(2433)

San Francisco

The Commercial and

Financial Chramcle...

Thursday, June 3, 1954

(2434)

]L0

market

Public Pension Fund

own

utmost

alone

investment Problems
New York

investment

fund investment.
basis for security trading by pension funds, and

cusses

ments
I have had

a

investment in

on

typical

planning for many
years.
Unfortunately, our invest¬
ment banking industry does not
readily lend

about 30 to

itself

awhile.

in

pension

to

maximum

pen¬

planning.;
Nevertheless,
Bros.

Hutzler

usually

takes

to reach its
the swift expan¬

reserves

seems

The

years,

12

the

How

on

rapid

of

rate

growth of these funds will affect
the demand-supply ratio of long-

deal

term

we

of

study,

launched

new

program

which

I

will

hope

ulti¬

mately

allow

pension goal.
One of the major obstacles we
have yet to overcome is to be
able

our

include

to

myself

in

didn't

here

come

However,
foist

to

business

years,

Yet, we must concede that
the

that

who

believe

supply of funds seeking
will, in the long run,

investment

I

faster

increase

the

than

the

supply

problems
you,

some

you.

However, just remember the

of our industry upon
but to try to be helpful to
Perhaps a brief glance at
some
relatively recent economic
history will help to set the scene.

War,

called

the

of

rainy day, for their old age.
they were using to
achieve their end, however, was
taking on a new form. Instead
a

The

means

of individuals

vesting

doing their

own

in¬

in

stocks, bonds, and so
on, they were turning over their
savings to savings institutions to
invest

for

them.

These

institu¬

tions,

savings
banks,
insurance
companies, mutual funds, etc.,

and

men

them

work

to

and

women

the

in

was

passed

back

in

that

some

econo¬

time

the

crystal ball

with
the happy
the reserves to be

came

up

anyone who wanted Treas¬
314s due 1933-78 could have
picked up all he desired at , a

were
pooling the individual sav¬
ings of thousands upon thousands

of

made

were

Security Act

1930's.

At

its

on

penThe State of Wis con-

a

in

State

The

most

U. S. Treasury
muncipal

local

quality is simply
recently

no

created,

or

revised funds,
guaranteed rates

recently

either

have

no

which are
more
in keeping with the yields
obtainable on highest grade inif

or,

they

do,

ones

Yet.

vestments in today's market.
a

of

revision

public pension fund
practices, as a whole,

investment

be

to

seems

more

press

1

seems

all know,

we

those

not

portfolios

your

of

you

permitted

«prudent man" basis

which

one

As

on

manage

as

obtainable.

The
most

rate of reeminently

a

that

;who ,are,stiU

to

the

on

take

n0

important step than
for
early adoption,

to

can

an

\

.

.

realize that other solutions to
tha problem ^ave been advanced,
but such make-shifts as the proP°sa*
have the Federal Government issue special bonds direct to State and local j governmerd pension funds in amounts
and yields sufficient to satisfy
••'their needs are certainly no answer. They would merely shift
the burden and in a manner not
at
beneficial to the continued
good health of our State and local
governmental units. In my opindo not need a crutch to

10n> Y°u

needed.

lean on.
best pension fund administraand
average
rates of return on tors feel uneasy about undertakstate pension funds,
shows that ing the responsibilities of "prua

tabularequirements

recent U. S. Treasury

A

tion of interest rate

substantial difference exists be-

dent man' portfolio management,

began to
tention

World

In

War

pension
the

in

almost

pay

to

salaries.

the

must

&

securities

eloquent

as

emergence

a

as

hardly

discount.

I

proud

am

say

Hutzler

advertisements

in

markets

and

salary

not

earners

Size of

these

bears

obtained

be

from

tax

rev-

ample,

we

are

almost

engaged

daily in working out some phase
burdens all of us now bear,-this
of an investment problem with
poses a serious problem.
If our the managers of one or another of
only choice were to continue to the
public pension funds with
confine pension fund investments which we do business,
to

Considering the heavy tax

United

States

State

and

and

Actually, it is

no

trick at all to

Since
of

the

end

of

the

war,

the

pension reserves pil¬
ing up from sources both public
and private has been as impres¬
sive

their extraordinarily rapid
of growth.
From the long-

as

rate

range

to

point of view, these funds

meet

ment

gotten

future

claims

income

under

•An address

have

way.

for retire¬

just

about

And,

since

by Mr. Smutny before the

™°°roffic%tT.rocUtifn:slUtrcisS
Cai., May
25,

1954.




the

size

of

rate

at

and

public

figures.

And

please bear in mind that the fig¬

their

ures

security. They do
poorhouses in their de¬

the

and

Reserves

the

at

estimated,

are

Corporate
total

pension

about

$11

not

actual.

reserves

billion

now

and

are

growing at the rate of $1.4 bil¬
lion annually. Pension plans trus•

teed

with

life

panies
$8

have
billion and

growth
serves

of

of the

minister

billion,

an

about

ladies

you

insurance

reserves

annual

$1

com¬

of

about
rate

billion.

of

Re¬

public pension funds
and

run

gentlemen

around

$7

to

ad¬

$8

magnitude

gives

yOU

SOme

billion yearly.
of these figures

idea of the Vast

investment responsibility
carry.

familiar.

become

course

to

I refer,

liberalization

the

of

you

Investment experience and

over

40

of

years

trading

tech-

niques to place at the,disposal of

clients.'
and to the rapid postwar spread
At this point, many of you are
of
"prudent
man"
investment Probably asking yourselves—how
legislation.
can we get an unbiased opinion
pension

investment

fund

rules

°ur

about
"Prudent

Man"

Principle

;

Some

public pension funds already operate on a fairly liberal
basis but the widespread adoption
of

"prudent man" investment laws
for
savings
banks
and
other
fiduciaries such as public pension
funds is relatively new. However,
"prudent man" investment prac+tices

neither

bond,

a

price

from

a

possible

They have been used by life insurance companies for a long, long
time! They have undergone the

selves.

In

through

many

acid

test

of

both

weather and foul.

nor

fair

economic

They've proved

more
can

liberal

be

sion

They

a

the

investment

real

fund

boon

tp

the

choice

field

and

of

policies
the pen-

investment

broaden

vestment

adoption

officer,

of

in-

build

up

who

or

a

has

a

We
care

of

believe
them-

past
44
years,
crises, we've demonstrated that this premise works,
Part of its application consists of
giving the best information and
advice

Accordingly,

market,

broker

spreads.
will take

profits

new

a

stake in making a trade?
My answer is: Salomon Bros,
was
founded in 1910, on this
premise —to make the largest
markets possible in the greatest
number of high-quality investment securities at the narrowest

novel,

are

increasing apnroximately they work.

$800 million- to $1
The

government obligations, the

alreadv
of

Fund

look

a

reserves

private

clining years — they want pen¬
sions, and—they are getting them.
size

decreasing

a

local

which they are growing. For the
sake of perspective, I include both

want

want

Pension

for

Now

continu¬

and

of

of

ing strength of this trend toward
institutionalizing savings.
Wage
families

fears

supply of investments.

to

major factor

witness to the

ran

long-run

following

years

the

II,

funds

rights

For

need

pay

short-term

the

another,

portfolio

.

At

this

by Pension

interject

a

As

it,

I

see

bases

for

fund.

One

out

of

for

the

Funds

point, I should like to
comment

trading.

on

there

are

trading

by

two

sound

pension
is to make, a switch
security into another

one

of
up-grading
The other is to

purpose

your

investment.

take

advantage

a

of

favorable

a

market by
selling out holdings,
originally long-term but which
now,
because of the passage of
time, are due to mature in the
next few
years, and reinvesting
the proceeds in long-term maturi¬

ties.
Aside from such up-grading and
refunding operations, I can see no

whatsoever for trading

reason

by
fund managers.
To in¬
dulge in trading for the sake of
scalping a
market
profit
only
lays the fund open to needless

pensjon

market risks.

This

raises

another

Should the portfolio

question:

manager

de¬

yields guaranteed to beneficiaries and yields obtained from

enues.

that at that time, when
bearish prophets were in the vast
majority, we at Salomon Bros.

much at¬

as

pension

market.

Therefore,

officer
to

tween

§et the aid you need. In our ofnationally circulated newspapers need to make up this one-half of fice, as in your depositary banks,
slowed this trend. In fact, it prob¬
ably intensified it. For example, unequivocally recommending the 1% deficiency out of tax revenue economic, industrial and individpurchase of these bonds. Today, would be regrettable but neces- ttal security analysis is a daily
I believe this quest for old age
as
you know, they are no longer
sary.
routine. In addition, as primary
security was directly responsible
a
discount, but at a
for the enactment of the Federal selling at
However, there is an alterna- dealers, underwriters, and traders
9-point
premium.
So
much
for
tive
with
which
Social Security Act.
many of you have
in institutional securities, we have
Job seekers
era

needed.

attention

Trading

believe

cereiy

were

.

many cases,

and

bonds of high

ury

to

investment

depression

when

investment

legally

funds

and

rate,

yield of 4%

ago,

substantial

putting

markets.
The

the

little

t should like to point out that liberately stay out of a market
thought that
there is a wealth of experience just because he feels it may slide
created by the Act would quickly
investments.
In
this
tabulation, and guidance available for their off a
point? I don't think so. I've
grow so
large that by the late the average of yields guaranteed useInvestment counsel can be been trading bonds for 30-odd
1940's they
was
3.20%. The average of yields hired.
would have bought
Examples of the portfolio years, and, I assure you, markets
obtained
was
2.66%.
Moreover, makeup
of the life insurance can be
up the entire outstanding Federal
slippery things to handle.
debt.
Today,
nevertheless, our this latter figure was padded by companies operating in
their If the yields available meet your
blue sheet which lists Treasury the inclusion of yield results from
states can be had for the asking, requirements, I think you would
securities
issues and
quotations funds
pursuing
"prudent man" The services of trained invest- be well advised to put your funds
still shows a sizable amount of investment practices.
ment analysts in the banks which to work and not try to out-guess
such bonds
From tnis laouiation, it would
afe their depositaries can be had the market.
available for would-be
buyers, and the present state of appear that many public pension either free of charge or at nomNow, let's take a lock at the
the Federal budget indicates more fund portfolios tall at least onemM cost, as can those of the in- basic material which goes into
bonds will be offered to you in half of 1% short of earning their vestment banking firms ready to
the
construction
of
a
pension
the months ahead. Moreover^ you
guaranteed rates. Under the cir- render service in pursuit of busi- fund
portfolio.
To try to make
will all recall that just a year cumstances,
the
missing
yield ness- At Salomon Bros., for ex- this discussion as
graphic as

savings."
By that, they meant
merely that people all over the
country were trying, as never
before, to plan for the future,
dor

predictions

same

originally

and

a

"institutionalization

belief.

their

mists looked into the

following the First

movement got un¬
which
the
economists

derway

of

sort

for

when the Social

Story
In the years

investment opportunities, have

ground

is

feasible.

and

obtains

longer

economists

these

to have been 4%.

continue to hope that the
demand-supply money equation
will remain in fairly even bal¬
those

return

sjni usjng similar rules, averages
a return of almost 3Y4%. Wiscon-

time, 4h«^

same

ot

favored
still

expansion and replacement needs
will have to be financed, and we

of

World

At the

conservative

and

ance.

partners and

my

plan.

our

be

to

may

Rudolf Smutny

achieve

to

us

remains

the

Over

seen.

a

is

~

turn

ago. Last year,
after a great

investments

it

-

usually guaranteed
then regarded

Investment

very

v/nicn

patterns are flexible. The steady
sjn achieves this eminently satisinflow of funds permits easy re¬
factory result by using equity as arrangement of
portfolio pat¬
I think you will .all agree that'-well .as .fixed
income securities terns regardless of -market, condi¬
the
primary concern in the in- in its portfolios,
tions. New ratios can be achieved
vestment
of
pension
fund
reJust three weeks ago, the New merely by directing new
money
serves
is,
and must always be, York City Controller, Mr. Lawr- into the desired channels.
And
safety of principal.
Because of ,ence Qerosa, sought and obtained
lastly, if investment quality, is,
the importance ot this basic pre^ authority to use more liberal maintained
and
portfolio yields
cept, when such funds were first ^investment
practices in the man- equal
actuarial
requirements,
set
up
years
ago, their, invfest-agement of certain city pension pension fund managers need pay
ments
were
usually limited by funds
The application of "pru- little
attention
to
the' relation
law to obligations of the United
dent man" investment principles between market value,and book
States and of the State and lpcal
does pay 0fi \n the form of higher .value.
h;"";■
governments which crea ed the returns on. inves.ed funds. I sineficiaries

Effect of Growth of Funds

years

ques-

public_ pension

investment officer

funds.

to diminish.

Long-Range

the

what

2.90%

sion funds.

,

the

witn

.

com¬

farther in the next few

direc¬

J;''-

consider

us

there

about

FunHc

permitted to do.

took

that

tion

Dis¬

let

of

fund

to

rather than

&

first steps

our

in

still

Salo¬

at

mon

Now

tion

continue for quite
importance of their
effect on the capital market is,
therefore, more apt to increase

likely

sion

we

.

-

.

Investment >

on

tuna

-

given

any

.

years

size,

these

of

sion

fund
40

Restrictions
r%r

stocks.

common

the

keen interest

very

at

\

Legal

First World War, and the investment
problems relating thereto that have developed. Says it ap¬
pears
many
public pension' fund portfolios are at least
one-half percent short of earning their guaranteed rates, and
need for liberalization of pension

media

time.

pension funds following

sees

any

That

is—to get the most return for the
least
risk
among
the available

story of the growth of

banker gives

investment

They
the

in

choice

pension

^v/
experienced,, competent, made.
and continuous portfolio superNow let us consider certain dis¬
vision. But Lie results they pro- tinct portfolio advantages which
duce certainly justify the effort
automatically accrue .to the pen¬
they require. For example, this sion
fund
investment
officer.
State of California in which we For one
thirig, liquidity is not a
are now meeting has,. I believe, - problem.
Because
a
steady in¬
no guaranteed rate of ureturn
to flow of
money is typical of pen¬
beneficiaries and, operating under sion
funds,
liquidity is always
course,

are

make

to

you

investment

portfolio yield. .They demand, of

your

given, set of circumstances.

& Hutzler

Partner, Salomon Bros.

Senior

either

command,

importance.

enable

wisest

RUDOLF SMUTNY*

By

know-how,
that at you

or

the

of

we

the

can

to

*

our

clients.

Every member of our organization is thoroughly aware that today's "fast buck" can be tomorrow's

headache, and that no trade

is worth

a

hoot unless

it fits the

requirements of the institution or

pos¬

sible, all of
should

have received, or
received, a set of

you

have

Salomon

Bros.

& Hutzler's daily
offering sheets, of
which we send out approximately
7,000 daily. These sheets, as you
will
see,
give a pretty compre¬

quotation

hensive
field

and

the

of

coverage

of institutional

entire

investments.

Thev

show auotations. offerings,
yields, and other pertinent data,
all publicly traded U. S. Treas¬

pn

and Governmental Agency se¬
on
selected
State
and

ury

curities,
local

municipal
various

on

traded

obligations, and
of
actively

types

corporate

bonds

and

pre¬

ferred stocks.

First, we'll take up the U. S.
Governments show-n on this blue
sheet.
These
blue
sheets, inci¬
dentally, have quite a history.
They've been coming out in their

present

form

quarter

of

years

ago,

for

more

than

a

Several

century.

a

we

decided to stream¬

line them. However, the first day
they appeared in their new guise,
we

got

to

a

banks

some

the

their

old

form.

statistical

geared to
and

"hurry-up call" from
asking us to go back
seems

had

that
been

the old form for years

would

tirely

It

records

have

recast

had

had

to

be

en¬

changed.
Naturally, we couldii't ignore this
appeal. So, if any of you ladies
and

gentlemen

we

don't

like

our

blue sheet setup, all I can say
"We're stuck with it!"
As

we

all

is,

know, UJ S. obligaContinued on page 32

Volume 1-79

-f:

Number 5330;::. The Cx>m:nerciul and- Financial-iChromcle

(2435)
-.1 v..

...

•/

^

'

•; -infcWrig along

>

as

1
rapidly

■
as

would like, then certainly

.

handles advertising and publie relations and. he may not him-

you

man

your

,

..

■

.

11

.

with any figures as to what your
own particular allocation for ad-

•

.advertising^appropriation
'should self, clearly
make- due allowance

*

delineate the differ- vertising should be but I think,;
enee<>betweerr-advertising an d having in mind the several points
It is unfair to outlined previously, you will

for .adequate

J*;* \fundS'To be spent promoting this public relations.
;

tlce-President,

.

you cannot

Mr. Lewis outlines

problems in allocation by banks
advertising outlays. Lists a number of guiding rules and
lays down as conditions affecting advertising expenses: (1)

■

v

competition;

sadvertising the

tmuity
tne

(2)

adequate budget for

an

-

^

a

bank

period

a

of

in

vears

tion

advertis-

An

t h i,n

often

no

all.

have
nave

lion

Likewise

successful
d

ertising
campaign is
a

v

terminated too
for

soon

of

take

anv

Tut'-

petition in

addi-

stitution

or

form
a

and

of

i

an

to

Conversely
a
large appro¬

step

up

waroiu

vv

this

i-ewis

.

be mishandled

new

cancel

portion

a

of

threat

prede-

your

fdvp

tA

JltL+i™

v) hprpp?

lpm

a

annronriation
titv

aualitv

r

p

nmh

I Lf/P

think of

mav

th^

rather

u;c

tn

with

man

o

rn

quan-

If

vou

hone
cents
nope to
to find
nna the
tne dollar
aonar and
ana cents
answer
to how much to set up
your

advertising appropriation

you are

doomed to disappointment

m

because neither I
can

I

can

of the
a

nor

else

anyone

tell you

do.

exactly what you can
point out to you some

methods used

decision

the

on

to

arrive

important

more

with

Here

are

proceduies

a jiTAriicar'c

(1)

ad-

brief explanation.

a

/1\

at

the

of

size

vertising appropriation.
the

This

the

-

may

ish

This

recommended
use

of their

the-theory

system

has

been

by bankers for the

corporate

being

fully

watched. This may- ffisult
thinking ^b-e c a u se
more, not less, advertising probably should be the-rule when
times
are
tough.
This
method
serves to deny the dynamic concept of markets and the fact that
advertising creates sales.
erroneous

(3) The Advertiser's Task: The
technique employed in following
this method is (a) to define the
The advertiser's task will be

task.

aiong

Boiled down, it's the
type of advertising

needed to fulfill the seller's need;

(c) to price the cost of what
determined

in

was

section

switching
to
effective presentations.

vertising

as

bank's

a

matter

cents

vaiue

advertising has
j| |s

both

Using

Last

an

Actual

Expenditures and Then Providing
a

Flexible

Reserve

for

Advertis-

ing: Companies having experience
,

* An

address

Annual

May

25,

by

Mr. Lewis

before

the

1954.

•)

.




J

XirUlf

A11V

Common

in

AAcfc*

O

organi-

men proceea in tne same way to

advertising

deal with all the other services

various

devoted to

Premiums, surveys, and research

of the bank which

and market investigations.

be advertised, such

In the

you
as

feel should
safe deposit

border-line"

charges quite boxes savings department, com°"en tha Justification for the mercial loans, special checks, etc.
charge depends on the method Having come up with the answer
case of

or

money

to

spend,

or

advertising• appropriation

your

of

Advertising:

think

of

it

Perhaps

as

a

middle of the road pol-

;
.

.

'THOBiaS
Ji Rfil
hviiihv vi

g0vera us in such a

sltuatlon'

V

Willi
wvitii

New York Hanseatic

per-

\

1Iv5'

i

many

dollars"

an

•

-

.

(5) Have Your Advertising Pro-

•

used to fritter away.
which might well,

is

on

constructive advertis-

\ne

character.,

and

producer

Tailored

it

has

abuse

appropriation.

in-

in

to

Your

Bank's

the

This

Thomas J.

difficult to have definite data

Reilly

*Jhi

dollars

thenA prafctice' to

so

as a

services.

banks this^ajj

•

phrase

good-wili: be spent

jf

hank

£ram

.

real

dual

:a

its true light,

.'

Thomas J. Reilly
has become as—j

v

•P?. *1111!"6! S

??

»

sociated with New York Hanseatic

-sociatea w:itniNewxorK nanseauc
This win reQuire a survey by a - Corporation, 120 Broadway, New
partially' competent firm something banks York City. - Mr. Reilly who has

hpmme

the

Market Potenrial For Your Bank:

advertising

is

due to the fact that in recent years

bave been reluctant ^to-accept as«been

in

the

investment business

?.
•

This announcement is neither

an

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

The offer is

The Recommendation of
Your Advertising Agency: I have
.me|

never

from

account

an

-

executive

.

advertising agency who * '
nor-imagina- v|i0n and it is well this is so. They :
are uniformly nice gents and you'.vget to be quite, fond of them,
\yMie it is good to be on excelan

iacked

]ent

1,000,000

enthusiasm

with

terms

the

Scudder Fund of Canada Ltd.

time
hands
on your money pockets while they
same

it is advisable to keep
talking

are

to

Shares;

from

men

the

at

agency,

your

Common Shares

your

(par value $1.00

per

share)

Seriously,

you.

(7) Minimum Job Concept:

Price

$32

per

Share*

♦Prices for

single transactions of less than 1,000 shares. Prices are scaled
down for sinj,le transactions involving greater numbers of shares.

The

advertising appropriation should
be adequate to reach the goal set.
The goal should not be set so high
available

advertising

cannot attain it.

to be

a

the

While this

funds
seems

simple statement, the truth
is

matter

that

are

Copies of the Prospectus may be obtained in any State only from such of the

adverising

often

be

between
T-

a

the

„

proper

task
.

If, for example,

deter-

small

loan

LEHMAN

relationship

and

the

funds.

,

yOU decide your
department
is
not

several Under*
such State.

writers, including the undersigned, as may lawfully offer the securities in

mined without any regard as to
whether or not they are adequate
to reach the goal desired by management. In other words, there

Convention

of the
Pennsylvania
Association, Atlantic City, N. J.,

17

(6)

must

Bankers

bl

(2) By a Pr°Per Classification Needs and Cost Predetermined to :
of AdvertisinS Expense: There is the Extent Possible: How well
a strong tendency to toss into ad- you have this done will often
ver.tisin£ expense accounts items influence the size of the allocation.:
^tiich bear no relationship to it
ge prepared |0 Present Pera, f
,ne
? most common f0rmance Records of Past Year's <
?fm.en^s, y°u
ar®und a Advertisement, If You Have Such
bank is .charge that to adveitis- a Record. Unfortunately it is usu-

less

e

or

of

and

expense

appropriations

Year's

ing in

allocation.,

of

(4)

^ D-fl

ttvUI/iU

«nn/\n

ly increases its value each / year
and seeks to maintain it at a rea-:

which

able to accomplish

pxpputivpc

Value

0f sajes for

a Portion of AdCapital Investment:

reputation

ft

and

that

appear

Blind

comoetitors

expensive and totally
program
unneces-■
sary luxury. They are inclined to

more

pni.*«

(5) Regarding

(b).
The
choosing of several different types
of advertising campaigns, all of
the purpose successfully.

r\V«

r\

haven't the

some

review hav-

a

ered because of their experience,

and

avoided

the

be fool-

the

tional effort will be used to attain

goal.

ads.

v o u r

gards

anticipated

it would

sav

continue

most agencies will render as unbiased an opinion in the matter
of advertising expenditures as
they can and their recommendation should be carefully consid-

amount

their

like

sales task,
broader than and
including advertising; (b) to outadvertising's role in the accomplishment of the, task.
The
seller must designate what promothe

of

more

line

a

are

imjtation

as

customersr sonable evaluation. This line (of
reasoning) might get you a bigger

that it : holds
advertising down in a recession
period when company -expenditures must:be-.reduced and carein

to

would

vou

you

y0ur

is

Earnings:

effective

your

|ng established this fact will

A

in 10 years time you will
yourself with quite a large

as

desjrahie lines, and

procedure

is,

CrvWA

an

;

dojng

are'receiving

than

Neediess to

generally followed by banks.

it

iob

a

attention

of

not

are

and others that

since human nature

is what

feel

u

effective

most

is

portions

some

a(Js

And

perience:

•

As part of this viewpoint on the So in for a little advertising only
(4) Your Budget Must be Adeflexibility appropriation it is wise if earnings are good and future quate and Sufficient for the Ac-..*
to, review y°ur advertising pro- prospects appear bright. Such complishment of a Successful Job: ;
gran; at least onca every three executives will be completely ar- Strive for quality and not quantity ''
^onths- and Probably more often bitrary in setting aside an ap--when faced with a small allocalf y°llucan flnd the time. There propriation. Others see advertis- tion.

Poe*

The Advertisers Past E

find

to

mav

hp

J.'

advertismg.

or

nrLnteTYmef Slfh TsZTll*™™/
in order
appropriation^
do^a better iob
e ac'e(Juate tunds.
hppan^

•

Some factors which influence conversely, the only way we can Sprobiem
the advertising allocation:
keep up our volume is by constant j,
'
ignore
m How Your Mahae^ment Re-*advertising to
attract what busi-

must

you

partment as an example, we:
department, house organs, should decide how many times we.
memberships in various organiza- wish to feature it in the newsHons, entertainment of customers, papers and after the size of the ad,
annual reports, etc. There are also is determined we should then
the

interested.

,

you

.competition

1

.

.

.

where mstitutions are of compar- This point can be argued from
af e,SjZe
i!rS no *ollow eac^ both sides of the fence—advertis- flexihle. I think, then you would
snould spend the same amount on jng bas little value because people have a pretty good solution to

your

propriation either

can

the par-

*

telligent and satisfactory approach
to our advertising problem if we
will sit down and carefully evalu-'
ate those services we wish to push
through advertising in the coming•
year. Taking the small loan de-»

....

might decide
advertising program at the time they open for
business. If you have a fixed ap-

adequate

appropriation.

picnic programs, charitable,
religious and fraternal donations,
stationery other than that used in

are

provided by your
is

■-

-

ot >"tle'
lnterafCarrying 0n a certain to this you would then set aside
an additional amount as a reserve
munl^ies and other problem may <
y*"
^£er. ^f.lyJrom. you-rs-. lv.en _X3> Adverse Turn in Business: fund in order to make your budget

your

financial in-

new

on

con-

centers

average published advertising expenditures include all banks, big

eon

com-

the

eventually

which he

should be

»!

»,

of

rare

tingeneies that may arise
ing the year. For example,
bank might be faced with
tional bank

lack

priation

to

services

this

-

.

f^e wayorofestimate
advertising.
Trym your
how much memoersnips

Rv
1
w*
ay
iiexiointy we

reserve

additional

an

at

is

attention

services

m

It

?

^
*
Some of the things on the black
nst which should not be included
jn y0ur advertising appropriation

they "e spending and also how ^tions

should

flfvihi ftv

f]exihi 1 itv
nexiDiiiiy.

there.

to flnd out

fho

for

setfing asid^an approoriaUon^lus

ap¬

propriation
a

annrnnriatinn

is

worse

than

advertising

partTcSgyear^^Keston

spread

too

v e rti s i n g appropriation*
readily understand the impossibilthough to let anything get into it ity of doing this. I do think that
that does not
rightfully belong most of us can create a more in-

cial institutions in your commu- some border-line cases which may know definitely what our costs are
™ty 1o"see what «»ey are" doing ?r may not rightfully be included Wing to be by merely applying

exten

bashfproblems KZ&taStot
-the foundation
upon which all conclusion In^centyearTtoaUhe
advertising is built An
one

ing appropriamg
appropria

the* a d

(8) Your Competition: Watch
the'Other-banks and other finan-

successful- advertising job.
over

which

readers

ticular

«

The advertising appropriation is
of advertising's

bank.jofters.

.your

how management regards value of
advertising expense; (3) the proper classification of adver¬
tising expense; (4) the condition of general business, and (5)
your

time,
serv-

importan^vthmg in advertising is
J.9 advertising and con-

basic

3

same

neglect the other

;ipes that your bank provides. To
do so would be
fatal, as the most

First National Bank, Chicago; III. A

Treasurer, Financial Public Relations Association

^-

jc>!

department yet, at the

,
'

By HAROLD W. LEWIS*

June 3, 1954.

BROTHERS

,

22

(2436)'

•

1

"

>

"

.

-

'

•

The Commercial and Financial Chronicle... Thursday, June 3, 1354

-

lift

Banking Center?

•

~

world.

Sees

likelihood of

no

rival

a

arnlagga»d*4n»eafning*power.
Holds New York-City banks harr high relative adequacy ofifipitilirstiop and liquidity, and. are strategically situated in

-

f

*

I

look

you

will

you

of the

u

Let

t

agoi

Corporation

'

hearing
of
w

lot

a

reasons

h y

t h e y
switch

should

peak until a bottom of
16% was reached in 1920.
We all look
on
the 1920s as

New

from

York

deposi¬

taries to banks

enormously prosperous times

other

in

for

centers. Trend
detectors

on

Wm. A. Lyon

strength is
to be ebbing.

Out country
of competing

businessmen

tbe

of

flight capital from
With dictators', bombast

view tnese dolorous re-

my

prospects

and

condition

stayed rather close to
level is a far cry
from the 1940 figure of 27%.
After the crackup in the stock
market
the
New
York
City

Mark Twain said of rumors about

greatly exaggerated. It

his death,
is

plain for all to see that New
banking is the repository of

that

rise

began
a
through the

percentage

York

1930s and
a
relatively smaller amount of am0unted to 10 percentage points
the
country's
commercial bank jn a\i From that wartime peak
deposits than it was before Pearl a drop set in that extended all
Harbor.
New York City's com- through
the
1940s.
New York
mercial banks now have 15% of banking's exnerience durin** and
all the

commercial bank deposits

of

nation.

the

is

That

sizable

a

alI

lasted

after World War II has an almost

the

exact precedent in

years

dur-

instead of evoking ing and after World War I. As we
pride it has called forth a meas- try to estimate the significance of
ure
of concern among our own events in the years since 1940 it
bankers
in
the
last few years, is wise to keep this historical perbut

Ifigure,

Substantial

though

which
New

York

publish
tion

of

spread

around

have also

•We

others.

some

York's

New

and

Go back to the be-

century and fit
banking's perform-

rSn'g^lfSve/thTcTuntrT^undi
fl®

into the half-century picture
you
_

S®*1

1

f N

«

will find a wiggly trend

swings
now above
he
level
and
now
below
it.

ino?
20%

v

flow .

than

gree

Only once betore, and that briefly,

*

York

if

war

and post-

see

that New

will

share of the nation

s

countryj

s

r0wed

To

anywhere
New

York

iarger de_
else

in

City

banks'

Let

the

us

gradually
one

back

go

com-

sloping

first

of

a.

little

City's

below

deposit

the

New

posit

suddently just before and
The

earlier

cumulated

New
♦An

in

York

large

City

decline

as

find

New

more

however,

away,

business

stagnation,
balances

York

make

then

and
for

accumulating

without

an

ac-

in

Euro-

address

by Supt Lyon before the
Dinner
Meeting'
of
the
Metropolitan
Croup of the Association of Bank Wociwi, New York City, May 13, 1954.

these various activities before

They give us
showing today.

a

us.

overall

better

a

outlet.

deposits

signs

Deposits

by saying that I see no
New York is experi¬

banking center of the nation and
the world.

mercial

orous

It is true that

banks

as

1940.

in New

1940

which
a

nothing

f

to
.

do
,,

New

the

a money

and thus the

are

has

dollar

farther

earn¬

to

For another thing,
deliberately sacrifice some

around.

go

they
earn¬

ings for the sake of higher asspt
quality
and
liquidity.
Beyond
those

ing

however, the earn¬
our banks is held

things,
of

power

back

because

burdens

of

direction

to

show
year

culmination

of

with
and
depression; that
banking's

of

the

nation's

almost exactly

de¬

equal

to

the roaring

of

the

out

New

'20s, and that
the
last several years is an inescap¬
able accompaniment of the enor¬
mous
expansion in business and
the huge demand for credit.

the drop in the percentage in

laid

on

Banks

Yet it

_

_

_

notions about what

our

cea-

there

are

mean

problems

can

'that

anywhere

indulge itself in

the

luxury of
should
direct

I

study,

not

and that New York bank¬

around

ing

no

do

amount

dash of
We

concern

and

our

of

a

complacency.

should

say,

less

quality positions.
To begin with, New York City's
banks had at the year end a ratio
of
capital
to
assets
of 8.29%,
against one of 6.63% for all banks.
Our

toward

ital

to ipy sec¬

major theme.
careers

in

based

In spite of all
demagogy that have

denouncing our
New York banks, the fact is that
on

for some years now

bad

earnings

current
cap¬

accounts, against 17.8% for all
Net profits here were at

they have not

up-to the standard

eral Reserve to make bank

assets

liquid in times of crisis. Our sup¬
ply of notes and currency is no
longer rigid as it used to be in the
old days.

Still, in spite oLail'th^se

reforms,

have failed
the

to

pattern

ments.

changes

make

of

What

common

the

of

one

require¬

reserve

used

be

to

has

sense

we

been Sna¬

has

sound

become

with

the passage of time discrimination
which falls most heavily on our

large banks.

The survival of this

regional discrimination is quite ir¬
relevant

the

to

required

basic

of

purpose

today, which
is to control the money supply. All
reserves

that discrimination does is to lock
up

assets that

to

far

banks could put

our

better

in

use

improving

their income position.
It would be harsh and unfair to

put all the blame

on

Reserve.

out

1935

For

since

years

15

the

have

we

the Federal
of

the

18

Banking

Act

of

witnessed

inflation

when
major changes in reserve
requirements would have ndded
fuel

the fire.

to

leveling out
of

If

now

seems

that

a

ahead

the time may

us

look at

new

But

period

this

be ripe for a
requirements.
bring ab^ut a re¬

reserve

should

tl)e rate of 6.3% of invested capi¬

moval

tal,

against

against banks in New York City,

The

lower

bank

9.0%

for

earning

all

banks.
of the

power

capital dollar in

I

want

New

tween

all

in

banks

does

be

which is

third

questions

long overdue.

that
ratios

the

that I should like to raise

be¬

policies and

City banks and

not

in

made

New York

you

capital

York

difference

the

inequities that exist

will

The second and

show

to

difference

of the

redress

a

City stands out.

explain all of

earning

concern

assumptions that are
with
deposit insurance.

tied

in

Any

debate

the

over

wisdom

of

power.

continuing deposit insurance has
enough capital long since ended. It has given our
from the New York City banks'
banking system the full measure
total to put their ratio on a parity
pf public confidence that is sa
I

have

subtracted

that

all

of

banks.

to 7.9%.

The

higher earning rate
below that of 9.0%
The

This

is

and

new

still

up

well

for all banks.

remainder of
the earnings
reflects the New York banks'

gap

policy of deliberately sacrificing
earnings in the interest of keep¬
ing asset quality high.
Situations

New

of

York

City

Banks

vital

the

to

achieving and main¬
stability at
or
very
near
full
employment.
There is no turning back of that
particular clock.
taining

My
with

*

of

economic

only questions

the

have to

do-

the cost of deposit
insurance is being borne. It seems
way

to

me
that the burden is dispro¬
portionately heavy pn the NewYork City banks particularly, and
all .big banks to some degree. Our

banks

| Thus we have here in this city
a

group

serving
tive

of big banks th^t is de¬
of high marks for rela¬

capitalization
and
soundness and
liquidity of
assets. They are strategically sit¬
uated
in our banking structure;
they are iniquely responsible; we
adequacy

of

expect them to be both exemplars
of

banking

good

bearers of

practice

and

full share of the cost

a

of

keeping the heart of our bank¬
ing
sound., I
wonder,
though,
whether
bit

in

have

we

overdone

piling the burdens
and

it

a

the

on

rather long suffering

here pay a heavy share of
freight for deposit insurance.

the

They

do

way.

In

banks

this

connection

I

want

to

raise

this

the

here

have

it.

big

our

better

they
as

banks

reserve

the big
Chicago
might ask, is
say,

in

banks., Why,

you

much higher

level

so
A
us

complete

than

answer

far back into bank¬

ing history, long before there was
and Federal Reserve system, to
a time when New York and Chi¬
cago

cash

banks kept the bulk of the
reserves

of

institutions

in

other centers small and large. You

that the liquidity
of the entire banking system in
can

readily

and

of

any

The

insurance

deposit in banks

to

some

extent

business.;

can

on

only

our

Deposit

big

insur¬

has

ance

undoubtedly led a good
big corporations to leave

funds

on

deoosit
that

with

would

shifted

many

a

otherwise

to

our

big

banks.

and

j;hat

than most

public confidence

gree of
cut

been

City

do

which do not enjoy so large a de¬

bank

required of central

could

insurance, it is
They are

have noted.

we

of any part

have

York

big
public's

the

conservatively operated,

small

city banks, that is to

one

our

here.

capitalized

are

deserving study is the level of

New

place,

banks

any

deposit

many

re¬

than

more

retained

If

without

three questions.
The first
question I should like to offer as

serves

in

first

confidence right up to and through
the banking holiday and they still

banks'

would take

me

net

banks.

elsewhere?

This brings

had

operating income of 13.8% of

New

the

than toward their relative earning

the

here

banks

doing and will do

business

are

earnings of the

on

changed. Look at the vast dispre-,
tionary powers given to the Fed¬

sketch

to

set

In

When I say that the alarms are

I

effect

like

backs.

Earnings of New York

unfounded,

further in this

any

should

^York banks' capital and as¬

strong
The

go

I

vig¬

began

share

current

York banks

That IS the mag-

netizing influence Which

/

numbers

commercial

the

__

ings

City

as

abnormal

an

that

York

York

tried

have

was

A

With

most banks

of the country since

marked the great

been

them at home.

I

our com¬

growth

a

opposite

marked

trend

the 1930s because the banks in the
_

their

But

that

of banks in other parts of the
country was sent to New York in

-

discussion of

any

power.

,

-

--

are

brings their rate of net profits

real diminution in its
importance
as
the
money
and

encing

ond

had

_s.

laggardsin earning power for various
reasons.
For one thing, they are
more
strongly
capitalized
than

from 6.3%

that

in
un-

trace it back

can

banks

large

with

I may sum up this

employable funds at the disposal

interior

i

a

de-

will

you

Our

.

is

commer-

large portion of the idle and

was

Funds

quantities

banks




die

decline in

up

I.

has

Indeed, our banking struc¬
designed along functional
lines
to
an
unusal
degree.
In
measuring New York's role in the
banking scene for the whole coun¬
try we must keep the sum of all

large extent
It is almost in-

Let the demand for commercial

loans"

18%, New

entirely cancelled out.

York

a

to swell bank deposits

percentage

after the outbreak of World

to

in other parts of the country than
here.

to

just

are

lending by New York banks

goes

of
off

shot

War

cjaj

it.

decade

level of just under 27%

a

York

the

for

above

the turn

to

After

century.

from

than

20%' rather

here

spent elsewhere.
evitable that increased

mercial bank deposits tends to be
under

in¬

have.

ture

posits is

did. the percentage rise as high customers are national-and interasAltu
? m
y°u throw national enterprises. Funds borout the two sets of
years you

number of

a

highly developed
mutual
savings system than most cities

that

tban th

r

war

York

New

more

slack or disturbed, funds have a
bablt of piling up in New York
£ pei lods of active busi-

ance

not

do

usually not
their figures

ing to the public's savings is less
exclusively a commercial bank¬
ing function in this city than in

abnormalities in it than

this

We

velopment.

Before I

companies,y < some
of
engaged in activities
closely related to banking. Cater¬

in other parts

of

-

for almost 20 years.

in

are

°f? at. any one time- T1*se
generalizations appear warranted:
^he,n industry and business are

ginning

•

of

vestment

which

York

ance

JNsitaiis

it

i.retak day

unlimited.

their condi¬

are

and

have not shown

that for 1954.

They

call reports,

statements

assets

are

State.

deposits, if you will-but seldom
do the exports and imports bal-

more

resources,

five-sixths

commercial bank deposits was at 27% in 1940, it was
higher than it had been for a
generation. When you come right
down to it, the 1940 percentage

country's

banking tradition. To
the idea that required

a

day

,

am sorry-

them in other years on the as¬
foreign
banking- sumption that their profits were
agencies in this city under the good both absolutely and rela¬
Banking
Department's
supervi¬ tively and their ability to shoul¬
sion.
These agencies have about der a public responsibility almost

The forces that underlie these

shifting tides in New York City
bank's deposits can be isolated
an<* identified. We should begin.
Is it'as bad as all that? I don't I think, with an appreciation of
think so.
Let us give the picture the fact that New York City is
a
little more breadth and depth, both
a heavy
importer and a
When
our
percentage
of
the heavy exporter of funds—of bank

as-

in asset quality.-1

31

are

Reason tor the Slutting Tides

glories; we wonder apprehensively whether our laurels are really
fading

had

cus¬

No Real Diminution of New

longingly to yesterday's

look back

have in their

deposit spective in mind,

our

percentage now is, the 1940 figure
was still higher—27%.
And so we

a

I wonder if you realize that

tody.

there,

deposits,.

bank

That

i6Vfe%.

as

are,

share

our

commercial

be it noted,

New York banking's

about

ports

funds,
States

these agencies

York was for are not included in
of all United City's banking totals.

New

that

the

all

For

market.

stock

magnet

ailment New York may

any

have is not trivial.
In

the country, and

tremendous boom in

part in the

became
this

-

tal in the market is not a new de¬

It followed several years

inflow

here $1,200,000,000

drawn

were

all around

indeed, from all around the world,
for trade reasons and also to take

banks, from what one hears, hope
that

Funds

ership.
from

said

new

—

New York City's

days.

banking succeeded to world lead¬

are

the
Our

getting
job.

those

.our

f act about 1-940, the peak - year in > tively lowi earnings artd Its:-re¬ stitutes the ultimate iwniid«iy <fy
New York City's deposit concen¬ flection in the value of bank capi-., our banking system haive radically

tration.

1915

the

under

to

importaiit

ad& another

me

-

are

discount

at*

does

smaller dollar loans in this market. The liquid funds in Europe took ref¬
deposits -'shifting of member bank reserves uge in New York banks. The flow
^
into the Federal Reserve Banks of
capital
is
not
as
running
-:apoh the -system's founding, com- strongly from Europe these days,;
>3 bined :* with: purchases
of
war but the
normal, the long-range at- •
goods by the European Allies and tractiveness of New York to for¬
by the United States Government, eign funds seems undiminished.
brought about a steady slide in
Certainly there is no falling off
New York
City's percentage of in the foreign bank representation *
all commercial bank deposits from in our market or in the funds

country

years

in

■*':"* 7/Europe<V'>.

bank

than <fchey.-had

^treasurers

take

markets.

money

have a
the

i't

be

to

appear

peans

that our New York

see

banks

City

"14

'ft

of

-

not

sold dollar securities here and threats of war
filling v the
and the belligerents iloated large European
air, great quantities of ;

figures,

deposit

at

percentage "of
*

does

Europe.

If

;

banking structures

persistent

value at which most of

book

The Inflow of Capital from

r

.

-

;

our

The

more

or

give rise to rival

r

and points -~..y

center,

money

J •i
■

reseryes
should* be the highest
in banks' stocks sell refleete
The dis-?- against banks: holding a large part
prospect.
Greater decentraliza- lo¬ satisfactory situation.
tion
of
industry
and
marked, count is troublesome when, it of other, iaaaks' liquid funds can
growth in banks in other parts of comes to raistoge jaew-fapitah^ a^hfetoumLramong the cardinal arthe country do not in themselves- step which most of
hawesto—tioles of the central banking faith,

^fc4*^piitjea»ons why the large banks
h

one

That

Supt. Lyon discusses shifts in percentage of nation's bank
deposits held in New York, and concludes there is no sign,
that New York is experiencing any real diminution in its importance as the money and banking ecntcg of the-natiwr-oe of the^»

,

if

•

always exerts.

important money
markets elsewhere in the country.

Superintendent of Banks, State of New York

"j

•;*/ J J ►

,

of

By WILLIAM A. LYON*

I

;f

banks here mainly have to

Is New York Declining
a

* f I'.'r'/.f-l'

■

What our of banking generally, and they those davs denended on the ready
fear is have fallen short by an even availability of these interbank denot a dispersal of funds through¬ wider margin of earning the re- posits,
and you can understand
times,
out the country in times of boom¬ turn on capital that industry has that the lessons of those
shown.
^
V
learned through panics and crises,
ing business but the springing up
market

As

f

•

Where the weight of deposit in¬
has fallen hardest on our

surance

big banks, though* is the system
of extending
the assessment to
those parts of deposit balances
that

are

ance.

$10,000
tected

get

not covered bv the insur¬

Remember, anything above
in

a

deposit

years

balance

by the FDIC.
ago

it

was,

is;^unpro¬
In

insurance
no

order to

started

doubt,

20*

the

see

,

"

.

Continued

on

page

3d

Volume 179

Number 5330... The Commercial and Financial Chronicle

(2437)

have been, on balance,

appears to

Monetary Policy's New Look
:

definitely
T.
The

By E. SHERMAN ADAMS*

v
.

American

however,

Bankers Association

nate

policies, the first aimed
later

a

policy aimed

at

of

restricting credit expansion,
conditions; Discusses

program

*.t""

eat*nS

"*

of

money Tales

Since.1950, monetary policy has

■

* ^

•

Ol

-' ;

raising interest' rates and making

has

matter

money, scarce, in- order v:to serve
the interests of bankers and other
lenders.?',/> * v—.

concern

M

Ridiculous

'

these

as

.

become

the

by

'a

regarded

new

of

times, they

past

few

to go

seem

At

years.
a

long

way

jn the direction ot disavowing re-

0ne

of "active easeSome bank-

of its broad

component part

as a

economic

program.
m

-

hn.ri_

greater

degree ' of
."•6r
■

the

n°w exists in
A
th
hav

that

freedom

,

,

money

market.

reoeatedlv

nointed

vu

thp mnrkpt

tnHa-v

a

P.01I\
far

rrv

&0m the rieidlr oeeeed market <rf

Th te

oonnamin

far-reaehihg implications* tonchtions early jii-ISM justified
stepping up of the Federal's
and
for -our * 'restrictive credit policy.- Our
-;..i
r_•
economy was hoomini* anrf
whole^ ecori-' economy was booming and getting
omy->lt is im- boomier- Business inventories
portant
for were increasinS at an unsustainbankers to able* rate:
Demands for credit
aDDraise care-: v/ere
abnormal. A policy of
fully
the^ greater restraint appeared to be

precipitously for almost a year. •
Some .people wonder - whether
the Federal i. Reserve and < the
Treasury mav have hprvimc nvprlv
Treasury may have become overly
sensitive to. these attacks.:It has
been suggested that this may part-

derstanding and support of moner.
tary management. This is a matter
that nresents a challenge both to
that presents a challenge both to
the monetary authorities and also
to bankers. y..• •

ly explain why the Federal Re-

''

has moved

serve

actively in the

so

+k«

mur

......i

7

~1'Vj";

•

'''*

,

iM

km

the Reserve author-

deserve

**,

-

*

f

On the

for

,

deal

ereat

a

a. great

of

deat 01

,

other

hand, admiration

virtues

the

market

of

be

can

all,i,central

P

The Advent of. fcase-

•

Jm,

— to

the need for more widespread ma-

free

a

money

overdone.

banks

After

instituted

are

among men because modern mon-

-

.

.

Over the past year, the credit etary.systems require some degree
situation has been completely re- °* management. • • . ; . ,
versed. Stringency has been re- ; Moreover, it is generally recogplaced by ease throughout the nized that the money market is
entire credit market.
not and cannot be completely free
This has been reflected in the by any means. This is abundantly
spectacular rise in bond prices and clear if one stops to review the
in

r>«

inifiroct

Long-

extent

to

which

the

market

has
and

Dr. E^6. Adams

Re¬

monetary" poiiCv"as that the Federal

Reserve and the tion.
-:v.l.. J. '
their .lows of last spring. Yields
Treasury might follow really get-- *
on -90-day Treasury -bills, which
stability.- Others say "that- tough ■■ credit'--and debt; manage^Monetary Policy Doomed?
approached 2%% a year ago, have
monetary policy has shot^its Tast^ me«t Policies. "Feaf of .afinancial
• A few observers have gone so been averaging less than 1%. ;. ;
bolt. Some profess to see a eon- ' crisis created^ a temporary credit far as t° say fbaf the
Reserve
During most of this period, the
of

nascence

the

dawn

of

new

a

of

era

.

eco-

T

„

.

¥,

JO

nomic

Board

and the Treasury over the

serve

past year and a half. After all,
the Reserve System is the key
factor

the supply side of the
picture; and the Treasury
is a_ major factor on the demand
side. Neither agency can possibly
avoid influencing money market
on

credit

and .the
forced; - to

Administration Federal Reserve System has acabandon their tively promoted monetary - ease,
views of varied hues—the officiaL' squeeze never came even close to
money
policies in . 1953 There is almost universal agreeconditions.
Federal Reserve
pronouncements, being an -old-fashioned -panic. It
became evident.that the ment that this policy has been in
the Republican "party line,'-'those" consisted
It is obvious, for example, that
largely*of a temporarily P°.
ca* results might be serious. the right direction. Monetary
who feel that the monetary policy
the Federal's open market operademoraRzed "bond market.
The -^ven contended that after the flexibility obviously must-be a
°
has been too timid, and those who* general- public
was
unaffected, ^xpenertce of last year, no politi- two-way propo sit ion. Policy tions are bound to affect the refeel it has been too bold.
Cleariy, There were no
rubs^ no cal Party .will assume the risks should flex in the direction of re- serve positions of the member
it is still a free country.*"
boarding, to fmancial-failUfes, no involved in permitting , interest straint -when inflation threatens banks-and thereby influence shortOne would be rash indeed to "spiral ^of credit liquidation. On the rates to',rise; This would- mean and in the direction of relaxation
term> interest rates. It is equally
try to delineate exact truth in. contrary,* the credit mechanism^^ that generai m o n e ta r y / policy when there is some slack in the apparent that longer term rates
this field.
Nevertheless, we can * continued to process a record vol- would -never again be used to economy.
will be affected indirectly,
spiracy to ruin the country with' S(liieeze*
"hard
money."- In between are' - It should

-

-

-

-

be

noted

that

this

were
so"

,

•

.

o

at

least

We

avoid

should

tinguish
ment

be

of

areas

and

sions

unbalanced

also

views,
to

general

reach

regarding

able

dis-

agree-*

certain

r

t

ume

of loans and

the

nation's

tinued to

conclu-' ments

their

at issue.

From

the

outbreak

of

the

Ko-

War
the spring
sDrine of
war until
until tne
oi 1953
iyod,

the

Federal

prevent

Reserve

excessive

sought

credit

to

expan¬

sion in order to combat the threat
of inflation.

be drawn

It

is

least

What conclusions

can

generally

that

agreed

at

of

program

uenefir:ai

harmful

early
to

th^

1953
Ppnn

oeneiiciai or narmtul to tne econ-

0n^'.
Opinions
.

precisely

.

....

is

The

ex-

what

effects

There

this

pro-

hut

that

agrfeiJ,en / nevertheless, that it
Probably helped to moderate the
.y)0171 a
thereby contributed to

Reserve

eariy

as May,
boom had

Those

did

market

open

engage

operations

which

was

its

passed

operations

The

0f the policy of preventing ejeces-

the

par, pegs

for

government

bonds paved the way for the

severe*

-

more

as

During
1950-52, credit
tightmoderately and interest rates
were generally firm.
Official support in the government securities

?redit became tighter than they
mtended..,{; Unfortunately, seme
Pe°ple have the impression that
)nlsri^as P3lu"bpr- lb^e

habituation of monetary
economic stabilizer.

policy

an

ened

market

greatly

was

Member
borrow

banks
rather

were

forced

heavily

from

to

the

Reserve Banks to obtain the additional
;

reserves

they required.

There is widespread

agreement

that during this period, monetary
-W—
*
•
'
management
made an important
contribution
our

the
stability of
It goes without say¬

to

economy.

ing that it was not the only sta¬
bilizing factor, but it was one of
them.
Many would go so far as
tO say that stability would probably not have been attained during this period if the support-atpar

program

had not

been aban-

doned.
•

.

.

The*

story

unanimous.
address

since

1952

1954.

of

1

unintended Tas
nrescriDtion

is

less

Banking, Richmond, Va., May
."•

•

"

C-

•

.

V

St

The

from

a

it

shifting

some

of

evidence

„

,

actually

caused

capital

invest-

into

1953

and

in

the

of

t^e

of

is

matter

the

From,

-

policy

therefore,1 the restraint
I

'

.-"r-

f

:r

A

in

t

f

I*

is:

ii'.tr.f

ronfusion

this

on

This is not

point

■

relationship is by no means con-

in

the

of

This is true

Ccntinued

*

on

page

36

nevertheless

.

deserves

*

the

program

offer to

an

$5,000,000

The Reliance Electric and

Engineering

Company
Twenty Year 3%% Debentures Due 1974

special

Due June 1, 1974

Dated June 1, 1954

■*.

*.

future,

it

Price 99.625% and accrued interest

seems

nf}v^
cy,n,caI to a®su["e that "°
efforts will ever again be made to
Such aq

Policy

that were

bein^

may

writers

dealers in securities and in which the

ban<*ied
when

g

Blyth & Co., Inc.

be

a

real

Stroud & Company

Smith, Barney & Co.

Kidder, Peabody & Co.

Incorporated

nay(Jcn, Miller & Co.
Curtiss

Need for Understanding

There

may be obtained from any of the several under¬
only in Stales in which such underwriters are qualified to act as
Prospectus may legally be distributed.

Copies of the Prospectus

*

McDonald & Company

Prescott, Shepard & Co., Inc.

Merrill, Turbcn & Co.

Fulton, Reid & Co.

House & Co.

;
.

.

*f'l;

.

June 3. 1954.

danger

here, nevertheless, that should not
-

'■ r

even

short-term

yields.
The relationship between bank recase

offering, of these. Debentures for sale, or an offer to buy, or a solicitation of
buy any of such Debentures. The offering is made only by the Prospectus.

..."
■

S1^110,r? of the banking system, this
stant and fixed.

an

sUll so

aggerated.
-

economic^ standpoint,

7,

other investors,

of

g0vernment
bonds were
being
pegged. Reports of its demise, as

cushion the

h>»

practical sigstandpoint of

that

reversal

thereby helped not only to temper of Mark Twain's, proved to be ex-

'f*

obviously

^ 1

^teover^while^overnment security yields are* admittedly sensi^y.e to ^ ,a^g?f ^.
reserve PO"

S°meto confuslon
°n as
tmS
P°lnl
have arisen
a result

admittedly may have con-

ance

^

industrial

Monetary

is

the

of interest rates.

,

seems

it.

assumption is reminiscent of the
premature obituaries of monetary

This

1954

DartiCularlv apparent

housing

cnrY1P

"

to; determine

not

pattern

or

cer-

monetary flexibil-

restrain credit expansion.

was Particularly apparent in the
of

bankers and

the

facpoli-

Treasury

close to the peak' This Perform-

another

.

that

suggests

from

nificance

ease was amazingiy good Seldom,
if ever, have the monetary authorities acted so promptly to ease

u

......

H4.«

—

the

and

question

of considerable

tained some element of luck, but

inflation.

newed

in

retreat from

timing

it
seems
clear
that citation
policy served as more
:
simply a deterrent to reAs for

than

is

It

This

"

by Fed-

extent

monetary policy from restraint to

Indeed,
monetary

•1..


f


a

fact

The

the

wave of inflation.

l:'

Vf

ity, not

:5°

nrcvent

There is considerable .{he boom but also tp
by Mr. Adams before the

exercise

an

inflation

nf

wavp

expansion.

one

what

to

Reserve

eral

cies?

reversal

a

k'l °f JmUt white hSuES ^

just

to

construction.

Richmond Chapter of the American Insti¬
tute

a^

_

ibfre^eentth,?t

case

•'The Credit Squeeze

*An

^

„.

easily

demoralized,

did not constitute

credit

mar-

and

by

caused

been

level

tainly clear that the easy money
policy of the past year has been

^ ^his short-

reduced.

becoming

was

sive

.

Federal.Reserve officials have
had ther^ojnmendabler candor to
admit thaf^or a time last spring

re-

ket

rates

"natural" supply and demand

before
peak,

taken, however, because the

interest

in

suitable quantity of bank

a

reserves,

tors

under-

were

Managed?

as

would probably have been

of

supply

or

To what extent has the decline

in

.e P0!",
§PnP
7
iner, tne inevitable readjustment

The

from

rnwprc

Natural

Reserve-Treasury accord of 1951
was surely a
landmark in monetary history.
The abandonment

executed.

now operates only in very shortterm securities in order to affect

refrained

reaRy long-term securities whicli

SOunj might compete with other bor- prices and yields as little as posfar invpstment monev
sible
Its
hasic
annroach
is
to
in
rowers for mvestment money.
siDie. its oasic approacn is to

®tablllty o* tbe econ-

well

offering

to

entirelv

is

Federal

and

Yet, the money market does today enjoy a notable degree of
freedom.
The
Federal
Reserve

the reaim 0f speculation.

some

Investors Carry the Ball

rS debt management
operations.
It
has
done
some
lengthening of the bank-held debt
respect

continuea, out tnat is entirely m

Federal

considerable

is

for^ed to,. a

money policies if the inflation had
continued

followed a
policy with

has

Treasury

somewhat comparable

J; PefyaPs contend that the

Some confusion on this point
may arise frQm the fact that the

.

naturally differ as to

had.

1
surely
.

viewpoint

authorities might have been

vv as the
Was
tne net
net effect
erieci of
oi the
tne credit
creait

restraint

gram

regarding this period?

through 1952, Federal Repolicy was well conceived

serve

This

mi^.
:Effects of Credit Restraint

The Accord and After

rean
rean

C0J?bat "Ration.

con-

require--teeme. If the monetary authorities
customers
Very are defunct, they show no signs
'
of having heard the news. One

of the points " much as usual.

some

banks

...

the credit

serve

of

investments, and

15,000

-

direct

to the government-and is

-

_

direction of easy money and why
emergent new warranted.
7;.
the Treasury has not undertaken
role of moneIt is generally conceded that any long-term financing since the
tary manage--for-a short- time last spring credit issuance of the 3y4's.
•
ment.
*
^ did get^too tight; The Federal Re' In short, it is argued that the
v-'
Vaiying- in- *-^ serve-has
this partly in creditirestraint program was un-terpretations1-terms^^ of ^underestimating the ex- fortunate because it led to attacks
MrKioiv
'

the

over

...

LS, Tnit f

*.

'

Administration

charges
Moreover, the events of the past*
seem- to udii&vib)
bankers, they
uiey artJ
are WlQtciy
widely /vdi
year uw
do suggest that
uidi political op»s
•regarded: as
beingbeing-politically
poKtically ef- position to a program
program of c
credit
fective. In fact,
facty they are stffl
still being restraint may be more potent

f™r* 4„S-some

r

placed

wderable Tespensihility £or the; sponsibility for the level of insufficiently- -nation's eeoaomic health. As a re- terest rates. At the same4 time,:'
some ault, despite* the greater degree of ^
they describe their policy as Hieing

was

made in spite-of. toe bet that In- formerly.-,.-* :"r
to that economic trest ;ratbs.fha.ve- been declining - These considerations emphasize

IllPSP

.

con-

have

-encourage

of .the

Ruu,,ut„e

on V a

.

WIC

ket

than it used to. The Federal Gov-

ernment has--now-assumed

achieved

scum

nevertheless,

been acquiring a new look.
Events^ number otf inaior points.
have already
„
demonstrated t h a
thtc romorlolmoiil
this
remodelment has

to

•

not be overdone.:

agreement,

1953

today

courageous

authorities

on the increased freedom that has
been achieved in the money mar-

never

of the government.. Warns r;:"

should

in

be

to

of the emphasis which the Federal
Reserve

requires

monetary

courage; but perhaps it takes more

be-

some

management

*
t

standpoint,- courage

which

new disthat-sound

a

sure,

"independence''

.

.

credit

opponents

.v

{fepenHence of the; Federal Reserve,^ monetary policy cannot be
an isolated operation, since it has* become the direct concern
the broad economic

from

be

to

*'• '

Concludes, despite the in-

-

Charge

different

a

spectacular

at easy money

question whether monetary policy is doomed and will
again be used to combat inflation.

,

r.

„

program may have
unfortunate. The tightening

been

f

and

„

Money

be ignored. It is not
covery,

lieve that this

JWr. Adams recounts monetary developments since the Federal
'Reserve-Treasury Accord, during which time there were alter-*

c

v

success.

Hard

There is

Deputy Manager in Charge of Dept. of Monetary
Policy

*

a

13

♦si.-i;t

v,v.

s.\.

jf,»'/.

•»

'

jr

-r )

,».<A

Ai,

n.i"

•

\»

tS.\'

<

"

14

V

(2438)

Our Foreign

foreign country for its investment
(2) Simplify
will be reasonably favorable. This •v-V;% tration:

Economic Policy

should

Mills, Inc.

need of a definite eco¬
nomic foreign policy, points out foreign trade is a two-way
street, and has not merely a commercial but also a political
and military meaning. Gives a quick rundown of where we
stand in foreign trade, and outlines President Eisenhower's
program, which he supports.
Deplores trade and tariff re¬
strictions and urges increasing our exports and foreign invest¬
match

to

outflow

the

of

Sees need

goods.

our

enlarging East-West trade and calls for

employees will
under

part of

afternoon

I'd

like

dis¬

to

vitally important interna¬

a

tional problem—but discuss it in

homespun
how

a

matter

no

many

languages

are

spoken
;

For

way.

trading

rencies

nations such

and

in-

thoughts in mind,

fourth

and

of

economic

Harry A. Bullis

country's foreign
is like those

our

program

very human

rise every so

family problems that
often to plague us in

homes.

own

to decide

family
we

are

in

is

going

the

we've

II,

rest

the

of

Now

ways.

been

continue

same

way

to

carry

adopt

or

sponsored
Eisenhower.
program

be

certain

well

we
we

on

to

dustries

ample,

in

to

it

recall

forget

when

all know that trade

two-sided affair. It helps both
the seller and the buyer and
gen¬

world

Our

the

to

average

water

tariffs

tariff

get

in

which

mind

is

that

of

1930,

slapped
since

But

reducing

our

trade

credit,

agreements

too,

for

many

reductions

former

that helped our
struggle
to
their

allies

economic

feet again.
specific tariffs

And,

levied

were

to

allies

have

maintain

required
and

at

fo,r

the

of

it

difficult

military

at

rate

a

unit,

cents

for

on

each

example,

so

pound. The increase

a

a

in

price of the commodity has,
the specific tariff, resulted
lower weight of fixed tariff

relation
rate of

to

25c

when

25%

price. For instance,
pound

a

wool

wool

on

is

is

dollar

a

a

pound, but it is only 12%;% when
wool is $2 a pound.

their

own

this

caused

us

defense

(4) For

to

offer

military aid in the fiscal

year

of

Such

around

$4.3

billion.

1953
aid

consisted largely of material made
in this country and donated to our

foreign friends. I might

here

say

that

the

very

largely replaced with giving

orders

to

donation

our

equipment,

procedure

allies

was

for

military
process
being

this

called ' "off-shore

procurement,"

which amounted to about one and
a half billion dollars in
fiscal 1953.
The
we

third

must

fundamental

remember

countries

is

self-supporting

the heat off

time

same

become

outlays

keep their
from collapse. Recogni¬

economy

tion

found

the

which

that

foreign

to

the
a

this

billion

a

confined
in

take

time now, Ameri¬
been
making private

investments

about

of

and

savings accounts.

some

have

cans

our

largely

to

the

dollars

to

Canada

of petroleum

case

a

tune

the

to—such

a

what to do with

to

touch

give

from

have

cousins

she

that

making

liar and

a

who

can

we

members of
of

family

the American

face of Russian
let

the

rest

The

vinced

health

ficient

is

sources

that squares with our

own

Let's take

main

quick

a

points

of

run

the

nessmen

to

and

at

the

transfusions
our

allies

increase
same

the

if

junk

we

whole

(1)

program

to

the

economies

only

authorize

the

construction
can

see

a

period

siders

of a plant abroad if
earnings flowing after

of

that

time
the

and

if

climate

it
in

con¬

the

part,
would
be

wish

we

remarkable

a

efficiency.

So

industries

our

look

as

con¬

little.:;

means

little

a

far

are

further

>

into

United

The steel

ton.

workers

in

Eng¬

land and Belgium are paid only 65
cents an hour. But because of our

greater

productivity,
American
are
paid $2.35 an

workers

hour.
Those
figures come from Dr.
Gunnar Myrdal of the United Na¬
tions
Economic
Commission for

Europe. He adds that Western Eu¬

today is producing 86 differ¬

rope

ent makes of automobiles.

a

No

one

But to get high efficiency

year.

low

and

in

costs

duction,

a

automobile

output

of

pro¬

have

must

company

minimum

250,000

a

cars

year.

Myrdal says that because
is broken up into small

national

pieces, each with tariff
barriers, there is no one
market, such as we have. He

vast

economic

urges

these

national

rope

for

consolidation

pieces

of

that Eu¬

so

a large
market1
industry which is

provide

can

the

steel

ready to expand. If the European
steel i industry is enabled to ex¬
pand through economic consolida¬

tion, that

would

minds.

carry

to

trade

our

in

all,"

policy,

he

warns.

are

take

Europe

larger

a

load

a

off

then

could

share of her

own

Trade, you see, makes the world
productive. And more trade

specialization. I mean
that—doing the things which

encourages

by

each
best

its

country
and

the

as

crying

need

for

and

more

trade.

pie to

more

is

point
can

economic

fog

in

we,

Like

the

pie
world

more

position
up our

their

of

and have

our

foreign

our

out

come

leadership, step
them.

round.

go

that

of

trade with

solvent

members

;y

ask

us

lower

to

No—far

authority

gradual

and

— as
specialization in¬
production increases and

relatives

if

easiest

greatest returns to

way

My

President's

do

can

with

people. And it works out

own

this

creases,

Eisenhower.

tariffs

from

it.

He

to

continue

reductions

on

with

selected

family,

any

vantage to get
on

be

their
on

but

it's

our
ad¬
relatives
don't they'll

to

poor

our

If

feet.

we

feet. That situation pro¬

our

duces financial

And he asks

corns

and

anything

loving kindness.

Bad

economic

tween

members

situations

be¬

families

and

of

nations

Reciprocal Trade
Agreements Act. This has

question of tariff reduction with¬

been

out

United

commodities.
(

trade

imported

in very

not at all.

