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Final
Edition
ESTABLISHED 1S39
in 2
Sections
Section 1
—
/
an
na
A
_
_
Tm/MiTT/1T X7
I
jnl xmlv,^ jl t! jlv^lijzi
Reg. U. S. Pat. Office
Volume
165
Number
4600
New
Tait Lauds Tax
Accountants Ignore
Economic Costs
Reduction Plan
In statement issued after
passage
of tax reduction
measure,
he
President against a veto
ground country cannot have
warns
on
free economy under
present tax
By ALDEN RICE
stick
present
of capital
Policy Committee, following final
are
replacements in depreciation computations.
being paid on fictitious profits.
passage of the Tax Reduction Bill
Congress,
said
that
191,000
d
t i
u c
siderations
to
If you
$7
your
Federal
income taxes
so-called
through
will
their
action
profit
the
of
to be
the
at
Rep ublican
Congress in
passing
the
000)
of
between
495,161 get
20
a
and
30%
and
16,-
20% cut.
"This most
certainly carries out
Republican promises of a tax cut,"
the Senator pointed out.
"According to present estimates,
even
allowing for
cession
from
business
a
re¬
present
there would be
volume,
$8 billion sur¬
an
plus in the Treasury in the next
fiscal
so
without
year
this
tax
cut
there will be plenty of
money
you
continue
Alden
R.
Wells
be used for
can
business
or
entirely
business, in the
outside
form
of
a
ates
on
profession oper¬
the principle that this $2
profit is not fictitious.
The differ¬
40)
A
The
following illustra¬
shoe store proprietor might
outright a 1,000 pairs of shoes
(Continued on page 30)
own
Leland Electric
employment
beginning of a business recession, the extent, severity
depend on rapidity with which maladjust¬
high prices and the evils of over¬
corrected.
are
Contends
"■Barron's
nancial
National
Business
Weekly, March
and
a
service
to
keen judge of local
a
serene
and
of
Montreux.
ex¬
we
(Continued
Raym.nd R.d,.r.
Established
page 29)
on
a
few, the Federal Reserve System with its national
viewpoint, foreign loans with their emphasis on
foreign trade and the
(Continued on page 39)
*An address by Mr. Aldrich be¬
fore the 11th Congress of the In¬
ternational Chamber of Commerce
at
Montreux, Switzerland, June 2,
1947.
Virginia Bankers Associa¬
Fi¬
R. H. Johnson & Co.
W. Aldrich
pavM,Afwi
State and
Aerovox Corp.
Havana Litho. Co.
W.
Switzerland has always been a
most generous host to
interna¬
tional gatherings, and the hospi¬
tality accorded the International
Chamber is in keeping with its
1947.
3,
us
difficulties involved at the present
time in
entertaining foreign guests.
these local Edens, World War I
brought not one "apple,"
but many "apples" of
change and overthrow of the old order.
To
*An address bv Dr Rogers before
the
cordial
f u 11 y.f realize
the special
values,, could
tion, Virginia Beach, Va., May 31, 1947.
to
in the
convene
beautiful town
because
untroubled life of
doing!)
for
gracious
the
Into
enumerate but
to
Govern¬
invitation
his
community.
(Of course, some
bankers had troubles, but
they were usually of
own
the
Com¬
and
hospitality
tended to
Prior to World War I, most
banking was a fairly
simple, uncomplicated, local business.
In those
happy days, a man with high character and pleas¬
ing personality, who was a shrewd observer of
forward to
mittee
We "appreciate
all
the
more
production
costs and
character and
Bank
Commerce
depression.
zerland
sees
due to
ments
their
reading
tion will reveal one of the
major
effects of
following standard ac¬
counting procedure:
page
Rodgers
would indicate.
The first example
merely discloses the difference in
world
their
and duration of which will
look
cut," Senator Taft said.
on
Dr.
of
ment of Swit¬
By RAYMOND RODGERS*
Professor of Banking, New York
University
of opinion lies closer to im¬
portant economic and social
prob¬
lems of today than casual
ence
National
Chamber
tional
the
divi¬
dend payment."*
The
accounting
ALDRICH*
—<§>me fc>wiss Na¬
profits can and will be cut, and because
high cost producers 'will be driven out, bankers
^tfly should he selective in
making loans. Holds despite
where there K
some ,unfavorable
an actual gain
factors, economic situation is
in cash which
sound and deposit and commercial loan outlook
expansion of the
good.
opinion.
(Continued
of
profit
exists
for debt reduction besides
the tax
"The tremendous burden of tax-
mean
true
thou¬
(6,980,-
get cuts in their taxes
persons
so
in business. A
million
sand
it
if
you
shoes
hundred
eighty
v:
all
can
Six
profit
W.
Chase
opening the Eleventh Congress of the International Chamber
Commerce, I should like first to express our deep appreciation to
The Financial Outlook
$2
Copy
In
—
out
$7
to replace the
Bill.
Robert A. Taft
no
costs
Tax Reduction
nine
of
turn
Board.
Denies U. S. recession will
sell for<S>
pair of
$5,
you
in
costs
Says taxes
fictitious because they give no con¬
costs for both equipment and material.
shoes that cost
re-
o n
a
yard¬
are
replacement
will
30%
a
inventory profits
tax¬
payers
get
26,-
"The
as a
gains, and neglect of higher
corporate
a
Asserting economic liberalism as opposed to aggressive nationalist
sentiment might have averted the war, Mr. Aldrich
points out Inter¬
national Chamber of Commerce goal is to
support free enterprise
system by promoting political and economic freedom.
Distin¬
guishes between expanding functions of government in a free enter¬
prise economy and totalitarian controls. Calls for more competition
in foreign trade and
lays depressions to economic nationalism.
change. Cites
never
conception of prices arising from using dollar
for
of
President, International
WELLS
accounting practice for assumption prices
Senator Robert A,
Taft, Chair¬
man of the Republican
Majority
by
By WINTIIROP
Chairman
Security Analyst, J. H. Goddard & Co., Boston
cizes
Price 30 Cents
Freedom and Economic Progress
Mr. Wells points out fictitiousness of
inventory profits and criti¬
erroneous
burden.
York, N. Y., Thursday, June 5, 1947
STATE
AND
Municipal
MUNICIPAL
Bonds
1927
BONDS
—*—
INVESTMENT SECURITIES
Hirsch & Co.
Members New
York
and other
Exchange
Exchanges
BOSTON
25 Broad St., New York
4, N. Y.
Troy
HAnover 2-0600
PHILADELPHIA
Baltimore
Chicago
Teletype NT 1-210
Cleveland
Geneva
London
(Representative)
Albany
Buffalo
Dallas
Pittsburgh
Scranton
THE NATIONAL CITY BANK
OF NEW YORK
Bond
Air
Dept. Teletype: NY 1-708
Detroit Harvester Co. Com.
■
*
■
'
.-r
j.;
SUGAR
7HH T It- 4t 6 ^
■ "i.!.
!;•»''4^
$.1
MONJr * -.PAS AD EN A^.
R EP L AN 0 S
•!-.
CLARE
•
Exports—Imports—Futures
MEMBER lOS'ANCEtES
direct. Private
■
STO<£k EXCHANGE
wire to new
y6rk Ct' j
NATIONAL BANK
Montreal
Toronto
THE
OF
.
—, >
'
i
,
,
M
Dlgby 4-2727
120
CITY OF
New
Brokerage
NEW
YORK
on
PREFERREDS
and Dealers
Broadway, New York 5, N. Y.
Telephone:
Bell
f,
REctor 2-8600
Teletype: NY 1-635
New
Members
New
York
York
30 Broad St.
Tel. Dlgby 4-7800
Stock
Curb
upon
request
.
Hardy & Co.
Members
i
Analysis
request
York Stock'.'Exchange
England
Public Service Co.
for Banks, Brokers
Reynolds & Co.
Members New
i
CHASE
1-395
$2.40 Conv. Preferred
•Prospectus
f Cj ■
Bond
Raytheon Manufacturing Co.
14
.
HAnover 2-0980
Service
Common
ST.
ANGELES
■
THE
Asm.
^Georgia Hardwood Lumber Co.
TRinlty 5761
LOS
Dealert
Bell Teletype NY
New York
Common
NEW YORK 5, N. T.
Investment Securities
SPRING
Security
Emery Air Freight Corp.
WagensellerSDurstJna
S.
York
Department
Products, Inc. Com. & "A"
LAMBORN & CO.
99 WALL STREET
626
New
53 WILLIAM ST., N. Y.
Wilkes-Barre
Williamsport Springfield Woonsocket
HART SMITH & C®.
Members
Syracuse
Harrisburg
SERVING SOUTHERN CALIFORNIA
SINCE 1927
Bond
64 Wall Street, New York 5
Stock
Exchange
Exchange
New York 4
IRA HAUPT & CO.
Members
and
\lll
New
other
Broadway,
REdtor 2-3100
Tele. NY 1-733
York -Stoc* Exchange i
Principal Ex> Ganges < tar.
N.
Teletype
Boston Telephone:
E-
Y,»,0
r
NV 1-2708
-
Thursday,, June 5, 1947
CHRONICLE
COMMERCIAL & FINANCIAL
THE
2
(2978)
'.Trading Markets
in:'.
Preforreds
&
Commons
'
.
Expreso Aereo
set
largely
result of increased sales and higher prices.
quite substantial. In view of the improved
as a
have been
the
nat¬
pa rues,
Savoy Plaza
postpone
to
consumers
question
arises:
The result of
"What can be.
Savoy Plaza
fused
and:
Some
economists
ing
losses
future
or
BID
WANTED
Members
York Curb Exchange
Street, New York 5
Telephone
Bell System
If
profits, there
are indications
that
New
31 Nassau
high
COrPajadt 7-4070
Teletype NY 1-1548
in
down-.;
a
turn
be
may
Chapman
M.
J.
Dr.
the; offing.
Accumulated
in
inventories
some
lines, labor
government agricultural
subsidies,
a
large
volume of
bank
credit - and of money in
circuulation, and rising prices—
these factors constitute a serious
trouble,
Engineers Public
Service
Rights
Gulf States Utilities
threat to the stability
Common
of our econ¬
in the months ahead. Though
some of the recent price increases
have been necessitated by wage
omy
Bought—$ old—Quoted
Prospectus
on
Request
Members
Stock Exchange
New York Curb Exchange
New York
BROADWAY, NEW YORK S
Tel. REctor 2-7815
f
correct,
If
Direct wires to
ods for
>
Jones Estate Corp.
;
May, McEwen & Kaiser
Pharmaceutical Organics
120
erably greater than even
any
food
Actual ThcctkeU Qu
Tide Water Power Com.
products.
The
Boston & Maine
R.R.
Aetna Standard
Eng.
reduction
of
markets and honest
Loft Candy Corp.
;
*Prospectu$
y
Most, of the talk,
'
Frank C. Masterson & Co.
Established
.
Punta Alegre Sugar
Detroit Int'l Bridge
seems
and industrial
Foundation Co.
management
Hood Chemical
scapegoats
mind
Albert Pick
.
present
the
impression
Time, Inc.
that
Argo Oil
it
that
if
and
duce
Security Dealers Assn.
prices
James
D.
Mooney
by arbi¬
trary decision.
It would be fine if it were that
just
Hanover 2-4850
Teletypes—NY 1-1126 & 1127
simple,
true,
reduced
Nobody knows better
that
if
for,
were
prices would have been
long
Trading Markets In
ago.
at
What
time
it
this
is
promotes
a
disunity
and
to unite in the common
battle against inflation. And it is
a
common battle — for nobody
than business and
industrial man-
benefits
or
labor
management,
'
ernment.
labor
ing,
we
Digby 4-3122
the funda-
We Maintain Active
•
Markets in.U. S. FUNDS for
Abitibi Pow, & Paper
Detroit & Canada Tunnel
Brown
Co*
Ohio Water Service
Bulolo
Minn.
Airways
*West Virginia Water Service
&
,
tical
(Continued
the
the
on page
address by Mr.
Securities
Department
Cleveland, O., May
British
38)
Troster,Curries Summers;
■V Members N. Y.
Mooney at
74 Trinity
"
Goodbody & Co.
G. A. Sax ton & Co., Inc.
|
110 PINE ST., N. Y. 5 WHitehall 4-4970 I
Private
Detroit
-
Members
N.
Y.
Stock Exchange
115 BROADWAY
Telephone BArclay 7-0100
$1.10
Wires to
Public
;
Alloys, Inc*:
and Other Principal Exchanges
NEW YORK 6, N. Y.
Teletype NY 1-672
Conv.
QUOTED
Conv.
Conv.
Preferred
Company
NEW YORK 5
ESTABLISHED 1890
Tel. HAnover
2-9300
Tele. NY 1-1815
& Common
request
Reynolds & Co*
Members New
STREET
Preferred
•Prospectus on
INCORPORATED
37 WALL
Preferred' ' !
Twin Coach Company
$1.25
90c
J-G White 6
Preferred
■*Universal Winding Company
Common
—
Conv..
Solar Aircraft Company
Service Company
SOLD
,
Cleveland
Pittsburgh - St. Louis
90c
—
2-2400
24, 1947.
Southwestern
BOUGHT
j
Security Dealers Ass'n
Place, N. Y. 6
HA
NY 1-376-377
Teletype
Securities
Department
»
k
of Indiana
Scophony, Ltd.
*Prospectus available to
dealers and banks only
Teletype NY 1-609
Request
Prospectus on
Automobile Day Luncheon of
Mid- Ame r ica Exposition,
'90
Gaumont-British *
Oni. Paper.
Canadian
%
Rhodesian Selection
Gold
Taca
United Kingdom 4
Service
purpose
Acme Aluminum
Cliffs Corp.
>
.
Right's When Issued
;
Public Service Company
Preferred & Common
>
I
Engineers Public
Once
and settle down in prac¬
American fashion to work
Utilities
When Issued
■
_
American States Utilities
Buda
/
t
New York 6;
Teletype NY 1-1610 ;
Gulf States
_,
understand¬
arrive at unity of
can
*
York Curb Exchange
Stock Exchange
' "
39 Broadway
get that common
we
,
to pit management
against each other,
Worse, it is stupid, for
Chicago
is
causing the present
epidemic of inflated prices.
*An
.It is wrong
and
facts that are
or gov^
""
need, and need now,
basic, common understanding of
the
real
underlying
economic
by inflation—consumers,
or
we
1
*
Members New
a
society
quickly re¬
N. Y. 5
Just
prices.
misunderstanding when what we
need is for all segments of our
would,
easily
STeeuewiCompomi
of
peculiarly
harmful disservice to America in
this
manage¬
ment could,
inflated
causes
real
the
about
fusion
Mgru
''
Joseph McManus & Co.
of deliberate
things
all
of
'
consumers.
picion and to promote public con¬
by
creating
Lea Fabrics
Members N. Y.
MICHAEL HEANEY, Mgr.
•
in
public
the
Int'l Detrola
Unlisted
WALTER KANE,, Asst.
in a free
agement that there is no profit
in over-pricing a market.
,
/ enterprise society such as ours is
Whatever. the motive back of that everybody shares in prosper¬
the
campaign the result is to ity and everybody suffers from
foster
misunderstanding of
the inflation—and I mean everybody
facts; to arouse distrust and sus¬ —labor, capital, management and
make business
Moxie Common
1-1140
Holds free
the radio or read in the
mental
to be to
"T
Securities
; j
official and otherwise, that we hear over
purpose
Newmarket Mfg.
Bell
foundations of progress.
*V..
propaganda.. /
V/>
:
NEW YORK 5T
HAnover 2-9470-
*
*
Curb and
for basic
be talked -j
prices; (1) increased production J (2) !
the subject of high prices is as pernicious as it is unrealistic. .
We might say that the subject is being handled frpm the viewpoint
The
Warner & Swasey
37 Wall St.,
Teletype NY
..
1923
York Curb Exchange
New
WALL. ST.
64
papers on
.
request
on
Willys-Overland Motors
as
money are
j
Aspinook Corp.
•
practical steps to- reduce
Federal debt; (3) reduced taxes; and (4) a return to free gold market
Urges
propaganda.
f
Citizens Utilities Common
those of
Asserting most talk regarding higk prices is pernicious and unrealistic^ Mr. Mooney calls
understanding; of facts. Says inflated prices are inevitable effect of cheap money, and cannot
down by
*
Bell Teletype NY 1-1227
;
1941 Prices With 1947 Dollar!
President and Chairman of Board,
Wharton Iron & Steel
New Eng. Electric System WI
U. S. Finishing com. & pfd.
Gen'l Aniline & Film "A"
Northern New England
United Piece Dye Wks.
Title Guaranty <£5 Trust
United Artists Theatre
Taylor
Broadway, N. Y. S
WOrth 2-4230,
Members
By JAMES D. MOONEY*
"A"
Exchange
Members Baltimore Stock
•
*
K
-
;
'
'
branch offices
Interstate Hosiery
the
losses which may
arise later.
As the American Im
stitute of Accountants stated iq
Don't Expect
our
many
building adequate reserves
meet
NY 1-1557
Elk Horn Coal Com. & Pfd.,
.
to
Exchange.'
tremendous increase
government, through sub¬
sidies, is helping to maintain tlie
increases, others have been made 1941; "Over the years it is plainly
prices of food, products.
At the
with wages boosts only as an ex¬ desirable that all costs, expenses
and losses
of a business other same
time, government buying
cuse. Offsetting these inflationary
than those arising directly from has
helped to boost the prices of
forces somewhat, but enhancing
capital
sto ck
transactions be
grains which are, in turn, reflectthe gloomy outlook, is the strong charged against income—but be¬
(Continued on page 24)
and growing tendency; of many cause of conditions impossible to 5
frfcpONNELL&fO.
120
HAnover 2-0700
taken
to increase prices—espe-=
latter group
eially those that related to agri-j
manufacturers, cultural commodities. At that time,middlemen and merchants will be
agricultural prices had declined!
stuck with, large inventories. This,
further than had those of menu-,
in turn,' will lead to a / decrease
factored products.
Today (May,;
in, production—and curtailment of
1947) the highest price increases;
production will be followed by a
compared with the average for
decrease in employment. / ^ /; /
1939, are found; in agricultural
products. -; Food
prices / on the
Government Subsidies Boost.
average >: have - risen
more /than
Prices
130%
since the end of 1939^Even though it is not possible at
nearly double v the increase
in
this time to predict when—pr how
prices of / all products exclusive
severely—-a possible recession may
of farm products—while prices of
come, it is well to consider, meth-;.
farm products have been consid¬
is
Despite cur-
coming onto
goods now
market.
the
rent
Vanderhoef & Robinson
the
all-
contingen¬
cies?"
Mfg. Co.
Worumba
situation.
anticipate still
Stock
York
St., New York 4, N. Y.
New Orleans, La.-Birmingham, Ala.
in the
cost of living, in the volume of
bank credit and of money in cir¬
culation are, in part, the inevita¬
ble result of government policies;
not-only during the war but as
far back as 1933, when steps were
The
New
25 Broad
ment."
higher prices and inflation. Others
predict a sharp business recession
because the public is not' buying
meet¬
possible
...
many
disturbing
with
assure
"A"
Class
as
Members
attain-:
often. fails of
it
foresee,
all this is a con¬
earnings to
done
3/6s, 1956
Steiner, Rouse & Co
financial position of these com-
expenditures as possible.
urally
Bought—Sold—Quoted
'companies have realized sharp increases in earnings,
In a number of cases, net earnings
During recent months, many
Security Dealers Assn.
Securities Dealers, Inc.
Exchange Pl„ N. Y. 5 HA 2-2772
BELL TELETYPE NY 1-423
N. Y.
Nat'l Ass'n of
times to
business
and to meet
of large fixed asset account;
depression periods and to stabilize employment.
recurrent
SECURITIES CORP.
Established 19?0
40
Louisiana Securities
fluctuations, of inflated inventories,
king & KING
Members
/ .-'.'.f;/ :
Chapman declares management must be exjtromeiy careful in good
aside sufficient reserves from gross income to counteract: effect of
Dr.
Higgins, Inc.
Lear, Inc.
.
of Business,
/Associate Professor of Banking, School
Columbia University :
,
Alabama &
<
By JOHN M. CHAPMAN
Rails
Old Reorg.
Adequate Reserves
Why Business Needs
Standard G & E, Com.
120
i
.
v
York Stock Exchange
Broadway, New
York 5, N. Y.
Telephone: REctor
Bell Teletype:
2-8600
NY 1-635
.
j
;
Volume 165
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4600
INDEX
and
Articles
The Future of the
Page
News
Steel
Freedom and Economic Progress—Winthrop W. Aldrich__Cover
Accountants Ignore Economic Costs—Alden Rice Wells—Cover
The Financial
Outlook—Raymond Rodgers..——-Cover
2
2
Concern Grows Over Unwholesome
Securities Act—Edmour
•v
Mr. Sykes, in
3
Effects of '34
Germain
What Program for America?—Sen. Alben W. Barkley____—_
Bankers' Responsibility in Debt Management—Daniel W. Bell
How Britain Sees It—Herbert M. Bratter
6
The World Bank and
—E.
Should
material
Investment Bankers
Sell
shortages of
Debentures?
Bank
World
—Henry Schouten
Recent
6
Developments
in
Anti-Discrimination
Y.
N.
—Julian Reiss
7
not
Is Management
Disfranchising Stockholders?
—Benjamin A. Javits
99
,
i
e x
s
We
must
all
have
without it. All
of
7
modern
Present Problems of flTrust Funds Investment—J. H. Weedon_
8
would be
Public and Private Construction Outlook—Thomas S. Holden
9
existent with¬
iron
out
the
——
King
Revised Railroad Reorganization Called for
—W. Wendell Reuss
Henkel
The Outlook for Gold Mining
Coal
and
4 '
Stocks__
Output Declines
Sees Treasury Debt Redemptions Drain
Fund and Bank Jottings
The
Outlook
Peacetime
Spending Power_
on
Opposed
Agent
by
as
the
beginning
Sykes
of
most fertile
our
19th Cen¬
areas
for lack
*An address by Mr. Sykes be¬
fore the 55th General Meeting of
the American Iron and Steel In¬
stitute, New York
Bargaining
"__
1947. -
12
Draft
Opposes Peace
steel
and
eastern
that
City, May 21,
•
1...
-The
tems
transportation
great
grew
from
the
Australia Files $38 Million Bond Issue With
supporting
few
a
hundred
There is
no
Page
•
•
Stocks
.—
cheaply
as
or
as
-v(Continued
on
plentifully
page 32) v
U. S.
Securities
Field
16
..........
,
:
.. ...
..................
:
...
.
;
...................
38
Salesman's!
Now
Whyte Says), V..... .,,........... ■ 44
Washington and You.....
5
*See articles on page
5
U.
S.
Patent Office
WILLIAM B. DANA COMPANY, Publishers
25 Park'Place, New York 8, N. Y.
REctor 2-9570 to 9576
Editor & Publisher
WILLIAM DANA SEIBERT, President
WILLIAM D. RIGGS, Business Manager
June
Thursday,
5,
iry
25.
York,
as
1942,
N.
at
records,
—
Subscription Rates
Salle St.,
Chicago 3, I1L
(Telephone: State 0613);
1 Drapers' Gardens, London, E. C., Eng¬
land, c/o Edwards & Smith.
/
Other
135
Offices:
S.
Pan-American
Union, $35.00
Dominion
Canada,
Other
of
per
$38.00
year;
S.
of
in
year.
per
Other
Bank
and
per
Publications
Quotation
Record—Monthly,
(Foreign postage extra.)
Earnings
Record — Monthly,
year.
Monthly
,
per
year.
Note—On"
that
in
(Foreign
extra.)
postage
account' of the, fluctuations
the rate of exchange,
remittances for
be made In New York funds.
f
in
for¬
-
■
..
B*U Teletype.
NY 1-2033
and
officers
directors
the
and
U. S.
Sugar
actions
of
Susquehanna Mills
need
registered
companies
now,
observers today are of the
opinion that instead of extending
many
should .be
this
amended
to
eliminate
objectionable feature."
;
may
will
be
on
change,
a
national securities
to
report
chases and sales of
all
their
ex¬
pur¬
securities
the
companies and sub¬
own
but
of
these
within
transactions
$ny six months' period to "recap¬
ture" by their companies.
The
Critics' of
the
SEC
those
intends to ask Congress
whose
>
securities
are
listed on a. national securities
25 Broad St., New York 4, N. Y.
often
have
been
indeed have something
constructive
contribute
to
very
and * worthwhile
to
*Hungerford Plastics
*
Metal
the
general discus¬
sion on the SEC's powers and SEC
regulations generally. These crit¬
*
Forming Corp.
District Theatres
*Dumont Electric
ics probably don't exaggerate one
bit when they describe the SEC
bureaucracy intrenched, using
bureaucracy in the pop¬
to amend the Act so that these re-- ular sense as meaning something
quiremenis may be extended to undesirable, bureaucracy interest¬
the officers and directors of the ed not only.in perpetuating itself
unregistered companies,, that is, but in extending its powers when¬
now
DUNNE & CO.
Members New York Security Dealers Assn.
WHitehall 3-0272—Teletype NY 1-956
unthinkingly
accused
of
wanting toe turn the clock back. In
the role of the "loyal opposition,"
even if nothing
else, these critics
it
*
Prospectus
Available
as
the word
not
ever
ex¬
FIRST COLONY
corporation
New York 5, N. Y.
52 Wall St.
event, bureaucracy—including the
change.
and wherever it
(Continued
In any
can.
on page
Tele. NY 1-2421
Tel. HA 2-8080
50)
**Stern & Stern
We
are
Bagdad Copper Corp.
interested in offerings of
Textile, Inc.
High Grade Public Utility and Industrial
•1st quarter
***Rome
^
Preferred
Spencer Trask & Co.
Reiter Foster Oil
James H. Acker & Co.
25
New
York
Broad Street,
"
Tel.:
Members N. Y. Security Dealers Assn.
2-587$. .Teletype
NY.I-27&5
Stock
Boston
Members
>
New
York
135 S. La Salle
Curb
Exchange
St., Chicago 3
Tel.: Andover 4690
2-4300
r;>
Albany
Exchange
New York 4
HAnover
25-Broad Street-^New York 4, N. Y.
T-eL HAnove*
^Public National Bank
& Trust Co.
PREFERRED STOCKS
Members
Whitehall 4-6330
the 'attitudes
of
Alegre Sugar
**Offering Circular on request
6%
Prudence Co.
Broad St,H.Y.
the present law
way
affects
South Bay Consolidated Water
N. Y. Title & Mtge. Co,
York Stock -Exchange
serious
are
which
law
Globe Oil & Gas Corp.
Lawyers Title & Guar. Co.
1-714
Lea Fabrics
„
General Aviation Equipment
Lawyers Mortgage Co.
New
From the
Punta
FIRM MARKETS
MAINTAINED:
CERTIFICATES
tembers
there
the
eign subscriptions-and advertisements must
TITLE COMPANY
iwburger, Loeb & Co.
matter;^—even
philosophy—are beginning
realize
defects
SEC
Countries, $42.00 per year.
$25,00
La
Bond & Mtge. Guar. Co.
con¬
jects the profits which they make
Subscriptions in
United States, U.
Possessions, Territories', and Members
$25.00
city news, etc.).
the
to
sorhe
the: statutory requirements in this
respect, the Securities Act of 1934
to
of; their
1947
market quotation
corporation news, bank clearings,
state and
New
March
of
3, 1879.
Thursday (general news and ad¬
vertising issue) and every Monday (com¬
statistical issue
at
office
theAct
Attn.
"insiders" of
listed
the. post
under
Y.,
to so-called
Exchange Act of
recalled*, among
things requires officers .and
directors of registered companies,
that is, those whose securities are
matter Febru-
Dealers
Broadway
the
1934,
9.
second-class
Every
plete
given
The Securities
;
Company
Reentered
,
HERBERT D. SEIBERT,
'
Copyright 1947 by William B. Dana
The COMMERCIAL
Reg.
have
other
■
and
FINANCIAL CHRONICLE
(Walter
2-4500—120
Haytian Corporation
correction.
in. Registration,45
18
May....
Published Twice Weekly
•
Corner."',/.:.
Securities
Tomorrow's Markets
15
Observations—A. Wilfred
■»
10
.
1908
Y, Security
Bell System Teletype N. Y.
and its
14 "
.
52
NSTA Notes
*
s.
.
*
Securities
Recommendations
Einzig—'Terms of Sterling
Convertibility
Funds
....
Established
among them who may be
strongly inclined to favor the Se¬
curities & Exchange Commission
Public-Utility Securities?;.', vp. 8
Railroad Securities
provision thereof applying
those
Page
Reporter on Governments... 20
Reporter's Report.
49
Prospective Security Offerings,... 49
Real Estate Securities............
Investment*
Dealer-Broker
Mutual
14
Finishing Com. & Pfd.
Members N.
listed companies.
sideration
Our
Coming Events in Investment
Haile Mines
or
to over-the-counter corpo-
powers
curities market; Market-wise peo-'
.52
Our
Canadian
Republic Natural Gas
.
metal that is produced
Some of the provisions of the
Securities Exchange Act of 1934,
it is4' becoming more evident every
day, are having an increasingly
unwholesome effect upon the se-<?*—
—————
52
'.
12
51
Hoving Corp.
substitute for steel.
no
i
recapture
23
-
Regular Features
;
Member
Exchange
rations but should amend Securities Act of 1934 to eliminate profit
pie ?:,who
■
Sugar
&
ST., NEW YORK
TEL. HANOVER 2-9612
''
There is
Congress should not extend SEC
17
:
Ask Exchange to Lower Limit on Fully-Paid
.
Assoc.
thou¬
poverty, America
became the Mecca of the world,,
drawing teemipg millions to its
shores to share in its bounty.
|
Shipments to Germany___L____^__'_— 52
Commerce Department Revamp Rumored-
•
Exch.
Coffee
WALL
REctor
;___,51
Business Man's Bookshelf.. .7...
York
New
CO.
York Stock Exchange
Curb
sand Indians in
[
SEC
Continuing
Bank and Insurance Stocks
York
of
By EDMOUR GERMAIN
:
16 "
____________
Army Bans Cigarette
&
FARR
Members New
New
J.K.Rice,Jr.&Co.
Proposal---—.___ 16-
_______
High Exports
Quotations Upon Request
sys¬
furnaces
Effects of '34 Securities Act
13
Congressional Survey Reports Falling Prices and High
Our
WHitehall 4-6551
the iron and steel mills. Instead of
13
—______
Staff
Collins Nominated to Head IBA.i..—______________
Wages
STREET, NEW YORK
13
_—
ABA Spokesman Oppose Loan Guarantee
,
to
6's-1955
miracle of America possible.
;
:
Eccles Favors F. R. Guarantee of Term Loans_^____16
Julien
is
sleep.
Vicana Sugar
120
Nystrom Looks for More Competition With Severer
Regulation
your
13
Michener Sees End of Export Boom:_
II. W. Wilson Joins World Bank
now
with
developed in
states
iron and steel that made the
was
,:
Party
Socialist
—
Church
that
At
do
can
and
industrial
the
of
12L!
Presbyterian
steel
9
Spokesman
■
and
tury people starved in the m-idst
10
.1
Conscription
M.
9
i
_
Wilfred
9
Oil___
for
Ward, Gruver & Co. Employees Choose UFE
'
the
yours
means
Without
age.
8
Mortgage Loans Rising, Says W. W. McAllister_____
non¬
to till the soil effectively
efficiently. Farmers and their
families toiled long hours to gain
a
mere existence.
The supply of
existed before
7
Szymczak Resumes Post at Reserve Board
uring
ditions
;
6
_,
Geneva
man-
and
those
of
could
completely
changed, this picture, and as tools
machinery became plentiful,
we could have
so man was freed from the
strug¬
never
risen gle to keep from starvation. The
from
the land could be developed and its
primitive con¬ riches made available to all. It
iron
Cover
:
t
iron
steel:
52
Senator Taft Lauds Tax Reduction Plan_
Ruhr
a c
14
_
Taxes Destroy Incentive—Roger W. Babson
Wool
f
14
An Eastern RR. Consolidation Plan—Charles C.
-
WALL
Telephone:
and
u
Peace—Col. Herbert G.
they
Dickens
for
bonds
t$
8
Russia and
and
food.
agriculture
Modern
all
held
been
stocks
the
raise
scrap.
Agriculture is our basic industry.
Steel, however, dominates all industry.
Law
-
—■but
including
Contends
iron-bearing
Predicts, hcwever, recurring
adequate for future needs.
6
—
—
91 million tons with annual demand
have
—may
obsolete
Estimates present
exports ranging up to 86% of this figure up to 1955.
there is no overall substitute for steel and there is
Dynamic World Economy
a
Fleetwood Dunstan
great expectations
Company
analyzing probable future steel needs, concludes
capacity above
4
5'
AND COMPANY
SYKES*
Steel
present capacity is ample for years to come.
3
:———
President, Inland
•
3
liCHTtnsiim
-
Industry
By WILFRED
Why Business Needs Adequate Reserves—John M. Chapman-
Don't Expect 1941 Prices With 1947 Dollar—James D. Mooney
The Future of the Steel Industry—Wilfred Sykes.—___—l
(2979)
Teletype—NY
Glens Falls
-
-
4%
Cable
***Analysis
C. E.
Worcester
Corp.
Conv. Preferred
request
on
Unterberg & Co.
Members N. Y. Security
61 Broadway, NeW
1-5
Schenectady
"
analysis on request
Dealers Ass'n £-
York 6rN;Y.
Telephone BOwling '.Green 9-3565
Teletype NY 1-1666
Thursday, June 5, 1947
COMMERCIAL & FINANCIAL CHRONICLE
THE
4
(2980)
i.
•ifc +*- <■'
•'
BUSINESS BUZZ
Mining Stocks
The Outlook for Sold
L;
price of gold has become a government monopoly
in relation to gold has been increasing rapidly.
attention to rumors of further devaluation of gold dollar, but
Writer points out
and paper currency
Calls
nrn
■ iv i
be
predicts there will
1
FACTUAL MARKETS
hedge against currency inflation or depression.
mining stocks as
A
increase in price of gold in U. S. and
Recommends purchase of gold
no
foreseeable future.
in
Canada
stocks is their steadiness in times of
market weakness. Generally speaking, gold-
of gold-mining
feature
depression and security
mining stocks, <e>
owing to the is
Abitibi Power
American Hardware
independent of ordinary conpurchasing power, and the
fixed
Airlines
Amer. Overseas
vance
Bates Mfg.
Chicago R. L & Pas.
Old
Pfd.
Gt. Amer.
Industries
Higgins Inc.
Lanova*
1199344567256
Timing"
the
that
Michigan Chemical
Minn. & Ontario Paper
Missouri Pac.
5%s
Moxie
Pathe Industries
Philip Carey
Polaroid
Purolator Prod.*
Remington Arms
Com.
Taylor-Wharton*
Textron
Upson Corp.*
U. S. Air Conditioning
U. S. Truck
United Artists*
Vacuum Concrete*
Warner & Swasey
Amer., Gas & Power
.
Cent. States Elec. Com.
Derby Gas & Elec.
Federal Water & Gas
already apprais¬
earnings
whole,
upon
pick-up.
Price
of
Gold
£om*
April 2, 1792 estab¬
lished the'first monetary system
of the United States under the
the gold dollar
of
pure
gold,
an
gold content of the
reduced, making the
was
(in thousands
U. S. Senator from Kentucky
35,723
38,030
; ')>->
39,485 Kf J
40,907
40,818
35,582
29,541
27,075
26,590
of
Canada
South Africa
1,928
3,044
2,972
3,285
10,412
11,559
4,096/
4,725//,
American Bureau of Metal
.
5,311 -*
5,331
4,841
.
3,651
2,923
2,651
3,200$
1,750$
■"Production of Philippine Islands
10,774
11,336
11,735 ,
.12,161, .i
,12,822
14,038- •
14,386
14,121
12,800
,12,277
12,214
11,800$
5,094:,',.
997
n.a.
10,480
3,748
if
Russia
for retirement of
public debt ahead of "temporary" tax reduction.
Holding that real wages have declined in last year, he pleads for.
voluntary price reduction.
k Siberia
1,100
1,990
4,000
5,000
Whether
artisans
6,500
5,900$
t,
5,800t'f.
5,000$
4,000$
4,000$
"4,000$
4,000$
n.a.
n.a.
n.a.
stability
our
business
own
we
or
professional men, whether we be
profoundly concerned about the
<$>-
are
in
order
Our share of this
conflict
and
average
Alben Barkley
the world's greatest
military contest. That contest cost
nations
democratic
the
were
which
fighting aggression and to¬
talitarianism
thousand
a
ESTABLISHED 1927
22 East 40th
Street, New York 16, N. Y.
billion
of
Senator
Alben
the testimonial din¬
ner to Mr. Morton J. May and the
National Jewish Hospital of Den¬
W. Barkley at
ver,
Teletype: NY 1-2948
Telephone: LExington 2-7300
address
*An
Colorado,
Hotel,
Astoria
at the Waldorf
New York City,
(Owners
"
of Weber
Specializing in
MINING
v
REctor 2-8700
\
~
I
''
.
Analyses
»
T
,
upon
request
'
j
[
,
„
G. F. HULSEBOSCH & CO.
„
Incorporated
PNTEI^RIgE PHONES
*
6111
Buff: 6024
Bos. 2100
Members
"
41 Broad
New
York Security
Street, New York 4
,
been
final
consum¬
ratification,
justifies the statement of
Starling,
during the
which
Colonel
progress
require five years following
of hostilities to bring
would
the
of the war, that Presi¬
predicted that it
Roosevelt
dent
end
peaceful settlement qf tjie
growing out of the war.
j
a
do
not
call attention
to ■ this
J
Dealerg'Xiiociation
flAnover 2-2100
created, not only by the war, but
by long decades and generations
of
antagonism
and
misunder¬
standing among the nations
Europe* and Asia, and I have'
of
the
of
heard
resounding vcMhie as to
recalcitrant and Wransi-
utmost^ faith
Seligman, Lubetkin & Co.
\ "
has
its
s
SECURITIES
1-1286-1287-1288
Direct Wires To
Phila.,»C?hlca#o ga-Loo Angeles
to
patience. Great progress has been
made in clearing away much, of
the
underbrush,
which .was
and
INDUSTRIAL
Consolidated Dearborn
120 BROADWAY, N.Y. 5
single
in the adjustment of the
growing out of the war
either in discouragement or; im¬
earnings
1926
treaty
peace
all
Two years after
issues
& Heilbroner)
Stock selling about twice
world.
of it with
frustration
and
the end of hostilities, not a
issues
.AiemlersN.Y. Security Dealers Assn.
v
the
over
out
come
delay
Fashion Park, Inc.
Tennessee Products & Chemical
VT
have
We
about
May 24, 1947.
request
is an
of more than $5 billion
of the 48 states in this
prostration
mated
Ward & Co.
N. Y.
each
union.
We have just
of
for
billion, which
$260
nearly
Sen.
the total wealth of
three decades ago.
come out of that world
with a public debt of
country
our
We have
in their char¬
out
governmental
than
greater
acter.
come
destructive activi¬
to
outlay was $350 billion, an amount
prob¬
which
interna¬
EASTERN CORPORATION
40 million men from
or
productive
lution of those
Bought—Sold—Quoted at Net Prices
Corporation
eco¬
ties.
scope,
Central National
the
and
areas
tial in the so¬
sion of 30
I
EST.
vast
nomic loss involved by the diver¬
tional in their
SERVICE CO.
of
tion
that
may
fundamental
NORTHERN INDIANA PUBLIC
the outlay from
was
their-governmental 'treasuries. It
takes no account of the destruc¬
make
it
powerful
and influen¬
we
are
n.a.—Not available.
This
dollarst
of
eco-,,
nomic system,
lems,
Statistics,
be
we
agriculturists,
justice and the'
or
world
included with the U. S.
JEstimated by Standard & Poor's,
tremendous
counteract
of fine ounces)
u. s*
30,354
34,230
Leader states great adjustments are necessary to
war-caused economic upheaval.
Pleads
Senate Minority
2,208
2,449
2,916
3,619
4,296
4,753
5,008
5,559
5,920
5,981
3,619
1,385
1,002
World
19,673
24,306
27,318
Program (or America?
By HON. ALBEN W. BARKLEY*
.
Union
tEstimated.
What
for
the
1—PRODUCTION OF GOLD
Table
1938„___
of gold
ounce
price $20.67 per ounce, which
nearly 100 years remained
production
Getting Ready
"Sneedle Always Puts on That Act When He's
to Ask Me for a Raise!"
1837 the
In
dollar
(Continued on page 41)
1932
at 24.75 grains
being worth $19.39.
then
commodity prices
and labor costs. Industries in gen¬
eral can recover higher costs by
increased sales volume' or price
adjustments, but gold
weight
Constitution, and fixed the
of
of
levels
the
Upon Request
Circular
speed
recession could help
The
industry as
influential factors are
Tide Water Pwr. Com.
or
a
the
changes in costs than
Standard Gas Elec.
9Bulletin
and
Although gold mines are some¬
less subject to pronounced
Southwest Natural Gas
tProspectus
is now improving
but production
Cost
Labor Chief
Puget S'nd P. & L. Com.
<
plants
shipbuilding. Labor has been
slow in returning to the mines,
The Act of
Source:
United Drill & Tool "B"
being
of in¬
proved correct.
1940.^—
*
down
shut
was
and
as a
1939J—
Wts. & Pfd.
country
dustry such as ammunition
of both
goldmin-
what
a
profit
in
by government order, labor
required in other, branches
result of resumption
of production, and from the in¬
vestor's viewpoint
offered only
limited
attraction. That opinion
expected
1929
Stand. Ry. Equip.
Taca
1945
2,
prices
been
have
this
in
for
Oct.
said
has
Majestic Radio & Tel.
Mexican Gulf Sulphur
responsible for
margins.
During the late war, gold mining
"Invest-
Timing"
costs, the larg¬
of expense in gold min¬
contraction
In
Bradshaw
Editor
ing stocks were
Jack & Heinz
~
ing,
cline.
ing the return of higher
Hydraulic Press
Old Pfd. &
of market de¬
H.
an
unpredictable factor.
Increase in labor
est item
American and Canadian
Hoover Co.
other
stocks in times
"Investment
that
remembered
be
is usually an
stable
more
than
are
of dividends
represents the return of capital
and they are therefore dependent
on the life of ore reserves, which
but
market,
we
should
stock, dividends
stable and liberal, it
gold
■.
important ; portion
they have the
merit of being
Leslie
General Machinery
While
normally
propor¬
tionately with
the
general
Aspinook Corp.*
Brockway Motors
Cinecolor
price is fixed for long periods.
price of
product,
not ad¬
do
Armstrong Rubber
Barcalo Mfg.*
sumer
the
-
that*' 'the
-
voice
mankind 'Will-be! Ultimately
WHiteh^ll4»4845
;o
Branch
113
Hudson
bOttli NY D26I3
Office
St., Jersey City,
in such
compel
N. J.
(Continued on pagG 111
JH9
w; wifturiMn
,
Volume 165
Number
nrmafwwwi^
HW,„M
^
„.,
^
^
THE COMMERCIAL & FINANCIAL CHRONICLE
4600
(2981)
5
New
Observations
Washington...
By A. WILFRED MAY
Behind-the-Scene Interpretations
from the Nation's
Jersey Bond Glnb
Annual Meeting
Capital
ECONOMICS MASQUERADE
The Politician in Economist's Clothing
It now becomes obvious that dollar international collectivism is
influence 1948 tax policy, will limit—may even prevent—tax
to
relief for business.
*
must
for
*
*
Remember:
<§>-
American
be, scattered
two
separate
dollars
Federal
world-wide
ing- of the Monroe Doctrine, and
(2) to help finance our exports.
The alternate, say proponents
of
this
theory:
a
return to
hemispheric nationalism a n d
& Power Co.
,
constricted foreign markets for
our business and industry. Con¬
now—won't
$
yond
Truman
the
.
won't
are
fashioning
Congress a lend,
for
for
dismantle
than
(1)
FPC
utility
in
rules
within
was
a
to
Connecticut Light &
(2)
accept
FPC
con¬
Power demurred, lost in the
Appellate Court, won in the Su¬
preme
Court;
(3)
Supreme
government dollars for tax relief
Court jurists told FPC
at home.
This "line"
subside;
or
conceded
general tax relief.
the
(4)
it
to pro¬
its
prove
claim, vacated its order against
it
Connecticut
looks like they can't have both.
subsided
It
and
company,
tests.
looks
for
like
they
settle
may
revision
tax
relief,
general tax
form and
tax
dimunition
1948
FPC
unlikely
of
terms
may
net
bills to individuals
■.
#
tote
tax
that
mean
corpo¬
*
*
a
grudge
*
more
when Congress debates
walling off FPC from intra¬
state utility operations. The inci¬
dent will be cited as proof how
FPC
(1)
distorts
congressional
intent, and (2) forces private en¬
terprise into costly court defense
of inherent rights.
Hearings on
this restrictive legislation are to
(Continued on page 36)
bills
rations.
you
*
hear
secution
revenue
and
will
pro¬
of
this
Connecticut Light & Power per¬
re¬
much
overall
the
not
legislation
in
tax
without
in
It's
tax
little
for
than
juggling of specific
a
schedules
burden.
rather
murmured
*
balanced budget and gen¬
a
eral
If
with
against
Responsibility
In Debt Management
,
By DANIEL W. BELL*
:
1
■
>
must be
adjusted
so as
make-up of government debt
long-term investors. Warns debt reduction is deflationary and
in depression period be detrimental.
may
I am,
of course, delighted to be here with you today. I am not
so sure why I chose the
subject, "Bankers Responsibility In Debt
Management,"
because
I
certain
that
most
am
of
books at as
high a percentage of your assets
as
that represented by Govern¬
ment securities, you would feel it
highly essential for you to be
thoroughly acquainted with all of
you
realize
just
what your ob¬
ligation
is
in
this,
respect.
The ^
commer¬
cial
'banks
the
the ^profit
of
of
!U
n
chasing power pur people may need to purchase the goods which our
factories and farms are capable of producing when our work force
is fully employed," and to enlarge on government controls, nth
degree doom is not only being prophesied for the future, but deputed
as actually haVing already arrived.
Thus a Report compiled for and
distributed
"the
hard-hit
But, looking at the facts—the official figures readily available to the
as well as the expert economic interpreter, what do we find
to be actually happening? The retail sales, whose "decline" is giving
so much alarm, actually according to the Federal Reserve Board, in
the nation's department stores in the final week of May, were 15%
above the boom level of last year, 52% over two years ago, 170% over
1937, and even 140% above the 1929 boom's sales.
invested
in
your
which
Daniel
W.
i t"e d
While
these
measures.
are
designed
are
to
Aside
a
am sure
I
that if you had loans and
^discounts ;of individuals and busi*An; address by Mr, Bell before
"theuV irginia/'Bankers • Association'
-
X&ny&dte v^irgipi^; BeactoVi^
■
b"!
""'tnfb\>0i
Shawinigan Water} & Power
HJUtT SMITH & CO.
!2 WILLIAM ST., N. Y. 5
a
New York
t
u
<■
.i
;
■
■.%>
^Continued
institution
':
•
on
Montreal
Di-Ncc
...
Soya Corp;
•
.
'I51C
"■
'
siegel & CO.
.
actual
39 Broadway, N.
Y, 6
Dlgby 4-2370
Teletype NY 1-1942
American Maize Products
Specialists in
Dravo
Corporation
Domestic, Canadian and
Electric Bond & Share "Stubs"
Philippine Mining Issues
United Artists Theatre Circuit
as
Bought—S old"—-Quoted
MAHER & CO.
62 William St.lNew York, N.
FREDERIC H. HATCH S CO., INC.
\
i888X^>? V *!*:'•,
;.
.
^MEMBERSNYV SECURITY DEALERS ASSOCIATION
63, Wall
Street*
8f N«'• •
•
«
•
\ \
*,
Tel.
'
WHitehalC4-2422
Branch Offlee,;1 fs'
BeM-Teletype, NYT1-S0T'
"IT
i-iO
.
• .v
Co.
owns
"•
- t
Toronto
ACTIVE MARKETS
page'40)
,
1-395
material omission of
of the other basic business indices of the
large
proportion of the
public debt, you are interested in
it as a public-spirited citizen. It
has been stated: by good authority
that1 the national debt will affect
the? life, of every man, woman and
child? ift: the;VUiiited States- It is
K«.
HAnover 2-0980
Bell Teletype NY
maintain
being interested
banker whose
such
Li
myi3%mW
from
Wortsf Ltd.
quick to point out wherever unit
*
some
ested in all governmental policies
which affect the economy of the
All you have to do is to look at
the figures on your balance sheet
responsibility.