No

across-the-board

reduc¬

Gradual, rather than sudden,
Peril and escape

clauses to be

Let's

painting
our

admit

for¬
they

•

countries

have

been

theirs.
their

is

not

an

cannot

situatibns

risk

bad

its

eco¬

with

nomic relatives.
"

Let's

face

it.

countries
controls
which
discriminate against both
goods and services of the United
continuing

are

States.

policy

States

political

If

we

Foreign

stringent

refuse

to

products, they won't let

buy their
our

goods

example of "How to Win Friends

into their countries without penal¬

and

ties.

Influence

But

if

we

People."

review

the economic

picture of the past 20 years with
intelligent self-interest instead of
self-righteousness,
an

reductions.

other

Surely

small

tions.

kept.

cousins.

raising

products

quantities,

without

criticism at

this

always played ball. Dur¬
ing the past 20 years when we
were
lowering our tariff walls

of present

on

or

at

haven't

many

limited to 5%

or

emotion

eign
re-

tariffs.

through

have to look

we

the finger of

years.

permit certain
in

think

I

in effect for 20 years:

Larger reductions
,

we

employment, our
living, our security,
solidarity of the free
all involved," according

the

for

huge

a

keen that

so

defense burden.

ests well for 20 years.

rates in each of three years.

Private foreign investment must

which

—

asks for a three year extension of
the Reciprocal Trade Agreements
Act—it's been serving our inter¬

agreements.

by these investments?

wish

of

drastically?

one

dramatic¬

contrasting European set-up.
England,
Belgium
and
the
States steel sells for $117

In

of

the

is

have

alike, often produce hurt
feelings and political unrest. Cer¬
tainly,
with
world
tensions
so
acute
as
they
are
today,
the

But

of

in

fail

Does he

The

Reductions

profit
give blood

cur¬

domestic

more

He is very definite on

duction

busi¬

wish to

plan is, it does spotlight the eco¬
nomic problems of the world—

President's

any

fail

we

the

large

more

Moderate

"

their

time

over

Let's

there's

well-balanced program. Rut re¬
member this point—he insists that
all parts should be accepted be¬
cause

eco¬

we

us

cerned, the tariff

Tariffs and Trade Restrictions

re¬

to

and trade

foreign

we

of

our

President

to

national
security
and
is
also
profitable and fair for everyone.

ask, shall
our

to

We

attained

of

Dr.

himself, breaks
four major objec¬

eco¬

and

have

we

Europe

facilitate.

may

world

situation

own

of Inter¬

He,

into

standard

in¬

not

are

different.

converti¬

use

Trade—which

"Our

family of

capital

ally

a

currencies.

Convertibility

"If
con¬

national

our

of

use

non-

Monetary Fund to

President's

to

(4)

get as much
possible and the most ef¬

as

in

Investment—which

(3)

we

is

foreign
nomic policy is clear.
trade

currency

and

permit

encourage.

and

Anti-Red

says

purpose

but

trade

Aid—which

wish

Program

terest in the field of

Its

China

Red

Korea,

-

(2)
to

his foreign economicis vital to the economic

of the

with

plan.

(1)
tail.

tend

maker sells more than 150,000 cars
on

expand.

Eisenhower

nations. He

Government

encourage

branch

that

program

large funds

Stress

down

capitalistic

our

President's

President

with

tives.

threats, decide to

of

of

goods.

the

it

hang.
stable

a
do-nothing attitude toward the
violently urgent problems of for¬
eign trade—not unless we, in the

to

to

to

markets

steel

There you have the bare bones

family, adopt

Amend

continue

go

businessmen,

the international

by

embargo

strengthen

a

nomic

we

may

of

tariffs

duction methods.

a

be

goods.

national

decided

they

industry. Here

States

is

off—not

for three

United

at

eyes

members

let the rest of the

free

interfere

bility: Support

of

Nor

to

strategic
(12)

big

family
when j faced
with
such
problems would just shrug them
unless

duty

grants necessary.

East-West

cheat.

a

responsible

international

instead

trade

.

No

Extend

the

that

and

enough to encourage modern pro¬

.,

direct basis.

Increase

North

to

seem

»

keep far too many inefficient in¬
dustries in production. Their na¬

sup¬

Merchant

our
on

Continue

how to make Aunt

sense, or even

just

(11)

another

'

Europe, nationalistic markets,

most

of

Technical cooperation de¬
veloped vigorously by pro¬
viding experts and knowand

children than business

more

possibility

not

how

a

and

degree

Loans

what

or

siill

to

In

products.

makes

(10)

them¬

walls

at home. Com¬

Except where mutual defense

dif¬

hedge

tariff

is

Economic aid should

questions

they

with

petition among

loans instead of grants:

for

in

Help maintain foreign markets
for
our
agricultural

allowance for tourists.

(9)

about

market right here

Encourage

to¬

and

debt-ridden son-in-law

answer

policies

our

dense

other restrictions.

the

over

much

not

serious

as

of

minerals.

travel:

child, how to stabilize

that point.

few other countries.
Although
capital was ventured in the

An¬

nual
Meeting of the Millers' National
Federation, Chicago, 111., May 18, 1954.




really

but

sources

little

a

methods.. So
selves

Our

field

Marine

(8)

seem

tional

domestic

our

Export Import Bank.

for, themselves, it
a boost to foreign

it
at

all

world

tomorrow

materials:

Study

tomorrows.

are

and

facilities

—

by Mr. Bullis

lives

civilized

hope of profit
certainly gave

with

sians have taken full stock of
this
address

human

will

of

The

weakened.

France,

*An

day—and
years

year,

for example, of
necessity be considered froih a
England, Western Ger¬ profit viewpoint rather than from
many, and Japan—foreign trade is an
altruistic one. A Board of Di¬
a
necessity lor survival. The Rus¬ rectors will
many

touch

so-called

Raw

as

we

enterprise. They're not very
our mass production

limitations

same\ basis
nationals.

as

alert to

American

on

own

porting

world go hang.

in the

in

(7)

have

foreign trade
has a new meaning to us
This raises the point whether
here,
not merely a commercial
meaning we should maintain this lower
but also a political and
tariff
scale
and
reduce
it
still
military
meaning. For example, some of further in order to help our allies
our

the

helped, too. These specific tariffs

a

washing the

affair.

been

of

mark

was

48%.

was

bilateral

should

other

importance

"Terms

Our
average
tariff rate
down to about 13% in 1952.

under

the

have fa¬

tariffs.
was

thereafter enables his foreign
customer to buy in turn from him.
Sort of a one hand

in

trade"

us.

have

we

and

bear

trade

selfwilled

high

imports

physical

fundamental

on

of the ide¬

countries.

sell

American

many

should

years

a

exports compared to

The

a cycle. It enables the sell¬
with the proceeds of his sale,
to buy from his
foreign customer

we

side

refers

our

er,

second

dollars

degree to finance

a

foreign

erates

A

five

about

seven

our

"Terms of

(3)

is

a

•

spent

price of our imports.
price of goods we make here
export has not increased as
much as the price of goods our
economic cousins in other parts of
the

<

fruitful years to come.
these questions of foreign

All

average

then

discuss particular in¬
commodities. For ex¬

or

we

more

when the average rate we

us

to

on

trade"

new

question

for

inclined

are
come

planting ideas that will result

in

is

viewpoints
foreign trade which

our

is

exports.

own

(2)

fundamental

regarding

of

rundown

with

nations

even

up

vored

(6)

extend their

activities,

from

their

on

though they have begged for help.

realize

the

to

controversal

much

as

They don't like competition.

They
free

"Com¬

word

cousins

hustle

to

that

in

-'.V.:'
have just

'

foreign

had

have.

tariffs.

production

how

Marianne

i

that

answer

their

welfare

deal

Survey

ornery

also served to

on

To

improve

methods and
social

brute

Fundamental Points

might

you

and

President

by

try to show them how

to

quite

get

The

"yes" or "no" quickly to
question of whether or not

shall

can

in

answer

(he

countries
when

rev-,

;by import quotas instead of

•

been too easy. Like many relatives
most of us have known, foreign

must

world
we

of

war,

insurrection.

bidders

Protect

haven't

most solvent families have to face

of

(5)

much money on this
assistance. And it hasn't

ological fence. These dollars have

the

various

We

program.

guarantees

from

bidders

the

irksome

price of

War

under

ferent in human values from those

of

helping

have

for the past

to do about
foreign trade. Ever since the end
World

very

that

war-

economies

our

conference

those

Our
not

favorable tax laws.

Exempt

American

petition."

abroad:

broader

popular

invest-

"Buy American" legislation

through

loans to Britain, France and other
countries, Mutual Assistance and
other shots in the arm to foreign

our

have

we

American

Four

spent

face:

we

We

year

philosophies, the

our

is

assistance

Point

kind

helped

dispose of

private

.r/'

Where's the joker?
think the answer lies

I

quickly.

cases

olution, and
(4)

opportunities

relatives

to

against losses by

of

England

as

grown strong.

trade.

on

easier

more

By

forgotten
power

doing and the

billion of the taxpayers'

moral

problem

quick

a

have been

we

(1)

By

Nevertheless, technical assistance

problems

explosive

we

our own

Here's
what

other

between

the

as

most

Where We Stand

dif ferences

What

well as
important
capacity and the

and

social

in

what

dollars

strength of our own
internal economy, let us see what
our program in the past has been.

con¬

countries

our

billion

necessary

earning pat-

the

economic

about

bread-

ferns

war

cold

France

point of

volved, de¬
flicting

shattered

to
dangle before the
mouths of England ancjl
a

ment

work

condi¬

Thursday, June 3, 19o4

.,

which raised their tariffs have not

now,

Encourage

v-

from the abili¬

arose

has

most

been

the

cur¬

spite the

the

in

weapons

be

great

it

customs

(3)

willingness to take
chances
in
foreign
lands
with
their savings.
(5) The fifth way the United

of

their

of

one

to

"

burden

Make

adminis-

customs

complex

Heavy

abroad and the

hungry

these

or

are

has

and

able

to recognize

ty

worth of commercial orders. With

ep

how many different

situation
recent

Too

of

stable

not

the

and Holland

States

This

should

It

that

be

reasonably

tions.

convertible currency.

cuss

chance

a

that both the native and American

general return to

a

have

getting
his earnings out, of not having his
plant taken from him by expro¬
priation or nationalization, and

Prominent industrialist, commenting on

ments

that the American investor

means

By HARRY A. BULLIS*
Chairman of the Board, General

The Commercial and Financial Chronicle.

/

r

we'll

discover

interesting fact. We, the nation

which has reduced its tariffs, have
grown

Strong.

<*V,

.

But

those

nations

That

situation

produces bad
feeling in the family.
The solution, and a vital

increase

to

eign

our

imports

one,

and

is

for¬

investments to match the
our goods. That's what
program
has in

outflow of
the

Eisenhower

mind.
His

proposed

extension

of

the

Volume 179

Number 5330

The Commercial and Financial Chronicle

.

(2439)
Reciprocal Trade Act has the same
objective. We haven't time in our

Japanese

economict and

situation

could

become

political

explosive.

family

conference this afternoon
to discuss this part of his
program
in detail.
Certain industries are
fearful

6f

the

competition

-

from

cheaper foreign goods. There
be

can

doubt that there would

no

be

hardship in certain cases. Whether
to force a hardship case to seek
another
industry or whether to
pay

direct

a

effect this
times

subvention

is what

is)

is

tariff

a

of

one

(and

the

in

some¬

dif¬
ficult problems. Everyone likes to
very

theorize about what the other fel¬
low should do, but when the shoe

pinches there
These

is

howl

a

conditions

of

pain.

have

their

counterpart abroad just as well as
here.
Perhaps we should recall
that

the

volume

eign trade
of

is

of

our

small

a

for¬

own

percentage

total volume of trade.

our

But

the

gate

will

not

wide open and most of

be

flung
indus¬

our

tries

today are too strong to fear
competition.
The
situation
was

different

years

when

ago

struggling new industries
starting. And further; the
clause
of

and

the

our

were

escape

Convertibility
There's

not let American

out.

I

optimists

the

plan

of

But

does

the

give

dollar

foreign hands is still
give our foreign
cousins economic
security. A large
part of the foreign reserves are
the result of expenditures which
not

sufficient to

the United States has made abroad
to
build
up

military

will be able to present our

the

present, I believe
Eisenhower
program, as

So

have
If

what

does

all

this

they want to
tobacco,
dried
foods from
war"

buy

hides,

and

other

return,

adversaries

Now

meat,

milk

In

us.

tallow.

"cold

our

offer

and

us

Western Europe manganese which
We must have.

Increased

trade

between

East

and West is serving to relax
economic
pressures,

some

particularly

in

those

to

because

us

and

tariff

Battle
to

countries
of

unable

dollar

directs

withdraw

But

the

the

President

aid

our

sell

shortages

restrictions.

Act

to

from

up

who

the

on

live

hill

in

the

large house
prosperity. But we
there alone for very

if

up

trouble

Soviet bloc: But how important do
you think that provision will be
if we diminish our foreign aid to
the vanishing point?

We

fact

might
for

to

be

of

reasons

earlier

trade:

The

survival

there

increase

some

West

^

well face up to the

as

the?

mentioned

•

in

is

going

the

Western

EastWorld

does not want to increase the mili¬

tary

potential

There

as

has

been

selling

even

butter

would

of

the

the

thought that

Soviets.

items such

consumer

textiles to the Soviets

or

release

" manpower

for

military production. In this

con¬

nection

the

following

made by

were

of

sen,

the

Administration, in

April

on

24

remarks

Mr. Kenneth Han¬

Foreign

Operations

speech given

a

before, the

World

Affairs Council of Northern

Cali¬

fornia:

blows

And

up.

grand total of about $2.7 billion

worth

of

goods.

exceedingly
world
less

That

small

trade.

than

is

only

Furthermore,

one-half

an

fraction

of

one

of

it

is

percent

of the total
goods and services
produced within the Soviet bloc."

Of

in

the United States per¬

course

mits

imports

no

Communist

ports

to

North

Korea.

erate

their

in

which

China

the

own

Some
same

any

ex¬

China

or

countries

op¬

way,

initiative
our

originate

or

Communist

because of
to

how

be?

We

depend

critical

many

we

them

on

materials.

imported all the tin

we

In

for

1950,

used,
all
the industrial
diamonds, na¬
tural rubber, coffee, tea and
cocoa,
99% of our nickel and chromite,
95% of our asbestos, 90% of our
cobalt and manganese, 52% of the
tungsten, 45% of the lead, 35%

of

our

and

copper

we

zinc.

We

tinue to be dependent on
of these
materials from

con¬

imports
foreign

countries.
On

the

export side,

too,

inter¬
national trade is necessary to our
own
agricultural and industrial
health.

We

have

been

exporting
cotton, rice, wheat, soybeans, sorg¬
hum, tobacco, tallow and lard —exporting from 20% to 40% of
our
production of these various

agricultural products.
Exports of

our industrial prod¬
important, too. In 1951
we
shipped abroad 35% of our
rolling mill machinery; 20% of
our tractors, sewing machines and

ucts

partly on
partly

and

insistence.

We have to open our
eyes wide
the
situation
in
Japan. Her

natural

trade

would

be,

are

machinery: 16 to 17% of
printing machinery, oil field

machinery and office appliances;
15% of our motor trucks and 12%
of

our

agricultural machinery. In

1952

tractor

23%

of

markets

manufacturers

their
and

facturers

in

output

machine

sold

11%

tool

of

manu¬

their

pro¬

duction abroad.

our

pacity

can

need into defense

fact

makes

are

not

not

industrial

excess

which
it

be

at

production. This

very

plain that

self-sufficient

withdraw

ca¬

turned

into

arid

the

we

too

happily, to look to

free

world

also

as

a

for

raw

us

and the

materials

place to sell her

Intelligent self interest must be
the

watchword

total

as

Eisenhower

we

weigh

Foreign

nomic

Policy Program. We
the position of leadership
cannot

with

de¬

partment,

spe-

gation and
of

Com¬

the

monwealth

Pfau is

visor

automatic

i

1
"electric

the

m

p

turnover

and

on

an

which

airplane

chase

without

direction.

This Same electronic Principie is

being applied to operation of a
factory by a dozen employees, in

to

"press
done

be

can

women

nelp;

but not for many presentday jobs. They will want the in-

of

and

Serious

Blow

China

to

will

aside.

cast

I

her
Gordon

W.

has

to

and

massed

Europe

has been active in the

the
As

tack.

depending

armies

first
the

to

day

Free

Europe learn to

of

Moslems

use

of

her

•

18,

Clute will be admitted

partnership in Straus, Blosser
McDowell, members of the New
Midwest

Stock

Ex-

be

It

here

and

atomic

a

of

wea-

on

a

great

nuisance

the

tremendous

warfare

DETROIT, Mich.—On June

at-

Nations

to

clutter up a battlefield.
Premier
Nehru recognizes this. It explains
his great desire to remain neutral,

cause

Straus, Blosser Partner

on

overrun

Russians, Chinese and
will

Electronics

Minion Glufe to Be

be

automatic

typical

—

and

will

education.

is

in

United

the

atom

changes in both

surely

wonderful

live

who are to graduate this month,
They will have so many more opportunities than we oldsters had.

These

sales manager.

Security Dealers

salesgirl

of

The New York
has

Trustees of the

The most important way we can
continue to assist the rest of the

omy

Inc.,

fill

have

previously
bv

the

our econ¬

elected

Bean
of

salesmen
tions

and

Such
had

be

must

by

qualificathe

who are to get good
The field of advertising and
sening is yet in its infancy, with
marvelous

who

possibilities

properly

train

for

I

Forecast/'«That

This

change

(1)

Manual

and

will

gradually
(2) To keep

routine

become

Mackie,
Board

of

&

caused

the

by

employed

home

with

Jacobs has

industries

of

the

effect

of

>

G.

H.

Street.

become affiliated

Walker
He

&

was

Co.,

Ill

previously

Brainard, Judd & Co.

S.

with

the

same

with

(3j The pay increases will go
to the serious and intelligent empioyees.
to the

the

There

will

be

salaries of those

needed

character,
loyalty, and initiative.
(4)
will

The

great

U.

no

limit

who have,

brains,

S.

problem

be to raise crops, or to
homes, or to manufacture
merchandise, but to get people to
buy; Hence, instead of subsidizjng farmers, we will subsidize
not

build

(5)

I

and

salesmen.

advising young men
to become expert machinists, instead of lawyers; trained outside
salesmen, instead of inside pencilpushers; and after graduation this
am

June, to attend night school in
preparation for the NEW AGE.

T^otes have been placed privately by the undersigned.

Promissory Notes, Due May 1, 1969

F. Eberstadt
June 1,1954

take-

will boost .the
"Build-It-Yourself" industries!

Phonograph Corporation

Pearl

those

This

pay.

Chkonicle)

Conn.—Karam

labor

obsolete.

Emerson Radio

Herbert

&

the

Financial

HARTFORD,

Conclusion

those;

therefor.

Means::V

With G. H. Walker & Co.
The

June

graduates

j0bs.

Harry MacCallum, Jr.

to

and

intelligent
clerks'who secure

customers.

new

referred,

Gratuity Fund, to

vacancy;

(Special

,

hiahlv-naid

our own economy

imports.

think

Singer,
member

a

death of

sound and encourages a high

inflow of

Security Dealers

we

Singer,

today

She could

replaced 70% by "self-service"
counters, 20%
by push button;
vending
machines,
to
which
I

$7,500,000

Elect Trustees

old-fashioned saying—"We all live
in the world together."

a

process,

be

merchants

to

States, which
is leading in these new developments. I envy our young people

office, Bankers Equitable Build¬
ing, with which he has been asso¬

Association

for

abandoned

photo

changes. Mr. Clute will make his
headquarters in the firm's Detroit

N. Y.

fore-

Linotype mathe type for this-

unable to do anything else, theirhours of work will constantly be

Russia,

India

been

Pfau

department,

formerly with Stroud & Com-

as

move"

the

even

decreased
Russia

pany.

ciated

people
courses;

them

could become obsolete.

college graduates.

masses

and

this
well

as

evening

Chine which sets

The

push-button1

young

to better jobs when the

cast that

ployers will always need human

school

years
he has specialized in
Pennsylvania muncipal bonds. He

to

will

push-buttons,"
by

cent

&

re-

the

enable

ones• are

10%

| telligence and judgment of high

-the

M~

catch

human

above;

graduates
character more

good

will

forward
dull

our

and

any

pons,
wars
will also
go
"push-button" basis.
The

Minton

eye,"

which

new

securities business in Philadelphia
for the past 20 years, and in re-

was

A

illu-

e

the

young

Better training
by homes, churches and colleges
will
be
absolutely essential in

column

W.

Mr. Pfau

take

that

mean

'

Super¬
of

now

forecast

opens doors at the correct
time without any help from you.

J

municipal bond

new

are

who

s

is

Pennslyvania.
Gordon

electronic

Wise

mod-

of

which

i%

au¬

issues

new

age.

I as by men. Labor does not realI ize the great changes ahead. Em-

in
obli¬

thority

this

the

I

Another illustration is the record-

|

cializing
general

stration

m 'be

bond

the implications of
that family position. Nor can we
deny the economic wisdom of that

by




its

munici¬

a

pal

in

and

the

of

Eco¬
are

escape

manu¬

program,

facilities

electronics
furnishes

% contrast to the 400 formerly
|f Quired. As their chief duty

the addition

the

Naturally each of us in our
own
companies and in the various

Eisenhower

has

to ;f

before.

machinery.

Babson

"missiles"

121

Broad

added

w

'

Bache

fShpCr E'XCpbugLi ah,"a°U?rep
firmjs Philadelphia office,

ever

phonographs, including the automatic, stopping
of the machine,
The niost complicated are the new

Co., members of the New York

Street,

r

changer

the

need

than

of

in.

degree.

Character and Brains

will

col-

or

courses

A.B.

school

ern

R

these

an

changes

basis

field

take

get

graduating
from
high

opment

productive

to
to

Never

factured goods. Unless we step up
our trade with her. as
encouraged

the

our

people

up

instead of forcing young

courses,
Oruer

The devel-

more

schools

and
colleges}
to these changes
that are
ahead.
Better
pension
off the professor who can teach
only the orthodox old-fashioned

This
a

the

wake

Never Land of isolationism.

high employment keeps

none

that

wish

l d be

lege

the farm, in the mills,

on

the

South

j

through

progress

s.
o u

I

would

warning to
those now

fl

HI

the

dare

ways was before the war, with the*
strong. Expanding production with
Chinese Mainland and Southeast

Asia. Now she is forced, and

is

progress

Gache Go. in Phiia.
&

IK

conviction

PHILADELPHIA, Pa.

York

port

H

r

h

an

Gordon Pfau Joins

sold

foreign

'Sl||
JjJlfpM

/

of

era

textile
our

it al¬ -world is to keep

as

s

of selling will
milling industry
to
keep pace with the progress of
this country and our relatives in
the family of the free world.

if

our

routine worke

near

independent of
foreign relatives do you think
can

in

firm

a

than

am sure

enable

healthy

Without exports, we cannot sup¬

"During 1952 and 1953, the free
world exported to the Soviet bloc
a

Just

and

new

get

can

without

on

the

nations with

is teach-

they

;

take

of

of

any

country not strict about its se¬
curity controls on trade with the

I

into the

among

beneficial

and

add

family way—in a family of
free nations way? We are are
big
shots in the family
picture, the

by

States

walk

we

research

united support.

our

capacity

a

:

States, believing that what is good
for the country as a whole should

war,

Trade

support

This

ing employers that

trade policy
citizens of the United

peaceful

on

research.

foreign

that

Independence

neces-

should

we

in

to

Today, the Reds are getting there is one thing the free world
doesn't lack today it's the threat
Danish
butter,
Cuban
sugar,
French textiles, Australian wool of trouble.
United

position

our

be

Our

Labor leaders have forced employers to resort to unprecedented

to

case

the

atomosphere of friendly and sympathetic understanding. For the

ficult

convertibility

when

arises. I am sure that the
presentation will be made in an

life.

and

government

sity

could

Let's

economic

has many able
men, well informed and alert, who

mind

how

intelligence and judgment of high school and
college graduates.
Says he envies young people who are to graduate this month.

industry

open

kinfolk

of

on the well-being of the
milling industry.

friendship

see

Commenting on changed employment conditions, because of
development of electronics, Mr. Babson holds, though
employers will always need human help, they will require the

the

bearing
Our

t4

By ROGER W. BABSON

when definite proposals are made
which in themselves have a 'direct,

flour

•1

*

June Graduates

opinions are in this connection. I
prefer to leave that to the future,

defenses.

maintained.

*-

country as a whole. I am
not
going into detail with you
today as to what my personal

decline eventually and
our- national
policies are not
favorable to world trade it is dif¬
if

i

the

on

These will

very

facts

for

in

reserves

not to have well-fed

the

that

Eisen¬

long. It wouldn't be

face

eco¬

hope

meant just
that—but, of course,
only in terms of consumer goods.
r

con¬

admit

progress in a limited way.
The volume of gold and

can't live

he

will

future.

near

hower

tween

West"

of

^complete convertibility of
currency for any large number of
foreign countries cannot happen in

ones

and

inter¬

such

Deal
with
the
Soviet
bloc?
When the President mentioned "a
greater
exchange of goods ber
East

absence

Even the most stubborn

to in

the

the

mean

nomic

industry down.

East-West Trade

in

vertibility. Actually, convertibility
of a currency means complete re¬
moval of all exchange controls. ■

will

program

devil

national trade that must be driven

pjril point provisions

Eisenhower

another

-,-f 4* *

sucfra program on us rather than

15

'*?

&

Co. Inc.

&

%

The Commercial and Financial Chronicle

Thursday, June 3, 1954

...

(2440)

16

somewhat, but didn't return
to

THE MARKET.

.

.

AND YOU

Richfield and Gulf, as a
of

ter

STREETE

By WALLACE

popularity with any gusto
plans were spiked.;

From

when such

showed

fact,

Washington

mat¬

Ahead

definite

easiness at times.
Jersey Standard Oil, however,
signs- of

week

to

climbed

all

is

which

the

to

has

market

the

that

fact

325-330 area

technical

that

studies had indicated for

this

swing. The long-heralded re¬
action continued to elude all
around, and

the sold-out bulls

the

70-odd

few

short

point climb in a
after the

months

lows of last

September comes

being something of a

close to

swing without any cor¬
of the name.

record

rections worthy

Scientists

if

if

*

Union New Status for the Steels
Pacific, aided by a relatively
Steels turned a little bit
good earnings statement, was
able to put on an above- ragged after their recent gen¬
eral improvement but in their
average
performance for a
carrier. Here again majority ability to hold their ground
sentiment has suffered a set¬ during market softness show
rails

most

although

evidence of

been

had

it

because

back

a new

lolling

couple

a

of cently
for

a

over

at

that

in

movements

sudden

such

of

This

week
got underway, each issue add¬
ing a handful without any
specific news to account for it.

the

Large blocks of individual signs the students watch for
as a signal of the final phase
were also being liqui¬
of a bull swing. But while the
dated steadily, many of them
so-called secondary issues
via normal trading although a
have become more prominent,
few
special and secondary
there have been few specula¬
offerings were noted. In the
tive excesses and the buying,
latter
category

shares of

Scott,

was

187,791 *

far from

Merritt-Chapman

one

being haphazard, has

concentrated

of the larger sec¬

what

on

ondaries of recent note. Pack¬ observers call the

ard,

on

rumors

of

a

chips.

merger

offic'

1

confirmation,

of the year

couple

of

except for a
flareups in RKO

Pictures

■Central.
.

and
.;

York ly

New

-rv'4'■

*■
.

/'.v.'"

.?■

.

Two

Jn

v

Strong Seaboards

some

of the

cases

also

passed

had its moments of

a

better

of sud¬ earlier

this

its

1952

idea

But while
fared well, the

the

Dow

am

that the merits and demerits of the Oppenheimer

sure

are over my

averages.

',

:

the

as

to what is

AEC

if any
<|ione with the money. The General Accounting

of other government

does

but

the

committee know

this

of

members

only

They are informed to the
extent that they can occasionally make speeches of forebodings
and portents but that is about as far as they know.
Thus, for men charged with the responsibility and confidence
given to the AEC members and subordinates to be engaging in the
wrangling and backbiting and the peddling of gossip against their
colleagues in the same manner that the regular run of govern¬
ment agencies do, is a very serious thing. We are told that these
men hold the power of life or death over all civilization.
To pic¬
ture one of them talking to a gossip columnist in a back alley,
figuratively speaking, is disturbing.

slightly

more

than the general public.

•

the
he never made public
and let leak out in any way that an investigation of Dr. Oppen- :
heimer was taking place. The good doctor did this himself:^ - ~
The stories now of dissension in the agency and of martinet
practices on the part of the chairman are not coming from him.
He is keeping a discreet silence and the result is that not a pretty '
picture of him is building up in the public mind. Stories are cir¬
culating that he is jealous of Oppenheimer, that he is a Hoover
reactionary, having served with the former President right after v
World War I.
The fact that men serving with and under him
would be planting such stories with the leftist columnists stamps
these men as unworthy of the power they hold.. They are not
supermen at all.
Indeed, in this endeavor, they are not even
unusual men. They are acting like and seemingly are like the rest
of the bureaucrats who ieVery time they have an office grievance
run
with it to a sympathetic gossip columnist.
It is a situation
that to my mind should be looked into and looked into promptly.
seemingly conducted himself with

Strauss has

dignity befitting his office. In the first place

indecision

% • \

content to let it

AEC. Everything it
hush. There is a joint Con¬
gressional committee which is supposed to keep abreast of what

v
•

.

of the
Mountain Oil Pipe

Chairman

also

is

He

Bechtel Director of

averages,

.,,

head and I have been perfectly

does, every penny it spends is hush

had

which
says
prices are . the
activity, the reasons be¬ these issues
came apparent this week in- "standard"
leaders, the 're¬ "highest since 1929;" exempli¬
fies the non-uniformity of the
eluding the 3-for-l split cently split Douglas and Boe¬

den

the

agencies does not pry into the affairs of the

3% return, ap¬

Jones

Oppenheimer,

Dr.

of

Office which watches over the expenditures

mark, parently isn't as

year.

They are after his scalp because

investigation

appropriation committees of Congress have only a vague,

mostly

with close to

loyalty

eminent men who are handling it. But its effect
upon the Atomic Energy Commission is of concern to the country
as a whole.
Here is an organization that has been given billions
of dollars and as a matter of fact it accounts to nobody.
The

leader¬

working into; p o s i t i o n

a

be settled by the

enticing as
better
opportunities else¬
which makes it something of
where for capital gains. Tele¬
a
laggard since most other
issues moved to all-time highs phone, which is included in

to

.

I

*

tors. The old high of 1947 of
to nearly $175* however, hasn't
been in any jeopardy in the
hands, such as North
American
Aviation
and runups. The better than 5%
Grumman, the latter final¬ yield, against "growth" stocks

traded

initiated

case

its 2-for-

Telephone

,

wonder man.

institutional section of inves¬

*

*

American

information

mission and of the subordinates.

he

light blue lately after a marked demand
for it, presumably from the
":.v

In the aircrafts the

regular way on one 34,000 ship
new
block which is one of the larg¬
est

V
*.

Studebaker that lacked

with

some

corridors, my

confined to putting together the bits of

Chairman

r

Carlisle Bargeroa

is necessarily sparse and I am
gossip which come to me,
gossip which appears in the left wing columns, tracing its source
and coming up with some sort of a pattern as to what is happening.
What seems to be happening is that there is a movement after
Chairman Strauss' scalp on the part of other members of the com¬
lared

rather than the rule.
.

They are applying smear tactics.

having access to the closely protected
offices in the AEC or even to its marble pil¬
Not

split in 1949. Utility issues
that have doubled in price in
that time are the exception
*

are

columnists.

1

if

The

peddling tales on their fellow
scientists. They are even resorting to the old
Washington custom of feeding stories to gossip

scientists

dropped below 70%
couple of weeks belies

issue reached before

highly secretive and sacrosanct agency

suffer, I shall be greatly surprised.

will

section. This issue,
inciden¬
leadership lately, too,
tally, has slipped a bit recent¬
has been a shade less than
ly but it still commands a
perfect. This is another of the price better than the best the

stocks

human

plain

politics which is just about the most destruc¬
tive thing that can happen in any organization.
If it doesn't turn out that the general public

The

*

*

*

Waning Leadership?

are

highly trusted guard is in the throes of office

investment

Pipe Line, the
erratic member of the staid

holiday-shortened

they

destroyed daily under the watchful eyes of a

handle Eastern

%

❖

tf

Energy Commission would seem to indicate

ways

many

the rest of mankind.

beset

a

as

Atomic

the

where memoranda and stenographic notes are

points under the "signal"
all the dour estimates of the
level without indicating any
buying climax, what with pin¬ intention of confirming the immediate postwar period
point demand hectic enough industrial "bull" swing. Some when statisticians were try¬
to add a handful of points to
to prove that red ink
of the April prdfit reports, ing
their value,
would result at anything
in some cases
however, have indicated that
short of 85%.
amounting to a 10% or better the roads are
getting expenses
if
if
*
improvement. But these mo¬ under control and improving
mentary runups die out and
The
utilities
continued
their earnings a bit in the face
any of the excesses that might
of lower revenues. So few of quietly to earn favorable in¬
be indicated have no effect on
the analysts gave up hope of vestment attention in a calm
the list generally. Lee Rubber
fashion without any sudden
a confirming
move while re¬
and Copper Range featured in
outbreaks
except for Pan¬
vising their timing.

showed all the earmarks

and not subject to the rules of

Apparently they have their jealousies,
petty meannesses and the frailties which

their

quite at odds with their
widely expected that once the
old-time reputation of being
rails built up enough steam
the most cyclical of all the
to breach the
1954 high of
boom-and-bust
segments
of
103, the assault on the 1952
the American economy. Their
and
1953 highs in the 112
bracket would be automatic. ability to keep up profits even
when the operating rate re¬
But the list
week

supermen

beings.

status

a

he

may

society and the laws by which ordinary men are governed, as has
been claimed since the advent of the atomic age, but happenings

mark.

Seaboard fared better than

issues

individual

Some

working up to
all-time

the 90 bracket for an
*

*

*

spent more than

*

*

•'f

in

succeeded

1948.

push their read¬

ing to the highest level in a
quarter century despite all
the caution around and the

annually since

been increased

Industrial shares continued
this

of the News

By CARLISLE BARGERON

Board of Trans

Trustee of the
Institute, and
a member of the Advisory Coun¬
Henry C. Alexander, President cils of both the School of En^Line

J. P.

.

of

J.

Morgan & Co.

P.: Morgan & Co. Incorpo¬

a

Research

gineering and the School of Busi¬
ness
Administration of the Uni¬

*

has announced that Mr.
proposal in Seaboard Oil ing, were able to put on some
*
*
*
■■■;'? rated,
Stephen D. Bechtel of San Franr
which followed several weeks spirited moves to show that
Continued large-scale con¬ cisco, California, had been elected
during which the issue was they are far from out of the
a
Director of the Bank.
:
;
struction
and
the
glowing
Mr.
Bechtel
is
President
of
running.
Also
in
the
coinci¬
outstanding on the side of
estimates of the total building Bechtel Corporation with head¬
strength. It is the first split dence category is the fact that
latter, started
out
the starts to be achieved this year quarters in San Francisco. Calif.,
for this issue which, available the
and is chief executive officer of
as recently as
1949 at below week by s c o r i n g identical has kept the cement issues in various Bechtel affiliated domestic
$40, had climbed to three gains an eighth short of two moderate demand.. L e h i g h and international engineering and
Portland and General Port¬ construction organizations.
times that level by the time points each.
He
is
Vice-Chairman
and
a
*
*
if
land both made the new highs
the split was announced. By
member of the Executive Commit¬
list
in
short
order
as the new tee
Oils
as
a
of
the
Business
Advisory
group were far
coincidence, another good
month started. For both it Council, United
States Depart¬
performer was something of a from spectacular and it was
ment of Commerce, and is serving
was
a
story
of
all-time
high
namesake, Seaboard Air Line pretty much left to individual
as a director of a number of cor¬

Company,

Stanford

versity of California.
V

World
War
II,
Chairman
of

During

was'

Bechtel

Board

of California

Corporation

and

a

Mir.
the

Shipbuilding
Director -of

Marinship Corporation.

E. J. Gannon III Willi
,

.

Kail Road. But here the
tivation

was

mo¬

another dividend

hike which has become

some¬

situations

keep

the

like
group

Seaboard

to

interesting.

The division had been shaken

recordings.
[The
article
time

what

expected

pany

since

of this

payments




com¬

a

bit

by Washington talk of

have cutting depletion allowances

views
do

Chronicle.
those

not

coincide

porations

expressed

in

this

necessarily

at any

with

of

those

the

They are presented as

of the author

only.]

Can

including

Continental

Company Southern Pacific,

United

States

Indemnity

Lines,

Industrial

Company,

Hendy Corporation.

Joshua

Shearson, Hammill
'

DALLAS, Tex.
Hammill

&

York

New

other
nounce

leading

Buillding.

of the

Exchanges,

and
an¬

Gannon ni has

that E. J.

office,

Shearson,

Exchange

Stock

with their Dal¬

become associated
las

—

Co., members

Fidelity
-

Union
.

Life
• <

0

Volume 179

Number 5330... The Commercial and Financial Chronicle

(2441)

for

used

FHA and 61 Loans

Despite

tribute

By DEANE C. DAVIS*

r
x

being

these loans

are

first lien

a

on

a

is

buy

FHA

an

v/e

belief

our

not

are

that

loan

or

buying

when

GI

loan,
mortgage

a

a

loan in the conventional

the word.

I

piece of real estate.

Decries

his

mind
make

mitted by borrowers

right

effectively to strengthen the posi¬
tion of FHA loans in the
future,
rather

a

substantial

and

C.

Deane

loans.

Davis

of

the

is

company

Under this law

thorized

FHA

loans, it of course repre¬
real departure for us as

a

for

the

authorizing the purchase of FHA

the

GI

sented

it did

from

and

Company first
of

detract

in complete accord with the
spirit
letter of the law of Vermont

Life

Insurance

field

to

This policy

When the Na¬

entered

than

appeal of their quality.

g u a r a n t ee.

tional

cessa¬

tion of such practices should serve

loan

other

lenders.

It

took

self-

"to

make

we

and

are

au¬

invest

in

loans secured by mortgages which
are
insured under the National

Housing Act, and to obtain such
insurance;
." This statute not

the

of

of

to

improve

FHA.

my
ness

I

also

the

he

ex¬

wish

to

express

appreciation for the willing¬
and
enthusiasm
of
Acting

Commissioner

Mason

in

assum¬

ing

the responsibilities imposed
upon
him by the President in

connection

with

his

office,

new

He has assumed the position at a

difficult time, but is vigor¬
ously / undertaking
a
program
very

which

FHA

should

in

maintain

to

serve

its very

important posi¬

tion.

FHA

insurance

and

the

VA

guaranty, particularly when the
represents more than 50%

latter

of

the

loan.

This

because

is

the

guarantee of principal and inter¬
est of debentures issued pursuant
to the
contract of insurance by
FHA

the

and

under a
VA loan are by express terms of
the law unconditional obligations
of the United States Government,
which obligations for credit pur¬
poses are of equal binding effect
with the obligation expressed in a
government bond.
As
far

matter

a

in

guaranty

of

fact,

we

go

thinking

to buy such

We also believe that, as a

return.

lending

institution,

we

have

a

great responsibility to make loans
to the extent that they are guar¬
anteed

insured

or

when

the gov¬

of the United States has

ernment

its willingness

give
its guarantee. Unless we are will¬
ing to accept this guarantee in
good faith and at face value, it
expressed

behooves

us

to be

to

less critical

of

government inroads into the field
of private finance. Because we are

willing to rely upon FHA insur¬
ance
and GI guaranties, by the
same
token
we
are
willing to
make 100% loans, loans without
cash down payments, and also to
go to 30 years on the term of the
loan, relying again
antee.

...

statements

These

bit

extravagant

some

in

the guar¬

on
|

.

may

the

seem

light

legislatures that lenders might
rely fully on the guaranty of the
Veterans Administration.
When buying an FHA loan

a

or

a

loan, we believe that we are
obtaining as security not only the
virtual equivalent of a govern¬
ment bond, but even more. In ad¬
dition

to

United

have

the

obligation

States

of

the

Government, we
on a piece of real

first lien

a

estate, and also the credit obliga¬
tion of a carefully selected Ameri¬
citizen.

can

We

have

noted

we

times

many

raised eyebrow when

we

a

that

say

willing to make loans for
and we of course respect
opinions of those who insist

are

upon

cash

a

the other

be

may

not

down

hand,

payment.

On

though there
cash payment, let us

no

even

forget that the borrower has

an

corporation with a govern¬
ment charter plus a governmental
ance

obligation.

not

be easy
In

another.

for him to refurnish
the

third

place, this

has always taken pride
home ownership, and we have
time and again that people

will cling to

their homes

long

so

it is possible for them to do

as

Furthermore, let
the

fact

ments

that

usually

us

the
are

so.

not overlook

mortgage

pay¬

about equal to

less than the

or

sum which would
be paid for rent. And
finally, with
each monthly payment the

equity

of the

owner

increases.

Over the years we have studied

very carefully the attributes of our
However, it should mortgage portfolio, so-called, and
v/e
have been increasingly im¬
be
emphasized most vigorously
that at no point has anv sugges¬ pressed with the inherent liquid¬
ity
of
a
modern mortgage loan
tion been made that FHA loans
are not
good investments or that portfolio. I already have empha¬
the insurance of such loans is not sized the importance of the in-

ing the

past several weeks about

FHA activities.

gilt - edged
regardless
of
what
might have happened in connec¬
tion with

an

insurance

of

occasional loan.

these

loans

and

The
the

ability of the mortgagee to obtain
debentures guaranteed as to prin¬

'Should

trouble,

we




ing

from

ment

on

tures

on

readily

a

great many

we

encounter

receive a cash pay¬
the GI loans and deben¬

the FHA loans which

marketable

or

may

are

be

people

major factor

a

the

of

insurance

the

for

risk in

small

features

car¬

proportion

of

of that which insti¬

excess

tutional lenders ordinarily would
make under conventional stand¬
The FHA not only made this

ards.

financing possible, but popular¬
ized an improved pattern of mort¬

a

ess

available

our

determined by the proc¬
I have just outlined.
as

Let

ly,

illustrate this specifical¬

me

and

again

at

request.

your

Last

autumn, at the company's
maple breakfast held during the
Mortgage
Bankers
Association
meeting in Miami, we expressed
a willingness to consider
the pur¬
chase of $15 million of FHA and

Leonard

in

ence

the

next

three

million

of

days

loans

us, and we committed
lion at a discount of

It

had

we

offered

lending

gage

with

monthly

loan

was

$19 mil¬

$1

million.

K.

with

CITY,

and
at

monthly rental payments. Limita¬
tions of time prevent doing full
justice
to
the accomplishments
and
importance of FHA, but a
few conclusions

are

apparent:

attractive

the

GI loans

the

been

from

series

a

June

definitely revised
monetary policies which had
prevailed in the early part of the
year.
These indications included

The

FHA

has

become

an

integral part of mortgage financ¬
ing in this country;
(2)

The

surance

of

FHA

as

mutual in¬

a

with

company

govern¬

a

charter should be kept free

politics, and deserves only the

highest

quality of business

man¬

(3) FHA with,its generation of
successful
operation should not
in

ever

the

the

on

future

altar

of

inviting

Fund's

discount rates.

Chairman

social

speak

to

today, the Chairman of
gram committee asked
in

manner

mine

when

shall

we

heavily.

There
suggestion

tle

which

higher

that

mortgage prices

behind

bond

the
our

As

here

me

funds

committed

activities

ited

than

the

been

even

our

more

statutes

reluctant

to

lag

The appointees are James A.
Edgar, of Baker, Weeks & Com¬
pany;
John W. Dayton, Jr., of
Clark, Dodge & Co., Inc.; Miller

even

H. Pontius of F. Eberhardt & Co.,

to

Charles

Morse,

to remain at

hill,

Had

the

loans
have

historic

had

of

lower,

FHA

and

still

we

good buy.

a

of

relatively low levels.

prices

gone

lag

of

GI

Raymond

Co.;

As devel¬

&

Kidder,

wood

would

L.

Noyes

D.

Stitzer,

Jr.,

Co.;

Peabody

Boynton,
Robert

of

of life

in¬

trustees of
to

us

and

of Hemp¬

&

we

And

I do

Powers,

of

Barney

had been

Chairman

suggest,

was

favor¬

our

insight

as your

kind

would

we

very

But if

good

as

a

&

enough

have

Co.

by

Program
to

&

Co.;

The

of

B.

is

headed

Lemkau,

Chair¬

Morgan,

Contributions

bought

Reginald

committee

Hudson

man,

and

Stanley

obtained

Co.
the

investment bankers committee go

However,

to

$40

have

to

million

have

gone

at

committed

that

beyond

time

our

for

the

Fund's

distributed

would

projected

campaign and
423

among

This

is

tration

not

an

and

about

is contained
obtained

offer

to

sell

thf*se

securities.

prospectus requirements
the

issuer,

in the

from

the

the

the

of

securities,

and

boroughs.

They

in

subiect

circumstances

to

the

who

is

a

registered

regis¬

Informa¬

the

of

given to tpe buyer and

underwriter,

securities

are

Federal Securities Act.
the

prospectus which must be

undersigned

offering
may

dealer

Offered

as

a

in

Speculation

1,250,000

shares

LIGHT METALS REFINING CORPORATION
COMMON STOCK
value $1.00

per

share.

•

Light Metals Refining Corporation ivas formed to develop tin¬
der license the newly patented high
intensity arc process for
refining beryllium ore and the ores of other light metals.

OFFERING PRICE $4.00 PER SHARE
Copies of the prospectus may be obtained from:

PHILIP GORDON & CO.

takes

INVESTMENT

not believe that

We make careful studies of the
are

be

this State.

New Issue

par

IN(I

likely

SECURITIES

Principal U nder writer
39

are

voluntary

agencies serving human needs in
the five

schedule of available cash.

take, market

amounts of money we

&

by

$40 million instead of $19 million.

Be¬

funds.

&

Smith,

Pressprich, Jr., of G. H. Walker

made

we

investment)

should speculate with life in¬

surance

El-

Hallgarten

opments since that time have in¬

position, whether he
likes it or not, he is approaching,
if not entering, the field of specu¬
lation.

Ames

Co.;

dicated,

conservative

one

of

Corp.;

Amyas

market

a

Private

mortgage prices had caused them

loans

buy

prescribe.

The minute

Fund's

Securities

this, the National Life In¬
Company
always
has

positions.

the

deter¬

we

specificallv lim¬

are

by law, and

policy is

are

of

Equitable

the

York

par¬

almost a sub¬
that w£ possess

we

by

Inc.;

was

investors

funds,

special

New

campaign was made
Samuel R. Walker,

November,

honesty compejs me to assure you
most emphatically that such is not
case.

Greater

1954

City Investing Co., with
appointment of nine members.

prices.

and

The

for

the

of

indicates

tend

prices,

investment

an

though bond prices had risen by

ciate the implied compliment, but

the

security

Furthermore, experience

of

President

Firms division and Vice-President

an

the part

Administration to re-estab¬
lish lower interest rates with con¬

some
kind of magic formula or
insight into the market. I appre¬

surance

to indicate

of the

your pro¬

ticularly to explain to this group
the

today

These revisions in

of

committee

gifts to

tion

me

bankers

pronouncements, purchase
by the Federal Reserve
System, and the reduction of re¬

sequent

with

Company,
was

Greater N. Y. Fund
Completion

bills

on

associated
&

White

Wahler, Secretary-Treas¬

of

avowed determination

Com¬

sacrificed

be

unsound

welfare schemes.
In

Mr.

official

us

&

Wall Streefers to Aid

Federal

the

policy seemed to

Evans

urer.

indications

the

J.

many

place, there

of

that

on,

FHA

in

authorities had

able purchase.

(1)

place,

yields

Louis

associated

1009 Baltimore Avenue. All

and Mr.

then available

were

highest

and

become

McDonald,

pany,

purchase.

In the second

years.

had

first

Mo.—Leonard

Atkinson
have

were

belief at the time that

our

John E. Wahler

White, John E. Wahler, Clar¬

Sommer

to

on

White

KANSAS
A.

$40

A.

(Special to The Financial Chronicle)

GI loans "at prices
satisfactory to
us," for delivery this year. With¬

payments approximately equal to

reinvestment.

tion, resulting from

by Mr. Davis be¬
fore the Texas Mortgage Bankers Asso¬
ciation Convontion, San
Antonio, Texas,
May 20, 1954.

the

for

Apart

of

housing
crisis of the past decade. By pro¬
viding mortgage insurance, FHA
made it possible for financial in¬
stitutions to make high ratio loans

surance

these regular payments, there are
substantial payments on the loans
in excess of scheduled amortiza¬

was

solution

yond

causes.

address

and

the

a

cipal and interest by the United

an

in

it

vide

States Government provide an in•From

joyed

instalment

payments, which pro¬
steady flow of cash calling

millions

of

who could not otherwise have.en¬

country
in

noted

of

of the allegations made dur¬

reach

agement;

him

a

believe that

we

In

In

to

of

at

Why?

is

place, his
furnishings have been adapted to
the particular house, and it would

If

formerly
Wahler, White

again.

second

rates

us.

which

which

available

best

to

an

financed

was

ment

the

the

were

Housing Adminis¬
a unique institu¬
with capi¬
tal furnished by the U. S. Gov¬
ernment, all of which has been
repaid.
Consequently, the FHA
today while normally a govern¬
ment agency, really functions as a
private mutual mortgage insuiv
It

equity in his house.
In the
first place, he has used all or a
large portion of his guarantee,
not

at

available

at those prices FHA and GI loans

Federal

The

100%,
the

a pol¬
invested

closely

tion.

with

VA

so

that we are
loans solely
on
the
guarantee provided we
have a borrower of good credit
standing on the paper. This atti¬
tude reduces the costs of originat¬
ing the loans and increases our
our

willing

of

times

funds

McDonald, Evans Go.

how
upon

tration is indeed

tion, and the

the

all

called

We then follow

keeping

particular time

operations

time has gone on, we have become

same is true of the
statutes of other states. Review of
the statutes pertaining to GI loans
indicates a like intent on the part

of

about

be

within the limits of

the

thoroughly
convinced
that
we
may
rely almost entirely upon

to pay out.

icy

just

shall

statesmanlike

the Federal

Housing Administra¬

know

we

execution

only permits but suggests com¬
plete reliance on the insurance of

I must

.

and

rapidly

specific type of investment offers
unusual value, we may then con¬
sider buying a few months ahead

confess, a little time
to orient our thinking to this new
pattern
of investment.
But
as
us,

.

count

at

part

Wahler, White Join

approximately 18 months ahead.
analyze our commitment ac¬

We

return

important

an

The financial plan of
FHA
with
high
ratio
loans
brought home ownership within

.

have available for investment.
We project the flow of these funds

the Federal Housing Administra¬

un¬

com¬

FHA offi¬

or

cials, the investigation and

90, 95

a

100%

If

conscionable acts have been

would

without

of judgment
acts of malfeasance on the part
errors

of any government official.

lender

no

FHA

highest

and

well-known efforts which

United States Government is still
the finest credit in the world re¬
or

of

pay

to

tion

erted

vestment of which any institution
can
be proud. The credit of the

gardless of any

tl y
i s,

apparen
everyone

that

or

of

sense

sure, 7 as

am

in

we

to

faithful

Guy T. O. Hollyday for his
assumption
and
of the responsibilities
of FHA Commissioner, and for the

importance of recent allegations of FHA scandals.
It

allegations
wish
the

to

ment

a government bond, and adds, in addi¬
obligation of the United States Government,

an

publicity

mortgage financing structure of
this country. I especially compli¬

virtually equivalent to
tion to

recent

members of the FHA
staff who have assisted in making

Davis, in discussing Federal guaranteed housing loans as
companies' investment, holds these loans afford a security

life

insurance

sacrificing

President, National Life Insurance Company
Montpelier, Vt,

Mr.

mortgage

the

containing
scandals, I

Life Insurance Investments
a

the

premium.

as

17

Broadway, New York 6, N. Y.

Phone: Whitehall 3-7849

May 13, 1954

The Commercial and Financial Chronicle

(2442)

18

bank

call

will

together their of¬

ficers and employees and
known that it is t

bank

By WILLIAM II. NEAL*

be

regarding sound money as
above the heads of average
people, Southern banker defines sound money as the kind that
will buy approximately the same today as in the future. Says
sound money is the very base of our national growth, and
urges bankers to organize and work for it. Advocates renewed
vigorous support to the United States Savings Bond Program.

nationwide public

Col¬

attention.

umnists, commentators, politicians,
lot of just

plain people are
talking about money—its func¬
tions, its value, its. uses, and its
and

a

bankers,
because

tremen¬
this discus¬
is not only

we

interested

dously
sion

are

in

money

everybody's

business,

it

is

our

stock in trade.

•

Some of the discussion

plicated,

have

bankers

clear

correct

I believe that
responsibility to

a

the

up

confusion,

the

of

some

com¬

the heads of

over

people.

average

is

is distorted,

of it

some

and most of it is

belp

to

misinforma¬

tion, and to take a bold and cour¬
ageous stand in support of sound
money.

All

sorts

of

terms

being

are

used to describe money.

We hear

-of hard money, easy money,

tight
honest money, and sound
These terms are confus¬

money,
money.

ing to

lot of people.

a

What

is

sound

for ex¬
ample? Sound money is the kind
of money that will buy approxi¬
mately as much next week, next
month, and next year as it will
buy today. It is stable money—
money that you can depend on,
not

It is money on which future plans
be

with

based

of

national

our

the

growth.

is required

Sound

incentive

as an

saving, which is the source of
the new capital investment upon
economic

our *

pends.

growth

de¬

Without confidence in the

rfuture worth of their money, peo¬

ple will either
all.

-

possible
the

as

less

not; at
With sound moneyj Ameri¬
will keep saving and make

cans

better

save

capital

new

for

base

the

and

investments

employment

new

production

things for

or

of

and

more

fruitful

more

a

1

life for all.
But you

ask, "What

I

can

as

individual banker

or

what

can

organization

bankers

do

tion's

of

our

to

15,000

the

of

everyone

banks

na¬

not

dramatic.

effective.

And

But

has

It

the

in

it

be

can

be

can

most

lelpful in establishing and main¬
taining a sound economy in this
country. It is this: We can give
renewed, vigorous support to the
United States

Savings Bond Pro-

gram:

The fact that 40

$37

Bonds

billion

is

in

of

million

of

"E"

peoole

and

tremendous

the

"H"

impor¬

debt

management
program, and sound debt manage¬
ment is essential to sound

monev.

1954, $5.6 billion of series "E"

Bonds mature. The maturities for

been

achievement.
which

we

When

of

re¬

outstanding

is

be

can

later

and

of

record

a

again

them

used

less

other

our

interest

have

a

build

to

and

out

worthwhile

purposes,

revived

is

and

determination

new

help

others

we

to

is

ticipation?
since

a

gressive

maturity,

promotional

nevertheless

be

Savings

Bond

their

present

level.

is

effort

will

needed simply

keep

public

ag¬

an

persuaded

holdings
Unless

to

to
at

the

purchase

person-to-person canvass
for

Convention

sociation,

by

Mr.

of the

Hot

Neal

Arkansas

Springs,

the

at

Annual

Bankers As¬

Ark.,

}954.




May

payroll deductions

'•

to buy-bonds?

Is

bank

your

'cooperating

by

distributing bond advertising ma¬
terial regularly?
Do your bank
know

that

and

their

ifonds?

bank

them

urges

to.

Are you of-,

is

time

a

gain

to

for

us

to

In

the

the

in these days

security and national
solvency are identical because one
is impossible without the other.
is

to

up

us

bankers to pro¬

as

vide individual leadership of the
highest type, not only by increas¬
ing the usefulness of bank serv¬
ices

to

but
on

100,000,000 customers

our

by

effort

educational

active

behalf of sound monetary pol¬

munities.
money

should

people

help to inform the
what "sound money"

of

them

to

means

then

and

do

our

actively pressing the sale
of U. S. Savings Bonds, for cer¬
tainly the

of the

sale

stone

in

taining
now

in

sound
have

we

combining

but

with

a

bonds

been

we

Administra¬

with

the

sound

sale

Bankers
Bonds and

cause

have

opportunity to tie in
advocate

our

first

our

efforts to

policy

monetary

of

of the

bonds.

we

they have

a

a

Savings

favorable

able

Yet,

passive attitude rather

than active support.

It is

opinion, but not

an

favor¬

a

aggres¬

sive policy. Facilities for handling
are

to bond

provided in most banks,
our

efforts

servicing

as

are

confined

distinguished

from bond selling.

may

if

favorable

job,

therefore,

change this passive
aggressive sales
complish this,

we

Massachusetts

(center)

Turnpike

is

by John O. Stubbs, of F. S. Moseley &

(left), which headed nationwide underwriting

the

bonds.

At

First

National

bond

issue

offering

group

right is Henry S. Parker, Vice-President of The
Bank

of

Boston, Trustee for the Authority.

oversubscribed

was

May 5.

on

few

a

hours after it

The

offered

was

.

Terms Seasonal Business

It

Jules Backman points to

mes¬
com¬

be

must

a

opportunity!

There

has

been

of

Friday, June 4,

Professor of Economics. New
Aork Univers¬

ity

Wall

is

to

To

ac¬

must start with

top management.

25,

If the executive officers in each

will

Street

forget

fights,

proxy

Day

Commer

c: e

and

members

of

the

New York head
Hollow ^Country

borough, N.
day.

Y.

stitute,
ing in

negotiated

competitive bidding,
/the

York

as

Club

Bond

for

The

by

announced

pleted

Club

at Scar¬
for their annual

W.

It

of

Dayton,

has

pointing

with

a
a

sports and

entertainment.

in

their

annual

with

things

Street bondmen

all

three

hole-in-one

a

U.

S.

will
the

contest.

Talbert, Captain of
Cup Team, and

Davis

Moylan will play

hibition

tennis

pair

match

with

Bond

the

Club

an

and

ex¬

then

winners

tournament

of

in

a

special doubles match.

Exchange trading (Bond
Club version); Annual appearance
of the "Bawl Street

Journal," the
club's world-famous funny paper;
Skeet
shoot, horseshoe pitching
baseball

and

and

batting contest.

Beefsteak
at

exhibition,
swordfish

or

tables

pool,

lunch¬

surrounding the
with continuous

by radio and tele¬

vision stars.
Buffet
Stan

and

an

and

with
his

evening

music

by
Tigertown
of special

entertainment including "Beat the

Clock,"
Roxanne.

with

tion, carlcariings and total incustrial production, lagging automo¬
bile sales, and the post-Easter de¬
cline in retail trade.

1954.

cline

in

been

less

in

the

second

severe

months

ing

initial

of

of

instances,

some

or

the

year.

In

decline

has

year

this

the

been halted—at least

of

has

quarter

than in the clos¬

last

months

temporarily.

end-product demand
business and gov¬

consumers,

ernment

been

has

maintained.

fairly

Sharp

well

cutbacks

in

production, accompanied by high,
sustained

demand

for

finai prod¬

ucts, suggest that the major part
the
cyclical
correction
has

taken
V'

place."

Dr.

"a

number

of

pressures of a

at

are

pointed

that

out

the

(c)

the

on

demands for

such

new

research

the long-term

Bud

Collyer

and

(productivity)

use

tal and labor;

form

up¬

of

both capi¬

(d) further tax

stimulate

re¬

individual

and

incentives; and (e)
prospect
that requirements

the

to

business

defense will continue to

i

o

the

rate

which

at

is revolutionizing
American industry have a subtle
but

g y

important effect

the atmos¬

on

phere in which economic decisions

being made currently.
affecting the busi¬
ness
situation today may be di¬

are

"The factors

vided into (1)
expansionary, (2)
sustaining, and (3) negative," the

university professor pointed out.
"Among the evidences of expan¬
sion

the

are

rise

recent

in

com¬

modity prices, the continued high
of

construction

rising

levels

awards, tax
local and

of

expenditures, and

the easy
policy of the federal gov¬

money

ernment.

"The
the

sustaining forces include
high level of consumers' dis¬

level of savings of American con¬

sumers, the continued strength

foreign

economies,

built-in

stabilizers."

tion

with

fessor

supported

in

insurance,

old

floors

prices,

and

income

taxes

the

as

that

Pro¬
"in¬

age

such insti¬

by

unemployment

annuity pay¬
agricultural

below

heavy

revenues

more

connec¬

noted

part

ments,

traction

In

factor,

demand continue to be

tutional factors

eral

various

latter

Backman

and

come

the

of

and

as

a

reliance upon
source

of

fed¬

(in periods of con¬

tax

burden

contracts

sharply than income). Gov¬
spending at a relatively

ernment

level

is

likely

be

to

con¬

tinued"
,

:/•

liquidation and for repayment of

currently

formation

generates;

1

long-term character

Among such
factors are (a) population growth;
(b) accelerated technological re¬
and

and

n o

"The need for further inventory

work

capital

h

e c

basic expansionary

American economy.

search

t

high

Backman

have
impli¬

posable personal income, the high

activity continued to
the first quarter of
However, the rate of de¬

off

taper

ulation

state

modest'increases in steel produc¬

short-run

Thus, tax relief already
granted in
1954, the continuing
sharp rate of growth in our pop¬

relief,

relatively

longer-

undoubtedly

cations.

the

ward trend toward more efficient

supper,

Rubin

unem¬

These

years.

forces

favorable

some

small decrease

of

Stock

tournament

the

many

range

level

unemployment,

Meanwhile,

Tennis—Bill
the

in

the

"Economic

to

open

trophies. at
stake for low gross, low net and
match play against par,
plus a
variety of individual prizes. Also
a
golf show by expert profes¬
sionals— "Swing's the Thing" —
and

sea¬

for

relatively

Dr. Jules Backman

holiday:

Golf—Tournament

members,

the

of

some

are

store for Wall

on

of

em¬

phasized

Jr.

issued
outlining

Events,

day jam-packed
Here

As

disap¬

speaker

Committee

Day

John

outing.

Schedule

on

evidence
this

today that it had com¬
plans for the club's

its

New

City,

sonal rise,

Field

,

meet¬

May 26.

of

Sleepy

field

headed

of

Finance, told
the Carpet In¬

all

deals and

School

Accounts

good part

a

seasonal

some

pickup in business, but it has been
"disappointing," Dr. Jules Back-

Bond Club Plans

On

relatively small decrease in

ployment, and modest gains in steel production and carloading
as evidence industrial slump has
not entirely abated.

don't win it now,

For 30th Field

Pickup 'Disappointing'

use

again have'such

entertainment

attitude into

support.

to

man,

eon

Aggressive Action Needed
first

Program

vehicle

won.

we

never

swimming
Our

be

can

Edward

in

believe

attitude toward the program.
it is often

at¬

Up until
handicapped
two efforts;

national

dollar,

a

money.

tion committed to the
sound

is

actually

these

pike Authority

This struggle for sound

But

won.

30th

We

Bond

ideal

the

iq carrying the sound money
sage to the people of our

about

of crisis.

National

It

Cross-State

Co.

renew

and to our nation

economy

Savings

have

we

efforts, to rededicate our time
and
our
energies - io a program
that is vital, one that is essential
our

$239,000,000 bond issue to finance construc¬

123-mile

the

of

handed to William F. Callahan, Chairman of Massachusetts Turn¬

Can they discuss
advantages effectively with

these

our

to

A check for the

tion

"H" Bonds?

new

Five
talk

par¬

How long has it been

made

was

to stimulate it.

percentage cf

ycur

see

go

kind of benefits.

same

but often

beyond

its

into

prospective buyers?

proud.

think

homes, to buy farms, to educate
children, to go into business, to
provide for old age, and for count¬

*'E"

bonds

look

to

of the
millions
of
people who for 12
years have bought Savings Bonds

bonds

A

be done

can

What

re¬

service

of

an

It

we

1955 total $4.4 billion. While
many

Bond holders will keep their

should

bank

distinguished

a

field

every

it

re¬

fering your services to county and
regional boncf leaders, and do they
realize that you are giving them
the
nation
through support of
wholehearted
support?
Do
you'
Savings Bonds since 1941. For 12
take
advantage of opportunities
years, bankers have been effective
to
talk
to
schools,|
civic
clubs,
bond salesmen.
They have pro¬
women's organizations, and other
vided leadership for the program
groups in your community, urging
at national, state and local levels.
people to buy bonds?
For
12
years,
they supplied a
Do you
promote the Bond-Amajor portion of the servicing es¬
Do all of your of¬
sential to the issuing and redeem¬ Monffi Plan?
ficers
and
contact
employees
ing of billions of dollars worth of
bonds held by millions of people. know about the advantages of the
have

Bankers

record

foundation

and

banking association in the coun¬
try can do to help. It is not new.

In

these

icy.

There is something we can do—

tance

sub¬

share by

something

bold

what

in

a means

assurance

payroll savings plan and

ligations and getting a-larger por-r
tion of the national debt into the.. recommends
buy Savings
hands of private investors.

an

Iielp?"

It is

Each

If we can push-sales
the volume Of redemp- •

tions, it will afford

employ¬
for some

top management before

own

borrow from

to

many

are

newing their efforts to sell bonds.

Treasury

offset

to

some

from

tiring bank-held Government ob¬

This

base

very

for

which

required

sources

beyond

confidence.

Sound money is at

money

be

word,

money,

only today but in the future.

can

will

other

the

amounts,

There

waiting
definite

are

customers

abuses.
As

stantial

who

ees

economists, demptions.

leaders,

Government

"H" Bonds

"E"- and

new

developed.

thousands of officers and

partly complicated, distorted and

Money is big news these days.
It has attracted the spotlight * of

tremendous

a

of additional sales would

amount

recent discussions

Referring to

actively

everyone

opportunity,

every

Winston-Salem, N. C.

Wachovia Bank and Trust Company,

have

to

support and sell Savings Bonds at

Vice-President

Senior

Complete Massachusetts Turnpike Offering

let it be

policy of the

e

Thursday, June 3, 1954

,..

run

for

high

consumer

significant

credit indicates that no

upturn

business

in

is

likely over the next; few months.
Although there has been consid¬
erable public discussion concern¬
decrease in inventories,
seem high," the speaker
stated.
"Inventories rose by $6.5
billion in the year ending Sep¬
tember 1953.
In the following six

ing

the

they still

months, the decrease
billion.

dation,

was

only $2

The annulal rate of liqui¬

therefore,

has

been

less

than the prior accumulation. Busi-

Number 5330

Volume 179

...