I
Great Amer. Indus.
investment
your
Hiram WalkerGooderham &
(Continued on page 44)
represents more nation, and which have a tremen¬
one-fourth
of
the
total dous bearing on the management
amount of the gross public debt. of the public debt.
j;
economists
,
Looking at
than
W realize,
Distillers Corp.-Seagram, Ltd,
Recession Perspective Distorted
and support the public, credit.
As
a
matter of fact, you are inter¬
Bell
Mining & Smelting
Co. of Canada
layman
interested in the taxing pol¬
icies of the Federal Government
States Government securities. This
total
stock
are
and
Consolidated
completely ignoring the fact that even future dollar sales declines
will leave activity at levels very high in terms .of all normal historical
businesses
Telephone of Canada
Canadian Pacific Railway
task to restore whatever amount of pur¬
sales may appear to lag, they make the very
money. You are, therefore, inter-,
ested in the national debt—its ef¬
fect on economic conditions.
You
about
'65%:; di their
"earning assets
in
our
the
various
which
you
had
their total
assets
your
fect
$70 billion or
Close to 50%
*
on
system, and cumulative wage-raising.
basic major premise that we are facing a crucial
the economic conditions which af¬
nation
haVe'
firms
ness
Bell
the
market, and economic barometer."
And
another committee member, Leon Henderson, in a speech published
in last week's "Chronicle" speaks of "bankruptcy ahead," "mills
closing down," and "retail sales declining" (for which the reactionary
Republicans and Southern Democrats are the responsible villains).
among people. Says short-term debt should not
be refunded until sufficient capital has accumulated in hands of
(To serve for three years)
Frank R.
drums.
situation wherein "it is
and
spread holdings
Members of Board of Governors
New Deal compensatory spenders are beating the
Again they are trying to create a panic about a
non-existent "bust" in an effort to sell their over-saving thesis, their
Again
Cassandra
ruptcies and foreclosures"; "sustained demand rapidly disappearing";
to meet needs of investor groups and to
J. William Roos,
Aluminhim Ltd.
by Americans for: Democratic Acjtion by Chester
Bowles (as chairman), J. K. Gilbraith, Robert Nathan, Paul Potter.
Seymour Harris, etc., harps on "distortions," "bust," "a collapse
such as followed World War I with widespread unemployment, bank¬
Formerly Under Secretary of the Treasury
For Treasurer,
MacBride, Miller & Co.
Beating the Drums for Bust
widely,
President,,American Security & Trust Co.,^Washington, D. C. !"
Former Treasury executive contends
Officers
are
Cole, F. R. Cole & Co.,
Despite the cold fact that the actual course of events has com¬ retiring President; J. E. Egner and
F. Sheppard Shanley.
pletely disproved the dire Goetterdaemerung expectations; there is
no abatement; whatever of this agitation—only
a little juggling of
the alphabetical nomenclature of their organizations.
More vehe¬
mently than ever is the case being built up for lavish use of govern¬
ment financing to fill the void created by the supposedly disastrous
insufficiency of private spending as the creator of production. Other¬
wise, it is being picturesquely shouted from the housetops by these
"objective" economists, we are rushing pell-mell into the climactic
"bust" of American civilization. ("We, and Mr. Wallace, were wrong
about this before only because our timing rpiscued a little.")
To establish their
Bankers'
..
ganging-up of profes¬
now
condemnation, of
r*.
bad now is the
individuals when they were part of the Wartime
FPC last week
couldn't
Committee has submitted the fol¬
lowing nominations:
primarily continues the basic outlook of these
Administration. The
expedient policy then was to exhibit the post-war specter of a
tremendous business collapse with a permanent mass of 8 million
unemployed; Induced by supposed inability of the masses to consume;
over-saving, etc.—the New Deal production-consumption "gap" thesis.
duce more convincing evidence
Next year, both major parties
want a
balanced
budget and
legislation. Here again the nation's
according to the "public
.
(To serve for one year)
far and wide citing and inter¬
preting "facts," and broadcasting prophecies—
For President, Alexander SeidA.Wilfred May
recklessly and irresponsibly, but uniformly—to ler, Jr., National State Bank.
fit their political "line."
For Vice-President, Stanton M.
The possibility that a
direct result of their whooping-up of a Depression may be the crea¬ Weissenborn, Parker & Weissehtion of just the communally harmful conditions against which they born, Inc.
profess to be fighting, apparently does not concern them nearly as
For' Secretary,
Courtlandt B.
greatly as do their ideological and political objectives.
Parker, R. W. Pressprich & Co.
the
trols;
as
Dealers, who
public
of
company
dollars
now
of this epochal
welfare is being directed
relations" motif!
Just
Connecticut
purview
with com¬
Chairhian; Wilbert H. Campbell,
Campbell & Co.; James B. Kirk,
Harris, Upham & Co.; Joseph R.
Mueller, Mueller & Currier; and
F. Sheppard
Shanley,- Manning,
Shanley & Co., was duly appointed
by the Board of Governors. This
sional economists, largely including former New
January*
Federal Power Act, ordered the
relief, for fighting communism,
financing exports and fewer
Right
the cleverest political skullduggery,
on
plete cynicism and without any regard whatever
for the technical merits or economic implications
*
Light and Power
That
it.
government
more
courses of political maneuvering pursuant
straight party politics.
The public which is
interested in prophesying his action, is unani¬
mously laying its veto bets according to its guess
Here's the history of the FPC
shakedown:
ing billions. Congress may demur
but
*
*
lease and give-away device cost¬
means
more
native
to
intent,
to
enterprise.'
Congressional
*
aides
1948
That's of
dominate, intra-state
be next
1941,
for
is
taken
completely for granted as a major
premise that the President's action on the pending,
tax and labor bills will be based entirely on alter¬
bu¬
local importance. It's a haymaker
on
FPC ambition to dictate be¬
year—ready to espouse that al¬
ternative.
*
Commission
Power
reaucrats,
here's
a
chance
tb*
gloat. Grudgingly and belatedly
FPC is admitting defeat in its
seven-year fight to seize jurisdic¬
tion over the Connecticut Light
(I)
reasons:
to shore up Truman's globaliz¬
gress isn't
The practice of governmental officials of opportunistically de¬
signing their "economic" pronouncements to further their party's
political strategy, previously pointed out by this columnist, is con¬
tinuing ever more intensively and recognizably. For exarhple, it
NEWARK, N. J.—The annual
meeting of the Bond Club of New
Jersey will be held at the Down
Town Club, Newark, on Wednes¬
day, June 18, 1947, at 12:15 p.m.,
for the purpose of electing officers
and
governors
for the ensuing
year, and to transact such other
business as may regularly come
before the meeting.
Pursuant to Article 5
of thq
constitution, a nominating com¬
mittee consisting of William C.
Rommel,- J.
S., Rippel
& Co.,
>
«
r
v
»
*
<r
».
p.v.
Y. ]
j
f
6
Ruhr Coal Output
'
How Britain Sees
Declines
Special to "The Financial Chronicle *
■
WASHINGTON, JUNE 4—Ac¬
cording to word received by the
the
British Zone of Germany, North
German coal
production unfor¬
tunately is just holding its own,
and even shows tendencies to de¬
crease slightly.
The latest Ruhr
coal output figure (daily basis),
that for May 13, is 214,293 tons
gross clean hard coal.
"Chronicle"
this
from
week
C
ft
it.
about their ability to meet
.
intently®1
how
of Lon¬
City
shall be called upon to bear
watch-
ing
every
move
Bayway Terminal
relating
the
to
satis-
of
faction
Coke
world
that
appetite.
Sunshine Consolidated,
Inc.
of late
been
Members
6
S.
York
New
CALVERT
exchanges
Bell
New
York
in
don
about
There
America.
from
a
loan"
"second
BA 393
Teletype
a
Lon¬
talk
Herbert M. Bratter
2
Telephone REctor 2-3327
discus¬
is
sion of the "dollar" burden Britain
There is
bear in Germany.
must
BOSTON
realization that, the more
also the
dollars the outside world receives,
B
Britain's
better
the
of
chances
pulling through the
"transition
period" without another loan.
&
Thus, the "Financial Times," in
approvingly on the
that with the loan to France
the W6rld Bank at last had got
commenting
fact
Boston & Maine RR.
Preferred
Prior
Traded in Round Lots
Walter J. Connolly & Co.,
24 Federal
Inc.
Street, Boston 10
Tele. BS 128
Tel. Hubbard 3790
this year.
will
progressively eased as Amer¬
filters through to the
various parts of the world."
Stat¬
ing that possibly Britain's dollars
may run out before the transition
period is over, that paper adds;
"Hence, if the
authorities are
really in earnest about balancing
our external accounts, it is not inipossible
that
we
seek
a
Optimism
give you
on
WHEELOCK & CUMMINS
was
Preferred
ginia
of
EQUITABLE
exportin g
states,
I
do
i
not
of very
DES
MOINES
Phone 4-7159
9,
IOWA
Montgomery, Alabama
>
Teletype
Telephone
&
3-6696
MG 84
L. D.53
Bell Tele. DM 184
and
American Air Filter
Consider H.
Willett
Stix & Co.
Murphy Chair Company
INVESTMENT
Reliance
Varnish
™E
SECURITIES
Co.
STREET
OLIVE
509
St.LouisI.Mo,
BANKERS BOND ££i
Incorporated
1st
Floor, Kentucky Home Life Bldg.
LOUISVILLE 2,
Members
St.
Louis
Stock
Exchange
KENTUCKY
Long Distance 238-9
Bell Tele. LS 186
SPOKANE. WASH.
LYNCHBURG
'Uiiiiiiiiiiiiiiiiiiiiiiiiimiiiiiiiiiiim
NORTHWEST MINING
Trading Markets
SECURITIES
American Furniture
Co.
For
or
Bassett Furniture Ind.
of
Immediate Execution
A.M.,
Dan River Mills
—
of Orders
Quotes call TWX Sp-43
Exchange
from
Std.
Pac.
10:45
Time:
on
to
Floor
11:30
Sp-82
at
other hours.
•
STANDARD SECURITIES
CORPORATION
Members Standard Stock
,
Inc.
Lynchburg, Va.
of
Brokers
-
Peyton
-
LD 11
iiuiiitiiiiiiiiiiiirii!i3ii2iiiiiiiiinifiiik
Underwriters
Building,
T*r«n phoc
Tele. LY 83
Exchange
Spokane
Dealers
quickly
seriously
you
were
how
E.
Fleetwood Dunstan
af-
affected.
to
serious efforts being
solutions
find
to
both
monetary
and
tariff
problems
through
international
concert.
Even
as
we
meet, the Interna¬
tional Trade Organization
is hold¬
its sessions in Geneva and
delegates
of
the
International
ing
Chamber
Commerce
of
are
on
to Montreux, Switzer¬
land, for their coming meeting. * I
have no doubt you are—and will
be—watching these sessions with
their
way
avid interest.
or
clause will not mean
the drain on
Britain's dollar resources so many
is
The
Dollar
Scarcity
But there has been
J
another de¬
the change-over
which directly
And that is the
serious world scarcity of dollars.
It has found reflection, for in¬
blow.
In 1931, United States exports of stance, in the very heavy tax that
the British have just placed upon
apples to the United Kingdom
Denying the voter his
totaled 9,153,000 bushels.
In the tobacco.
next year they dropped to 5,662,- smokes is something no political
000 bushels and by 1934 they were party would do except in a case of
emergency.
Well, it has hap¬
British officials find they
*An
address by Mr. Dunstan pened.
Virginia
the
before
Association,
Bankers
Va.,
Virginia Beach,
that
transaction.
Secondly; it
has been erroneously claimed in
London, the dollars must really b^
needed by the owner of the new
sterling
balances;
that is,
no
country trading with Britain will
be supplied dollars in exchange
for newly acquired sterling if that
country possesses dollar balances
or other assets freely convertible
dollars, since in that case
velopment
in
from war to peace
affects Virginia.
have no choice.
?
$3,750,000,000 loan granted
(Continued on page 20)
The
\
Investment^ Bankers Sell
World Bank Debentures?
Spokane
of
Kellogg, Idaho and Yakima, Wn.
it
Correspondent writes past experiences prove present
foreign lend¬
Bank loans will result in heavy losses. Criticizes
set-up of World Bank capital and says only cushion for its deben- •
tares will be cash from U. S. Treasury.
Holds if conditions are *
sound private investors could supply market for bonds, without
ing and World
aid of Bank.
Editor,-Commercial & Financial Chronicle:
In
wrote
1932,
a
Professor
Lothrop
book entitled "Europe
Stoddard,
....
'
A.M., Ph.D., Harvard,
On the dedication
and Our Money."
page the following sentence ap-®>—:
—•
peared. "To the common sense of nations borrowed billions of
the
American People, which is lars in the twenties (for the same
Interpretation of "Net Balances"
so-called productive purposes as
often deceived but which usually
Still
another
indication of a
and have de¬
gets wise." After our ill-fated past proposed today)
faulted right and left on their
very hard-boiled British attitude
adventures in foreign lending, one
toward the obligations assumed in
obligations.
'
would think that the American
the convertibility
clause of the
Character is something that we
people would "get wise" even¬
American loan agreement hinges
tually. But apparently such is not understand in this country. Fin¬
on the interpretation of the clause
land
does not
need .. a Bretton
so.
We are doing it again, on a
to mean only "net balances."
In
larger scale than ever. Bretton Woods or any other trick idea
the loan agreement nothing is sai4
Woods has taken over where the in order to sell her bonds in the
about net balances.
The way is
International do-gooders of two United States. The events of the
left open to make new sterling
decades ago left off.
Only this past two decades speak for them¬
balances convertible as they occur>
No
country
was
more
time there can be no doubt that selves.
or
to set down an arbitrary in¬
despoiled and impoverished by
the majority of the nations that
terval at the end of which each
are
going to receive our dollars war and aggression, yet little Fin¬
time the books will be balanced
are
bankrupt. The last time we land paid on time, and on the
and only the net surplus ;made
only guessed that this was so. line. The same cannot be said of
convertible
into hard
currency!
Today we know the exact location many of our so-called Allies, now
While the U. S. Treasury has vol¬
of
every
empty sieve through members of the Fund and the
unteered no statement as to its
which our billions are going to Bank, that plead poverty no more
interpretation of this aspect of the be
distressing than that which Fin-,
poured.
convertibility obligations assumed
land knows.
"
The International Monetary
by Britain under the loan, it seems
Let us refresh our memory. Lefc
safe to assume that the British Fund and the World Bank were
us look before we leap once again
Treasury will take the narrower foisted upon the American people
into the same cauldron of deceit
view, as the city is urging it to when war-time emotionalism was
and default as we did 20 years
do.
An editorial in the "Financial at its peak. Those who concocted
ago. Here is what our esteemed
Times," of London,
a well-in¬ this scheme realized that after the
English friend Mr. John Maynard
formed journal, insists that only experiences of the 1st World War,
investors
would
not Keynes wrote in "The Nation"
net export surpluses accumulating American
(London) Aug. 9, 1924: "There is
make any more direct loans to
in the form of sterling balances
on
the part of most countries, &
will
be
convertible.
It adds: most foreign countries. Nations
strong tendency to default on the
"That explanation clears a good that could not now qualify for
occasions of wars and revolutions,
direct loans even at a prohibitive
deal of the ground reassuringly;
and whenever the expectation of
rate of interest, are in this con¬
but it leaves open the issue how dition because they have proven further loans exceeds the amount
of interest payable on
the old
the time factor will operate—that themselves unworthy of the. faith
(Continued on page 35)
and trust of our people. Those
(Continued on page 42)
could not demonstrate
American Turf Ass'n
Girdler Corporation
to
you
know,
made
4
into
ST. LOUIS
LOUISVILLE
have
remind
collapse
of
the
pound
incorrectly tinderstood When
in
this
country.
The British sterling was followed the next
Treasury, it is reported, is not so year , by the Ottawa Conference
pessimistic as many about the ef¬ and "Buy British" signs began to
fects of the convertibility clause. •.
appear in every city, town and
It is pointed out in London that hamlet of the Empire, your apple
the
coming into force of
that industry was dealt another severe
pletely
.
THORNTON, MOHR & CO.
BUILDING
apple
tant
capital
Inquiries Invited
Stock
two
impor¬
you
Should
Meredith Publishing Co.
Common
the
most
exporter, for example, cannot
transfer the proceeds of a sale tp
Britain into dollars to be kept in
New York.
That would be £
all issues
Stock
As Vir¬
is one
to be con¬ May 31, 1947.
to which the
dollars furnished by Britain will
Letter to the Editor:
be applied must also
be needed
for current transactions.
The lat¬
ter has a double emphasis. / The
word "current" means that an Inp
Municipal Bonds
Iowa Power & Light Co.
forced off
gold.
dian
Continuing Interest in
bacles in the future, there are, as
when
vertible the purpose
ALABAMA
INCORPORATED
the
only 3,378,000 bushels or less than
37% of the 1931 figure.
V /
In order to prevent such de¬
British pound
modest
Convertibility
*
—;
imme-^
years
diately before
and after 1931
particular interest
to financial London is the irhplementation July
15 of the corivertibility clause of the American
loan agreement.
It is felt in Lon¬
don that this subject
is incom¬
Also
understood,
3.30%
order to refresh my memory—
news—I checked up on apple export figures for the
coming down here, in
Just before
not to
started, observed: "From the more
Britons fear.
This* is another way
selfish viewpoint, this evidence of
of saying that the outside world
activity on the part of the World
is not going to find sterling as con¬
Bank is a welcome development.
vertible as might be hastily pre¬
Little more than two months re¬
sumed.
The reference, of course,
mains before sterling earned by
is only to sterling balances newlj1
countries
becomes
freely
con¬
derived
as
a
result of current
vertible.
The burden which we
transactions.
What is not so well
MONTGOMERY. ALA.
DES MOINES
-
ican capital
unfo unded
Baltimore Stock
&
ST., BALTIMORE
successful World Bank is prerequisite for wellbeing of both lending and borrowing countries, and for our high
standard of living. Reveals France may apply for additional loan
great deal of loan from the International Bank
premature and —despite what has been said to
the contrary."
a p p a r e ntly
STEIN BROS. & BOYCE
Exchanges and other leading
has
There
Reconstruction and Development
International Bank for
be
is
don
Director of Marketing,
Mr. Dunstan states
—
financial
•-
4
being written in our financial press about
American dollar exchange abroad, it is hard to realize
BALTIMORE
&
■-
Despite the volumes
the hunger for
Dynamic
a
FLEETWOOD DUNSTAN*
By E.
^
t
and
World Economy
-
for relief from dollar famine London is
pinning hopes on World Bank loans to other countries as well as to •
itself.
Reports Britishers feeling we misunderstand convertibility
provision of American loan agreement and are too pessimistic tj
the
Coal
■ 1
Correspondent holds that
.
Davis
I
]
-
'•»
The World Bank
It
HERBERT M. BRATTER
By
Thursdayxjune 5, 1947
COMMERCIAL & FINANCIAL CHRONICLE
THE
(2982)
"need//>
✓
t
dol-
Volume-165
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4600
Wool and Geneva
Recent Developments in New York
Non-Discrimination law
making little
headway with Congress in elimi¬
nating import fee.
By BENJAMIN A. JAVITS*
"
By JULIAN J. REISS*
<
Spokesman for New York State Commission Against Discrimina¬
tion in Employment explains working of new law and expresses
gratification at employer cooperation. Says there have been 152
complaints closed on the merits after investigation, and, at present,
only 127 are pending. Stresses educational work of Commis¬
sion and need for careful examination of complaints, particularly
:
WASHINGTON, June 4 (Special
Discrimination
Commissioner, New York State Commission Against
"Chronicle").—On June 3
{Undersecretary of State Will Clay¬
ton
the
you
had
the
work
the
of
Commis¬
bill.
Clayton
rights be upheld versus labor, government and foreign
j
ment.
re-
Our
of
same
result
efforts to legislate
temperance.
.
portance
i
to
n
a
I think it
Gestapo need¬
lessly
haras-
a
Administration witnesses in their
before the legislators
appearance
to have made any head¬
seem not
The House members of the
way.
conference
least
at
evidence
no
be-
ever
Ours
successfully made capital >
succeeded—momentarily it is
true but nevertheless succeeded—
is
ways
political
and
sys¬
tem of repre¬
and
by being able to point with scorn
to businessmen and business ex¬
eco-
ecutives, especially of
sentative gov(ainutuii
the
the bill.
,
strive
g
e m
-
ployers with
unwarranted
investigations.
I
am
say
Juliart
J.
Reiss
has in
and I
glad
to
that the
Commission
no
way
its
altered
am
policy in this respect
very happy to have the
opportunity this afternoon to tell
you
something of how the admin¬
istration of the law has proceeded.
7
The
Law
Discrimina¬
Against
tion recognizes and declares that
the right of employment without
discrimination
due to race,
color,
civil
right and it establishes a commis¬
sion with the power and the duty
first to prevent and eliminate dis¬
creed
national origin is a
or
".The writer is told that Clayton
might be well to give
failed
to
is the capital¬
istic system in
cans
side
panies,
so
in
employment,
as
goaded and de¬
who are still
^.his
country.
The
capital-
luded
!stic
system
reached
politicians
into
believing
that
companies like American Tele¬
phone &, Telegraph, U. S. Steel* •
International Harvester, National <
its
flowering
Renjamla A Javit«
stage
and
is
•mw subject to
the same rules, ideology and in-
by
our
own
small-time
some
.
to
„
color,
race,
creed
or
are
writing
this
At
national
origin.
'/scheduled
conferees
a second
the
hold
to
*A
talk
Javits
by Mr.
League
taking a very
active part in
making the position of the stock-
holders, by not
strong and very
before
Investors
Forum,
Society's approach to this, mat¬ meeting/late today, but attainment
of agreement at that meeting is York City, May 22, 1947.
of temperance is sound when
not likely.
Even a deadlock is
We seek to promote temperance
by the forces of education and regarded here as not entirely in¬
conceivable.
Since
that
would
religion and restrict the applica¬
leave domestic woolgrowers un¬
tion of sanctions and
New
continued
ter
on page
penalties!to
em¬
1
f
Afherion, Williams
Co-Chairmen of Outing
,
racial
state.
The
Council members gather around a
from various religious and
within
groups
our
to
table
conference
of "human
lems
which
to
and
munity
prob¬
relationships
•
their
in
occur
study
own
devise
com¬
ways
and
to arrive at their solution.
All action on their part must re¬
means
ceive
prior
Commission
authori¬
work
of - these
Against Dis¬
crimination is interpreted to the
the
Through
-
of
his
.
possessions
court action
In the
may
.
bring
T
a
councils
the
r
same
way
the person who
jfin vitcdmi
xUR
us
opportunity to
his
deprived of an
earn
his living, be¬
Special
to
The Financial
Chronicle
r" CLEVELAND, OHIO
cause
of
tional
origin, 'may file a verified
race,
color
na¬
or
Cunningham
Commerce
complaint with this Commission; Prior
(Continued
on page
to
forces he
—
familiarity with markets and market
instances—in our
time is important
Finding the best market for securities
Charles
&
Co.,
Union
so
the fact that we have
is our business
been able to render concrete
.
#
services to
'
was
in
If you
Exchange.
Stock
Serving
the
armed
kind of
with Gassman & Co.
do
and
34)
a
our
,
dealer friends is not surprising.
Building, members of
Cleveland
the
day-in-day-out trading experience provides
with
'being able to assist dealers when
D. Gentsch has become associated
With
ore
conditions which results—in many
...
has been unjustly
Qfot
to-
Cunningham Staff
Joins
against the aggressor.
Since the enactment of the law on
zation.
so.
Soucy, Swartswelter & Co.
Law
wire
haven't had occasion to prove the value
cooperation, this is your personal invitation to
We know you
or
of this
will be glad you did. Just phone,
write.
-
•
and the Commission
is kept in constant touch with
whatever problems exist and the
community
proposed methods of solution. The
powerful force 1 of education is
brought into play to promote good
will and better understanding. At
the
such
present tipie there are
councils operating
in
state
others
,A
of
are
New
York
and
11
U
six
the
many
A
in process of formation.
study from our .' Research Department
covering the six largest companies in this
The educational work which the
Commission is doing with the as¬
_
.
community coun¬
cils would be a subject for an
afternoon discussion by itself. I
sistance of the
am
to
•
of
by
the
issuance
t
■
v
.
■;
Pressprich 8C Co.
Street
Members New York Stock
of
enforceable orders if necessary.
14 Wall Street
.
.
.
.
[Telephone HAnover 2-1700
Teletype NY 1-993
-
Smith, Barney & Co.
preventing
and eliminating discrimination in
employment
68 William
201
going to pass over this and go
first assignment of the
that
.field is available upon request.
R. W.
NEW YORK 5
the
Gommision,
Devonshire Street, BOSTON 10
Members New York Stock
Exchange
Exchange
522
Fifth Avenue
GOVERNMENT, MUNICIPAL,
RAILROAD,
*
Many people feel that this as.
address by Mr. Reiss be¬
fore the Commerce and Industry
Association of New York, New
York City, May 15, 4947.
'v
_
*An
.
im.
f
y.J:
,
present any new argu¬
consideration. The Law
It
Discrimination does mot ment or face-saving formula.
City Bank, Bank of America, Met¬
is believed he would be satisfied
legislate the virtue of'
ropolitan Life Insurance Com- »
tolerance
but
the
Commission with an escape clause, such as he instincts of American democracy pany, Pennsylvania Railroad and
seeks
to
promote tolerance by suggested in his recent letter to as are our political entities. When a host of others, are all owned
marshaling all the forces of edu¬ Representative Cooley, but that a voice vote taken at the stock¬ and controlled by Wall Street,
cation for that purpose and we
proposal, was firmly rejected by holders' meeting of the U. S. Steel viz., by a few selfish and greedy
Only seek to apply sanctions and the House when the bill was be¬ Corporation approves the estab¬ bankers, especially J. P. Morgan*
penalties to acts of intolerance fore it. The formula was that the lishment of a stockholders' com¬ Kuhn Loeb and Dillon Read.
and
discrimination
when
those import fee power should not exist mittee which "may be available
Managements Disfranchising
*
in1 cases where its use would con¬ to work with management on la¬
acts deprive an Inhabitant of the
Stockholders
state
of
the
fundamental
basic flict with an existing or future bor and government matters," we
trade
agreement
to are making real progress.
Today American managements
right he has to earn a living, reciprocal
without consideration, as to his which the United States is a party.
Our
political
representatives are in effect disfranchising stock¬
this
jacts of intemperance When those protected, however, the conferees
acts inflict an injustice upon an are expected to reach agreement
—
'' ' *
powering the Commission to issue Inhabitant of the state such as. ultimately. *
enforceable orders. Second, the when a drunkard
gets behind the
mandate is given to the Comrniswheel of an automobile or when
sioh to study discrimination in all
he goes home and beats his wife'
fields of human relationship and and children.
(''1v J
'!!!: "
to marshal all the forces of edu¬
Honesty is another virtue. We
cation and moral enlightenment
seek to promote honesty by edu¬
I',, PHILADELPHIA, PA.—Dudley
for the promotion of good will and
cation and the forces of religion fR. Atherton, Jr., Lazard Freres &
better understanding among the
but we do not hesitate to apply
Co.,
and
G. Elwood Williams,
peoples of the state.
;
;
sanctions and penalties to acts of
Pennsylvania Co. for Banking and
{ Realizing the magnitude of the dishonesty such as fraud and em¬
[Trusts, have been appointed coassignment, the framers of the law bezzlement and
grand larceny. chairmen of the June 13 outing to
empowered the Commission to ap¬
The
Commission's
approach
to be held by Philadelphia Securities
point local community councils
this matter of 'intolerance is pre¬ Association at Llanerch Country
consisting of representatives of.
cisely the same.
;
'
Club.
sound citizenry, drawn from busi¬
A person who has been robbed
ness, from labor, the clergy, and
crimination
large com¬
representing nobody *
really but themselves. There are
millions upon million of Ameri¬
homic
has
disposition to alter the position
by'the House when it passed
taken
the Virtue
political demagogues gener¬
ally, from Hitler down, have al¬
management
than
.
and
cor¬
Against
sin
»
by
'
sion
encroach¬
,
It is quite important at the present time and in the days ahead
for the American stockholders to get more recognition of their im-
■orp
respondent, the Agriculture De¬
partment has been "on all sides of
this controversy." In any case, the
did
as
-
1
on
would have the
disfranchising stock-
beclouding their position to public. Urges stockholders'
holders by
CWT
gressional informants of this
of
em¬
pect of the law is unwise for, as
barking on they ; say, you cannot legislate
witch / hunts; virtue; that tolerance is a virtue
that we would and that any attempt to do so
develop
wool
Ufa
ui i)oau
asking elimination from the
pending measure of the provision
authorizing the imposition of an
import fee.
According to Con¬
tion
not
J-mVi&v
!
_
in
inten-^
no
A cfri
porteoiy hafci the yuppun
that the State Commission Against Discrimination
assurance
of
Mr. Javits asserts American managements are
-
When Mr. Turner appeared here almost two years ago, he gave
1
the
on
pattern of industrial employment
Advo¬
through conferences and conciliation, and
discrimination in employment aids communist movement.
warns
Ur^eTcerretarv
ue
iUifc-
adjustments
cates
and
culture N. E. Dodd appeared be-
<
,
relation to overall
in
the
>t0
7
:1s Management Disfranchising
Stockholders?
Administration
;
(2983)
'
NEW YORK
PUBLIC
UTILITY,
INDUSTRIAL
AND INVESTMENT
BONDS
STOCKS
18)
*
Thursday, June 5, 1947
COMMERCIAL & FINANCIAL CHRONICLE
THE
8
(2984)
government.
resulting
if
in
crease
Any property sales,
in a substantial in¬
cash,
Russia and Peace
doubtless
would
By COL.
require some change in the pro¬
posed plan, possibly by scaling
HERBERT G. KING
Stock Exchange
Member, New York
down the amount of new bonds.
SEC will
Presumably the
King points out Russia, despite her apparently unfriendly
attitude to U. S., wants financial asssitance rather than war.
Urges
Col.
an¬
hearings on the new plan
Foreign Power Plan
A
recapitalization plan for American & Foreign Power was I at some time in the near future,
recently filed with the. Securities and Exchange Commission.
The
old plan, filed jointly by Foreign Power and the parent company
Szymczak Resumes
Electric Bond and Share over two-and-one-half years ago, had been
"on the shelf" apparently due to an unfavorable reaction at Philadel¬
Post at Reserve Board
phia with respect; to the degree of subordination of the Electric
nounce
The American &
a*
-±
•
'■«
public
new
interest.
plan, which is said to
have the blessing of the SEC staff,
goes somewhat further than the
old plan in reducing the claims of
the parent company, and increas¬
ing the amount of new stock as¬
signed to public holders of the old
Bond and Share
The
and
U/4% bonds:
Share
receives
senior assets
slightly
$8,098,000 deben¬
tures
compared with $6,368,700
debentures and $1,592,210 cash un¬
der the original plan.
If the new plan is approved, the
—
capitalization will consist of $35,000,000 debenture 3V2S due
1968,
$91,392,000 debenture 4V4S
1982, and 5,000,000 shares of
stock.
common
The
due
new
debenture
3^2s will rank ahead of the 4V4S
and both bonds will carry
funds.
sinking
The debenture 3V2S will be
used, together with
Common
the
In
has just been announced
$11,079,626 compared with $9,-
795,899 for 1945, an increase of
13%.
Subsidiary revenues gained
$10,911,418 while expenses rose
$10,138,045. Without adequate de¬
tails, however, these figures cannot be compared with the esti-
earnings used
Treas¬
mated
ury
cash, to refund $50,000,000 de¬
benture
5s, and the new 4Y4S
above.
would be issued to holders of the
approval of the new plan by the
SEC staff is a strong point in its
some
preferred stock.
Public holders of the old
secur¬
ities
(with
dividend
arrears)
be required to make the
following exchanges: The 7% pre¬
ferred would receive, for each
share $110 debentures and IV2
shares of common.
The $6 pre¬
ferred would obtain $100 deben¬
would
tures and 1 y4
shares .of
common.
The second preferred stock would
receive 1 Vs shares of common, and
the present common
ceive only 1/25 of a
would re¬
share (the
forma
pro
the
While
tentative
indicated
favor, the usual
opposition has al¬
ready made its appearance. Coun¬
sel
for
the
Norman 1 Johnson
Group"of
Second
anodntin?
filed
a
Preferred°stock"
anTlesiidhethirthe"
onLp
would
Thi Prln hfa
it
plan of its own last Octo-
P^eCfefre°dUlsdt htve
the
ously (at the expense ofBondT/d
Share)
of Bond and
2nd
been
has
It
a
the
anticipated
that
might
of its properties,
was
serve
In
the
of
Col. Herbert G.
time
understood
is
it
czak
is
man's
that
ger
was
following President Tru¬
over-ruling of the earnest
Frank Keating for the
General,
German
.end
this year or early next
private financing to aid in
of
dispose of some
that
plan
Tel.
published,
was
one-half
as
with only
shares,
pro
were
then ^esti¬
earnings
mated at $3.37
plan
valued
Present
What would
stock be worth
Obviously it should
in
relation
similar
to
issues, but it is difficult to find
any
holding
company
stocks
which
exactly
are
time
comparable.
sold
ago
their
Government
portant
developments,
some* of the, Argentine properties
XXTCkY'Ck
were
<'ovnT»onT»i o+n/I"
"expropriated" by the Pro¬
of Cordoba last November
the amount of compensation
vince
and
Governments
will
By J. H.
4
-
;
full
contribution
a to v
,
Europe, U. S. private
find
other
apparently not yet been de¬
termined.
It was also reported
some
time ago that the Panama
subsidiary might be sold to uie
has
sound
increased
European
credit will
opportunities
countries
long-range
SOLD
m
for
investment,
Since the
Federal Water & Gas
West Virginia Water Service
.
Prospectus
on
Request
1879
Consolidated Elec. & Gas $6 Pfd.
New
England Public Service Pfds.
Portland Elec. Power Prior Pfd.
Gilbert J. Postley & Co.
29 BROADWAY, NEW YORK 6, N. Y.
<
Direct
.
he
Metternich and Talley¬
today we can get a
of the future from our
knowledge of
the qualities of
Marshall, Stalin and Bevin.
The
latter • we can almost eliminate,
because Great Britain now finds
herself in a position where her,
rand,
so
glimpse
interests are very
closely aligned,
of the United States
her best advantage to;
those
with
and it is to
stick very close
It was my
•.
good fortune
(Continued on
i1
' .1 • :
during^
page 41)
'*
to us.
"
of Trust Funds
WEEDON*
Vice-President, First National
Bank, Chicago
explains functions of trustees
earliest days, a
trustee has been
protect the principal amount of
was
expected "to invest in<^
such
a
manner
as
would insure
and a fair in¬
and legislatures
reasonable security
terest."
Exchange
at the annual
Paine, Webber, Jackson & Com
Established
of their
.
charged with a duty
the funds entrusted to
;
duties has, it seems
very
his care;
to me, changed
considerably.
Prudent Man Rule
At
have
dent
the
present time, 19
States
adopted the so-called Pru-1
Man Rule of Investments,
which is patterned on the Massa¬
chusetts rule first laid down in
severely restrictive 1830. For you who are not con¬
laws governing the type of secur¬
versant with the rule it may be
m e e t i n g, to
ity legal for trusts and, for the stated as follows: "All that can be
serve
for
a
most part, investments under the
required of a trustee, to invest, is
second con¬
various statutes were limited to
the he shall conduct himself faith-*
secutive
oneGovernment, municipal, and State
fully and exercise a sound discre¬
year term.
bonds, first mortgages, and first tion. He is to observe how* men of
Harrison
mortgage bonds. In simple langu¬
prudence, discretion, and intelli¬
Garrett,
age, a trustee was charged with a
gence manage their own affairs
Robert Garrett responsibility on the one hand and not in regard to speculation but
&
Sons,
and
on
the other hand told how he in
regard to the permanent <dis-;
Benjamin
H.
should discharge that responsibil¬
position of their funds considering
Griswold 3rd,
ity.
the probable income, as well as
Alex. S.Brown
I do not believe that the con¬ the probable safety of capital to •
J. Dorsey Brown
& Sons, were
cept of the basic responsibility of be invested." You can see that this
elected to the
a trustee has changed; he is still
precept is quite different :from *
governing
committee for two- expected to protect the corpus of the restrictive precept formerly 1
year terms, and John Redwood, the estate and to keep funds in¬
placed
upon
a
trustee. . The
Jr., Baker, Watts & Co., was re¬ vested at a fair rate of interest. shackles have been removed, and
But the concept of how he shall
elected to the committee for the
accomplish this discharge of his the trustee is now free to consider
same period.
the "trend
of the times," -with
The governing committee will
*An address by Mr. Weedon beprudence, and — always with pru¬
meet on June 9 for organization fore
the American Institute of
dence
to select those Investand election of other officers of Banking Conyention,
Detroit,
Southwestern Public Service
Public Service of Indiana
tlereagh,
Courts
BALTIMORE, MD.—J. Dorsey thereupon, with obvious distrust
Brown, of J. Dorsey Brown & Co., of the abilities of trustees to dis¬
was re-elected
charge this obligation, set about
P r esident
to prescribe what type of invest¬
of
the Baltiment a trustee should buy. Most
^Indiana Gas & Water
Puget Sound Power & Light
*
Heads Bait. Exchange
to the outcome
stability.
helpful to world stability."
QUOTED
key
problems then was to be found in
the characters of Alexander, Cas-
and "prudent man rule''
in making investments.
Cites difficulties in adjusting investments
in interest of both beneficial and remainderman, and gives illustra¬
tion of investment of $50,000 fund. Concludes common stocks
cannot afford in future any degree of value stability, and stresses
need of proper timing in making investments for yield or for
Mr. Weeden
the: rest of
Dorsey Brown Again
—
Asst.
<<A
to
BOUGHT
the
Investment
no
s the German economy is rebuilt by the Germans on a peacealthough ful basis, and comes to make its
over
to be in a situation very
analogous to that in which it
found itself when the Congress of
Vienna convened in 1814. Just as
appears
Present Problems
doubt tajsie form,
$90,000,000.
However,
thus far there-have been no im-
for
1944 when the old
common
marketwise?
be
share.
proposed.
was
new
a
some
-
holdings to the Peron
therefore somewhat
are,
better than in
the
,
many
forma
earnings
Military
Europe
Strange as it may seem,
greatest dan¬
At the time, he was pos¬
wild dream of a united
jthe over-all export-import pro-
share
the
with
TeZZlTt
economic reconstruction. Further of food-and drink and brilliant |
and more ProSress must be made, uniforms of the. Soviet officers
^'eotton^s'now betnfd'C® a"d diplomats that 1 had to pineh
cussed in Germany by our cotton ™ySelf t0 866 U 1
really
shippers' 0ther sialilar plana wil1 dreamlngbe discussed in connection with
reconstruction. By the
earnings on
the new common stock are estim¬
ated at $2.16. When the earlier
forma
most
Great Britain on the Soviet Union
critical and had become a fanatic on the
occupation economic problems in subject of Communism. However,
Germany.'
his sincerity left such an impres¬
"U. S. private credit has a role sion on me that later when I had
to play in the reconstruction of occasion to be present at some of
the European economy," said Mr. the receptions given by the Soviet
"This is true Ambassador at Washington -and
Szymczak today.
year,
Pro
tegic
attack bY France, Germany and
Governor's
continued assistance in the
position, with Stalin the
powerful human being in
world, in the driver's seat.
the
by
that had threatened Europe
and that unless it
crushed, it was bound to
spread.
American & Foreign Power
warrants would be cancelled).
find themselves
sessed by a
and
they now
occupying a stra¬
However,
desolation,
centuries
for
are
staggering and they have endured
all the ravages of war, famine and
mur¬
declaring
communism was the
Szym¬
pleas of Generals Lucius Clay
the
emphasis,
great
activity,
Mr.
remember
I
position
they
emerged from a
too much.
dered
again mak¬
his
Re¬
Here'
subse¬
quently
Nazis because he knew
his chief full-
Szymczak
S.
M.
King
R e-
System.
ing
serve
people today
just as confused about Russia
did.
The basic strength of
the Soviets has been that all the
outside world was their enemy.
I
as
Reichstag
and who
fire
Federal
income for the
system
as
his
d
as
ernors
1946 the
calendar year
net
has ree
member of the
$13 $15 $17
124 127 130 104
111 114 116 94
16 18 20 16
.5
.6
.7 3%
consolidated
m
u
duties
of—
Equivalent value
7 c,'o
preferred
6%
preferred
2nd preferred
Govern¬
Board of Gov¬
Value of New Com.__
Est.
in
more
s
Multiplier Receni
6
7
a Mkt
imagine a lot of
I
feel
now,
having
devastating war,
Zaharoff, Al¬ victorious over their two greatest
fred
Rosen- enemies and about to sit at the
b e r g
and peace table with their allies and
True, they have had to
George
Bell, friends.
the man who pay a very great price for their
later
staged victory.
Their losses have been
called
the German
ment for Ger¬
many,
Arn¬
Rechberg,
then
Office of Mili¬
tary
Brest-
Litovsk,
Division in the
multipliers of six to
eight times pro forma earnings;
and a value of 95 for the new
earnings
and
Bond
old
using
the .plan,
under
curities
while under the present
plan this drops to 67%. However,
plan
returned here from service abroad
as
director of
Tannenberg
and
Oil
the
:
over
Russians
the
at
the Economics
tained about 76% of the new com¬
new
to a conference
WASHINGTON, June 4 (Spe¬
to the "Chronicle")—Gover¬
nor M. S. Szymczak, who recently
new
friend, Sir Henri Deterding, of Shell
with General Maxmilian Hoffmann,
my
ago
years
me
victor
earnings. The following table will
indicate the values for present se¬
mon,
the
Some
invited
cial
average
the old plan
Bond and Share would have ob¬
under
issues have been selling to
about 12 times earnings,
issues about 6-9 times
pany
Under
securities.
operating com¬
utility
Seasoned
new
Secretary Marshall
worrying about war, and let
cease
handle Russian situation.
States
had
.
Wire to Chicago
•
the Exchange/:~
-;-JMich.',;June 3,
Volume 165
Number
4600
THE
COMMERCIAL & FINANCIAL CHRONICLE
Sees
Treasury Debt Redemptions
Drain on Spending Power
National City Bank of N. Y. points out current
redemptions come
from government
surplus and not from accumulation of excess cash
reserves
in
as
1946, and this will result in
drain
some
The June
the
Federal
financing
market.
money
The
and<£-
article
says:
Some of
the
retired
debt
the
demption
scheduled
of
$1
cash
billion
of
the
which
it
vested.
mature
the
June
on
1,
the
Federal
be
can
spent
the
But
securities
paid
rein¬
or
greater
are
off
of
held
com-
part
Government will bring its retire¬
by the Federal Reserve and
ment
of
merical
since
the
public*
total
of
been
of
the
$7%
debt
more
all
billion.
of
six
1947.
Federal
debt
to
up
June
should
debt
able
had
the
President's
The
this
retirement
down
to
budget
short
in
of
10
1946
in
were
last
cash
by
outgo
billion. *
In
being
cash
no
budget
age
a
an
ceipts"
example of
but
spending
pension
tax which
deferred
$1
which
still
drains
out of the
power
econ¬
The issuance to veterans of
omy.
leave
bonds,
due
some
of
withdrawn
from
hence, provides on example
"budget expenditures" which
do
not
years
contrast, debt this year is
paid off primarily from a
surplus, which means with
money
total
fund is
the
than
more
than
fre¬
is not counted in "net
budget re¬
banks;
exceeded
year
is
outgo
accumulating the old
accomplished
the actual intake of tax and other
revenues
cash
quently^ less
almost entirely by drawing down
idle government deposits held in
War Loan account with the
on
good
a
indicated by
expeditures. The tax collected for
whole. The debt redemp¬
tions
been
is
actual
cause
months of 1946, it has a
radically
different meaning for the econ¬
omy as a
government's net drain
income
represent immediate
cash
In the first four months of
1947,
outlays.
the
government cash income ex¬
ceeded its cash outgo by $4.4 bilr
lion, equivalent to an annual rate
spending stream, through taxation
multifarious forms,
sales of
surplus property, and other re¬
of
(Continued
Fund and Bank
on
2
36)
page
Jottings
contact
The Italians are
expected to apply for a
World Bank loan of perhaps
$250,000,000.
*
*
W.
W.
McAllister
ter
future
advances
going
into
previous
ten - year
(reached- at the close of
peak
1941)
and the first few months of the
current year have been far ahead
of the identical 1946 months in
construction lending by these in¬
stitutions.
in
policy of rpany
paying out money
for new construction requires that
the homes be pretty far along in
before
process
start
to
in
ume
the
disbursements
be. made.
the
of
He
therefore
mounting dollar vol¬
reported
home
construc¬
tion loans an indication that more
homes complete enough to move
into are going to be built this
spring than last.
"It
is
certainly far too early to
as
a
big disappoint¬
1947
ment in the
production of homes,"
said Mr. McAllister.
"While home
for
$
Recent
$
$
Foreign
be
the
First, let
examine
us
struction
because
of
ing
Thomas S. Holden
as
maintained
a
statistical record of contemplated
postwar projects in the 37 eastern
States.
At the end of May 1945,
the cumulative total amounted to
$15,746,000,000.
Of this total 73%
contemplated
public
Dodge discontinued
this particular cumulative series
after May,
1945.
However, the
construction.
"Engineering News-Record," hav¬
ing started a similar series cover¬
ing the 48 States in January, 1943,
has continued
it
a
as
cumulative
the
Bank
cumulative*; total
$37,515,000,000, of whi£h 77%
was
rep¬
resented public construction.
A mere recital of these two sets
of
figures is- adequate proof that
they do not indicate either the
relative magnitudes of public and
Administration, the associa¬ private
tions lent
much
as
$103,868,000
as
in the two middle winter months
homes.
new
The
1947
in
such
non-seasonal
a
as
February, this
decade
construction needs or the
probable future relationships be¬
tween the two, whatever value
the
construc¬
pattern of the 1930's
model to be
a
sider
Corporation
1947,
(latest 'month
for total
report), the loans to build
new houses picked
up in January
and have been climbing.
recommend
tion activity
through
February
construction
1930
60% less than in the preced¬
decade.
Few people, if any,
would
through May,
1945,
F.
W.
represented
the
in
were
Sep¬
Dodge
Private
expenditures
projects.
From
1920-1929.
expenditures was high
private construction was
low.
very
post¬
construc¬
tion
applied
was
The percentage of
public construc¬
tion
expenditures to total con¬
two
planned
war
in which every
stimulus
decade,
we now
tabulations
period
a
ume, was only 3% greater than
the public construction volume of
the
preceding
fol¬
in
up to the present
A% of the end of
February,
interpreted in two building month
is
to
lowed
theoretically
Perhaps
activity.
in order to attain maximum vol¬
time.
"Even
Bonds
decade,
conceivable
the
to
three
among
construction
<$>-
backlog series
figure
in the
$
Market
sum-
purchase loans by the associations
continued to decline from Odtober
compares with $61,673,000
European Office of the World Bank will prob¬
same two months of 1946, a
ably be established, President John McCloy has indicated.
gain of 67%.
Poor
choice
a
public
tember, 1942
He adds that the
sees
ly
home construction had passed
the
associations
that
municipal spending for improvements.
more
face.
new
to
first phase of
asserts
most like¬
W. McAllister, San
Antonio,
League's President points out,
the amount of savings and loan
to finance
#
More Than One
clue
a
one
began to be gathered on a monthly
basis by the Federal Home Loan
visiting Washington have been in
*
the end
1946, Wal¬
By
of
Corporation
industry situation similar
mary of the
three will give
homes.
"For the first time since figures
(From Our Washington Correspondent)
Two Foreign Missions
with the Fund and Bank.
to
use
count
the
brief
association
Spending Power
regularly much
greater than "net receipts" un¬
der the budget, and,
secondly, be¬
$23
last
on
1 i es
fami-
build
urges
Recorded statistics offer
possible patterns of postwar
low
and
construction
sees
spending and
money
moder¬
income
HOLDEN*
next ten years if
building expansion maintains its normal relation¬
ship to national income. Scores public construction through deficit
a
half
a
the
the amount of the budget surplus.
This comes about, first, because
last
the
the
investing in
or
the
ate
is
avail¬
money
spending power has
deal heavier than is
$7% billion of debt
falls
redeemed
the
spending
Drain
The
cash
While
in
result
ago
cer¬
bring
January.
billion
for
the
and
the hands of the people.
$257 billion, $3 billion below the
figure foreseen for June 30, 1948
in
banks
reduction
a
is
This
than
months
The
redemption
total
year
retirement
anticipated
tificate
the
turn
marketable
fur¬
from
S.
shortage has
passed and peacetime production is being stepped up.
Sees price
stabilization approaching and says we can avoid a
depression in
tradi¬
third to
of
where
certificates of indebtedness which
for
which
Holden
following World War I and
as-
sociations
redemptions put the money back
re¬
Mr.
savings
tionally
THOMAS
President, F. W. Dodge
of
loan
is held by the general public and
With
a
or¬
nish
ceipts.