(2443)

The Commercial and Financial Chronicle

"Whereas, the Municipal Secu"Therefore, Be It Resolved, That
rities Committee of our Associa- the Board of Governors of the Inhigh, judged by normal peacetime mittee of the I. B. A. and by the tion has carefully studied the pro- vestmpnt rankpr<; Association of
standards.
It is far more likely Board of Governors of that body." cedure recommended by The MuThp fe^^r^VpsnlMtinn" foU
nicipal Forum, of New" York re- America recommends to its memthat
inventory liquidation will
ratios

sales

in

inventory-

and

inventories

ness

general

Municipal Forum

of

New

.

a

than

the

that

stimulated

months

the

in

continue

ahead,
will

economy

by

"Whereas, The Municipal Forum
of New

ventory accumulation."

cost

Among the other negative fac¬
tors stressed

in

by Dr. Backman were

the following: new orders in man-

income

is

;

and

and

possible errors involved

copies

preparing

ommen.ded

procedure would

as-

opinions sure accuracy, be legally effective
and result in substantial saving in

of

b°ndS'

the

recommends

use

time and cost in

PreParing such

of photo off-sets of such opinions, copies; now

.,

i*

„j_

bers and to dealers generally the

use

"Whereas, it finds that the rec-

York, recognizing the time,

approving the legality of municipal

agricultural

in

cline

specting copies of such opinions;

lows:

be

demand for in¬

a

Geo. Stewart Admits

York,

by the Municipal Securities Com-

still

are

a

George Stewart & Co., 350 Fifth
ueorge bte^r\&
> a5u
venue, New York City, members

^eYr^?r^ !'^Ume,rn ers
of the New York Stock Exchange,
wil1 admit Alfred T. Manacher to

limited partnership on June 15.

and acceptance of photo off-

sets of approving legal opinions or

copies prepared through like processes

where

have

the

such

approval

whose opinions are

reproductions

With Brew-Jenkins
(Special to The Financial Chronicle)

MILWAUKEE,

Wis.—Henry

be nationally marketable."

National Bank Building.

r

the

is headed

ment

lower.

Dr.'Backmah ^ stated:: "Thus far,

only

relatively small'dent has
toward repayment of,

a

made

been

record

the
debt

amount

outstanding.

dfj consumer:
later-

At some

date, consumers may again be in
a position to accelerate their con¬
sumption

borrowing

by

heavily

against future income. Currently,
however, dept repayment is a sig¬
nificant negative factor as it re¬
lates not

Cities Service

only to the purchase of
goods, but even toy

views one small corner

durable

new:

other forms of consumption which
must bow to the inevitable priority

of its vast estate...

of payments of both principal and
service costs
debt.

existing

on

consumer-

Last year, consumers were

spending more than their current
income—with the difference at-5
tributable

to

they

year,

-

are

their current

borrowing. * This
spending less than

income—the differ¬

represents

ence

-

repayments

'

last year's loans..

-:":

"During ' the" first

;

on

-

quarter ' of

i954, wool carpet and rug pro¬
duction totaled 15.5 million square
yards
lion

compared with 20.4 mil¬

as

the

in

1953.

of

24%.

corresponding

This

was

Production

period

period
of

decline

a

that

during

the lowest it has been

was

during recent years, f However,
the continuation of high level dis¬

posable income and the high level
new
housing starts suggests

of

that there is

siderable

market for

a

volume

a

of carpet

con¬

sales.

Some improvement in the volume

of

production

carpet

take

should

and

sales

in the months

place

ahead."

IBA

Approves Use of

>?

«

Photo Off-Sets of

*7/

,

'

-

''

Bond legal

Governors

of

''

''/ft''''

''

urge

jk;xk;.:.v.<v:v.; ; >: v*p x#::?:::?

mem¬

generally to

and accept photo

off-sets

reproduction

■mMk

May 20,

bers and dealers

such

'>

'

'■■■■,-y v-;: Ki*'
• '■

Opinions

In resolution, adopted
Board

v','/',/,/

or

w&yzyx

use

other

of

processes,

legal opinions of municipal bond
attorneys to reduce costs and

possible

preparing

in

errors

duplicate copies.
On May 27, the Board of Gov¬

.

of the Investment Bankers

ernors

Association of America forwarded
to Association members
a

of
Board
May 20th, in which it is rec¬
a

copy

resolution adopted by the

on

that

ommended

dealers

and

municipal

brokers

bond

and

use

ac¬

photo off-sets of attorneys'
opinions rendered on the legality
of municipal bond issues.
A copy
of the
letter
accompanying the
cept

?/y//ssY/SStV/S//S.

v//.-vy/////s,

transmittal of the resolution states

"The

that

copies

of

matter

opinions

providing

of

the

covering

legality of municipal bond issues
has

of

been

both

as

and

the

increasing

to the accuracy
cost

of

of copies

preparing

and

furnishing such copies, especially
In view of the

of opinions
cases

use

of

like

processes

will,

we

in

this

been

prospective oil and gas lands in the United States

and Canada—in addition to

holdings in South America, Egypt, and the

Middle East-^are under lease or owned

outright by

increasing number

required and in many

CITIES

the increasing size.

"The

Eleven million acres of

concern

photo

of

off-sets

such

or

opinions

believe, contribute much
regard.

The

matter

has

carefully considered by The




E.

attorneys Schlass is
with
Brew-Jenkins
recognized to CompanyInc., Fir^t Wisconsin
of

1953 level, defense spending has. continued to
decline, and'total" business' invest-v
below

likely

19

SERVICE
©

A Growth Company

20

The Commercial and Financial Chronicle

(2444)

but

works

Banking During the

assume

than

experiencing a transition from an econ¬
one of surpluses—a transition that has
psychological as well as material consequences—Dr. Nadler
finds both strength and weakness in current situation. Among
strong factors he mentions: (1) growing population;
(2)
sound financial position; (3) backlog of public works, and
(4) a more favorable attitude of government toward busi¬
ness.
He lists as weaknesses: (1) rigidity of prices and
wages; (2) an unrealistic farm policy; and (3) heavy pub¬
lic debt. Reviews banking situation, and finds there are oppos¬
ing forces, since an increase in deposits from investments will
offset a decrease arising from reduced commercial borrowing.
are

we

Introduction

The

the
States is
that

belief

general

of the

economy

(4)

United

merely undergoing a normal cycli¬
inventory readjustment is only
partly true. If

cal

the

capacity of the free
notably Western Europe,

debt

the

have undergone considerable
changes during the last year and

ury

operate to stimulate business

now

activity. Moreover, the fact should

of any

phase of the

(5)

more

of

The

the

The

of

world,
which

tion

in

the

policy of getting

competition

private
proposals fa¬
tax amortiza¬
with

accelerated

on

climate

reflected

is

business and its tax

voring

business.

to

economic

Administration's
out

plants.

new

Principal Weaknesses

one

fields and factories.

can

detect at present is a con¬

can

siderable
All

country

these

foreseen.

developments

It

were

con¬

fronted

solely

early

with the

prob¬
cycli¬

readjustment

in

quite

was

that

1953

were

evident

downward

a

degree

rigidity

of

of

In spite of the
industrial
production

prices and wages.
that

fact

from

July to March has decreased
by 10% the level of wholesale
lem of a
What could not be predetermined
prices has remained practically
cal
inventory was when the turn would take unchanged. The consumer price
readjustment place, how extensive the readjust¬ index is near its
peak and hourly
the
future ment would be, and how long it
wage rates are still increasing. A
course of busi¬
would last.
rigid wage and price structure, if
ness
could be
The
effects of
the
transition it persists, may prolong the tran¬
predicted with from an
economy of shortages to sition from a war to a peace econ¬
a
fair degree
one of surpluses will
continue to omy.
of

accuracy.
The
situation

is,
Marcus

Nadler

however,

more

compli¬
cated
because
the inventory
readjustment is ac¬
centuated by the
liquidation of
debt, notably consumer
credit,
contracted

under

favorable'

more

employment conditions than
vail

at

present.

however,
United

is

the

States

transition

More

that

the

experiencing

from

shortages to

important,

fact

is

pre¬

an

a

of

economy

of
surpluses, from
buyers' market, with
increased
productivity resulting in

a

sellers' to

keen

very

competition

and

ability of manufacturers

the

and

dis¬

tributors to shift any increase

in
the costs of
doing business to the

ultimate
and

consumer

becoming more
difficult, if not impos¬

more

be felt even after the
inventory
readjustment and debt liquidation
have

sible.

consumer

sellers' to

a

buyers' market not only has

eco¬

nomic but also

both

and

course

credit,

normal levels.

fall

the

in

ness

not

return

a

pattern

from the end of

dle of 1953.
of

hostilities

return to

an

a

labor

is

the

prevailed

1946

to

the mid¬

an

outbreak

major scale, a
of shortages

economy

not

in

goods and

likely.

After

thb

current

inventory
readjustment
liquidation have been
completed a new pattern of busi¬
and

and

great efforts in cutting costs
production as well as in dis¬

tribution.
to

It

assume

would

that

be

the

the

moment

tivity will automatically return to

not

play

the

a

management

to

war

expected
could

little

to

a

economy

It

come.

and

be

peace

the

clearly

been

predicted.

ket

sellers'

a

caused

was

a

by

briefly summarized,

buyers' mar¬
the following

points

expendi¬

The so-called

new

look has resulted in

expenditures by the De¬
partment of National Defense.
(2)
ated

The

pent-up demand cre¬
during the war for all kinds

of durable consumers
tal
goods and

goods, capi¬
homes, had been

met.

The

only exception

was

in

the

economy,

are:

tive
ble

The increase in

our

capacity which is
of

produc¬

now

capa¬

meeting thk maximum

fective

demand

of

the

ef¬

civilian

remains to be

seen.

Banking

Banking activities will continue
to be influenced by the policies of
the

authorities

Reserve

debt

and

the

of

the

policy

management

of

trend

business.

ditions

It

elaborate

to

exercise

is

not

change
with

much

greater

indicates

before.

ever

high

a

economic

level

All

se¬

this

of civilian

con¬

banking, for
handmaiden

a

channel
of

of

(2)

of

financial

bank

private

of the economy is sound.
The working capital of American

corporations
to

is

large

maintain

of business

a

and

ade¬

higher level

than prevails at pres¬

ent.

a

total

as

loans and

deposits of the
banking system dur¬
bound to increase as

the

of

in

end

commercial

should

the

large

Government

be

of

the

year

bank

deposits
they were

larger than

at the

beginning of the year. The
deposits created 'through invest¬

ments in all

probability will

more

in

deposits that

The growth of

deposits

should apply

well

to

as

demand

experience of

to

time

deposits
the

as

be¬

last few

population

banks

reserves

months has demonstrated that the

against possible bad debts.
(3) There is a huge backlog of
public works and the -construction

the increase in unemployment did
not lead to a reduction in savings.

at present.
•An
51st
sey

address

AnnuaJ

Bankers

N. J., May 7,

by

Dr.

Convention

Nadler
of

Association,

the

at

New

Atlantic

1954.




the
Jer¬

City,

have

substantial

industry is operating in high

gear.

The

rates

will

lower

level

stimulate

of

not

money

only

public

decline

in

business

activity

and

the

whether

lower

are

policy

Interest

than

rates

they

were

and

1951

rise

in

1948

the

merely

middle

of

temporary

a

World War I.

was

interruption

which set in after

The operating costs

commercial

have

banks

creased

considerably and
is not yet in sight.

tion

about

1953

long-term downward trend

in money rates
of

from

rates

money

to

rates

paid

by

in¬

reduc¬
Interest

a

should

banks

be

flexible, reflecting
conditions

ply.

money market
demand and sup¬

and

Now

that

the

upswing
to

come

its

should

whether

downward,

carefully

policy is in the
the

consider
such

interests

best

and

economy

their

savings depos¬

on

continuation of

a

in
end

an

banks which have increased
rate of interest

the

of

a

of

banks

themselves.
Loans:

The

trend

.business

made

volume

industrial,

for

and

the

on

commercial

be

subjected

forces,

agricultural
loans

to

The

in

two

tending

one

of Joans

purposes.

level of commercial
will

in¬

an

to

1954

sets

of

increase,

and the other to reduce their vol¬

The factors that will operate

ume.

to

bring about an increase
loans, briefly, are as follows:
(1) Tax borrowings by

in

than

the

was

case

in

in

or

June, 1953. Not only
corporations confronted this

are

June with the task of paying 45%
of their 1953 tax liability but it is
also

quite probable that earnings
of many corporations during the
first half

than

of

1954 will

the

was

bound

tions

to

(2)

to

smaller

the

corre¬

This

year ago.

a

force

borrow

As

some

corpora¬

for tax

purposes.

business

there is

creases

in

case

sponding period

be

activity de¬
tendency for the

a

slow down.

Tnis, too, is likely to
business

some
more

concerns

the banks.

to

recourse

(3) The decline in business

tivity
in

accompanied

profits

effect

by

ac¬

decline

a

will

have

an

the

cash

position

on

to

adverse

of

many business concerns and com¬
pel their resort to increased bor¬

rowing from the banks.
Th'e
to

factors

reduce

briefly,

that

the

will

volume

operate
of

loans,

are:

(1) A lower volume of business

activity normally means reduced
working capital requirements. The
also is true when inventories

same

reduced.

are

tories

A

decline

invariably
in

crease

the

in

leads

inven¬

to

demand

de¬

a

commer¬

is

The

need

no

attitude

and

the

of

economy

sound

be

can

adopt a
loans.

is

country

serious

no

the future

to

toward

in

trouble

envisaged.

for

bank

the contrary boldness on the part
of bankers in granting loans is

important

more

the

today than was
during the period of the

case

sellers' market. Assistance
to

customer in

a

granted
period of read¬

a

justment tends to make business;
friends for

long

run

long time and in the
to be profitable.

a

proves

Pressing customers unduly for re¬
payment of loans is harmful both
the

to

customer

banker

and

well

as

the

to

as

gains

reputation of

a

the latter the
fair-weather friend

which is the worst reputation that
a

banker

tions

officer

policy

have.

can

Under condi¬

they exist today the loan
in
determining his loan

as

would

be

well-advised

to

consider the following factors:

(1)

Management—i.e., whether
young and inexperienced.

tested

or

vailed,

sellers' market

pre¬

management

was

every

successful.

The

test

of

manage¬

ment will be determined to

siderable extent
both

costs

as

distribution

and

a

con¬

ability to cut
regards production
on

and

stimulate

to

sales.

Competition is keen and is

likely

to

become

keener

time

as

In the period of a buy-only the experienced
operate
profitably.
It
is,

goes on.

ers' market

will

of

for

tance

the

the

utmost

banker

to

impor¬
make

it-

(2) Solvency: The banker should
inquire whether the firm is essen¬

tially solvent rather than whether
a
loan
can
be
repaid when it
It is,

due.

therefore, neces¬
what the net
worth of the prospective borrower
would
be under
the poorest of
comes

ascertain

to

sary

circumstances.

If

circumstances

net

than

larger

the

attitude, should

under such

even

will

worth

loan,

taken

be

be

positive

a

the*

by

1

banker.

(3) Status of Industry: The sta¬
of the industry or field
of

tus

business in which the borrower is

engaged
fected

h<W it will be af¬

and

the dynamic

by

economy,

inventions,'by the growth
of chain stores, supermarkets, etc.
A dynamic economy, as is well
known, creates new values and
destroys old values. As a result
of the
huge amount of money

by

new

spent

research

on

American

by

business concerns many new

the

continually

are

These

market.

prod¬

coming

will

with older products.

on

compete

The banker,

therefore, in appraising the merits
a
loan, must not only consider

of

the

current

rower's

he

but

ness

position

industry
also

bor¬

the

of

field of busi¬

or

endeavor

must

to the best of his

(2)
One may expect that at
least in the immediate future there

arise and how the old

product will

stand

new

what

tain

will

be

loans
that

tendency for

a

continue

to

finance

also
It

is

for

loans

companies

will

will

be

it

ance

the

in

expected,

sets

to
of

important.

more

would

crease

difficult
two

appear

loans

and

minor decline

jis

that
can

state
forces

bal¬

On

that

an

in¬

not

to

be

relatively

a

be anticipated.

a

riod
a

of

transition

from

a

sellers'

buyers' market, when the in¬

efficient

and

weeded

are

ever,

to

tion

in

bound

to

incompetent

out,

the

firms

deteriora¬

some

quality

take

as

loans

as

were

one.

are

say

of

loans

is

must

to

be

altogether too often used
and when a loan is
the general attitude is

"No"

that there will be
that

continue

the banker. Figures, how¬

declined

trouble from

no

It requires

source.

a

knowl¬

edge of more than figures to make
a

good loan

out of

cial statement.
a

must

period of declining business
activity and particularly in a pe¬
to

sheets

ance

of

Quality of Loans
•In

against the

may

figures is always useful and bal¬
used by

yet

as

of

competition

utilization of balance sheet

The

In

decline.

which

up

new

ability to ascer¬

consumer

decrease.

demand

the

event

sales

by

to

good

a

poor

This is the

While

banker.

finan¬
essence

banks

of necessity

there

is

no

conditions

to

be conservative
need under present

a
negative
the loan policies
adopted by the banker will de¬
pend- to a large extent business
developments in the not distant

policy.

adopt

Upon

future.

place.

anticipated when
made

originally.

r

On

loans.

the

many

There

negative

ucts

rates

rising,

stable.

payment of accounts receivable to

prompt

were

activity
commodity
prices have remained remarkably

ment well.

larger

be

Deposits:

business

be

March

During the period when interest

Savings

in

decline

his business to know the manage¬

In some
repayment of loans will not

on

the

has been orderly and

tions in June will in all likelihood

cases

Interest

others, workouts will become
However, no serious

trouble is to be expected because

therefore,

corpora¬

-

necessary.

So long as a

of

activity is bound to have
fluence

In

re¬

a

the long trend of in¬
terest rates is still downward. The

in

result from

may

decline in loans.

defense

and greater national
requirements than exist

today

than offset any possible reduction

cause

All

will

banks

s.

primarily

At

gages.

of

authorities.

deposits,

investments

to

as

advisable.

not

securities, tax-exempts and mort¬

a

Reserve

are

result

position of the country is strong,
the loanable funds are l&rge and
can
be increased by the actions
the

the

on

Deposits: Total

position

the

policies

investments.

ing 1954

sector

quate

their

regards

credit

authorities

impact

spite of the sharp in¬
private indebtedness the
of

the

Reserve

an

commercial

In

crease

the

have

demand for all kinds of goods and

services.

arises

versal in bank interest rate

is

the

on

business

on

banking is merely

and

While

Situation

Treasury

consumption, a constant
in the mode of life and

tion

have
The

institutions.

other

cause

tion

and

of

to

to

A growing population with

Practically all private debts
the
field
of
public
works
for are amortized, thus removing the
which there is still a considerable
danger of inability to refund when
accumulated demand.
large debts mature. The banking
(3)

continue

will

of

rate

general level of interest rates was
rising such a policy could be jus¬
tified. Today, however, the ques¬

is

these weaknesses

rising
standard
of
living, a
dynamib growth in both produc¬

military

further de¬

a

of

crease

taxes,

industry and trade and the
through which the credit
the
country flows.
Business
activity, debt management by the

(1)

curity than

tures.

of

a

factors:

(1)
The
termination
of
the
Korean War, which made
possible
a
decrease in military

and of excise

powerful influence

foreseen.

transition

of the
profits

excess

burdensome.

very

Whether

the

have become apparent. The

strong

The

to

taxes

economy
of
the
United necessary
States is sound but certain weak-,

long

that nothing has
happened in recent business de¬
velopments that could not have

spite

the

the reduction of personal

and

are

of

Treasury, both of which in turn
will be materially influenced by

Economy's Strong Points

consequences

It

tax

income

in

taxes,

The

nesses

was

should be noted

from

conditions.

boom

did

important a role as is
today.
This transition

bound

was

of

was

as

case

from

and

dividual

elimination

mistake

a

riod of the boom
merchandise sold

effort

not reduced

plague the economy
ness
will evolve in our growing
of the country for an indefinite
and dynamic economy which will
period of time or whether they
be marked by keen competition
will be rectified in the near future

present inventory difficulties have
been, overcome that business ac¬

itself, sales
importance

be sound.

to

seem

The public debt is large and
during the period
of the boom.
Budget deficits are
in prospect for the next several
years and corporate as well as in¬
(3)

debt

psychological con¬
because during the pe¬

sequences

storing and stockpil¬

ing does not

that

a

for

duction

was

to

an

quantities of farm products at the
expense
of the taxpayers.
Pro¬

or early
However, this

Short of
on

The Congress adheres to

(2)

unrealistic farm policy which has
led to the accumulation of large

return

sellers' market

or

in

more

summer

likely.

mean

business

to

An upturn in busi¬

late

is quite

does

in

The transition from
a

their

run

inventories and debt, particularly

one

a

the making.

in

was

the

and the trend is again

(1) The principal weakness that

the output of Ameri¬

on

increased

their savings accounts
in order to meet the competition
on

interest rates has

has made these countries less de¬

pendent

banks

of the

economy.

Government

business

or

favorable attitude

improved

for

credit

of bank

abuse

no

there has

that

overlooked

be

not

been

The increase in the produc¬

tive

and

authorities

management policy of the Treas¬

of shortages to

omy

be

can

serve

Pointing out

character

serious

more

a

envisaged at present.
Both the credit policy of the Re¬

York University

Professor of Finance, New

The government is alert to
trends and ready to in¬
readjustment should

(4)

cial

interest

tervene if the

NADLER*

By MARCUS

of

erection

business

Transition
M

the

also

homes.

Thursday, June 3, 1954

...

Mortgages
Banks
rlpnosits

operating
will

with

rontirme

to

savings
invest1

Volume 179

Number 5330

...

The Commercial and Financial Chronicle

in mortgages.
In this connection 'fluctuations are determined prithe
following
facts
should
be marily by„business conditions and
borne in mind:
particularly by the position of the

(1)
The pent-up demand for
homes has to a large extent been
met.
Home starts during the last

individual

two

marked by a

years

larger

were

than

Since 'the

(2)

Real estate is not selling as
freely as before and prices par¬

becomes cf the utmost

tendency

to

buyers

have

Prospective

decline.

value-conscious

more

At

become

investment

exercise

to

power

to

tivity,

no

rise

after

moderate

a

decline

is

to

While

wall

factors

clearly

indi¬

cate that in dealing with conven¬

tional

mortgages * a conservative
appraisal on the part of the banker
is essential.

tion
as

has

current

important

conditions

is

mortgages

credit1
main

of

the

the

nite

payment,

if

of

years.

30-40

able

down

larly

of

make

least

at

This

wages

time

high

were

quite

mortgages without

that

sure

held

for

time.

if

rm^d

of

selling medium-

obligation

or

long-term

meet its

A

is

the

for

suitable

are

in-

banks.

of

swings
bonds
the

governments

in

prices
more

are

of

that

and

tax-exempt
than

numerous

in government

of

Bank

is

Also associated in the offering
The Chase National Bank;
The National City Bank of New
'? Longer maturities than prevail
While York; Bankers Trust Company;
at present are desirable particu¬ money market conditions.
a portion of savings deposits may
Harris Trust and Savings Bank;
larly if families in the lower in¬
be invested in high-grade long- L P. Morgan & Co. Incorporated;
come groups are to be enabled to
term tax-exempt obligations, maGuaranty Trust Company of New
acquire their own homes. How¬
turities above 15 years are not York; The First Boston Corporaever, in the extension of a mort¬
rinr+ipi.i-r'v
Hpfir-mn
Or+pW tion;
Blyth & Co., Inc.; Smith,
gage loan for a period
of 30-40
types of corporate bonds are also Barney & Co.; 'American Trust
years, even though such loan may
suitable for commercial bank in- Company, San Francisco; Contibe guaranteed or insured by an
vestment.
However, here also nental Illinois National Bank and
agency
of the government, the
long-term obligations with matu- Trust Company of Chicago; Chemlender must take into account the
rities of 25 years and over do not ical Bank & Trust Company; The
possibility that before the mort¬
seem to be attractive under presNorthern Trust Company; Lazard
gage matures the house, for vari¬

ment

would

not,

therefore,

seem

ous

reasons, may

a

buyer could

no

-

the

Since

families
to

Administration

investments.

in

lower-income

and

30-40-year

gages

tion

to

them

turn

to

over

be

cannot

stressed

or

bond for the

a

remaining

of the life of the mortgage
with a corresponding rate of in¬
terest.

make

of

Such

provision

a

maturity
at¬
prospective
buyers.

mortgages with
25

over

tractive

would

to

a

much

years

that if private lenders do not buy

such

mortgages

governmental

a

in all probability will be

agency

established

to

finance

the

mort¬

transition from

bound

exercise

to

influence

a

considerable

bank investments. So

on

long as the trend of business ac¬
tivity is declining and unemploy¬
ment remains at present levels,
one may take it for granted that
the

low

policy

a

of easy

turn

on

these
bound

on in
the year,
boom conditions such

later

lower and

stitutions will
to

be

from il946 to the middle

ment

income.

bound
the

all

under

The

peace
an

econ-

effect

major activities of the
Because of the

Government, the changed

credit policies of the

thorities
ment

and

the

Reserve

debt

au-

manage-

policy of the Treasury, one
that the holding of

pressure

readjust¬

by investments is bound to

coun-

the decline that may result
from a reduction in the volume of
teract

loans.
to

a

The transition from

peace economy

price of certain credit bonds whose

of

the

affect

&

National

&

a

war

will also have

the lending policies
banks.- However, now is
on

involved in that affair.

were

digesting of the securities

bring about the proper

operation to
which

supply of the

It is reported that the floating

l7/a% note is still fairly large, even though

new

this issue is still moving into strong hands.

Technical Position Confusing
again

is

Government market

The

in

&

itself is

behaving. There is

no

denying that the financial commu¬

be

should

strong compared with the rest of the market.

so

important force, which is not the case this time.
of

money

is

further

by

term

To be sure, this is one way in

is made available to the money markets by short-

money

market operations,"

"open

increase the

but

the other hand, it does

on

competition for the available supply of Treasury bills.

the Government list has

The intermediates and longer end of
not been effected

so

far by

the Treasury bill "open market

authorities, and there are indications that

it will not be for

some

been

quite

time to come, if at all.

talking

market

"open

about

operations"

>

mill

&

well illustrated

by the

acting.

Long Positions Eschewed

that dealers and traders are not

interested in taking positions in

anything but the shortest maturities.

in the Government

ness

It is admitted, however, by

market specialists that there is no feeling

most money

market,

nor are

there

In

13

mon^y conditions, which is not likely in

the foreseeable future.

Nevertheless, it

tangible

more

expanded
ments

seems

as

though there will not be much of a

this attitude of the trading fraternity until

change in

comes

open

of the

become

that Henry

market operations or a change in reserve require¬

deposit banks with time deposit requirements

Life
There

are

Companies Selling

reports of

with the extending of maturities

term Governments in order to

sales have not been too sizable but,

Wyllie and Thornhill in charge of
Norfolk

formed

It is indicated that these

because of the uncertain posi¬

prices

market, they have had a marked effect upon

from time to time.

funds, mainly the public variety, continue to

Pension

purchases of the more distant Treasury
also, there has been a reduction in thement and there is

ing commitments.
much

on

ments

time

the

will

amounts seeking invest¬
sho'pping before mak¬

The private pension funds have been

sidelines, because it is reported that

tend

keep them on the well

to

make

issues, but in this case

greater tendency to go

a

pretty

private place¬

invested side for the

being.

notes

office.

that this

was

We

in

as

well

tutions have

as

the out-of-town areas, according to

the 3 Vis of 1978/83.

been

there has been

some

are

error

in¬

It is reported that these insti¬

rather sharp declines in loans in

be¬

certain

of these areas.

Savings banks have
which

is

going

some

instances

tions.

Because

as

he had never been affiliated with
the latter firm.

ad¬

the new 1%%

putting new money into the l7/ss of 1959,

in Flor-

indicated that Mr. Isaacs

had formerly been connected with
their

the intermediate and long-

get funds which have been put into

preferred stocks and private placements.

of the

There are also advices

the so-called very big ones in the life

insurance business have been sellers of

tion

Balance

on

switches being made by some of the

to the effect that certain of

cause

was

also

being lowered along with the others.

associated

with Shields & Company
ida it

something

into the picture either through different or

vices, have been among the important takers of

Chronicle" of

in reporting
had

of bearish-

signs of liquid¬

Commercial Banks Offset Loan Decline

the "Financial

Isaacs

any

These two factors are

ity preference coming back into the picture.
the forerunner of tighter

such

of the present money market is

mental make-up

The

Co.

CORRECTION

G.

something

in which the intermediate and long-

way

term Government market is

Commercial banks in

May

being

just the purchase of Treasury bills seems to be rather

other than

being the main theme in these operations.

Marks & Co.;

The fact that

Sproul of the Federal Resqrve Bank of New York has

President

Co.;

Kidder & Co.; Schoellkopf,

opera¬

tions" of the monetary

larger life insurance companies,

M

bills

securities^

the buying of these same

supplemented by

the Federal Reserve Banks.

which

The abundance

which is available for the purchase of Treasury

(incorporated); Mercantile Trust
company, St. Louis; Reynolds &
Co.; J. Barth & Co.; Laidlaw &
Co.; Trust Company of Georgia;

A

of those technical

one

spots which it gets into every once in a while, because investors
as well as traders and dealers are confused by the way the market

'Co

government securities by the com¬

The increase in deposits created

is

Government securities.

though the money markets were not given enough

as

help during and after the recent refunding and new money raising

expect

may

impact




a

have

larger than expected deficit of the
Federal

an

adversely

to

to

commercial banks.

the

may

1953

ot

under

in¬

Pressorich

Clark, Dodge &
Co.; Wertheim & Co.; W. H. Morton
&
Co. incorporated;
L. F.
Rothschiid & Co.; Francis I. du
pont & Co.; Bacon, Stevenson &
Co.; Chas. E. Weigold & Co. Incorporated; R. S. Dickson & Company
Incorporated; The
Illinois
Company; City National Bank &
Trust Co., Kansas City, Mo.; F.
s. Smithers & Co.; G. H. Walker
& Co.; Roosevelt & Cross Incorporated; Ira Haupt & Co.; Bacon,
Whipple & Co.; Shearson, Ham-

not likely.

is

seems

jjruce & Co.; John Nuveen & Co.

M

to

re¬

many

W.

Button & Pomeroy, Inc.; Laurence

Prevailed

1954 will be higher than at the
beginning of the year, thus cre¬
ating new deposits.

lengthen maturities in order to

maintain

return

of

high-grade bonds
be

a
as

and

The

/

is

near

It

William R. Staats & Co.; Heller,

likely to level off in the
future and begin its upturn

mess

money

circumstances, therefore,
to

neace

a

mercial banking system at the end

interest rates.

on

to

fol¬

this naturally is bound to have an

impact

war

will

authorities

Reserve

a

While the trend of bus-

economy.

on

of shortages to one of surpluses is

R.

Los AnSecurities Cor-

wi'ttc,r

Dean

busin<L's(s f tivit-V

The transition

economy

Bank:

Equitable
poration;. Bear, Stearns

.

.

private indebtedness notably consumer credit,
but also represents
a

interest away from the longer

Angeles; Seattle-First Na-

tional

that

e
Ju y,
1953, constitutes not
merely an inventory readjustment
aggravated by the liquidation of

omy

an

often

of Los

Conclusion

.Tbe

the low-income groups.

The transition from

Portland, Oregon; Security-First National Bank

geles;

v

of families in

Investments

too

of

Bank

prime importance at present.

is

requirements

gage

National

'

more

The fact should not be overlooked

invest-

the quality of the obligation is of

•

cash
years

the

in

Co.; The Philadelphia
Bank; California Bank,

the

government after 20 or 25 years
and receive the unpaid balance in

loans with

portfolio should be reduced,
and whenever loans decrease, maturities
may
be lengthened. Ht

mort¬

the Administration should
give
consideration
to
enacting
legislation which would give the
holder of such mortgages the op¬

Co.; R. H. Moulton &
Glore, Forgan & Co.;
C. J. Devine & Co.; Merrill Lynch,
Pierce, Fenner & Beane; The First

ment

acquire homes with small down

payments

Drexel &

Company;

Whenever loans in-

maturities

crease,

groups

Likewise, there appears to be no shortage of offerings in the cor¬
porate and tax-free fields, the calendar for next month or so being
on
the full side. This has taken more than a minor amount of

Freres & Co.

is to coordinate

gram

ap¬

anxious to assist individual

pears

are:

The soundest policy for a bank
follow in its investment pro-

to

be found.
t

are

ent conditions.

have depreciated

point where

obligations

influenced by supply and
demand
factors
as
much
as
by

to be sound:

to

case

and

to be confined

ket

®00 Los Angeles City School District and $20,000,000 Los Angeles
City High School District, 21/2%
bonds» election 1952, Series C, due
Jul.Y
!955-79 inclusive.
The
bonds are Priced to Yield from
•807° to 2'70% according to maPurity, \\ y.:'-

However, it should be noted that
their liquidity is not as great as
that

by

are being made in the short Governments, seems
mainly to preferred stocks and private placdShents.

from those that

This is particularly true without "liquidity preference" being the

America, N. T. & S. A. is offer21?g tw0 new bo.nd. issues totaling
$30,000,000 consisting of $10,000,-

liquid-

commercial

headed

group

fill, because it

be done to make the intermediate
and longer-term issues attractive to investors. Demand for Treas¬
ury bills and other short-term issues continues to be as strong as
ever.
Commitments as far as most investors are concerned, 'aside
is waiting to see what is going to

nity is still looking for the answer as to why the short-term mar¬

Offers Los Angeles
School District Bonds

indefi¬

an

T^e

Governments

By JOHN T. CHIPPENDALE, JR.

.

Bank ?fAmerica Group

on

The Government market continues to back and

trie boom,

•

,

such

institution

an

under

Tax-exempts

some

particu¬

down pay¬

any

long-term

only after

bonds in order to

and over¬
To acquire

common.'

of

made

is

of

be

vestments

is

be
the

ity requirements.

so
today when for many
job opportunities were am¬

years

ple,

to

payment.

to

never

logical that anybody who is in the
market to acquire a home should
be

an

may

decline ma¬

can

be

be

can

rt^Hod

paramount

very

any,

transition is over, based on

dynamism^f the.^economy, the
^pndly growing population and
Jf1® increase in the standard of
JlvmS»:^usiness activity is bound
l^vels^ higher than those
prevailed during the period

maintaining adequate liquidity is

low down
and a maturity
It would seem

a

rates

character

Purchases

institution

issues

The

problem confronting inves¬
today is whether to acquire

tors

mortgages with

in

on
sound and while

1S

.

ac-

though

even

interest

bonds should

the

on

government.

in

cyclical

terially.

-guar¬

riskless assets for they rest

that

bcde'

.

prices of long-term bonds includ¬

however,

are,

their

business

credit

ing governments

est.

I,: Government-insured and

stimulate

shown

only

the rate of inter¬

as

authorities

Reserve

,,

weaknesses, such as the
ligidity of costs, have developed,
£^£t00' w ill b e overcome
ngh more efficient labor-sav.-i? devices;and management. Once

in/

everything within

upturn

The rate of amortiza¬

under

anteed

the

do

flexible

these

All

in

concerns,

a

+JhfI?^omy of tbe country
,

Reporter

dif-

inefficiently

and

„

to be

Our

cus-

current

The most important fac-

managed business

change in the System's
policy appears
likely to develop.
Temporary
swings in bond prices are, therefore, to be expected. Experience

be

expected.
'

caution

extreme

overcome

the incompetent

issues

vestment in credit bonds.

prolonged

a

such

con-

tor to consider in loan policy is
the borrowing firm's management
since the transition will weed out

importance.

present it would appear

to acquire homes irre¬
spective of price or of quality of
construction is a thing of the oast.
(3) Even real estate is subject
swings -and

in

to

ficulties.

advisable for commercial banks to

and ; the

pressure

'

in

ity

a

to be bold and to assist their

' tomers

suffer considerably, seiectiv-

may

shown

negative •'

a

trary, this is the time for banks

readjustment will be

ticularly of older properties have

adopt

attitude toward loans. On the

weeding out process
during which the poorly-managed
and
poorly - financed
companies

the

total number of family formations.
•

not the time to

companies rather than

by changes in money rates.

21

(2445)

on,

in

also been in on some of the

switching
in

with the 1959/62 maturities being let out
order to

go

into selected

longer-term obliga¬

of the thinness of the market,

tions have been resorted to in certain of

piece-meal opera¬

these operations.

,

_j

22

The Commercial and Financial Chronicle...

(2446)

distribution

£175,000

ate
bank

NEW

OFFICERS, ETC.

of

in form of

The

CAPITALIZATIONS

the

At

of the fective May 20

regular meeting

City Bank of New York, held on

phia, Penn.

June

Douglas Hill was ap¬
pointed an Assistant Vice-Presi¬
dent. He was formerly an Assist¬

his

in

assignment

present

District

Mid-West

continue in

will

and

Bank's

the

of

the

Domestic Division.

*

The

ft

whole

21

head

the

of

Bank's

Foreign Department has been an¬
nounced
by
James
G.
Blaine,
Mr.

President.

ment since

Mr.

with

with

the

Upper

its

of

is

Office

and

of

tne

Com¬

Trust

from

York
I

A.

tt

1936

nounced

elected

was

was

an¬

1

by Henry C.
Brunie, President of the Bank. Mr.
Gambee

will

Bank's formed
He

ment.

By

officer

of the Chase National Bank, New
York.
ft

ft

*

of

Bank

stock

000

effective

from

New

York,

May

28

Trust

Horace

P.

May

the First

C.

common

to

of

creased

from

its

elected

on

Flanigan,

capital stock

$100,000

$200,000

to

effec¬

tive May 18.
Election

Chicago,

of

President
Bank

William

of

Greenfield,

Dallas,

Henry

Vice-

as

National

Republic

of

of

ft

ft

effective

Texas,

announced by Fred
F. Florence, President of Republic.
1,

He

was

Bank

Illinois

Trust

and

111.,

Chicago,

Company,
and

Van

Etten

has

Assistant

in

except for two years

1933,
in the

bank
with

the

corporate

trust

depart¬

ment in its bond division.
it

Effective

ft

division, auditing, special service,
personnel divisions.

collection and

with

$1,250,000

375,000.

to

$1,-

the

ft

*t

close

business

of

May

as

14.

effected

of

"The

Farmers

the

under

title

National

Merchants

Bank

discussion
the

proval

000,

o n

date

of

consolidated

the

"O

u

point

now

where

the

true

producers

con¬

bank

ef-

forts

to

in¬

crease

Treasury

tic

E.

Buchholzer

service

training
■.

tech¬
■

,

from

probability, the air con¬
ditioning industry will surpass the
two billion dollar business volume

At

year.

its

present

rate of annual

increase, the indus¬
top the four billion
dollar record by 1958," the Chrys¬
ler Airtemp President predicted.
should

be guided by past
history in this country,

can

we

realize

to sell

now

that

will have

we

products to meet and
competition.
This means

more

the

of

same

*

The

*

Nassau

Bank

of

stock

*

its

from

sale

$550,000

of

National

Centre,

common

new

to

stock

N.

Y.

effective

*

Rye

*

ff

National

with

common

Rye,

stock

of

$500,000, and the Rye Trust Com¬
Rye,

pany,

stock
of

of

the

under

N.

Y.,

$215,000

close

the

of

title

with

common

consolidated

business
of

May

"The Rye

as

14,

Na¬

tional Bank."
At

the

the

date

into

common

and

366,100

stock

each;

of

consolidated

will have capital stock of

$2.00

J.

elected

$732,200,

shares

of

of

$293,000;

profits of not less

An increase in the
stock

by

ft

common

from
a




McKinnon

cap¬

has

Vice-President

a

The

of

of

a

the

bank,

been
and

Canadian

announced.
as

a

Bank

Can., the
McKinnon

Mr.

General Manager

which he
October, 1952;
following seven years as Assist¬
ant
General
Manager, and ex¬
post to

appointed

was

in

tensive service
the

in

The
Bank

at

its

disposal,"

he

by no means is it a sink
proposition," Buchholzer

swim

or

cautioned.

"The

individual

air

conditioning

manufacturers
are
going to have to invest heavily in
both added facilities and improved
production techniques for the next
two
to three years in
order to
meet
lar

the four to five billion dol¬

"It will be a mighty worthwhile
investment," Buchholzer assured,

"since

both

the

demand

for

and

ability to purchase air condition¬
ing exists already and no doubt
will continue to exist in

London,

Eng.,

on

The

Standard

Limited,

have

to

resolved

shareholders

General

Meeting

to

Equitable

at

be

tion,

2

Securities

Wall

Street,

Corpora¬
New York

July 28 next payment of

City, has announced that E. Gor¬

dividend

don

three

pence

able in British

ject to income

of

one

per

shilling

share

pay¬

Currency and sub¬
tax

of

nine

shil¬

lings in the Pound, making total

in

Phillips has joined

its
Mr.

been

sub-

ore

now

lost

forever

the already ailing zincmining industry fold up com¬
pletely.
That would delight the
boys in the Kremlin. We believe
leaa

it is

high time that certain silver
stop being so greedy and
halt their campaign of misleading
against producers of
highly important metal.

propaganda
this

Respectfully yours,
SPOKANE STOCK EXCHANGE

By BEN HARRISON,
President
BEN

5c

an

ounce

subsidy. If
the

on

pro¬

aid, he said,
basis

as

the

so-called

silver

taxpayers

dime and also

a

the only one yielding a profit.

Treasurer

Spokane, Washington
May 27, 1954.

Am. Stock

Exchange
Honors Old Employees

more

the

same

63

Eighteen centuries of service by
employees of the American

Stock

tonight

charged

that

the

present

Exchange
(May 27)

Mann,
awarded

gold
of

honored

were

when

Exchange

members

John

watches
the

J.

Chairman,
the

to

market's

Em¬

ployees Quarter Century Club at
organization's seventh annual

the

dinner
The

V He

REDFIELD,

,

last

than

more

entitled to

that

at

63

the

Vanderbilt

individual

Hotel.

members

rep¬

resent

30% of the total eligible
"subsidy" is a windfall to
employees of the Exchange. Five:
some
producers.
The facts are
new
members were inducted at
that very few lead, zinc and cop¬
the dinner.
per mines could operate at a prof¬
The organization, organized in
it today without the income they.
1946, is composed of employees'
derive from their byproduct pro-of the American Stock Exchange
duction
of
silver.
The
Idahoand its subsidiary, the American
Washington Emergency Lead-Zinc
Stock Exchange Clearing Corpo¬
committee
pointed
out recently
that virtually all lead-zinc mines, ration, who have been with the
Exchange for 25 or more years.
in the area would be closed now
silver

the

for

silver

which

ores

their profit

of

content

has- provided

margin

in the period

Guests

of

honor

at

cocktails

and

dinner, in addition to Mr.
Mann, included Edward T. Mc-

Cormick, Exchange President;
Charles J. Kershaw, Vice-Chair¬
Ramsey charged that
man; David U. Page, Realty As¬
silver producing interests exploit:
sociates
President;
Bertram
R.
every ■ opportunity
for obtainingLowenfels, Clearing Corporation
a higher price for silver.
And he
President; John S. McDermott,
complained that the "silver block
Members Five & Twenty Club
is prowling around again" with a
President; Peter Barbis, Exchange
bill to increase the price of silver

of low base metal prices.

sales

the firm

department.

Phillips
associated

Loeb, Rhoades &

had
with

Co.

to around $6.50

an

previously
Carl

M.

Actual¬

ounce.

ly, it has been the well-financed

lobbyists

of

who

the

silver

manufac¬

have

every

session

years

seeking

prowled around
of
Congress
for

to

knock

the

out

Silver Purchase law.
blame

these

They used to
for
the
high

laws

price of silverware.
fore

Former

Compton

Phillips With
Equitable Sees. Go.

to

often
mine

reve¬

the

in

source

That

Idaho

I.

was

be¬

Congressman

our econ¬

omy."

E. 6.

Africa

lead

anck watch

ounce

Treasury's

totaled

a

are

turers

potential market.

positions

*

of

South

recommend

final

*

directors
of

Annual
held

other

what the entire indus¬

bank.
*

and

$3,888,750 to $5,stock dividend ef¬

dividend

ft

ff

will continue

a
ft

ft

stock

a

com¬

$100,000

18.

Commerce, Toronto,

bank

bank

of the par value of

surplus

undivided

000,000

.

con¬

than $100,000.

ital

.

Neil

in

effective

solidation

divided

,

of

Bank,

by
V

■

Director

.

Y.,

$300,000

its

from

of

capacity
developed—substantially
has

and

make

of

Admiral

"But
Bank

increased

stock

effective May

capital
$670,000

May 19.
The

to

ft

-t

National

capital

mon

County

Rockville

increased

N.

*

Oakdale, Cal.,

value.

by

::

First

The

par

an

"subsidy" is the only government
monetary
policy which doesn't

$188,000.

now

this

know

try

shares

1953

other commodity. He should

every

said.

401)00

this

about

ducers

undivided profits of not less than

its

would

workings.
Repeal the Silver Purchase law

seemed

$25 each; surplus of $300,000; and

increase

the

years

capital

to

that

cost the

I

all

this

zinc

silver

of

conservation

it

mining

by and
in /abandoned

Testimony at a recent Congres¬
appropriations hearing re¬

it should be

niques.

mark

the

passed

then revaluing it at $1.29 an
ounce to secure silver certificates?

stock from $750,000, consisting of
30,000 shares of $25 par value per
share to $1,000,000, consisting of

York

in

9OV2C

at

that

users

department

producers

price
great

a

in

possible
marginal

and

than

New

un¬

States

a seigniorage profit of near¬
$10,000,000 under the act by
buying silver bullion from domes¬

more

of

United

the

made

called
Carl

surging

far

it

than the world price of silver. He

demand, and invest heavily
in new plants, equipment, better
production techniques and more

a

paper

Is

ly

their

will

printing
it?

ad¬

an

the

be

measure

greatly perturbed
that the Treasury is paying silver

CapaC-

as

we

a

certificates

Or is he

need

we

that

miners

do'

"If

silver

just

as

sound

except

State

of

He

the

cease

try

from

being

are

our

money

greater production

the

unsound

paid a sub¬
sidy at the expense of our mone¬
tary system. Doesn't he believe in

be

of

is

Company, the world's
manufacturing

.Raising
would

unchallenged.

Act

Silver

firm.

cannot

we

monetary point of view and silver

must

Department

that

He asserted that the Silver Pur¬
chase

surpass

ing

picture

let it go

others?

must

'make

v

incidentally, earned
in
1953, compared

share

a

its

approxi¬
ounce
of

with $6.45 a share for Internation¬

c o m-

panies

"In

Sunshine,

largest silverware

$300,000,000. Would Admiral Ram¬
sey rather get this revenue from
higher taxes on silver users and

the

at

was

counsel of the Silver
association. It so distorted

eight

busi¬

r

is

It

legislative

nue

tioning.
ness

Act.

on

purchased.

al

have capital stock of $200,divided into 8,000 shares of
common stock of the par value of

May 20 from the Bank¬

on

Purchase

38c

of
each

the kind of propaganda that could
be expected
to come from the

vealed

condi¬

economic

effective

the

solidation

58c

Silver

silver

reduce

to

charge

sional

outlook
air

for

of

Cruz."

At

*

common

was

The Nassau County Trust Com¬
pany, Mineola, N. Y. received ap¬
,

with

Cal.,

$100,000 consolidated

consolidation

Santa

"

1

of

of

$100,000
Savings Bank,

Peoples

Cruz,

stock

of

stock

common

the

and

from

Merchants

industry
least five

at

recent

a

flexible

ft

and

Farmers

National Bank of Santa Cruz, Cal.,

tal

stock

<i

*

The

The

of

bank, its trust tax

to

record-breaking

n

sales

Santa

ft

May

i

visions

the

conditioning

forward

years," C.
E. Buchholzer, of Airtemp Divi¬
sion of Chrysler Corpora¬
tion,
asserted

ity

of

air

look

sales

included as¬
signment in general operating di¬

Brooklyn in New York,
N. Y. increased its common
capi¬

Bank

the

to

Vice-President.

and

21 by sale of
stock the Lafayette National

new

that bank, having
position of Sec¬

by

advanced

Van

Etten, who joined the
staff in 1937, is associated

"The
can

employed by the Con¬

was

tinental

for the industry with

years

sales reaching $4 billion in 1958.

effective

dividend

His positions have

;<s

Secretary
of Bankers Trust Company, New
York, according to an announce¬
ment by S. Sloan Colt, President.
Mr.

both

20,

to

the

vocate

ing

ond

been

7

mately

backed by silver?

Main office, 55 Broad Street.

E.

July

inclusive.

government

recently published an ar¬
by Rear Admiral Donald J.
Ramsey (Ret.) urging repeal of

You

ticle

having

employed

Lawrence

necessary

the

seigniorage

forecasts five sales record-break¬

ft

common

Chronicle:

capi¬

Mr. Markey is assigned to the
personal trust department at the

.

and

C. E.

May 18.
ft

Editor, Commercial and Financial

31

$300,-

U. S. Navy, has been continuously

tjt

usual

Mar.

Buchholzer, of the Airtemp
Division of Chrysler Corporation,

President.

*

at

Conditioning
Industry to Reach
34 Billion Mark in '58

Manitowoc,

The
Florida
National
Gainesville,
Fla.,
in¬

18

Bank

of

Company,

announced

was

by

books at less
as

Air

increased

$200,000

stock

a

June

Appointment of Charles
Markey as a Trust Officer
Manufacturers

all

from

closed

ft

Wis., increased its

charge of the
Depart¬

former

a

in

value

Users

dividend

stock

a

tal

Insurance

was

and

dates

National

111.,

{t

ft

ft

in

be

but
Bank's

year

capital.

stood

market

last

stock dividend.

a

By

York, it

June

on

last

as

increased

provisions have been made. Reg¬
ister of shareholders will be

capital stock effective

common

by

ft

Sumner Gambee

New

share

per

the

than

May 18, from $600,000 to $800,000

to

Vice-President of Empire Trust

Company,

total

the

;

Ben Harrison, President, and Ben Redfield, Secretary of the
Spokane Stock Exchange, challenge views expressed by
Admiral Ramsey in issue\of the "Chronicle" of May 6, in
which repeal of the Silver Purchase Act was advocated.

now

of divi¬

form

make

payment for the year at the same
rate

,

ft

a

made
$50,000

was

and

Avenue

tt

1939.

in

will

ft

Chicago.,

National

Bank

New

pany,

The
Bank

depart¬

associated

was

London

Chemical

this

1946.

Rasmussen

ft

ft

has

Rasmussen

associated

been

dividend

stock

a

appointment of Harold W.

as

com¬

capital stock effective May
from
$100,000
to
$200,000.

$50,000 of the increase

distribution

of

and

Ramsey

On Silver Purchase Act

,

Ambler, Penn., increased its
mon

Rasmussen, Vice-President of The
York

\

a

bonus to shareholders.

investment

ft

ft

Differ With Admiral

down

by sale of new stock.

Marine Midland Trust Company of
New

Philadel¬

of

Ambler National Bank,

The

by

«

*

Bank

on

1, B.

Cashier

ant

made by The

was

National

First

writing

£338,133.

recommended

dend

Board of Directors of The National

LETTER TO THE EDITOR:

Hitherto
part of final distribution has been

Bankers

and

REVISED

to

premises earring forward

balance

CONSOLIDATIONS
BRANCHES

shillings and

three pence per share for the year
ended Mar. 31, 1954, to appropri¬

News About Banks
NEW

of two

Thursday, June 3, 1954

White

dramatically
showed
in
Congress
that
the
amount
of
silver
going into a
piece of silverware accounted for
only a very small portion of the
cost

of

the

manufactured

them

out

dreamed

this
of

silver,
a

none
ever

way

such

figure.

of

even

The

domestic silver producer,
Mining Company, oper¬
ating in northern Idaho, recently
called attention to rising produc¬
tion costs and the fixed price of
largest

Sunshine

silver and said there is

a

need for

Clerks

Association

Pres¬

ident; and honorary club mem¬
bers, Dr. Louis J. Fox and Henry
H. Badenberger of Francis I. du.
Pont & Co. who helped organize
the association while he

was

witb

the Exchange.

Joseph
the

Assistant

the

of

President of
Century Club and

Mayer,

R.

Quarter

the
three

Treasurer

and

change, all of whom
of

Director

of finance

department

of

Exchange,
stated
that the
vice-presidents of the Ex¬

the

club,

have

a

members
total of 105

are

Charles E. McVice-President and Sec¬
retary of the Exchange will have

years

item.

As for silver producers wanting

$6.50-an-ounce

Floor

of service.

Gowan,
total

of

of service on
the oldest em¬
ployee in length of time with the
Exchange. Of the seven depart^
mental directors of the Exchange,
a

May

years

is

members of the

five

are

and

have

service.

38,

He

28.

a

total of

150

the club
years

of

Volume 179

Number 5330... The Commercial and Financial Chronicle

LETTER TO THE EDITOR:

»

have done

Burgess Statement

of

the

Shall

continued confidence in the dollar

says

requires immediate return to redeemable
Editor, Commercial and Financial
Chronicle:
In

7
the Sub¬

Federal

on

Reserve

Matters of the Banking and Cur¬

Committee of the Senate

rency

Mar.

W.

on

•

founding

of

nation

un¬

in

tgold.
a

G. Shull

Frederick

The gold value
the dollar,

established

under

Washington and Hamilton, was not
•changed, except fractionally, for
140 years.

The confidence in

the value of the dollar which

this

-helped to instill in our people and
the people of other countries was
of the foundations of the

na¬

That

is

statement

made

'the fact that "the dollar
to

value

"'gold
lished

gold,"
of

under

was

and

firmly

that

the

Eccles

by

to

averse

gold

stand¬

Mr.

directly af¬

so

years

ago

to

the

warn

country against irredeemable pa¬
per; ' against the
paper of banks
which do not pay specie for their
own

notes; against that miserable,
and fraudulent pol¬
icy, which attempts to give value

lai,

any

moment

is

paper

in

of

paper,

single

bank, one
than such

any

longer

redeemable

demand

on

gold and silver."

1933,

have been

we

continuously,

the fact that the
Platform

tion

to

dollar

oper¬

with

"irre¬

paper"; we continue to
with it—notwithstanding

operate

1952

Republican

pledges the Administra¬

return
on

our

to "a
fully convertible gold

a

or

currency

Red

We

that

to

Premier,

recognize
economic

more

powerful

force

in

the
of

re¬

as

ly

than

of

sooner

or

is

other
determining
any

history, is the view
We

Eccles.

isolated from

litical

cept

alliances

the

therefore

are

if

World

of

natural

our

do

we

po¬

not

ac¬

that the nations

fact

Free

the

trade

must

of

with

Communist

World,
Mr.
McCarthy
notwithstanding.
Japan, for example, cannot long
survive
such

as

much

with

able,

longer must

this

and

go

we

"miserable, abomin¬

fraudulent"

Mr.

free

a

N/-

money?

tunately

concluded

still

that

it

"Al¬

unfor¬

is

for

necessary

the

defense

a

effort sufficient to deter war,

it is,
important that

however, even more
recognize the wisdom and the

we

value

the

of

promise.

principles

Essentially

has

no

bits

for

with

far

all

of

in

more

than

unites it

of

the

com¬

human

wish to blow itself to

race

has

its

its

diversity

heart

that

divides it."

Chairman,
Gold Standard League.

2009

Chapel

New Haven

Street,

Urges Compromise Policy Toward
Communism

/

:.

Annual Field

Red China

University Presidents

says

Day

Marriner

S.

former

Eccles,

We

therefore

are

Chairman of the Federal Reserve,
^nd
now
Chairman of the First

relentless

•"Security Corp. of Salt Lake City,
Utah, in a talk

Russia

^before the Na¬

logic

the

cept

of

tion

her

with

satellites

the

the
ac¬

that

are

co-

Democratic

3,

stated

in

any

that
realis¬
appraisal

tic

the

•of

we

are

to

ask

**'Are

on

W

from

the logic

he

main¬

of events

solved any of the

never

problems
them.

centuated

but only ac¬
Today we must

recognize that the world generally
is divided into two divergent po¬
litical systems — the Democratic
Communistic.

and

the

that

there

a

tems

light

war

is

of

could

between

totally

Any

emerge

these

a

two

unrealistic in

today's

idea

victor

completely

sys¬

is

cost

in

blood

in

It would

be far less costly
to use our

successful

more

the

and

political conditions

backward

not

countries

of the

tinue

the

lack
of

their

confidence

it

is

discon¬

people,

and

such

support

Chiang

as

Kai-shek, and the French Colonial
Government
much

not

of

Indo-China.

repeat

the

We

costly

and

futile mistakes of Korea by

a mil¬
itary intervention in Indo-China.
Having recognized Russia and all

her

opportunity to enforce the condi¬
tions of peace without risk of war.

that
we

blessing and backing of
the reactionary governments that

Peron and

II, Mr. Eccles holds, lost its

stated

our

the

Democracy, after winning World




Eccles

satellites

as

well

Tito,

as

Franco, it would

seem

that the time has passed when the
Communistic

regime

of

China

should have been recognized by us
as

the

Great

ruling

power

Britain

and

which
most

of

it is.
the

with

other

in judging
interesting and

factors

Also it is

how investors value the effectiveness of invested

see

capital in different companies by determining the extent to which
shares sell above

below book value.

or

Accordingly in the table below, we show the current market,
liquidating value as of Dec. 31, 1953, and the market as a
percentage of liquidating value for 26 of the leading insurance
companies. Where appropriate figures have been adjusted to the
present capitalization of the respective companies.
the

Liquidating:
Indicated

Aetna Fire

63V2

$2.40

Agricultural Insur

Yield

Market
As Percent, of

Value

Dividend

Dec. 81,''53

3.77%

Liquid. Vain©

62.6%

$101.38

311/2

1.60

5.08

American Insurance

291/4

1.20

4.10

38.44

76.1

Boston Insurance

3.84

46.86

77.9

54.54

57.8

36V2

1.40

Continental Insurance

851/4

3.00

3.52

97.25

87.7

Federal Insurance

311/2

.70

2.22

29.47

106.9

86I/4

.3.00

3.48

109.11

79.0

331/8

1.00

3.02

47.C7

69.5

67%

2.00

2.95

83.25

81.4

391/4

1.50

3.82

47.65

82.4

401/4

1.80

4.47

69.30

58.1

3.00

1.79

149.90

112.1

431/2

2.00

4.60

61.47

70.8

92'%

2.50

2.70

78.16

118.7

Fidelity-Phenix
Firemen's

...

(Newark)

_

Glens Falls
Great American

_

Hanover Fire
Hartford

Fire

168

__

Insurance

No. Amer.

Co. of

81

3.00

3.70

137.41

58.9

New Hampshire

44

2.00

4.55

70.56

62.4

North River

33

1.40

4.24

45.29

72.9

87

3.40

3.91

141.21

61.6
69.8

Fire
Ins

Pacific Fire
Phoenix

58.1

2.27 i:

33.72

130.5

Bond

Security Insurance
Springfield F. & M.__

Club

of

Los

Angeles

are

United States Fire

Deeh

Westchester Fire

Peter> of Blyth & Co., Inc.
the

of

Robert

Committee

Crary,

Jr.,

U.S. Fidel. &

J.

&

;

Under the direction of the Com¬

mittee, Bond Club members will
participate in a full day of activi¬
ties at the Wilshire Couniry Club
June 11.

changes:
Transfer of the Exchange mem¬

Bade

Louis

to

proved

William

late
J.

Dupre

was

H.
ap¬

by the Exchange, May 27.

bership of the late Arthur J. Vogel
to Edwin R. Wallace

was

Transfer of the Exchange mem¬

Burns

approved

27,

1954.

late

Robert

to

by

the

Alexander J.

H.

Oliver

Exchange

was

May

subsidiaries

of

sizable
sold

tax

Transfer of the Exchange mem¬

S. Baird will be considered

tax

Transfer of the Exchange mem¬

73.49

94.6

63.71

68.3

27

1.10

4.07

36.74

73.5

stock

be

investments, it
incurred

is obvious that a
the securities be

should

liquidated. Therefore, to the extent that a
incurred the liquidating values are over¬

company

be

bership of the late Miles H. Ver¬
to Earl T. Risser will be con¬

4.

i,

...

,

Obviously the potential tax liability is greater for some com¬
f
panies than for others. Where a company has held a large com¬
mon
stock position for a long period, its profits may be greater
than

where

one

followed.
In

a

.

policy of investing primarily in bonds has been
V:
'
■

above

the

is

interesting to

see

that investors

are

30.5% above the liquidating value of St. Paul Fire
its stock and accept a yield of 2.27%.
In sharp
Hanover Fire and
Providence Washington which

willing to

pay

Marine

for

are

table it

sell at 58.1%

of liquidating value and yield 4.47% and 5.22% re¬
Obviously, investors view the future prospects of the

Ot the

twenty-six companies only four sell at premiums over
liquidating values. Only one other sells above 90%.
The average for the group is around 75%.
year-end

insurance stocks have frequently sold closer to
a reasonably profitable

Historically

liquidating values than at present.. Given
period
expect

and a further modest increase in dividends, we would
investors in time to value insurance shares closer to

liquidatng values. In individual instances, the size of the discount
on
premiums will continue to depend on the investor appraisal
of the efficiency of the capital employed.

EARNINGS COMPARISON

NATIONAL BANK
of INDIA. LIMITED
Bankers

to

the

Government

FIRE &

CASUALTY

in

Uganda

Kenya Colony and
Head

INSURANCE STOCKS

Bishopsgate,
London, E. C. 2

Office:

Branches

Jn

26,

India,

Pakistan,

Protectorate.

Authorised

Paid-up
Reserve

banking

£4,562,500
£2,281,250

Capital
Capital

Fund

and

Circular

Ceylon,

Aden, Kenya, Tanganyika,
Zanzibar, and Somali-

Uganda,

£3,675,000

The Bank conducts every

exchange

Request

Members New York

Stock Exchange

Members American

Stock

120

BROADWAY, NEW

Telephone:
Bell

business*

Trusteeships and Executorships

on

Laird, Bissell & Meeds

description of

also undertaken

3.

2.88
4.14

would

liability might

land

by the

Exchange June 3.

June

2.00
1.80

stated.

Burma,

sidered

691/2

direct

or

liability

the

or

'

bership of Harold S. Baird to Earl

non

68.3
61.2

approved

by the Exchange, May 27.

bership of the

63.65
85.03

companies quite differently.

The New York Stock Exchange

has announced the following firm

the

3.68
3.85

qualification should be mentioned in connection with
the above figures on liquidating values. As a substantial portion
of the value is based upon appreciation in security holdings, either

spectively.

Weekly Firm Changes

of

1.60
2.00

431/2

Guaranty
...

;'

Some

contrast

New York Stock Exchange

bership

52

,

in¬

of

Co.; Thomas Drummond,

Co.

431/2

__

rapidly ahead with the
appointment of a Field Day Com¬
mittee under the Chairmanship of

Transfer of the Exchange mem¬

equally important that

combination

1.00

can¬

exploit.

de¬

structive weapons.

War

Com¬

by
around

efforts

the

and

of

contained

attempting to do
formidable,
endless
and

Mr.

tained,

wars

S. Eccles

e

learned,

world's

be

world which the Communists
Marriner

have

in

treasure

in

should

that

world

economic

the

to peace
the road to

r?"

instructive to

in

particular situation.

a

44

he

now,

knowledge and substance to create

road

a

the

em-

we

dbarked

w

military

and

•ourselves,

•or

isolated

and

by

forces

cannot

futile.

today

the

munism

so

world

fcound

that

know

used

be

potential of

49.47

on

should

added,

May

should

the

&

We

Presi¬

on

it

148.33

MqCready, Jr., of Revel Mil¬
Co.; Donald Summerell, of
Wagenseller & Durst, Inc.; Wm.
Witherspoon, of Witherspoon &

World.

Uni¬

of

dents

Similarly merger has not been a popular prac¬
realizing discounts among insurance com¬
In part this is a reflection of the shortage of insurance
capital and in part the method of doing business.
Thus
in seeking values
among
insurance stock too much?
significance should not be attached to liquidating values. However,

5.22

tional Associa¬

versity

ing equity capital.

3.29

Wm.

to

basis.

1.50

ler

fact

this

on

3.40

tis; Olaf L i g h t h i 11, of Gross,
Rogers, Barbour, Smith & Co.;

by

events

unpalatable

and

powers

forced

investment

28%

Barth &

other

for

IO31/2

.

Iron Curtain countries only serves to
weld Communist world more closely together.
and

field

Insurance...

Members

attitude toward

our

attractive

an

Providence Wash'gton
St. Paul Fire & Marine

clude

Former head of Federal Reserve in talk before the National

selling

The thought behind such efforts
by realizing the discount either
higher appraisal of the shares.

ANGELES, Calif.—Plans
for the Annual Field Day of the

of Paine, Webber, Jackson & Cur¬

Association of

common

securities

panies.

National

Bond Club of L. A.

moving

15, Conn.

offer

to

Home

LOS

Connecticut State

or a

of the most

those

general rule, insurance stocks sell at discounts and would

a

Market

Free World to maintain

-

FREDERICK G. SHULL,

dollar, estab¬
Washington and

As

one

for

without

nation

this time

at

profit

Current

Eccles

of

type

to

through merger, liquidation
seem

Ins.

How

possible

trade.

though

it

liquidating value.

or

is

look

to

tice in recent years of

necessity

ultimately

course

Mr.

it

is

of financial problems but this is not for tne
purpose of withdraw¬

China's

must

later

analysts

among

either

refusal

basis."

on

that

Insurance Stocks

—

search for investment values

below book
is

JOHNSON

look at Mr. Chou En-

ported by United Press.

abominable,

to

practices

E.

However, it should be pointed out that very seldom is an insurance
company liquidated. Occasionally a company is dissolved because

Dulles'

speak to

the

the

Hamilton, was not changed, except
.fractionally, for over 140 years."
Mr. Burgess admits that "sav-

in¬

and

being discussed at the Geneva

those

possible by the "confidence in the
value of the dollar" resulting from

the

Korea

going to find ourselves increasing¬
120

endeavored

ating,

was

of

sorely

of

of

Indo-China, which

ready

deemable

"spectacular success"

which the U. S. achieved

;attached

the

on

than

yet

promptly
gold standard.
In
•other words, it clearly admits that
much of the

so

Congress.

the

the

to

will keep its

All it needs to do is to lend

of

the United States should
return

so

establish "con¬

we

money

back

have

in support of the theory that

rseen

is

money can be
"keep its value"—why is

Since

one

I

arguments

is

solution

problems

This Week
In the

fect Red China and the Free World

Paper Currency," said: "I have al¬

tion's spectacular success."