By
na¬
the.
issue of the "Monthly Bank
Letter," published by the
National City Bank of New
York, contains a review of the effects
Construction Outlook
officers of the United States Sav¬
ings and Loan
and
9
Public and Private
cur¬
loss in solving the
housing shortage is voiced by the
ganization
deposits. Reports investment funds still in
plentiful supply, but notes decline in genuine risk capital.
recent
writing off the
on
tionwide
since it reduces bank
of
Caution
rent year as a
League,
spending,
on
Mortgage Loans Rise
(2985)
it
followed, or con¬
likely trend for the
a
as
next ten years.
There remains
a third
alterna¬
tive pattern for examination and
appraisal, the construction record
of the decade 1920-1929. That dec¬
ade
was
a
postwar
period.
started with
It
backlog of deferred
demands,
it
went
through early phases of reconver¬
sion, price inflation and deflation.
It was a period of
general expan¬
a
construction
sion of the American economy. In
many quite important respects it
records a situation similar to the
present
In
<
»'(
Hi
one.
Price
Stabilization
Phase
'
'
At
the present moment we
in the same phase of
postwar
are
re¬
covery that we were in in the year
1920, the price stabilization phase.
We have completed the first
phase
of shortages and rapid
stepping up
of peacetime production.
It is to
be hoped that the
postwar price
inflation and major labor disturb¬
they may have as indicators of ances characteristic of earlv post¬
phases of the construction war recovery are also behind us.
picture. An extended period in Fortunately there are a number
which public construction dollars of reasons for
believing that the
other
would
outnumber
struction
dollars
private
to
3
1
is
con¬
quite
present
phase,
commoditv
price
and construction cost
stabilization,
will pass without the serious de¬
Washington.
One view is that it is a bad sign for the year's construction loans reached inconceivable for the American
flationary aspects of the 1920-1921
forthcoming issues of World Bank securities, while the other inter¬ $52,723,000, which was more than economy as we know it.
Another statistical record we depression. I consider the current
in March of 1946.
pretation is the opposite: "Investors naturally
This does not
prefer an obligation
recession in construction
backed by 45 nations to one backed
activity
by just one borrower, and look as if the building of homes might examine is that of the 19301939
therefore will wait until Summer when the
decade, a period in which as a necessary adjustment of an
first World Bank offer¬ is slowing down to anything like
unbalanced
the low point which the alarmists public construction was a factor
market
ings will be made. It is only another couple of months."
situation
(Continued on page 37)
seem
to be trying
to establish. of much discussion and relatively
ways
in
Even
London
Site
of
Meeting of Fund and
won't be changed,
according to Mr. McCloy.
ernors
*
Bank
weeks in
Executive
*
"
*
Bank
*
Director Beyen returned
recently from
Europe.
*
World
*
*
Gov¬
nearly perfect.
*
*
sH
League's
3,600
IBRD
the
are
of
opment.
Neither
nor
that
the
the
initials
the
fact
special
on
International
Bank
that
for
the
books
of
matches
Reconstruction
matches
and
used
by
Devel¬
and
member
with
begun
in
hoped,
it
fewer
printed in silver is viewed
are
*
slovakia
will
*
predictable:
seems
be
as
*
blue
are
to
the
associa¬
homes
new
having
any
announced
before
No
loan
the
Bank
to
Poland
or
approaches
Czecho¬
construc¬
REAL ESTATE
tion.
Even
these
figures must
be
viewed in perspective for sound
interpretation of their significance.
the
U.
S.
This is not to imply
standpoint of the Truman Doctrine Poland and Czecho¬
in the same category. Czechoslovakia
may be described
.
.
.
Gov.
Hotel
Clinton
2-4s
2s
1958
1956
Greeley Sq. Bldg. 6s
slovakia
"borderline case."
Colombia Is Believed
*
*
4!
apparently large volume of
public construction in the 1930
*An address
★
★
Membert New York Stock Exchange
by Mr. Holden at
Memberi New York Curb Exchange
conference
of
the
Mu¬
40 EXCHANGE PI., N .Y.
Bell
Corp. 5%s 1956 WS
Westinghouse Bldg. Part. Ctf. CBI
1951
WS
2
Park
10
Wall
48th
1955
%
East
40
Bldg. 5Y2s 1963 WS Manqueen Corp. l-5s 1952 WS
s
Savoy Plaza 3s 1956 WS
World Bank circles
one of these
days formally indicates
World Bank loan.
★
SHASKAN & CO.
Sherneth
Lexington Units
New York Athletic Club 2nd 1
Seeking Bank Loan.
•
The
Firm
WS
WS
New York Athletic Club 2s
*
SECURITIES
Dlgby 4-4950
Teletype NY 1-953
OFFERINGS WANTED
Beacon
Lincoln
.
public
covered
of
or
nicipal Finance Officers Associa¬
tion, New York City, May 26, 1947.
Hotel
are
$20,000,000,000,
annual
enough starts to push the GI
loans volume into new
high dimen¬
*
investor with its first securities this Summer.
a
$48.421.000 000,
were
were
that from the
as
decade
which just over
April than some had
is obvious that there
Whether the Truman Doctrine is
having any effect on the World
Bank's lending plans the reader is free to
guess for himself.
One
however,
to
the De¬
sions for 1947."
initials
covers
special significance.
thing,
According
over-all estimates of
41.4%,
bulletin
tions all over the country, Morton
Bodfish, Chicago, Chairman of its
Executive Committee, said:
"Even
directors
significance.
the
der way."
In
a
recent
*
Management thinks its job no picnic.
But, taking
advantage of May weather, the Bank had a picnic in
Washington's
Rock Creek Park.
The attendance record was
,
high
partment of Commerce, total con¬
struction expenditures during that
mainly to be accounted for by the
several fact that more new houses are un¬
Bank
*
allowing for some rise in
building since this time
the cost of
last year, it is obvious that a 37%
increase
in
dollar
volume
has
September
Ave.
40th
St.
2nd
3s
1946
St.
6s
1956
5s
1966
California & New York
WS
St. Realization 4s
1952
61
1955
WS
Realty
WS
Real Estate Issues
Broadway Corp. stock
79
870
7th
Corp.
Ave.
5s
Trading Markets:
1948 WS
41/2s 1957 WS
will not be surprised if Colombia
its intention to apply for
There
nection.
-
has
also
.
.
been
,
a
some
talk
about
Brazil
in
a
similar
Amott, Baker & Co.
con¬
Incorporated
.
'
Chile's
application is said to be marking time, under preskiire of
the bondholders, until the atmosphere clears.
150 Broadway
Tel. BArclay 7-4880
New York 7, N. Y.
Teletype NY 1-588
J. S. Strauss & Co.
155
Montgomery St., San Francisco 4
Tele. SP61&62
FVhrnok8515
COMMERCIAL & FINANCIAL
THE
10
(2986)'
Thursday, June 5, 1947
CHRONICLE
Oil
The Outlook for
Dealer-Broker Investment
demand but
send interested
to
express
firms mentioned will be pleased
parties the following literature.
on
to
petroleum industry's major
lay plans and build facilities*
demands
sat'sfy unprecedented
for oil.
f
to
appraisal—Stroud
&
Company,
Incorporated, 123
South Broad Street, Philadelphia
and
Valuation
9, Pa.
available is a
Also
valuation and
Equipment
appraisal of Railroad
'
'
I
Philadelphia Bonds —
of
City
& Elevator
Inc.
Colorado Milling
and Bird & Son,
on
Co.
discussing the outlook before
In
a
the In¬
meeting of directors of
Association
Petroleum
dependent
Engineers
prob'em at present i)
May 10 that the
of America at Jackson, Miss.; L. F.
Public Service —
Hentz & Co., McCollum, coordinator of produc¬
Street, New York 4, ing, and Howard W. Page, head of
the Coordination and Economics
——
—
predicted
a
demand fcr oil
;n
as
Beaver
N. Y.
Also
■
J
a
of industry
number
groups
in
cycle—G. H. Walker
Wall Street, New York
the 1919-1921
-
&
1
Co.,
•
5, N. Y.
Company
world
requirements for crude oil,
foreign government requirements
for revenues, and concession re¬
f
asking.
the
,
.
,
Shortages
1
Priced Dividend Pay¬
Ten Low
Stocks—List of companies in
; diversified industries which aping
;
growth and
pear attractive for
market appreciation
Pine Street, New
Heller & Co., 30
York 5, N.
Stanley
—
Inc.—Analysis— equipment;
Park,
Fashion
to/reCr
oil products rose
mand for
velop the. properties but you must
lay- pipelines,
build
marine,
freight, and oil terminals, con¬
postwar de¬
that the
fact
The
Seligman, Lubetkin & Co., Inc., 41
Broad Street, New York 4, N. Y.
structs refineries', operate tankers,
instead of dropping off
had been expected. ''''/V/;,////:,
ord levels
available are analyses of
Tennessee Products and Consoli¬
Also
as
While
1
date Dearborn."
Y.
quirements similar to lease obli-s
gations in this country. ' /; ; f!
"In practically all instances," he
said, "you not only have to de¬
V
of materials/for new
.>
..
V, .I:
•:
.
bring the total demand
asserted
McCollum
Mr.
foreign oil
He
pared with those of this, countryis
controlled
by three factors:
A
capacities;
differences
pointed out that the rate of de¬
velopment of foreign reserved—
which has been very slow as com¬
The Babcock
on
conver¬
developments and operations.
special memoran¬ during the war years and/to carry
on
normal replacement and/ex¬
& Wilcox
pansion of pipeline and refinery
many also be had for
Edison.
nia
dum
fundamental
between domestic and
.
'
for
.
nightly
-
materials
raw
to
several
available
-
of heating fuels, may
competitive with crude
gasoline and other petro¬
leum products, thus helping meet
the expanding worldwide demand,
Mr. McCollum, in discussing the
world oil picture, said there are
is the "Fort¬ Department of the Standard Oil
Company (New Jersey), said that
Investment Letter" con¬
the problem was created not by
Industry
Performance in the
taining information on New York,
lack of crude supplies, but mainly,
Stock Market, 1919-1921—MemorChicago & St. Louis, Cities Serv¬
because of these reasons;
andum and table showing action
ice Company, Chicago, Burlington
of the market as a whole and of
Inability to do sufficient drilling
& Quincy, and Southern Califor¬
Certificates.
gas and coal, which are
competitive with crude oil
source
as
sion
Memorandum—H.
60
a
become
oil
continuing
prod¬
ucts-throughout the wcrld during
the next five years.
H's forecast
exclusive of Russia, was for a lise
of 2,100 000 barrels daily by 1951,
or of 30% over 1946, which would
Mr. Page
increase
j
'
,
natural
expressed belief
(N.J.) company executives
Oil
'
.
Page also pointed out. that
Mr.
now
Standard
Two
understood that the
It is
ter.".
few years. Foresees unprecedented
confidence in creating-new supplies.
demand and supply over next
and Literature
Recommendations
problems in petroleum
Oil officials tell of major
Two Standard
able before the end of next win-
up
and provide bulk plants and fill¬
to 9,t ing stations—and all for the pur¬
• / '■*
pose of marketing the crude.
To
400,000 barrels a day.;.
.
Finch Telecommunications — tl^t in face of probable require¬
serve
these facilities, you must
By areas,, he forecast for the
ments over the next few years
build highways/ railroads, camps,
Analysis—Troster, Currie & Sum¬
five-year period an increased de¬
the - oil
industry is "really ' up
mers, 74 Tfinity Place, New York
mand - of
23%
for
the United hospitals, schools, and modern ihagainst it to satisfy growing de¬
dustrial
establishments — some¬
6, N. Y.
States, 32% for the rest of the
mands," he expressed conviction
Western Hemisphere, and 50% for times whole cities—where jungles
that it would not fail to solve its
and deserts often existed formerly,
Fire
and
Casualty Insurance
the Eastern Hemisphere.
;
problem.
'
•
"As all this cannot be done on
Stocks earnings
comparison for
"New transportation and refin¬
"But even with good breaks,"
the spur of the moment, develop¬
1946—Laird, Bissell & Meeds, 120
he said, "it is going to take lots of ing facilities are under way," he ment
of foreign crude reserves
Broadway, New York 5, N. Y.
crude
production requires
hard work, common sense, and co¬ said, "but, with material shortages and
careful planning and a long, long
and
slow deliveries, very little
Fort Wayne Corrugated Paper
t
six
the
covering
Study
'
Industry
Rubber
and
Tire
companies in the field —
Barney & Co.,
14 /Wall
New York 5, N. Y.
Corporation—Circular
Aspinook
Co.,
&
—Ward
Broadway,
120
5, N. Y.
New York
available
Also
largest
Smith,
Street,
*
*
*
—
are
memoranda
and Taylor
Wharton Iron & Steel; Purolator
Products; Upson Corp.; United Ar¬
Corp.
Lanova
on
tists;
Mfg.
operation
stock — Descriptive
brochure—David A. Noyes & Co.,
208 South La Salle Street, Chicago
Co.
common
Franklin
Detailed
memorandum — Bear, Stearns &
Co., 135 South La Salle Street,
Chicago 3, 111.
Deep
&
Oil Corporation —
Doyle, O'Connor
—
Co., 135 South La Salle
Street,
Chicago 3, 111.
Co., 231 South
Chicago 4, 111.
Also available
&
La Salle Street,
—
Comstock
•
"
are analyses oi
Mfg* Co., Long
Bell Lumber Co., Miller Manufac¬
turing Co., and Old Ben Coal Cor-
Press
poration.
R. Hoe &
Co.—Analysis—Adams
231 South La
Chicago 4, 111.
& Co.,
Memor¬
andum—Buckley Brothers, 1420
Walnut Street, Philadelphia 2, Pa.
Also available are memoranda
Corporation
The
—
Long-Bell
.National
Distillers
—
Memorandum
& Co., 1 Wall
York
Invest¬
interested
and
Securities Dealers,
5,
New
Bankers,
New
Public
Service
National
Public
Ira Haupt & Co.,
Broadway, New York 6, N. Y.
—
Co.—First quarter
Unterberg
Financial Institutions upon
Pacific
Northern
Memorandum
request.
M.
A.
St.,
N. Y.
England
Co.—Analysis
Ill
ment
Products
—
Kidder
analysis, 1935-1946,
to
" i
Corp.
4th Edition
complete
Bell Lumber Companycontaining
complete
Long
Brochure
111.
Brochure
available
Salle Street.
analysis from 1935-1946 available
on
request to investment securi¬
ties dealers, bankers and financial
institutions—Comstock & Co., 231
South La Salle Street/ Chicago 4,
Lumber Company
A
49 Wall
Also
—
Railway
—
is
available
Also
and
Inc.
of
analysis
an
Textiles
Rome
well,
Salle St.
Dearborn T501
Teletype CG 955
Marshall
Spring
Street,
—
647 South
Angeles 14,
Calif.
,A.
■
Circular
Gen¬
Wilcox-Gay Corporation
Terra-Life
&
—
—
De¬
memorandum — Aetna Se¬
curities Corporation, 111 Broad¬
tailed
.
New York 6, N. Y.
available is a memoran¬
Also
on
York Corrugating.
Circular—Caswell
Co., 120 South La Salle
Street
*
With William C. Roney
Chicago 3, 111.
York
affiliated
Co., Buhl
of the
Detroit
Stock
members
Building,
COMMON STOCK
become
Roney &
with. Wm. C.
Hamilton Manufacturing Co.
and
Co.
MICH. —George H.
has
Williams
SIHCE1908
L
Cotton Mills
Mohawk Val¬
Investing Co., Inc., 238
esee Street,
Utica 2, N.
.DETROIT,
Fred.W. FairmanCd.
—
ley
dum
Max¬
& Co.,
Los
—
way,
Pacific-American Investors, Inc.
—Detailed memorandum
CHICAGO 4
Inc.
offering
an
circular on Stern & Stern
Cable Corp.
COMSTOCK & CO.
& Mohawk
Utica
Trus"
Broadway
61
Co.,
&
&
Bank
analysis—C. E
New York 6, N. Y.
Vilas & Hickey,
Street, New York 5, N. Y.
available is a leaflet of
current Railroad Developments.
231 So. La
AND RESERVES
PRODUCTION
WORLD CRUDE-OIL
Corp.—
Coal
County
analysis
Detailed
Hydraulic
Rock
Eastern
time."
capacity will become oper-
new
1
Service" Co. —;
Memorandum
the part of every¬
Concrete; Barcalo 4, 111.
Vacuum
Cities
on
one."
New
Ex¬
Bought
*
A Prospectus
Utility
*
,
Sold
.
.
.
Quoted
With Interstate Sees. Corp.
Special to The Financial
5y2's of *52
John has
CHICAGO 4, ILLINOIS
i
.
System
CG
537
York
\j\J a
.
"
Members: Chicago
St.
become associated with
|
PHONES—Daly 5392
Interstate Securities
Stock Exchange
225 EAST MASON ST.
Telephone Randolph 4068
Direct Private Wire to New
Bell
Chronicle
CHARLOTTE, N. C.—Bruce
208 SOUTH LA SALLE ST.
Chicago: State 0933
f,
t
; •.
Peninsula Power Pfd.
Cleveland and
today 10,000
shares of Upper Peninsula Power
Co..
cumulative preferred; stock.
"Otis
&
Co.
of
associates are offering
51/4%, series at $104 per
yield about 5.05%.
i
mercial
MILWAUKEE (2)
Teletype MI
488
John
share,to
"t\
.
..
organized' in.
February, 1947 to acquire Hough¬
ton
County Electric Light ' Co.„
Copper District Power Co. 5 and
Iron Range Light & Power Co.,.
all serving with electricity terri¬
The company was
in the
Michigan.
tory
The
Upper
properties
Peninsula of:
are
Copper Range Co.,
Furnished On Request!
Upper
being
ac¬
quired from Consolidated Electric;
& Gas Co., Middle West Corp. and!
changes.
Central Public
Otis & Go. Offers
Bank
was
Corp., Com¬
Mr. St.
Building.
formerly with First Se¬
curities, Corporation,,*
.
V
which will be
principal owners of the new
company's common stock.
1
the
..
Proceeds
from
the
sale of
the
preferred stock and $3,500,000 of
first' mortgage
bonds, together
with
entire
used to
the tnree companies being
the
common
acquire
new
stock,
company's
will
merged into the new
be
company.'
>,
Volume
165
Number
4600
THE COMMERCIAL &
FINANCIAL CHRONICLE
(2987)
Pennsylvania Brevities
Warner
yet to be determined is the
extent,
if
any,
to
which
Philadelphia
1
Company and Wawaset Securities Merged
Ralph
At
*
special stockholders' meetings held last Thursday, approval',
Straws in the wind indicate
given for the formal merger of Wawaset Securities Co. into its!
.operating subsidiary, Warner Company, and the distribution of xhe ^complete subordination, leaving
former's holdings of
241,800 shares of Warner Company, common* t6' ^Philadelphia Company in con¬
trol
<
central-mixed concrete and
ufacturers
of
limestone
and
man¬
its productive capac¬
30%.
The
management
ity by
foresees
the
!i
capacity operations
next five
The
to
seven
000
the
of
common
in
the
term
management's
its
nance
out
;
short
per
stock,
of
eries
expansion
current
Despite
a
of
desire
it
to
for
be
semi-annual
r
The
of
that
the
broader
"floating
supply"
common
next
be¬
ment
to
seek
Philadelphia
York
Philadelphia's
a
*
can
indi¬
fin
the
full
price
John A.
of
\
•
by
the
Benjamin Franklin
and
the
West
River
Parkway
Drive.
,
the
Securities
&
R.
Hallo well,
©f Hallowell,
and
his
Sulzberger &
President
Civic
of
the
Association,
organization
that
this
through
cost
on
Dec.
5.
be
rural
nature
cost
condemna¬
a
low
in¬
The Main Line group de¬
clared that the proposed park-
the
H.
Grand
and
men
*
t
way,;would
become
part
of
a
»
&
Electric
Cd.,
Nicolls, general
Rapids.
Cele¬
of
control
Company,
with
plan,
Standard
which
of
extension
of
the
out
of
*
Penna.
women.
is
first
Co.,
*
latter
be
it;;
his
into
company. The new
Company
the
*
of
owner
nine
West Virginia
single
a
?
lie
L appreciate
more
publicity
nection
;
and
"the
value
of
relations
part
an
expanded ef¬
000,000
of
P.
B.
A.
companies,
i
coming-year.
related group, that the public in¬
terest is well served and that op¬
are
-
James
H.
full
last
the
on
comple¬
the
■
B.
Conly, Pittsburgh, to fill
unexpired
term
of
few additional steps yet to
These
are
easy
to de-
tine and do not present anv diffi¬
cult financial problems.
justments
The
ad¬
necessary
are
consid¬
ered to be facilitated by the
type
American
con-
first
period
four
9%
up
for
were
Empire
operating
election
Empire
The
is
one
an
Co.
Gas
the
Pittsburgh Rys. Co.
year
Sterling Motor Truck
four-
equivalent
Nazareth Cement
Warner Company
of
H. M.
Byllesby & Company
PHILADELPHIA
an-
Investment
OFFICE
Stock Exchange Bldg. Phila. 2
Telephone
follows:
President,
Marguerite A. Campbell, A. C.
Wood, Jr. & Co.; vice president,
Marjorie A. Dechert, Whitp, Weld
& Co.; treasurer, Sarah Jean
Wag¬
ner
Montgomery, Scott & Co.;
secretary, Jane A. Crispin, Stroud
& Co.
-v."'
v
■
Teletype
RIttenhouse 6-3717
PH 73
,
,
.
Ben Franklin Hotel Com.
Hotel
Phila.
Joins Howard,
to
Phila.
has
Transportation Pfd.
Transportation 3-6s 2030
Catawissa RR. Pfd.
The .Financial
Chronicle)
ORLEANS, LA—Geo. B.
Riviere
Keystone Com.
Phila. Warwick Com.
.
been
added
to
the
staff of
Howard, Labouisse, Friedrichs &
Co., Hiberriia Building,
members
of
the
New, Orleans
Stock Exchange.
Samuel K. Phillips & Co.
Members
Philadelphia
Stock
Exchange
Packard Bldg., Philadelphia 2
Teletype
N. Y. Phone
PH
"
375
COrtlandt
7-6814
the
late
Joins Foelber Patterson
(Special
:
FT,
to
The
Financial
WAYNE,
Casebere
is
Chronicle)
IND.—Homer
with
L.
Pennsylvania
Foelber-Patter-
sbn, Inc., Lincoln Bank Tower.
and New
Jersey
Municipal Bonds
h
Available Publications
Dolphin & Co.
Pittsburgh Railways Co.
consisting of 53 corporate en¬
system
Steel
Southern
substantial
tities operated under trusteeship.
All factions at interest are
agreed
that a reorganization of the rail¬
Board
months
over
Women's Club of Philadelphia re
as
Box
Botany Mills
^
with the
now
HAnover 2-2280
WHitehall 4-2400
since Oc¬
tober, 1945. He named B. Frank
Morgal of Gamp Hill, Cumberland
County, whose term expired April
1, to a'new 10-year tenure and
John
New York Phones
-
257
$20,-
in
PHILADELPHIA, PA.—The
NEW
Duff
five-member
ment for the first time
retention on the allegation that
the nine companies which it
pro¬
poses to retain constitute a closely
of
Labouisse Staff
Pennsylvania Public Utility Com¬
mission, bringing the agency up
Philadelphia Company has thus
the
to
;
month filled two vacancies
its
Teletype PH
Inv. Women's Club Elects
p. U. C. Appointees
Governor
to
for
: Earnings
nual
Street, Philadelphia 2
Locust 7-1477
87 cents per share.
(Special
;
.
Valuation and Appraisal
Fidelity
K-
'
Philadelphia
Philadelphia—PEnnypacker
York-—HAnover
'New
Bell
important factor
Building
Telephones:
*
RAILROAD EQUIPMENT CERTIFICATES
Trust
PHILADELPHIA 9
-
immediate
System
5-4646
2-9369
Teletype—PH
299
Valuation and Appraisal
CITY OF PHILADELPHIA BONDS
'
in
''
Phila. Elec. Co. Common
*Nor. Ind. Pub. Serv. Com.
Western Pennsylvania
Copies
on
Request
Harshaw Chetn. Co. Common
Issues
'"Roberts & Mander Common
Direct Wire to New York
City
CHAPLIN
and
STROUD & COMPANY
COMPANY
Members \
N. Y. Stock Exch.
Pitts. Stock Exch.