^strongest

it

(Feb.
22, 1834) Daniel Webster, address¬
ing the Senate on "A Redeemable

se¬

A

volved

by which

More

was

tached to

since

support to legislation now pending

•of

•one

Then,

Administration

ard?

rious war, the

firmly

and that when
broken," the

is

needed.

instead

Conference, will not be hastened

getting

1933, with
Interruptions

dollar

depend
will

weld

now

made to

til

time of

all

ahdlnsurance
Stocks
By H.

close¬

more

together.
Realism
political
expediency

money

to

serves

"economic life is disorganized and

the

the

only

retarded."

method

'//'/

•over

value";

China

ly

value"—and since the gold stand¬
ard is the only
known reliable

Treasury,

"From

in

confidence

important that

Secretary of

our

its

"this

fidence that

said:

that

keep

1954,

dolph Burgess,
Deputy to the
the

investments

Ran¬

29,

Mr.

and

Bank

denial

our

Communist

the Communist world

.

currency.

confidence

on

statement before

a

committee

ings

the

China, Mr. Eccles declared, stat¬
ing that in fact our attitude to¬
ward

G.

that

fact

Government is the government of

For Return to Gold Standard?
Frederick

long ago.

so

Nothing is solved by

Argument

an

23

other countries of the Free World

i

.

(2447)

(L.

A.

Teletype—NY

Gibbs,

Manager

Exchange

YORK 5, N. Y.

BArclay

7-3500

1-1248-49
Trading Dept.*

Specialists in Bank Stocks

t

24

The Commercial and Financial Chronicle

(2448)

Sterling Area

Pressure for Sterling Convertibility

say about
convertibility

on

the

Britain's position

vertibility, Dr. Einzig holds, in some ways,

for

they

by

exposed to shocks, because of the burden of maintaining
convertibility of other European countries, and this burden
Britain cannot bear today.

witnessed

in

agitation

of

favor

early

an

sterling's converti¬
bility. Dr. Erhard,
the

restoration of

G

ep r

bility attempt

n

a

m

Minister

of

criticized

National

is

Economy,

Mr.
1954

frequent

in¬

tervals

he

makes
t

s

t

a

public
ents

e m

foreshadowing
an early deci¬

possibly

sion,-

at the
Dr. Paul

Einzig

Sep¬

tember

ing

meet-

abolish

provision

chance
ago.

to

the

of

bility
valid.

Puerto Rico Lists 33
Tax
sanitary

seven

that

is

it

over

SAN JUAN, Puerto

pro¬

now

debtor

sections

other

over

of

possible as a result
of the mopping up of excess pur¬
chasing power inherited from the

many

economists,

the

under

clearing

ar¬

of

goods

and

the

on

that

the

proceeds

British

would

make

heavy

roads in Britain's dollar

In

some

tion

is

vorable for

distinctly
return

a

bility than it

was

of

At

year

dice

1947.

was

exporters,
sellers'

a

duty.

fa¬

converti¬

the

that

loaded

were

British

in¬

posi¬

less

to

in

Island

fateful

time

in

the

favor

because

market

in

of

there
almost

to

ish Government would have been

is largely attributed
lenient terms
on
which

Germany's
prewar
debts
were
prior to her sudden re¬
covery.
And
this
circumstance
makes British opinion reluctant to
accept friendly advice from Bonn.
funded

any

the

Erhard

Dr.

case

last

is

would

claim that

to

person

advice

disinterested.

He

quite frankly wants Western Ger¬
many to eat her cake and keep it.
He

would

like

her

benefit

to

by

the freedom of trade within West¬

Europe, under which German

ern

exporters have

a

chance to unload

large quantities of their goods in
Britain and the Sterling Area. But
at

the

time

same

he

like to be able to
with

the

aid

also

would

acquire dollars

of

the

sterling
exports,
in
order to accumulate a
gold re¬
serve.
Since it is quite obvious
what he is after, his periodic pro¬
of

proceeds

those

nouncements

British

tend

to

opposition

strengthen

to

converti¬

Mr.

Per

Jacobsson's

much

made

in

line.

which
to

he

grind.
^

have

to

impression, precisely be¬

an

cause

pleading

liable

more

has

He

obvious

no

does

not

to

axe

it

con¬

vertibility for the sake of securing
special

to

try

Britain's

—

advantages
Sweden — at

his

coun¬
ex¬

find

markets

if

it

sible

to

cut

cult,

if

alternative

more

as

he presented the

convertibility from
His

main

thesis

is

a

the

case

for

new

that

angle.

the

con¬

easy

Today,
politically pos¬
domestic

impossible,

markets

con¬

diffi¬
to find

very

In

overseas.

they

is

were in
1947
Britain would

time

that

only country to restore

vertibility.

the

the Scan¬

and

countries

lead,

con¬

Western Germany,

Holland, Belgium,
dinavian

be

not

would

follow

that the burden of
by
dollar-hungry
countries would be less unevenly
the

so

pressure

shared.

Even

it
would be found that, owing to its
in

so,

practice

international bank¬

as an

ing center, London would have
to shoulder the main burden.
When

civilized

most

the

on

share

the

burden.

Before 1914 Britian's international

enough
but

position

to

withstand

between

placed

her

1925

at

a

the

and

strong

shocks,
they

grave

disadvan¬
to be¬

The weakest spot in Mr. Jacobsson's
case
for
convertibility is

been

introduced

in

other spheres of the
economy. In
3947 wartime controls were in
full

force.

have

Now

been

that

most

abolished




he

controls

thinks

if

that

it

is

convertibility

the

near

no

would

reason

be

were

in

accepted assumption that steps which drive interest rates .
quite arbitrarily and by brute force, as it were, are
in order whenever the money managers get the idea that :

down

Soaps
Canned foods and extracts

times this idea

the rank and file that one rather rarely hears it';
questioned any more—nor, for that matter, the companion ■
notion that somehow the trend of business conditions can .

among

be reversed in this manner.

It appears now

and preciotis stone
polishing
Fishing equipment

Diamond

only

remain convertible if British and

again and again in practical experience. ;

financial

of

times

Slaughterhouse products
Leather

to be commonly supposed that notions

down from the ancient authorities and ')

thought of Walter Bagehot, the lead¬

ing authority in Britain on the subject. Bagehot took the
initiative in insisting that good central banking demanded
that funds be made available to worthy borrowers in

tiles

panics

Automotive bodies
Candles

today

Candy

as

confused

Animal feed

or

less

regardless

of

fully valid. This doctrine sometimes seems to be
with the belief that central banks should vir¬

tually force

Perfumes and other cosmetics

money

down the throat of the financial com- ;

munity in order to stimulate business activity.

,

are

Biscuits, crackers and pretzels

obviously wholly different proposals.
Time to

Clothing
The

Gloves

Paper products

time

is

definitely

better than to accept

Rugs

The two J

.y,'

Speak Up
come

for

those who

know;

these strange ideas to speak up.

It

requires courage, of course, and it is for that reason that;
we
have been heartened to find in the current issue of

Shoes

Cigars
Food

more

prevailing circumstances. His ideas on the subject pre¬
vailed and are regarded by close students of the subject

products

"Banking," the journal of the American Bankers Associa¬
tion, a frank statement of some of the facts of this case

pastes

Leather, tanning, finishing
Tin products

by E. Sherman Adams, Deputy Manager of
tion. Says Mr. Adams:

Edible oils and fats

Glassware

Hydroponics

the Associa-;

can be expected from an easy money policy?simply remove impediments to the flow of credit?:
is, in addition, a positive stimulant to the use of

"What
Does it

Form B. F.

Fagenson Co.

F.

Fagenson, member
of the New York Stock Exchange,
Bertram

general

partner

and

Leon

Hess,

limited

partner, will form B. F.
Fagenson & Co. wth offices at
52 Broadway, New York City, ef¬
fective June

15.

Chicago Analysts to Hear
CHICAGO, 111.—On June 10, O.
McComas,
President of

Parker

Co., Ltd., Inc.
will address the luncheon meeting
of

the

Investment

Analysts

Chicago,

to be held

of

12:15 p.m.

can

come

been further from the

Ceramics, sanitary ware and

ciety

sterling

activity otherwise is likely to decline. In recent.
appears to have gained such a foothold

business

nothing could be further from the truth. Ideas such
as these, contrary to what at times appears to be the com¬
mon belief, had no place in the doctrines of the classical.
British theories of central banking. Nothing could have

Bedsprings, mattresses

in the

run

finds

science, but by what process of reasoning can they come •
to such a conclusion? It appears to have become a widely

Yet

Paints

the absence of the realization that

long

one

Or

it

credit?

...

"The chief

So¬

at

an easy money

policy, surely,

adequately available. This

eliminating pressures that might
and might inhibit lending and j
investment policies. It means seeing to it that the banks
are amply supplied with reserves and giving them confi- •
dence that they will have no difficulty in obtaining addi-;
tional reserves if they need them. It is largely a negative

is

a matter of
lenders cautious

largely

make

matter

courage

of avoiding a

restrictive policy which might dis¬

the extension of credit.

It also insures against a

,

shortage of credit.
"An easy money

in the Georgian Room,

Carson Pirie Scott & Co.

objective of

is to make certain that credit is

Philip Morris and

future.

who really believes that lasting good ,
thing? Apparently there are, for >
defenders of the faith vocal enough in all con- '

of this sort of

have been tested

Baseballs

otherwise

restored

come

of this sort

1931

before

lieve

There

was

can

Artificial flowers

international

to

of

countries

gold standard, Lon¬
position ex¬
posed Britain to shocks, in spite
of the fact that in theory all coun¬
tries on the gold standard were

were

free

Straw, reed fibre products

Furniture

the

States

Rico:

Puerto

in

than

tage.

had

any

Following is the list of products
grant firms tax exemption

Hosiery

vertibility attempt of 1947 was
premature, and was foredoomed to
failure, because it aimed at restor¬
ing freedom in foreign exchanges
it

Incentive

the law,

policies seems

soon

and the wave of
to be destined for world wide :

Is there any one

10-

a

which

The only respect in which con¬
ditions are more favorable today
this

the

enter

Cigarettes

examination

all

Industrial
Under

6.

the meantime Germany and Japan
have re-entered the field.

financial

Britain,

been

abroad.

down

not

supposed

in

were

have

sumption, it would be

For this reason his argu¬
ments have been subject to serious

pense.

the Brit¬

consumer

would

even

don's

favor

By tightening the belt

position to secure a very
exportable surplus for

a

large

position

bility.
was

The movement

rate.

observance.

products

the Common¬

States, goods manufactured in the

the

resources.

Britain's

ways

today

of

every

his

new

No.

33

qualified firm locating here and
manufacturing
the
listed items

market,

conversion

of the British

be

under

period

year

of

The fact is that the infla¬ automatically enjoys complete ex¬
all
taxes
for
a
tionary wa^es spiral is still in full emption from
U. S. A. Federal Income
swing in Britain. This means, that decade.
Tax laws do not apply in Puerto
in the absence of controls, West¬
ern
Germany and other dollar- Rico, which has no voting voice
hungry countries would be in a in Congress. Since Puerto Rico is
position to dump large quantities a Commonwealth of the United

rangements of the European Pay¬

In

list

a

war.

ments Union

the

matter of purely

exempted from taxation for

creditor while Britain is

a

discount

their

in

reduction

as a

application seems doubtful enough

or

of controls

financial
editors and
politicians. And re¬
cently the British Broadcasting
Corporation
gave
special
radio
facilities to Mr. Per Jacobsson, of
the International Monetary Fund,
who spoke
in favor of an im¬
mediate return to convertibility.
Dr. Erhard's rather aggressive
pleading tends to weaken rather
than strengthen British opinion in
favor
of
convertibility.
He
is
respected and admired owing to
his success in restoring the eco¬
nomic strength of Western Ger¬
many. But the fact that Germany
a

domestic {
in its own •
right. But, of course, such developments as these are
rarely confined within the borders of one country — not
when they take place in the economic center of the world.
Higher rates have been attracting short-term funds to .
London, and sterling ; has been pushing steadily at the
upper limits set by the British authorities, who/appar¬
ently, have been buying dollars to keep control of their
own currency.
And now more recently the British have T
come—somewhat reluctantly one suspects—to the conclu- ;
sion that they had to follow New York with another ;
this

The wisdom of all

concern

easy money

sponsors of the Island's "Op¬
eration Bootstrap" program, has

announced

wealth's

is

Of Doubtful Wisdom

tion,

Law

by

Rico, U.S.A.

order—if it

1952 and early 1953.

spread from London to the Continent,

and

has been made

shared

not due in

was

(May 28)—The Puerto Rico Eco¬
nomic Development Administra¬

trade

that the removal of those controls

are

canned foods,

central bank policy is in

conditions firmness in

consumption.
Yet on the face of it, it seems
safer to make sterling convertible
if the misuse of its convertibility
can be kept in check with the aid

duction,

at any rate within the next
12
months, before the renewal of the
European Payments Union agree¬
ment expires on June 30,
1955.

views

ware,

cosmetics, clothing and hosiery.

convertibility in

controls

Exempt Products

10-Year term includes cigarettes,

International Monetary Fund, but

British

all

alone

reason

he says, was

bad, and a turn-about in policy was promptly inaugurated.
No one has taken the trouble to explain under just what

no

in favor of converti¬
must de dismissed as in¬

the national economy. He believes

His

are

arguments

in

that

did

it

thinks

restore

absence

this

For

form.

the

at

thinks

than

He

There

States.

on the part of American
opinion to accept payment in that

convertibility would stand a

years

the

of

that

easier

have to be paid for
of increased exports to

faulty

policy during the earlier

The psychological effect, so

months of 1953.

record

on

Jacobsson

better

be paid

would
United

the authorities showed

judgment in its firmer money

indications of any increasing will¬

time.

heading the
campaign. In

paid

Itl§BM

We See

As

ingness

made in 19'47.
as having

was

But he is not

be

1954

first page

didly stated the opinion that

these ex¬
for.
Obvi¬

how

of

unless they could

means

the

exchange restrictions.
He is emphatic in condemning
the provisions of the Anglo-Amer¬
ican Loan Agreement of 1945, un¬
der which the premature converti¬

revival of the

a

Britain should try again to

few

last

Eng.—The

LONDON,
weeks

in which
facilitate

by the American taxpayer in
form of continued dollar aid,

the

standard, London's international position was

the gold

on

were

Continued, from

Thursday, June 3,

great deal

a

exports he is silent on

could

ously,

today is distinctly less favorable for a return to convertibility
than it was in 1947. Contends when most civilized countries

has

the way
would

question

ports

goods are allowed
into
the
Dollar

he

to

American

the widespread offensive, both in Britain and
W the Continent, to force an early restoration of Sterling con¬
Commenting

entry

While

Area.

EINZIG

By PAUL

freer

a

...

a

decline in business

policy cannot be expected to reverse.
activity.

It cannot do much more

Volume 179

-Number 15330

The Commercial xind Financiul Chronicle

(2449)
than

remove

tionary."'
Here is

that

pressures

otherwise

might-/be defla¬

\

■

.

speak for
vital

a

warning, an extremely cautiously worded
warning, but still a warning which the apostles of the new
thought about credit management should take to heart.
The
country, all of us in it, would be the gainer if the
authorities did

Adams would
it

not

time

such

answer

that

some

questions

one

raised

them

with

the

the

research

ing to

laboratories,

pass

for

products.
greater

and

new

portunities

greater

the

We

op¬

of

use

our

visualize

can

of steel

use

bring¬

are

in

construc¬

employees.
natural

leader

peratures

is well

to

steel

tomorrow's

in

greater

air¬

quantities

the

meet

friend

of

of

potentialities

dustry

facing our in¬
realize that, despite

is to

the past progress of which

we

are

justly proud, the steel industry

so

in

these

be

only in its infancy.

As

United

leaders

part in

this

States

to

have

era,

we

a

are

confronted with greater responsi¬
bilities than many of us may have

comprehended.
exempt
duty to

None

from

the

of

us

necessity

is

and

belieifs
is

another

an

incident

of

in

projected,

and

new

frank

added.

were

items

of

electronic

the

only

marine

on

looked.

to

the scope

play

is

no

of the role

we

limit
must

in

gearing the industry to
triumphs through applica¬

new

tion of all

developments that will

contribute

being.

the

to

national

well-

Doubtless, there are many
important phases of our

other

business

which

need

be

to

ex¬

amined critically and programmed
for * inclusion
along with other
t ingredients essential to the mak¬
ing of the next heat of steel.

this

During

bridge
vital

I

mention
the

size

however,

curred

to divert

jective.

tarianism

hope of mak¬
the intervening

have

has

much
from

us

Various

forms

swept

totali¬

great

over

portions of the earth.

oc¬

this ob¬

of

In

our

na¬

tion, for instance, as a result of
long periods of war-time econ¬
omy,

with

tions

and

wounds

ing

its

controls,

restric¬

regimentation,
inflicted

were

left

scars were

deep

and

closely.

this

of

national

and

in¬

upheaval, it has
apparent that busines

be-

ternational
come

not

survive

premise.
with

a

solely

We

are

can¬

its original

on

confronted

greater challenge.

now

It is the

additional task of keeping the op¬

portunity

/To
being

how

know

to

performed,

aware

first

forces

which

of

serv¬

have

this

new

came

into

how
one

the

for

necessary

only to empha¬

that

the

growth
industry parallels this
With the introduction of

the

the addition of staff in

complexities

growing
out
of
the
closer
relationships
between industry and community
life, our communications became
but

We have had the leaders
not been
able to co¬

have

ordinate

all

gredients
able
and

forts
still

with
theories
full

to

keep

en¬

social

that

have

service

a

profit, but

a

to

the

potentialities.

rendered

hope of

in¬

necessary

business

our

our

have

We

the

cope

political

vitiated
the

in
to

us

of

in

ef¬

our

opportunity

open

leave much to be desired.

Putting "Mental-Lurgy" to

Work

Leadership,
a
job that,

is

tails

as

all

of

know,

us

assumed,

once

responsibilities

far

en¬

beyond

the call of routine duty. It is with
24 hours a day, and unless we

us

give it 24-hour attention,

our pro¬

It

will

be

through

the

has

of

ability,
life,

of

way

at less unit cost

our

on

economy

healthy

a

can

ability

Guard

Action

be considered

also

in the next heat

of

steel pertains to industrial leader¬

ship

expressed

as

through

associations.

ness

known

It

is

busi¬
well

a

fact—particularly among
we might add
we are a nation of joiners.

subversive elements

The
'

members

industry

have

national

1,600

associations

purpose

and

than

more

trade

in

range

business

of

from

which
ex¬

change of highly technical infor¬
mation to a
good excuse for a
night out with the boys.
Recently, we had occasion to
review
an
analysis of approxi¬
mately 20 typical business organi¬
zations.

This group alone listed
budgets totaling more than
$15 million—$15 million for only
20 out of 1,600 trade associations.
These organizations provide
in¬
annual

formation and services

on

great

a

variety of subjects and appear to
be doing a good job in this di¬
rection.

But

do

know

you

what

membership in these organi¬
is buying?
Do you know
what the organizations stand for,
what their objectives are, what
they are saying to the public and
whom
they
are
sponsoring
in
their day-to-day efforts?
For example, of the organiza¬
tions covered in this review, only
your

zations

four

listed

the

opposition

group,
was

considered

jective.

And

of

advancement

private enterprise
principal aims.
In

their

among

six

to

of

the

Socialism

secondary

a

almost

ob¬

without

ex¬

ig¬

were

noring the importance of action
and information at the state and
local

levels.

clude

that

One could only con¬
if

the

battle

the

of

century is for the minds of men,
private capitalism, the way mat¬
have

been

going,

is

at

a

disadvantage and at best

it

must

can

be

tremendous

been

at

work

we

the

full

support

and

people.

leadership in the
will meet its most

Federal
to

Gov¬

take

ad¬

vantage of our unbounded faith
that Constitutional freedom would




days

our

employees and

And this is

business

ahead

crucial

test.

As close

as we are

to the human

ardent

in

mean

to

"call

will

saying
the

gamble

and

poker

you

we

hands"

with

our

personal freedoms.

character-building insti¬

of

this

land

and

through

ture

of

individual

freedom

is

and

industrial

being

nation

our

yesterday's

another
in

the

citizens who
a

of

freedom-loving people. Again,
are we
doing, as individuals,

what
to

that

assure

facilities

people

are

:

educational

our

giving

our

young

clear and lasting under¬
standing of the full potential of

central

government
could solve every economic prob¬
lem.
In
turn, the people were
burdened with higher and higher
taxes

and bigger and more
bureaucracies. When

gant
was

freedom?

Participating
major responsi¬

citizenship
bility

is a
business

of

management,

launched

Agriculture, industry and

regulated and ad¬
ministered by the central government. And when this strangulation
was

complete, the Roman Empire

perished.
Yet,
the

we

of

national

our

and

nessmen

efforts

matter
busi¬

as

individual

as

If there is

zens.

the

citi¬

quality which
people of this land require
and admire in their dealings with
one

the

business
is

the

quality

have

this

with

and

done

excellent

within

the

job

in

business

In all of my business ex¬

perience,
tered

other, it
integrity.
We

of

an

respect

world.

each

I

have

never

situation

a

not

the

encoun¬

where

integrity
requisite for

first

A business may produce
or seek to fill a human

service

of

past

economic

through the years,
virtuallly every country in the

in

world,

has

progress

theories
is

have learned little from

archives

failures. Down

community activity.
there

public

turned to the Roman Government

back

then

there

works projects. When there was a
flood or a famine, the provinces

and it extends into every area of
And

arro¬

unemployment, the Roman

Government

a

economic

to believe that

came

powerful,

commerce were

support

for

which

Empire. It perished
through the foolishness of its own

for aid.

all

factors

Roman

moral

financial

news.

warning

brought about the decline of the

shaped in the
minds of our young people. Such
programs merit the wholehearted
and

are

been

for decades while
run

their

held

socialistic

course

of hope

and frustration to fail in the mire

of

excessive

controls,

and

taxes

bureaucracy.
And

' ft

what

of

our

own

nation?

The

experience of the past 20
with the exception of the
last year or so, was one of steady
progress by the economic sooth¬
sayers. We have not as yet thrown
off punitive taxes or vast govern¬
years,

ment

spending or governmentmonopolies and a
national currency. In
particular,
we
still
have
the
graduated income tax system of
Karl
Marx. It is
alarming that
sponsored

cheapened

want, but regardless of its end
product, its procedures must be

these programs are referred to

honorable.

marks

spect
of

we

this

is

through the re¬
gain among the people

land

that

their

secure

in

It

we

in

wholehearted

faith

cannot

flash

push

to

a

the

Twisted

Out

Institute, I
alert, nor can

red

hand

to

midnight, but I

concerned.

Facts

the

of

The

minute

one

am

much
of dis¬

very

problem

sipating

a
people's freedom, or
letting it go by default,
is not a new experience.
In the
long history of mankind, it is
worse,

recorded

known

that

only

,

a

constitutional
as

have

we

the

few

has

world

centuries

government

lived

of

such

flourished

and

under in these United States. The

experiences we have encountered
personally have been experienced
by men who have preceded us
—men with just as much courage
as you can find in the broad ex¬
panse of this land today. The only
is

difference

that

the

free

now

as

in

land¬

Century

progress.

Charge the Next Heat of Steel
Well

a

Straightening

even

Twentieth

best

can

profit-motivated, privately
operated economic system of un¬
limited opportunities for all.

I

quarters

some

com¬

How

long

ignore

these

can

we

continue

lessons

to

of

history?
The
answer,' in part,
lies with
those of our leadership forces in
this
nation, who have not suf¬
ficiently interpreted the results
of these experiments and thereby
failed to alert their fellow citizens.

Gentlemen, as we prepare for
the next heat of steel, let us em¬
brace the number one
attribute
for

success, which is to think
logically and clearly to a conclu¬
sion so that we may charge it
with vision and imagination; in¬
tegrity and a full measure of
employee understanding; a knowl¬
edge of the past and truthful ap¬
praisal of our future objectives;
faith
in
freedom, and trust in

Constitutional

government.

And

above

all, let us keep the oppor¬
tunity open to continue rendering
service

that

to

our

economy

tered by

through profitable private enter¬
prise with the just rewards that
accrue
to good honest American

an

effort.

petitive enterprise system as fos¬
this Republic has created
enlightened leadership in
greater numbers than found in
any
previous era or under any
other governmental system.
Yes,
have

we

more

enlightened

leaders, numerically, but unfor¬
tunately they appear to be more

local job level prob¬
are in those which
impinge on our local government
and national solidarity.
engaged

have

no

bounties

freedom's

end."

!

they

Commerce

the old
dy¬
empires
and
even
governments of more recent times,
had its leaders but it was always
an elite, a select group, definitely
limited

where

land

on

lems than

nasties

And every day, whatever your
activity, keep watch over this vital
task before us and say, with me,
"God
help us to preserve this

under

and

in numbers. In

this

coun¬

La Salle Street Women
Elect New Officers
CHICAGO,
Street

Women

111.—The
held

La

Salle

their Annual

Meeting on May 13, 1954 at the
Chicago Bar Association.
Miss Joan Richardson of Glore,

freedom and

was

prove

obtaining

some

is

of

many

espoused

forceful spokesman for individual

The

that

me,

There

and

they

programs
familiar as

a

read

guard action.

there

try

is

select

no

class

Local,

well,

be

come

planners

the
as

human

has

believe

economic

or
elite
&
Co.
was
re-elected
annoi nt ed Forgan
no
period in President of the organization. The
history has there been the poten¬ following officers will serve in
tial talent available as is present the capacities designated:
in this great land of ours and it
Mrs. Aleta B. Kitchen, Illinois
should be encouraged to combat Agricultural
Association,
Viceany time any forces inimical to
President; Miss Ivy Etter, Voss
the
tenets
laid
down
by
our and Company, Recording Secre¬
founding fathers.
tary; Mrs. Margaret Femyer,
In China around the Fifth Cen¬
Glore, Forgan & Co., Correspond¬
tury B. C. a large bureaucracy ing Secretary; Miss Marv Barba-

pursuing

shall

as

I

Gentlemen

the

to

it

theo¬

outstanding programs
as
Junior Achievement, Boy Scouts
and other
organizations, the fu¬

a

ingredient that should

alien

Like

I

who

the

was

Rear

An

finally that private enter¬
prise can meet the challenges be¬
fore it.
We must give evidence
that we are vitally interested in

lurgists"

In

grow¬

basis.

ters

management

able

more

that

end

world

the

our

The

product

and

in

the

distinct

where

were

the

produce

duction of "off heats" will get out

cooperation of

ernment

is

effort

of hand.

framework

our

taxes.

ception the associations

on the minds of our citizens. The
elements that burrowed into the
of

with

of steelmen to be expert "mental-

business

and
be

a

profit.

a

understand

purpose of

best

to render

open

ice and make

this

point

processes,

economy.

Out

the

,

last¬

the nation's

on

of

technical devices, new and varied

strained.

service in the

years,

tenth

modern

der

In

-

operation of the craft.

and

profit.

one

information

proper

of

able to relay to the

was

only

early years of the Insti¬
tute, the primary responsibility of
its members in preserving private
competitive enterprise was to ren¬
a

func¬

and

In the

a

equipment

not

but

success.

over¬

engineering, research, personnel
methods, improvement areas,

Keeping Opportunity Open

ing

was

tioning simultaneously, the horri¬
fying discovery was made that
the telephone system was inade¬
It

but

fundamentals.

seciirity the

known

—that

test, with all of

a

fabulous

quate.

bought

to

ing

sub¬

a

premacy of our economy and our
freedom and our way of life.

there

machines,

gadgets

were the card games in the crew's
quarters and the daily entries in

steelmen,

be

to

equipment

thd Captain's log.
One important factor

bath

of

guaranteed at the bar¬
table any more than it

be maintained

electronically
con¬
mechanically performed

or

private

this potential lessens

manifested

not

trolled

basic

be

honest

As my friend said,

operations

of

terms

sound

from

Radar and numerous

installed.

were

in

industry.
and

defense

na¬

mem¬

useful

ever

you

complex

our

the

and

washing
of

only real

know,
into the realm of greater impor¬
tance during World War II and
as

and

of

among

more

terms

wherein

area

business

need

can

Navy, was nevertheless a
relatively simplified mechanism.
was

doctrinaire

understanding
economy

gaining

the

the

It

em¬

leadership
is
nec¬
that is in building a

and

cannot

Navy. The
in
its
early
stages,
important component

submarine
while

an

his

They need to know that security

time ago by a

some

of

and

the
value
of
that
money.
.Our
people need a better understand¬
ing of the elusive word "security."

This

marshal his talents, his
ability and his energy in support¬
ing jointly and
individually
through eternal vigilance the su¬

As

j

me

of mine in

many

destined

dynamic

well

may

exemplified by

related to

ever-growing needs
of our rapidly
expanding popula¬
tion. In considering the
long list

collectivists.

may

those

such

tracts

The
steadily increasing com¬
plexities of business and finance,

government
and
community
affairs, presented projects ready-

for

employer

only as it retains its
potential to command goods and
services, and anything which de¬

of

the

The

of

tutions

is

to dispense collectivist phi¬
losophies almost at .will.

tion, for interior and exterior
walls; steel capable of withstand¬
ing speeds, pressures and tem¬
craft;

|

who
were

able

for

we

Our people need to develop a
stronger realization that money

Thus many
reached influential positions

you

academic

in

always prevail.

made

have

us.

players,

ployees and always will be despite

tubs

our

of

were

and

that

to

mean

economic

to

discussion

in

we

all

sel

We

or

to

ideas

of

are

begin

capitalism—not

attitudes

long-rec¬

opportunity

which

liberty and

must

bers

The Next Heat of Steel

ries

what

essary,
better

Continued from page 5

promulgation

know

affirmative

rank

ings and social gatherings be
ready-made p 1 a t f o r m s for the

always
regarded as a responsibility in
giving sound leadership and coun¬

tional

employee

a

when

—

denied

There

and file?

of

of

when

ago

teachings to the contrary.

would, but is

as we

right

exercise what

is the

restraining hand were laid upon
reckless borrowers. Is it
always wise to spur business on
to greater
activity by means as artificial as making it easy
for it to go further into debt? We have
no doubt that Mr.

many years

divested

were

literally

time when all of

perform¬
Many of us re¬

jobs.

so

ognized

Yet in certain
particulars we feel constrained to go
even further than Mr. Adams did.
Is it always wise to

successful

our

not

we

to

a

of

ance

us

the

to

call

so.

encourage borrowing? Is there never
us would be better off if a

have allowed others to
too often in matters

scene, we

*

.•

25

action

State

National

and

matter

of

state

comprises

a

Action

and

local

third

and

equally important function. Think
with

me, if you will, what could
accomplished if every member
of management, from the front¬

be

line foreman to the highest execu¬

tive,

omy.

were

a

ready,

our

alert

traditional

and
econ¬

No longer would civic meet¬

representing
leadership and at

built up that laid the ground¬

work

for

some

of

our

modern

tosta,

Hallgarten

Treasurer.

&

Company,

<

20

(2450)

Continued from

«-

^
Productivity, Competition
And Dollar

presumably $7.4 billion this year)
ts
another unsafe anchor; so are

countries

good crops and last

last summer's

comparatively

Shortage
In

short of capital.

are

¬

,

savings or drive them into biding.
"Physical" controls produce the
same
result.
They, too, foster

flight—perhaps the
most important single factor,-but
one of doubtful duration, too. And
the commercial progress of most
countries is due not so much to
;m
appreciable advance of their

discourage

.etc.,/; which

ditions,

capita) flight out of the respective
countries, or impede the return of
hidden
funds..
Shortage of risk

highly/ subsidized
rather to - the capital

exports,

tiuilar

largely Europe's own
the least because
ruthless cutting of their dollar' undoing, not
imports.
Which means that they governmental ventures and so¬
cannot buy their imports in the cial expenditures absorb too large
cheap markets and have to main¬ a share of capital market funds.
tain
artificially
high
domestic And much of the governmental or
price-cost levels.
At that, sev¬ "directed" investment flows into
eral European
countries. Britain relatively unimportant, if not
unprpductiy^Thannels,
and France in particular,,profit totally
dollar-wise by the mechanism of wasting precious resources, to say
these

as

the

permits

tbe-cuff

within each country,

Austria.

Holland—and

gium,

(In

British and French "draw blood"

also.)

So

far

tions

na¬

is

this

concerned,

a

is

where

man-

per

larger

times

five

than

S.

U.

output

to

two

the

—

in

the

it

is

United

substan¬

shies

from

away

which

tries

constantly

or

coun¬

inter-/

at its
to

their trade balances.

otic

Productivity and Exports

soft
money
countries still unable to
achieve a genuine balance of their
caternational
accounts,
and
to
forego
American
assistance
as
Why

well

against Dollar Area ex¬
A stock answer to this

ports?

tariff.

blaming the

in

consists

question
S.

European

the vicious discriminatory

as

policies

*L

the

are

ities.

production costs, are over-raised
in
France, Britain, Scandinavia,
etc., due to exorbitant excises and
sales
(transaction
or
purchase)

importers of
British goods complain about de¬

with, livery delays.

above

"Last

with the disincentives

all,

neurs

and employees

What

the

on

is

that

But

refuted

is

by the fact that the same accusers
feel compelled to barricade them¬
selves
against
American
industrial products which are evidently
either cheaper or of better qual¬
ify (at the same price) than their
•Wn. For this same reason, U. S.
goods displace British products on
third

within

markets—even

in

responsible in the
the

other.

Britain

Americans

duces

life

of

a

costs

between

But

share

of

the

then

and

S.

U.

in

the

world

ex¬

for

wards

27%, in spite of the fact that Brit¬
rates

are

American.

one-third

"One

of

"appears
efficiency in the

"United

States,", especially so in
weaving sector of the indus¬
try. This is a complex industry,
and

vast

a

and

whims.

conveyor

as

to

processes

could

-

con¬

Standardization

type

production

give America's capital-

opportunity Europe

supremacy an

not

plants
nor

of

be applied to any such ex¬

cannot
tent

number

products, exposed to the

sumer's

less

match.

need

be

The

neither

latter's
smaller

well-equipped than

This is very

True, the average American

significant.

ours.

Amer¬

ican industrial supremacy in pro¬




he

age,

with
t>han

is

far

labor

-

as

much "horse¬

better

aver¬

equipped

saving* instruments

is his Transatlantic counter¬

lagging be¬
hind America in many other ways
which do not depend on additional
capital outlay, or to no major ex¬
But

part.

tent:

in

Europe

is

standardization

and

sim¬

plification of processes, in special¬
ization

and

decentralization

functions, in the reliance
entific

phasis

on

of

sci¬

measurements,
the
em¬
research and innova¬

on

tions, close teamwork between la¬
bor

and

management,

budgetary
controls and standard-costing pro¬
cedures, careful pre-planning of

activities,
speed and

the

fullest

utilization of

possible
men

and

machines.
All

of

which

is

neglected

in

which

and

not present¬

were

factious spirit.

might well be surprised

.

.

individual
by price
and job regiaities, naturally lack
incentives
the driving force of
progress.
; .V 7.'77/ 7
—

at

...

the prospect lor
is replaced

betterment

.

of output; wages enter into
equation, of course.
Which
brings us tc the hard core of the
problem.
More often than net,

labor costs
benefits") per
unit of output are higher in Euro¬
pean manufacturing than on this
(including

AVERAGE

"fringe

A recent report

which

rates

wage

YEARS

Output

per

Hourly

wage

-

1952

AND

the

Class I carriers
hit

rates.....

In

of

at

a

than

in

Britain,

rate

of

113

100

such services under the formula would

times

faster

actual

labor

is

of

In the

nut¬

man-hour, hoth of
the progress
of ours, labor in Britain records
a progress in employees' earnings
output

ahead

of

The

ours.

same

majority of European

a

industries.

we

icit under the ICC formula, and

operating
business

ratio.

show for-a

of labor productivity

behind

lag

pay¬

To

bridge the Gap, either
wage rates must be reduced
(which is out of the question) or
per-man output
enhanced. Com¬

number

of roads

such

as

the passenger and allied services

Passenger & Allied Services
Total Net Railway

1R5S Net Railway

Operating Income Operating Deficit

Atchison,Topeka & Santa Fe
Coast

Atlantic

Baltimore

Line

Ohio..

&

$75,109,000

____

Ohio

&

___

Chic., Milw., St. Paul & Pac.
Chic.

&

Western.

North

Chic., Rock Island & Pac.___
Denver

&

Grande

Rio

West

Erie

Great

Northern

—

$42,074,000
17,045,000

146.5

36,737,000

180.0

59,916,000

15,121,000

179.4

14.664,000

21,904,000

150.3

8,956,000

23,420,000

152.8

28,259,000

14,352,000
4,577,000

131.5
167.4

27,531,000

10,833,000
21,019,000

161.3
175.1

128.5
144.1
154.4
119.2

13,096,000
18,986,000

13,482,000

34,384,000

15.052,000
16,168,000
52,439,000

supporting status.

N. Y.,

Germany's extraordinary prog¬
since the 1948 monetary sta¬

ress

bilization is rooted in the fact that

hourly wage

facturing

rates in

behind

lag

manu¬

labor

pro¬

ductivity increases. The result is
that real wage incomes rise and
create

incentives

more

still

for

higher productivity. For example,
in the 12 months ending Febru¬
1953, German industrial pro¬
ductivity per man rose by 6.1%,

ary,

by

wages

money

wages

4.4%,

and

In Britain,

by 6.1%.

on

real
the

other hand, manufacturing output

operator

per

has

become

almost

stationary since 1951, while aver¬

rates have been boosted
in 1951, 6% in 1952, and

Missouri
New

11%

3%

in

1953.

The discrepancy

be¬

paychecks and labor pro¬
ductivity is equally pronounced

tween

in

France

Small

and

wonder

if

in

Scandinavia.

Germany

man¬

her European
competitors on the world markets;
the physical volume of her ex¬
ports increased by 80% in three
ages

to

displace

Pacific

York

23,414,000

Central_________

Chic. & St. Louis
N. Y, N. H. & Hartford
Pennsylvania
Seaboard Air Line

Southern Pacific

Southern
Union

Railway

—

Pacific

63,180,000

21,772,000
9,928,000
74,796,000
23,829,000
59,320,000
41,986,000
28,880,000

2,993,000
13,363,000
56,650,000
10,322,000
51,128,000
14,717,000
52,218,000

-

157.2
102.6
118.3
134.9
149.3
134.1
166.7

operating ratios for the individual roads *
102.6% for New York, New Haven & Hart¬
ford, for which this end of the business is relatively the most im¬
The passenger service

run

all the way from

portant of the

roads listed, to 180.0% for Baltimore & Ohio and
These ratios do not in themselves
drain on the individual carrier's freight

179.4% for Chesapeake & 0,hio.
tell the full story as to the

profits—it is obvious that a passenger operating ratio of, say, 120%
a road that gets 20% of its gross from this end of the business
will be more of a strain than a considerably higher ratio for a

•

for

road

that

gets

only 5%

of its revenues from the passenger

and

allied services.
The

age wage

by

Ratio

134.6%

10,296,000

32,940,000

is,

it

Opcr.

43,798,000

Louisville & Nashville

/

>

"

Illinois Central

what

Western Europe cannot adjust

;

allied

if
her
costs to the (high cost!) American
level, she will never regain a selfbeing

petition

7

the

services comprise- the "head-end"
mail, express, etc., moving in passenger trains.

These

V-

Chesapeake

V

The Dollar Gap reflects the

checks.

below

per

holds for

.

tabulation

reported 1953 net operating income, the net operating income def¬

which lag far behind

V:.-'

no

even

production volume and at a rate

a

Never¬

large part

a

would be wiped out if the

slower—
a

not be eliminated.

of the expenses charged under the formula
services could be abandonedat'nd there
question/ but that the passenger problem is a serious one,
on an out of pocket cash basis, to many of the railroads.
7

theless,

in the
position.
On

competitive

cost

28

of the deterioration

latter's

the

220

there is the whole story in

shell,

tion of expenses

justifiably so, that even If the passenger and allied services were
abandoned entirely the full maintenance outlays charged against

appreciably

grow

allied services does not represent a full out of;.'
The results are based on the ICC formula for alloca- -ito the two services and not purely cn the basis
of running the passenger Trains.
It is claimed, and

pocket loss.

40%

135

but

*

the

course

the passenger and

130

three

rises

costs

Of

labor productivity

America,

in aggressive programs for eliminating local runs
unprofitable operations.-;
;
figure for the large net operating deficit for

and the most patently

175

production..

price

This* fdss absorbed nearly 39% of ';

$1,812.8

all been engaged

100

Labor earnings

a

million net railway operating/income realized from ; f
freight service. These figures are particularly disappointing when b
it is realized that huge sums have been spent in recent years on ~
modernization of passenger services and that the railroads have 7
the

U. S.

12%

man.......

as

.

high of $704.6 million;

new

a

*'

,C,qmmission'.again highlights

on

of the passenger

account

on

railroad Carnihgs by the recurring ^
abd allied services. Fof the '
whole it is indicated that .this deficit last year"/

imposed

drag

severe

deficits

/

J

-U. K.

from the Bureau of Transport Economics and

Statistics of the Interstate Commerce

OF THE LAST THREE PREWAR

•

;;

her

power" at his elbow. On the

the

with

by all the available evi¬

over-"

unit

the

borne

worker has twice

etary Fund pointed out,
greater

of

is

for

textiles, the April, 1953, "Staff
Paper." of the International Mon¬
be

It

be¬

European and U. S. prod¬
for both cotton and rayon

to

Teams.

reason

(and

ucts,"

out

is

unan¬

differences

price
tween

cost)

That

work.

conclusion

imous

dence.

wage

the

the overwhelming and
A.A.C.P.

the

aver¬

and
capital
invest¬
ment, better arrangement of
work,
better application of
the human being to the work
as
arranged, and better re¬

ports rose from 5 to 15%, while
Britain's
share
fell, from
36 to
ish

because

not

American

saving

in

1951,

work,

higher

of brain, brawn, skill, and
potentiality, but because of
much
bigger
(and
easier)

in 1937.

as

pro¬

of

mented

of

If
restrictions were lifted, they
(the British industrialists)

per-

-climate

the

well

workman

age

Em¬

leader

world

of

—

in his hour, year,

more

or

endeavor,

longer hours

But

American

The

the

of

50%
same

to 12%

10

than the latter.

Take, for example,

was

the

in

work

and

one case or

exports as late

number

ployees

the textile trade.

textile

In

fact, Britain's manufacturing em¬

pire preference
barriers
(Can¬
ada!). Obviously, U. S. .duties are
Jiot

industry."

manufacturing

Zealand

Representatives

ed in any

differentials

matters

tion-saturated

strong

was

New

British

competitive positions

productivity

by

the

shpddy standards of some
imported goods.
The
complaints
were
well
docu¬

of

the

alike.

world markets are not determined

alone.

there

in

employment and. excessive social
security, of all-out pressure group'
subsidizing and import restricting,
the
spirit of
competition
lan¬
guishes. Economic systems, in

House

Wages vs. Productivity
But

Volume

in

overly expensive and
sales organizations; to

to

inefficient

•

year

criticism

by public policies. These
disincentives impede entrepre¬
created

Wholesale

the total
America
has
only
Britain's
population, and has a smaller pro¬
portion of all her people at work

com¬

rigging- practices 'by private ^and
public monopolies.v In the infla¬

out
in his penetrating
("We Too Can Prosper,"
1953):
"Between 1950 and 1951,
the
mere
increase
in American

than

quality, the

•

pointed

more

taxes;

As to product

traditions;

antiquated

of

survival

per

Britain — yet
three times

Everywhere,

"create

study

was

to

The London "Econo¬
mist," in a recent article, pointed
out that British engineering ex¬
ports
are
handicapped
by
the
shortage of proper servicing facil¬

resisUng:; innovations -"which 1 American/ competitloh-is. virtually:
.•
■
- ■
unemployment"; with the / excluded:

cies

Englishman, Graham Hutton,

of

inability

bureaucratic, rpd-tape and .inters

appearance

output

Euro¬

plaints of New Zealand are char¬
numerous afid complicated. -They : acteristic,
coming .from Britain's
most
loyal Dominion from which
have to do with labor union rpoli- ;

such vital resources as are

output

back to the

coming

pean

brings aboht
compete for ex¬

that

The reasons are

Switzerland.

and

disposal. This is what comes
in remarkably low
labor productivity, measured by
American standards. As a patri¬

down
on
the
servicing of debts because of a
"fundamental
disequilibrium" in
clamp

But

nqt the

are

port outlets.

the

.

mittently

("The Econo¬

disparity between labor costs
and labor productivity:
basic as
that disparity is, it is only one
among several factors which im¬
pair the export capacity of West¬
ern Europe.
Prices, and therefore

highly unstable, situation. The es-jeotial problems remain unsolved,_ Europe could net stand the com-;
The
following figures on the
namely, the necessity .to' increase' petition. It actually does stand it comparative trend in manufac¬
their
exports
into
the
Dollar. along specific lines even under; turing in the U. K. and the U. S.
Area; and to attract capital there¬ present circumstances. The diffi¬ speak for themselves:
from. Of course, the second prob¬ culty, lies deeper, first of all in
PERCENTAGE INCREASE BETWEEN THE
lem hinges on the first; foreign
Europe's comparatively inefficient

.capital

Competitiveness

element

sole

man-hour- vary
between little more than
and.
one-fifth
of
the
simply a matter of capital one-half
American
rates.
Yet, in Europe,
availability. Nor are we so much;
ahead in entrepreneurial ability,, total unit costs tend to be higher
"know-hew" and labor skill that than ours.

of

of

Prices "out of line"

not

use

there

move

wards the U. S."

mist," June 13, 1953.)
Lack

The

possible exception of Sweden

the

in: side,;.'despite

leadership,

American

Nay,

O. M. H.—output
is

European

most

as

are

on

cessive industrialization.

Addition to aid from America, the
Jrom their neighbors,

drain

the

Cermany, Switzerland, Bel¬

from

produce everything
and to forget
capital by such ex¬

to

tendency

members:

other

from

ultra-protectionist

nothing of the

Payments Union,
them to buy on-

European

which

is

as

are,

that

was

hour

Kingdom

and domestic controls
brought about a rever

of capital

sal

sus

in

Productiv¬

on

tially ahead, of the Continent,

capitalistici' tax systems, money
manipulations, unruly labor .con¬

in Europe,

Council

Their overwhelming consen¬

ity.

the

while that of the U. K. de¬
slightly.

countries), as

large

provement of the dollar positions,
combined with the relaxation of

exchange

clined

reality,

capital shortage is to a
extent a consequence of
misguided policies, such as anti-

The/im¬

gold.

Russian

winter's

-

American

be to¬

years,

(leaving

by the reports of
management
and

out

labor

would

Europe,

speaking

the
21
"specialist"
teams
studying al¬
most as many American industries
on
behalf of the postwar Angloborne

47

3, 1954

Northern

Southern

the

aside

ductivity terms is often ascribed
to the fact that ample capital re¬
sources are available, while other

($7 billion in 1953,

American Aid

and

Western

first page

The Commercial and Financial Chronicle... Thursday, June

most

important consideration is the extent to which the

service deficit cuts into the freight service profits. Take
comparison of Chicago & North Western with a passenger oper¬

passenger
a

and Nickel Plate with a ratio of 157.2%.
business is relatively much heavier
the latter
handled more efficiently.
Thus, last year the passenger deficit
North Western absorbed 72% of the road's profit on freight

ating ratio
North

of

152.8%

Western's

passenger

than is that of Nickel Plate and the freight business of
is

of

operations compared with only 12% for Nickel Plate. While this
is an extreme example it will be noted from the table that wide
variations

exist

throughout the list.

,

I

Volume 179

Number 5330.

The Commercial and Financial Chronicle

..

(2451)
defeat

Continued, from page 2

corrosion

sistant

and

colors
dull

The

Security I Like

approximately

$63

million

'

,

of

conversion

of

4%

Convertible

which $30 million was raised from

Debentures

the saie of bonds and the balance

interest savings after taxes.

will

be met from

financial

company's

resources and

own

Throughput

short-term

.

.

The total volume of crude trans-

erately.

ported in 1953 wa? 54 million barrels, an increase of 77% over 1951
operations and
29%
above
the
1952

figures.

cline to
000

a

tariffs

slight de-

is

conservative

estimate

earnings is $1.75 a share
utilization of the sys-

full

further growth a
price-earnings
the necessity of
pumping 3 million ratio of 15 times estimated 1955
barrels of crude to fill the
new-earnings is a reasonable evaluaextension to Sarnia and
operation* tion of future prospects.
Diviof additional
pumping facilities, dends now being paid at a rate of
No revenue accrued from
the fill- 30c
line

tariffs

as

d

collectible until oil is delivered to
the consignee.
At the tariff rate
of 64c

to

the

3

million

would have produced

barrels

revenues

additional

smaller

a

some

75%

number

of

earning

ahead

al-

of

of

earnings is

reasonable

a

expectation.

1,439,552

Interprovincial Pipe Line Com-

shares sold during the
year;. Per
share earnings in 1952 were $1.32
on

though

time

some

payment

outstanding at the year-end which
an

of

percentage

for

When the system is
completed operating costs will be relatively
low and a dividend

of

$1,920,000. Earnings for 1953 were
equivalent to 88c a share on shares
included

smaii

nower

increase in the present dividend is possible next
year,

barrel from Edmonton

per

Sarnia

common is traded
(current
price 26) in the Over-the-Counter

pany

shares

Market

outstanding, after adjusting for a
ten for one split,
assuming full

and

Montreal

is

also

and

listed

Toronto

the

on

Stock

Ex-

changes.

mirrors

has

can be easily and
repaired,
This material

jackets,

c

A blue

chip with positive longgrowth possibilities, selling
around $54-$55 a share on the New

proximately 45 million automobiles on the road in the United

term

Exchange,

States

Libbey-

7%

Owens-Ford
Glass

tive

mM
MM

the

attrac¬

more

issues

current

today.

annual

Even

with

only

replacement

of

a

cars

averaging 14

seems

of

one

at

annual

an
'

1

years, it would mean
volume of at least 3

?n

ear7?,,TLv rpnii^ont"

nnn

3T
^ oUnS^t^P^~
to mention
growth of popu-'

™t

lahnn
two-rar
families
otn
Sihpp
lation,
two-car families,
etc.
Since

prices.

General

Motors

does

about

50%

Growth possi¬
bilities seem

of

virtually

un¬

limited

and

Owens will benefit not only from

the

the

try,

loans,

in

the

indus¬

Libbey-

appear

replacement

of glass

use

buildings

pre¬

debt.

would

The

bank

ferred stock

it

sales

rpnnirpmpnts

with

any

annual

renair^and°^fndnwbrerda^pmpnt

company

is not bur¬
dened

and

struction

or

has

dously in

Sole

Stanley

of

Heller

this

in both office

residential

value

par

stock outstand-

common

ing
The

fields of operation

bey-Owens-Ford
and' all

of

share

future

in

divisions

its

of Lib-

widespread

are

divisions

growth.

should

Its main

glass for both

cover

tomotive and construction

addition,:

the

tered the

new

ing

au¬

use.

has

company

In
en¬

field

tion of Excess Profits Taxes alone

could
the

earnings

with 1953.
the

to

close to $1 a share in

mean

1954

both

compared

as

This adds significantly

growth

possibilities

income

net

and

for

dividend

payments.
This

increased

recent

division

supplies

IVIotors

glass

all

of

require—

riouovol

Mnfru-c
nf
General Motors,
of course,

ments.

of

nniirco

is
is

years

tremen¬

and

sales

be

well

should

activ ty

like

residential

new

starts

favorably with

compare

will

previous

peak periods..
The
panes

use

of

with

a

tween)

for

homes

Thermopane
air

dead

picture

has

with

be¬

space

windows

outstanding

Thermopane

(two
in

growth.

metal-to-glass
.

bond still is regarded at the most
effective unit for large areas and
for

non-stardard
the

rropane

lend

may

production
standard

sizes.

itself

methods

sizes

is

It

Glass Seal

new

to

in

be-

Thermass

popular

...111

will

and

probably

glazing of windows will be obsolete.

in

competitive advantage in

and

The

1955.

automobilesr

has

increased

this

trend

glass
years

tremendously
expected to

is

will

of

recent

in

Panoramic

tinue.

shields

use

-

the

more

windows

side

and

1954 cars,

33

.

more

model's
area.

It

22

feet

of

glass

square

feet

The
over

area

than the average
-

is

cars.

for example, have

square

50%

of

inc.c

of

or

1940

glass

estimated

there

are




ap-

when
when

one of constant improvement. Net
income in 1953 amounted to $3.75
a share as compared with $2.88 a
share in 1952. Currently, LOF is
paying
60c
a
share
quarterly
against total dividends of $2.40 a

•

jn 1953-which included a
30c year-end extra. This compared

dividend

be

mav

year

excellent

financial condition. At the end of
last

year,

gated

current

assets

$51,965,358,

liabilities

aggre-

while

onlv

were

current

$22 676 590

or

a
current ratio of 2 3 to one
Cash and government bonds alone
amounted to $17 488 480 Itmieht

be

noted

and

U.

held

that

S

in

$27 415 955

Government

in

cash

securities

"property improvement

a

and

replacement fund" was exeluded from current assets All of
the exnansion of the
company has
been
through earnings and not
through outside
borrowings or

financing.
In

sum, the company's well
trade
position,

trenched

finances

en-

strong
favorable'outlook

and

should allow for further
important

expansion in the years ahead. The
stock,
despite
recent
strength,
with $2.00 paid in each of the two, still seems
attractively priced as
preceding years. In view of the, a quality issue
providing a^ood
volume of business and future yield and evidencing
important
prospects, it is believed that the long-term growth.

Securities Salesman's Corner

ford plant, provides for maximum
needs of the Armed Forces for
precision glass for aircraft glazinS and for flat component parts
of military and naval optical instruments.
Biecause of reduced
military needs twin-ground glass
will also be widely used for mirrors and other applications where
Slass of
quality, parallelism
of surfaces, and freedom from
is

oi

Record Keeping Pays
Back

in

the

roaring twenties I
worked in an office where there
were about 15 men in the sales
organization and, in addition, there
was one lone woman. Women cus,

,

.

tomers' representatives
quite

demanded.

properties

By JOHN BUTTON

are

even

today, but in those days

rare

this gal was very much alone in
man's world. But she had

a

out his card and she discussed his
.

_

>

holdings in
think
tomer

to

better

he

at

the

was

which

time

any

that made him

way

a

that

she

all.

she

had

As

„
acquainted

tomers

only

she

became

i—
her

with

added

cus-

devoted

the

—
cus-

of

names

their

children, their wive's names,
of family interest such
as
a
clientele builder.
owned jointly by
as birthdays, hobbies, etc. to her
was she attractive in the
Owens-Illinois Glass Company,
way that
file of information. People liked
isn't a handicap to any
which
serve
capable her and I honestly believe that if
plants of the two
companies af Charleston, W. Va., woman in the business world, but it hadn t been for the 1929 crash
include 626 wells on 135,261 acres she worked at the job.
she would either have ended up
of land, owned or leased, and 534
She was the most conscientious marrying one of her millionaire
miles of pipelines.
In 1953 the record keeper I've ever known, customers, or walking off with the
Gas

the

Owens,
Department,
LOF and the

ability
Not only

.

department

furnished

7,660,568,-

Rossford, Ohio, one of the most
modern plate glass plants
in the

trate the point.

world, covers 467 acres, employs
over 2,100 people and is the home
of

the

Its

twin-grinding

new

P™ducts

include

units,

plate

and

instruments

aircraft,

for

curved

anyone

used

to

sell

dustrials
later

on

bonds

we

that

rifles,, guns
safety

solid

glass,, glass doors, bent plate glass,

a

had

constantly
the

flood of

a

foreign
along—the rest
It used to ~be quite a
came

trick to trade
above

In those days we

bonds; primarily in6% basis, and then

on

glass is history.

bianks, polished plate glass, precision

-

and although I don't believe that Job of
has to go as far as she
did when it comes to record keeping> possibly this story will illus-

"

bits

A

000 cubic feet of gas for the glass
making operations of the two

plantg5

and

..

,,,

out

to

went

issues

that

premium

a

new

But in order to make every-

ones.

boss, yourself, and

glass. This plant also is the home

y0u

happy,

one

old

offering price for

transparent colored polished plate
glass and heat absorbing plate

which

included

your

customer,

your

at least had to keep

record

a

sales

,

mayor of the town
Her
always around the top

were

of the list and her record keeping
was to a great extent responsible

for this. Now you don't have to
believe this part of the story untoss you feel so disposed, but if
my memory is not becoming feeble
with the years, I was there, and I

and heard it.

saw

restaurant

where

There

was

a

of , the
bond salesmen used to,eat; sort of.
a hangout for the fraternity. Often
many

we would gather together and
lunch with our competitors, or
others we knew in the business,

Because of this it

was very seldom

of the Thermopane Division pro-

margins

single

Ther-

on

considerably higher
ordinary window glass.

Fiber-Glass

automotive

currently

Division

also

possibilities

in

industry.
Fiberis being used to

manufacture the sports model
Chevrolet
this

Corvette.

material

lie

and

use

The

new.

engineering
engineering

fiber-glass auto
commercially feasible,
it

a

new

might
to

of

Should pub-

prove

mean

use

/in automobile body

manufacture is

field

well

tests

site

covers 363 acres and has
2,200
empioyees. This plant produces
safety glass, plate glass blanks
and
polished plate glass, pano-

ramie

windshields, E-Z-Eye safety

plate

glass

shields,
cheats

for

Ohio

and

main

class

wind-

laminated

aircraft

the

safetv

shaded

and

and

plastic

At

Toledo

nlant

nroduces

E-Z-Eve safetv

plate

shaded

windshields,
panoramic windshields
polished plate
gjass, Electrapane
and
aircraft
uj^gg

bullet—resisting

televi-

and
_

sion

glass

periscopes

'

.

and

blocks.

vision

•

The plant at Charleston
turns out

window glass

portant items as the interest rate,
maturity date, or series number.
The

W. Va.

and plate

main

file

in

everyone was gambling away
without much thought of records,
yields, or anything else. There was
capital gains tax either and
'
the income tax was almost neglirviK1«
T4
nru'i
gible. It was a "new era"
and" in
«

_

j.__

T.rnc

fairness

all

found

to

;

i

O

to

those

of

us

who

in it, our customers wanted
make quick turns and easy

were

giass blanks, while Shrevport, La.,
window glass. Parkersburg, West Va. is the center of

to
profits, and there

the

body was buying, selling, and inflating.
,

produces

Fiber-Glass

division

and

products include blanket-type insulation materials, super-fine

flotation

materials

(navy

jackets), clothing inter-liner,

life
con-

you could do to

gut

system

Z

bonded

ruled

for

the

electrical

to

keeping

tinuous drawn fiber-glass twisted
and
plied
yarns,
fiber-glass
strand

the

her

town's
As

arm.

',

back

record

she

had

some

that

cards

,

ln

our

gal"

procured

rec0rd

.

to

little
Every-

very

stop them.

"sellin'

She

six
,

get

was

c

best

duces

and flat fiber.
glass reinforced translucent plastic
sheets

corrugated
for

skylights,

awnings,

customers

datf>

each

tr

every customer's

maturity

che a].0 had

ptc

^te, etc., etc She also had
01 ^

^ls sa^es.

talked

with

a

a

rpr_

a rec
Every time she

client

she

one
on

nearby table she proceeded to

deliver

a

bundle of bonds, coupons
As we sat

there sort of pop-eyed one of the
wiseacres at our table half whisBetter
Pered toward her table, "Re¬
look out! With all these bond sales¬
men

around here aren't you afraid

you'll

lose

Without

a

star

your

customer?"

moment's hesitation the

little gal opened up her handbag
and pulled out the neatest pair of

silk pongee underdrawers you
could wish to
you

can

and said, "When

see

'em

make

this

like

him, with his monogram
then

I'll

start

to

on

worry."

the laughter, generously

for

them,
Amid

shared by

her customer, she handed the un¬
mentionables over to him and he

grinned and took them.
When I goi

back to the office I

.

On

paid,

and

they comfortably sat

told her that she had a sales techjfj

price

were

a

four
were

~

ledger form.

a

us

firms,

Dorothy with

ancl ah> to ncr client.

bope for the best. Business
was easy to come by in those years
before the great big bustup, and

purchases,

mate-

was

other

in walked little
of

from

room

from

and

card she recorded

since

office

the

across

at

strand for plastic reinforcement.
At Houston, Texas, LOF pro-

could

the

and

salesmen

also several weeks behind but we
would consult it when necessary

n.

.

"""'

_

m °ur desk^ Other times we would
not'. °r "e would omit such im-

industry, and roving and chopped

for LOF

been

-

rases

it

supply this
has

j

bodies

General Motors.

Fiber-glass

z.

--

sincflr

are

tremendous

glass

rial

-

on

The

type wind¬

timp
time

Profits

than

has

in

the
the

mopane

and

widespread usage as
evidenced
by preliminary reports of the 1955
line of cars. Adding to this trend
is the greater use of glass in rear
...

hasten
hasten

con¬

continue

improvement and modernization,
/ The trend of earnings has been

For defense work, Twin-Ground
Glass, a fine polished plate glass
which is the product of the new
twin-grinding process at the Ross-

"

tain

its

hi-efficiency beam splitters
and hi-efficiency Dichroic mirrors,
Since 1937, well over $100 million has been expended on plant

The

quarterly

0f your client's holdings. Most that you would take a client there
""""8 Thermopane insulating salesmen in those days were lazy for lunch Even m those days we
glaS?
for
buildin^
construction,,
(they are different now I hear), used to try and cover up the
refrieeraterl
railrnaH "pars'
customers.
portant benefits from repair and 1*1
nmrlnntivf
fprm
hnildirws'
Anyway we didn't keep very
modernization work. Also, buildOne bright day around noonria^
Sal Thprmnnana airpraft good records. Sometimes we would
ing activity has been surprisingly ^nipS anri wtn^iPiS
write
customer's
write our
our
customer's purchases tir
time several of the bond selling
strong this year and it now looks can°Pies and windshields.
and sales on his card that we kent
boys were sitting around the table,
building

new

hv far the leading automobile
by far the leading automobile
producer and is expected to main-

1954

reinforcements.

signalling

uses,

strand

and new Plants with more efficient and more modern machines
are increasing the potential of
this division. Its use as an insulation material has untold pos-

Here too, and perhaps to a greater
extent
LOF
should
derive
extent,
LOF shpuld
derive imim-

lieved

company

General

rate

and

rapidly grow¬
of fiber-glass. Expira¬

chopped

rescue

and rear-view mirrors for

planes, " vacuum applied
coatings for gjjmsights and optical
systems,
electrically
conducting
coating for optical and electronic

fiber-glass division is being expanded to double its original installation which was put into
production in 1952. The demand
for commercial applications has

con¬

capitalization
consists of 5,176,574 shares of $10

and

mirrors,,

fighter

twisted and plied yarns, bonded
strand for the electrical industry,

Libbey-Owens

Libbey-Owens-Ford Glass Company

Stock

o^her use? including,
materials,
navy
life
1 o t h i n g inter-liner,

many

60c

Brackenridge, Pa., plant further liberalized this
autq
mirrors,
transLibbey-Owens is in

parent mirrors/metallic front surface mirrors, Cromir outside rear-

dam-

view

Gas

Senior Partner, Stanley Heller & Co.. New York
City
Members, New York Stock Exchange

York

impact

rapidly

STANLEY HELLER
..

great

automobiles,

The

uses.

produces

or

aged body parts

distortion
V!:

has

partitions, and other construction

Its

annually/ will constitute only sibilities.

not

are

re-

increased along with output desmajor markets might be ac-rtined for military aircraft and
celerated by a cut in Canadian other defense requirements.
Recrude prices..
search is developing newer and
In view of the opportunities for wider applications of fiber-glass- share

an

ing of the

fire

proof.

inclined to fade

In

insulation

1954

is

new

effective

was

in

to

tern's capacity could produce earnings around the $4 level within
five years.
The development of

Oct. 15, 1952.
increase of $1,145,000 in
operating expenses due to

There

A

1955

while

$18,437,000 from $18,902,to a voluntary reduction

due

in

of

The operating rev-

in 1953 showed

of crude

it

of additional facilities but earn- and roving
ings are expected to improve mod- for plastic

Onprations

enues

giving'effect

not
likely to be very much higher
than 1953 pending the completion

borrowing to the extent necessary,

u

and

and

strength

"

and

vermin

not

are

27

pulled

,

hique that I didn t think
of the rest of
"Listen

sonnv

us

any one

could duplicate.

bov"

L.sten, sonny hoy,

she

replied,

she repueu,

I even have his size, to

.

the result of keeping records."

The Commercial and Financial Chronicle... Thursday, June 3,
23

Continued from

The textile revolu¬ the out-turn being limited by the greater significance than domestic
long ago as 1920, possibility of grazing millions of production.

the othe^way.

first> page

begah

tion

as

when I first made my acquaintence
with this industry. But

The Textile Revolution
has

try

inventory dustry. The production of textile
fabrics, an excellent indicator for
the industry as a whole, has been
pretty well liqui¬ maintained at a record level. Total

been

level.

has

in

not

are

some

dustry they are low.
I'd like to summarize briefly the

behind my
prediction, first, in terms of the
industry itself and then in terms
of business in general. I shall then
Co on to develop my reasoning for
lies

that

reasoning

*

you.

was practically
in the peak year of

as

same

quarter of a bil¬
lion
yards
below the wartime
high of 1952. The greatest support
has
been
provided
by
cotton
fabrics, which, in 1953, fell only a
billion yards below the 1942 war¬
time peak. Rayons and woolens
1950 and only a

been produced
at lower levels for the past several
and worsteds have

years.

(1) A primary factor behind the
Viewed
from
the
consumers'
decline in your industry has been
side of the counter, this picture
excess inventory accumulation be¬
is still not as good as it should be.
yond the mill level. Now this un¬
due accumulation has been pretty For despite the record yardages

produced, the public during 195053, spent $1% billion less for ap¬
parel than they should have, based

liquidated. Even at the mill
level,
current
stocks
are
not
burdensome and in some branches

well

they

of the industry

disposable income,
employment,
working, and other signifi¬

women

cant factors.

(3) This coverage will be made
more
readily because prices
are
reasonable, indeed lower in
some cases than officially quoted

his

been

durable

ap-

not sub¬
general belief. I also

scribe to this
do

subscribe

not

other

that

to

popular belief that too great a
portion of the consumers' income
was
going to meet the large in¬
stalment debt assumed at the out¬

Picture

business

general

the

for

automobiles,

goods:

liances, and so on. I do

.sign of a healthy industry.

Now,

because he has
putting them into consumers'

ket in recent years

(4) The great variety of new
fibers,
new
fabrics,
and
new
blends should help sales. Experi¬
mentation and new products are a
stimulus to the market and the

Business

a

that the consumer has

show.

General

popular belief
withdrawn
dollars from the apparel mar¬
is

there

Now

the

indexes

relationships of

historical

the

on

low.

are

coverage for Fall
cannot be deferred much longer.

Normal

(2)

break of the Korean war.

(1) The low in the general busi¬
picture
has
almost
been
reached, and while some indexes

Volume

ness

the bottom for a

will remain

near

while,

upturn

an

expected

is

within the next few months.

in

two

first

the

In

ways.

place, consumer buying will be
stimulated by rising employment
the second

indexes. In

other

and

industrial textiles used

place,

by

does anything about:
the
weather.
Unusually
mild
winters
have
affected
sales of

and nobody

heavyweight garments, especially
women's

check

men's

over¬

average

sales

and

coats

My predictions for the textileindustries are based on

view of the
decline. It is terminating

present

general

the upturn

terminated

time,

on

time

on

it is quite in order, and

I think

particularly before
students

and

audience of

an

for

scholars,

an

If author to refer to his latest book

speech he
of fact, I

any

makes, As a
once received

expectations.

overproduced

We

and oversold for

months. We

some

compensating

are

that

for

now.

But this is not another 1937-33, or

another 1920-21. It is
another

1920-32.

certainly not

The

present

re¬

adjustment
is
to
be compared
accurately with 1948-49 and

more

1951-52.

Well, that is the optimistic side
of my
I

forecast... But
am

recall

that

I

conservative optimist.

a

The upturn

will

within the

come

next few months, and

it will

pro¬

vide opportunities for better busi¬
ness,

but

the

guarantee
„

ducers,

retailers,

upturn

profit

a

will

to

all

not
pro-

distributors,
processors,
etc. There will not be

blanket and

dressier

also af¬

have

garments,

that

think

changes

style

unpredictable and
able

as

are

unmanage¬
weather. But they

the

as

We

aren't.

as

style

foresee

can

changes,

unlimited opportuni¬

replacement of consumers' inven¬
tories of women's coats and men's

new

must
make

tiUe,
Let

industry is entering
nhase,
which operators

understand
the

most

"The
me

of

Textile

give

if

thev

it.

to

are

Hence

my

Revolution "

little picture
of the present situation in the in¬
you a




will

suits

addition

occur.

will

This

current

the

to

be

in

increased

interest in dresses.
If

stand to hear some
figures, I'll give you a little sum¬
mary of where yardages went be¬
you

can

In

1953.

and

1939

tween

this

period the yardage used for coats,
suits and dresses increased only

used for

total

while the

19.8%,

blouses and skirts increased

men's

the

In

ures

used

suits

declined

used

for

creased

the

44%.

trade the fig¬

wear

startling.

more

even

are

Yardage

overcoats

for

and

8.5%

and

yardage

jackets and trousers in¬
I expect that in

174.5%.

period to come, the trend to¬

ward

tially

ties. For this
a

phenomenal success. Now demand
these two fibers has turned

its total remains low.

Shortly

the

before

the

textile

nylon

war,
arena,

sub¬

stituting for silk during the war
in essential industries.
Since the
it

war

Now

and
It lost out in the tire in¬

Cotton has also had its ups
downs.

tremendous
comeback
in apparel textiles,
mainly because of substantially
improved finishing and process¬
ing. The stability in the cotton in¬
dustry can also be attributed to
government participation, such as
loans, acreage control, etc.
Although wool has also received
some
government support, the
and

dustry,

fiber

made

suffered

has

a

losses in

some

the upholstery
dislocations
the

industry, and some
by the introduction of

non-cellulosic

fibers,

Dacron,

Orion, Vicara, Acrilon, etc.
I should also like to summarize

economic

general

some

you

war

there

and

a

markedvtendency to integration, a
tendency that has now passed its
peak.
(2) Large segments of the in¬
dustry migrated from the North
to

the

South, where unionization

lagged.
(3) Synthetic fabric prices have
markedly, despite the

the

American

cashing in at the present time.
the end of the

dressier
reverse

clothes

will

par¬

these ratios.

These various changes occurred

gradually
while
our

I

heads

call

over

some

of

a
us

turned

them

period of years,
—

the

of

part

revolution, and I

not I

say

afford any more to

—

other

the
no

had
way.

textile
one can

turn his head

war,

or¬

my

ganization advised clients who re¬
tained us for special studies that,

of

regardless
in

trend

tile

the

ner

the

or

it

fabrics

he

produces.
the time is

believe that

I

little conse¬
what yarns or
of

him

to

quence

is

com¬

ing, although it is still some time
off before it will be
universal,

new

lems

with
it.

with

any

It

may

seem,

on

a

One

of

the

that

is

the

textile

lessons

important
in

learned

have

we

recent

years

successful

to

answer

operations is knowing the

possibilities of the industry and of
the
I

have

dealt

at

with the industry.

A word

two

or

markets.

about

'V

(

I contend that the

industry has

failure to observe and

How val¬

project market trends.

uable it would have been if fabric

producers

could

projected

have

the increase in demand for blouse
from

million

46

uses,

possible

new

greater

refinements

and

very

yards

in

character

The

trend

the

those

distribution

I

the

are

Distributors

familv

ache not only to cotton processors,
but also to business forecasters.

stable commodity,

the loose ends;
discussion by summarizing
my thinking about the status ancfi
future of the textile apparel in¬
dustry.

"V

point in general
industry has

low

The

(1)

business and in your

im¬

The

reached.

been

almost

will be gradual ancD
lacking in uniformity.
minent upturn

(2) Competition in textiles will
gain among fabrics, among indus¬
tries, and within industries.
(3) Rayons and acetates, though
temporarily in a declining trend,,
should not be written off. This in¬
dustry has the greatest technical
knowledge and research capacity-

*The greatest expansion int.

(4)
in

of

use

reach

will occur
poundage will
heights. Price relation¬
synthetics
Total

blends.
new

before a truesound, sta¬

ly for some time
relationship based

on

Textile-

established.

ble factors is

mills will have to watch and pre¬

do

fluctuations.

these

Textile mills will have to
better job of observing not.
the industry but also the

(5)
a

only

This includes: style fac¬

markets.

tors, the position of consumers and'

prices.

If

in late on theclothes, don't

you came

toward casual

trend

by going so all-out:
style that you forget tc#>

compensate
this

for

ments

The

Dressier

shifts.

its

watch

gar¬

coming back into vogue-

are

is,

novelties

toward

trend

gaining, providing a greater chal¬
lenge to the creator, the stylist,,
the

designer.

gamble

The

novelties

is great: the return

be worth

the gamble.

im

will'

Again I repeat: watch your mar¬
"Turning on the faucet" irv

kets.

producing

yarns

and fabrics, with¬
what the market

out

regard

to

can

absorb

may

in

drown

remember the term-

us

the

twenties-

being

recalled.

from

Era"

it

Well

is

wilF

you

mean

overflow.

the

Many of
"New

now

"New Era.'*'
You may profit from it if your
combine caution and knowledge?
this

Only

with

is

a

new

ingenuity and daring.

recog¬

increase

in

receiving

and

the

Resident

of

such social

have

units

of $3,000

Larzelere, Obendorfer

living

the decrease in the ratio of

income

more

shifting

factors.

engineering and technical
problems, they have introduced
a
spirit of experimentation that
can only help the entire industry
in the long run — although — a
word of warning—some who can¬
not
match the pace
of the in¬
novators may fall by the wayside.
Another great boon provided by
the synthetics is that eventually,
and even now, they help to equal¬
ize production w i t h increasing
demand.
Cotton growing is sub¬
ject to the whims of nature—a
phenomenon that is a big head¬

a

American

suburban

to

American incomes

tion.

Wool is

of

scene carefully can not only
explain but to some extent predict

nized

And, still not meeting their

I'd like to tie up

of my

social

greater variety of fabric produc¬
own

domestic industry.

life, and those who scrutinize the

and

On the contrary,

ing greater national self-depend¬
ence all around. Competition from
imports might gain and become art
irritating thorn during a down¬
ward readjustment, but it will at
no time be a serious threat to the

length

some

the older fibers.

made

large. In
general I should say that I view
the Textile Revolution as indicat¬

dict

markets.

the trend of styles.

have

in difficult periods, even a

ships between synthetic and nat¬
ural fibers will fluctuate marked¬

superficial examination, that syn¬
thetics have simply displaced the
they

f

synthetics producers, etc.

the

revolution, this
factor has brought new prob¬
as

been

the

shifts in 1939 to 254 million yards in 1953!
emphasis, an industry in which How valuable it would have been
ingenuity and an understanding of for the woolen and worsted indus¬
specific and general developments try to know that while the use of
fabrics in men's suits would de¬
are the operator's greatest assets.
yards from
Perhaps the most revolutionary cline eight million
factor in the textile industry, the 1938 to 1953, their use in trousers
more
than
double!
How
factor that has changed the in¬ would
dustry most since I first observed valuable knowledge or at least
it 30 years ago, has been the in¬ some intimation of these trends
troduction of synthetic fibers. This would
(h a v e been, especially to is the factor that has supplied the selling agents and mills with their
necessary increment of fibers for own selling organization!
our
Knowledge or guesses about
growing population and ex¬
panding economic needs; that has such developments don't come
most fostered the development of from thin air. Style shifts are not
fabrics; that has enabled us to blown upon us by crazy winds
provide better and more attrac¬ whose origin and destination are
tive lower-priced garments to the unknown to us. They derive from
But,

have

will classify
themselves as "textile producers,"
rather
than as cotton,
wool or
when most producers

many

public.

own

minimum

has the proper

weaver

machinery,

needs, or at least their
requirements. There
periodic complaints of
competition from imports, which
represent only a small portion of
total domestic consumption. How¬

their

tex¬

it

industry,

eign markets. These were espe¬
cially lucrative after the war, but
this was a temporary phenomenon,
for most nations can normally fill

favorable

the then

branches of

all

would be advis¬
able to prepare for the intensified
competition which was bound to
come.
This meant to try to set
up
machinery that could utilize
all tyes of fibers within certain
major classifications. If the spin¬

fluctuated

yarn

will

public

ity of elasticity in their operations
At

have

processors

been too dependent on for¬

small import total looms

possibility of varied use of
fibers, if processors will recognize
the growing need for all-purpose
machinery. Those mills who, after
the war, recognized the advisabil¬
are

cotton

Our
never

ever,

great

im¬

was

of

regardless

profit most, and the individual
operator will profit most by this

has gained enormous pop¬

ularity.

purely in terms of

needs,

Varied Use of Fibers

down, at least temporarily. Then,

entered

the

as

wind and weather.

for

during the war came the loss of
raw silk; and, since the war, it has
recovered slowly, aided by its in¬
creased use in blends — though

varied

economic

fabrics

again increasing. And along with
this, I expect that the necessary

title, and it lies behind my think¬
ing here this evening. The present
decline is clearly in line with my

be

can

developments,

Lifetime." Its thesis is stated in its

"No

a

act

can

espe¬

item whose volume of production

and will continue to be many new

advantages from it. Secondly, the
trend toward dressier garments is

I

with

met

blends,

in

Style changes, the trend toward
casuals and decline in demand for

published a short book,
Major Depression in Our

tober

rayons

cially

dollar volume.

and we can influence
matter
style changes.
I predict two style changes that
good advice to this effect from my
help
bolster
the
upturn.
very
dear friend, the' late
Dr. will
Irving Fisher of Yale University. Novelties are gaining in contrast
And I hesitate to ignore the ad¬ to staples, and those businessman
vice of an old teacher. Last Oc¬ who can follow this line will have
in

of

their pure state and

in

skirt, any lag in sales of these
heavy items markedly affects total

woman's coat is con¬

a

fected dollar volume. Perhaps you

in 1953.

which

acetates

and

production
small in relation
to the total, but it serves the pur¬

popular belief that stability of
prices would stabilize fabric
prices.
All these changes add up to an
industry in which there have been

for

or

apparel

introduction

Silk

has always been

suffered by

the

Since

siderably higher than for a blouse

demand.

•as

everybody talks about

Twain said

agricultural implements, bagging,
shoes, etc. will be in increased

as

apparel

which Mark

The first is a factor

coats.

my

the

(1) During the
mediately
a f te r

affected the

reduced dollar volume of

automobiles,

industries

such

came

fiber, has
this. First

tile-apparel industry.

reasons

some

sales

affected by this up¬

tries will be
turn

fiber
by
something like

revolution,

outline

which I believe have

textile-apparel indus¬

The

(2)

gone

factors that have affected the tex¬

to

I want

development of the textile

The

wealth countries.

use

Dollar
of Apparel Sales
Reduced

for

Reasons

Textile

the

Revolution

for

picture:

of

sheep, especially in the Common¬

pose of supplementing the other
fibers.
The
synthetics, besides
providing endless possibilities for

war.

Development

1953

in

yardage
the

burdensome
branches of the in¬

stocks

rent
and

been

Even at the tjpill level, cur¬

dated.

the

of

excess

beyond the mill
Now this undue accumula¬

accumulation
tion

end

the greatest

has been seen in recent
and particularly since the

impact
years,

■

1954

(2452)

an

under, and

proportion of

Managers

PHILADELPHIA,
mon

the

Bros. &

New

have

Stock

York

and

Exchange,,

that William G-

announced

Larzelere

Salo¬

Pa.

Hutzler, members of

Herbert

Obendor¬

those

receiving an annual income
of over $3,000. And the distribu¬
tors have been trading up. Yet the
textile

weavers

seem

be

to

pro¬

fer

co-managers

are

recently opened Philadelphia of¬

fice, 123 South Broad Street.

ducing fabrics at lower and lower
prices, though such fabrics hardly
show a profit, and often show a

Elected Director

loss.

PHILADELPHIA,
to be

Some words need

anoarel
which

industry,
I

refer

have

not

a

our

even

in¬

textile

subject

on

touched.

narticularly to the

world

wool

output

W-

Keen

Butcher,

Stock

Exchange firm of Butcher

& Sherrerd,

elected

to

a

partner

in

the

Philadelphia, has beera

the

board

of

directors

cotton

fabric division, though I am aware
that

Pa. —W.

sooken

before I close in regard to the

ternational relations of

of the firm's

is

of

of

Botany

Mills, Inc. of Passaic,

New Jersey.

Volume 179

Number 5330

The Commercial and Financial Chronicle

...

Continued jrom page 5

(2453)

The Middle Atlantic States' toll held. almost steady at

;

demand for washers, freezers an&
some
television sets,
while a*r

81

weeks noted in May at

against 82 a week ago, but six other regions reported declines,
including the Pacific States where casualties dropped to 39 from
60, the East North Central States, down to 26 from 40, and the
South Atlantic off to 14 from 24.
Only two areas had higher
mortality during the week, the Mountain and West South Central
States; in the latter region, the toll climbed to 19 from 6. Casual¬

be

ties

as

Chrysler Corp. and the Independents will
June, with next week marking three-day
operations at many plants.
continued

during

"Ward's"

1953

in five of

level

Exceptions to this rise from last

that

said

the

exceeded

average daily Ford car output was in¬
responding to the challenge issued by Chevro¬
let's second-quarter production boost effected in mid-April.
How¬

West North

the

conditioners and

nine

Central, South Atlantic and East South Central States.

creased 8% in May,

out-produced

Chevrolet

ever,

'

Ford

the

in

month,

131,500

Wholesale Food Price Index Attains New All-Time Peak

to
of

Scheduled at 70.9% of Capacity This Week

June will be

working.

May had the best daily rate of steel ingot production

since February, it notes.

figures are in, it will be found that ingot
production that month averaged approximately 70.5% of capacity.
The February average was 74.3%; the March average, 69%; and
the April average, 68.2%.
As May neared an end, steel ingot production continued in¬
creasing slightly and nudged "Steel's" production rate up to 70.5%
•of capacity in the week ended May 30.
That was a rise of half
.a
point over the preceding week, which had been the highest
since the close of February.
June could well be

a pretty good month, since summer vaca¬
tions and hot weather don't start slowing things down that early,
"Steel" declares.
Good weather promotes the use of steel among

such

heavyweight customers

of

steelworkers'

strike

Threat

the construction industry.

as

could

inspire

a

buying

de¬

and

spree

•diameter.

such

Contracts

may impart some strength to
The hot carbon bar market has been slug¬

the steel bar market.

gish for

increase

an

over

American

The

to have leveled off, with some indications

coming weeks, it further states.
Iron

Steel

and

Institute

that

announced

the

•operating rate of steel companies having 96.1% of the steelmaking
capacity for the entire industry will be at an average of 70.9% of
capacity

for

the

beginning

week

May

31,

1954,

equivalent

to

foods

based

now

For

duction

annual capacity of 124,330,410 tons as of Jan. 1, 1954.

on

like week

the

month

a

1,654,000 tons.

A

year

placed at 2,246,000 tons

the rate

ago

69.4% and

was

pro¬

Wholesale

or

The

lower

trend

the

Slightly Forward the Past Week

distributed bty the electric light
industry for the week ended Saturday, May 29, 1954,

and

power

was

estimated at 8,433,000,000 kwh., according to the Edison Elec¬
The

;•

^

current

figure represents an increase of 60,000,000 kwh.
above the preceding week, and an increase of 477,000,000 kwh., or
€.0% over the comparable 1953 week and 1,622,000,000 kwh. over
the like week in

Car

1952.

r v"

275.94

II.4%

below

79,738

cars or

week

a

corresponding date

681,967

cars,

a

decrease of 87,651

Grain markets

within

narrow

a

in¬

The daily wholesale commodity price

earlier,

and

the

on

l

mixed last week with

were

277.35

with

compared

ago.

prices fluctuating

Strength in wheat reflected light country

range.

offerings and reports of large additional storage

space

which will

be available before the harvest.

or

the

corresponding 1953 week, and a decrease of
10.5% below the corresponding
yveek in 1952.

U. S. Auto Output Declined 4.6% BeloW Preceding Week

of the Western Great Plains

to

of

new

wheat

crop

mated

119,585

cars,

vious week.

The past week's production total of cars and trucks

amounted to

141,830 units, declining 4.6% below last week's nine-

month high of
•

Last

148,645 established the week before.

week, the agency reported there

were

•

sufficient

Daily
week

for

the

increased

futures

totaled

demand.

in

Trading

grain

soybean

and

moderately.

purchases

average

; in
this country, as against 22,171 (revised) in the previous week
■] and 12,519 in the like 1953 week.
'
"Ward's" estimated Canadian plants turned out 6,514 cars and
1,252 trucks last .week, against 7,859 cars and 1,489 trucks in the
•

I preceding week and 8,735

cars

and 3,148 trucks in the comparable

'

1953

week..

'

•

54,100,000

on

Business Failures Drop in Latest Week
and

industrial

failures

declined

to

in

the

j week ended May 27 from 248 in the preceding week, Dun & Bradj street, Inc., reports.
Despite this decrease, casualties were notI ably higher than a year ago when 168 occurred or in 1952 when
;

;

was 136.
However, mortality Remained a third below
the pre-war level of 303 in the comparable week of 1939.
Failures with liabilities of $5,000 or more fell to 168 from 211

at

the

week,

but continued above the

138 of this

size

a

year

ago.

A

slight increase took place among small casualteis with liabilities
under $5,000.
Large liabilities in excess of $103,000 were incurred

by 20 of the
week

concerns

failing during the week,

All

as

against

15

a

!

ago.

industry

and

trade

had

lower

during
the week, with the sharpest declines in retailing, down to 103
from 126, and in manufacturing, down to 41 frorh 53.
More busi¬
nesses

failed

service.

than

last

Construction

year

groups

in

all

accounted

the 1953 level.




mortality

lines except wholesaling and
the most notable rise from

for

,

,

level

of

For the

ended May 22,

|

decrease

of

5%

1954,
reported.

wa$

period *Jan. 1 to May 22,
1954, department store sales regis¬

tered

decrease of 3%

a

corresponding
Retail
York

year

volume

last

in

week

New

advanced

20% above the like week
which

ago,

days

below the

period of 1953.

trade

City

about

had

only

a

four

result of Memorial Day.,

as a

contrasted

with

five

days

thiu

weekend

to

Federal

Re¬

offerings

and

Cocoa

ended

3%

continuing rains in Brazil which
The domestic
tone

although

raw

the

sugar

recent

are

affecting the

market displayed

build-up

further gains in the

in

near

of

while

corp.

somewhat better
raw stocks pre¬

a

refiners'

slightly downward.
selling induced by

*Jan. 1 to May 22, 1954, a decline
of 1% was registered from that
of the 1953

period.

•-comparison
Jan.

week

4-9

week

5-10

a

tight supply

developing

support was attracted at times by reports of unfavor¬

in parts of the belt, the need for considerable re¬
planting and the better outlook lor exports in the new season.
Reported sales in the ten spot markets last week rose to 104,100
bales, from 92,400 a week earlier and 58,600 in the same week a
year ago. Domestic mill consumption during the four-week April
period, according to the Bureau of the Census, was 660,000 bales,
equal to a daily average rate of 33,600 bales. This compares with
33,800 in March, and 36,900 in April last year.
'

The volume of retail sales in the

.

loan

a

the

year-ago

period ended

level.

on

Wednesday

Prolonged cool

weather in

Suburban

stores

reported

slightly

better business,

however,

than did large city department stores.

stitutional
sale

Regional estimates varied

ago.

levels

Southwest

was

of

by the following percentages:
and

Pacific

Coast —1

to

from

the

Northwest

comparable
+1

to

—3;

—5; South —2 to —6;

Apparel sales in men's and children's lines

were

below those

of the

preceding week and markedly below seasonal expectations.
largest decline was in men's suits; slacks and furnishings

were

somewhat

women's clothes
there

more

showed

sizable

popular.
The volume of purchases of
no
change from the previous week and

sales

of

blouses
and lingerie.
The buying of luggage rose slightly with the ap¬
proach of the vacation season; plastic and natural leather pieces
were gaining in
popularity.
were

beachwear, separates, cotton

Housewives spent about
week and

ticularly

a

had

been

group

of in¬

investors

covering the
of promissory

$7,500,000

&

Co., Inc., New York. A sinking
$575,000 per annum is to

May 1, 1957.

on

The proceeds of the loan will ber

used

principally to finance" an
increasing volume of sties result¬
ing from the company's entry in<
September, 1953 into the air con¬
ditioning field and the potential
increase
when

in

mass

volume

anticipated
of .coIo/

production

television sets

commences.

;

Light Metals Refining
Common Stock Offered
Gordon

&

Co.,

Inc.,

of:

York

City, are offering 1»shares of common stock

250,000

(par $1) of Light Metals Refining

Corp. at $4 per share "as a spec¬
ulation."
The net proceeds are to

follows:

Fcr

be used

of ad¬
royalties; construction and
equipment of control and main
plants, and for working capital

as

payment

more

high

as

much for food

than in the similar 1953 week.

for

fresh

vegetables,

canned

as

in the preceding

Demand

meats,

was

par¬

frozen

fish

consumer

durables noted

I

Light

was

a

'

continued drop in the

Metals

Refining

Corp.

incorporated in Delaware qn

Oct.

8, 1953 for the purpose of
developing under license the new¬
ly patented Sheer-Ko^man high
intensity arc process for. refining
beryllium ore and the ores of
other light metals.
It is expected
that the company's plant will be?
located in the New York area. Its

office

is

located

at

20

Exchange-

Place, New York, N. Y.

With J. G. Kinnard Co.
(Special to The Financial Chronicle)

MINNEAPOLIS, Minn.—Paul R.
O'Malley has joined John G. Kin¬
nard

sticks and orange concentrate.
Retailers and

reserves.

esti¬

New
England —4 to —8; East —5 to —9 and Midwest —6 to —10.

The

Jan.

fund of

and

in the week

by Dun & Bradstreet, Inc., to be 3. to 7% below the level

year

1953

Ilia

the

vance

weather.

a

with

with

agreement
into with

Philip

many parts of the country restricted consumer buying; extended
shopping hours, easy credit terms, bargain pricing and aggressive
promotions generally did not counteract the influence of the

of

begins
and

notes maturing May 1, 1969. This
loan was arranged by F. Eberstadt

New

/

dipped slightly below that of the previous week and

below

1954

1953.

Benjamin Abrams, President of
Radio
&
Phonograph
Corp., on June 1 announced that

Affected by Unseasonal

Weather in Latest Week

of last week

period
in

in

Emerson Loan Placed

the steady

1953 government loan which has

able weather

Trade Volume Adversely

in

weeki*

May 22, 1954, a decrease of
reported.
For the period

commence

largely reflected

week

four

was

entered

future.

prices declined in moderate trading.
In the Chicago 1
market, hog values moved lower in the face of the
heaviest market receipts in five months. Cattle prices generally
were slightly lower under fairly heavy receipts.
Cotton was irregular the past week with the trend of prices
"The easiness

the

Emerson

livestock

volume of withdrawals from the

the similar

for

108,792 bags, against 114,-

Coffee extended its gains the past week despite a mild reac¬
at the close.
The market derived support from reports of

tion

>

irregular but the under¬

was

the world supply position continued
became scarcer.
Warehouse stocks of

week previous, and 153,772 bags a year ago.

a

•

preceding week, May 15*
drop of 6% was reported

1953,

continued to decline and totaled

cocoa

the

In

against 49,500,000 the previous

activity in soft wheat flours
confined mostly to trade in

department

in New York City for
weekly period ended May 22,
1954, registered a decline of 5%
from the like period of last year.

that

was

the
index

store sales

a

was some

coverage

early replacements.

tighten

371

but

to

Board's

the

remained very firm as

the toll

last

weeks

from

bushels,

nearby requirements. There

mated

206

the

under

preceding week. In the previ¬

the Chicago Board of Trade last

The total dollar volurtfe of retail trade

Commercial

a

ous week,
May 15, 1954, a decrease
of 8% was reported from that of

1954,

week, and 36,700,000 a year ago.
Bookings of hard wheat bakery flours last week continued
slow with
buyers limiting their purchases to immediate and

continued

22,245 trucks made

4%

According

was

strong due principally to light producer marketings Which were

not

Reports,'^]assembled

Automotive

on

taken from

22, 1954

decreased

serve

latest/week, ended May 28,
an esti¬
compared with 126,474 prevised) in the pre¬

"Ward's

sales

as

the Federal Reserve Board's index
the week ended May

improved small grain prospects.

reported underwa^ in
central west Texas and was expected to
move
into southern
Oklahoma within the next week. Cash corn markets were steady

(Harvesting

The automotive industry for the

to

store

rains in the middle and southern portions

.

according

wgs.

year.

Moderate to heavy

Some

cars

Department

country-wide basis

a

general commodity price level was mildly

year

a

and

For the

dex, compiled by Dun & Bradstreet, Inc., fell to 274.95 on May 25,
from

level

last

the similar week in 1953.

prior to the new crop movement.

Loadings of revenue freight for the week ended May 22, 1954,
increased 4,386 cars or 0.6% above the preceding week, according
to the Association of American Railroads.
totaled

pound

per

Generally Lower Trend

the

virtually eliminated the possibility of

Loadings Lifted Lightly Above Week Ago

Loadings

the price

total of

sum

and its chief function is to show the

Lard

The amount of electric energy

tric Institute.

in

past week.

cludes any

Electric Output Edges

the

use

Commodity Price Index Registers

A

the actual weekly production

ago

99.6%. The operating rate is not
comparable because capacity was lower than capacity in 1954. The
percentage figures for last year are based on annual capacity of
117,547,470 tons as of Jan. 1, 1953.
I
was

in general

below

four

tone

week ago.
The industry's ingot production rate for the weeks in 1954 is
a

new

general trend of food prices at the wholesale level.

need of

(actual)

previous peak
all-time high of

ago, or a rise of 15.3%.
The index represents

I,690,000 tons of ingots and steel for castings, as against 1,698,000

71.2%

the

the

tons

and

a

week's

year's volume.
The greatest declines were in the

for

time. Now, however, the decline in defense require¬

some

ments for bars appears

of

this

as

well

May 26. This represents a gain of 0.9% over last week's
$7.39, and compares with $6.47 on the corresponding date a year

mands

growing out of the increasingly taut international situation
•could begin appearing, it points out.
Some new defense business is already coming out, it states.
The Midvale Co., Philadelphia, received a $3,321,000 Army con¬
tract for mass production of high-explosive shells for atomic can¬
non.
These shells will reuire forgings in excess of 11 inches in

above

rose

activity in the week
moderately from the

previous

textile markets.

on

of 31

When all of the May

price index

$7.42 touched on March 30 to reach

$7.46

little busier steel month than May, if current

a

sentiment continues, says "Steel," the weekly magazine of metal-

a

wholesale food

street

Steel Output

Wholesale

decreased

Up sharply for the second successive week, the Dun & Brad-

126,000.

,

electric fans*

' gained in popularity. Sales of au¬
tomobiles were spotty, with the
greatest interest in used models.

major regions.
occurred in the East and

year

29

&

Company,

Seventh Street.

133

South

>

30

(2454)

The Commercial and Financial Chronicle...

Square D Co.; Allis Chalmers Manufactur¬
dowment
Co.;
Arvin
Industries, Inc.; Bell &

policy

ing

Gossett

Gary

Mutual Funds

Co.;

Co.;

&

and

By ROBERT R. RICH

Shares, Inc.,

Dividend

mutual fund

a

man¬

aged by Calvin Bullock, at April

ance

30, 1954, at the end of the fiscal

and

$136,541,621,
$113,651,038, a

com¬

earlier. A number of records

were

half-year,

were

with

pared

year

those

increasing

reasonable assur¬
of well maintained earnings

dividends in the period

lying
immediately ahead and favorable
growth shares over the long

and number of

shareholders, now
more than
68,000.
The net asset value per share
$2.04, compared with $1.86

was

on

April 30, 1953.
The report refers to the sharp
rise in common stock prices in the
face

further

of

the business situation

conspicuous
six

feature
The

months.

this rise

as

the

belief

past
sees

of grow¬

part

of

investors arising
that the business

its end.

irymths," Hugh

Bullock, president, stated "should
be critical in the sense that they
should
provide
indications
whether the recent improvement
in

H i)

business

marks

or

i

merely seasonable
major turn.

a

"Under

.

is

these

Shareholders
of

reinvested

ily with the

program

speculative

more

of reducing

and

cyclical

A MUTUAL INVESTMENT FUND

Proceeds

in

were

price
depressed
dynamic basic

metals
machinery, and
growth industries at attractive

in

steel,

as

price levels.

recorded

ended

with

its

in

fiscal

April 30, last,

quarter

compared

as

gain of 9.21% by the Dow-

a

Jones

Fund

11.5% increase in net

an

value

asset

Electronics

-

Industrial

Averages in the

period.

The

report

showed

the

Fund

closed the quarterly period with a
net asset value of $8.02 per share

compared

as

with

$7.19

share

a

three_months previously, and with
$6.93 a share six months earlier.

$7,146,259 increase in
assets during the quarter boosted
the total on April 30th to an alltime high of $38,656,140 as com¬

NATIONAL

SECURITIES

pared with $31,509,881 at the start

SERIES

of

the

quarter and with $27,835,-

082 at the

beginning of the Fund's

fiscal year on Nov.

WRITE FOR

New

FREE INFORMATION

ing

RESEARCH

CORPORATION

Co.;

Mallory
Co.;

quarter

of

included

Union

Carbide

the

common

Carbon

&

Co.;

Insurance Plans

120 Broadway, New York 5, New York

The trend within the
tual

iz

fund

Inc.;

&

Glenn

Co.;

Railway

T;

P.

L.: Martin

Tecnnicolor,

Inc.;

of

graph

"A";

United

America;
and

described

lationship"
cleonics.

Tung-Sol
Corp.; Vitro

Zenith

Union

Radio

Tele¬

Corp.

"the extremely close re¬
electronics and
nu¬
Tripp pointed out that after
development in the nuclear

as

and

have

tronic

business

been

devices

comp.eted, the
is

"Because,"

essential

of

elec¬

actual

pro¬

use

to

he

continued,

"of

this

re¬

production

contracts

in

the

lield

of

are

frequently awarded to
already
in
electronics.
portfolio,
therefore,"
Mr.

went

"embraces

on,

several

passed

additions

the

such

STORY

chose

atomic

during

complement

A

of

different

Tripp

energy

and

quarter

just

holdings."

two

roads

|

to

build

a

Fundamental Investors, Inc., a
million mutual fund, com¬

$190

the

pares

results

of

two

15

year

"lay-away" plans.
Called "George and
John," this
latest edition of the
Long organ¬
ization's

humanized

nancial

study of fi¬
shows that in

planning

each of-the past 15
years the com¬
bination of term insurance

vantages

plus
distinct ad¬
the plan using only

plan

over

had

.

insurance.

set

aside

total

a

of

solely to

pay

period each

year

$1,200

a

year,

or

$18,000. When used
premiums on an en-

a

| ment income, payable June
J

!

L.

combined

a

Tuesday

by A. J.

1,

announced

was

Wilkins, Vice-

mu¬

had

"shelved

term

insurance

tional

Growth

worked
the

for

in

term

Mr.

would

have

In¬

firm's

a

of

one

insurance
bank

and

It

promotion

have

discovered

talks,
and

service

inherent

too

a

dif¬

capi¬

the

Fund

will

become

investment

end

who would

in

the

Broad
Broad
sales

new

million

for

the

utilize such

May

upturn

April
the

was

in

same

Sales

Investing

shares

mark

month.

in

intends
vest

tor,

Goelet,

agement;
the

Fred

open-end company.

is

the

with

ance

1

scaled down

For
a

Fund

Stevens

for

of

from

Inc.,
30,

will

be

to

in

policy

a

of

concentrate

the

its
of

be expected

may

development of Ca¬

in

the

United

Shoe

four

ended
of

months

April
4,700

addition

the

Machinery.

Additions

to

previous

holdings

Natural Gas,

land Electric Illuminating,
wealth

Edison,

of New York,
El

Paso

15,000

5,200

Reduction,

in

5,(j00 Pacific Gas &
Seaboard
Air
Line,
and
Gas,

Oil of California.
^
holdings include 5,000 Air

3,200

Allis-Chalmers,

Aluminum Company,

5,000

Celanese,

5,300 Virginia

oid,

18,100

9,000 Armstrong Cbrk,
Marshall Field, and

14,000

Electric.

Eliminations

dated Mining
York

Edison

Consolidated

1,500

Standard

Reductions

included

10,000 C.eve-

14,800 Common¬

1,800 Consumers Power, 8,700

Natural

Electric,

and

corporation,

the

include

of

United

resources.

Canadian

investment

as

Fund.

5,800 American

the

securities

the

act

Scudder,

Guaranty Trust Co., 13,500 May
Department Stores, 25,000 Southern Cali¬
fornia Edison, 1,800 United Gas, and 5,200

particularly

nadian industries and
.As

their

outside

and

The

will

Herbert

C.

& Clark.

of

in holdings of Dividend Shares,

during
1954

shares

Ltd.

Canada

sources

and

Stevens

PORTFOLIO CHANGES
Changes

per snare;

to

States

the

Hamilton M.

Wiese,

Strange

James
Hard-

Jr..

Lawrence,

prices
1,000-

companies deriving

Canada.

Montreal;- and

mutual

funds

for

as

on

include

Chrysler,

Consoli¬

of Canada, Iowa-Illinois Gas

Electric,

Manufacturing,

Joy

Wheeling

Fundamental

his

articles

fund

figure

industry

Steel.

Investors, Inc.

Diversified Investment

in

Manhattan Bond

with

promotional and edu¬

its sales

an

Fund, Inc.

in

Wellington

and

year

executive

Fund, Inc.

expansion

activities, and in its dealer
out,"

said,

in

in

May,

It

was

gross

contrast

period

Corporation's

1954

passed

the

totaling $934,000
reported

and
to

last

Report

Diversified Growth Stock

Fund, Inc.

the

"we

net
a

that

sales

slight

year.

the
over

decline

mutual investing to the American
public and to broaden the stock
ownership of American industry
through ownership of mutual fund
shares.

The addition of Mr. Fox-

PROSPECTUSES

AVAILABLE

FROM

and

will

enable

intensify

all lines."

these

us

to

broaden

efforts

along

ON

LOCAL

THESE

MUTUAL

INVESTMENT

FUNDS

DEALER,

Cleveland

Chicago
Los

Hugh w. long and Company
Incorporated

Angeles
1

Martin

YOUR

Sen Francisco

Westminster

at

New

Air
Brake, Pacific Lighting, RuberSocony-Vacuum, Texas Utilities, and

and

"Prudent In¬

the
Uni¬
John

Canada;

subsidiary

Clark

&

Glass

of

iDes'.gnate)

of Scudder,

to

adviser

Eco¬

Canada;

Hobbs

Administration,

Vinton

H.

and

Limited,

President,

lawyer,

Robert

Dominion-

Limited,

Trust,

Robert Qr

Canadian

A

Richard1 G.

Director,

Dean

F.

Rauch, all

share; 2,-

per

of

White,

Chase,

provide a me¬
investment by residents

organized

Porteous,

N.

Chairman' of

Montreal;

Business

wick Stires,

Direc¬

Francis
investment man¬

Western Ontario,

G.

Lehman

Wood,

Gardner,

of

Jones,

and

accord¬

follows:

as

im'ted,
of

number of shares,

greater
are

P.

of

involving

transactions

W.

The

E.

Company;

Bank of Montreal; Brian N.

Investments

versity

shares

C.

Bank

Investment

School

priced! at $32 per share.

single

and

Managing

at

of

number

estate

Bertie

Board.

Barrett,

the

offered

rein¬

and

profits :and

of

Robert
&

Ivey, Director,

nomic

being

President

Gen.

Roebuck

real

Scottish

is

and

dividends.

and

Sears,

shares

stock

gains

accumulate

pay

Brothers

as

with

are

income

Corporation;

the holder at asset

is,customary

will

If

all.

sale of investment

The board of directors comprises: Robert
Lehman,
senior
partnef
of
Lehman

value; however, the Fund will not
make
continuous
offerings
of
as

to

its

not to

redeemable

be

corporations

at
a

h^ve sought to bring the story of

Street

Street

of

15%,

securities, the gains are not sub¬
ject to Canadian tax. The Fund

open-

and

company

its stock will

at the option of

an

taxed

realized from

&

Stevens

Canadian

be

not

Clark, of
Boston, Mass., and New York City,
as an
investment company of the
closed-end type. Upon completion
of the current ofering of shares
Scudder,

Department,

in

"Year

end,

of

of

rate

from

signals

services.

request




of

other

the

organized in 1953
counsel firm

was

reputation for his

Widely-known

the

the

Fund
a

letters

mutual

inves¬

in

interests

insurance.

in

Brothers.

provide

investment

to reflect the

Wellington

not

tors

$5

this

the

cational

be,

of

well

as

hews

ficulties that might perhaps
best

maximum

a

interest will be taxed at Cana¬

Mr. Wilkins said the association
of

many

program,

able at
or

vesting."

long-term difficul¬

ties in such

Canadian

for his educational broadcasts and

the
pre¬

learned that Vance,
was
believed to

was

Sanders

Mutual

he established

insurance

had

lowest-cost

organization

present

the

to

comes

under

Kidder, Peabody & Co. where, as
Manager of that Stock Exchange

with

Life

charges within the industry.

Street, New York 5, N. Y.

the

"non-resident"

Fox-Martin

Wellington

had

detail

Company, Boston,

reducing

miums

63 Wall

will

companies which

Wilkins

Fund.

ton

six

assets of

Hancock

J.

A.

President of Wellington Company,
national distributors of Welling¬

program for investors which

Distributors Group, Incorporated

The Fund

by

Fund

Milton Fox-Martin

tax¬

States

received by the Fund will be tax¬

Exchange Com¬

$30,000,000.

income

na¬

million,

out

John

surance

from your investment dealer or

tal of

United

and

such

no

United

laws: either interest and dividends

invest¬

register with

to

Lehman

by

financing

ties

Stock

Fund

underwriter

$800

over

a prospectus on

The

investments

Boston

from

alternatives available to the

Fund

of the United States in the securi¬

Trust, Massachusetts

mutual funds with

A Balanced Fund

headed

ers

vestors

Vance, Sanders & Co.,

of

Fund

Fund with initial investment

dium

the

Canada

in

mission, is being made Thursday, dian
corporate rates and dividends
June 3, by a group of underwrit¬
(with
minor
exceptions)
from

from

11,1954.

Group Securities, inc.

Canadian

companies

cumulative programs in the
shares of Massachuseets In¬

Century Shares Trust.

FUND

first

the Securities and

was

indefi¬

income

upon

the

of

one

Scudder

set-back

Fund,

ADMINISTERED

1,000,000

3,000-9,999

program

major

a

Investors

THE FULLY

company

1,999 shares, $31.75

cumu¬

30 to stock of record June
WALTER L. MORGAN, President

of

Scudder

of

Ltd., a new investment
organized in Canada and

Joins

through

investment

with

i

offering
shares

purchased in the individual trans¬
action.
In single transactions of
less than 1,000 shares, the stock

June

of

operate

Income taxes payable un¬
der Canadian statutes will depend

of Canada

prices which decrease in

effective

Fund

to

way|that it will realize

able

Peabody Manager

reducing term insurance

pany

share from net invest-

Public
common

The

Wellington

Scudder

proposes

sources.

such

During the 15
man

nitely" its plans to "cover"

20c

Ltd.
a

Scudder* s Million

ment

who

men

capital fund, Hugh W. Long and
Company, national underwriters
to

Industrial

marketed in these states:

are

States,

Offers

The

today when it was learned
that Vance, Sanders & Com¬

I

Lehman

nu¬

those

companies

toward

offering

Fund

a

Financial

of

lationship, research, development work and

Fund's

■

of

$39,080
at the end of the period. This was

duction.

cleonics

;

Shares

Arizona, Arkansas, Louisiana,
Georgia, Idaho, Kansas, Louisiana,
more
than
100% better, for the Mississippi,
Montana, Nebraska,
time period under study, than re¬ New Jersey, New Mexico, New
York, North Dakota, Oklahoma,
sults under the plan using only
Oregon,
Pennsylvania,
Texas,
insurance.
Utah, Washington, West Virginia,
value

shares, t $31.25
pershare; 10,000-99,999 shares, $31.00:
100,000 shares and over, $30.50.

in

received

Quarterly Dividend

investment

tions.

for

coverage

period but resulted in

same

total

the

cash, provided

new

insurance

same

for

funds

lative

98th Consecutive

outlay of

called

between

Mr.

research

field

same

the

Chester D. Tripp,
president, called share¬
holders' attention
in
the report to what
he

ital of the Fund is invested in the
stocks of 75 of America's corpora¬

Fundamental

&

Inc.;

Aircraft

Western

ago

By contrast, the plan combining

American

co/p.;

Corp.

One year ago net assets
$14,538,000 and five years
they were $4,339,000. The cap¬

were

in

the

Aviation
Co.;
Oak
Co.; Radio Corp. of Amer¬
Robertshaw-Fulton C on t r o 1 s
Co.;

$18,613.

insurance with annual investment

R.

Manufacturing

than

the life in¬
expired and the value of

000-2,999 shares, $31.50

and

<J^FUND

Co.,

North

T

the Fund.

15 years. At

greater participation by the
dealers

WELLINGTON

General

The appointment of Milton FoxMartin to the home office
staff,

Investment Program

Establiihed 1930

Eitel-McCullough
Corp.;

International

trial

the end of the period

coverage for

the policy was

usual

Vance Shelves
SECURITIES &

Signal

1, 1953.

PROSPECTUS

NATIONAL

"A";
Dynamics

General

NET ASSETS of Financial Indus¬

surance

investments made by the Fund dur¬

the

stocks

*

of

of

amount

$18,613 of life in¬

Fund, Inc., attained' more
$20,000,000 this month, the
highest mark in the history of

surance

Aircraft

W.

investment

record

stocks

Corp.;

this

money provided

the

Inc.

IN

TELEVISION

in

tories.

and

more

industries, such
and agricultural

A

FOLDER AND

sold

were

realized.

stocks in the

circumstances

during the past
proceeded stead¬

has

companies

profits

same

months

advised that

were

Group's holdings in the

price stable food and public

utility

your management

six

recession

leveling off, at a point histor¬
ically excellent for business gen¬
erally.

the most

the

increasing evi¬

business

the

Group

is

more

the

recession is approaching
"The next few

dence that

some

company

on

businessmen and
from

of

reflection

a

confidence

ing

as

Securities reports

of

deterioration

of

made

common

Phenolic
Corp.;
Borg Corp.; Borg-W'Urner Corp.;
Corp.;• Allen B. DuMont Labora¬

Georie

bpcrry

MANAGEMENT

the

Corp.;
Aerovox
Corp.;
American

Electric

THE

Engineering

Clevite

ica;

term."

established both in value of assets

increases

in

were

Admiral

holdings
and
which provide

&
,

principal

Radio

of

assets

Electric

Co.

The

NET

Corp,; Theodore
Marchant Calculating

Reliance

quarter

TOTAL

ElectroData

Company;

Thursday, June 3, 1954

Parser, Elizabeth 3, New Jersey

OR

Volume 179

; Number 5330... The

Commercial and'Financial Chronicle

(2455)

Wyoming and the District of Co¬
lumbia.

:

DELAWARE FUND
a

.number of

has added to

existing positions in

the past two weeks, and has com¬

pleted the elimination of the last
of one holding—StudeAlthough Studebaker's

remnant

baker.
sales

have

resisted

the

effects

31, .-1954;- net assets in¬
from $1,955,944.06 to $2,645,424.82.
*
.
.

During the quarter ended March

31,

1954, the

net asset value per
from
$38.38 to

share

increased

$43.26

or

12.7%

in

8.0%

Dow

the

other independent, Delaware

VEGH

Income

sales and increased costs have put
Studebaker's operations on an un¬

set value per

basis,

at

least

for

the

being.

A

from this condition

recovery

to

require
siderably higher

seems

mobile

return to

a

levels

of

auto¬

to be in the immediate out¬

seem

look.

ports

Mutual

Fund

Inc.

re¬

that

during the fiscal year
ended
March
31, 1954, the net
asset value increased from $37.50
to $43.26 per share. Adjusted for
the distribution of net long-term
capital gains realized during the
previous fiscal year, the apprecia¬
tion

for

March

the

31,

compared
Jones

fiscal

1954,
to

8.4%

Industrials.

ended

year

20.1%
as
the Dow

was

in
On

the

same

basis, the cumulative appreciation
for the four years since April 5,
1950 when de
Inc.

Vegh Mutual Fund,

commenced

102.6%,

operations,

was

compared to 44.3%

as

for

the Dow Jones Industrial Average.

During

the ' fiscal

ended

year

Stock

Inc.,

mutual

Investors
from

fund

$69,416,859
of

crease

half

Oct.

April

$15,296,036
according

30,

Inc.,

the

1953

1954,

an

first

fund's

today

by
rose

31,

the

for

to

issued

report

managed

Services,
of

as

of

as

year,

annual

affiliate

Diversified

$54,120,823

its

to

to

in¬

"CAN

shareholders.
Net

$2!.76

At

the

fund,

increase

an

asset value of

$16.06

of
as

1953, the report showed.
Dur¬
first six months of its fiscal year,

fund

cents

net

30,

of

31,

ing the
the

share

per

April

on

the

over

Oct.

of

value

asset

$18.82

was

maintained

per

share.

the

close

investments
curities

ripe old
age?" is the question asked in a
study on preparing for retire¬

its

1953

first

the

public

petroleum

rate

of

36

six

utilities

18.66%

months,

equity

se¬

funds

17.41%, capi¬
goods 14.52%, chemicals 10.27%, light
manufacturing
and
service
industries
7.47%, consumer durable goods 6.44%,,
5.50%,

building

4.09%,

consumption goods
portation industries 3.58%
As

trans¬

and financial 0.94%?.

,

of

assets

industries

3.74%,

merchandising

,

April 30,

was

nearly 95%'

invested

in

with

of the fund's

common

assets

to

Stock

The

prepared

was

of

has

which

in

to

prepare

for

retirement.

as

analyzes the reasons
"unhappy fact" that most
people over 65 have to continue
working or depend on others. In
the

many cases,

it concludes, the rea¬

is the failure to take

son

into

ac¬

count the longer life expectancies

due

to

in

progress

health

protection,

medicine and

the rising

and

living.

March

that

at

31,

1954 show net
date equivalent to

$200.20 per share of $2 Converti¬
Preferred

ble

Stock

(preference

in liquidation $50 per share and
accumulated dividends), and $4.15

share of Common Stock. Com¬
parable figures for Dec. 31, 1953
were
$188.53 per $2 Convertible

per

Share

and

$3.83

share of Common Stock.

,

per

.

i
■
■/
•
•/.
•;:
THE NET asset value of the Com¬

Stock of The Colonial Fund,

mon

Inc.
30

.

.

was
as

share

Oct.

fiscal

with

$20.95

per

31, the end of the
year.
Total net as¬

sets of the Fund amounted to

in¬

only

company of its kind in
country with assets of about
million invested
in
more

$14,-

operating costs and the con¬
venience of having an investment

stock.

Each of these

booklet
the

points

out,

investor

who

The

booklet

leveraged

the

value

of

its

booklet

also

points

to

look

cluded

the

at

the

are

hypothetical
Continental

investments

ing results that might

Feb.

distributions

vestment

income

in¬

totaling 24c

23c

versus

from

for the

per

compar¬

At

the

Oct.

on

COMPANY




fiscal

77.2%

of

were

in

As of April 30 of

ANGELES

West Seventh Street

have been the
well

year as

percentage

still main¬

Fund

constructive

was

attitude

to¬

the market.

to

closed

its

out

com¬

holdings in American

Columbia

Stevens,
J.

C.

Court.

The

the

the

Maine

case

its

at

Supreme

to

was

Court

Penney,

Maine

rently selling
,

be¬

come

May,

1954

Power

is;

cur¬

counter around

over

21 and

pays $1.20 to yield 5.7%.
Earnings for the 12 months ended
April 30 were $1.68, the month of
April making a very good show¬
ing. These earnings would pre¬
the

annual

increase

rate

Youngstown
Northern
Edison.

National Lead.

were

increased

Sheet

States

was

business at
Maine

On the other
influx of mili¬

an

the

the

Service

12

previous
for

creased

13%

ended

with

$1.79

period

number

balance

earned

months

compared

as

kept

normal level.

near

a

Public

$1.73 in
April 30

of

on

shares.

a

The
in¬

stock

common

in the latest period.

The

quarterly dividend rate was
increased a year ago from $1.20
to

$1.40.

selling

The

is currently
American Stock

stock

the

on

be selling for only
IIV2
earnings as compared with
the general average of 14.3.
Maine
nual

Makes Private Sales
Libby,
McNeill
& Libby has
placed privately through Salomon
Bros. & Hutzler, an issue of $15,000,000 of 25-year 3V2% sinking
fund debentures due May 15,
1979,

Public

serves

an

Service, with

of $3 to $4

revenues

about

area

an¬

million,

120

miles

$10,000,000 of 5J/4%

tive

preferred

stock

cumula¬

($100

par

value), both at 100.
The expansion of the

company's
since prewar years, in¬
cluding its entry into frozen foods,
the management said, made the
business

new

that

so

would

financing

necessary.

Carr Co. Adds to Staff
(Special

to The

Financial Chronicle)

DETROIT, Mich. — Frank G.(:<£
Spikerman has joined the staff
of Carr
&
Company, Penobscot
Building, members of the Detroit
Stock Exchange. Mr. Spikerman
was formerly
with A. M. Kidder
& Co. and

Bradley Higbie & Co.

long and 30 miles wide in Aroos¬
and

Penobscot

Counties

Joins

in

northeastern Maine, near the Ca¬
nadian border.
It serves 52 com¬

munities at retail, including Cari¬
bou, Presque Isle, Ft. Fairfield,
at

V

(Special

King Merritt

to The

Financial Chronicle)

CENTRALIA, Mo.
Caldwell

is

—

Charles F.
with

connected

now

King Merritt & Company, Inc.

wholesale.

area

Population of the
served is estimated at a little

under 100,000. A

l&c

New

With Abbott, Proctor
(Special to The Financial Chronicle)

subsidiary, Maine

Brunswick

primarily

to

the

The
and
as

Electrical

:

CHARLOTTE, N. C. — William
Wagnon is now with Abbott,

M.

Power

&
and

a

parent

Tube,
Ohio

company,

distributed

in

area

company,

properties

New

of

a

Robert B. Berman

small

Brunswick.

the

a

company

subsidiary are operated
single interconnected system.

large

area,

the

important

sections

growing

Robert Bennett Berman, partner
in

considerable

area

includes

making
products.

a

number

starch

and

There

well

as

for
as

products, and

are

of

factories

other
also

potato
a

large

the

&

Berman

New

and

York

away

a

Stock

June 1,

With Francis I. du Pont.,
to The Financial Chronicle)

(Special

Calif.

FRESNO,

United

also pro¬

of

Exchange, passed

as one

pulpwood

manufacturing

miscellaneous wood

Neuberger

member

potato-

the

in

The service

States.

paper

is well known

most

Paine, Johnston Build¬

power

with the

to

the

duces

in

hydro

a

Aroostook County, which covers

Broad¬

American

Chicle, Chesapeake & Ohio, Grey¬

Holdings

of

production.

hand there

and

Central

of

and

Maine

having been sold below the

cost of

amount

term.

farming

Home Products, Sunshine Biscuits.

P.

in po¬

the

crop

selling the major part of its

J.

the slump

some

,

drought last

severe

as

prices,

of this balanced

Fund

over-sub¬

tato

ing-

stock

being

35%), with result¬

ing dilution
of common
share
earnings.
Other adverse factors

is

a

issue

about

76.6%, indicating that the Trustees

inghouse
LOS

(the

scribed

Proctor &

the

hound, Lone Star Cement, West-

BOSTON

zto

last

1953,

31,

stocks.

basis

Madawaska, and Ft. Kent, also 15
the

of

investments

year

The

DEVONSHIRE STREET

South I.aSaile Street

in¬

At the end of 1953 the
company
common stock on a l-for-6

offered

Power Company, Ltd., contributes
about 12% of system revenues. It

casting,

izo

pealed

remainder

relating to the shares of any of these separate
investment funds may be obtained from authorized dealers or

Broadway

close

Lexington's

tained

A prospectus

6i

investments

6-month period.

BOSTON

CHICAGO

from

from

$172,474 for
the
semi-annual period ended April
30, 1953 to $183,693 for the latest

mon

YORK

in¬

on

County

real crop fail¬

a

ure.

However, the increase

only about 42% of the

took

Income

ward

NEW

$76,323

vestments.

this

Bond Fund

a

times

Company's
portfolio
in¬
by $413,095 during this
period.
In
addition,
the
Trust

Aroostook

known

never

last

perhaps 15 cents might be added,
making a pro forma figure of
$1.83.
On this basis, the stock

period, stockholders of record

received

common

iTfie

delay

this

year

Canada General Fund

shipbuilding.

sumably include less than half of

creased

Century Shares Trust

metal

are

represents an increase of 79c per
share for a gain of 8.4%. During

creased

tsurTI

in¬
and

company had requested and
hence the decision had been
ap¬

ment

IVMassachusetts

contributors

was

this

has

and

Pulp and paper
largest industrial
followed by textiles;

Tri-

able period a year earlier.

„

residential

shoe¬ y the

1954,

40,000, and large
sheep, hogs, chickens

turkeys.

Ubby, McNeill & Ubby

have been

15,

of

and

smaller

fore

on

some

Exchange around 24 V2 to yield
5.7%, and the price earnings ratio
November, is about 14.2.
in
two
separate orders, allowed
the company increased revenues
of
about
$1,420,000
annually,
equivalent after income taxes to

attained with Monthly Investment
Plans over the past 5 and 10 years.

paid

continuing

the

are

share.

period ending April
30, 1954. Taking into account the
capital gain distribution of 5c pel

totaling
numbers

mills

27c

fiscal

growing acreage of hay, oats,
and peas, as well as herds of cattle

in

four

NET ASSETS per share of Lex¬
ington Trust Fund increased from
$9.38 per share oh Oct. 31, 1953
to $10.12
at the close of the 6-

the

miscellaneous.

long

In¬

in

stock

recent

The company has had some dif¬
ficulties with rate regulation. The
Maine Public Utilities Commission

no

of

the

45%

after

record.

results

common

about

shoes and

features may be, the investor will
want

still

are

rolls from these installations

Tri-

from

that

in

trades, lumber and woodworking,

common

out

potatoes

industries.

smaller

the

stock's benefits and

a

Contribut¬

condition
been

Customers,

stock !has sold in recent years and
its
outstanding
warrants.
The

matter what

While

the largest farm crop, diversifica¬
tion is increasing as indicated by

sion and modernization of
existing

concerned

discount

than in
where industry

rural, 16% commercial, 30%
dustrial, and 9% wholesale

single

discusses

which

at

this
have

were

features, the
may interest

capitalization

Continental,
asset

also

cyclical

concentrated.

to

Maine

The company's revenues in 1953

companies

is

mill and two important air

bases.

tary and civilian personnel to the
two important air bases, and pay¬

low

a

less

in

trends toward greater diversifica¬
tion of
industry, and the expan¬

management,
profes¬
and
supervision
of securities, spread of investment
risk, flexible investment policy,

cashed in profits of

A

been

other states

more

ing

selection

month

Growth Stock Fund

have

years

perienced

different

additional

conditions

some

is

features of the company—ex¬

many

8,000

customers on short-term
The area served by the

Business

The booklet discusses the vari¬

through the ownership of

months

summer

about

company has a population of over
617,000, which is about two-thirds
of the State's population.

than 130 companies in over 20 dif¬
ferent industries.

in

which repre¬
gain of 3,624 during

During the

serves

rates.

vestment

ous

219,012,

net

a

paper

seasonal

represented

The market value of the Invest¬

SANDERS

it

$24.17 per share at April

compared
at

Fund's

the

company

were

,1953.

that

out

with the problems of choosing and
up with individual stocks.

Equity
Corporation for the three months
ended

is

firms.,

Tri-Continental is the largest in¬

THE STATEMENTS of The

assets

points

1953

sented

keeping

NEWS

Massachusetts Investors

111

furnishes electric service in 14 of
the 21 cities, and in 260 towns
and
"plantations" in the State. Total
electric customers at the end of

among the 10 most popular stocks
with investors using the M.I.P.

sional

The study

for

booklet

vestment

the

he

member

Tri-Continental

$200

To help answer the
Long organization
includes
figures
showing
the
reaaer of any age how many years
of average life expectancy he can
look forward to, how many years
the

Maine Power, with
$27

revenues
annually, is the
largest of the Maine utilities. It

to acquaint the

a program

The

share

VANCIS,

Two Maine Utilities
Central
million

booklet

Exchange

share

OF

By OWEN ELY

the

mem¬

question

207,000.

stocks.

stock

common

Monthly Investment Plan of

$190,000,000.

,

the

of

stocks

tal

electronics

fund

mutual

«

Utility Securities

de¬

ber firms of the New York

a

issued by Hugh W. Long
and
Company, national under¬
writer to Fundamental Investors,

Preferred
of

in

comprised

portfolio,

.2.03%

afford

YOU

fiscal
semi¬

23,220

its

Stock

CLOSED-END
Fund,

booklet

new

or 10.4%. Shares investing
public with Tri-Contiincreased from 29,- nental. The company has had many
957 to 34,107 and net assets from requests
for
information
from
both
individual
investors
and
$300,413.03 to $377,656.91.

Fund

Total net assets of Investors Stock

Public

Corporation

outstanding

costs of

Investors

a

"

$10.03 to $11.07

ment,

VEGH

de

released

share increased from part of

con¬

production, which doesn't

has

Continental

-

Fund, Inc. re¬
during the quarter Exchange.

ports that

ended March 31, 1954, the net as¬

profitable

Tri

ing

states the combination of reduced

time

Copies
Approach

F und

to
scribing its operations, and relat¬
Indus¬

Joites

trials.

de

Tri-Con

compared

as

of

the battle of the giants better than
any

March

creased

•

.

,

31

—

Kenneth

G.

Inman has become associated with
Francis I.

of

ager

Merced

with
and

&

dta

Pont & Co. as Man¬

their Fresno office,
Street.

E.

F.

He

Hutton

was

&

2117

formerly
Company,

Merrill Lynch, Pierce, Fenner

Beane.

,

32

The Commercial and Financial Chronicle...

(2456)

Continued

from

4

page

Importance o! Steel Industry
And Its Obligation to Investors
i« the hands'of the

lic

each

tA^at it would cost—and

This is

basis—to

replace that ton of capacity. /

why

industry
indispensable and as sta¬

which is

ble

should

aa

physical /standpoint

m

ered

Can

be

consid¬

risk; a speculation from
financial standpoint?
Why does
the steel industry compare so un¬
favorably
in this
respect
with
jrtost other major industries? Why
•ire

as

a

in the big

we

nical operators

league

in

the

than

But other industries do have their

average—to lag behind most other

problems and

be

No. in

industries all the time.

search for the

the

reason

our

for the poor

past the record of the steel indus¬

earnings and poor dividends rec¬

try

ord

to

as

of

Twent

certain

earnings

the

and

dividends has

and

pay-

been

■of

that others

eye." They

continuing study

The

measure

:>tudy is earnings
ot net worth'.
Now

listen

to

period

yaar

as

have

percentage

ing
the

1928

below

were

the

They

26-

at

our¬

looking at us
coldly ' appraising
the people who

now

a "

are

funds
and
the
people
responsibility for advis¬
public on
investments.

want

last

through

the

of

who have

to

have

we

if

know
learned

long

at

anything

from experience—if steel manage¬
ment now recognizes that an in¬

1953 the earnings of the steel in¬

dustry

first

responsibility for the invest¬

ment

used in the

a

this/. In

from

should

look

long

are

—and ' with

earnings in manufacturing in¬

dustries.

good,

a

we

—
the management of the
companies in this industry.
I am sure Jiffs" hot "news to you

vl'he National City Bank of New
a

that

think

selves

sporadic.

Vork has made

I

take

un¬

Relatively Low Steel Company
(Vjjk- \/,,/V/ Earnings "• V
•*

average

and. in

ating rate,
tensive

to

steel

United

meet

dustry had

net loss.

a

age of all

steel

The

industry showed

in¬

aver¬

a

loss

figure in only one year—1932. The
study included 43 industries in

must

fche

recognize this obligation and also

first

ufld

45

six

of the

years

industries

period

that

the remain¬

in

it'ever climbed to
from

the

the top
26

ttever

year.

the

In

a

ability to

do

this

does

carry

because

it

becoming

financial

experience.
is

of

to

and

cover

requirements

also

If the
those

remain

stfeel

industry

requirements—
private

a

try—it will have to obtain

indus¬

large

a

part of the money it needs from
the investing public.

record!

old

title

of

on

Situation Faced by Steel Industry

this

industry
—"Prince or Pauper"—is highly
inaccurate. We have been "pau¬
pers" often enough.
But where

Let

us

consider the situation

we

The

steel

industry today has

a

—

1928

Through

1953

vestment
and

,■

higher

lower

Highest

Average all

Iron

Lowest

earnings than the iron

Industry

Industries

and Steel

Industry

and steel industry

1928

27.7

11.6

7.0

—

1929

27.1

12.8

11.2

—

l'car

1930

23.6

1931

6.4

18.0

2.3

4.5
—

30

11

5.6

25

17

7.2

23

19

—10.0

24

18

30

12

38

4

—

0.5

1.2

1

1932

13.4

1933

—

0.5

12.3

2.5

1934

.21.7

4.3

1935

21.5

1936
1937

,

—1 4.0
—

—

—10.4

1.9

—

0.4

—

.

4.0

it

in

up

1.3

25.7

10.4

4.7

38.5

10.8

6.9

1938

36.6

4.8

1939

37.5

8.5

1940

-

1941

33.9

10.3

48.8

12.4

—

—

0.2

—

4.5

8.5
...

\

9.6

the

product

But

it.

39

5

39

5

do

4.6

31

13

5.7

39

5

2

1

—

7.4

1947

34.8

|

17.1

11.3

1
—

and

35

9

25

19

IP50

32.3

17.1

15.3

1.8

26

13

1951

19.9

14.4

12.3

4.7

25

19

1952

18.7

12.3

8.8

3.5

33

11

1953

r*21.0

12.5

11.6

4.6

20

24

—




,

now

we

our

steel management is that
other industries are comair

these

petitors

competitors for the

favor;

of the investment

public. We have
to deliver a competitive product.
In this case the product is com¬
prised of earnings and dividends
that compare, in all respects with
those

other

of

class.

industries

that

And

in-

the

means

important industries of this

try. We know, that if
product

quality,

in

cannot

we

it

customers.

In

those

cannot

coua-

not

com-

and

service

hope to interest

the

same

the financial side, it
and dividends

our

most

physical

our

steel

our

petitive
price

to

steel Industry

,

.

comparable

other " industries

of

hope

to

on

interest

the

clear.

+

.

to

that

mean

advocating

that

Continued

from

the

I

vestor

confidence

-

-

investor

be

abso¬

is

"by show-

only

-

-

ing, now and

in

->••

-

the

-

future, that

we—management in the steel

industry-^will fully recognize the
imp0rtance of the investor; that
we wjij
regard protection of the
investor's

interest

management
t^at

^

is

as

a

-definite

responsibility,
fjrm

our

.

and

intention

to

...

out this .responsibility by

carry

earnings

am

attitude

lutely essential to the future of
our industry.
We can develop in-:

maintaining

What I have said might be

interpreted

,,

the

obligation

.

ahlP investment
investm*
able

we

here
js somemake very

the

industry as one that'merits
confidence*;0f the investor in
eyery respect ".
because a favor-

in-

to

.

over-emphasize
is

it

steej

clear record of fair

a

and

fair

dependable

a

want

that

of
management—the management of
every
company—to establish" the

vestors.

thing that I

,

cannot

our earnings

not

are

way,

Should Merit -

Confidence of the Investor

■

.

fact

strongly as I

dividends

basis.

I

that from

can,

'

on

urge,

as

now
,,

„

Pn> Pr°Per consideration of the
investor will be the policy of the
steel

industry.

10

page

Public Pension Fund

maintain

w

maxi¬

cover

very

remote

can

we

come

to

only

The steel industry

tions represent the highest credit

tion makes them much too rich to

category available.

The only fault

be

anybody

with

money and lots
big question is where

Naturally,
both

some

of

replacement

must

from

come

find

can

the yield—a lot of
United
in
30

They

years.

the

3!4s.

a

on

the

range

days

in

to

yield

percentage

Bills,to

on

about

the longest,'the famous

These
one

few

range-

fractional

a

shortest,

trate

securities

from

3V4S

to

serve

definite

market

illus¬

advan¬
pen¬

from

be

of

out

come

large

a

of

new

earnings. There
and continuing

money

source—and

one

we

can

and

only

look

for

there

one—to
it.