New York Curb Exch. (Assoc.)
■
a
Common
company
1948
said
He
were
month
Heating
Co., and Pittsburgh
Railways Co.
of
end
program.
i to
at
Chestnut
Phila. Phone
the
story
of
banking
throughout" the state during the
Real Estate
erating economies
the
on
Spread
Gas Co., Ken- 0
,
com¬
1421
company's $115,five-year construction
suited
said,
the
public
He will foster
company
are
2039, Pfd. &
H. N.NASH&CO.
with
revenues
munity,"
fort
become
*
tucky & West Virginia Gas Co.,
Equitable Auto Co., Equitable
recommending United Gas
Improvement common stock as an
be taken.
3-6s
$25,000,000 securities
the
i of 1947
"The longer I am in the bank¬
•
Philadelphia
would; then
ers are
ity Holding Company Act, there
Philadelphia Transportation Co.
Light Co.
stockholders
to
before
Mr. Shotwell has spent
business
life
in
the
business,"
&
meeting that
contemplates the sale
tional Bank 38 years
ago.
Co.,
Cheswiek and Harmar R. R. Co.,
Equitable Gas Co., Pittsburgh
&
entire
Power
told
000,000
Presi¬
between the bank and the
owns
.
merged
Trading Department Active
is in substantial compliance with
the provisions of the Public Util¬
Stocks
es¬
*
.
| annual
Bank, has been elected President
of the Pennsylvania Bankers As¬
*
under-valued equity. It is point¬
ed out that, although the
between
and Los Angela
def¬
'
;
Williamsport National
Pitts -
deal¬
Wire System
Philadelphia
quarter
United Gas Improvement Co.
investment
Private
Philadelphia, New York
Bank & Insurance
itself
Oakes,- President
of
Pennsylvania Power & Light
1
ago.
dent of the
hurgh-Harrisburg Turnpike.
Pennsylvania
Exchange
that
E.
*
■j" George Porter Shotwell,
Gas?
Philadelphia
would
the
"must."
tapping
Curb
York
Los Angeles
Pittsburgh, Pa.
Hagerstown, Md.
N. Y. Telephone—WHitehall 3-7253
earn¬
declines has been
,
than
more
'
stock
future
include
Re-
'
that
ways
should
market
-
■
; - •
New P. B. a. President
•
ing
company
proposed
system which in the not distant
an
at
plexities" cited by the SEC in its
simplification
order
has
to
do
would
tion."
into
William
\ 2,000
,
in¬
virtually
the
is of
volving
low
as
-
'speaker.
tional field force
against the company by the
whole territory
which
the
highway
and
passes
that
'
reorganization
own
under unified management. r / w
One of the insupportable "com¬
crossroads
no
Merion
"convinced
only
entrance to the city,
volved
Co.
states
is
the
is
partner
office.
main
Pittsburgh utility
far based its
argument in favor of
Henry
Convention
brants included 1,200 employees
from the home office and a na-
con¬
Allegheny. Steam
of
of
earnings.
Stevenson, President,
the
agent
including Duquesne Light Co.,,
ation
tablished
into
i sponse greetings were extended
.
©f
ready acquired an 80-foot rightof-way from Philadelphia City
Line to Green Lane, West Manayunk, the eastern end'of the pro¬
posed parkway. Leading into the
city, the drive will be a continu¬
the home
underlying
support of all civic and
community associations along the
Main Line. The State Department
Highways, by purchase, has al¬
said
is braking
"sellers'
with
tied
C.
*
is
high-speed
dual lane highway leading from
the heart of Philadelphia to Val¬
ley
Forge, and
by-passing
all
heavily populated areas has won
and
sible price
banking business, starting as mes¬
senger boy for the Steelton Na¬
present its
Under
Valley Forge Parkway
a
sales
quarter, increas¬
competition
felt
na¬
sociation.
SEC
of
York
initely over." He reported $1,300,000 inventory reserve
against pos¬
na¬
a
President.,
ing
Hall,
where the celebration"
originated
company will be permit¬
retain all or most of its
to
tered
Stock Exchanges.
Construction
and
of
•
plan in conjunction with hearings
on
the
simplification order en¬
the
on
New
wire
Philadelphia
Stock Exchanges
Member
New
quarter
far in second
so
are
the
was
hookup
of
York,
Walnut Street, Philadelphia 2
ings levels have been maintained
cities
to
Warner
listing
and
miles
86
of
observance
New
1420
Corp.
while first quarter sales and
dinners
During the month, Philadelphia
Company was granted permission
of the
lead the manage¬
may
in
si;
,
agencies
Feature
telephone
10,000
operating subsidiaries or whether
it will be
compelled to reduce it¬
self
to
a
simple gas company
utility.
;; •'
market
of
general
New
Also
*
first
Ballantyne,
with
simultaneously
where- its
tional
.
lieve
afforded by the increase
centenary
maintained.
-was
before
holding
Warner
dealers
the
market
the $370,000,000
issues
begin
Investment
held
;•
tionwide
Exchange Commission in proceed¬
ings which will determine whether
ted
will
the
*
tinued
gross and net
distribution
week.
and
of
Throughout May, hearings
reports.
Wawaset
'its
ed
Philadelphia Co. Sweats It Out
Company shares formerly held
by
!>.
Now. entering -its second cen¬
tury, Penn Mutual Life Insurance
Co., founded May 25, 1947, mark¬
have
relationship
between
value
(
current
customarily
company
net
.....
are
tially
1946 period in both
The
*
Request
BUCKLEY BROTHERS
Members
steel
period, were announced by Philco
Corp. in reporting $1.10 a share
earnings for the quarter. John
>
proper¬
the stock.
reported to be substan¬
ahead of the comparable
year
expected
assets
deliv¬
concrete
the
securities
realistic
more
by the recent strike of ce¬
ment mill employees
along the
eastern
seaboard, Warner ' Com¬
operations
Record
major
Son, Inc.
on
_
fi¬
caused
pany
*
Memos
$50,187,000,
exceeding
previous
high of $49,132,000 in fourth 1946
.
Net
plification, it is believed that
cated
central-mix
.
.
and
.
pres¬
the
Bird &
*
Co.
stainless
Philco
Penn Mutual Life
plus investments
operating
•
•
ties. Over a period of time, as
the company completes its sim¬
is
program
of
of
share.
per
resolve
Steel
of
«
in
be
estimated value of about $19
share which is only slightly
consolidated
earnings.
.deferment
value
to
to
Wood
Los Angeles
sheets.
problems.
below
present
market
price,.
This figure gives ho considera.tion to the substantial value of
earnings
since
$34
marketable
an
;
ed tp $2.92 per share.
Present
dividend policy is conservative
and
will probably
remain
so
the
of
current assets
thereon which, in 1946, amount¬
over
asset
appears
pected
Alan
production
•
v
years.
applicable
underlying
common
The
Eastern Corporation
Colorado Milling & Elevator Co.
*
manufacturing facilities for the
re-
have '
ent hearings, which will con¬
tinue throughout
June, are ex-
theoretical
the
equity
claims
Trustees since 1938.
liquidation,
excess
distribution does not in¬
shares
nor
the
on
what
public
s!t
11
ap¬
expired
Jessop Steel Co. that they have
integrated their technical and
prior treatment.
The
big prize consists of some $23,000,000 in cash piled up bty the
1,566,378
of immediate
the
over
crease Warner
Company's out¬
standing capitalization of 475,.
Viewed
basis
increase
with
after
by
received
company's assets!
capital structure1
simple
which consists solely of
shares of capital stock. '
products
for agricultural and chemical
use,
recently embarked upon a $5,000,000 expansion program
designed
to
the
and
mains
whose
have
Announcement has been made
"
."Wawaset stockholders in the ratio of 1.9
shares of Warner Company
for each common share of Wawaset.
v
' / \
Warner
Company,
producers ?>
:
and distributors of
sand, gravel, and value of the
would
April 1, 1949.
was
.common
Thorne,
pointment
Company claims in respect to the
j railways shall be subordinated to
public holdings.
*
W.
419 Wood Streef
PITTSBURGH 22
Grant 3900
Bell
FA.
61
NEW YORJC, N. T.
Bowling Green 9-3987
System Teletype—PG
473
''
only by prospectus
Bought—Sold—Quoted
Inco^^rated
-
Broadway
*Offered
123
SO. BROAD
STRF'
PHILADELPHIA 9
*
120
newI
~
PEnnyp£ckeP¥-73""
_
Pittsbu
.
E. H. Rollins & Sons
*
"
Incorporated
PEnnypacUer
'
(
Allentown
broadway
york 5, n. y.
REctor 2-6528-29
Lancaster
Scranton
5-0100
1528 Walnut St„ Philadelphia 2
New
York
Boston
San
Francisco
Chicago
i at raisrit*
-rxMrtwi <MMiflvii
viwmrnwi*fi^M wuwwmm*M
n flw-r
j*
(2988)
that currently
sells 2% points
It will be noted
Fidelity-Phenix
Insurance Stocks
Insurance Co. and Fidelity-Phenix Fire Insurance
top companies in the America Fore group.
Their
the New York Stock Exchange, are prime favorites
This Week
Continental
Co.
the two
are
stocks, listed on
stock investors.
Dec. 31, 1946 the two
of
As
Fidelity-Phenix is
vorable.
companies compared in size as
follows:
Admitted
holders'
Unearned
Premium
Consol.
Assets
Surplus
Reserves
Liq. Value
($000)
157,283
129,876
($000)
11-2,596
93,694
($000)
34,168
26,775
$
66.86
74.57
Total
Continental
__
Fid.-Phenix
Policy-
►
acts
her's, and when dividends are in¬
cluded, the difference in favor of
with insurance
even
based
,
'•
4.4%
Fidelity-Phenix
' 4.6%
_
It will be observed
that at current
10.0%
that Continental is the larger company,
gets a little more for
but
his
of each
The following table compares the six year earning record
company. Earnings are on a consolidated basis; underwriting profits
and investment income are before Federal income taxes, but total
net operating profits are after these taxes.
Six-Year Record
Dividends Per Share
of Earnings and
■
4
'•
Op. Prof.
•"
Dividends
$
$
$
covering
costing
50,000 square
$300,000
will
2.20
2.92
2.00
2.53
3.82
2.00
3.00
At
2.84
3.61
2.00
range,
1.64
3.07
4.22
2.00
."
Net Inv.
Net Und.
1941
2.89
1.87
..
Dividends
$
1
4.52
2.20
.85
2.86
3.04
2.20
2.91
4.53
2.20
1943
1944
1.60
3.09
3.64
1945
1.87
3.22
3.93
1.66
3.54
4.81
2.20
$1.86
$3.09
$4.08
$2.20
_
1946
Aver._
yr.
_________
Average net
2.20
2.20
,
Continental covered average
operating profits, after Federal
investment income of
dividends 1.35 times; average total net
covered dividends5^
Undistributed earnings average total pet, operating profits
1.85 times. The annual amount of
retained in the business, averaged
earnings retained in the business
$1.57 per share annually, equiva¬
was
$1.88 per share, equal to a
lent to a total of $9.42 for the sixtotal of $11.28, equivalent to ap¬
year period, an amount equal to
proximately 25.5% of consolidated
approximately 22.5% of consoli¬
dated
liquidating value at the liquidating value at the start of
income
taxes,
1.80 times.
start of the six-year
In the
case
the
period'.
moderately in
investment income
covered dividends 1.40 times, and
net
average
period.
comparisons,
also,
These
of Fidelity-Phenix,
are
favor of Fidelity-
Phenix.
From the
April lows of 1942 to
May
28, 1947 the comparative
market performance has been as
BANK
followg:
FidelityPhenix
Continental
and
31
INSURANCE
the
over
48
46%
disbursed
dividends
period
Including
STOCKS
30
4514
April 1942 Low—
May 28, 1946
Appreciation
the
same
com¬
parative gains are as follows:
Members
New
York
m BROADWAY,
s
Stock
Continental
Asked
Exchange
nial
metropolis
Bell
of
union.
45'A
48
($)
Tot. gain (%)
2414
9Q
77.5%
96.7%
Tot.
Dept.)
28,
gain
In the
Home
FREDERICTON,
ADA
&
V
*
•
■
.
'
•
'
; of
^
Hanover FirnXnsuranee Cm
North IfiverTnsurance Co.
B.,
CAN-
Bishop
has
«
STREET
the Government in
Kenya Colony and
Head
Branches
Uganda
Bishopsgate,
London, E. C.
Office:
CALIFORNI A-
ill Hi
In
26,
India, Burma, Ceylon, Kenya
Aden and Zanzibar
Colony and
LOS 'AH6ELES- 14, CALIFORNIA
TELEPHONE MIKITY 7«7I
TELETYPE:
,
.N.'
F.
Co., Ltd.
Bankers to
BUTLffl-HUff SCO.
Bank
Firemen's Insurance Co.
Vinton
of INDIA, LIMITED
Co.
Security-First National
—
joined the staff of W. C. Pitfield
Group Issues
Bank of America
LA 277.
Subscribed Capital
LA 290
~
2)uecl
- ^ ^ ;,'iQSTOM|J'EW',YORki^lilLADELPHlA V'-MMOlh 4
CHICAGO
•
ST. LOUIS
DALLAS
•
SAN FRANCISCO
•
SEATTLE
we
are
imperialism to give the world
international
federation
of
sure
cooperative
which
monwealths
alone
com¬
can
in¬
permanent peace."
Thursday second victory in as many
Previous win was as
£4,000,000
Paid-Up Capital
—£2,000,000
Resmrr-Timd^irrrrrr£Z,3O07U0iJ~—
-p-The-"DanK 'eujiduebs">p7wy
banking
and
"niesmiptlim""uf"
exchange business
Trusteeships and Executorships
also undertaken
union's eyes, a
small company,
NATIONAL BANK
Great American Insurance
,
policy of leadership for uni¬
disarmament and an end
time to work out an
Drysdale & Co.
weeks for
Union apparently
Office
concentrating now on smaller firms.
:r.
•
branches of the Household
'
hearing was held yesterday
by the State Labor Board at the
union's request for an election,
Corporation.
"
'
■
.
'
."
A
;
Among
the larger firms,
has made progress so
union
Finance
contract is,a
large or a
cotract, whether with a
With W. C. Pitfield
ACTIVE MARKETS
American Insurance Co.
that
a
.
$11.00
1947
May
to
Employees International Union, also AFL, seeking elections among
senior
employees of three local banks, at one of which, Lafayette National
partner of Drexel
& Co.' and
Chairman of
the City Planning
Bank of Brooklyn, Financial Employees Guild, C10, is also seeking
Commission,
whose
civic
im¬
jurisdiction.
provement program will be trans¬
The employees of Ward, Gruver & Co., stock brokers of 40 Ex¬
lated in three-dimensional form,
calls
the exhibition "a sort
of change Place, in a State Labor Board election last Thursday voted,
10 to 7, in favor of the United^
—
stockholders' report." -' .' ; ■ :
issue.
Mr.' Comstock said more '
Financial: Employees,
AFL,
as
"Philadelphians will see in dra¬
than a week ago he might be*
their collective bargaining agent.
matic, understandable form the
The victory was the second for ready with a decision- in about ten
ideas and proposals of the for¬
days or' so but that in any event
ward-looking v businessmen
and the union in as many weeks.. On it would not take him more than
Wednesday of the previous week,
public officials who are charged
30 days to decide what to do.
i.he union won an election, 21 to
with directing the growth of the
The Office Employees Interna¬
18, certifying it as collective bar¬
Nation's third city."
tional Union, AFL, brother organ¬
gaining agent for the employees
It is planned to open the dis¬
of Drysdale & Co., stock and bond ization to the UFE in the financial ■
play on Sept. 8 at Gimbel Broth¬ brokers of 71 Broadway.
field but on the banking end, is
ers
where it will remain until
Negotiations looking to a con¬ pressing the State Labor Board for
opened between the elections to determine collective
Oct. 15 before becoming part of tract were
union and Drysdale & Co. yester¬ bargaining agency among the em¬
a permanent exhibit.
It is pointed
day, but negotiations between the ployees of three local banks, one
out that its cost will amount to
union and Ward, Gruver & Co. are of them, the Public National Bank
one-tenth of 1% of the estimated not expected to get under way & Trust Co., with headquarters in
the Wall Street district. The State
cost
of
improvements
planned until sometime next week.
The elections at Drysdale & Co. Labor Board will conduct a hear¬
here in the next six years.
and Ward, Gruver & Co. seem to ing tomorrow at 10 a. m. on the
request for an election
indicate a change in the tactics union's
On Brennan Staff
of the union. Up to this point, the among the employees of the Pub¬
union has been trying to organize lic National and its branches, and
ST. JOHN,, N. B., CANADA—
another
hearing
tomorrow
at
i;he employees of the larger Wall
Archibald R. F. Read is with F. J.
2:30 p. m. on the union's request
Street brokerage houses. Now ap¬
for an election among the em-,
Brennan &
Co., Ltd., 85 Prince parently, the union has decided to
of
the
various ..local
concentrate on the smaller firms. ployees
William Street.
Phenix
Asked Price,
world'
changing tactics in
y
30
$10.00
Dividends
7-3600
Teletype—NY 1-1248-49
Glbbs, Manager Trading
(L. A.
Low
1942
NEW YORK 5, N. T.
Telephone: BArclay
for
Hopkinson, Jr.,
Edward
Price,
31
rejected by the American people
the
Election held last
"Greene
tricenten1982 may be
Ponn's
Fidelity-
Laird, Bissell & Meeds
the
of
It must be
versal
argues
universal
make
insecurity,
security.
national
not
Employees of Ward, Gruver & Go. Choose UFE
As Collective Bargaining Agent, 10 to 7
Jr.
growth
Philadelphia's
of
William
observed.
3.30
1942
Hopkinson,
Countrie towne" to the
Op. Prof.
.
$
$
•
E.
in
300
from
$
Income
Profits
J
tries
magic
years
Total Net
Commission
international
means
military training
United Nations
more
effective because it 'would
reassure
the peace-loving coun¬
that
would
it will
a
which
INSURANCE CO.
FIDELITY-PHENIX FIRE
•
depict
$2.03
$3.60
$2.71
*' $1.73
•
mass
longer
mirror
Aver..
war,
"Truman's
Commission.
3.20
Fleischman
succeeded in promoting it.
City Planning
2.71
that
a
upon
drafted by the
2.53
not by
manpower which
they can outmatch, but by- Ameri¬
can
industrial strength, technical
are
American
Harry
the
in
'The
men
impressed
out:
Kremlin
it proposes reliance
system—peacetime con¬
scription—that has never in his¬
tory stopped war, but has only
atomic
im¬
prove m e n ts
1.96
6 yr.
feet and
soon
be
of
gram
leading military analyst,
skill, and air and naval power.'
of atomic war and And it will also enable Stalin to
staggering burden of decen¬ win the sympathies of millions as
tralizing and putting underground the alleged victim of capitalist
vital industries.
But instead of preparations for war against the
V.
urging American leadership for Soviet Union.
universal disarmament to avoid
"Universal
military
training
the
1.45
1946
points
Baldwin, the
W.
Hanson
of the horrors
vis¬
to
As
nation's
the
phians of to¬
day. The disp 1 a y
will
serve
will
It
peace.
mission warns
P hi 1 ade 1-
3.77
.
sia.
a
on
Com¬
and
derstanding
irritate but it will not scare Rus¬
Social-
"The
to
shown
2.56
_______
1945
a
Philadelphia
2.69
1943
1944
t
leader
added
Future
1.23
1942
6
To Show Diorama of
1.38
1941
in
The
ist
five-year pro¬
Total Net
Income
Profits
s
has
conscription
promoted international un¬
never
de¬
clared
$302,400,000
Net Inv.
Net Und.
J
1 i
a
our
"Peacetime
the
June 3.
ualize
CO.
CONTINENTAL INSURANCE
of
statement
money.
PHILADELPHIA, PA.—In pan¬
and diorama, an
exhibit
market prices the investor
.;V
campaigns of aggression.'
Sec¬
Party
orama
Fidelity-Phenix.
in
money
.68
.64
9.3%
Continental
peaceful
for his
28, 1947 Continental closed at 45^4 and Fidelity-Phenix
Comparative dividend yield, earning (ratios and liquidating
ratios are as follows:
./,
■ Ji \
: , x. ,
Dividend
Earning
Market to
Yield
Yield
Liq. Value
value
powers
share
gives the
investor moderately better value
On May
48.
at
that may not
aims to plan
couraging
retary
So c i
current -statistics,
on
necessary
Fleischman,
and
record over the past six years
moral
cough
National
the
on
ourselves of the
to support our
leadership and are thus en¬
'stripping
not
strength
drops," Harry
Thus, even though Continenta.
is the larger company and both
are under the
same management
Univer¬
security, it
<s>
a
cancer
with
.
.
like
cure
-
Fidelity-Phenix,
peacetime conscription for national
quack
doctor
trying
to
fa¬
more
Truman's hand-picked Commission on
"When President
sal Training proposes
than the lat¬
substantially better
it is like "curing cancer
says
gain since 1942 has been
market
—
National Secretary,
with cough drops."
Harry Fleischman, Socialist Party
position was reversed
Fidelity-Phenix selling one pom1
below Continental. The former's
relative
DEUSEN
E. A. VAN
By
Opposed
Peacetime Conscription
higher than Continental, but tha
at the low of the 1942 market the
Stocks
Bank and Insurance
Thursday, June 5, 1947
CHRONICLE
COMMERCIAL & FINANCIAL
THE
12
the
far
only at A. M. Kidder & Co. It has
met defeat at the hands of such
the employees of the La¬
National Bank', and
companies as Harris, Upham & branches of Brooklyn, and another
Co., and Carl M. Loeb, Rhoades & hearing is scheduled for June 13*
Co. Of course, the union has con¬ A two-way fight for jurisdiction
tracts with the New York Stock is developing in this case since
Exchange, the New York Curb the Financial employees1 Guild,
Exchange and the New York Cot¬ CIO, rival organization to the AFL
ton Exchange. In fact, it is at the unions in the New York financial
various
exchanges
where
its field, is likewise seeking certifica¬
strength is really concentrated.
• tion as collective bargaining agent
The UFE hasn't got a contract for the same employees.
yet with A. M. Kidder & Co.,
though most differences between
the union and the firm are ironed
in the wages ques¬
tion ']£II£xpected to be_ handed
dowirsowr by Louis K; Comstock,
prominent member of the Com¬
out. A decision
Industry Association,
who is serving as arbiter on the
merce
&
among
fayette
Admits J. M. Frankel
Jay
W.
Greenwich
New
York
;
Co., 120
members of the
Kaufmann &
St.,
Curb
Exchange, have
admitted J. M. Frankel to
partnership in the firm.
limited
.
Volume 165
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4600
Presbyterian Church
Opposes Peace Draft
Bank Economist Sees End of
'
of exchange and U.
£
Also
United Nations
approves
as
tive influence
instrument of reconciliation of U. S.
and Soviet Union.
Speaking at
At Grand
Rapids, Mich., on May
28, the General Assembly of the
Presbyterian Church in the United
States of America ended its 159th
meeting
by
adopting
resolutions
condemning
compulsory
peace¬
military training and ap¬
proving the United Nations to be
the rightful instrument for
recon¬
r
time
ciliation
of
differences between
this country and the Soviet Union.
The delegates defeated a
report
as
H.
minority
military service
favoring
presented
by
the
Rev.
Mark
Penoyer of McNary, Ariz., who!
as an
Army chaplain and
served
said that he was
keeping faith
with the
many who had expressed
their feelings to him before
giving
their
lives in
the
war.
He
military
Bank,
March
,
rate
of
ally,
in
$16
D.
training
during
*
pay
means
of
maintaining
adequate
an
Army and Navy except in time of
war, and gave its support to the
Landis Bill calling for the inter¬
national
abolition
of
peacetime
conscription, and in addition urged
President Truman and
Congress
to
supoort
ment
world-wide
disarma¬
through the United Nations.
balances
and
last
exchange which
Jack Jones Pres. of
abroad
Hartley Rogers, Seattle
SEATTLE,
Jack
dency
E.
of
.1411
WASH.
Jones
how
imports
H.
With
Nystrom
urge
Investment
the
in
1918
clared.
we
He
istration and Finance.
sociated with
from
Inc.
the
17
ciated
peo¬
o
1
their
tions in
being taken
years
G.
to
The
Russell,
nected
Recovery
Financial
Co.,
asso¬
Jr., has
with
next
the
de¬
years
of
attempts at stabiliza¬
prices, higher wages and
biggest
management - labor
problem this country has ever ex¬
perienced."