That

is investment
by the public
through the purchase of steel com¬

bonds and equities.

Of course, this investment
be
forthcoming unless

not

until

the

the
steel

intention

public

is

assured

will

on

means

a

a

term

of course, shorter

In

definite change in

Government

used to meet

maturities could
an

portfolio.

Conversely,

erated under

lb

company

—

to

bring

that

change about.'.
We
of cur

know
main

precisely the nature
difficulty. The steel

in

to

15%

of

long-term

course,

empt

the

no

more

op¬

Governments.

have

issues

than

invested

portfolio

few partially

Treasury

standing

funds

"prudent man" rules

would tend to have

steel

need.

might be called tradi¬
tional type public pension funds,
long-term Treasuries would prob¬
ably comprise the bulk of the

the investment public's opinion of

It is the obligation
of management in the steel indus¬
try — the management of every

unusual

what

the

industry.

the

bonds,

issues of primary interest to you.
For occasional special purposes,
be

and pay fair divi¬
continuing basis. This

very

can't be redeemed until 1978. This

and

earnings

freedom

freedom from early call is a char¬
acteristic feature of all the long-

that

industry has both the
and the ability to make

funds—their

pension funds. Their tax

Of

tax-ex¬

still

noplace

held
So

by
a

tax-free investor.

any

for

much

let's take

Treasuries.

Now

look at the back of this

blue sheet. Two-thirds of this side

'///.'"

States

maturity

from

is

people wish it

more!

were

them

involuntary redemption. As in¬
dicated by the figure after the
maturity
in
1983,
these
bonds

3

3.1

What

,minds

"

/. ' '
must get into

■

sion

41

3.0

.

tage long Treasuries have for

6.0

11.6

on

not

dends

14.0

dependent

that the total capital requirements
the steel industry simply can¬

fair

13.9

less

or

r

which

of

of

1

18.9

i°n&er«

earnings

I
'

,

2.76%

4

30.2

more

This, in itself, indicates
the need for larger earnings on a
steady basis.
But it is obvious

40

Study by the National City Bank of New York.

on

pro¬

earnings.

43

31.5

Source:

in

add all of these factors

we

for
expansion

4.8

1948

—

and

the

money

2.6

1949 i

—

in

get it?

we

the

pany

0

5.1

find

must

materials to

The

source

9.5

are

.

with thd

other industries-all

going to need

of

which

2.2

industry

raw

to- have

inventory

conclusion.

is

42

9.3

raw ma¬

•

Its treatment/of

.

difference

fabricator's

needs

an

but

9

44

12.1

re¬

may he proud.

demand not only in the near

mum

4

4.0

22.2

He

we
raw

35

6.5

41.6

un¬

I

finds the best and lowest

portion to his current production.

40

5.6

1945

the

only

3.7

6.5

19" 6

is

material.

0.9

9.9

■

essential

an

the

our
industry and fabri¬
industries.
Our finished

influx

10.1

it

long period
of

may
be
requirements

be

can

which

to

that

steel

locked

which

:

✓

between

cating

5

43

ground

is

3

1.8

capital

Responsibility for

39

36.8

5.2

and

large

very

terials

41

45.0

9.3

is

ferred.

7.2

1943

23.6

them

problems

usual

2.8

1942

1.944

in

represents

must

6.7

:

opera¬

and,

,

recovered only over a
of years.
This is one

is
.

our

farther

go

Raw materials impose a very
heavy financial burden. The in¬

one

Number of Industries with

V

near

/

together,

•

■; •

more

longer de¬

no

consequently,
must pay higher costs for location,
development and transportation.

When

(Percentage of net profit to net worth)
'

eternal

future.

Iron and Steel and Other

Manufacturing Industries,

can

must

afield

future

Comparison of Net Earnings

We

reserves

farther

the

face.

the

difficult and

more

We

hand

record shows conclusively

the

pend

in

heavier than anything in previous

steel

What

must

it

years

with

place
13

the

that

immediately ahead the
steel industry will be confronted

industry
above sixth place from

the bottom.

that

last

years,

rose

This

21st

has

It

the

The highest

was

it

out.

ing 20 years—all of the important
.manufacturing industries in the
country.
In 1942, the steel indus¬
try was at absolute bottom in this

group of industries.

demonstrate

is

.

this 26-year

the

That

now.

facilities

when

comparison of the earnings of the

.

problem of finding raw materials
—principally iron ore and coal.
To
an
increasing extent this is

employees

mutual, not: op-

.

hazard^ ja. guej?$ as to what
will find/that .134,000,000 tons

ready for it.;
;
Future expansion involves an¬
other problemc—both physical and
financial—that, we must begin to

and public are

.^e mvestor has been; an unforing the supply of steel available tunate ; exception." The investor
when and as it is needed. Nothing ^as been the forgotten man of our
shows this more clearly than the industry.
He must not be any

is

must be

investors" and

ests of

consuming industries has not ineluded this service factor of hav-

the

year
of ingot steel vare not/enough but
when it comes the steel industry

the

*ost products.- . .
. • .
•
' V
adequately recognized by steel f.. ** many respects the steel ing /
management. The cost of steel to dustry-has a a*ecord*of which it <

s^eej

not

fall

in

-la the past, as I say, this,, truer
of production has not been

likewise steadily increasing. I will

tions.

period

ex¬

steel

not

the em£;C.-

necessary^,

as

cost

of

in

fair dividends—not just
years but on a depend¬
able, regular basis.
The steel industry is now in a
period of trial. Steel management

i

;

creasing and, in addition, the per
capita

of

just

■

steel

consumption

private economy the inthe machinee^59^

..

time

in

and

those

world, population is steadily in¬

ar.d

pay

States

should

in

ployee who opei^^ the^beeMne. /
The investor renders an essential >' service to industry; he is fully:
entitled to fair, compensation for > .
that service. Our whole American -./..•
experience proves that the inter- /-

of

consumers

investors

on

In the

industry—which

needed

But, of course, it is an
absolute certainty we will be in¬
creasing capacity again and prob¬
ably not too far in the future. In
the

burden

and -facility

building

posed. /Where: investors find the
best opportunity:, for a good; re- / /
turn/employees also find the best are .below the capacity-of the4 in^ -.opportunity for. good rand improv-/?
dustry.
•
>i
: /;>
>
\
.*
ing jobs and wages /?. / and the
of

should

some

Its

Noth-

/'vestor who provides

obligation must .is

the

of

expense

be farther from the truth,

Every

con-

country.

"break" at the

a

can

American industry today
there
because investors put it there.-

is a fact
that steel management has overlooked in the past. The true cost
of
producing steel includes the
cost Of providing and maintaining
all steel facilities not just the part

come.

expensive.

some

feel that

may

construction

problem for

a

dustry so essential as steel has an
obligation to make fair earnings

all

we

new

be

not

by

exclusively

expansion of steel-

view of the present oper-

manufacturing
industry
i« every single year. (See accom¬
panying table.)
in five years of

fiir

1

difficult

given

employees and the public.
ing

industry

obligation to steel

and to the

shared

steel.

need

making capacity; In view of the
huge expansion in recent years

tech¬

is that in

of course,

the

are

the minor

as

with

thai

much

serious

be confronted

to finance the

problems

may

will

has

fundamental
more

And

industry

problems of most other industries.

financial operators? The

as

answer,

steel

the

while ours
somewhat more difficult
they are not a good reason for
the
steel
industry to be under

league

and

conditions?1

blame

we

that

say

the Rock of Gibraltar from

as

this

steel,

The cost of this

be

'

Now

•

for

our

sumers

conservatively

.

as T say,

conservative

most

a

be

to

are now.

most

,

of

ton

demand

required just to replace the plants
and
facilities that comprise the
In other
whole we certainly have never present steel industry.
words,
it must be our job to find
earned profits nor; paid dividends
an.
average of $1,000,000,000 'per
•that
could
be
described : as
/.or about
"princely."
And on the basis; of year for this purpose
this record, we can hardly blame $400,000,000 more per year than
'the investor for having taken a the industry provided for depre¬
/'
dim. view of our industry. ' '
/' ciation and depletion in 1953,
Who or what should we blame?.
•In- addition to- replacement, we

steelmakirijg
capacity in those ^companies was
.#53.02.5 That is roughly 20% of
on

they

is highly vulnerable to
swings. No matter how
decline may occur in the

must still carry the raw materials
and facilities for 100% operations,

costs

that

any lower than
On that basis—and
estimated—
minimum of $30 billion will be

going

are

a

indication

no

great a

single year. In comparison with
manufacturing industry as a

value placed by the pub¬

average

see

can

industry
cyclical

a

stock and
that the

indicate

bonds—would
;

Not in

find the "prince"?

do you

public—com¬

preferred

stock,

mon

steelmaking capacity in excess of
124,000,000 tons. We know from
experience that this capacity will
have to be replaced entirely with¬
in a period of about 30 years.
I

Thursday, June 3, 1954

in

is taken up with obligations of the

Governmental Agencies. These se¬
curities
are
designed primarily
for commercial banks'
and

wouldn't,

much

Towards

exemp-

to

issues

of

ment

are

of

shown.

the

of

U. S.

International

Reconstruction

afford

be

bottom

public

the

investment

rule,

a

you.

the

all the

dollar
Bank

and

Develop¬
yields they

The

should

certainly be attrac¬
tive to pension funds. The 3s of
1972
and 1976, and
the 3V4S of
1981, afford yields of 3.03% to
3.16%, with not

even

a

theroetical

risk of loss through call.
The total amount outstanding
the World
sues

U.

Bank's

S.

capital
This

U.

far

to

comes

Bank.

S.

less

is¬

than

the

subscription
results

of

dollar

in

to
a

the

wide

margin of safety which, together
with
other
factors,
has
made
these

bonds

acceptable

legal
banking
logical in¬
as

investments to many state

departments. They are
vestments
folios

for

pension fund port¬

operated

under

man" investment rules.

"prudent

,T

r,

When International Bank issues

out¬ r.first
any

interest

sheet,
for

as

came

stitutional

to

market,

investors

some

were

in¬

insuf¬

ficiently informed concerning the

^

Volume 179

Number 5330... The Commercial and Financial Chronicle
v

investment
Others

the

of

status

bonds.

recognized their
investment
merits
and
eagerly
sought - the
exceptionally
high
yields which are usually afforded

-

-

readily

by something

to the market.

new

Still others, when the early issues

quickly moved up to one, two, and
even
three points premium, de¬
cided to reap quick profits and
started a wave of selling.
*
V; In
addition, an attempt
was
made^4so »-have
dealings ' in
the

v

V

.

•

place

in

sort

a

of

'.A mongrel combination of the U. S.
Government
and
the
municipal

might
been

which

of

a sea

aided

was

constant "flood

of

intothe & act,

./^development
in

-^markets

of

the

proper

bonds

lessly delayed.

•
.

-

,

the.

trading

'

need-

was

C-f*

;«

a

year

Bank

and, of

ago

bonds

course,

World

with the tide.

wqgt

Howevej^m^rit Will be rewarded,
in *spite

an<i

,

market

of

of

of

going rate

been

paid '■> off.

on

certificate

a

issue

has

Meanwhile,

0

,^r, va substantial yield differ- 14

ential

as

if

In

compared with light and

obligations.

power

times

of

heavy new
flotations

higher had not New York

Comptroller McGovern stepped in
bought up the new issues

equipment and sells JL to another., yields than, are /obtainable
road. A railrOad= is no Jgood with?, .seasoned
kindred credits.
out
rolling stock. Consequently^ periods, of slack demand the.

around- that-

even

the

State

and

level

the

to

various

but

I

also

type

•v;~T?PTtfolio,manager

.

fact

that,-most

out with

equity

an

know: year

as

issues

Such

start

substantial cash equity,

a

which
serial

a

builds

eacn

up

maturity is paid
preferred market

a

bond

them.

can't
not

be dismissed out

suitable

vestment.

for

time

From

American

.

are

substantial in size and have rates,
lar

those

to

there

so

subject

of

is

corporate

good

no

them

to

the

bonds,

to

reason

cumbersome

This type of bond already has a
but excellent financial his¬

brief

tory.
the

The

roads
have

war

completed since
plagued by

been

variety of rising cost. How¬
market
practices of basis-traded ever, the urgent need for such
municipals. At Salomon Bros, we facilities is evidenced by the fact
-finally assigned the World Bank that revenues have consistently
bonds to the trading unit which far outstripped skyrocketing costs.
"-handles
Most of this long overdue trans¬
Canadian
Government,-.
/^provincial and municipal bonds, portation network is still in the
"••v".-5 where
they fit in very well. Their construction
stage.
Supervisory
vw-quotations now reflect the char- authorities bar investment in con¬
every

trust

funds,

panies

by pension and

life

insurance

com¬

and

savings banks. Top
quality
utility
preferreds
gen¬
erally yield about 1% more than
similar

will

that

there

certain

are

double-A

the

either
these

fining1 7%,

makes

Kodak

6%,

does
or

its

Motors

and

devoted

.

market

stability

in-

of

struction

financing
tosome
financial institutions, nota¬
institutional securities.
*
•
•
Next, let its consider the tax- bly the commercial banks. This,
exempt market. A representative of course, has a depressing effect
cross-section of it
is shown
on
on price, and a beneficial effect on
this green sheet.
Most of these yield. You can see on our green
tax-free offerings, as you can see sheet
that
long-term
Turnpike
at a glance, are much too rich for Authority bonds show yields rang¬
tax-exempt investors like pension ing all the way from a bit under
funds. Some, however, yield about 3% to a bit over 4%, a higher re¬
turn than afforded by most cor¬
as much as the Treasury 3%s, or
bonds,
and
the
shrewd
perhaps a shade more. In this porate
group come the longer maturities alert investment officers of some
of light and power revenue bonds, of 'the biggest life insurance com¬
water and sewer
revenue
bonds panies, savings banks, and pension
and like obligations. Also in this funds
in
the V: country - haven't
yield bracket are the long-term hesitated to accept these-attrac¬
tive
issues
of
big city debt whose
yields. Considering the re¬
totals are so large that many in¬ sults achieved by the first Penn¬
stitutional portfolios already hold sylvania Turnpike extension, the
enough of the credit, and despite New Jersey Turnpike, the Brook¬
an attractive price, feel they can't
lyn-Battery Tunnel, and the Maine
take on any more of the name. Turnpike, all built since the war,
Long-term New York City debt all in operation, and all paying
would be one prominent example. their way, investments in
these
Such debt tends towards regional securities seem amply justified.
Automobiles
need
roads,
and
concentration, and pension funds
project

-

outside

located

profitably

might

York

New

term

There

northeast

the

examine longCity bonds.

another mu¬
situation
which
mentioning.
During
and
after the war, many communities
•experienced a mushroom gjrowth
of population which simply overwhelmed existing
facilities. The
result was growing pains.
New
schools had to be built, new water
works
developed,
new
streets
is,

nicipal

besides,

market

bears

-

paved,- and so on. - Under
-conditions, public debt ran

.

rapidly
quickly

.

-

such
up

as

population. Debt ratios
reflected
the situation,

as

yield

3%—more in some cases—

and these bonds may well

the

return

funds.

>-

County,

-example,
has
-which,
six or
-served

'Today
..

automobiles

at

much

pretty

the

present annual rate, I'm sure you
will agree

that automobile owners
are
going to be able and willing
to pay for roads adequate for the
cars that they drive.
let's

Now

sheet.

turn

headed

It's

this

white

"Short

Term

to

a

ings

a

listed

few

New York,

That is rather

years

hundred

ago,

children.

their school children are
in the thousands. One

-numbered




run¬

ning

the

good

deal

of

be

price

takes

up

trading

skill,

a

it

but

can

done.

Now

That

is

direct

to

within

five

These

man"

yellow

type

port¬
show

sheets

offerings, quotations, and yields of
representative group of public

a

utility
do

road
a

issues.

the

same

and

few

The

orange sheets
industrial, rail¬

for

Canadian bonds, and for

preferred stocks.

with

the

market

current

In

general,

the

public

utility

section usually affords the biggest
investment

supply. Currently, the

issued

in

serial

maturities running out

They represent

intermediate

and

pension

sector

of the

range
can

in

be

fund's

used

form
10 to

a sort

the

of

whole

able.
you

As

tend

little

to

maturity

When
can
a

buy
count on it.
you

group,

investment

they

quality.

a

maturity,

yield

They

top

show

a

"richer"

Industrial

less,
the

issues

issues

to

be

a

investor.

are

gener¬

.

/
in-

v

mar-

of

placement,
to
move

apt

are

take advan-

can

prevailing

of

tag'e

this

favorable
be

markets. Time and money may
saved

SEC

on

registration.
At
time,
face-to-face

future

with

borrower

of

lender

unforeseen
tions

but

desirable

the. terms

in

tions

than

of

supplies

corporates,
of

the

the

as

in

market,

demand-supply

somewhat

case

in

utili¬

other sec¬
temporary

conditions

occa¬

operate to give the in¬
vestor an exceptionally good re¬
turn. Last year finance company
sionally

rapid succession of
issues, each coming close on

new

a

the heels of its

predecessor, caused

prominent puihinvested in

one

pension-fund

equities, and
have already

has

private funds
30% of

some

committed

admiration

profound

my

work you public
ministrators are
possible

the

tirement of

public

deal

doing.

safe

and

make

To

re-

secure

country's devoted

our

of

for the

pension fund od-

servants

great

must

give

you

a

satis-

well-earned

faction.
it

is

a

of deep

source

gratifiesSalo-

tion

that

m0n

Bros. & Hutzler, shares some

small

organization,

our

part in this important social

undertaking.

altera¬

.

With Illinois Company

loan

the

What does the borrower
bv this method of

of the time,

a

give

CHICAGO,

up

financing? Most

little lower rate of

interest. In addition, he loses some

flexibility
in his sinking fund
operations if the money market
should change in his favor.
What
does
the
lender1 gain?
Generally,-a more generous rate
return, and the size investment
without scurrying around

desired

authorization.

lender

eke out

to broker to

broker

give

up?

What

the

does

Immediate

mar-

111.

VI

Leonard

—

^ockhart has become connected,
with The IIlinois Company, 231
South La Salle Street. Mr. LockK^
hart was formerly with Central
Republic Co.
,

v

.

1

.

n

Joins Iventucky
(Special to The Financial Chronicle)

of

LOUISVILLE,
Hill

is

with

Ky.—H

o y

,

€.

i

the

Kentucky ComLouisville Trust Building:

pany,

of

members

the

Midwest

Stock

Exchange.

ketability.
Of course,
insurance

in the

company

of

case

or

life

a

With C. F. Childs & Co.

a

(Special to The Financial Chronicle)

BOSTON, Mass.
Briggs is with C.

public pension funds? Indeed
they are, if certain rules are fol¬
lowed. Public funds, by andTarge,

are

not

well endowed with

as

in¬

believe

the

With
•

financings of well-known

cor¬

are

only

readily
in

available,

company

and

with

then

major,

nationally-known institutional in¬

Loring T.
Childs and.

Inv.

,

Planning :'

Special to The Financial Chronicle)

BOSTON,

Mass.

Boucher and
become

—

J

a m e s

.

,

M.

Mary P. Drew have

affiliated

with

Investors-

Corp. of New England
Inc., 68 Devonshire Street.

Planning

'

1

1

:•

Joins Townsend,

confine their
participations to

porations with an extensive his¬
tory, where market, comparisons

F.

^

they should

direct placement

—

Company, 3o Congress Street.

for

vestment research facilities as are

is

in-

ultra-conservative

v

private pension funds and life in¬
surance
companies. Therefore, I

floating

smaller

300.

(Special to The Financial Chronicle)

1

the

and

above

be advantageous in obtaining

may

number

than public
floating supply
is smaller. In addition, they usu¬
ally have active and substantial
sinking funds, whose operations

keep

fewer in

bit
for

new

bonds, due to

repesent

Industrial

rails.

western

other

lie

•

bond mar-' ties.
to meet a
In

special

classifications

-"

'

pension
fund, the marketability given up
is
should they be redeemed, a buyer
only theoretical anyway, and
might have a loss on the invest-, after such directly placed securities have been outstanding for a
ment.
reasonable period of time, they do
Long-term, high quality rails
show a bit more yield than utili¬ become marketable.
Are direct placements suitable
ties, even in the highly regarded

utilities,

15 years.

quality

top

•

number

a

direct

negotiations

rate,

program.

ally

are

In

reasons.

do

the public

are

faster. Borrowers

contract.

short-term

certificates

There

some

aspects of planning an investment

borrowers

do

Bl-plus. Quotations show security,

helpful

irreguHt/

an

upward trend from

to

a

>

Why

contact

maturity, call price,
bid and ask, and yield. As you
can
see,
these sheets and their
companion pieces can
be
very

shown

on,

35

stand at least

fi-

banker.

Offerings are listed alphabeti¬
cally by ratings in the institutional
securities
quality
range,
from
triple-A and Al-plus to BAA and
coupon

1887

sustained

and

investment

an

kets?

"prudent

as a group,

trust

of

stead of going to

folio.

representative'

be worth almost

corporate their assets to common stocks/,
borrower or, very rarely, a public
-./.Now,
ladies
and
gentlemen,
borrower, seeks financing from a. we've covered a lot of financial,
small group of selected lenders, or
ground, though of course, the time
sometimes from one large lender., element
permitted only a surface
Usually this is done through the survey. In closing, I must express

of

a

50

now

This, J
think,
illustrates
why
savingsbanks, trust funds, pension funds,,

section

the

placement,

mediation

to the

come

but

in

placement
•.

In direct

long-term
Corporate
bonds
which
would
comprise the bulk of the holdings
we

a

generally

ket,

equipment

are

due

Among
other
desirable
for qualities, Th!ey have one great
'virtue: as a rule, they are not call¬

districts

school
seven

to

blocks of such issues without

pension fund but,

equipment
with

it

on

certificates

needs.

•

Nassau
.

of

yields which range from
4%%. To acquire small

3V2

ago;
index of

go back further: the
Dow-Jones industrial average has.

from

after

long

appearance

nancing.

an

provide; maturity

fattening portfolio
for traditional type pension

means

tected

pro¬

best. In today's market, the next
quality category affords yields of
up to 3 to 3Ys%. Where yields run
markedly
higher
than
these
ranges,
the
bonds
are
usually
priced so
far above
call
that,

program,iand Ford is Still expand¬
If these two leading Ameri¬
can
enterprises are
willing to
wager that people are going to
have
the
money
to
spend
for
ing.

for

obligations
of
growing communities

They

well

from

years.

Long-term

few.

a

and

show yields of about 2% to 3%, at

a

makes freauent visits to the

such raoidly

name

nounced

trust

mar¬

to

excellent

two

ratings by the statistical services.
developments always beset
the
credit
of
a
borrower
who

rise.

:

willing to

are

roads. Only a few
General Motors an¬
billion-dollar expansion

good

7%,

in- Standard; and

years

other public-in-vast?., vestors have been acquiring holdmedia, or which ings of common stocks. I under-

issuance.

months ,ago,

Securities" and most of the offer¬

ketplace. When supply outweighs
demand, prices decline and yields

•

apparently

for

pay

and this resulted in lowered credit

These
■

drivers

Steel

one

•

$224,000. To

area

all

at

appear

For

reason.

bolster

stocks would

which

field

'

afford

Con-

Pete

important

an

not

any

its

Nickel

5%,

-

ment information

International

7%, General
United
States

40

around

investment

good

a

they-

Poor's

ago,

year

Phillips

Now there is
of

Bethle¬
hem Steel 7%, Corn Products Re¬
Eastman

a

mill.

vestor's

non-callable, high dividend indus¬
as

than

112, were selling at 100. Everything, in its time and place, may
be grist for the pension fund in¬

trial

preferreds, such

Less

at

quality utility bonds. You

note

•*

acteristic

•

hundred thousand dollars invested

yields attractive to institutional

investors.

is

thing,:

Telephone and
graph convertible issues have sold

sheet.

they

**

yield; , for
time^.another, in-the long view they
Tele-*; are safer than they seem.; One

.to

listed towards the bottom of this

the

there

as

Government market trading tech¬

Nevertheless,

penwere

immediately tradeable, it is safe

in-

•

niques.

size

maturities, and call features simi-

.

of hand

institutional

vertible 3.70s of 1983, now selling

limited in

Where

sion funds. If these securities

be.^eizqd. ^ they • hdhpted: to fpension fund investexample," 6n^the';jrer^^
.;
)«.
verse side
of the yellow sheet.-is o'jrrNo
rsurvey
of the investment
a
quotation
section
devoted
tp -market, would be complete wifhconvertible bonds. Nothing in that out a comment on common
stocks,
list now has any special attraction
Equities have come to play an ro¬
tor pension fund investment officreasingly -important role ih..pe»+
cers. However, convertible bonds
sion trust investment. For this,

have been bought

status.

market.

major

country and private

For

occur.

by Government market standards, they
did not readily lend themselves to

their

Company,
were

managers should.

the

Being

•

In

grade preferred stock issues. Many

market

occupy

in

out the

ret

at

proper

-

on

municipal bond
legally permis¬
sible, these bonds should be prime
candidates for your portfolios. I
am referring to the toll road reve¬
nue
bonds, some of which are

now

position

a

Investment

Buyers of these issues

larger life insurance companies throUgb-

,

off, gives them

of tax-free

pre--

-

districts

achieved

now

5%%

years. Recently, we placed pritwo
similar
type
issues;

Associates

afford

new

•

roads

every

get, ample
As
institutional
invest¬
laid, that the; county
is status.
responsible for their tax collec¬ ments, they have a long and very
tions, and that the love of parents satisfactory history. The pamphlet
for their children is a factor more you received, along with our quo¬
powerful than statistical revela¬ tation and offering sheets, con¬
tions, and school taxes will be met; tains a complete description of
Another

bori owing.

*

state

has

of

in .bankruptcy make verse may
true* //
,; ,t_.
to say; they.would be selling at a
effort-to find the money to
Thesq,,market inequities farely. ^premium., today. So;> within the
meet their
equipment' trust ob¬ persist tand" the unusual - bppor? [.stipulated
standards, direct placef • ligations. This, together with the" tunities they presejitotp: portfolio ment* issues •/* seem*1-" very ^ well

great;

investments
sound?
There. arer I-think, few which are
better. I know their credit ratings

dropped,

for

simply seizes the

-

benefit of the state pension funds,
the school districts'
credit, and the

have

certificates

trustee

shares

aggregating $22.5 million for the

money

trouble

the

100.000

vately

■-

••

,

of their bonds up to the 3% level.
It
might
even
have
driven
it

develops,

and

a

yields ferred stock with a 100% sinking
chalked up on each Issue;-fund scheduled
to give the preFor a while,,
telephone bonds ferred an average life of about

On the reverse side of this white

be

in Wall Street his-

tory, the bonds

•■l-Vi

As

33*

were

for this is obvious. Title to

reason

the
the long maturities

acute
market
indigestion.
result, successively higher

sheet you will find listed a num¬
ber of actively traded investment

would

"

.

high ratings, en¬
anyway.
The

prominent

which

errors

hard to

!-

collection

a

markets

turity

the

All this occurred in the early
stages of the. postvvar^decline in
bond prices which reached its low

v

ratings, and the few

have

good

district borrowing has driven

with ;-v everybody:- I Are. -such

tho-eonfusion,

jryisig^ ta

their

don't

the equipment doesn't pass to the
parent road until the last ma¬

school

>-S<s. bondcimftKtar* As a -result'of- all:, children's welfare, i '-

t

joy

by

homes and

on

in

that

romance

abetted

and

low down-payments
by VA mortgages.
The

this

the school boards had

say

swamped in

(2457)

i

Dabney

(Special to The Financial Chronicle).

Mass.

BOSTON,
Kukkula

has

—

been

son,

the

30

State

New

York

Edward

added

staff of Townsend,

E.
the

to

Dabney & Ty¬

Street, members
and

Exchanges.

Boston
j

S4ock
<

vestors.

With

This week at Salomon Bros., for

example,
lion

we

direct

will close

placement

a

(Special

$25 mil¬

for

FALL

Libby,

McNeill & Libby, the issue being
$15 million of 25-year 3 Vz % Bonds

F.

Lane

King Merritt 1

to The

Financial

RIVER,
is

with

Company, Inc.

Chronicle)

Mass.—WilLiam

King

Merritt &

34

TT& CtnamerckdsTid FiMwxQX Chronicle...Thursday, June 3, 1954

(24?S)

Continued ;irom

6

vaae

a

.

!_!•

«

v

tifftfllflV££S
AilftftJrAVJr
C*

AT

.U

u

,

♦

ample, both the New York State
Retirement System and

Teachers

California

the

the

added

Retirement

Employees

State

net

same

percentage of new members.

Yet

'

.

-•!»

1

-U

.

*

>

•

to

consider

earned

when

rate of

is

not

way,

the

use

of

Types of investments

visor would not

the

the city officials in charge of

the
in a

York

New

State

Teachers

the

average.
...

In

.

ture
two

method
fund

a

16.4%

funds

v

General Obligations

retirement

BondV"""""""

corporate

an

of the

re-

for the

next

that

the assumptions

be

pre-

cisely documented on an actuarial
basis, but the results were amazingly comparable. In 1958, the
estimates
indicated
that
public
have

would

of

assets

ap-

proximately $15.3 billion and intheir net assets by $1.8 bil-

crease

the

following

In 1963,

year.

the'

comparable estimates would
billion and $2.3 billion
and in 1968, $38.1 billion and $2.9
$25.3

billion.

should

It

that

noted

be

these projected estimates

actively

factor is reduced*to 2%%

Investment Counselors
One

area

in

est

th0Se
the

analyzed, 105 reported that

tbe Board of Trustees of the funds

responsible
the

,

Nor is

remaining

State

or

Local

in-

cases,

Treas-

city Comptroller, State InCommission, etc. Upon

urerj

vestment

doser

the

of

examination

105

funds where the Board of Trustees

had the investment responsibility
it \s

probable that all investment

implementation

wh0 would

in-

salary

making

for

vestments. In the

provision

annual

with

dealt

responsibility for making inthe use of the pri-

was

with the possible

exception of over-all policy decihad been delegated to a gov-

Si0n

officer

administrative

additionally originate
the policy for the Board of Trus-

tees to act upon. Thus in the majority of cases, the investment

provision made for
inflation, as
it was assumed that any modest
increase in the cost of living in

policy of the funds was dependent
on public officials who were in

the

the

any

additional

near-term

would

future

not

dual position

of Trustee and
general trend toward an appre- Government
Official.
Recently,
ciable change in the average Gov- many important people and orernment employees wage, which ganizations,
notably
The
New
incidentally, over recent years has York City Bar Association, have
.increased
faster than
the. con- raised the question as to the possumer
price index.
Benefits on sible conflict of interest that a
the other hand, for many funds, person might have in this dual
have a considerable distance to go position. Basically this is a legal
before
a
subsistence
level
is or administrative
question that
near

cause

a

V"

This therefore is

reached.

social

a

problem and difficult to forecast,

'

who

the Gov-

should

be

the affairs
public fund. As public retirement funds become larger and
interested

their

investment

jzed,

the

in

liberal-

policies

question of the use of
be given

an investment counsel is selected, it
should go without saying that it
should be
professional and in
close active touch with the se-

that

was

vate investment counselors. Of 125

^

official

or

in-

advise

should

counsel

used

the

investment counsel will

survey

vestments and

were

pub-

M.F O A

questions

funds

a

of considerable inter-

the

ernmental

for

21/2%.

or

>

a

if

example,

For

ernment

0f the

are fully funded or put
actuarial basis, the interest

an

make no
provision for increased retirement
benefits and only make a modest
creases.

rate

of

use

in-

one

merit

considerable

properly.

on

15

that the average emcontribution
would
increase from $325 per member
in
1952-53 to $410 in 1970.
Neither
method
is
completely accurate,

high prescribed

a

has

The

use

and

counselors

private investment counsel

or

of interest

and

can

have

iic

six

firms

vestment

1970.

assumed

ployee

be

investment

use

private investuse banks, ten

six

counsel,

the Board of Trustees

in

increase

method

annually

lion

a

ment

is evidence that when those funds

of

rate

funds

to

revenues

use

out

102

would amount to $50 million for
all funds in 1970. However, there

public employee coverage would
increase by 100,000 net new mem-

nor

additional

125

do not

that

five years thereafter,
decreasing to a Ql/z%

year

compounded annually, that

years

of

source

a

of

indicated
funds questioned,
survey

public agency.

second

bers

an

Insurance

M.F.O.A.

earnings, 50 were dependent on
the employer. While thjs deficiency was small in 1953, % of 1%

the

interest factor of 21/2%

1

substantial number of funds
earned interest deficiency.

a

The

1953-54,
rate of inwould decrease by 1% each

annual

4

seen

percentage

for
gradually

^ i

be

can

has to be solved by legislation or

court decision.

However, in some

increased consideration. If

curities markets
should be

a

at

all

times, it

fiduciary in all of its

relations with the fund, it should
be independent of all political, soor economic pressures, and it

rial

should be made up of men who
are
capable and
respected
by
other members of its profession.

°

Changes in Investment Policy
Ninety-five of the 125 funds
analyzed by the M.F.O.A. survey
reP°rted that they had made no
changes in their investment policy during the past five years,
Thirty funds reported that they
bad broadened their investment

pol*cy during that period. This
broadening was predominant y o
a Seneral nature except f
cases where the fun s we e pe *
mitted to pure ase °ut-o - a
municipals, FHA gua a tee
0gages, real estate mortgages
r
special assessnfient too
t ^
assumed that if author ty ha

funding

If

»

*n charSe

ppHirn

fun(T

It is most unfortunate that

Ninety-five

funds

analyzed

in

public

retirement

the M.F.O.A. survey had an aver-

select certain

of return on investapproximately 2.84%.
This compares with 3.33% for life

abilities.

obtain the

insurance

Trustees

rate

age

of

ments

companies, approximately 3.25% for corporate pension
funds
and
approximately
3.70% for a representative group
of

foundations

in

1953.

the

In

M.F.O.A.
117

supplement analysis of
public funds, 28 funds earned

3%

or more on

funds earned
no

their assets and 18

2V2%

or

less.

With

weighting given for the assets
component funds, then the

of the

model

interest

rate

for

24

funds

their

ciai

investment
Most

of

composed

of

who

engaged

in

rate

of

creased

interest
over

This change

the

past few

movement
Government

rate

bonds,

in-

years,

is due to the recent

rates

on

has

earned

upward

ment

years

the

of

trend

liberalization

corpo-

of

invest-

and




interest

and

the

dis-

of

the finan-

could meet

actively
matters

once

month

each

investment

all

on

be

and

matters.

The remaining investment implementation could be done by the

Government official
ment counsel.
of

a

A

an

or

invest-

typical example

fund not making the most of

them would be that of

individual

Board

a

investment

Comparing

the

or

leading citizens
These

would

the

1953, it is evident that the

of

public funds could

services

would be between 2.71 and 2.80%.
1951 to

not

compensation.

Trustees

pass

do

because

background

communities'

without

funds

trustees

more

opportunities

employees
Board

of

consists

available

retirement
Trustees

of

various

fund.

of

to

large city

a

this

The
fund

city

officials,
Mayor, the President of the
City Council and the Comptroller.
the

All of these
of

them

ment

are

are

able

men

but

professional

officers.

It. would

appear

term - securities

that

that yield

'

place* in

no

a

publie

"tion

inTstments

21

19

attoactive
to
equivalent grade corporate bonds
because of the recent tremendous

,

.

°?e. inference that should not
b.e taken from the above tabula,

tl0n 1S tbat 23 funds could not
purchase U. S. Government Secur^es or that 38 funds could
not Purchase General Obligation,
State and Municipal Bonds. The
aPPa*"ent distortion is due to the
last tw0 categories "Investments
le&a'l
Banks and Insurance
Companies." The proper conclus*on .to draw from this table is
R13* R °* tbe 12* funds, 47 could
buy corporate bonds, and if we
logically assume that insurance
companies and banks can purchase
corporate, bonds, then a total of
33 funds or 68% of the funds could
purchase corporate bonds. This
figure compares with a 52% estiniate madUnion Securities survejrin4952. Thus it would
appear that public retirement
lunds that could not legally purchase^ corporate bonds are in the
minority.
rinficS«„a«A„

nf

j

v

.

mately $6,031,000,000 on June 30.
Hi0? |ecurs"

U. S. Govt. Sees.
State & Mumcipai Bonds
_
Corporate Bonds

Mortgages------

.

56.0%

54.0 /o

14.0
22.0

26.0
14.0

■,•••; 7.0

4.0

1.0

2.0

Other

{0

t

mar-

g
ooDortunitv
naa me °PP°rtunity

h

h

di"g,

d

•

A most important and meaningful portion of the M.F.O.A. survey
is the classification of investments
owned by 124 funds who had assets of $4,352,639,544 in 1953. The
percentage diversification of assets shown below is compared
with the 1952 Union Securities
summary which covered funds
with estimated assets of approxi-

__

volume of offerings that the
k

•

:

•

Average Maturity
The lengthening of maturity ofters a fertile field for the retire-

Tm,oc<niflnle

^lassiiicaiion ci investments
ea

jompared

^currently
16
20

g

cfs^tfhieh

is not true in the

grade revenue bonds' as thev can
be satisfactory
tor tax
exempt funds
Their yields, are

29

Comnanies

retirement

,

ment fund desirous of increasing
its return on assets. Of 104 funds
analyzed by the M.F.O.A. survey
with assets of $2,7-31,385,318, 6%
of the investments had a maturity
of less than five years, 10% less
than 10 years, 29% less than 15
years,.and 48%^ less than 20 years,
This would compare with an avgrage life insurance company tljat
has 6*7% of its assets invested in
securities with a maturity of over
20 years. A large percentage of
short maturities is important for
funds that might have need for
liquidity. Serial maturities for the
pension fund often only help to
exaggerate the investment probJem. At the present time, most
pension fund investment managflsi areA relactant to speculate
that next year s interest rate pattern will be more attractive than
this year's—it might be less attractive! A pension fund that is
in the accumulation stage has the
opportunity to dollar averagejts
investments through the rnvestment of the net new money available each year at the then prevailing interest rates. This fact
is further brought out in the
M.F.O.A. study of the flow of
funds available for investment by
°ver a three-year period,
? indicated that an approximately
level amount of money was available for each of the 12 months, v

Conclusion
The conclusion to draw from
the M.F.O.A. survey is that public
retirement funds are... dynamic,

They are important today even
though their assets are not the $44
billion they could be by 1970. For
example, in .1953 their jaet new.
money available forTinyestm^nt
percentage increase was, actually could have pui-chased all of the.

lu^ne.^

,

has .'Recently', taken'- plaCe:'ior life publicly offered 'long-term corcompanies and savings banks whd porate bonds rated "A" or better,
raised funds for the purchase of As the trend of investment broadother securities through the sale ening for public funds continues
0f government bonds.
The de- and as the funds continue to grbw,
crease on both
a percentage and
the outlet for the investments of
dollar basis in holdings of State new money in the money market,

liberalize their investments but

ancj Municipal bonds is probably

^or vari°us reasons, had not done

due to

s0-

The; New York

ees

Retirement Fund is

Employan exam-

these

vyill become more competitive.
Those funds whose portfolios al-

securities and due to the fact that

ready contain large percentages of

other securities

higher yielding,

the serial

nature of

had

more

attrac-

p*e
this. They have always had
the authority to purchase any se-

tive returns. Several funds sold
short maturities at low interest

curity eligible for

rates

a

New York

State savings bank. Yet, in the
past> they confined their purckases principally to New York
City obligations and United States
Government Bonds. Recently with
a

change in Administration and a

and

reinvested

in

longer

bonds yielding substantially more,
The most startling change in
the above comparison is the increase

assets

jn the percentage to total
of corporate
bonds held

from

to 22%.

These percent-

ckan§e in New Y°rk City finan- age changes confirm the previous
cial policies> this fund has re- indications that public funds have
ceived Board of Estimate approval become substantial purchasers of
to purchase high grade corporate C0rp0rate bonds. Most of these
bonds a"^
guaranteed mort- corporate bond purchases were of
§a^es- Furthermore, none of the necessity in the electric utility
retirement funds will be obliged industry as the trend has been
to purchase f^ew York City obli- for industrial bonds to be placed
Satl0ns unless their yields com- privately and only a limited numpa,fe' Quallty considered, with ber 0ffered in the pubiic market,
other types of avallable invest- Although there is little question
menisJ
that public funds will continue to
Types of Investments Legal for
Pension, Funds

none

invest-

r

good grade corporate bomfe^nwe

~

'47

savings Ranks

.

any

a

as

sihcation this broadening^ would
100.0% 100.0%J?e.used. ine trend continues to
Holdings of U. S. Government
be icxr turmer investment lio^aii- securities as a percentage of total
zatl0n proven_py tne^iu itino^.m, assets increased to 56% of the
J ®xhsurvey tnat^contempmted^a combined portfolio. This small

drawn from this

«

.

been granted lor a wider diver-

over a period of investment ^administration of these ably funds t at had alrea y -r^.
conclusion is to be funds by the use of certain mem- ceived sucn autnonty.
projection of &s- bers of the Board of Trustees as
Furthermore, some of the funds
sets, it is that this projection is a a Finance Committee, or by the included in the 95 funds that had
conservative
minimum
and
an
appointment of a special Board of not broadened their investment
even more dynamic rate of growth
Finance to advise the Board of policy during the past five years
is likely.
Trustees or the Government Offi- were funds that had authority to

quent

years.

long

ReSe

fnSenls ^gallorT""

dividual

during

serves

Thus it

or more.

diversified
and

83

dual

meet these deficiencies in interest

year

The

funds

97

by

this

crease

the

first Of the 55 funds that indicated

increase

would

assets

then

The

were
used.
assumed that

jeetion

of

funds out of 117 funds earned general public.

»

projection of fu- 3%
growth of all public funds, that
independent methods of pro- had
making

that 32

fact

bonds

tax exempt securities
approximately the same
98 / or less than governmenbdxmds or

.

State and Municipal Bonds:

would not be placed
Real £State Mortgage
position, or at least their Preferred Stocks
average
employee
contribution analyzed had a prescribed rate of trusteeship would be of less conCommon stocks ~
was
only 60% of the California interest of 3.00%
In 1953 only cern to the fund membership and

the

as

\ No.of Funds

,

existing U. S. Government Securities

the

investment adbe necessary and

an

the

itself, but

2.84%

that

for investment staff submitted. In this

examining

rate

month and review the rec- - ;

ommendations

t

.

assets

The important point

interest

average

ji

i

Government

and State and Municipal

invested in

tained for little or no com pensa- "summary of this study istion- These men could meet once follows: -

'

J

-

invested

select^United States Government Secu-

of rities/Stateand Municipal Bonds there is-agrowin gfeeling-among
' services
uninterested
financial men whose and Corporate Bonds were the public pension fund officials^hat
probably would be Ob- principal investment mediums. A thelrTunds should be

Pension W 1111(1 S .%
A - wAMAVM • A l§Wtw< -.each
tribution of
public funds.

should

1 * a Board of Finance, composed

*

* IMflAV;
mPU||]|fl

/«!

I

ff

situation like tljis,, thei l21^unds legally could purchase/ low yielding ,ur Si

o£ Trustees

Board

-

^

■

The
on

the

M.F.O.A.

types

survey

purchase

corporate

bonds,

it

is

conceivable that the rate of acqui-

reported

of investments that

sition will be exaggerated during
the next few years by the sale of

high

grade

cor-

porate and revenue bonds will
find less difficulty in maintaining
portfolio yield than those funds
whose portfolios contain a large
percentage of short-term lowyielding securities. The current
pressure for additional yield will
further increase the need for investment broadening and diversification—perhaps into the fields
of private placements, fee owned
real estate or equities. This will
necessitate larger investment staffs

and more time spent by public
officials on pension fund investment matters.
In the past,
pension fund investment management might have been a minor

part of the overall municipal fiscal management. However, in the
future, it will be a separate and
all-important function. Public pension funds have come of age and
will be giants—all in the matter
of a few years.

Number 5330

Volume 179

.The Commercial arid Financial Chronicle

..

(2459)

The

Indications,of
Business
AMERICAN

IRON

Indicated

AND

Bteel operations

Steel ingots

AMERICAN

Crude

.

INSTITUTE:

'

PETROLEUM

INSTITUTE:'

condensate

'

r

output—dally average

(bbls.

Crude runs to

a--

Gasoline

output

Kerosene

output

Distillate

fuel

Residual fuel
*

oil

6

§1,690,000

V *1.698,000

1,654,000

Kerosene

(bbls,)

Distillate fuel

;

;

V Residual,fuel

1

,

oil

(bbls:}

at.

»•:«

CIVIL

ENGINEERING

CONSTRUCTION

7J 020,000

6,812,000

6,983,000

23,353,000

24,050,000

23,319,000"

2,019,000

8.261,000

8,136,000

,

'

Jay 22
V

—Jay 22

22,660,000

Mixed

,0

8,316,000

175,750.000

178,033,000

152,403,000

18,518,000

22,003,000

Benzol

58,932,000

66,776,000

Crude

45,766,000

45,996,000

43,779.000

40,629,000

Refined

v

"

677,581

'.. '626,181.

x

589,402 '■/■■■

769,618

565,866

State

*

Federal
'

.

COAL OUTPUT

(U.

.-Bituminous coal

-

;

S. BUREAU

and

lignite

(tons)

DEPARTMENT

V

STORE

AVERAGE

$291,296,000

152,246,000

227,510.000

144,295,000

153,844,000

136.236.000

102,937,000

96,808,000,

137,452,000

.May 27

116,533,000

80,483,000

-May 27

19.653,000

May 22
;

May 22

SALES INDEX—FEDERAL

SYSTEM—1941-49

,

$241,103,000

May 27

j.

•

22,454,000; ,:

,

76,596.000

97,269,000

20,212,000

40,183,000

imports

(barrels)— i—_
(barrels).
,

(barrels)

products

imports

(barrels)

consumption'domestic

(barrels) %
Increase all stock

and

Ago

5,134,470.

'5,904,599

4,931,469

4,809,586

5,534,416:

4,619,439

67,886

..76,626

91,387

256,993

293,557

220,643

222,882,000
201,702,000
21,142,000

198,387,000

* 222,699,000

178,605,000

202,458,000

19,749,000

20,202,000

33,000

35,000

39,000

•<v 20,260,000
13,483,000

17,395,000

20,320,000

14,649,000

14,156,000

export

"V

259,355,000

i

(barrels)

DEBITS—BOARD

of

April

BUSINESS

(in

OF

.

.

GOVERNORS

237,413,000*

255,565,000

2,730,000

6,982,000

;1,610,000

$154,661,000

$141,933,000

$145,567,000

*$46 ,115

$44,797

OF

thousands)-—;:

INVENTORIES

(MERCE

NEW

6,740,000

8,767,000

413,000

443,000

687,000

DEPT.

—

OF

SERIES—Month

COM-

March

oi

dollars):

of

Manufacturing

7,100,000

::

Month

$45,698

___

Wholesale

Retail

—

v

11,774

*11, 854

11,488

22,564

22, 421

21,981

$80,036

$80,390

$78,256

RESERVE

100

—

Ji.150,000
457,000 *

Year

Month

THE FEDERAL RESERVE SYSTEM—Month

$330,447,000

MINES):

Pennsylvania anthracite (tons)

,

Previous

(barrels of 42 gal¬

oil output

output
(barrels)'

output
oil

(millions

OF

of that date: "

are as

Latest

INSTITUTE—Month

:

crude

656,205

May 27

—

and municipal-.

$288,432,000

therms)

therms)

gasoline

Indicated
-

(M

i

each)

^Natural

21,590,000

"■•i.

(M

PETROLEUM

Domestic

-

,.65,531,000

.

sales

sales

•

68,329,000

599,311

—

sales. (M therms)

gas

gas

lons

8,348,000
.*

.

22,263,000

681;967

either for the

are

March:

of

BANK

May 27

.

___

Public construction

therms)—

Total domestic production

s

.

(M

gas

AMERICAN

9,753,000

ENGINEERING

—

NEWS-RECORD:
Total U. S. construction
•/",
Private construction

Total

2,122,000

9,418,000'

..

174.552,000

V

•2,155,000

a"

7

i

ASSOCIATION OF AMERICAN RAILROADS:
Revenue freight loaded (number of cars)
:
X
;
May 22
Revenue freight received from connections (no. of cars) .L May 22

v

§6,969.000

8,953,000^

i' ?

;

6,359,950

2,030.000

Jay 22

._

6,586,450

9.153,000

_

_2-—__—:

2,246,000

6,428,250

May 22

__

.

i

6.434.850

May 22
May 22

(bbls.) .at

'

AMERICAN GAS ASSOCIATION—For month
of
April:
Natural

•

May 22,

at-

oil

99.6

'.:

•

of quotations,

cases

Ago

-

69.4

Manufactured gas

Stocks at refineries, bulk terminals, ln.translt,
in,pipe lines—
Finished and unfinished gasoline (bbls.) at—

; ;,

in

or,

Year

*71.2

-May 22

27

'Ago

production and other figures for the 4,

cover

Dates shown in first column

that date,

<

(bbls.)

output

Month

§70.3'

.May 22
■

(bbls.)

output

Week

on

of

.

(bbls.)
(bbls.)_.—

oil

Previous

Wee a

month available.,

month ended

or

6

May 22

stills—daily average (bblsJ

Latest

or

.

,

June,

—

7: 42 gallons each)
.

>

June

v

and castings .(net tana):

oil and

'C

(percent of capacity)

Equivalent to—

week

Activity

STEEL

following statistical tabulations

latest week

35;

'•

106

May 22

i.'"C

101

97

■

112

EDISON ELECTRIC INSTITUTE:

;

Electric output (in 000 kwh.)

v.

FAILURES

(COMMERCIAL

IRON AGE

steel

Pig iron

■;

8,433,000

&

8,373,000

8,390,000

206

248

234

4.634c

4.634c

»'■:

May 27

„

7,956,000

'

/

—May 25

4.634c

'

4.417c

May 25

$56.59?'

$56.59

$56.59

$55.26

May 25

$28.25

$28.08

$26,17

$38.67

May: 26

29.700c

29.700c

29.700c

29.650c

May 26

29.650c

29.675c

29.575c

29.700c

May 26

93.500c

93.750c

97.750c

96.000c

May 26

14.000c

14.000c

14.000c

13.250c

May 26

13.300c

13.300c

13.300c

13.050c

May 26

10.400c

10.250c

10.250c

11.000c

(per

gross

M.

J.

(New York)

Lead

(St.

Zinc

(East

Domestic

St.

'

•

•.

•••-*-

a-

at

;

at

Louis)

at

Louis)

.

LIFE

S.

,

at

Government Bonds

Average corporate—
.

Aa

■

v

June

1

June

1

June

.

Industrials
MOODY'S

Average

YIELD DAILY

437,000

$3,427,000

$2,784,000

Total

MANUFACTURERS'

NATIONAL

Durables

Nondurables

112.37

112.75

105.34

(tons)

Percentage

of

99.04
101.47

102.63

—June

111.25

111.62

112.19

105.34

2.5 6

2.54

2.44

3.21

■■>1

—As

MOTOR

2.87

3.37

PLANTS

3,02

3.43

FACTURERS'

_—June

.3.17

3.15

3.15

3.49

3.43

3.47

3.21

3.20

June

3.14

3.16

3.13

3.63
.

Total

3.81
3.66

3.10

3.06

3.05

3.43

June

437.1

439.3

433.5

420.4

May 22

215,437

242,970

199,437

203,693

225,054

249,190

252,436

| 91
371,563

92

85

96

417,905

350,355

433,436

May 28

107.06

103.13

109.77

106.24

'

100

=

DEALERS

EXCHANGE

AND

SPECIALISTS

SECURITIES

—

ON

EXCHANGE

N.

Y.

short

sales
sales

Dollar

X

sales

sales

•

May 15

993,976

1,008.020

848,921

584,635

May 15

3.070

8.614

3.733

7.849

576,786

$23,289,207

May 15

985,906

999,406

845.188

May 15

$44,272,117

$45,373,149

$37,018,685

—May 15
by

'

SALES

ROUND-LOT

OF

ON

THE

STOCK

MEMBERS

,

hand

margin

$44,797

24,045

*23,620

25,763

$29,707,000

$29,904,000

$29,754,009

631,769

633,002

723,532

534,667

531,529

596,633

96,723

101,177

126,754

V

296

145

$1,716,250

$1,594,377

April

debit

net

banks

in

customers' free
value

of

value

of

balances—_—

$1,786,241

customers

to

and

Market

accounts—

listed

U.

in

credit

S

balances-

shares—

33,259

39,413

312,022

312,023

308,816

819,174

787,281

737,841

25,250

134,586,165

129,122,311

114,861,878

108,356,342

107,976,396

98,561,619

Member

borrowings

issues-

106,481

146,964

57,753

Member

borrowings on other collateral-.—

1,130,652

1,081,526

1,158,672

*$283.0

$283.6

listed

—

bonds

U.

on

S.

Govt.

PERSONAL INCOME

IN THE

(DEPARTMENT

March

of

(in

UNITED

STATES

COMMERCE)—Month

OF

billions.):

Total

personal income
and salary, receipts; total—.—
employer disbursements—
Commodity producing industries
Distributing industries

-

320.340

283.815

303,420

320,340

283,815

308,420

179,530

N.

Y.

217,310

343,340

319,370

193.6

industries

Government
Less

——1-——.——
.•—

——-—-——

contributions

employee
surance

social

for

—

—

interest

Personal

transfer

Total
Total

rental

and

Proprietors

STOCK

TRANSACTIONS

(SHARES):

————

—

income———-----

income

dividends-

and

payments

income

nonagricultural

194.7

196.2

190.2

192.4

83.9

*84.9

88.8

52.0

*52.2

50.9

24.3

24.1

23.2

33.4

*33.5

33.3

4.7

4.8

'

in¬

—r-

Other labor income

242,180

$232.8
189.1

Service

179,530

•

Wage

Total

.

———May 15

.

AND

ACCOUNT

carrying

Market

1

dealers—

TOTAL ROUND-LOT STOCK

EXCHANGE

/630.331
$28,504,799

May 15

Number of shares

FOR

789,682
$36,077,922

May 15

Round-lot purchases

*$46,115

omitted):

extended

of

of

—————r—

Short sales

»■'

1,038,600

$47,744,336

by dealers—

Number of shares—Total sales

Other

993,442

$45,767,553

V

:.

value

Round-lot

May 15

May 15
(customers' sales) t—

Number of shares—Total sales

other

19,778

$45,698

$25,019

COMMISSION:

value

Customers'

*19,947

379

EXCHANGE—As

customers'

on

.

coaches

STOCK

firms

Total

♦$26,16R

19,835

April:

cars—

trucks.

motor

of

(000's

Credit

STOCK

Number of shares

Customers'

motor

Cash

Odd-lot sales by dealers (customers' purchases) t—

Odd-lot purchases by dealers

of

YORK

of

vehicles

of

Number

Total

STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODD-

FROM

MANU¬

passenger

Member

249,134

May 22
May 22

number

SALES

S.—AUTOMOBILE
ASSN.— Month

of

30

May 22

FACTORY

U.

Number

NEW

ASSOCIATION:

of period

IN

Number

3.59

-June

OIL, PAINT AND DRUG REPORTER PRICE INDEX—
AVERAGE

VEHICLE

2.89

—1

(000's omitted)

31

3.04

3.56

$25,863

CIRCULATION—TREASURY DEPT.
March

2.01

3.23

at end

of

3.16

—

(tons)

MONEY IN

3.07

3.13

dollars):

Sales

June

3.14

SERIES—

of

Total

101.97

110.70

activity

orders

110.34

657,000

$3,411,000

SALES

&

NEW

(millions

583,000•

Inventories-

111.81

110.34

INVENTORIES

COMMERCE)
March

90.46

109.42

(tons)

Production

OF
of

106.39

104.66

INDEX

PAPERBOARD

Orders received

(DEPT.
Month

103.13

«

COMMODITY

March

of

537,000

June

Group
Group

Industrials
MOODY'S

Dollar

$2,171,000

INSTITUTE

—

Month

$1,810,000

115.63

110.52

.

Group

—

513,000

110.70

104.43

Utilities

LOT

220,300

584,000

100.65

,109.24

June

.

1949

204,400

177,800

$2,330,000

99.41

110.15

corporate

Unfilled

187,800

170,400

Group

115.24

108.88

^

A

Public

"

203,100

(units)

Industrial

AVERAGES:

.

Railroad

PURCHASES

INSURANCE

110.52

104.31

—

Group

BOND

;

June

—

Group

U. 8. Government Bonds

Aa

shipments (units)

omitted):

99.18

June

—

Group

Utilities

LIFE

(000's

110.15

June

—

Railroad
Public

ASSO¬

April:

shipments

range

114.85

109.97
Baa

gas

INSURANCE

OF

MOODY'S BOND PRICES DAILY AVERAGES:
U.

of

QUOTATIONS):

at

Export refinery at
Straits tin (New York)
Lead

MANUFACTURERS

CIATION—Month

Automatic gas water heater
168

ton)—

.

v

DUN

Scrap steel (per gross ton)

Domestic refinery

.■

—

(per lb.)

METAL PRICES (E. St
•>; Electrolytic copper—

.

INDUSTRIAL)

,

APPLIANCE

COMPOSITE PRICES:

Finished
i

May 29

AND

BRADSTREET, INC—

GAS

„—

4.0

5.2

5.1

5.1

49.9

♦50.0

50.7

23.1

*23.0

21.9

15.7

15,0

13.7

265.5

*266.0

265.4

Total Round-lot sales—

Other

sales

i—:

a

X*
7

—

TRANSACTIONS

ROUND-LOT

FOR

393,130

297,310

May

3

375.930

495,340

—.————May

8

9.996,970

12,071.290

10,500,110 '

6,268.720

—May

8

10:372.900

12,567,130

10,898,240

6,566.530

Short sales
.

Total sales

ACCOUNT

OF

Total

of

—L.—————

Short sales

Other

—

sales

-

-Total

Other

618,170
772,190

the

floor—

—2.

sales

Initiated off the

Total

purchases

Other
Total

sales

—

19,300

31,000

20.300

22.000

May

282,530

375,730

384,990

166,300

May

302,330

406,780

405,790

188,300

purchases
Short sales

L ABOR

28,010

55,050

47,100

59,960

351,250

401,130

386.016

314,470

389,260

456,180

433,116

374,430

1.733,665

2,070,790

1,970,838

1.009.192

:

NEW

(1947-49

=

SERIES

—

U.

S.

DEPT.

grain

8

May

8

267,880

May

8

1.533,050

May

8

1.800,530

.

331:870

294,290

235.980

1,854,340

1,780,166

1.098,940

2,074,456

1,334,920

2,186,210

Feed

grain

OF

Meats
All

commodities other than

♦Revised
of Jan.

1,

figure,

farm

flncludes 677,000

1954, as against the Jan.

tNumber

of

orders

not

reported




and

foods

barrels

111.3

111.0

111.1

99.8

100.7

100.4

97.3

107.0

107.6

105.4

104.8

-—May 25

99.9

101.9

95.0

94.3

114.4

114.6

113.5

May 25

of foreign crude

runs,

114.3

§Based

on

new

annual

capacity of 124,330,410 tons as

252

247
215

443

424

Cotton
Fruit

212

210

209

Truck

246

233

267

275

269

291

—

crops

j—

crops
and products

Livestock

..—
—

products

Poultry

REAL

-—-—

animals

Dairy

eggs

FINANCING

ESTATE

S.

U.

OF

—

Bank

and

associations:
companies
trust

savings

companies

—
—
—

———---——

institutions..:———

Total

UNITED

STATES

BUREAU
(000's

OF

EXPORTS
CENSUS

Imports

—

277

316

315

301

267

276

188

208

217

$666,335

$517,138

$604,854

LOAN

banks.

lending

274

271

257

(000's omitted):

Savings and loan
Insurance

268

NONFARM
BANK

IN

HOME

BOARD—Month of March

AND

123,583

104,813

125,944

335,343

274,350

316,046

102,773

84,553

91,451

241,198

208,470

236,016

314,287

235,869

252,291

$1,783,519

$1,425,193

$1,626,602

$1,404,000

$1,122,000

$1,393,000

948,000

858,100

1,012,629

IMPORTS
of April

Month

omitted):

1, 1953 basis of 117,547.470 tons.

since introduction of Monthly Investment Plan.

237

236

208

—

109.8

May 25

-May 25

/

'

258

Individuals

——May 25

:—.—

foods

264

239

208

hay

and

Oil-bearing

'

258

256

238

263

Miscellaneous

products

15:

443

Mutual

/

100):

commodities—:

Farm

Processed

INDEX

Mar.

Tobacco

Commodity Group—
All

of

products

Food

AREAS

May

PRICES,

222.862

May

sales

—

388,728

May

Total sales

•

437,660

members—

Total

WHOLESALE

364,215

farm

Meat

—May
1

Total round-lot transactions for account of

Other

May

————.——May

sales

162,600

360.850

floor—

8hort sales
*

392,600

279,290

—May

sales

transactions

154.020

1,009,160

1,235,550

Short sales

'

226,390

1,077,430

1,323,250

purchases

Other

/

839,270

1,109.340

on

—

AGRICUL¬

OF

100—As

=

Crops

623,730

-May

.___

Other transactions Initiated
Total

245.820

220,070

-May

—

1,139.560

1,272,280

1,030,160

-May

—.—_—May'

Total sales

1910-14

All

specialists In stocks in which registered—

purchases

DEPT.

S,

—

TURE

Unadjusted—

BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS:
Transactions

U.

NUMBER
—

FARMERS

BY

RECEIVED

PRICES

MEM-

—

36

The Commercial and Financial Chronicle...

(2460)

Continued

from

of

as a "stimulus"
"impetus" to the
economy
by "promoting" credit
expansion.
Most bankers would
use a different emphasis.

13

page

Monetary Policy's New Look
positions

«erve

rates is

realistic, there¬

It would not be

pression

fore, to regard the monetary au¬
as being solely responsi¬

noted

thorities

tue

ble for the extent to which interest

sion

rates have declined over the past

Reserve System has
positions of the

The

year.

eased the reserve

most

that

be

during

ease

stimulated

the

con¬

also

should

excessive

1930's

in

unfortunate

It

sequences.

expan¬

an

supply which
subsequently proved to be infla¬
tionary.
is

It

money

obvious,

of course, that
cheap money tends to undermine
the earning capacity of banks and

banks, to be sure, and has given
blessing to lower interest rates.(
On the other hand, security prices other financial institutions.

*ts

,and

yields

established

are

by

transactions among investors; and
the

Also,
people to use
credit
for
purposes
which
are
economically unsound.
it

encourage

may

of investors to
At the persent time a supersecurities at progressively
fiigher prices and lower yields easy money policy would repre¬
bears no precise relationship to sent in essence an attempt to in¬
the actions of the Reserve System. flate
our
way
to. full employ¬
In short, the Federal has been ment.
What we should strive for
willingness

buy

pointing the direction for interest
.rates to go; but \t has been the
investors who have actually been
running with the ball. The Fed¬
has

eral
run

to

far

as

they have,
true that the

is

It

v

investors

forced

not

authorities

could

monetary
tempered

have

the decline in rates if they had so
desired.

The

to

seems

answer

be

\that both the Federal Reserve and

is

healthy,

balanced growth,

not

repeated doses of inflation.

adoption of
inflation

ous

threat to

would

our

The

policy of continu¬

a

be

serious

a

economy.

Some people do exist, of course,
who have a built-in propensity to

exaggerate the harmful effects of
and to underrate

money

easy

benefits.

That

is

its
for

excuse

no

going overboard in the other di--

had

have

Treasury

been

under¬

standably reluctant to make any
moves
that might even possibly

rection
and

mentioned above.

V

have accelerated the downturn in

What
What Can Easy Money Do?

What

be

can

policy?

easy money

ply

expected from

ployed
an

Does it sim¬

impediments

the
flow of credit?
Or is it, in addi¬
tion, a positive stimulant to the

use

remove

to

of credit?

The phrase

primarily

"easy money" refers
the

to

degree

with which borrowers

of

can

criteria

ease

obtain

to

policy

determine

of

should

how

be carried?

em¬

far

ing, if

relaxation
far?

When

should

not

seek

to

find

a

magic formula to answer these
questions. There can be no single
guide for monetary policy at any
time.

What

is

needed

is

appraisal of the whole economic

related, to be

more

attention

sticks

than

It is

the

not

sure,

same

but they

thing.

when credit becomes

available,

interest

are

Generally,
easily

more

tend

rates

situation.

Yet,

the

most

Last

to

able

cannot

one

to

paying
certain yard¬

escape

to

others.

Which

are

important?

In the

case

of most types

'

f

,

ment policies. It means seeing to
it that the

banks

plied with

reserves

them

are

confidence

have

no

sup¬

and giving

that

difficulty

additional

amply
tney

in

there

year

bankers

find

it

hard

under¬

to

consider¬

they

have

gone
too far.
More¬
question the desirabil¬

over, some

ity of compounding such an error
by successive reductions in the
discount

rate.

extension of credit.

It also insures

much
..

than

more

that

It

cannot

remove

otherwise

might
tionary.

do

pressures

be

defla¬

t

Ease Should Not Be Overdone

at

credit

is

reasonable

amply available

idly

follow that the looser it becomes
the better.

that

fact,
credit

is highly
should

mitted to become

not

important
be

excessively

per¬
easy.

This is just as clearly a responsi¬

bility of the monetary authorities
as

it is to prevent credit from be¬

coming too tight.

We

do

One

of

chief
dangers of
credit is its tenacious
tendency
to
perpetuate
itself.
For illustration, one has only to

look

at

the

1940's.

the
The

entire

not

decade

overcheap

of

mo^ey

the

that

bad developed during the Big De¬




year?

How

,

have

accurate
methods of measuring the avail¬
ability of credit.
Nevertheless,
there

is

very

widespread

among

competent

credit

has

now

agreement

observers
become

that

amply

available throughout all the major
segments of the credit market. A
Federal Reserve spokesman
re¬

cently

declared
of

ease

that

the

perva¬

is

today

"un¬

precedented."
In

the

it

in view of

collapse of open-market rates,
is

not

surprising

that

many

bankers feel that easy money has

already been carried far enough,
least

under

present

circum¬

stances.
On this

point, there seem to be
some
misgivings with respect to
the policy of the Federai.
One
,

reason

may

which

some

claim

be

the

extent

Federal

seem

at

to

Reserve

times

to

dis¬

of funds.

ora

large

It has

quantities

not piled up

of

excess

re¬

Also, the Reserve author¬
ities must certainly be cognizant
of the dangers of overabundant
money. They are inevitably con¬
with

cerned

cial

the

health

institutions.

important that
ceive

of

finan¬

They know it is
should re¬

money

living wage. They cannot
abdicate all responsibility for the
a

level of interest rates.

So,

the

have

Federal
in

erred

Reserve

the

may

direction

of

ease, and may continue to do so;
but it can assuredly be counted

ridiculous

treme.
It

ex¬

.

would

ing to

not be at all surpris¬
in the not-too-distant

see

ber bank

reserve

Reserve

authorities

If

exercise

they should be
accomplish this without

to

further depressing short-term in¬
terest

rates.

With
respect to these prob¬
lems, and some others as well, it
would

be

most

desirable

illumination

more

At

times,

statements

have

statements

usually

to

have

from

official

when

official
miscon¬

been

a

more

spur to business than
ers

believe.

ample,

one

powerful

most bank¬

.Recently,

for

ex¬

Board member spoke

built

is

size

and

up

to

a

substantial

a

is

being rebated by the

time

question

banks.

to

thought to the
deposit insur¬

give
whether

cost should

ance

related

cor¬

believe

I

not

be

the

to

di¬

more

protection

a

have

been

un¬

There

has

subsidize

to

sense

its

tition.1-■
This
its

compe¬

^

issue

would

lose

some

Market
The

the

year

nevertheless
tions

than

swered.

with

more

been

who

ques¬
an¬

concerned

otic

and

even
daffy to take a
publicly in favor of easing
the burden on the big banks. Per¬
haps. But I think that the present

stand

method

of

deposits is

billing

a

assessing

unprotected

no more equitable than
skyscraper for fire in¬

much a floor, right
roof, and paying off
losses resulting from fire only so
far as they are incurred on the
at

surance

so

the

to

up

first floor.

It does not do any good
rationalize the present assess¬

ment method

by maintaining that
through its operations the FDIC
is protecting all depositors even
though its insurance liability ex¬
tends only to the small accounts.
At the hearings three years ago
Senate

Committee

made

pretty clear that Congress
not
given the corporation

it

had
any

such latitude.

Conclusions
As I

My

last question relates to a
practice that has grown up since
deposit
insurance
was
started.
When

the

in

passed

ously

Insurance

1933

sought

to

find the money

of

payment

was

Congress ingeni¬
help the banks
to pay the insur¬

assessments

ance

the

Act

by

on

de¬

mand deposits.

that

seem

but there

to be much that

could do about

|

they

it.

Now, years later, some of them
coming up with a way around
prohibition.
Unable to get
any interest from the banks on
are

this

New York

their

cash

I

want

to

paper

emphasize
offered by

other

corporations.
Instead
of
banks themselves being the larg¬

est

buyers of commercial paper,
nonbanking corporations are now
the principal takers....

would

clarification

1929 it suddenly became clear to
everybody that it was not desir¬

problems.

Something Old, Something New

city and state ought also to
a
certain sense of pride in
what
our
banking has accom¬
plished, over the worldwide emi¬
it has attained, through the

nence

Our

years.

seeing

there

to

cine.
tant

Nevertheless,
new

added

its

monetary

medi¬

some

ingredients

impor¬

have

which may have

been

improved

the

Ours

to

assume

their

is

the

time

to

at times; but after all, tient back on his feet as
rapidly
relearning a complicated as possible.
under radically changed con¬
In
general, both the doctors
ditions after a long period of dis¬
and the patient are to be con¬
are

art

In

gratulated.

addition,
learned

For

they
some

do

seem

lessons

to

from

It

is

to

hoped,
surely, that they will continue to
work closely
together over the

one

■

interested in

having the

pa-

most

practical

is

two

important

as

ot

and

to

a

New

nation's

force.
of

structure.

the

world

Banking

nation

and

our1

is

most

15%>
labor

service-

much

the

of

city's and state's;
product.
If you

celebrated

include

all the

related

to

to

financial

Banking is the backbone^
large and complex finan¬

our

cial

jobs to

city gives

one

the

activities

that

are

banking and cater
it and grow from -it, you wilt

have

our

of

one

You

ever,

of nature such

take

problems
of

us

to

us

as

it

are

in

our

continues

strongly and suc¬
like some force

as

as

eco¬

that

asskme

bankina^vUl

function

we

vital

well.

as

cannot

New York

cessfully

most

our

nomic activities

the Gulf

for

the

Stream,,

granted.

Its;
alt

of

concern

this

city and state. Its;
well-being affects more than our
pride. The success of our bank¬
ing system means nearly as much,
as

good

a

tourist

season;

to Florida.

We need not only to believe in
ourselves
also

to

in

to

our

New York

banking.

that

see

is

this

We

given

a

need'

industry

economic

so-

health

in

fair chance

competitively. I do not know how
an organization such as the Metro¬
politan Group of the Association
of

Bank

Women

could

enlist

energies and enthusiasm in

a

its

bet¬

ter cause.

With Bingham, Walter
(Special to The Financial Chronicle)

LOS ANGELES, Calif .—William;
A. Cameron has become connected?

with

Inc.,

Bingham, Walter & Hurry,
621
South
Spring
Street*,

members of the Los Angeles Stock;

Exchange.

Dempsey-Tegeler Adds
(Special to The Financial Chronicle)

medicine

is

good

for

LOS ANGELES, Calif.—John L._
Liddle has been added to the staff
of

Dempsey-Tegeler

West Seventh Street.

&

Co.,

210*

He

was

for¬

merly with First California Com—
pany.

be

thing, they are years ahead. That, of course, will
not as rough as their predecessors
require good doctoring; but it will
were—in 1920, for example.
Also, also depend upon whether the
they
seem
to
be
considerably patient realizes that monetary
more

the

Finance

times

This
of

determine

doctors, by and large, have whether
the same faults that were
considerable skill.
They found to exist in call loans
by
have used a little too much

use.

but

York City employment as to that
of the United States as a whole.

lending, it was felt,
properly a function of banks.

medicine

they

is

interests.
half

shown
may

anything

Short-term
Now

The

had

They are farther out of
reach of credit control than banks.
was

effectiveness.

banks

loans.

is

excel

academic.

have

we

people's interest in
York banking con¬

New

tinue

able for nonbanking lenders to
have such huge amounts of funds

monetary placed in the call loan market.
policy, post-accord style.
Essen¬ Nonbanking lenders can be pretty
tially, of course, it is the same skittish. They ran fast in 1929 and
So

banking is losing

this

if

scheme,

once

say

have

much

this

to

its competitive edge or the unique¬
ness of its position.
All of us in

to

for

like

of the last decade do not indicate

The large deposi¬
tors, and especially some of the
large corporations, did not care
did not

should

I

that the deposit fluctuations

more

forbidding

interest

to the end of my re¬

come

marks

for

After the stock market crash of

market

further

haver

fully

are

credit

from

these

half

a

raised

have

All

the

benefit
of

and

that

chief

point

here, commercial

monetary developments of

past

with

banks

banking
holiday
period.
This
lending short-circuits the banking
system
and
affects
the
banks*
earning power adversely.

were

Open including,

Committee.

the

on

our

vital

the

by
-

big banks, which were not
offenders against good
practice in the rates of interest
paid on deposits in the preis,

the

the

of

lending.

the large corporate balances,

of

if the earnings position
reversed, and our big banks
were
doing better than banking
generally.
There are those who
will regard it as naive and quix¬

present in short-

'

hardest

falls

means

deliberations

also

It is apparent that the nonbank¬
ing commercial lending which i3
an offshoot of prohibiting interest
payments
on
demand
deposits

balances, corporations
also been the early publication of have been
turning in increasing
the Board's "Annual Report," to¬ numbers to
employing idle bal¬
gether with the full minutes of ances in short-term ^investments,

the past.

be

which

informative.

apparently

easy

is

a

Explanations Help

cials

that

it

mem¬

requirements.

however,

care,

able

have

feel

fund

of the annual assessment in¬

come

to

future another reduction in

responsibility for money
Also, certain monetary offi¬
can

the

poration to the

serves.

rates.1

credit

Now

hand, the Reserve afforded so that New York bank¬
System has not created a pleth¬ ing will not have to continue, in

old-fashioned

view of this and

spokesmen

super-easy

past

further, if at all, should
cheapening be permitted to go?

at

it

the

over

others.

big banks a cost
considerably more than the cov¬
erage they were getting out of it.

rectly

much

rates,

therefore,
there may be little point in mak¬
ing it still cheaper. Just because
money should be easy, it does not

In

and
ease.

Has credit been easing too rap¬

siveness
Once

ample
the

an

Are We Going Too Far?

if

a shortage of credit which
might aggravate a recession.
An easy money policy cannot be
expected to reverse a decline in

activity.

assuring
of
credit

avoidance of excessive

wni

against

business

than

commercial

the

on

On the other

number of

availability

are

term

why the authorities should
share
a bit if they find

discussion

other

others

placing

reasonable

stand

Declining
a
Banking Center?

better part of wisdom to build the
insurance
fund
up
rapidly by

not back-track

sources.

was

they must; but bankers

err

money

obtaining

they need
them.
It
is
largely a negative
matter of avoiding a restrictive
policy which might discourage the
reserves

the

As

of

of the idea that strued
by the market, some peo¬
supply should expand ple have criticized the monetary
at an annual rate equal to the av¬ authorities for
"talking too much."
credit. Availability, however, may erage annual growth rate of the A more sensible conclusion would
have considerable influence upon economy—somewhere around 3%
seem to be that spokesmen
might
the volume of borrowing.
per year. This concept is not en¬
be more careful to guard against
The chief objective of an easy tirely devoid of merit v/hen ap¬ such
misinterpretations.
The
money policy, surely, is to make plied to a period of full employ¬
misunderstandings
of
investors
certain that credit is adequately ment. At other times, however, it
can
best
be dispelled
by clear
little
available. This is largely a matter has
application—or none. explanation, not by silence.
of
Under
present - day
eliminating
pressures
that
conditions,
In this connection, we are in¬
might make lenders cautious and there appears to be no definite debted to the
Reserve authorities
might inhibit lending and invest- guideposts
to
monetary
policy in recent months for a

decline.

•of credit, lower rates have little
or no effect upon the demand for

Is New York

policy
side

the

broad

mostly a matter of the
availability of credit, not its cost.
Availability and cost are closely

credit.

tneir

on

perhaps be pardoned for
wishing they did not have to err
quite so vigorously. Also, some

the

"easy" become "sloppy"?

We

that

err

may

a

Ease, yes; but

how

and

be

how

monetary

fast

does

should

to

upon not to go to a

How Far Is Down?

business.

frankly

been

12

page

have

They have admittedly
picked the right direction for err¬

of

ignoring the validity
importance
of
the
points

from

ease.

'

the

authorities

Reserve

stated

Continued

give

can

The

did stay for dinner

sure

with

and

variable.

more

even

long-term

and

money

easy

that

Thursday, June 3, 1954

him

Hutton Adds to Staff
(Special to The Financial Chronicle)

LOS

ANGELES,

Calif.—Frank

F. Bell has been added to the staff

of E.

South

F.

Hutton &

Company, 623
Spring Street.

(2461)

Number 5330... The Commercial and Financial Chronicle

Volume 179

INDICATES

Now in

Securities
it Aluminum Co. of America

Registration
Underwriter—White, Weld & Co.,.

corporate purposes.
York.

New

Plan.
Aluminum Co. of

May

America, Pittsburgh, Pa.

^ American Progressive Health Insurance Co.

(6/9)

of New York

filed $100,000,000 of sinking fund debentures
1979. Price—To be^supplied by amendment.
Proceeds—To repay bank loans and for capital expen¬
ditures and working capital.
Underwriter — The First
20

Underwriter—None.

N. Y.

Boston Corp., New York.
American Transportation

Insurance Co.,
City, IVIo.
March 17 filed 20,000 shares of capital stock (par $100).
Price—$150 per share. Proceeds — To increase capital
and surplus. Underwriter—None. I

American-Canadian Oil & Drilling Corp.
May 12 filed 1,500,000 shares of common stock.
Price—
At par ($1 per share). Proceeds—For drilling expenses
and acquisition of additional properties for development
and

exploration, and related activities.

Tex. Underwriter—None. ;%

March 22

Office—Dallas,

>

.

American Coffee-Matic

Kansas

Water

Artesian

Co., Newport, Del.
May 12 (letter of notification) 5,467 shares of class A
non-voting common stock to be offered first to stock¬
holders at $18 per share; then to public at $20 per share.
Proceeds
To improve and expand water distribution
system. Office—501 Newport & Gap Pike, Newport, Del.
Underwriter—Laird, Bissell & Meeds, Wilmington, Del.

Corp., N. Y.

(letter of notification) 300,000 shares, of

stock (par 10 cents). Price—$1 per share.
—For working capital, etc. Office—20 Broad

mon

com¬

Proceeds

—

St., New
York, N. Y. Underwriter—Mid-West Securities, 164 Con¬
gress St., Brooklyn, N. Y.:
\r?

expire June 17.

(June 3-4).

held; rights to expire

York.

June

4

Bonds

Utilities Co

States

Gulf

(Friday)

11

$24,000,000

EDT)

a.m.

Gulf States Utilities

Co

11:30

(Bids

$16,000,000

EDT)

a.m.

(Offering

June 7
(Offering to

..Common

Stroud

(White,

W.

Brooks

&

Brothers)

(Vickers
(P.

Brooks

W.

&

Common
Inc.)

Co.,

R.

St ant.-;

Hornb.ower

California

Co.,

Inc.)

Weeks;

&

Rothchild

H.

&

Co.)

June 16

Central Soya

Common

(Tuesday)

28 filed

lBids

;

V

11

CDT)

a.m.

(Putnam

Common

.

,

(Offering ttf stockholders—underwritten by Kidder, Peabody

."v/.;::/1

Panhandle

& Co.) 213,261 shares

(Kidder,

June
Aluminum

(The

9

(Wednesday)

of America

Co.

First

Boston

Grand

&

Weeks)

(Greenfield

&

Inc.)

Common
shares

(Thursday)

>

&

and Carl

Preferred

Co

& Co.; and
$10,000,000
-

Scianton

Debentures

Merrill Lynch, Pierce, Fenner &
Loeb, Rhoades & Co.) $35,000,000

Bonds

June 21

(Van

$275,000

$25,000,000

invited)

be

to

expire

Price—$100

7.

June

on

per

unit. Proceeds—To

pay

California Electric Fower Co.

105,000 shares of cumulative preferred!
Price—To be supplied by amendment.
redeem two issues of $2.50 preferredi

April

22

stock

(par $50).

filed
—

(par

To

totaling

$50),

98,800

and, together-

shares,

proceeds from proposed issue of $8,000,000 of new

bonds, to redeem $8,000,000 37/s%

bondkJ"1

presently outstanding.
Underwriter — Merrill LynehL,
Fenner & Beane, New York.
Offering—Tei»-

Pierce,

porarily deferred.
Central

Illinois

Public

(6/15)

Service Co.

bonds, series

F, due June 1, 1984. Proceeds—To finance part of con¬

Underwriters—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; Kuhn, Loeb & Co. and A. C. Allyn & Co. Inc.
(jointly); Blyth & Co., Inc., Kidder, Peabody & Co. and
Merrill Lynch, Pierce, Fenner & Beane (jointly); Leh¬
man Brothers and Bear, Stearns &
Co. (jointly); Salo¬
mon
Bros. & Hutzler; Equitable Securities Corp.; TfceFirst Boston Corp. and Central Republic Co. Inc. (jointly). Bids—Planned for June 15.
Central Maine Power Co.

(6/4)

(par $100) to be offered for subscription by holders cf
outstanding common stock and 6% preferred stock on
the basis of ©ne new preferred share for each 50 shares
of common stock held and one new share of preferred
stock for each 10 shares of 6% preferred stock held on

rights expire June 14. Price — To be supplied
Proceeds—To reduce bank loans. Un¬
derwriters—Harriman Ripley & Co. Inc. and The Firs*
Boston Corp., both of New York; and Coffin & Burr,'
Inc., Boston, Mass.
,
<
'
June 4;

Alstyne,

Preferred

Corp

Noel & Co.)

it Central Soya Co., Inc., Ft. Wayne, Ind. (6/16>
May 27 filed 99,000 shares of common stock (no par) to
be offered for subscription by common stockholders of
record

$800,000

June

15

the basis of one

on

new

share for each

ten shares

be

(Monday)

Commercial

Continental

,

Co.;

M.

(Bids

;

^

Common

Co

&

W.

Co.)

&

Pipe Line Co

Eastern

Peabody

Bcane;

Chas.

Co.;

Tennessee Gas Transmission Co.__
.

Common

Co.,

Goldman,

by

99,000 shares

Corp..

Estabrook

100,000 shares

Co

Uranium

Mesa

,

$100,000,000

Giddings & Lewis Machine Tool
(Hornblower

,

Debentures

*

Corp.)

Co.)

Connecticut Light & Power

Utilities, Inc

■/.

<to

June 17

Bonds

$10,000,000

.

/

—Common

(Blyth & Co., Inc. and William R. Staats & Co.) 130,000

e

United

20,000

by amendment.

Gas & Electric Co

Southwestern

(Wednesday)

stockholders—underwritten

Radio

Hoffman

..Debentures

(Lehman Brothers) $20,000,000

|

Inc.
shares of capital stock

(par $1)
$200,000 of 6% subordinated notes due June 1, 19f4.
being offered in units of five shares of stock and $50 ©f
notes to stockholders of record May 19, 1954, on the basis;
of one unit for each 50 sharets of stock held. Rights wd>1

•

$475,000

Co., Inc..

to

(Ottering

$600,000

Fruehauf Trailer Co.

May 20.

Gas

May 20 filed 50,423 shares of convertible preferred stock

First

Sachs

June 8

Common

(living J. Rice & Co.)

shares

250,000

Transportation Development Corp
(L.

and

Corp.—Common

$760,000

Western Plains Oil & Gas Co

Common

Co.;

&

;

$490,000

Nevada Power Co

(William

Common

United States Sulphur & Chemical

$250,000

Lynch Carrier Systems, Inc
Southern

Bonds

$6,000,000

EDT)

a.m.

.

shax©„-

struction program.

by

(Offering to stockholders—underwritten by Blyth & Co., Inc.)
88,000 shares

Debentures
Inc.)

Co.,

11

Lily-Tulip Cup Corp

$2,500,000

Co.)

&

Lynch Carrier Systems, Inc
(P.

(Bids

$500,000

Common

Weld

<Ss

be

Jersey Central Power & Light Co

.Common

Inter-Canadian Corp.

underwritten
Co., Inc.) 40,000 shares

stockholders—may

to

(Monday)

stockholders—no underwriting)

effective

Natural

May 24 filed $5,000,000 of first mortgage

°

•

Light Co., Ltd

per

merchandise?

the

and

Preferred

1

Hercules Cement Corp

$5,042,300

|

in

Brandywine Raceway Association,
April

Preferred

Harriman Ripley &
Inc.; The First Boston Corp.; and COflin <Si Burr, Inc.)

Hilo Electric

Price—$14

activities

Underwriter—Glore, Forgan & Co., New

first mortgage

CALENDAR

(Olfering to stockholders—underwritten by
Co.

.

Corp., Santa Fe, N. Mex.
Dec. 23 (letter of notification) 748,000 shares of commcra
stock (par five cents). Price—40 cents per share. Pro¬
ceeds—To acquire properties and leases. Office — Blarft
Bldg., Santa Fe, N. M. Underwriter—Hunter Securitiw*
Corp., New York.
'v

Proceeds

(Bids

1

America

of

June 7.

on

extend

Statement

Basin

with

Central Maine Power Co

To

—

vending field.

stock

ISSUE

Co.

ISSUE

delphia, Pa.

Houston, Texas

be offered for subscription by common stockholders of
record June 1, 1954 at the rate of one preferred share
for each 15 shares of common stock held; rights to

NEW

REVISED

Price—To be supplied by

Associated Oil & Gas Co.,

•

by amendment.

ITEMS

MayiJ.2 filed 900,000 shares of capital stock

(par 10).
amendment. Proceeds—To re¬
pay bank loans, for development of properties and for
general corporate purposes. Underwriter—Allen & Co.,
New York.
Offering — Expected today or tomorrow

Price—To be supplied

PREVIOUS

current liabilities, and for expansion and improve¬
ments, etc.
Office—Wilmington, Del.
Underwriters—
Laird Securities Co., Inc., and Laird, Bissell & Meeci.%
both of Wilmington, Del., and Harrison & Co., Phila¬

,

American Cyanamid Co., New York
May 5 filed 585,000 shares of cumulative preferred stock,
series C (par $100—convertible prior to July 1, 1964) to

Canteen

ADDITIONS

SINCE

April 30 filed 77,706 shares of common stock (par'$5)
being offered for subscription by stockholders of record
May 20 on the basis of one new share for each six shares
Proceeds

May 21 (letter of notification) 30,000 shares of common
stock (par $2).
Price—$10 per share. Proceeds—For
working capital. Office — 92 Liberty St., New York,

due June 1,

Automatic

for general

increase working capital and

Proceeds—To

;

May 26 filed 520,000 shares, of common stock to be of¬
fered for sale under company's Employee's Stock Option

f

31

held; rights to expire on June 29. Price—Tosupplied by amendment. Proceeds — From sale cf

stock, together with $6,000,000 from long-term borrow¬
ings, to be used to pay for expansion, for working capi¬
tal, and other general corporate purposes. Underwrite^
—Goldman, Sachs & Co., New York.
V
,

June

10

(Thursday)

Grant Building, Inc

Common

Fuel
(The

Supply Co
First

Boston

(A.

G.

&

Co.

11

(Bids

Common ]

$10,000,000

11

EDT)

a.m.

Bonds

14

(Bids

Hornblower

&

..Preferred

to

be

invited)

$6,000,000

Preferred

Pacific Gas & Electric Co

Weeks)

(Blyth

$25,COO,000

Inc.)

Co.,

&

.

,

114,954 shares

June
June

Central

Illinois

(Offering

(Tuesday)

to

be

invited)

-Bonds

(Offering to

June

Common

stockholders—no underwriting)

$7,526,198

Duquesne

29

to

OneMediumSellsM!
services in the Chicago Tribune,
you reach most effectively at a single low cost both major invest¬
ment markets in Chicago and the midwest—professional buyers
and the

11

be

invited)

11

general investing public.

July
Mesa

Uranium

on

page

38

$5,000,000

EDT)

.....Common
245,000 shares

from

your

advertis¬

Williston

(Thursday)

1

—Common

Corp..
(Tellier

'

Oil

Basin

&

Co.)

$300,000

Ventures, Inc

Common

$50,000

advertising counsel or a Chicago Tribune advertis¬

ing representative.

July 12
United

CHICAGO TRIBUNE
The World's Greatest

: i

Continued

Preferred

EDT)

(Tellier & Co.)

your

Co., Inc. and D. Gleich Co., both of New York City.

(Wednesday)

a.m.

a.m.

Inc.

or

For facts that show how you can get more

ing, call

it Charge-It Systems,

May 24 (letter of notification) 230,000 shares of common
stock (par 10 cents).
Price—$1 per share. Proceeds—
For working capital and used to reduce current bor¬
rowings and to extend operations. Office—60 East 42nd
St., New York, N. Y. Underwriters—Milton D. Blauner

$16,000,000

Florida Power & Light Co
(Bids

& Co.; W. C. Langley & Co. and
Hemphill, Noyes & Co. (jointly); Baxter, William & Co.

Bonds

Florida Power & Light Co
(Bids

Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutz¬

ler; Kidder, Peabody

&

(Tuesday)

Light Co

June 3G

advertise securities

Common

underwriting) about 281,432 shs.

stockholders—no

(Bids

When you

(Friday)

$5,000,000

Light & Power Co

to

25

Merritt-Chapman & Scott Corp...

Public Service Co

(Bids

Connecticut

15

bonds, and $797,000 series J 3%% bonds, to re¬
bank loans and for new construction. Underwriter—
by competitive bidding. Probable bid¬

ders:

(Wednesday)

June 23

*

.Common
and

I 3%%

To be determined

(Monday)

Inc.

it Centra! Vermont Public Service Corp.
May 28 filed $4,0p0,000 first mortgage bonds, series Er
due June 1, 1984. Proceeds—To redeem $1,956,000 series
pay

$5,000,000

*"

i/0 J.
,.

EDT)

a.m.

Duquesne Light Co

Organ Co

Becker

Bonds

Co

Washington Gas Light Co.__-

$12,000,000

(Offering to stockholders—Drexel & Co. and Morgan Stanley
& Co. wi.l be dealer-managers) 944,952 shares

Hammond

Power

(Bids

Debentures r

Corp.)

Philadelphia Electric Co

June

Gulf

22,069 shares

(Offering to stockholders—no underwriting)

Mountain

(Tuesday)

22

June

The Tribune gives to

exchanges the largest ckcclatioa given them in America.

(Monday)

—.Bonds

Improvement Co
(Bids

to

be

invited)

$10,000,000

New York

Boston

Philadelphia

Newspaper

the market tables of the leading stock




Gas

July 26
Boston

Edison

(Monday)

Co

(Bids

to

——„

be

Pittsburgh

SaN Francisco

invited)

$18,000,000

Bonds

Private Wires to all

offices

Chicaco :

Cleveland

38

The Commercial and Financial
Chronicle...

(2462)

Ccntinued

from

due

37

page

Underwriter—None.

Hudson)

St., New York 14, N. Y.
Bliedung, Washington. D. C.

Chicago, Aurora & Elgin Ry., Wheaton, III.
May 18 (letter of notification) 5,000 shares of common
stock.
Price—At market (estimated at $8.87Vz per sh.).
Proceeds—To Earl C. Nagels, President. UnderwriterHodman & Renshaw, Chicago, 111.
Childs

Financial

•

construction.

new

Inc.
$50,000,000 of first and refunding mort¬
gage bonds, series K, due May 1, 1984. Proceeds—To be
applied towards cost of redeeming $27,982,000 New York
Steam Corp. first mortgage bonds and $25,000,000 Westfiled

May

Loeb

$4,000,000 convertible capital debentures
due June 1, 1984 (subordinated to all other borrowed
funds), with warrants to purchase 40,000 shares of com¬
mon
stock, to be offered in units of $1,000 of debentures
and warrants to purchase 10 shares of stock.
Price—
$1,000 per unit. Proceeds—To redeem $175,000 of de¬
bentures, for expansion and reduction of short-term borrowings. Underwriter—Paine, Webber, Jackson & Cur¬

$25,000,000

General

first

of

mortgage

bonds

Price

Price—To be not less favorable to company than a
3Vs% basis.
Proceeds—To redeem at 105.25% a like
of

outstanding

3%%

bonds

due

1983.

<

Corp.,

Miami,

Baton Rouge, La.

writer—A. C. Allyn &
to be withdrawn.

capital.

Underwriter—Van

—For

Co., Inc., Chicago, 111. Statement

Noel

&

Co.,

New

Cornbelt Insurance Co.,
Freeport, III.
March 17 filed 300,000 shares of common stock

Price—$3

per

share.

(par $1).

Proceeds—For investment.

Under¬

writer—None.
•

Curtis and

Decca

May

10

filed

954,474

shares

of

capital

c^nts) being offered in exchange for
Co.,

Inc.,

stock

common

on

the

of Decca stock for each Universal
share.
1 owned 672,996 shares

344,338

shares

stockholders.
the

purchase

$10

per

be

(par

2Y4

50

Decca

shares
on

•

May

Also there
of

79,873

held

by

tendered

were

warrants

shares

others

of

outstanding for

Universal

than

Decca,

stock

at

to

and

any

for

Giddings & Lewis Machine Tool Co.

reduce

bank

loans

for

and

be determined
by competitive
The First Boston

Chicago, 111.

bidding. Probable bidders:
Corp.; Lehman Brothers; Blyth & Co.,
Inc.; Kidder, Peabody & Co., Merrill Lynch,
Pierce,
Fenner & Beane and
White, Weld & Co. (jointly); Kuhn,
Loeb & Co. and
Smith, Barney & Co. (jointly). Bids—
Tentatively expected to be received on June 23.

•

Probable

be

bidders:

Boston

Proceeds

June

to

1,

1954.

Proceeds—For




redemption

of

6%

from

July

debentures

(June

be

Price—To

used

due

sale

to

on

one

be

supplied by
of stock, together

•

Co.,

at

stock

held about

other

Pro-

.

funds,

$403,100 of collateral trust bonds
100% and accrued interest.
Under-

May
1984.

26

filed

$10,000,000

mortgage 4yg%

bonds

of first

bank

new

loans

and

due

^

Proceeds—None.

Underwriter

?■;>:

,:■

stockholders

of

record

May 19
held

the basis of

on

(with

an

one

oversubscrip¬

Proceeds—For working capital.

Under¬
"

—

Inter-Canadian

Corp.,

Chicago,

III.

common

cents per

Office
Mine

—

Fi¬

10, Wash.

(6/7-10)
stock

(par $1).

*

Jersey Central Power & Light Co. (6/15)
May 13 filed $6,000,000 first mortgage bonds due June 1,
1984. Proceeds—For construction program. Underwriters
—To be determined by competitive
bidding. Probable
bidders: Halsey, Stuart & Co. Inc.; White, Weld &
Co.;
Glore, Forgan & Co.; Kidder, Peabody & Co.; Union
Securities Corp., Salomon Bros. & Hutzler and Merrill
Lynch, Pierce, Fenner & Beane (jointly); The First Bos¬
ton Corp.; Lehman Brothers.
Bids—Expected to be re¬
ceived up to

11

c/o General

Public

a.m.

(EDT)
Utilities

on

June 15 at 67 Broad

St.,

Corp., New York, N. Y.

it Jolly Jack Uranium Co., Salt Lake City, Utah.
May 24 (letter of notification) 1,160,000 shares of com¬
stock (par 10 cents). Price — 25 cents
per share.

mon

Proceeds

For mining expenses. Office
Bldg., Salt Lake City, Utah. Underwriter
Co., Salt Lake City, Utah.
-

—

—
-—

620

Judge

Coombs &

Kendon

Electronics Co., Inc.
(letter of notification) 150,000 shares of com¬
stock (par 10 cents).
Price—25 cents per share.

April 21

(6/22)

Proceeds—To refund

determined

'

Co.

Exchange.

White, Weld & Co., New York.

Colo. Underwriter—J. W. Hicks & Co., Denver, Colo. k
Power

be offered

■a

Great Western Uranium Co.,
Denver, Colo.
May 10 (letter of notification) 2,000,000 shares of comstock (par 10(f).
Price—150 per share. Proceeds— 1
For mining expenses. Office—704
Equitable Bldg., Den¬
Gulf

to

per share. Proceeds—For venture or semiventure investment situations in Canada. Underwriter—

mon

ver,

(no par)

,

num¬

Price—$25

retire

1957

capital.

a company sponsored monthly in¬
Price—That prevailing on the-New

April 19 filed 100,000 shares of

3).

amendment.

with

Stock

stock

(with debenture warrants).
Price —15
■;
Proceeds
For mining development.
106 King St., Wallace, Idaho.
Underwriter —
nancing Inc., West 909 Sprague Ave., Spokane

share for each five

common

common

program.

share.

(6/9-10)

basis of

class A

or

working

Inspiration Lead Co., Inc., Wallace, Idaho
/
May 4 (letter of notification) 2,000,000 shares of class B

general
&

and

stock

1

f

1^0% and accrued interest

for

by amendment. Proceeds

equipment

writer—Blair, Rollins & Co. Inc., New York.

writer-r-None.

Underwriter—None.

JTrice

common

10.

bonds

per share. Proceeds—For
working
capital. Office—Long Branch
Ave., Long Branch. N. J.

?

Co.

shares of

—$5 per share.

For

ceeds—From

June

it Ellicott Drug Co.,
Buffalo, N." Y.
May 24 (letter of notification)
$290,000 6% debentures
.due June
1, 1974 to be first offered in
exchange, par
for par, for the
presently outstanding 6% debentures
due 1957,
unexchanged new debentures to be offered

Uranium

stockholders

shares of

Electronic Associates, Inc.
April 19 (letter of notification) 7,500 shares of
common
stock (par $1)
being offered for subscription by stock¬
holders of record
May 10, 1954 on the basis of one new

9, 1954. Price—$18.50

—

common

Corp.; Glore, Forgan & Co.; Kuhn, Loeb &
Co.,
Securities Corp. and A. C..
Allyn & Co., Inc.
(jointly); White, Weld & Co.; Drexel & Co. and Equit¬
able Securities Corp.
(jointly); Harriman Ripley & Co.
Inc. Bids—Expected to be
received on June 29.

on

Offering—Expected today

Mesa

and

privilege); rights to expire on June 7.
Of these
shares, 9,000 are to be first offered to employees. Price

•

by competitive bidding.
Halsey, Stuart & Co. Inc.; The First

held; rights to expire

and

McCormick

—

tion

Grant Building, Inc., Pittsburgh, Pa.
(6/10)
May 21 filed 22,069 shares of common stock (par $1) to
be offered for subscription by common
and class A

determined

shares

—

Unsub¬

,

mon

mining expenses. Office — Felt Bldg.,
Salt Lake City, Utah.
Underwriter—Greenfield & Co.,
Inc., New York. /

Umon

share for each 15

loans

Underwriter

held.

Mills, Inc.
1
May 6 (letter of notification) 59,000 shares of common
stock (par $1) being offered for
subscription by com¬

May 15 (letter of notification) 1,100,000 shares of com¬
mon
stock
(par 10 cents). Price—25 cents per share.

Duquesne Light Co. (6/29)
May 26 filed $16,000,000 of first mortgage bonds due
July 1, 1984. Proceeds—For construction program. Un¬
derwriters—To

Grand

bank

repay

purposes.

shares

to

Indian Head

working capital. Under¬

corporate

Proceeds—To

plant

share for each four shares

Proceeds—For construction

ment.

new

employees under

York

(6/9-10)

Glass Fibers, Inc., Toledo, Ohio
May 13 filed $3,000,000 convertible sinking fund deben¬
tures due June 1, 1969. Price—To be
supplied by amend¬

Underwriters—To

four

Corp., Los Angeles, Calif. (6/16)
130,000 shares of common stock (par 50

filed

—None.

& Webster Securities

exchange. Offer will expire on
Soliciting Agent—Georgeson & Co., New York.
Duquesne Light Co. (6/23)
May 26 filed 120,000 shares of preferred stock (par
$50).
program.

to

writer—Hornblower & Weeks, New York.

upon exercise of such warrants

June 30.

;

Stone

each

offered

Price—To be supplied

vestment

May 21 filed 100,000 shares of common stock (par $2),
of which 60,000 shares are to be sold
by the company and
40,000 shares for the account of a stockholder. Price—
To be supplied by amendment.
Proceeds—To company,

hands

^Universal stock acquired
may

of

(66.2%) of Universal stock, with
of
approximately 1,783 other

in

share

stock

Universal Pictures

basis

ber of

Corp. and asso¬
ciates. Proceeds—To retire 5.2% preferred
stock, to re¬
pay bank loans and to pay notes due to the General
Telephone Corp., its parent.
*

Records, Inc., New York

for

be

it Hussmann Refrigerator Co., St. Louis, Mo.
May 24 (letter of notification) an indeterminate

preferred stock outstanding on the basis of two new
shares, plus $4 per share in cash for each 5.2% share
held.
The exchange offer will expire on July 1.
The
remaining 30,000 shares of 5% preferred stock were
offered publicly at par by Paine,
Webber, Jackson &

York.

to

Underwriters—Blyth & Co., Inc., San Francisco, Calif.,
and New York, N. Y.; and William R. Staats &
Co., Los
Angeles, Calif. ■/ ./'.■/T'.//,"■','/

stock

apd for working

Alstyne,

19

cents).

General Telephone Co. of Kentucky
May 7 filed 46,000 shares of 5% cumulative preferred
(par $50), of which 16,000 shares are being offered
in exchange for the 8,000 shares of 5.2%
cumulative

filed

share

one

shares

Hoffman Radio

May

-

Pa.
(6/21-24)
80,000 shares of 60-cent convertible pre¬
ferred stock (par $10). Price—To be
supplied by amend¬
ment. Proceeds—To reduce bank loans
1

of

.

Pittsburgh,

June

,

employees.
Price—At
par ($20 per share).
Proceeds.— To repay, bank loans
and for additions
and improvements.
Underwriter
May be named by amendment.

General Stores Corp., New York
March 8 filed 300,000 shares of common stock
(par $1).
Price—$1.37 V2 per share. Proceeds—To pay part of cost
of acquisition of Ford Hopkins
Co., Chicago, 111. Under¬

Inc.; Morgan Stanley
Co.; Kuhn, Loeb & Co., and Union Securities Corp.
(jointly); Harriman Ripley & Co. and The First Boston
Corp. (jointly). Offering—Postponed temporarily.
it Continental Commercial Corp.,

;

Chicago, 111., and Hornblower & Weeks, New York,

basis

f

&

70 Broadway, New

Organ Co., Chicago, III. (6/14-15)'
May 24 filed 114,954 shares of common stock (par $1).

scribed

Co., New York. Offering—Postponed indefinitely.

writer—To be determined by competitive
bidding. Prob¬
able bidders: Halsey, Stuart & Co.

Hanover Bank,

Hilo Electric Light Co., Ltd., Hilo, Hawaii (6/7)
May 10 filed 25,000 shares of common stock to be Offered
for subscription by stockholders of record June 5 on the

Fla.

common stock (par $5).
by amendment. Proceeds — To
Underwriter—Kidder, Peabody &

selling stockholders.

Under¬

The

at

Hammond

Inc..

To be supplied

—

15

N. Y.

March 19 filed 100,000 shares of

due

1984.

amount

Gas

Co..

mortgage

bonds

mon

due

$6,593,000 of outstanding first
1983

and

construction.

for

repayment of
Underwriter—To be

by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Kidder, Peabody & Co. and
White, Weld & Co. (jointly); Merrill Lynch, Pierce,
Fenner & Beane, Salomon Bros..& Hutzler and Drexel

a

1983, and for general corpo-r
Underwriter—To be determined by com-

York, N. Y.

stock

&

June

on

March 25

Consumers Power Co.

filed

due

Price—To be supplied by amendment. Proceeds — To
selling stockholders. Underwriters—A. G. Becker & Co.

Underwriter—Murphy

6

bonds

mortgage

Higginson/Corp. and Carl M. Loeb, Rhoades & Co.
(jointly); Stone & Webster Securities Corp. Bids—Ten-'
tatively expected to be received up to 11 a.m. (EDT)

Corp., Miami, Fla.

conditions.
•

(6/15)
first

of

Bros. & Hutzler and Union Securities
Corp.; Kuhn,
& Co. and A. C. Allyn &
Co., Inc. (jointly); Lee

mon

filed

(letter of notification) 74,990 shares of capital
(par $1). Price—$4 per share. Proceeds—For work¬
ing capital. Office—799 N. W. 62nd Street, Miami, Fla.

May

Utilities Co.

$24,000,000

bidding.
Probable bidders: Halsey, Stuart &>
Inc.; Lehman Brothers; Merrill Lynch, Pierce, Fen- '
& Beane and White, Weld & Co.
(jointly); Salo-'

ner

(6/16)

27

General Credit

date set.

filed

rate purposes.

Co.

Co.; The First Boston Corp. Offering—Originally set
for May 11, but has been postponed because of market
new

States

14

petitive

Un¬

tis, Boston, Mass., and New York.

&

No

Gulf

York.

tal. Office—100 West 10th Street, Wilmington, Del.
derwriter—^heehan & Co., Boston, Mass.

Under-

writer—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Morgan Stanley

■

June 1, 1984. Proceeds—To redeem
$10,000,000 of 3%%
first mortgage bonds due 1981 and $10,000,000 of 3%%
first mortgage bonds due

Pa.
»'

1

Corp., Wilmington, Del.
Feb. 2 (letter of notification) 140,000 shares of common
stock (par 10 cents). Price—$1.50 per share. Proceeds—
For inventory, capital expenditures and working capi¬

May

and

(6/15)

up to
11:30 a.m. (EDT) on June 15 at The
Hanoverf
Bank, 70 Broadway, New York, N. Y. Stockholders willf
11 on
approving preferred stock financing.- ,■/

it General Acceptance Corp., Allentown,

"

Utilities Co.

vote June

Gamma

Consol. Edison Co. of New York,

l

sinking fund debentures due
be supplied by amendment.

To

—

writer—Lehman Brothers, New

Under¬

3 Chester Lighting Co. general mortgage bonds.

(6/8)

$20,000,000
Price

Foun¬

Proceeds—To refund $16,070,000 of present senior funded
debt and to increase general operating funds.
Under¬

Estabrook & Co.

April 7

Fruehauf Trailer Co.

18 filed
June 1, 1974.

it Connecticut Light & Power Co. (6/17)
May 26 filed 200,000 shares of cumulative preferred
stock, series E (par $50). Price — To be supplied by

Co., Chas. W. Scranton & Co.

Underwriter—E. J.

working capital.
Inc., New York.

States

—

Underwriter—Carl J.

Credit

May

• Connecticut
Light & Power Co. (6/15)
May 25 filed 590,290 shares of common stock (no parstated value $10.0625 per share), to be offered for sub¬
scription by commoin stockholders of record at 3 p.m.
on June 1,
1954, in the ratio of one new share fo.r eaph
10
shares held.
Price—$12.75 per share.
Proceeds—
For construction program. Underwriter.—None.
/
*

&

Gulf

May 14 filed 160,000 shares of preferred stockj^par $100).
Proceeds
To redeem 50,000 shares of $4.50 dividend
preferred stock, 60,000 shares of $4.40 dividend preferred
stock, 1949 series, and 50,000 shares of $4.44 dividend
preferred stock at the prevailing redemption prices
of;
$105, $105, and $105.75, respectively.
Underwriter—To
be determined by competitive
bidding. Probable bid¬
ders:
Stone
&
Webster
Securities
Corp.;
Lehman
Brothers and Equitable Securities Corp.
(jointly); Kuhn,
Loeb & Co.; Glore, Forgan & Co. and W. C.
Langley &
Co. (jointly).
Bids—Tentatively expected to be receivedv

filed

tain & Co.,

Inc., Jacksonville, Tex.
(letter of notification) 5,000 shares of class A
common stock (no par).
Price—$13 per share. Proceeds
—For working capital. Underwriter—Moroney, Beissner
& Co., Houston, Tex.,
and Eppler, Guerin & Turner,
Dallas, Tex.

Proceeds—For

29

ceeds—For

Food Stores,

writers—Putnam

& Co. (jointly); Equitable Securities
Corp.; llnion Securities^Corp. Bids—Expected to be received up tdvll a.m.
(EST) on June 22 at 20 Pine St., New York, N. Y. \

Corp., New York
250,000 shares of 7% cumulative sinking
fund preferred stock. Price—At par ($2 per share). Pro¬

Jan.

April 26

amendment.

Un¬

Family Digest, Inc.
April 9 (letter of notification) 142,875 shares of class A
stock.
Price—At par
($1 per share).
Proceeds—For
operating capital and operating expenses. Office—421

May 10 filed 5,000,000 shares of class B non-voting com¬
stock (par 1 cent). Price—$1 per share. Proceeds—
For construction, operating expenses and working capi¬
mon

tal.

Cherry St., Buffalo 5, N. Y.

derwriter—None.

Industries, Inc., Oklahoma City, Okla.

Cherokee

Office—127

1957.

Thursday, June 3, 1954

V'7

,

Proceeds—For
purposes.

working

Office —18

capital

Clinton

and

general

corporate

Street, Brooklyn,

N.

Y.

Underwriter—20th Century Pioneer Securities Co., New
York, N. Y. r

it Kleen Industries, Ltd., Washington, D. C.
May 25 (letter of notification) 100,000 shares of class B
non-voting common stock (par one cent). Price—$1 per

Number 5330... The Commercial and Financial-Ghronicle

Volume 179

a detergent
"St., N. W., Washington, D. C. Underwriter

■Nev.

.

...

«■

—Node.

* Nash-Finch Co., Miitneapolis, Minn.
May 24 (letter of notification) 1,000 shares of common
stock (par $10). Price—At market (estimated at not to
exceed $18.50 per share).
Proceeds — To Willis King
Nash, the selling stockholders.
Underwriter — J. M.
Dain & Co., of Minneapolis, Minn.

Vep#s Continental Hotel, Inc.
njfuek 500,000 shares of preferred capital stock

and 500,000 shares of common capital stock
(no par—100 stated value) to be offered in units of one
preferred and one common share. Price—$10 per unit.
Proceeds—To build and operate a luxury hotel and for
working capital.
Office—Las Vegas, Nev.
Underwriter
—Lester L. LaFortune, Las Vegas, Nev.
(par $9:90)

March 10

•

15

the

on

basis

of

one

new

share for

working capital; etc. Underwriter—J. P. Marto & Co.,
Boston, Mass.
>,-•>:>■
V,./;V \U'-JI

;'-/f

April 4 (letter of notification) 600,000 shares of common
stock (par 25 cents).
Price—50 cents per share. Pro¬
ceeds—For mining expenses.
Office—Carrizozo, N. M.,
and 1211 E. Capital St., Washington, D. C. Underwriter
—Mitchell Securities, Inc., Baltimore, Md.
New

each

Orleans

Public

Service

stockholders of record June 1

share for each

on

Underwriter—None.

Nortex Oil & Gas Corp.
May 14 (letter of notification) 99,966 shares of common
stock (par $1). Price—$3 per share. Proceeds—For pay¬

$1,000 of debentures to acquire 150 shares of capi$3.75 per share through May 1, 1962). Price
—100% and accrued interest for debentures. Proceeds
—To

establish

sales

application

engineering1 offices in,

of

(par one cent). Price—$1 per share. Proceeds—
working capital in the acquisition, manufacturing
and distribution of products. Office—1511 Fox Building,
For

shares

16th and Market Streets,
—A. J. Grayson,

Pueblo, Colo.

-Underwriter—P.

W.

Brooks

&

Co.,

Inc.,

New

-

Office—Gibsonia, Pa.

poses.

Republic of Panama
filed

30

Feb.

American

voting

certificates

trust

for

1,000,000 shares of common stock (par one cent). Price
be supplied by amendment.
Proceeds—For ex¬
ploratory drilling and development, in State of Israel,
—To

for

named

operations

and

Underwriter—To

expenses.

be

by amendment.

it Mesa Uranium Corp., Grand Junction, Colo. (7/1)
May 27 (letter of notification) 2,000,000 shares of com¬
mon stock
(par one cent). Price—15 cents per share.
Proceeds—For mining expenses. Office—618 Rood Ave.,
Grand Junction, Colo.
Underwriter — Tellier & Co.,
Jersey City, N. J.
• '. •/■/'.■"
★ Metal photo Corp.
May 21 (letter of notification) 250,000 shares of capital
stock.
Price—At par (one cent per share). Proceeds—
For working capital.
Business—To manufacture metal
products treated to make them photosensitive. Office—
First National Bank

Bldg., Princeton, N. J.

*

Midland

General

Hospital,

May 17 filed 900 shares of

Inc.,

Brorix, N.

Y.

stock (no par). Price

common

—$1,000 per share. Proceeds—To erect a hospital in the
Borough of Paramus, N. J., and for working capital, etc.
Underwriter—None.
Mission

Indemnity Co., Pasadena, Calif.

March 29 filed

cents)

to

600,000 shares of common stock (par 65
be offered first to stockholders and to gen¬

eral public.

Price—$2

capital and surplus.

per

share.

Proceeds—To increase

Underwriter—None.

April

filed

23

Proceeds—To

shares of cumulative preferred
Price—To be supplied by amendment.

redeem

($3,475,000), to

repay

construction

for

ance

outstanding first preferred stock
$750,000 bank loans and the bal¬
program.

Peabody & Co., New York.
definitely.

notes and

Underwriter—Kidder,

Offering

—

Postponed

in¬

Co., Metropolitan St. Louis Co. and A. G. Edwards &
Sons, all of St. Louis, Mo. Offering — Expected today

Northern

May

257,338 shares of common stock (par $1).
Price—At the market price then prevailing on the New
York Stock Exchange, or through special offerings or
sfecondary distributions. Proceeds—To Lehman Borthers
(400 shares); partners of Lehman Brothers and members

Corp.

immediate families

(150,458); and The Lehman

Underwriter—None.

(106,480).

No general

offer

planned.
*

Mountain Fuel

Supply Co.

the

(6/10)

May 20 filed $12,000,000 of debentures due June 1, 1974.
Price—To be supplied by amendment. Proceeds—To re¬
bank loans and for new construction and acquisition
properties. Underwriter — The First Boston Corp.,
States

Uranium, Inc.
May 18 (letter of notification) 30,000,000 shares of
—For

mining expenses.

(one cent

per

com¬

share). Proceeds

Office—1117 Miner




;'^

director of company.

'

Pacific Telephone &

Telegraph Co.
May 7 filed 1,004,603 shares of common stock to be of¬
fered for subscription by common and preferred stock¬
holders
of

in

the ratio of

common

ings..

one

share for each

seven

shares

held. Price—At par
reduce bank borrow¬

and/or preferred stock

share). Proceeds—To
Underwriter—None.
per

* Panhandle Eastern Pipe Line Co. (6/17)
May 28 filed $35,000,000 of debentures due 1974. PriceTo be supplied by amendment. Proceeds—For construc¬

Underwriters

tion program.
Merrill

Lynch,

Pierce,

—

Fenner

Kidder, Peabody & Co.,
& Beane and Carl M.

Loeb, Rhoades & Co.

000,000 shares of common stock (par one cent). Price—
To be supplied by amendment.
Proceeds—For explora¬
tory drilling and development in State of Israel, and for
operations and expenses. Underwriter—To be named by
amendment.
*

Philadelphia Electric Co.

St.,

Idaho

(6/10)

May 19 filed 944,952 shares of common stock (no par)
to be offered for subscription by common stockholders
of record June 7 at the rate of one new share for each
12

held; rights to subscribe on June 28. Price—
supplied by amendment. Proceeds—For construc¬

shares

To be

(par

Underwriter—None.

Pa.,' and Morgan Stanley
Dealer-Managers.

Drexel & Co., Phila¬
& Co., New York,

subscription by stockholders.

Price—100% of prin-

and

2,025

shares

of

common

$1).

Underwriter—G. H. Walker &

1210, Chapel Hill, N. C.
Co., Providence, R. I.

* Smith-Dieterich Corp.
(letter of notification)) 1,775 shares of common
stock.
Price—At par ($2.50 per share).
Proceeds—To
May 27
P.

Stanley

Church

Smith,

the

stockholder.

selling

St., New York, N. Y.

Office—50

Underwriter—Cooke and

Lucas, New York City.
Las

Great

Basin

Oil

&

Gas,

Inc.,

Vegas, Nev.

May 17 (letter of notification) 50,000 shares of common
stock. Price—At par ($1 per share). Proceeds—To com-

plete well. Underwriter—Jock
Associates, Las Vegas, Nev.
•

Southern

Nevada

Hemingway, Hemingway

Power Co.

(6/7-11)

May 17 filed 250,000 shares of common stock (par $5),
of which 50,000 shares are to be sold for account of com¬

and 200,000 shares for account of certain selling
Price — To be supplied by amendment.

pany

stockholders.

Proceeds—For construction program.

Office—Las Vegas,

Underwriters—William R. Staats & Co., Los An¬

Nev.

geles, Calif.; Hornblower & Weeks, New York,
California Co., Inc., San Francisco, Calif.

and First

^ Southern States Chemical Co., Atlanta, Ga.
May 24 (letter of notification) 2,565 shares of common
stock (par $10) to be offered for subscription by stock¬
holders of record May 31, 1954 on the basis of one share
for each eight shares held
(with an oversubscription
privilege); rights to expire on June 21. Price—$15 per
share. Proceeds—For working capital. Office—1061 W.
W„ Atlanta, Ga.

Southwestern Gas

&

Underwriter—None. >

Electric Co.

(6/8)

14 filed $10,000,000 first mortgage bonds, series F,
due 1984. Proceeds—To repay $7,500,000 bank loans and

May

Underwriter—To be deter¬
bidding. Probable bidders: Halsey, Stuart & Co. Inc.; Equitable Securities Corp.; Leh¬
man
Brothers; Blyth & Co., Inc.; Kuhn, Loeb & Co.;
Merrill Lynch, Piesrce, Fenner & Beane and Union Se¬
curities Corp. (jointly); Harriman Ripley & Co. Inc.;
The First Boston Corp.
Bids—To be received up to
11 a.m. (CDT) on June 8 at 20 No. Wacker Drive, Chi¬
for

construction

program.

mined

by competitive

cago 6,

111.

Spokane Seed Co., Spokane, Wash.
March 8 filed $600,000 of 5% convertible debentures due
ern

located in East¬
Price—100% of
Proceeds—To improve facilities and

15, 1964, to be sold to pea growers
Washington and Northern Idaho.

June

as

Ar Pittsburgh Athletic Co., Inc. (6/11)
May 27 (letter of notification) $300,000 of 4V2% con¬
vertible debentures due Dec. 31, 1961 to be offered first
for

debentures

Marietta St., N.

Republic of Panama
certificates for 1,-

-

$135,000 of 11-year 6%

(letter of notification)

Southern

will act

,

*

stock. Price—At par

■

■

Corp.,

Price—Of debentures, at par; and of
stock, $7.50 per share. Proceeds—To finance expansion
of business into new territory.
Office—P. O. Drawer
stock

expire on June 8. Price—$38 per
property additions. Underwriter

Underwriter—None.

Colo.

Underwriter — McGrath Securities
Offering—Expected today (June 3).

capital.

ing

New York.

May 21

em¬

ic Otil Investment Corp., Denver, Colo.
May 25 (letter of notification) 250,000 shares of 7%
cumulative convertible preferred stock
(par $1) and
500,000'slhares of common stock (par one* cent) tofcbe
offered
in
units of one preferred
and two common
shares.
Price—$1.20 per unit. Proceeds—For working

delphia,

mon

to

Denver, Colo.
April 30 (letter of notification) 800,000 shares of com¬
mon stock
(par five cents) to be offered first to stock¬
holders.
Price—25 cents per share to stockholders; at
market to public. Proceeds—To drill for oil and gas on
21 offset locations.
Offtde—401 Zook Building, Denver

tion program.

Mountain

shares to be offered

Oklahoma Oil Co.,

4.

Development Corp. (Fla.)
(letter of notification) 83,000 shares of com¬
mon stock (par $1). Price—$3 per share.
Proceeds—For
development of land and planting Ramie and for work¬

subordinated

nine

.

of

.

to

share for each

new

Shawano

'Simplified Farm Record Book Co.

Proceeds—For

share.
—None.

pay

New York.

one

Unsubscribed

Rights

ployees.

basis of

March 30 filed American voting trust

filed

of their

on

Underwriter—William E. Conly,

Longmont, Colo.
Longmont, Colo.

April 23

Gas

Pan-Israel Oil Co., Inc. of

Monterey Oil Co., Los Angeles, Calif.
2

25

shares held.

'

Feb.

Natural

Co., Omaha, Neb.
May 5 filed 365,400 shares of common stock (par $10)
being offered for subscription by common stockholders

'

(June 3).

•

10 shares of stock.

Price—$500 per unit. Pro¬
equity bond, royalties, land, construc¬
tion of theater and related expenses.
Office—60 State
St., Boston, Mass.
Underwriter—H. C. Wainwright &
Co., Boston, Mass.
-V

($100

• Missouri
Telephone Co., Columbia, Mo.
May 13 (letter of notification) 12,000 shares of 6% cum¬
ulative preferred stock.. Price—At par ($25 per share).
Proceeds—For
expansion.
Underwriters—Central Re¬
public Co., Inc., Chicago, 111.; and Dempsey-Tegeler &

Jr..

ceeds—For actors'

capital. Office
Ernest and Cranmer Bldg., Denver,
Underwriter—Joseph A. Gallfegos, Treasurer and

50,000

(par $100).

194,

1, 1974, and 2,000 shares of common stock (par
to be sold in units of $400 principal amount of

$10)

Colo.

Missouri Public Service Co.
stock

Underwriter—None.

—

March

f

Underwriter—None.

Rio Grande Investment Co., Longmont, Colo.
April 19 (letter of notification) 1,150 shares of common
stock (no par) and 1,150 shares of 6% cumulative parti¬
cipating preferred stock (par $100) to be offered in
units of one share of each class of stock. Price—$100 per
unit. Proceeds
For operating expenses and to make
loans. Business—Finance company. Address—P. O. Box

North Shore Music Theater, Inc., Boston, Mass.
Feb. 3 (letter of notification) $80,000 of 5% notes due

Mediterranean Petroleum Corp., Inc.,

and

Underwriter

Pumice, Inc., Idaho Falls, Idaho
March 29
(letter of notification) 1,170,000 shares of
common stock (par 10 cents).
Price—25 cents per share.
Proceeds—To complete plant, repay obligations and for^ yworking capital.
Office —1820 N. Yellowstone, Idaho
Falls, Idaho.
Underwriter — Coombs & Co., Salt Lake^
City, Utah. Xy
■ ■ y V '

—

York.

Philadelphia, Pa.
New York,

* Pueblo Mortgage Exchange Co.
May 25 (letter of notification) 1,500 shares of class B
non-voting common stock. Price—$100 per share. Pro¬
ceeds—For working capital.
Office—534 Dittmer Ave.,

selected cities to aid effort of company's national dis- ■> ments to
creditors, drilling and completion of well, and
tributors; for machjidery^and^
"general
working caprtafv
—
Fidelity Union Life Bldg.,
funds to continue research and development; afod to pro- 1
Dallas, Tex. Underwriter—J. R. Williston & Co., New
vide additional working capital. Business
Designing T York.
and
manufacturing of electronic communications sys¬
North Pittsburgh Telephone Co.
tems. Office—San Francisco, Calif.
Underwriter—P. W.
April 23 (letter of notification) 2,000 shares of common
Brooks & Co., Inc., New York.
stock to be offered for subscription by common stock¬
Lynch Carrier Systems, Inc. (6/7-8)
holders of record May 1, 1954, on the basis of one new
May 4 filed 140,000 shares of capital stock (par $1). - share for each five common shares held. Price—At
par
Price —$3.50 per share.
Proceeds — To selling stock- ' ($25 per share). Proceeds—For
general corporate pur¬
holder.

Corp.

stock

held; rights to expire

talk stock at

debentures,

number

Development

May 4 (letter of notification) 300,000 shares of common

basis of 0.135

each

total

Lynch Carrier Systems, Inc. (6/7-8)
May 4 filed $250,000 of 6% sinking fund

of Potomac Electric Power Co.

Product

series A, due June 1, 1969 (with capital stock purchase
warrants attached—each warrant to entitle purchaser of

•

filed $1,000,000 face amount of the Potomac
Systematic Accumulation of common stock

26

May

Plan for the

Inc.

on June 24. Of the
outstanding, 1,059,901 (or
95.255%) are owned by Middle South Utilities, Inc. who
may subscribe for an additional 143,086 shares. Price—
$25 per share. Proceeds—For property additions and im¬
provements. Office—317 Baronne St., New Orleans, La.

York.

-Ar Potomac Electric Power Co.

May 19 (letter of notification) 7,127 shares of common
stock (no par) to be offered for subscription by minority
common

Minneapolis, Minn.

Co., Inc., Chestnut Hill, Mass.
April 8 (letter of notification) 640 shares of $6 cumula¬
tive preferred stock (no par) and 640 shares of common"
stock (no par) to be offered in units of one! share'of
each class of stock.
Price—$100 per unit.
Proceeds—
For manufacture of sporting goods.
Office — 48 Moody '
St., Chestnut Hill, Mass. Underwriter — Minot Kendall
& Co., Inc., Bostpn, Mass.
1

.

eight shares held; rights to expire J\ipe 29. Price—To
be supplied by amendment.
Proceeds—For general cor¬
porate purposes. Underwriter—Blyth & Co., Inc., New

Minn.

Porta

(letter of notification) 58,800 shares of com¬
Price—$5 per share. Proceeds—For

New Mexico Copper Corp.

Minneapolis,

Budget Loans, Inc.,

Underwriter—M. H. Bishop & Co.,

stock (par $1).

mon

"Lily-Tulip Cup Corp. (6/15)
May 25 filed 88,000 shares of common stock (no par) to
be offered for subscription by stockholders of record
June

Phoenix

May 4 (letter of notificati6h>4,000 shares 6f $1.50 cumu-' *
lative preferred stock, Series A (no' par).
Price—$24
per share.
Proceeds — For general corporate purposes.

Natick Industries, Inc., Natick, Mass.

Las

about

*

-

,

-

Langendorf United Bakeries, inc. ,
v,
May 12 (letter of notification) 2,500 shares of common
stock (par $1). Price—At market (estimated at $28 per
share). Proceeds—To a selling stockholder. Office—1160
McAllister St., San Francisco, Calif. Underwriter—First
California Co., San Francisco, Calif. *'

May

39'

Springs, Colo. Underwriter—Underwriters, itic., Sparks,-- cip&l**Sm6uiit. 'Proceedbs-^For wbrking capital. Office—
3940 Sennott St., Pittsburgh 13, Pa. Underwriter—None.
V,.-* .
*>t
■
'' X;*
\
\

share^JProceeds—To manufacture and sell
Office—622 £

(2403)

principal amount.
for working capital.

Underwriter—None.
Continued

on

page

40

The Commercial and Financial Chronicle... Thursday, June 3,

(2464)

40

1954

'

Continued from page
•

39

^Sterling Industries, Inc.

May 11 (letter of notification) 300,000
stock (par five cents). Price—$1 per

shares of common

May 26 filed $5,000,000 of refunding mortgage bonds due
1979. Proceeds—For construction program. Underwriter
—To be determined by competitive bidding. Probable

Halsey, Stuart & Co. Inc., and Union Securities
Corp. (jointly); Kidder, Peabody & Co. Bids—Expected
to be received up to 11 a.m. (EDT) on June 22 at com¬

New York.

pany's office in Washington, D. C.

Strevell-Paterson Finance Corp.

Webb &

(par 50
cents being offered in exchange for the $300,000 par
value
of authorized,
issued and outstanding capital
stock of Strevell-Paterson Finance Co. on the basis (a)
of 13 shares of Corporation stock for each of the 5,000
shares of 5% cumulative preferred stock (par $10) of
the Company and
(b) 23 shares of Corporation stock
for each of the 25,000 shares of $10 par common stock
of the company. Offer expires Oct. 31.
Underwriter—
Nbne. Office—Salt Lake City, Utah. Statement effective

'

,

640,000

filed

19

shares of common stock

March 30.

April 15 filed a maximum of 139,662 shares
(no par) to be offered for possible

of common
public sale

stock

1954 to June 30, 1955. Price
selling stockholders. UnderThe shares will be sold through brokerage

during the period July 1,
At market. Proceeds—To

Sun Oil

Co., Philadelphia, Pa.

April 15 filed 14,000

memberships in the stock purchase

plan for the employees of this company and its subsidi¬
aries and 146,100 shares of common stock (no par), the
latter
representing the maximum number of shares
which it is anticipated may be purchased by the trustees

Underwriter—None.

under the plan.

capital.

Office—201

East 42nd

Underwriter—None.

St., New York 17, N. Y.

Price—At par ($2 per share).

Underwriter—Graham

working capital.
burgh, Pa.

Proceeds—For
& Co., Pitts¬

Probable bidders: Halsey, Stuart & Co.
White, Weld

petitive bidding.

Inc.: Stone & Webster Securities Corp. and
fc Co.

(jointly).

ceived

on

Bids
17.

June

—

Tentatively expected to be re¬

*

West Ohio

•obtaining
for

for

contracts

other

L. H.

general

Rothchild

standing

,

per

Canada and

States and

for other corporate pur¬

Office—Glendive, Mont. -Underwriter—Irving J.
& Co., St. Paul, Minn.
'
• 1
*

poses.

Rice
•

Williston

Basin

&

Ventures, Inc. (7/1).
May 20 (letter of notification) 2,500,000 shares of com¬
mon stock
(par one cent). Price—Two cents per share.
Proceeds —For exploration costs.
Office — 420 Fidelity
,

Oklahoma City, Okla.

Canada.
stock (par $1).

April 30 filed 500,000 shares of common
I^rice
To be related to the market price at time of
offering. Proceeds—For development costs and general
corporate purposes.
Underwriter — To be named by
—

amendment.

or participations in
Savings Plan for Employees of company and United
subsidiaries, and 50,000 shares of outstanding
capital stock (no par), representing the number of shares
which, it is estimated, will be purchased under the
Plan during the 13 months' period following the effective date of registration.
'
•

the

States

United
•

States

Sulphur & Chemical Corp.,
City, Nev.
(6/15)

Carson

April 30 filed 380,000 shares of

Price—$2

per

ploration

and

share.

Proceeds

common
—

stock

(par $1).

For acquisitions,

ex¬

development expenses, and for working
Underwriter—Vickers Brothers, New York.

caipital.

United Utilities, Inc. (6/8)
May 19 filed 213,261 shares of common stock (par $10)
-

.to be

offered for subscription

of record

for each

about
six

June

8

on

the

by

common

basis

of

stockholders

one

share

new

shares

held; rights to expire on June 22.
Price—To
be
supplied b.y amendment. Proceeds—To
repay bank loans incured for construction requirements
of- subsidiaries
vested

in

-

Underwriter—Tellier

shares

for

each

10

common

shares

William N. Pope, Inc., Syracuse,

N. Y.

April 20 filed 1,000,000 shares of

Proceeds

new

Price—$1,121/2

common

per

Beane

a

proposal

to

construction.

(first to

(jointly).

holders

stock from

For

common

Underwriters

—

For

stockholders), Kidder,

Inc.; The First Boston Corp.; Lehman Brothers; Kidder,
Peabody & Co. and Merrill Lynch, Pierce, Fenner &

Prospective Offerings
common

—

stock

company

Peabody & Co. and Merrill Lynch, Pierce, Fenner &
Beane (jointly). -For bonds, to be determined by com¬
petitive bidding. Probable bidders: Halsey, Stuart & Co.

American Natural Gas Co.

28 stockholders approved

1

plans new
financing late this summer which would require issu¬
ance of common stock and probably $10,000,000 of bond3.

1

common stock (par $1).
share. Proceeds—For general cor¬
porate purposes.
Underwriter — National Securities
Corp., Seattle, Wash., on a "best efforts basis."

April

Proceeds—To

Florida Power

March 27, it was

'

held.

retire, in part, outstanding class A preferred stock held
by Reconstruction Finance Corporation. Underwriter-

on

Common stock

March

from

25

shares, and the preferred

increase

was

increased by stock¬

2,500,000 shares to 5,000,000
stock from 250,000 shares to

500,000 shares.