He added that although the eco¬
situation may be marked
nomic
by the biggest labor-management
problems the country has ever
experienced, business and indus¬
try would continue to support the
American
prise in
from
methods
Russia
"Americans
best
when
of
free
enter¬
to the challenge
response
and
think
Communism.
best
under
and
work
challenge,"
he
—
Joseph
become
Lawrence
con¬
Cook
Dr.
predicted
that
with
stiffer competition the outlook is
for
continued
high
production
Nystrom
while
costs
costs.
In
will
the
go
event
down
of
a
business
recession, he added, both political
parties will act to take care of
&
Fidelity Building.
unemployed first through ex¬
isting unemployment compensa¬
tion
funds
later
and
through
a
"bigger and better WPA" than in
the thirties and thus high produc¬
tion
costs and
high prices will
With F. J. Brennan Co.
Accordingly,
concluded
Dr.
Nystrom, increasing competition
Guptill is with F. J. Brennan & and higher costs and prices can
Co. (N. S.)
Ltd., 25 George Street, be looked for in the months ahead
HALIFAX, N. S.—Laurence
wide distribution of securities.
G.
Presi¬
Hartley Rogers & Co.,
Avenue, has been
This announcement is neither
an¬
*
L
nounced.
offer to'sell
an
nor a
solicitation of
an
offer to buy any of these
Debentures. The offer is made only by the Prospectus.
•
|
Coincident
-
with
the
motion
J
.
pro¬
of
o n e s
Mr.
i
were
those
of
ton
$200,000,000
Viereck
Gir-
Vice-Pres¬
as
ident and
ward
American Telephone and Telegraph Company
j !r
A Mr. *' uAxr*
Ed¬
\f
Hartley,
?
Secretary!- p§;
T
r e as u r e
The
rj■
an
1929
in
present
tion
1932,
"t
'
ii-Ki
..•?> .•<; *&.■
:?
■■
:• w
Forty Year 2V&% Debentures
r-
1,19lf7\
Due June 1,
1987
its
Interest
Jack E. Jones
payable June 1 and December 1 in New York City
the
Mr.
from
;.l
:
jwyti'
Dated June
loca-
in
•
of¬
Fourth Avenue
1411
wi1 hd'
"irh
,=
ni
fice in Seattle
in
f.
.
»
firm
opened
Building.
In
was transferred
Francisco office to
Jones
the
San
the Seattle office where he estab¬
lished its
trading department.
elected
was
1934
and
Vice-President
Price 102Vs% and Accrued Interest
He
in
later, Manager, continu¬
ing to supervise its trading depart¬
ment.
"
|-
Mr.
Jones
graduated from
University of Oregon with a
degree in economics in 1929.
His
was
Copies of the Prospectus
the
these
may
be obtained from only such of the undersigned as may legally offer
of the respective States.
: \
Debentures in compliance with the securities laws
local civic activities have included
his present
Mt.
Baker
is also
one
Vice-Presidency of the
Community Club.
He
of five members of the
executive council of the
MORGAN STANLEY & CO.
National
p.
..
,am
{
■_
Security Traders' Association.
,
few
continue.
organiza¬
predecessor
the
see
the
Chronicle
Smith, Barney & Co.
connection with the firm's nation¬
the
may
CLEVELAND, OHIO
supervisory capacity in
a
"the
bring on
perhaps more
economy,
for bureacracy
Special
was as¬
was
wartime
With Lawrence Cook & Co.
Dillon, Read & Co.
to 1927, and for:
following
of
new
agency,
less like the National
or
1921
with
the
over
"In
will
commented.
passing
some
attended
and
the
controls
Group Legislation
of
Dartmouth
American
serious
Paul
the Amos Tuck School of Admin¬
Michener stated
is, Dr;
Fourth
officially
—
Administration," Dr. Nystrom
Elevation
—
to
show
problem
New
Association, has a broad
of investment bank¬
ing experience. He graduated from
protect dollar
are
York
New
and
to
the
background
year.
measures
assist
to
of securities.
Bankers
reserves
than half of
balanced
that
abroad
trade
basis
Committee
exhausting
gold
States
but
the
will
Wilson, who is a veteran of
World War I, and is Chairman of
the
export totals, the only prospect of
heavy foreign selling is through
loans
and
gifts.
Despite gifts
abroad, indications now show that
the United States is not going io
equal the $7,000,000,000 total spent
The
of
and
United
for less
paying
lation,
that
ple in the end
tem¬
a
regu¬
challenge
the
With foreign buyers
on
still
greater
Mr.
wares.
here
for
communism.
in dollars as
the high prices of Ameri¬
their
Bank
in
was
distribution
peacetime."
The Assembly recommended
vol¬
untary enlistment as the proper
ness
rally
against
the
porary
continue
not
the
in
York
York office in connection with the
of goods abroad,
of ability of for¬
of lack
eign nations to
can
with
ciated
Club
City on June
3, that busi¬
curities Corporation, will be asso¬
could
rate
tive
Wilson, Vice-President, Union Se¬
Michener
was
this
because
as
W.
annu¬
this
y
Execu¬
New
Director
of Marketing, International Bank
for Reconstruction and Develop¬
ment, announces that H. Warren
peak
billions
t
tion
Fleetwood Dunstan,
E.
were
the
i
r
the
World Bank Staff
that
exports
e
a
Sales
H. W. Wilson Joins
on
he
stated
the<£
Price
V
ation, told the
war.
Although
of
Limited
Stores Associ¬
end
the
the
at
end
has
going
since
of
dent
of this
spent it,, all
the
by
boom
which
been
loan
and will have
by the end of 1948.
year
p
exoort
pointed out that Great Britain
States
the
proaching end of the
a
well
sory
Speaking on the topic, "What Is New in Selling," Dr. Paul H.
Nystrom, Professor of Marketing at Columbia University and Presi¬
will have allocated all her United
to
compul¬
<^"
tional
predicted
'
Marketing expert tells sales executives there is still an "urge for
bureaucracy" but says business and industry will rally to support
of free enterprise.
Foresees higher rather than lower prices in
event of depression.
the Chase Na¬
due to shortages
of
are
luncheon meeting of the Export Managers Club
June 3, D. W. Michener, Associate Director of
a
in New York City on
of
and
establishment
S. high prices
Research
The Assembly then voted
almost
unanimously to adopt the majority
report, reaffirming "its opposition
the
lack
exerting restric¬
says
foreign trade.
on
13
Nysfrom Looks for More Competition With
Severer Regulation
Export Boom
Chase National Bank,
D. W. Michener, of
(2989)
BLYTH & CO., INC.
Mr. Viereck joined the Hartley
Rogers organization as a salesman
jrl. 1939 and isrnow in charge of
the .firm's
of
Washington
where
SMITH, BARNEY & CO.
STONE &
WEBSTER SECURITIES CORPORATION
UNION SECURITIES CORPORATION
he
for
A. G. BECKER & CO.
1930-31 term.
LEE HIGGINSON CORPORATION
F. S. MOSELEY &
CO.
DEAN WITTER &
CO.
Incorporated
Mr.. Hartley became
,
of
CO.
municipal department.
President* of the ASUW
was.
the
HARRIMAN RIPLEY & CO.
Incorporated
LAZARD FRERES &
KIDDER, PEABODY & CO.
He,/was, graduated from the Uni¬
versity
GOLDMAN, SACHS & CO.
a
member
PAINE, WEBBER, JACKSON & CURTIS
WHITE, WELD & CO.
Hartley Rogers & Co., in 1930,
and
is-wellj knpwn in the invest¬
ment
field
west.
in
He/is;..
the
a>
Pacific
.graduate
Army; officer.
Roland
H.
He
is
a
as
.
son
,
a
,
—
HARRIS, HALL & COMPANY
-
~
-
•
_
HORNBLOWER & WEEKS
-
(Incorporated)
r
J -
>
~
<
HEMPHILL, NOYES & CO.
,
"
R. W. PRESSPRICH & CO.
an
of
Hartley, former - Gov*
ernQL6i"WashiBgio«^^v
.
of; Yale
and served in World War I
—
BREXEL & CO.
North¬
vw*
June
*
'if 1947.
"
—
.v>w,/wo:;.
iK>'>t00i> SI
't -I
rr
ul
14
THE COMMERCIAL & FINANCIAL CHRONICLE
(2990)
Field
annual
v
.
.
(Canada)
14-18,,1947
June
Acacia
Party,
Day
Country Club.
.
Dealers Association
Investment
"I
Jaspar Park.
understand the market
rail analysts to
difficult for most
Municipal Bond Dealers' Group
stock like Atchison,
a
,
tion
recent years.
ago,
present and the visi¬
everything is highly
As for the
future,
Duri nmg
of
the
the
Points
improved since reorgan- >
ization plans were presented and urges pending reorganizations be
referred back to Interstate Commerce Commission.
Cites detailed :
as
•
with
troops
phenomena as the 1946 pas¬
senger revenues started to drop
off sharply in the second quarter.
rary
Even with the
decline in passen¬
the
for
earnings
revenues,
ger
first four months of 1947 amount,
ed to $4.50 a share on the common
stock, a dip of only $0.52 from
year earlier levels. In both March
and April the earnings this year
1946 results.
above
were
Santa
has
Fe
not
a
pro¬
ings
as
many
western
roads.'
Nevertheless, the first part of the
is normally the period of low
earnings, with most of net oper¬
year
ating income accruing in the last
half of the year. On the average
the
prewar
years
193210.52% of net operating
10
1941 only
income
the
in
came
first
followed this year,
were
four
If that seasonal
months.
structure.
Santa
issues
It does
seem
pattern
and non-
20-22,
Calif.)
share.
loadings in May were about
to 10% above a year ago, a
than that registered
in
Passenger
revenues
probably declined less sharply in
May than in April/ On this basis
it
likely
seems
cumulative
that
earnings for the five months at
least caught up with the 1946 re¬
sults and perhaps surpassed them.
Traffic gains as compared with a
ago
year
are
continue for
to
a
almost
non-
of 4%
to
at
record
on
the highest
as
and will start to
heavy volume late this month
and
in. July.Considering the
world food situation it is expected
that
,adequate cars to move the
record
crop
will be made avail¬
able.
With
the, background
of
earn¬
ings already accumulated and the
favorable
summer
see
how
traffic
months
outlook
for
the
earnings this
year
could
Bonds
Special Securities
(Westfield, N.
Club
Bond*
New
of
charges of
$9 million a year.
less than
Investment Traders Association
of Philadelphia Silver
Teletype NY
Subcommittee
of
ton, D. C., May 23,
EVENTS
Detroit &
•.;*
-
June 6,
1947
(Baltimore, Md.)
Annual
and Outing at the Elk-
Field Day
Golf
Writer analyzes
convention.
annual
ciation
(Chicago, 111.)
Bond Club of Chicago,
nual Field Day at
Bond
1947
34th An¬
(Chicago, 111.)
Nov. 30-Dec. 6,
(Hollywood,
- —
Field
./v../'/
to
Annual Convention.
June
6,
of
Club
Spring
Longue Vue Country Club.
June
St.
nual
Picnic
CALIF. —Paul. HJ
the New York
Central is the
of
The
Chronicle)
Financial
OAKLAND,
D i
*
the
White
Club,
to
be
preceded
Wednesday night, June 11, with
a
cocktail party at the Nicollet
Hotel, Minneapolis:
June
^
-
(Special to
The
Dodge
become
II. has
.
r
•
_
.
C. C. Henkel
connected
network
coverage
,,
■
.
''
„v
Municipal Bond Club' of Boston
Outing.
Ohio Lines to
the
.
Con very With Goodbody
1947 (Cleveland, Ohio)
g o,
&
its
complete
of the industrial cities in
Lakes" region, wotild
provide better and more di¬
for the distribution of
O. coal. However, any ad¬
which the C. & O. tail
Cleveland Bond Club's annual
DETROIT, MICH.—Goodbody &
might
secure
from being per¬
spring party and silver anniver¬ Co.,
New
Penobscot
Building,
mitted
to
wag
the New York
sary celebration.
have added Edgar L. Convery to
Central dog could be obtained by
June 13, 1947 (Connecticut)
their staff.
In the past he was
a
traffic agreement between the
Security Traders Association of with Alison & Co. and Paine, two carriers and prob.ably at far
vantages
less; ultimate cost to the C. & O.
stockholders.
The mucn larger
Webber & Co.
Pennsylvania
(Philadelphia, Pa.)
13, 1947
Securities Associ¬
ation Annual Field
erch Country
June 14,
Day at Llan-
Club, Llanerch, Pa.
1947 (Chicago, 111.)
Bond
Traders
Club
of
Chicago
lions in the
With Moreland & Co. :
(Special
to
The
DETROIT,
Post
is
with
Penobscot
Financial
MICH.
—.
Moreland ' &
Building,
the Detroit Stock
A.
Hugo
Co.,
members
Exchange.
of
several mil¬
control the
Haven, Boston &
Valley, Wabash
sunk
attempt to
destinies of New
Chronicle)
Maine,
Lehigh
and Seaboard Air
Line.
Pennsylvania and the
New York Central have already
been-.developed into well coordi¬
•
Both the
due j
pic-
resulting from the competi¬
carriers.
'
'; -j
Young Three Trunk
Consolidation Plan the Penn-r
of highway
Under the
Line
Peoria
rect routes
C.
(Special to The Financial Chronicle)
with
gateway
of Chi-
Great
also
;
burden in recent years,
changed transportation
a
to the
sylvania would be a huge system
of 18,850 miles, loaded down with
not very profitable rail lines hav-^
and St. Louis.
The Central's ing little or no relation to its maiii
lines and from which they could
cities
David/C;
■
ex¬
tion
,'
Hogle & Co., Equitable •vast
Building.
.
Annual
ral
of
Ipre
c a
—
ion
of the
.
r%
Chronicle)
Financial
COLO.
DENVER,
with J. A.
j
(Boston, Mass.)
13, 1947
u
the
With J. A. Hogle & Co.
Yacht
s
tension
,
Bear
t
i
Chesapeake &
way.
Club 26th An¬
v
n a
M
at
ple:e coverage of the territories
they serve, and both are about as
large as is possible for efficient
and ecohomic'al management.
In
Watson has become affiliated with-:
to
Paul)
Twin City Bond
Plate.
The Big Four
Capital Securities Co., 2038 Broad-)
(Minneapolis-
1947
12,
the
fact,, both roads have found their
ownership" V. of
numerous
light
branch lines to be considerable
(Special
Pittsburgh 22nd
Outing
at
the
merge
Nickel
Joins Capital Securities !
(Pittsburgh, Pa.)
1947
-
Chesapeake &
Ohio and the
Day outing at the Sleepy Hollow
Country Club, Scarborough, N. Y.
with Cen- .*•
with '
The Young
Investment Bankers Association
York
of New
1947
-■.•••
Fia.)
Trunk Line ter¬
a
plan for the Chesapeake and Ohio, to secure control
of the New York Central is more logical from a traffic standpoint
than the for-4mer
proposal nated systems with a most com-'
•
Outing.
cago
Plan
HENKEL
possible railroad consolidations in
Suggests
Nickel Plate System.
Chi¬
of
Club
Bond
the Knollwood
(New York)
Club
1947
20,
Municipal
Club, Lake Forest, Illinois.
June 6,
22)
on page
four-system plan of: (1) Pennsylvania
/Norfolk & Western; (2) Chesapeake & Ohio with New York
tral; (3) Baltimore & Ohio with Wabash; and (4) Erie
ritory.
(Boston, Mass.)
National Security Traders Asso¬
Aug. 10-14, 1947
Sept.
6, 1947
(Continued
1947.
By CHARLES C.
ridge Club.
June
certificates
equipment
trust
certifi-*
cates), and $34,279,750 of pay(now
An Eastern R.R. Consolidation
Michigan Annual Sum¬
Party, Orchard Lake
Country Club.
Also a cocktail
party and buffet dinner on July
21 at the Savoyard Club, Detroit,
Field
Investment
In
receivers' and trustees'
Security Traders Association o 1
mer
I-I063
•;
schedule shows:
22/1947 (Detroit, Mich.)
COMING
Philadelphia
Telephone BOwling Green 9-6400
Reed
Country Club, Havertown, Pa.
1
York 4, N. Y.
cial data,-
the Senate Interstate and Foreign
CommerceJ Committee, Washing¬
July
June
New
the
25thl; summer outing at Llanerch
Connecticut annual outling at the
Street
Reuss
This
fore
Jubilee and
Conn.
25 Broad
Wendell
W.
given are
the "old"
selected finan¬
capitalization and
to
To
,
Country Club of Avon, iri Avon,
GUARANTEED RAILROAD STOCKS-BONDS
capitalizations as
dates; also
..
contingent
and
fixed
June 13,
Guaranteed Stocks
so
same
current figures for
the
-
difficult to
it is
of the
working capital of
as
of the end of
March, 1947. Barring an increase
Winged .Foot Golf Club,
the
total of cash
and
In August, 1941, the Interstate later,
in the dividend or declaration of
equivalent was $78,679,250, and
Commerce Commission approved
July 10, 1947 (Boston, Mass.) : *, ;
an: extra later in the year this
net working capital $77,720,849-^
Boston Securities Traders Asso¬ a modification of this Plan, with
might well be increased above
notwithstanding intervening elim¬
a
new effective date of July 31,
$150 million by the end of the ciation annual outing at the Wood¬
ination of the $11,499,168 R.F.C.
land Golf Club, Newton, Mass/..: 1941; subsequently, the effective
year. Obviously such a reserve is
loan (and accrued interest there-;
out
of proportion to
combined
on),
a
$21,364,832 reduction ift
July 11, 1947 (Philadelphia, Pa.)
^Statement by Mr. Reuss be¬
move
in
clearly
financial facts and
newly proposed
make feasible.
J.);!
selected
with
(reduced by more than $100 mil¬
since 1941) the company re¬
Bond
estimated
seem
Arrowhead.
ported net
$132,021,000
Annual
is
the
upfig¬
would
ures
in the form
is a comparison of
the Rock Island's "old" capital¬
ization
outstanding as of these
various effective dates, together
support
' •
Jersey
(1) At the time of the first ef¬
Spring Field Day at the <; Echo! my conviction, let us first refer
date—Jan.' 1, 1941, the
to the Rock Island reorganization.. fective
Lake
Country Club, Westfieldj
On Oct. 31, 1940, the Interstate
road's total cash and equivalent
New Jersey.
•/'•/ , S
to
only
$10,730,804,
Commerce Commission approved! amounted
with net working capital at $10,July 1, 1947 (Mamaroneck, N. Y.) \ the initial Rock Island Reorgani¬
New York Stock Exchange 48th zation Plan, fixing the effective
615,519; '
Annual Golf Tournament at the date as of Jan. 1, 1941. •
As
of Jan.
1, 1947, six years
The winter wheat
crop
Herewith attached,
of Schedule A,
June 27, 1947
largest carrier in the country of
winter wheat.
Angeles annual spring party
the North Shore Tavern,. Lake:
months
Santa Fe is the
at least.
come
certain
number of
to-date
Los
wider
gain
April.
as
—
:! present,
-
second
a
the
treat¬
ment
Angeles;
(Los
Security Traders Asociation of
1,241,728 shares of 5 %- noncumulative preferred stock v are
also non-callable.
In comparison
with the relatively modest debt
Bond Club of Baltimore
Car
better
1947
issued
nity to receive
mate ri ally
)
June
probable,
however, that 1947 earnings will
top the 1946 level of $13.52 a
0%
from June 6
Commission
modification of
plan, with tjie effective date
further advanced to Jan. 1, 1944.
Commerce
terstate
re¬
be given
opportu¬
an
Inverness
1942.
later, the In¬
two years
Then,
The
such record will be attained
this year.
1995, are
to
run
callable, and carry coupons
operating income were no higher
than that of last year, earnings on
the common for the full year 1947
would top $33.00 a share.
It is
obviously
highly
unlikely
that
■any
debt during
There are'now out¬
standing-only" two bond issues
(exclusive of regular serial equip¬
ment obligations) in the aggregate
amount of $203,155,500. Both of
recent years.
still
may
13th An¬
at
Outing
all of its Country Club (note change of date
Fe has retired
maturing and callable
the
Golf
nual
is to come out
to so amend Section
advanced to Jan. 1,
date was
maining "old"
bondholders
(Toledo, Ohio)
of Toledo
Club
Bond
reorganization.
now
of the proposition
railroad
the
course
proper
af-
it
as
fects
Roslyn;
Club,
Golf
June 20, 1947
lion
such
nounced seasonal pattern of earn¬
for
Engineers'
company's finances and debt
the
the
that
convinced
am
securities, that
Long Island.
Also, it is a tempo¬
height.
(New York)
:
Security Dealers As¬
Summer Outing at
77
1947
Certainly such a policy would not
be too fantastic in the light of
months of 1946
business was at a peak
redeployment of
the
at its
I
20, 1947
New York
and analysts
rails undergoing
changes in capitalization of leading
Hudson, New
-
,
operating and financial conditions have
wholeheartedly in support
looking towards the possible in¬
crease in dividend disbursements:
in the opening
passenger
June
to
out
;
York.
there were many
who were
clouded,
on
-
as
ors
far
outlook was
the
Scarborough
sociation
gross suffered severely from the
year-to-year decline in passenger
revenues. This was to be expected
■
•
fact, less than a year
when
investors
road's
year
As
$6 dividend rate.
matter of
more
early
the
iavorable.
months
a
the
of
improvement that has taken place
in Santa Fe's credit standing in
credit-
it affects railroad securities to permit
receive better treatment and to protect stockholders.-
Bankruptcy Act
the
amend Section 77 of
in favor of measure to
Mr. Reuss argues
S
•
ble
»
-
.
Stock Exchange
.Members, New York
.
I
.
.
& Co.
Partner, McLaughlin, Reuss
Topeka & Santa Fe in recent months. of Cincinnati Spring Party.
Down from a high of 99 earlier this year and'a peak.of 121-in 1946;
June 20, 1947 (Milwaukee, Wis.) «
the stock recently sold as low as 66. -With the improvement in general
Milwaukee Bond Club annual
market sentiment last week the stock staged a recovery to 75. Even
picniG at Merrill Hills Country
at that level the present $6.00 dividend rate affords a return of 8%
Club, Waukesha County, Wis.
-and it hardly seems likely that1®*
•
7June 20, 1947 (New York)
there is any widespread appre-^run much, if any, below the $16
I
Such earning
hension as to continuation of this $18 a share range.
Municipal Bond Club of New
power could, hardly warrant any York 14th Annual Field Day alj
distribution. Apparently investors
apprehension as to the continua¬
are hesitant to recognize the basic
Sleepy
Hollow
Country
Club,
action of
REUSS*
WENDELL
W.
By
(Cincinnati, Ohio)
June 16-17,1947
It is
Called For-
Convention at
of' Canada Annual
Reorganizations
Revised Railroad
■„
.
y,
Thursday, June 5, 194?
,
/
little
or
no
additional
except at the expense of
which can
afford ' to lose any of i their
expect'
traffic,
such secondary routes,
ill
present traffic if they are to ren-i!
der
satisfactory
service to the >
communities along their lines. Al¬
though the Pennsylvania, has the
of/;
any
American railroad and serves
the
largest
gross
earnings
greatest traffic producing terri¬
tory on'rearth, with the shortest
and most direct routes, it is un¬
likely
that it could get through
depression without going
down
the next
into
receivership if loaded
with the Lehigh,
Wabash, Nickel
Plate, Wheeling, etc. The
peake
would
Cheasa-
Ohio-New York Central
also be a huge system of
(Continued on page 21)
Volume 165
Number
4600
THE COMMERCIAL &
FINANCIAL CHRONICLE
(2991)
party,'luncheon and dinner, Saturday June
14, at the Acacia Country
•Club, Joliet and Wolf
Road, LaGrange,- Illinois. The Club has pur¬
chased a 32-inch
trophy to be awarded annually to one of its own
members who
NSTA Notes
low gross.
scores
The Club expects to
i
and has
gone to
a
have
>
a
•
'
,
,
Hargrave Chairman of
Chi.
.
good attendance from out cf town
to make this an outstanding,
great deal of effort
successful
GEORGIA SECURITY DEALERS
ASSOCIATION
The annual
Exchange Board
CHICAGO, ILL.-—The
day for members and guests.
f
John C. Rogers of Hickey & Company is General Chairman, Hal
Oldershaw, Blyth & Company is Chairman of the Golf Committee
and Elmer
Governors
of
The
Exchange has
tion
of
announced the elec¬
P.