4,000,000 to 5,000,000

(6/30)
'
plans to issue and
shares of cumulative preferred stock (par
$100) and 245,000 shares of common stock (no par).
Proceeds—To
repay bank loans and for new construc¬
Arkansas Louisiana Gas Co.
tion. Underwriters
To be determined by competitive
Feb. 22 it was reported Cities Service Co. may sell its
bidding. Probable bidders:'Blyth & Co., Inc. and Lehholdings of 1,900,000 shares of this company's stock.
If
srman Brothers (jointly); The First Boston Corp.; White,
sold at competitive bidding, bidders may include Smith,
^WYeld & Co.; Merrill Lynch, Pierce, Fenner &
Beane;
Barney & Co. and Blyth & Co., Inc. (jointly).
Carl M. Loeb, Rhoades & Co.; Union Securities
Corp.;
Arkansas Power & Light Co.
Glore, Forgan & Co. and Harriman Ripley & Co. (joint¬
Feb. 8 it was reported company plans to sell, probably
ly). Bids—To be received up to 11 a.m. (EDT) on June
In August, an issue of about $7,500,000 first mortgage
30. Registration—Expected June 8. '
bonds due 1984.
Underwriters
To be determined by
Hercules Cement Corp. (6/15)
1
competitive bidding. Probable bidders: Halsey, Stuart
May 20 it was announced company plans early registra¬
& Co. Inc.; The First Boston Corp.; Lehman Brothers,
tion of 40,000 shares of common stock to be offered
Stone &- Webster Securities Corp. and White, Weld &
for
subscription by common stockholders of record
Co. (jointly); Blyth & Co., Inc., Equitable Securities
June 15 on the basis of one new share for each four
Corp. and Central Republic Co. Inc. (jointly); Merrill
shares held; rights to expire on June 29.
Proceeds—For
Lynch, Pierce, Fenner & Beane and Union Securities
expansion and modernization.
Underwriter—Stroud &
Corp. (jointly).
Co., Inc., Philadelphia, Pa.
shares

when

enable

to

the

company

to sell

additional

Offering will probably be made to
present stockholders. Proceeds—To subsidiaries for their
construction programs.
Underwriter—None.
necessary.

•

shares

s

•

Florida Power &

May 25 it
sell 50,000

Light to.

announced

was

company

—

if Union Carbide & Carbon Corp.
May 28 filed $26,000,000 of interests

«

summer.

Corp.
announced that the

the authorized

Montreal,

*

Deposit,Co.,,Syracuse, N. Y.
May 9 it was announced company plans to bffer to com¬
mon stockholders 200,000 shares of new cumulative con¬
vertible preferred stock on the
basis of six preferred

Co., Jersey City, N. J.

com-

1

Utilities Associates

First Trust &

Wyton Oil & Gas Corp., Newcastle, Wyo.

the

of

Co., New York..
Corp.,

this

Oil

(6/7)

construction

the

Eastern

April 30 trustees authorizecbissuance of additional com¬
mon stock
(par $10) to present stockholders.on a basis
not greater than one new share for each 12 snares held.
Proceeds—To pay off $2,000,009-bf bank loans. Offering
—Expected not later than Oct. 1, 1954; probably early*

($2,500); for purchase or acquisition of addi¬
mineral
interests, leases and royalties in the

United

Halsey, Stuart & Co. Inc.; White, Weld & Co. and
Boston Corp.
(jointly); Kuhn, Loeb & Co.;

First

Cott Beverage Corp.
May 5 it was reported 160,000 shares of Common stock
are to be publicly offered—100,000 shares
foi*~account_of *
company and 60,000 shares for selling stockholders. Price
—In neighborhood of $10 per share. Proceeds—For gen¬
eral corporate purposes. Underwriter—Ira Haiipt & Co.,
New York. Registration—Expected 4n Junef1954; u

loan, etc.

Corp., Reno, Nev.

system, for working capital and
corporate purposes. Underwriters—

Retro-Chemical

Trican

and

remainder

subsidiaries.

to

be

advanced

or

in¬

Underwriter—Kidder, Peabody

Co., New York.
i

:

issue and sell from $15,000,000 to

securities. Underwriter—For bonds,
by competitive bidding. Probable bid¬

new

Harriman, Ripley & Co. Inc. and Alex. Brown & Sons
(jointly).

V
(par $1).
share. Proceeds—To redeem 1,250 out¬
preferred shares ($125,000), to repay - bank

Price—$4.75

pany's transportation

.

(6/15)

None.

Transportation Development Corp.

ders:

Office-—319 West Market
Co.

reported company plans, following set¬

to be determined

Lima, Ohio

& Gas

of $25,000,000. Underwriter—To ba
competitive bidding. Probable bidders;

was

$25,000,000 of

May 24 filed 100,000 shares of common stock

April 26 filed 100,000 shares of common stock (par $1).
Price—$6 per share. Proceeds—To finance the costs of

'

Oil

senior debentures later
and to re¬

loan
by

tlement of rate case, to

Underwriter—None.

Plains

'

A- Utida Uranium Co., Inc., Pocatello, Ida.
May 21 (letter of notification) 3,000,000 shares of com¬
stock (par one cent). Price — 10 cents
per share.

mon

Proceeds—To finance exploration, etc.
son
Bldg., Pocatello,
Co., New York.

Ida.-




Office—205 Carl¬

Underwriter—I.

.

J.

Schenin

I

.

'

—

•

Boston

Edison Co.

(7/26)

sought permission of Massachusetts
Department of Public Utilities to issue and sell $13,000000 of first mortgage bonds due 1984.
Prooeeds — For
construction program. Underwriters—To be determined
by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; The First Boston Corp.; Lehman Brothers;
Kuhn, Loeb & Co. and A. C. Allyn & Co. Inc. (jointly);
White, Weld & Co., Harriman Ripley & Co. Inc. Bids—
Tentatively expected on July 26. Stockholders will vote
on June 30 on approving bonds issue.
May

24

company

if Bullard Co.

Indiana &
Jan. 27 it

was

Michigan Electric Co.

gage

j

announced company

November, 1954,
bonds due

preferred stock

an

plans to sell around
issue of about $16,500,000 first mort¬

1984

and

40,000

(par $100).

shares of

Underwriter

termined by competitive bidding.
For bonds—Halsey, Stuart & Co.

—

cumulative
To

be de¬

Probable bidders: (1)
Inc.; Union Securitiei

Corp.,

Goldman, Sachs & Co. and White, Weld & Co.
(jointly); The First Boston Corp.; Harriman Ripley &
Co. inc.; Kuhn. Loeb & Co.; (2) for preferred—The Firss
Boston Corp.; Smith, Barney & Co.; Lehman
Brother^
Union

Securities Corp.

*

has advised stock¬
Kansas City rower & Light Co./
financing. .^Proceeds—
For expansion. Underwriter—White, Weld vk Cfo., hand¬ / March 8 it was announced that company may sell in thl
latter
led secondary offering in 1929.
part of 1954 $16,000,000 first mortgage bonds. ProMay 27 it

was

announced

holders it is planning

company

some

new

,

Co. of Baltimore

May 26 it

May 10 (letter of notification) 22,386 shares of commonj
(par $5), to be offered to common stockholders
of record May 15 in the ratio of one new share for each
15 shares held.
Price—$10 per share.
Proceeds—For

Western

In

$40,000,000 of senior debentures

Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.

stock

St., Lima, Ohio.

sell

Proceeds—For construction expenses

bank

a

The

Gas Co.,

and

additional $40,000,000 of

determined

Offering—Post¬

Underwriter—None.

May 3 (letter of notification) 1,993,333 V3 shares of capi¬
cent). Price—15 cents per share. Pro¬
ceeds—For mining expenses.
Office—139 N. Virginia
St., Reno, Nev.

^

York.

Wyoming Oil & Exploration Co., Las Vegas, Nev.
April 29 filed 500,000 shares of common stock. Price—
At par ($1 per share).
Proceeds—For exploration and
development of oil and gas properties. Underwriter—

tal stock (par one

>

New

,:

★ Consolidated Gas Electric Light & Power

15,000 shares of common
stock. Price—At par ($10 per share).
Proceeds—To de¬
velop and manufacture the Thalman Four Place Midwig
Plane. Office—1023 Fremont Ave., Salt Lake City, Utah.
Three-In-One Gold Mines

pay

Underwriters—White, Weld & Co. and Union
of

issue

to

an

in 1954.

poned indefinitely.

&

May 25 (letter of notification)

*

private sales of

Price—To be supplied by amendment. Pro¬
ceeds—Together with other funds, to be used to build

Bank Bldg

-

ic Thalman Aircraft Corp., Salt Lake City, Utah

and

20, 1952 filed 1,125,000 shares of common stock (par

tional

^ Tennessee Gas Transmission Co. (6/17)
May 26 filed $25,000,000 first mortgage pipeline bonds
due 1974.
Proceeds—To repay bank loans and for new
construction. Underwriter—To be determined by com¬

June

cents).

both

Vice-President.

Columbia Gas System, Inc.
March 5 it was announced that company plans early

Line Co., Dallas, Tex.

general corporate purposes.

Taylorcraft, Inc., Conway, Pa.
April 30 (letter of notification,) 150,000 shares of 6%
cumulative convertible preferred stock, of which 100,000 shares will be offered to public and 50,000 shares to
creditors.

a

Offering—Postponed indefinitely.

Corp.,

$21,500,-

financed

through sale of about 70% of bonds and 30% of equity
capital.
John R. Fell, a partner of Lehman Brothers, is

Dallas, Tex.

$55,000,000 first mortgage bonds to be used to build a
1,030 mile crude oil pipeline.
Underwriters — White,
Weld & Co. and Union Securities Corp., both of New

50

has applied to Colo¬

announced company

was

rado P. U. Commission for authority to build a
000 natural gas pipe line, in Colorado, to be

20,

Securities

shares of nonoffered for sub¬
scription by common stockholders on the basis of one
preferred share for each four common shares held; rights
to expire on July 1, 1954.
Price—At par ($1 per share).
working

March 5 it

(par 50 cents) to be offered in units of one $50 deben¬
one share of stock.
Price—To be supplied by
amendment. .Proceeds—From sale of units and 1,125,000

Nov.

Proceeds—For

Colorado-Western Pipeline Co.

of

West Coast Pipe

$1,000,000 of new preferred
working capital.
Underwriter—

Chilson, Newberry & Co., Inc., Kingston, N. Y.

debentures for
Equitable stock. Exchange offer, which
any time after June 7, 1954, is conditioned
solely upon acceptance by 80% of outstanding shares.
Underwriter—None. Statement effective May 5.

pipeline.

^ Tape Recording Corp., N. Y.
May 27 (letter of notification) 15,000
Cumulative preferred stock to be first

Proceeds—For

stock.

will expire

York.

-

v

stock and

-

issue and sell not to exceed

of $5 in cash and $7 principal amount of

additional shares of common

»

Co.

City Title Insurance Co., N. Y. C- —r : ./
•
\j
>
May 20, it was announced that company is planning to

sinking fund debentures

West Coast Pipe Line Co.,

$4,00^,000 first

Proceeds—To repay bank loans and fO£*r
Underwriters—To be determined by

bidding. Probable bidders: Halsey, Stuart
Inc.; Stone & Webster Securities, Corp.; Kidderr
Peabody & Co. and White, Weld & Co. (jointly).

1, 1974, being offered together with certain
cash by the company in exchange for outstanding com¬
mon
stock of Equitable Office Building Corp. on basis
share

intends to offer and

company

competitive

&

June

each

announced

was

construction.

new

ture and

^

houses.

v

due

it

sell around the middle of 1954 an issue of

mortgage bonds.

1952 filed $29,000,000 12-year 6,% debentures
due Dec. 15, 1964, and 580,000 shares of common stock

Co., Philadelphia, Pa.

writer—None.

«

Knapp, Inc., New York

April 14 filed $8,607,600 of 5%

Nov.

Sun Oil

Dec. 9

bidders:

share. Proceeds—
For working capital.
Office—100 West 10th St., Wil¬
mington, Del. Underwriter—East Coast Securities Corp.,

Feb.

Central Illinois Electric & Gas Co.

(6/22)'- v;—-

• Washington Gas Light Co.

•

:

Number 5330

Volume 179

The Commercial and Financial Chronicle

...

(2465)
»

i

>. t.l.i'

J"» i

.

■■

$ ?AV

?eeeds '-— To

bank loans and for

repay

new

construction.

■Forgan & Co.; Merrill Lynch, Pierce, Fenner & Beane,
Kidder, Peabody & Co. and White, Weld & Co. (jointly);
Equitable Securities Corp. and Union Securities Corp.

Underwriters—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Lehman
Brothers and Bear, Stearns & Co.
& Co., Salomon Bros. & Hutzler

(jointly); Kuhn, Loeb
and

Union

it is estimated
be

Wertheim

Equitable

Securities

April 27 aprpoved

Corp.

new

Meeting—Stockholders

financing.

April 20 it

:

announced company plans later in

was

issue, $20,000,000

mortgage

finance construction program.

bonds.

Proceeds

*

Underwriter—To be de¬
>

*

new
construction.
Underwriters—Blyth & Co.
Inc., The First Boston Corp. and W. C. Langley & Co.
(jointly). Registration—Expected in June.

late

in

1954.

May 1, 1955, and for general corporate pur¬
Underwriters—May be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Morgan Stanley & Co.; White, Weld & Co. and Salomon
Hutzler

Maine

May 28

Pembina

for

Underwriters

construction.

new

both

Fenner

of

New

&

Beane

and

&

bank loans and

July 19.

ital.
#

,

Merrill

Peabody

bonds.

it

was

cap¬

its

on

stockholders
l-for-10

9,108,824

next

basis.

shares.

common

Fall

There

additional

are

Proceeds

—

offer to
common

outstanding

it

7

bonds due 1984.

Proceeds—To repay bank loans and for
construction.
Underwriters—To be determined by

bidding.
Probable bidders: Halsey, Stuart
Inc.; Kuhn, Loeb & Co. ancU Leljrndn Brothers
(jointly); Equitable Securities Corp.; "Union Securities
Corp. and White, Weld & Co. (jointly); Merrill Lynch,
Pierce, Fenner & Beane.
Co.

New
Feb.

8

Orleans

Public

Service

it*was reported company

Inc.

plans to offer for sale

$6,000,000

of first mortgage bonds due 1984 late this
Underwriters—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;

year.

.

Co.

of

New

outstanding 50,000 shares of 5.40%
for

new

Co.

Investment

securities in the United States.
Rochester
.

May 17 it
year

Gas

&

Electric

Corp.

reported company may issue and sell this
additional bonds and preferred stock. Pro¬

was

some

ceeds—For

construction.

Underwriters—(1) For
bonds to be determined by competitive bidding.
Prob¬
able bidders:
Halsey, Stuart 8c Co. Inc.; Kidder, Pea¬
body & Co. and White, Weld & Co. (jointly); Salomon
Bros. & Hutzler; Shields & Co.; Blyth & Co., Inc.; The
First Boston Corp.; Union Securities Corp. and Equit¬
able Securities Corp. (jointly).
(2) For preferred stock,
The First Boston Corp.
•
new

-

Northern States
Feb. 8 it

was

and

of

sale

foonds due
fee

Rockland Light & Power Co.
April 1, Rockwell C. Tenney, Chairman of the Board, an¬
nounced
at

New York, New Haven & Hartford RR.
May 26 it was reported company will offer and sell $6,600,000 equipment trust certificates due Jan. 1, 1955 to
1969, inclusive. Probable bidders: Halsey, Stuart & Co.
Inc.; Salomon Bros. & Hutzler; Kidder, Peabody & Co.;
Blair, Rollins & Co. Inc.

Ttiter

'.

approximately $20,000,000 of first mortgage
by

Co.

Underwriters

—

To

competitive

Halsey, Stuart & Co.
&

(Minn.)

1984 in October of 1954.'

determined

ders:

Power Co.

reported company is planning the issuance

(jointly);

bidding. Probable bid¬
Inc.; Lehman Brothers and

Smith,




Barney

&

Co.;

Glore,

stock

to

(par

stock from

Utah

Power

Co.

applied to FPC for authority to issue
sell 13,135 shares of common stock (par
$10) to corL^

and

company

stockholders

mon

six shares held.

Co.,

on

the basis of

loans.

C.

D.

previous

Robbins

share for each,

new

later.

Proceeds—

Underwriters—Smith,

Omaha, Neb.; Glidden,

and

one

Price—To be named

bank

repay

&

Morris

&

Co.,

Polian

New

&

York;

Co., Newark, N. J., who handled

underwriting

in

1951.

★ Telecomputing Corp.,

May 26 it

reported early registration is expected of

was

shares

Richards

&

of

Co.

stock.

common

and

William

R.

Underwriters

Staats

Hill

—

&

Co., Los An¬
tv'-• .0/'/ ' .7

that

the

Tennessee Gas Transmission Co.

May 24 it

1954

construction, program,

estimated
$14,000,000, will require further financing. Common
financing to stockholders in 1953 was underwritten

stock

by Merrill Lynch, Pierce, Feriner & Beane. An issue of
$3,000,000 bonds were also sold last year at competitive

bidding, with the following making bids: Halsey, Stuart
Co. Inc.; Equitable Securities Corp.; Kuhn, Loeb &
Co.; Stone & Webster Securities Corp.; The First Boston
Corp. and Salomon Bros. & Hutzler (jointly); Lehman
&

;

//

reported company plans issuance and sale
of debentures later in 1954 (in addition
to $25,000,000 bonds filed May 26 with
SEC). Proceeds—

of

was

$20,000,000

For

construction.

new

Underwiters—To

be

determined

by /competitive

:bidding.
Probable
bidders:
Halsey,
Stuart & Co. Inc.; Stone & Webster Securities
Corp. and
White, Weld & Co. (jointly).
Transcontinental

-

-'/ 7

Gas

Pipe Line Corp.
March 16 it was reported company plans later this
year
to
do some permanent financing to
repay temporary
bank loans necessary to pay for new construction esti¬
mated to cost about $11,000,000 for 1954. Underwriters—
White, Weld & Co. and Stone & Webster Securities
Corp., both of New York.

'

Tri-Continentai Corp.
March 30 stockholders voted to
of

reclassify 500,000 sharet

presently authorized but unissued $6 cumulative pre¬
stock, without par value, into 1,000,000 shares of a

ferred

class

new

possible
stock

of

a

at

preferred

stock,

$50

par

value,

making

refunding of the outstanding $6 preferred
appropriate time,

an

when conditions

warrant.

Underwriter—Union Securities Corp., New York.
Ultrasonic

May 17 it

(

Corp.

reported company plans to offer some
provide working capital.
Details not

was

securities

to

available.

'/?:" 7/77'/-;-:'

United

May

Gas

it

11

new

yet

Improvement Co.

(7/12-16)
reported company may issue and sell
first mortgage bonds due 1979. Under¬

was

$10,000,000
writer

of Canada

Equitable Securities

Corp.; Union Securities Corp. and
Harriman Ripley & Co. Inc. (jointly); Lehman Brothers:
Kidder, Peabody & Co. and Stone & Webster Securities
Corp. (jointly); The First Boston Corp.; White, Weld &

Southern

May 10

preferred stock

Fund, Ltd.
April 27 the SEC authorized the company to register as
an investment concern and to make a public offering of

competitive
&

company

program

Service

Resources

Issue and sale in

new

reported

negotiated basis.

<{

reported this company tentatively plant
1954 of about $3,000,000 first mortgage

was

was

construction.
Underwriter—If
through
bidding, bidders may include Kidder, Pea¬
body & Co. and Blyth & Co., Inc. (who made the only
bid in June, 1952, for the 5.40%
issue, which was re¬
jected); R. W. Pressprich & Co. and Spencer Trask &
Co. (who were awarded that issue in July, 1952, on a

(jointly); Meririll
Lynch, Pierce, Fenner & Beane, Kidder, Peabody & Co.
and White, Weld & Co. (jointly).
16

proposal

a

common

Co.,
Pueblo, Colo.; and Boettcher & Co. and Bosworth, Sul¬
livan & Co., both of
Denver, Colo.; who underwrote
common
stock offering to stockholders in
1948; subse¬
quent; common stock financing was riot underwritten.

•

of Colorado

competitive

Thalmann & Co. and Wertheim & Co.

Dec.

Co.

(jointly).

and

of subsidiaries. Underwriters — To be deter¬
mined by competitive bidding. Probable bidders: Blyth
& Co., Inc., Lehman Brothers and Bear, Stearns & Co.
(jointly); Carl M. Loeb, Rhoades & Co., Ladenburg,

,

August, 1954.

.

construction

fund

For construction

Jersey Power & Light Co.

Probable bid¬

Hampshire
May 7 preferred stockholders approved a proposal to
increase
the
authorized
preferred stock from
160,000 shares to 300,000 shares, of which
it is planned,
to issue not in excess of 75,000 shares.
Proceeds—To re¬

program

New

or

Service

Public

a

by competitive bidding.

/

1,000,000 shares to, 1,200,000 shares.
It is planned to
raise about $3,500,000 through issuance and sale of new
securities.
Underwriters—May be Hutchinson &

on

Inc.

common

Underwriter—

May 21 it was announced stockholders will vote June 24
increasing aulhorized preferred stock (par $25) from
1,400,GOO shares to 2,000,000 shares. Underwriter—Blyth
& Co., Inc., San Francisco and New York.

Underwriter—To be determined by competi¬
bidding. Probable bidders: Halsey, Stuart & Co
Inc.; Blyth & Co., Inc., White, Weld & Co. and Merrill
Lynch, Pierce, Fenner & Beane (jointly); Blair, Rollins

stock

bonds.

ir Public Service Co. of Indiana, Inc.

tive

to

H

approve

and to increase the authorized

geles,- Calif.

Co.

that company plans to issue
additional first mortgage
bank loans and for new con¬

New England Electric System
April 29 it was announced company plans

$50)

to

were

issue of 50,000 shares of preferred

Proceeds—

plans to finance its
through temporary bank
loans, with permanent financing delayed until later in
the year. Previously, the company had planned to float
an
issue of $15,000,000 first mortgage bonds, due 1984,
early in 1954. Underwriters—To be determined by com¬
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc., Kuhn, Loeb & Co.; The First Boston Corp.; Harris,
Hall & Co. Inc.; Harriman Ripley & Co., Inc. and Union
Securities Corp.
(jointly); Lehman Brothers: Kidder,
Peabody & Co.; Blyth & Co., Inc. and Smith, Barney &

struction.

& Co.

series

in the

Colorado Power Co.

stockholders

ah

pected in July

April 12 it

some

Proceeds—To repay

and

••

,

(jointly).

year

F

14

95,500

1954

reported

this

Southern

Halsey, Stuart & Co. Inc.; The First Boston Corp.;
Glore, Forgan & Co.; Kuhn, Loeb & Co. Offering—Ex¬
Public

Montana-Dakota Utilities Co.
late

series

!

(Wash.)

holders o£.2;006- additional shares of capital stock
new share for each nine shares held.

To

ders:

stock

Proceeds—For expansion and working

refund

To be determined

16 it was reported company may sell in 1954 aboul
$3*500,000 first mortgage bonds due 1984. Proceeds—Foi
construction program.
Underwriters—To be determined
by competitive bidding. Probable bidders: Halsey, Stuarl
& Co. Inc.; White, Weld & Co.; Kidder, Peabody & Co
and Drexel & Co. (jointly); Kuhn, Loeb & Co. and Salo¬

sell

granted

000,000 first and refunding mortgage bonds.

Co.,

Metropolitan Edison Co.

March 17

been

&

Dec.

and

has

Co. of New York.

To

Bros. & Hutzler

company

Lynch,

Underwriter—None.

mon

announced

Savings Bank

ratio of one

obtain

Peoples Gas Light & Coke Co.
May 10 it was reported company plans the sale of $40,-

(about 281,432 shares) to stock¬
holders o# record Jurte 25, 1954 on a one-for-five basis
(with an oversubscription privilege); rights to expire
on

was

to

shares of 5%%

York.

common

•

(Canada)

by Mannix Ltd. of Calgary, Dome Exploration
(Western) Ltd. of Toronto, and Carl M. Loeb. Rhoades

preferred stock

—

Kidder,

it

14

right

(jointly).

Pipe Line Co.

jointly

Commission for

Merritt-Chapman & Scott Corp. (6/25)
April 23 it was announced company plans to offer ad¬
ditional

determined

a
permit to build a 72-mile pipe
line to transport crude oil from the Pembina Oil Field
in
Alberta to Edmonton.
Financing will be handled

Service Co.

applied to Maine P. U.
authority to issue 40,000 shares of new
(par $50). Proceeds—To redeem 60,000
preferred stock (par $20) and to repay
company

Pierce,

April
the

(jointly),

Public

be

of

was

sell

Light Co. debt and for

Underwriters—To

indebtedness

announced Stockholders will vote in June
"on'ajfrogosal to approving the issuance, and sale to stock¬

create

construction.

authorized

in¬

5,000,000 to

from

* Seattle Trust &

May 26 it

May

&

the

which

from

Drexel & Co., Smith, Barney & Co. and Merrill
Lynch,
Pierce, Fenner & Beane.y,,'-:^--\^

(merged with Pacific Power

Bros. & Hutzler

due

&

and

by
Probable bidders: Halsey, Stuart &
Inc.; Blyth & Co., Inc. and White, Weld & Co. (joint¬
ly); Kidder, Peabody & Co.; Union Securities Corp.;
Lehman Brothers, Bear, Stearns
& Co. and Salomon

Proceeds—To retire

.

'
issue

and

proposals

stock

~

■

may

shares

company

about $30,000,000 of new bonds later this year. Proceeds
—To refund all outstanding Mountain States Power Co,

poses.

Bros.

vr:

-

it Pacific Power & Light Co.
May 25 it was reported company

approved
common

$25,000,000
to' $50,000,000.
The
company has no
specific financing program.
Under¬
writers—Previous offering of $24,952,800 3% convertible
debentures, in September,; 1953. was underwritten by

Co., San Fran¬

Co.

$24,610,000 Atlanta, Knoxville & Cincinnati Division 4%
bonds

cisco, Calif.

stockholders

the authorized

10,000,000

v

competitive bidding.

reported that the company may issue and

of bonds

the

Underwriter—May be Glore, Forgan & Co.,
City. " /
" '/v.-.- ..7
(6/23)

Paper Co.

27

financing.

new

Louisville & Nashville RR.
issue

April

authorized

stock from 750,000 shares to 1,000,000 shares in
order that the company be prepared for possible future

struction program. Underwriter—Blyth &

—For

an

the

May 26 it was announced company plans to file with the
SEC (about June 3) a registration statement, covering
>1,000,000 shares of redeemable first preferred stock (par
/ $25 )A Price—To be named later.
Proceeds—For con-,

Long Island Lighting Co.
May 21 company announced plans to offer rights to com- '
mon stockholders
early in July to subscribe to 690,062
new common shares on a
one-for-eight basis. Proceeds

sell

increase

ic Pacific Gas & Electric Co.

<*

was

Scott

Co.

to

Underwriters—May

determined

creased

New York

To

i)y competitive bidding.
Probable bidders:
Halsey, Stuart -m Go. Inc.; W. C. Langley & Co.; Blyxh
& Co.f4nc.-a«d The First Boston
Corp. (jointly); Smith,
Barpey. & Go.

Power

stockholders voted

1954

—

termined'

Nov. 12 it

Tail

12

common

on

Long Island Lighting Co.
to

Otter

April

$1,661,000.

)

by competitive, bidding. Probable bid¬
Halsey, Stuart & Co. Inc.; Smith, Barney & Co.,
and Glore, Forgan & Co.
(jointly); Union Securities
Corp.; White, Weld & Co.; Equitable Securities Corp.-

(jointly); Kuhn, Loeb & Co., A. C. Allyn & Co. Inc. and
& Co. (jointly).

Securitiei

(jointly); Glore, Forgan & Co.; Blyth & Co., Inc.
and The First Boston Corp. (jointly); White, Weld & Co.
and Shields & Co. (jointly); Harriman
Ripley & Co., Inc.,

will cost

41

\ '

:■

ders:

Corp.

•

'

/.

•RJt

of
To

be

determined

by competitive bidding.
Halsey, Stuart & Co. Inc.; Blyth &
Co., Inc.; Kidder, Peabody & Co.; Morgan, Stanley &
Co. and Drexel & Co. (jointly); The First Boston
Corp.;
Blair, Rollins & Co. Inc. Registration—Expected about
June 15 to June 18. Bids—Tentatively set for week of
July 12.
■/•;
—

Probable

<

bidders:

West Coast Transmission Co.

Oct.

14, 1953, it was announced company now plans to
$29,000,000 in l-to-5V2-year serial notes; $71,000,000
20-year, first mortgage bonds; and $24,440,000 in sub¬
ordinated long-term debentures and 4,100,000 shares pfi
common
stock to be sold to the public.
Proceeds—To
finance construction of a natural gas pipe line from the
issue
in

Canadian Peace River field to western

Washington and
Oregon. Underwriter—Eastman, Dillon & Co., New York.
Western Pacific RR.
March

10

Co.

applied to the ICC for exemption
from
competitive bidding on its proposed $22,500,000
debenture
issue.
The 30-year 5%
income securities,
would be offered in exchange for 225.000 of $100 par
preferred stock, of the more than 300,000 shares out¬
standing. The company plans to offer $100 of deben¬
tures, one-fifth of a share of common, and an undeter¬
mined
and

company

cash

then

payment for

redeem the

shares of

each share of preferred

then

stock

remaining outstanding 83,211

preferred stock.

Brothers; Merrill Lynch, Pierce, Fenner & Beane.
+ Wisconsin
;'

St. Joseph Light & Power Co.

March

t

30, C. A. Semrad, President, announced that the

raise new money this year through the
sale of $1,000,000 first mortgage bonds or from tempo¬
rary bank loans for its 1954 construction program, which,

company

may

May 26
and

l-for-5

Southern

company

sell to

its

basis

(par $10).
collateral

Gas

Co.,

Inc.

applied to SEC for authority to issue

stockholders of

12,618

record

June

additional shares of

Price—$11
trust bonds.

per

share.

1,

1954

common

Proceeds—To

Underwriter—None.

on

a

stock

redeem

The Commercial an&'Financial Chronicle.,.

(2406)

42

buyers

the other,

on

keeping

are

Continued

from

close eye on two recent under¬

a

3

page

Blyth Group Offers V

takings^ namely Pacific Gas &.
Electric's ; $65,000,000. issue and

Public ^Service ' Electric f &
Corp.'s $50,000,000 of
The

former

new

brought

in

slow

attracting

out

at

buyers.

titude

Consensus
what

of its members is concerned

vide

ped the new issue market.

prospective issuers
indefinite postpone¬
undertaking which al¬

reached

entire theory of competi¬
bidding which came into be¬
ing under the auspices of the New
tive

Deal.

this

decided

withdraw

to

bids

for

for

its

mortgage

bonds

of

new-

because

of

"present market conditions." Bid¬
ding had
but

been set for
issue

the

is

yesterday,
off

now

this

method

of

under¬

writing, it is argued, the tendency
is to * put prices on
new
issues
which are not acceptable to peo¬
ple who have the money to invest.
Stress, it is contended, is on the
wrong things.

request

825,000,000

until

and
stimulation, of
might actually reSurr in

power

collections

tax

than

were

lost by tax

adjustment. Is not the
argument even more valid today
when there is a large volume of
unemployment and underemploy-

lead to
lized

date.

to

plant

more

the

both sides

of

the picture,

the underwriters
and

the

on

the

BABSON

W.

institutional

Those

ideas.

hand

with

taking down

portfolio

voice

same

100

Babson Park, Mass.

bonds

Invariably,

it

is

TO

ers," determine
"carry the ball."

Redemption

HOLDERS

OF

A

By

MORTGAGE BONDS OF

AND

Reliance

by

been

at

the oflice of Pacific Gas and

Company

245 Market
Street, in the City and County of
San Francisco, State of California,
all of its outstanding First and Re¬
funding Mortgage Bonds of Series
V, 4%, due June 1, 1984; that upon
at

the, presentation and surrender of
said bonds

at either of said specified
places of redemption with (in the

of coupon

case

bonds) all interest

maturing subsequently to
said date of redemption, and (in the
case of registered bonds or of cou¬
pon bonds registered as to princi¬
pal ) accompanied by duly executed
assignments or transfer powers,
coupons

there

will

be

paid to the holders
thereof the applicable redemption
price specified therein; and that in¬
terest

will

cease

to

accrue

said bonds of Series V

herein specified

on

on

all of

the date

for their redemp¬

tion.

PREPAYMENT OFFER

of

of their 20-

reason

Corp.
offering $5,000,000

is

subordinated

new

bentures,
Power

while

has

convertible

Central
issue

an

;

bond

the

V :K'V
rahk

file

and

the

of

the

Some 600 to 700 members of the

Bond
at

Club

the

will, finish

their

organization's annual

day
out¬

ing trying their hand at golf and
other forms of diversion.
So
one

that

the

week

was

a

short

in the business, what with the

holiday and tomorow's
abbreviated activities,
with em¬
phasis on trying to move backedmaterial.

Holders and registered

owners of
of said bonds of Series V desir¬
ing to receive immediate payment

any

Three With Standard
(Special to The Financial

of the full redemption price (includ¬

ing premium of 5%% of the prin¬
cipal amount and accrued interest
to July 1, 1954),
may do so upon
presentation and surrender of said
bonds in tljie manner described in
the

foregoing notice,

at

said oflice

Chronicle)

LOS ANGELES, Cal.—Forest N.

DeArmond, Medardo Rangel, and
Frederick
Tillinghast,
III
have
been added

ard

pany, or at

Investment Co.

of

California,

210 West Seventh Street.

,

V

the said oflice of Pacific

Company, or at the
head oflice of Americah Trust Com¬
464 California Street, San
Francisco, California. Coupons for
interest due June 1, 1954, or prior
thereto, if presented with the bonds,
will be paid at the same time.
pany,

E. E.

Manhard, Secretary of

to The Financial

Chronicle)

PACIFIC GAS AND ELECTRIC COMPANY

Joins Frank Knowlton Co.

San Francisco, California

May 28, 1954.




(Special to The Financial

ton &
f

now

Chronicle)

Calif. —Leon

W.

with Frank Knowl¬

Co., Bank of America Build¬

ing. In the past he
tal Securities Co.

and

with

was

with Capi¬
'

the

bank

outstanding

repay

and

remainder

will

go

penditures, expected

to

cost

$5,-

-

The company designs, manufacand sells heavy-duty elec-

'

and

trie motors, related auxiliary
equipment and electric drive and

The

1932.
one

man

another,

according

to

rewarding

in

individual

systems utilizing such
equipment.
It operates three
plants in Ohio and
another,
through a subsidiary, in Canada,

need

For the six months ended

30,

the

1954,

sales

of

April
had net
and net in-

company

$18,200,968

of $908,738.

come

\

With

S

^anrWn & Cn

A

I
it

Just makes the other possible and staff of S. A. Sandeen & Co., Talwhile I consider them both wrong cott Building..
'/

Dr.

"full
was

Wie-

employ-

Truman

pain and

-no more

teeth

our

should

sickness
not

Congratulations to

that

or

decay.
you

DAVID
President
Ironton

1

have

the

on

we

hope

SMUCKER
and

11

•xt

r\

.

.

,

they

will

About all that
hope for is reasonably
administration of these

can

sensible

of people who
convinced of where the wel-

Joins Hincks Bros. Co.
(Special

.

,

ff^ers of the Midwest Stock

politics

to

keep

moving

that

in

^xenange.

#

With Paine, Webber Co.

(.

establish

public

to

sta™e that *he Democratic Party

the

TU'd SJi ^ !"d Sfen,d' ,taVnd

inter-

.

,Speciui to the rra.»c..t ch,.„n.cle)

m^
su^cessor was
iess skilliul in the art of politics

Cwith

this insolent and: cynical crowd

theory

of Washington even for a

'

Quarrel

thT

HARTFORD, Conn.

Larson

has

-

become

i

curtis, 111 Pearl Street.

Joins Coburn Middlebrook
(Special

to The Financial Chronicle)

HARTFORD, Conn.

^vLll

country

Generally I like what I see in
the present Administration and I
think our big job is to keep them
Sithere to avoid ruinous administra¬
tion of .-policies and
programs

be most pros-

when

perous

all

who

te

work

be

properly

want
can

in

employed
normal

usual

„ZBEtaiSa8XK32itt)«t gSaamt&tZM' ^

and

David

E.

Smucker

occupa-

tions,

including proper governmental operations.
On the con¬
trary I don't think anybody could
dispute very much a conclusion
that the country would be in very
bad shape with only 20% of those

With Dietenhofer Firm
.....

desire

who

to

able

work

to

find

employment, both commercial and

governmental

proper
The

lies

danger

..

*

spheres.

entirely

with

the

possibility of selfish motiof the people who are re¬
quired to judge a situation of the

Qf Dietenhofer and

10 y°u-

Southwest

(Special to The

1. du

PASADENA,

R

-d

Pont

h

b

added

Broad

Calif.—F. Dwight

associated

now

Jack
staff

Heartfield, 670
Street.

(Special to The Financial Chronicle)

BOULDER,

?

is

the

to

With Allen In v. Co.

(Special to The Financial Chronicle)

Leslie

Financial Chronicle)

SOUTHERN PINES, N. C.

mou

Joins F.

John J.

Trumbull Street,

which we cannot possibly hope to
§et changed!;* I hope that this
lonntliv
Dvnncitirtn
r»f
rather lengthy exposition of may
views may be of some benefit
„iL.

—

Gagnon is now with Coburn &
Middlebrook, Incorporated, 100

i

^

John E.

connected

with Paine> Webber, Jackson &

k,

?

I don't think

est

Chronicle)

.

are skillful enough in the art of

,

locnnh

Financial

.

R?ls,
J0om®d
™a.
Hincks Bros. & Co., 872. Main St.,

[/ wlth Dr. Wiegand direction. The Great White Fa6 ^1 employment phi- ther was not making en empty
daneero H
I'inV w/",? statement when lie , said in sub-

+h

to The

BRIDGEPORT, Conn.—Floyd L.

a group

fare of the United States lies and

are

Toledo

that

be corrected.

ever

Railroad Company

e,

noooo

E.

Detroit

with

Francis I. du Pont & Co., 723 East
Green Street. He was formerly

standish

with Allen
1921

Colo. —Rolland

has

become

Investment

Fourteenth

D.

associated

Company,

Street.

He

was

}Ylth oL!ftf1r' Ryons & Co* and previously with Peters, Writer &
^err & BelL

Christensen, Inc.

vation

not

the

and

the

to

action

government.

ways

be

decide

sure

on

If

the
we

that

good

judgment

and

Jordan Proud Grandpa

whether

good of all the people

public servants could

Dinkin is

pay

the

wilL be

that'

President

requires

MENLO PARK, Cal.—Donald M.
Terr is now with Louis A. Love Co.

OAKLAND,

to

from

similar to Congress
passing a
law that there should be no more

this

legislation

wrote

or

i

By Order of the Board of Directors,

taxation

of

proceeds

debentures

control

theory of taxing
provide security for

ability

the

to

tures

some., very

since

re-

passed,

ment"

with

agree

When

moment

Joins Louis Love
(Special

changes

fund

rather than individual worth and vvltn
»janaeen <* uo.
accomplishment is a much mor^
(Special to the financial chronicle) ,
basic inequity and danger than
ROCKFORD, 111. —Delbert J.
the one we are talking ajbout. One Hilvers has been added to the

gand.

to the staff of Stand¬

of City Bank Farmers Trust Com¬
Gas and Electric

it

the

full

it may be, off the

like

exceeding

at the sinking

of

of

...

Monday

up

we

additional

000,000 for 1054-56.

onp

Country
perhaps that this week failed to
develop much in the way of new
business of the competitive bid¬
ding variety.
.

as

accordance

prescribed

slated to spend
Sleepy Hollow
Club, it is just as, well
at

.added

an

not

into the company's general funds
to pay for part of the capital ex-

It

govern-

Roger W. Babson

surely

r

fraternity

tomorrow

think about

books.

radical

Maine

of

Just As Well

With

enough.

undergone

of
of
de¬

50,000
shares of $100 par value preferred
up for the consideration of buy¬
ers.

test

the

part

notes

that

even

redeem

annually,

demption price,

an

of

policies by

Vanadium

of

to

$220,000,

election,

think

them-to

elect

amount

used

not, the

constantly improving "Chronicle."

30-year diet.

a

America

hattan, City and State of New York,
Electric

on

almost

unwise to

commencing April
J5,
1957, at
100%, and the
company
may

sale

or

and

Electric's $5,000,000

Meanwhile

Farmers Trust Company at 22 Wil¬
liam Street, in the Borough of Man¬

face

to

fund will operate to retire $220,000
principal
amount- annually

has

a

number of portfolios which have

a

the

in

inclined

Whether

I

Co. 'due

1, 1954 to-100% after June
1973-.—. A mandatory
sinking

1,

and

W&VMZ:. basic philosophies of our

Contrast

maturity, should fit well into

year

is

statute

was

debentures, by

ELECTRIC

COMPANY, a California corpora¬
tion, that it will redeem, on July 1,
1954, at the oflice of City Bank

and

of

'Engineering

June

,

leaders

Congressional

unworkable

of

trie

very

Administration

whole

circumstances.

JUNE 1, 1984

GAS

Bit

way

the

trying to get this
employment policy, unwise

and

these operations with more inter¬
est than usual under prevailing

(4%)

NOTICE IS HEREBY GIVEN
PACIFIC

price

contrast,
today
brought out a series of offerings
being marketed via the negotiated
basis.
Bankers will be watching

ELECTRIC COMPANY'S
FIRST AND REFUNDING

DUE

the

If

pressure.

business

"cheer lead¬

as

face' as' debentures of The Reliance Elec-

to

January.

even

am

strain

to

12

the
to

subjecting

to

PACIFIC GAS AND

SERIES V

argued,

I

seems

millions of the bonds in question.

15 firms must act

far

this

the

is offering pub-

licly $5,000,000 of 20-year 3%%

danger

in the past lodge

as

CED

and

as

(June 3)

an inwhich

group

to eleoi.4974, at 99.625%.
only enough for a bare numexiRegular, red em p t i o n prices
cal majority in the Congress imrange
from
103%
if
redeemed
portant committee chairmanships during the 12 months beginning

the

of

have

real

have

may

oncoming

firms which plan to
themselves
for
several

commit
REDEMPTION NOTICE

Notice of

intentions

I-thinJc;.j^at.The .Today

very

next

as

listened

point is made that there
be 75 or 80 members in a
syndicate meeting to discuss price

that is

one

a

banking

Democratic party is able

So
ROGER

may

on

we

tion under strong

lead

to

The

Meanwhile the rank and file

poses

vestment

-v-v

banks.

more

more

in

policy
which
early

Blyth & Co., Inc. heads

__

but
would
actually
savings being steri-

is

n

future

some

-

largely in some of the more conservative
Democrats
from
the
southern states. If on the contrary, the Democrats were able
to elect a very large and workin§ mapority of New Dealers we
would have an entirely different
situation and one which would
certainly place the Administra-

today

purchasing power to absorb the
products of the plant we now
have
(plant has increased 66%
since
1945,
in
rough
figures)
rather than a tax program that is
calculated

.

would

i

needed

is

expansion,

Under

week when Consumers Power Co.,

ing

Business

What

for the

**

:

held that the release oT pyrohasv^fcpshs-.and -green,

j

Feeling is that the current sit¬
could prove the acid test

into registration,
it is apparent that something has
got to give without much delay.

first

offerings

uation

ready has gone

was

ultimately

these

w•

-

in the
will pro¬
key to the immediate pros¬ ment?

a

where

point

that

be

to

33 g% Debentures

,//
«

more

Test of Bidding Theory

decided upon

That

new

pect.

When such conditions reach the

ment of an

toward

seems

happens
of

case

the stalemate that has grip¬

point

at¬

an

bond offerings in general.

judging by the comments of

try,

some
over

wariness

of

Reliance El. & Eng.

on

a

Slug¬

gishness here has prompted

Although far from panicky the
investment
underwriting
indus¬

Commentaries

Gas

bonds*:-

price to yield 3.Q8,% and the latter
priced to yield 3.02% have been

Thursday,-June 3, 1954

part

of

could aL

elected

our

be

men

high

of

cour-

and further that they would
in all cases employ staff assistants
equally competent in the
field, the mere statement of pol-i
icy
would
not
be
particularly

A

,

A

-

,

„

Goodbody Adds

~

„

On

the

experience

win ?WP A
lMIAMI, Fla.—Sam V. Silsbee
W^ter & Co., Seatte, Washington,
the. f°£d grandfather of a lit- has been added to the staff of
^ glAr1' .^b,erly ^Ann J^dan,. Goodbody & Co., 14 Northeast
w

born April 30 to I Andrew A. Jor- First Avenue. He
with Bache & Co.
dan' ^r- and b*s w^e Julie,
H.
„

^

L.

formerly

Frank

D.

Buchanan Admits

T

H* L'.

&
,v

rn
1

*m

V

+

Greenwich Street, New York City,

with the

Exchange,

20

Carl A. Halden to partnership.

years

was
and

Newman & Co.

members of the American Stock
contrary and
of the last

Staff

"

age,

dangerous.

to

(Special to The Financial Chronicle)

on

June

1

admitted

Joins Zilka, Smither
(Special to The Financial Chronicle)

PORTLAND, Oreg. — Samuel S.
has
joined the staff of
Zilka, Smither & Co., Inc., 813
Southwest Alder.
Duket

Number 5330

Volume 179

Continued

from

..The Commercial and Financial Chronicle

.

(2467)

DIVIDEND

8

page

NOTICES

DIVIDEND

NOTICES

DIVIDEND
THE

Dealer-Broker Investment

LONG ISLAND LIGHTING COMPANY

New

The

Preferred Stock

Recommendations & Literature

r.

SERVICE

.

dend
of

O

^

Pipe Line Co.

Memorandum

—

—

A

Kidder,

Peabody & Co., 17 Wall Street, New York 5, N. Y.
Seaway

St. Lawrence
Wall Street,

—

Analysis

—

quarterly

(1J4%)
of

Stock

have been declared.

—

Report

May 26,

share

July

the

D.

C.

1, 1954 to holders of
the close

at

KOBERTSMW-FULTON

of business June 11, 1954:

holders of

Per Share

Series

The stock transfer

open.

**

V

WILSON, Assistant Treasurer,
Broadway, New York 5, N. Y.

dividends

Preferred Stock of record

Page, Secretary and Treasurer

1954

quarterly

following

payable July

divi¬

a

Common

Both dividends

to

($1.25) per share, being Divi¬
Ill, on the Preferred Capital Stock
Company, payable August 2, 1954, out

No.

120

share

per

the

on

1954

1,

1954.

7,

remain

E. F.

Lerner & Co., 10 Post

—

June

books will

300 Montgomery Street, San Francisco 20, Calif.

Snap-on-Tools Corporation

per

payable

are

Company—Report—First California Com¬

20f

7S(

1964 and

dend

record

pany,

of

1954

Capital Stock registered on the books of the
Company at the close of business June 25, 1954.

183

Preferred Stock for the

quarter ending June 30,

Thomson & McKinnon, 11

New York 5, N. Y.

Sierra Pacific Power

dividend
the

on

24,

has
this day
de¬
Dollar and Twen¬

Cents

this

The Board of Directors has declared

Panhandle Eastern

COMPANY

May

of

undivided net profits for the year ending
June
30,
1954,
to holders of said Preferred

Quarterly Dividend

"

Y.,

N.

of

Preferred Dividend No. 193
Common Dividend No.

TOFEKA AND

RAILWAY

Directors
dividend
of
One

a

ty-five

Company

FE

York,

Board

clared

Bank Note

NOTICES

ATCHISON,

SANTE

American

43

Series* B, 5%

$1.25

Series D,

4.25%

$1.0625

Series E,

4.35%

$1.0875

CONTROLS COMPANY
Greensburg, Pa.
PREFERRED

STOCK

VINCENT T. MILES
A

Office Square, Boston 9, Mass.
Southern

York

New

May 26,1954

N.

5,

dend

5Jo

York 4,

1

Co.,

&

Broad

25

Irving Trust

Street,

Co.,

15

One Wall

THE

Street, New York

NOTICES

DIVIDEND

NOTICES

day

declared

dend
the

AMERICAN

of 30

AnacondA

regular quarterly dividend of 37Hc per
share has been declared on the Common Stock
CORPORATION

cents

share

per

460 West 34th

"July 1, 1954 to Stockholders of record at the

,

Secretary <Sr* Treasurer

Payable July 12, 1954

LOCOMOTIVE COMPANY

Dividend

Common

r

of

Dividends

($1.75)
of

per

one

share

dollar

Stock

this

of

Lv/ltANTY UvVl 'cUMfANr

The Board of Directors has authorized the
one-half cents

five

1954.

at

NATIONAL UNION

Broadway, New York 4, N.

Y.

FIRE INSURANCE
cents
New York, June

share on the
been

day declared
dend of

Transfer books will not be closed.
CARL A.

SUNDBlERO

2, 1954

this

of

cash

at

DIVIDEND

NOTICE

of

Fifty Cents

share

on

the capital

a

^AMERICAN

following

have

been

by the

close

Guaranty Trust Company

Board of Directors:

Preferred Stock

MACHINE AND

A

12nd Dividend

share

on

$4.25 Cumulative Preferred

W

Stock, payable July 1, 1954

M

to

If

M

the

stockholders of record at
close

of

business

cash

dividend
CENTS

paid

by

of
a

check

1954—for

the

on

June

A

be

mon

second quarter

ness

on

Stock, payable July 1,

1954 to stockholders of
ord

of this year—to share owners
of record at the close of

quarterly dividend of
per share on the Com¬

$0.15

30,

on

busi¬

at the

will

55?

-

M

Wm.

J. Williams

INTERNATIONAL MINERALS
& CHEMICAL CORPORATION

share in cash has been

declared

the

on

Common

Incorporated
Httth

Consecutive

Quarterly

Chicago 6

WEST

PENN

ELECTRIC

SYSTEM

Cash

Stock of C. I. T. Financial

Corporation,

payable July

1954, to stockhqlders of

record at the close of busi¬

June

10,

1954.

The

QUARTERLY DIVIDENDS

and

4% Cumulative Preferred Stock
49th Consecutive Regular

A

Quarterly Dividend of
One Dollar ($1.00) per Share
$5.00 Par Value Common Stock

Forty Cents (40#)

per

Share

On

May

27,

1954,

dividend No. 265 of

fifty cents (50$)
regular quarterly dividend of

seventy

five

cents

share will lie

1954

to

paid

(75#)
on

share

per

was

per

declared

by the Board of Di¬

June 14,

out

rectors

stockholders of record

of

past

earnings, payable on

May 28, 1954.

July I, 1954, to stock¬
holders of record

CHAMP CARRY

at

the close of business

President

June 11,

1954.

R. Cahill

F. DUNNING

Vice President and Treasurer

Executive Vice-President

A.

and

/

John Kuhn,
Treasurer

May 27, 1954.

501 PER SHARE

Dividends

Payment Date—June 30, 1954

*

C.

DECLARES

265th DIVIDEND

of

predecessor companies

Declared—May 27, 1954
Record Date—June 18,1954

transfer books will not close.

Checks will be mailed.

Year

YALE &TOWNE

paid by Pullman Incorporated

i




PER SHARE

Payable June 30, 1954
Record Date June 7, 1954
Declared May 27, 1954

ft#

be

quarterly dividend of $0.50

ness

.

■

M

*

DIVIDEND NO. 127

.

Monongahela Power Company
The Potomac Edison Company
West Venn Power Company

General Offices:

CORPORATION

9,

June 1. 1954

20 North Wacker Drive,

1,

.

rec¬

Vice-President & Secretary

per

.

close of business

Checks

1

FINANCIAL

June

t

mailed.

A

the

on

June 15, 1954.

closed.

C.l.T.

business

Transfer books will not be

June 15, 1954.

'

COMMON STOCK

1954.

Vice President-Treasurer

8

Common Stock

TWENTY-

share will

Quarterly Dividend

on

June 15, 1954.

REGULAR QUARTERLY

FIVE

of

1954 to

——-——-

record at the

the

■

A

30,

Company

(Incorporate!)

of New York

II
&■

will

Electric

regular quarterly dividend

of $1.0625 per

METALS, INC.

June

be,ri paid

stockholders of

dividends

declared

This cash dividend

June 15, 1954.
STUART K. BARNES, Secretary

The

a

dividend

(50#)

the close of busi¬

declared

today

company

stock.

mm

estPenn

The Board of Directors of this

Company for the quarter

of record

ness

PITTSBURGH, PA.
THE

July 15, 1954, to stockhold¬

ers

Secretary
New York 4, N. Y.

i

ending June 30, 1954, payable
on

F. BRADLEY,

130th DIVIDEND DECLARATION

the Capital Stock of

on

CHAS.
One Broadway,

COMPANY

quarterly divi¬

a

Seventy-five (75) Cents

share

per

Secretary

May 25, 1954

||:,

The Board of Directors has this

Company have

1, 1954, to holders of
of business on June 9,

close

the

12,

June

Secretary and Treasurer
25

dividend of thirty-seven and
($.37V2) per share payable
1954, to holders of Common
Stock of record June 3, 1954, who on
that date hold regularly issued Common
Stock ($1.00 par) of this Company.

payment of a

declared, payable July
record

"7

120

seventy

per

^'

on

EARLE MORAN

C.

184 s

No.

business

Stock
DIVIDEND

•«"¥'.

til-

the Preferred Stock and

on

five cents (25<0

twenty

Common

No.

dividend

prefekhed

Common

June 7, 1954.

New York 8, N. Y.

30 Oinrch Strwt

27, 1954.

on

of

close

the

at

share

per

United States Lines

date, June 29, 1954

Company

I May

its capital
stock of the par value of $50
per
share, payable June 29,
1954, to stockholders of record
($.75)

May 24,1954

Secretary

today declared a
dividend of Seventy-five Cents

EDMUND HOFFMAN, Secretary.

AMERICAN

KENT,

be closed.

WALTER H. STEFFLER

STOCK DIVIDEND OF 8%

Record
STEPHEN G.

Mining Com¬

has

pany

1954. Transfer
Checks will be mailed.
17,

June

The transfer books will not

Notice of

1954.

of

Directors

of

Board

The

Anaconda Copper

to stockholders of
business June 10,1954.

1954

20,

on

On

May 25, 1954 a quarterly dividend of one
and three-quarters per cent was declared on
the Preferred .Stuck of this Company, payable

St., N.Y.I, N.Y.

$10, payable July 1,

par

June

payable

record at the close of

quarterly divi¬

the close of business June 3,

at

NO. 184

DIVIDEND

STOCK

a

1954, to stockholders of record

May 27, 1951

books will remain open.

1954.

COMMON STOCK

capital stock of this Com¬

pany,

can company
PREFERRED

business

of

10,

A

The Board of Directors has this

of

of

close

the

at

business June

May 27, 1954

close

Preferred

stockholders

New York 5, N. Y.

Broad Street,

DIVIDEND

cent Cumulative

to

record

Company
Dillon &

per

Stock, payable June 20,
1954

N. Y.

Co.—Memorandum—Eastman,

Fruit

United

per

Convertible

Unilever—Circular—Oppenheimer
New

$0.34375

the $25.00 par value

on

rock Oil & Gas.
•

of

share has been declared

Sham¬

is a report on

Also available

Y.

Treasurer

•

Co., 54 Pine Street,

Union Gas—Analysis—Cowen &

regular quarterly divi¬

Phosphate

Potash

•

Chemicals

•

•

Plant Foods

Industrial Minerals

Amino Products

F

TRAILM0BIIE

THE

YALE & TOWNE

Secretary

MFG. CO.

Cash dividends paid in every year

since 1899

The Commercial and Financial Chronicle.. .Thursday,
44

finance trailer homes

posed to

BUSINESS BUZZ

under Title L

Government

Would Fight

Capital

from the Nation's

And You

.

the

On
that

Behind-the-Scene Interpretations

'

■

once

the controls pattern of the

Ko¬

the

for the controlled

dreadful

In

for

taken

be

is

something,

more

Cabinet

the

would-be

are

controllers—ever

ner

present come an emergency
buzzards when an animal

as
as

these

is

leap

One

over.

ad¬
immaturity
of

whose

of

Conditions Differ

is presented
to
the
present White
House
brainless trust, there is no basis
for
guessing what the White

tie—look

Mostly
around

momentum

time

being,'at

trols.

That

the

of

is, for
least, against

is

the

One of the differences is

the

great controls

battle

has

there

con¬

Taft

A.

Wolcott
^

of

and

Rep. Jesse

toying with the idea

is

preparing for possible total
the expansion of plant
capacity will not recur as stress

of

,

war,

that

this: The late Senator Rob¬

was

ert

history

great expan¬

pid unless the Adminis¬

way,

tration

the

a

capacity.
Presumably that is out of the

in

Recall 1953 Battle

been

that

sion in industrial plant

consequence

Congress of 1953.

Briefly,

now

1950, when the fighting started.

relevance.
The

revolve

between
and in late June

difference

the

conditions

some

will

there

against
controls.

of

reinstitution

past

have

used

be

to

arguments
the

the issue.

some

Stockpiles of critical and

Mich.) took the
party
policy
should be against standby con¬

strategic materials are relative¬

trols.

the

(R.,

that

tine

GOP

Wolcott, speaking
for the official leadership, and
Chairman Homer Capehart (R.,
Ind.) of the Senate Banking
Committee, speaking for him¬

on

trols
case

him

into

viewpoint,

the

a

their

out before President Eisen¬

his delayed "Annual Mes¬

In

of

February,

Eisenhower
and

and

for

Mr.
Taft

against

Capehart. He put
controls
in
against

language
that

plumped

1953,

However, aided
by the Democrats,

message.

abetted

is

an excuse

for buying

materials

to prevent

raw

more

hower.

sage"

to

scheme

a

providing

pro-con¬

argued

working
enlarge these

Administration

goals for the express purpose of

self and the Democrats who had

purred

la,rge, so large in fact, that

ly

Rep.

price slippage.
Stockpiles of new and modern

military equipment are large
and growing.
Finally, among the major dif¬
ferences between now and
rea,

is the greater

Ko¬

capacity of

System to
counter such monetary inflation

the Federal Reserve

as might be induced by a scarce
buying panic.
In June, 1950, the Federal Re¬
serve was still operating under

the

policy of forced pegging of
It was not until

Federal bonds.
the

Specialists in

March

1951

4,

abuses of a
quasi-public program. It moved
to legislate future abuses out of
existence by tightening up on
FHA
with
respect
to
those

Congressional hopes, this
which the Hill
leaders will advise against tak¬

GOP

is

something

ing

at all costs.

up

view

the

that

the fact

of

with air and

in

abuses,

,

accord

be¬

little

think

will

far

much.

It

automatically

doesn't

these abuses

and

immediately after Ko¬
took refuge in them
Republicans helped

but

him

it

by

ate

criticizing him

work

out

that

the

might
consider
it
better political strategy to hold
on

controls for

it

perhaps persuading the
forget what it passed

to

the

and

while.

a

a

gram, to

House

Democrats

are
legion,
failure of the entire pro¬

possibilities

from

It will not necessarily happen,

could

Banking Committee report.

The

for not having price controls.

but it

will

Senate to
soon

entirely
will

Lose Bill

now

been

proved that

On

pass,

new

have

written

"According to Plan"
It has

to

bill,
be

forget

what

and take

the

other hand,

the

Sen¬

consideration in Senate commit¬

political mosquitos who have
been biting, hasn't been consist¬

the

of

the

Administration's

housing bill has proceeded "ac¬
cording to plan."
The "plan," however, has not
been the White House plan. It

of speaking, striking at the

ner

about

ent

in

Germain

tightening

the

past

for many years

was

with J. Arthur Warner & Co.

Two With

Smith, Clanton

(Special to The Financial Chronicle)

in conference.

ate committee, while in a man¬

tee

P.

Troster, Singer & Co., 74 TrinityPlace, New York City, announces
that John P. Germain has joined
their organization.
Mr. Germain

an

which
entirely re¬
one

precipitation of the
Great Housing Scandal of 1954,

with

John

been torn to shreds in the Sen¬

some

into

Trosfer, Singer Co*

how

going to happen to their bill,
f
Virtually all of the Admin¬
istration's program as such has

after

;i

all are, per¬

they win the Congres¬
Harry Truman

rea,

off

after

far from enthusiastic about

sional elections.
was

Administration,

ing

such

for con¬

go

John Germain Willi

who would

any one

listen,- about what a wonderful

centagewise, insignificant. They
saw, perhaps too late, what was

if

trols

20, New York.

ing spectable of running up and
the
country making

institution is the Federal Hous¬

as

Building,
Plaza, New York:

down

to

away

Democrats

that

pro¬

30 Rockefeller

Housing and Home Fi¬
and his aides
have been providing the amus¬

speeches to
too

is

about

follow

modernization

Patents

Corpora¬

Agency

nance

east Asia.

January

under

—

Radio

the

of

in South¬

war

credit

—

Meanwhile the Administrator

question ride until Jan¬
assuming we
get em¬
a

easy

Licenses

tion of America, RCA

and to prevent "mortgag¬
ing out" under FHA.

controls

broiled in

too

and

gram

avoiding land operations initial¬
ly if possible, the counsel which
the Capitol will give the Presi¬
dent will be to let the whole
uary,

alleged

home

the

operations,

sea

with

ed

Corpora¬

land, Ohio (paper).
Research and Invention

already precarious state of

the

Steel

tion, Republic Building, Cleve¬

*

controls

the economy.

on

P.

up

Administration wants first to go

There will also be some hefty

Plants and Facil¬

ities—Republic

straight, Colonel—straighten your
busy—here comes that private again!'"

On-Uh!—sit

part of that choice in¬

a

circle of daily intimate

Until the subject

on

hundred.

per

other is Congress.

House will decide

free; in bulk, $4.5$

Republic Steel:

In

However, there is
history which may

copy,

.

unmixed blessing,
voices

as an

judgment
about
Congress is
only matched by the cocksureness of their opinions.

The

the White House.

not

visers

are

dies—must

United

the

of

*

if such conservative

even

that

hurdles

two

Commerce

single

a

rush to control the
For on|e thing, con¬
are
not viewed by the
conservative heads of the

trols

however,

taken for granted.
are

to

Who

Why?—Chamber

States, 1615 H Street, N. W.>
Washington 6, D. C. (paper)

economy.

which at this stage need not be

There

Administration

What Are They?

Gets Them?
of

-am;:.

Eisen-

the

within

,

head-long

granted.

they will be enacted into

That
law

PTTTLE1

COliONEL

it is a good bet
will be some solid

there

however

White House is something which
should

Profits:

I

case,

any

opposition

the

to

on

Opposition Exists
Administration

minds will

controls

puts

up

one

Within

after Korea.

brilliant

the

1953

of

history

the controllers.

that
That

recommend

anti-

the

anti-controllers

of controls

era

that finally passed

A
/ll$ v#

Investigations

that Repub¬

bragged

the

So
the

naval guns

shooting and

the

to

'

licans ended controls.

the aircraft
start dropping bombs, that the
economy will revert inevitably
start

■

•

White House

adopted

since

has

getically at work, and, with too
short
memories, get the idea
the

V

-

-

the "Chronicle's"

viewpoint as its own
merchandise and the President

Some knowing report¬
have discovered that there
such brilliant minds ener¬

as

"

-

controls

society.

soon

'""v

Schedule of

,

I

Standby controls

The

killed.

were

thereafter

'<•(<•

■XhnHfc .i

v

/-

'

'

turned out, the

finally

it

the controllers.

musty offices working en¬
thusiastically to draw the ex¬

and may or may
I

I

""MMIH-W

Republicans.

As

pretation from the nation's Capital
not coincide with
own views.}

'y/'fc

anti-controllers truimphed over

in

as

iISiii

the attitude of "neu¬
trality," thereby precipitating
a
nice intra-party row among

Undoubtedly there are bright
around

that

[This column is intended to re¬
flect the "behind the scene" inter¬

adopted

little bureaucrats stashed

ers

ness.

-

body politic and economic,
despite all the loose chatter on
the subject lately.

are

politi¬

up

cally salable merchandise. The
House
climbed off its
anti
controls viewpoint and

the

act blueprints

cooking

was

"Anti-Government

an

Competition Board" to watch¬
dog and recommend ways of
getting government out of busi¬

White

affair will be foisted upon

rean

he

like

velop in Southeast Asia, it does
♦lot follow
automatically that

has proposed that

(R., N. J.)
be

which eats

Frank C. Osmers

that pest, Rep.

Capehart looked for a time

Mr.

principle of nature
a
pest is established

there develops a pest

i

■

there

WASHINGTON, D. C.—Should
another "little war" finally de¬

*{

Competition

on..

'

June 3, 1954

(2463)

P.

GREENSBORO, N. C. — Mabel
Murray and
Ruth McEnery

havei joined the staff of Smith*
Clanton & Company, Southeastern
Building.

The

up.

committee proposed an entirely

Concession to Members N.A.S.D.

innovation with respect to

new

FHA

some

loans,

that

has been the pattern of conduct
which is almost inevitable in a

buyers

legislative body when confront¬

down payment. They

could

also

home

borrow

also

the
pro-

We suggest to investors
a

liberal

return

seeking

and

potential growth

Treasury and Federal
Reserve—several months after

tween the

Korea—that

URANIUM

tem

the

Reserve

SNAP-ON-T0OLS

Sys¬

began to beat a path away

from

the

nursing

government

CORPORATION

bond market.

Just

incidentally, the present

composition

TITANIUM

Board

is

ISSUES

of

Reserve

the

much

than

minded

less

that

CAPITAL STOCK

controls-

which'

was

Carl Marks

operating in 1950.

&

Co. Inc.

Report available

Threatens Political Hurricane

Finally,

Breeiie<miCompaTUj
Members N.

37 Wall
Bell

Y.

Security Dealers Ass'n

St., N. Y.

Tel. HAnover 2-4850

Teletype—NY 1-1126 A 1127




-

reinstitute

havoc
among ftie Republican Congres¬
sional following should this be
would

create

proposed

FOREIGN

active proposal td>
even
some
controls

SECURITIES

SPECIALISTS

an

any

political

time before

November election.

the

In view of

50 BROAD STREET

TEL:

•

HANOVER 2-0050

NEW YORK 4, N. Y.
TELETYPE NY 1-971

LERNER & CO.
Investment Securities

10 Post Office Square,
I"WW*-•.mI.vm,•ay

,v .«■

VZ

Telephone
HUbbard 2-1990

Boston 9, Mass.
Teletype
BS

69