Hargrave as^
Chairman
the
NSTA CONVENTION SPECIAL
As
Eugene R. Black
the
"Convention
pities will act
hosts to
as
Special"
Seaboard, two
the
delegates, wives, and friends attending
a
Fe'nner
of New
tor those who wish to
depart from train travel for
night, and their schedule contemplates a cocktail party to be fol¬
a buffet supper with
dancing and a floor show. That night
convention members will sleep on board the train or
at hotels, and
Sunday morning there will be church services at the Philadelphia
Navy Yard followed by a showing of the Navy Yard and a tour of
the city. They will leave
Philadelphia at noon on Sunday, and after
stopping in New York for 15 minutes, will arrive at the convention
city of Boston after having had dinner on the train.
York, Executive Director of The International Bank for Recon¬
struction
number
and
of
Development, addressed the Security Dealers
invited
guests
consisting mainly
business executives of Atlanta.
of
bankers
and
and
a
"I
other
outing.
Golf,
participated in, followed by a
tennis and other outdoor sports were
dinner at eight o'clock.
;
:
<■'
J. F. Settle was re-elected
President for the ensuing year, John F.
Glenn and Julian R.
Hirschberg were elected Vice-Presidents, and
R. C. Mathews, Jr., was re-elected
Secretary and Treasurer.
Mr.
Settle is President of J. H. Hilsman
& Co., Inc.; Mr. Glenn is a mem¬
ber of the firm of Courts &
ment has been
;
'
a
After the first
War, in which he served as
captain, of infantry, he began his
Street
LaSalle
the
with
career
firm of William H. Colvin & Com¬
Past Officers Break¬
Chicago,
pany,
In 1926
in 1919.
part
Colvin & Company became a
party at 6:30. Separate entertain¬
provided for the ladies during this time.
of E. A. Pierce & Company,
which
through mergers and
firm,
con¬
solidation, has become known as
Lynch, Pierce, Fenner &
Merrill
Beane.
•
>
,
! Mr. Hargrave is
On
Thursday, there will be various forum meetings ending with
cocktail party, dinner, and dancing.
a
from
College and
grees
/
World
optional golf. Tuesday night will be free,
i'
Wednesday will include an afternoon cruise of Boston harbor
together with a shore dinner.
'
Co.; Mr. Hirschberg is President of Norris
Hirschberg, Inc., and Mr. Mathews is Assistant Vice-President of
The Trust Company of Georgia.
'' ■■
V
*
;
/.
college de-
Indiana University.
around Boston with
&
Hargrave
both Central Normal
Tuesday morning will be "Open House" in the financial district,
Tuesday afternoon will feature a tour of historical spots in and
and
holds
grave
P.
Homer
fast to be followed by a meeting of the National Committee and the
official luncheon. The afternoon will be taken
up by the "Municipal
Forum at 3 o'clock and a cocktail
.;.
At the conclusion of the
breakfast, the Security Dealers moved
the Brookhaven
Country Club for their annual
over to
Monday morning in Boston will feature the
April
30, 1895, Har¬
Stratford Hotel
Mathews, Jr.
In¬
Danville,
diana,
lowed by
C.
Born in
1940.
a
R,
since
office
Leaving Baltimore that afternoon at 4:45, they will arrive in
Philadelphia at 6:15 the same evening.
The Investment Traders
Association of Philadelphia has
arranged for rooms at the Bellevue
Hirshberg
e,
firm's Chicago
A
R.
& '
in.
n
a
e
charge of the
historic Baltimore
Harbor, Fort McHenry, and the Naval Academy
Annapolis. Refreshments will be served on board followed
by a
seafood luncheon on the return of the
ship.
at
Julian
":
.
and director of the Chicago
►
'
.
Vice-President
Better
.
In addition to the four
r
officers, Messrs. Thomas
L, Varnedoe, Walter James
of the
M.
and
Johnson, Sam
The Registration Fee for members of N.S.T.A. will be $35, $50 for
non-members, and $25 for ladies.
Wayne Martin were elected members
Mr. Johnson is President of
Johnson,.
Executive Committee.
Lane, Space & So., Inc. of Savannah, Mr. Varnedoe is
President of
Varnedoe, Chisholm & Co,, Inc. of Savannah, Mr. James is Secretary
of Clement A. Evans &
Co., Inc. and Mr. Martin is Vice-President of
Milhous, Martin & Co.
V
-
.
9.
The San Francisco Bond Traders
and
25
at
the j'Agua
baseball,
ping-pong
and
bak trees./''.-
\
relaxing
under
County), California,
enjoyed
be
the
old
palm
and
shady
'■
bert Co.; Jack Hecht, Butler-Huff &
-
v. v,.
Co.; Dick O'Neil, Fairman & Co.;
Davies, Butler-Huff & Co.?.
Music
was
Jubilee
with
its
25th
11.
member and
Philadelphia will cele¬
outing at Llanerch
An elaborate program has
a
member
Chicago
and
Mercantile Exchange,
• r
v
t
.«
■
>
furnished
by Armando Etiopi and Mac McCarty, who
played steadily front Saturday noon until
Sunday evening with just
few hours out for sleep. All the
gang sang like they never sang
before with these two boys leading with
great gusto.
:
^
a
The San Francisco Bond Club also has
Who deserve special mention:
!
Glenview.
elected
Also
to
the
years were:
.
.-
as
serve
of
period
some
John
SECURITY TRADERS ASSOCIATION OF CONNECTICUT
talented members
,
?
;
•
/?.
Ross
of
Hill
Slocumb & Co. made
a
Richards
&
Co.
-
Golf, refreshments, prizes and
promised.
a
very well represented
&
W.
Davis,
Paul
and
Ernie
Blum
of
piano duet that really clicked.
burd
&
Johnston, Hulburd, Warren
Chandler;
James
McNulty,
J.
Ames, Emerich & Co.; Charles R.
gathering
Perrigo,
&? Weeks,
Hornblower
,
The
committee
possible.
.
-
requests that reservations be made
■?
;
and
as
soon
as
i
Robert
F.
Schenck,
•
.
.
1
Member.
>
This announcement appears
as an
Brush,
as a matter of record only and is under no circumstances to be construed
offering of these securities for sale, or as an offer to buy, or as a solicitation of an offer to ■
buy, any of such securities. The offering is made only by the Prospectus.
- --
•
Houston Hill, Jr., J. S. Strauss & Co., is a dancer Arthur Murray
could use to
advantage, all 6 ft. and 2 in. of him.
; ; Tony Bottari, Blair & Co., and Jack Egan, First California Co.,
10,000 Shares
tops for stories and funny stuff.
j I
Tony was asked how he ever could climb that
steep hill up to
hip house. He replied, "I simply read the paper going up hill and
before I know it I'm home!"
'
are
,
I
Fireworks kept the boys awake and no sleeping was the rule, .o
', J Clif Morrill, Walston, Hoffman & Goodwin, when
ordering scotch
and soda would specify ^Without those fire
crackers in It, pleasel'V;'/:
j .J. Bob Bourne, Conrad, Bruce & Co., was trying hard to induce a
fellow to play 18 holes of golf with him.
The other trader looked so
tired.and said, "I don't think I could make it all
around." Whereupon
Bob offered to carry him the last nine holes.
Such pep! '>''9
,
* The soft ball game was played by Upper and Lower Montgomery
Street teams. They didn't keep score because
no
lingers1 and toes to count the
©
hooti
It
Earl
a
was
swell
fun!
runs
.
f
v
Thomas, Dean Witter & Co., • was given
fellow fun-maker.
one
at 5 p.m. and besides
He reported it cost him
had
no
enough
one
Cumulative Preferred
Stock, 5\% Series
(Par Value $100 Per Share)
Price
-
1
$104
per
share
Plus accrued dividends from May
1, 1947
■'2
gave
Copies of the Prospectus
T,*'\'
egg shampoo by
exactly $5 to get that
may
be obtained from the undersigned,
an
jhair right again (some fun).!' But Earl took-it with
of his that wins friends, etc.? '
«
'•:■? 1 ':
JA Lou Spuller, Elworthy & Co., did a
grand job
'
Upper Peninsula Power Company
'
>
Otis
that great smile
&
Co.
(Incorporated)
as the picturetaker at this party, and deserves three
cheers from all the gang.
j 1 To the owners of the hotel at Agiia
Caliente, Sonoma County, Cali¬
fornia, Eddie and Pattie Levitt and. to Tommiee and Josie
Aleccia;
.
thanks
a
million
for
all
the
treatment by the entire staff.
©
huge
swell
It
success.
was
attention, meals and
The Bond Traders Club
&
Co.
Stroud
&
Company
Incorporated
.
of
Chicago is having their
June
4f 1947
49'
BOND TRADERS CLUB OF CHICAGO
b
Loewi
courteous
superservice that made the party
-•
1
'•••;?
j
\
annual
golf
H.
Co.; Norman Freehling,
i
V'
•
Floor Mem¬
Freehling, Meyerhoff & Co.; Hul-
Committee consists of: John E.
Graham, Brainard-Judd & Co.,
Hartford,.Chairman; George Eisele, Coburn & Middlebrook, Hartford;
Robert Bligh, Fahnestock & Co.,
Torrington; L. O. Ritter, Paine,
Webber, Jackson & Curtis, Hartford.
<•
is,
Billings,
Ralph
ber;
Davis
1 •"
Baker, Dean Witter & Co., a hot violin player.
Brush, Slocumb & Co.—on the piano, what class! "> •"
James M. Stewart, Wilson, Johnson & Higgins, a guitar tickler.'
This threesome did some real hard work
entertaining.
Bob
Gov¬
three
ber; Walter J. Buhler, Floor Mem¬
The annual outing of the Security Traders Association of Con¬
on June 13, 1947 at the
Country Club of Avon
Avon, Connecticut.
1
necticut will be held
in
W.
Ernie Blum,
f
Elm
Old
Casino,
Club,
Ted
!
Club,
the Mid-Day
of
ernors'for
Guest reservations will be handled by John I. Wilier, Buckley
V'
■
-I
.//'.•
oi
City of Chicago, a member of
the Chicago
of-
Summer
minute of
every
to get started on
included golf, swimming;
sure
Steve
and Bill
j
was
Visitors from Los Angeles were
Larry Pulliam, Weeden & Co.;
Turnure, Turner-Poindexter & Co.; Tommy Akin, Akin-Lam¬
■
Silver
a
Bros."'
"
•
the
been planned by Thomas F.
O'Rourke, Stroud & Co., General Chair¬
man/assisted by Chas. J. Brennan, Blyth & Co., Vice-Chairman.
Activities include New York-Philadelphia competition in
golf for
the Stroud Cup; soft ball, and free-foralls in bocce
gnd horseshoes,
Association outing, held May 24
Caliente" (Sonoma
pronounced a huge success.
•
tlThe boys were out in full force and
their stay—some arriving Friday
night to
the "fiesta" early Saturday. The activities
its
Country Club, Havertown, Pa. July
.
.
.
The Investment Traders Association
brate
Bureau,
director of the Board of Trade
INVESTMENT TRADERS ASSOCIATION OF PHILADELPHIA
SAN FRANCISCO BOND TRADERS
ASSOCIATION—OUTING AS
:,
REPORTED BY OUR ROVING REPORTER, EDWIN L. BECK
,')
Business
'
Jf.
•
-
B
see
F. Glenn
ar-
of Merrill
ner
b
On their way to Boston, The Baltimore Security Traders Asso¬
will pick them .up on
Saturday morning, August 9th. After
breakfast, they will be taken on a cruise down Chesapeake Bay to
John
H
general part¬
Lynch, Pierce,.
ciation
Fleming Settle
f
grave has been
Eastern
the National Security Traders Annual
Convention,
J.
o
Board.
Mr.
.
the
nears
Board of
Chicago Stock
Homer
Erzberger, Smith, Burris & Company, is Chairman of the
baseball.
meeting of the Georgia Security Dealers Association
was held on
May 30, A business meeting was held at a breakfast at
the Piedmont
Driving Club in Atlanta at which time
15
Floor
M
Vvfl«W*«WW1 *iM(JfM,il4**l*WlW^I
rt I ntWU*
mawmMwwtmwtt. IVMAMK Mfrf'u
01
,
detri¬
In
addition
to
the impairment of
U.
S.
investor
confidence the
country, but is also
in this
failure
Canadian Securities
By
attempting there¬
tourist demands
between
have al¬
ready been occasions when Cana¬
dian official
dollars have been
supplied to this market. Conse¬
quently any official intervention
in the opposite direction would at
times be not only logical but also
beneficial to Canadian and U. S.
and
projecting the Dominion trade figures for the
first quarter of this year it could v
______
be
demonstrated that Canada's of $64 million
Montreal Light
Heat & Power bonds, a portion of
adverse trade balance with, this
which is in the hands of U. S.
country is increasing to such an
holders. As a result the free dol¬
alarming degree that the Domin¬
lar which had just commenced to
ion's exchange reserves will be
almost entirely dissipated by the register the effects of the early
This, however,
is by no means the case. During
the first quarter of the year it
is normal that Canadian imports
remain on a high level while ex¬
the
of
year.
ports are at their
the
quarter, spring thaws re¬
mighty avalanche of Cana¬
second
lease
lowest ebb.
hand during
other
the
On
a
which could not
move
during the winter months.
Moreover at this time the Cana¬
dian winter season rise in imports
commences to diminish.
The sit¬
uation is further improved during
the summer months by the Do¬
dian
exports
the tourist traffic.
character¬
istic of sudden reversal. For the
also there is the
same
part Canadian travel in
most
is
dian
Investment
change.
The
country is
provi¬
a
spreading the risk by providing
for a fee. It is not the
purpose of this bill, however, to
denounced the provide guarantees for either
short
or
long-term
financing
tax reduction bill as inflationary.
which banks can and should ex¬
He also expressed opposition to the
in steady
the
In
course
investment banking
Collins & Co., has been
Eccles
an
are
enterprises is for long-term funds.
Some businesses need funds for
modernization of plant and equip¬
ment and additional facilities. The
Corporation.
struction Finance
statement to the
Banking
and
Currency
formal
His
House
Committee follows:
I
,
increase in
sections. The
section. 13b of
Federal Reserve Act and prOr
bill has two
The
one
consequently subject to
In the past
addition to the adverse
influence of the March trade fig¬
ures
there was the unexpected
announcement of the redemption
week in
ticularly
,
:
GOVERNMENT
i
size
Baird
Robert W«
Arnold
Hazen S.
Collins
H.
for
guarantee in part
chartered banks, par¬
by
loans
small and medium-
to
businesses that
need ? capital
periods up to 10 years.
'.'needs^rHave
financing
whose
Banks to
serve
factors v many
ous
lending, authority
a
provision
which would enable Federal Re¬
vari¬
enterprises
Because of these
ventories.
repeals
vjides for the return to the Treas¬
ury of approximately $139 mil¬
lions that was set aside from the
gold increment to enable Federal
-Reserve Banks to make direct
loans to industrial and commercial
businesses. The second section of
the- bill substitutes for the direct
extreme fluctuations..
arises from the sharp
prices and greatly ex¬
panded volume of business result¬
ing in a much larger volume of
accounts receivable and
of in¬
R. 3268.
H.
also
need
opportu¬
glad to have an
am
nity to appear here this morning
in order to urge the passage of
the
in this
without assistance.
tend
that higher interest rates
The basic need of the smaller,
anti-inflation remedy,, and
owned
business
advocated
abolition of Recon¬ independently
theory
first
Julien
without
by
of
insurance
size businesses.
of his testimony,
small and medium
Chairman
CANADIAN BONDS
to ten years
protection as provided
this bill. It amounts to a form
some
banks to
by chartered
loans made
for from five
to
Banks
guarantee
in
part
term
Eccles
S.
Marriner
constitutes the Cana¬
economic barometer
dian
essential fi¬
going to the
enterprises to obtain
nancing. The costs of
busi¬
capital markets for small business
sion which are prohibitive. Likewise, many
would
enable banks
properly feel that they
the
Reserve cannot extend some term credits
ness
Canadian free dollar mar¬
which
ket
to
to
purpose
_
direct
make
loans to
«
:
of
Reserve
demand.
President of the Chicago
the
Federal
gold stocks were
smaller businesses for
of providing them
with necessary capital that they
could
not otherwise obtain. It
will fill a gap in private financing
that now exists in enabling these
cially
au-
Banks
June 3
important to emphasize
that the principal purpose of the
bill is to make term loans espe¬
is
It
current
thority
Board ap¬
Currency Committee on
stitute for the
Head
Bankers Association of America
Julien H. Collins,
firm of Julien
sub¬
would
nominated as the next Presi¬
mostly takes place in the short dent of the Investment Bankers Association of America, it was an¬
summer season.
Thus during the
nounced by Edward Hopkinson, Jr., Drexel & Co., Philadelphia, Pres¬
coming months the appearance of
ident of the Association. Named with Mr. Collins were the following
the Canadian situation can under¬
nominees for Vice-President: Hazen S. Arnold, Braun, Bosworth &
go another somewhat bewildering
direction
opposite
the
in
ment
which
3268
Julien Collins Nominated to
this
country is concentrated in
the
winter months whereas the move¬
securities
Canadian
in
Bill
House
During the week
of the free dollar
disconcerting to the
only
not
investors
Eccles of the Federal Reserve
Chairman Marriner S.
the weakness
following the
In view of the attractive dis¬ Montreal Light Heat & Power re¬
count, the bulk of the tourist demption announcement caused a
traffic purchases this year should
sympathetic decline in Dominion
•be effected in the free market.
internals. In the external section
Conseauently this heavy volume
of the market there was an almost
of
demand concentrated in the
complete absence of activity and
space of a few months is likely
price changes were negligible. As
to cause another abrupt turn in
a result of continuing rumors con¬
this market. This erratic behavior
cerning the price of gold, Cana¬
Df the Canadian unofficial dollar
from.
and also urges end of
peared before the House Banking and
in support of»
mutual interests.
violently
7*4% bid to 10% offered.
tourist demands reacted
great invisible export—
In this instance
minion's
capital transactions
non-residents only, there
reduction on
Reconstruction
Expresses opposition to tax
banks.
ground it is inflationary
Finance Corporation.
nally devised for
period of the year
path.
For example, by
end
with private
small business and would not
market was origi¬
unofficial
the
Committee this type of financing is needed by
bring Reserve Banks in competition
Tells House Banking
in a loss of valuable
dollar exchange. Although
S.
U.
economic statistics covering any one
the casual observer is immediately on the wrong
fore to draw
authorities to control the
of the free dollar will re¬
sult this year
abrupt changes. In
its course, is subject to
conclusions from
governs
Of Term Loans
the part of the Cana¬
course
climate which largely
like the Canadian
on
dian
WILLIAM J. McKAY i
The Canadian economy
to
Guarantee
Eccles Favors Federal Reserve
Canadian interests.
mental
Thursday, June 5, 1947
FINANCIAL CHRONICLE
COMMERCIAL &
THE
(2992)
16
VW JfWWttf B
tiVAiWK
l|^uv»6c*l^wW#*M^«W»WHiMt +#
ordinarily be6h~rftef through cur¬
rent borowings now need "a fund¬
short-term obligations
ing of their
Into
a
term loan.
for
-Need
Owners
a
a
;iv*
•
.
- -
•'
•
Smalt Term Loans
of small
enterprises, as
rule, prefer to obtain funds on
loan rather than on an equity
basis
because
their
stock
diluted
or
they
do. not wish
.
to (be
to run the risk
of los¬
ownership
ing control of
the business. Term
(Continued on page 43)
•: t
'
Spokesmen Oppose Guarantee
ABA
PROVINCIAL
Kenton R. Cravens
capable of meeting credit
Earl R. Muir and
MUNICIPAL
banks
CORPORATION
are
of Loans
tell House Banking Committee
demands, without Federal aid.
engaging in banking business.
for the American Bankers Association
the House Committee on-Banking and Currency in
Oppose government
On June
4, two spokesmen
appeared before
CANADIAN STOCKS
opposition to H. R. 3268, which
would give the Federal Reserve
Banks
authority; to guarantee
loans of chartered banks up to
long as a period
when made to pri¬
arid individuals.
At hearings of the Committee
on
the previous day, Marriner
S. Eccles, Chairman of the Board
of Governors of the Federal Re¬
90% and for as
of ten years
A. E. AMES & CO.
INCORPORATED
H.
STREET
NEW YORK 5,
N. Y.
Robert W. Baird, The Wisconsin Co., Milwaukee; Hal
Robertson & Pancoast, San Antonio; Carey S.
Angeles; and Laurence M. Marks,
York.
boards
Committee,
of the Association,
Nominations, made by the
governors
considered
tantamount
election in the I. B. A., which
are
act on the
to
will
ticket at its annual con¬
scheduled for November
December 5 at the Holly¬
Beach Hotel,
Hollywood,
vention
30
to
wood
TAYLOR, DEALE
Mr. Collins
of
64 Wall Street,
New York 5
WHitehall 3-1874
1943.
was
has
Association
elected
been
SECURITIES
Municipal
Corporate
Provincial
-
■
-
a
Vice-President and
each
has also served
of the
Education Committee, which in¬
augurated and has been in charge
of the Association's program for
since.
since
Government
a
returned to office
year
CANADIAN
served as a governor
from 1940 to
Then in November 1943 he
the
1943
He
as
Chairman
recruiting and training youg men
for the investment banking busi¬
ness.
on
I.
B.
the
pany
Collins
during World War I,
graduated from the
In addition, he has
Chairman
of
the
served as
Membership
degree in 1919.
associated with
S.
He first became
the Harris Trust
and
Savings Bank, Chicago, where
he
remained
as
from
1919
to
1935,
Manager of the bond
department from 1931 to 1935.
and
became a.
director
Company,
bankers,
and
of
Trust Com¬
Kenton R. Cravens,
01 the Mercan¬
Bank and Trust
of St. Louis were the
Vice-President
in the Navy
1935 he
strongly urged the
Louisville (Ky.)
the
A.
serving
System
passage of the measure.
Mr. Earl R. Muir, President
the
Following service as an ensign
Mr.
serve
the Finance Com¬
mittee, and as Chairman of
Central
States
Group
of
University of Illinois with a B.
Florida.
COMPANY
&
M. Marks
Dewar,
Dewar,
Hill, Hill, Richards & Co., Los
Laurence M. Marks & Co., New
of
NY-1-1045
RECTOR 2-7231
Laurence
S. Hill
Carey
Dewar
Co., Toledo;
H.
TWO WALL
H.
concerns
vate
of
In
Vice-President
Hall &
Harris,
Chicago
Muir
R.
Earl
Company
pointed out the dangers of the gov¬
indirectly in the banking business. .
"The
American banking sys-^
of our system of private enter¬
tern," Mr. Muir told the Commit¬
prise."
tee "has the facilities, the funds,
Mr. Cravens added to this "We
two
ABA spokesmen,
ernment
the
to
of this
superimpose on these
desire and
meet
the
nation.
and both
engaging directly or
the willingness
credit demands
To
adequate
facilities agencies
for
investment governmental guarantees of credit
will do much to destroy the ini¬
an<f0 continued in
that
Kenton Rj Cravens
tile-Commerce
tiative * of
the
busihesstnan
lead:,
|p
the
individual small
and may
ultimately
complete destruction
are
opposed to
governmentibank-
the grounds that • it; uses
tax money free of charge and in
turn pays no taxes and therefore
represents an unfair advantage on
a
competitive plane,- and more
important it is the first step to¬
ing
on
ward
the
nationalization of our
system and .the
enterprise,"
banking
free
,
end .of
"
Volume 165
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4600.
Congressional Survey Reports
Falling Prices and High Wages
New York Stock
Exchange
Weekly Firm Changes
Bulk of
of a questionnaire on business trends this year.
replies show expectation of mild recession.
mary
-
firm
Congressional Economic Committee, under Chairmanship of
(R.-Ohio), issued on June 3 a summary of
a questionnaire sent ®
out through Dun & Bradstreet to come taxes and reducing public
leaders in manufacturing, finance, works expenditures..
A
Senator Robert A.. Taft
man,
the results of
on
economic trends
whether they
are dangerous, whether they look
toward greater or less prosperity,
and
if
toward
less
prosperity,
what
be done about it."
can
"It
are,
felt,"
said Sen. Taft,
"that men engaged in any indus¬
try should be good authorities on
the future of their own industry.
We hope this survey will be of
assistance to us when we begin
hearings."
was
According to the
was
survey,
majority
a
between
partnership in Fried¬
Brokaw & Samish, St. Louis,
Exchange,
member of
a
withdrew
from
partnership in Edward A. Viner
Co., New York City
Alfred
the
He
P.
Parker,
Exchange, died
reported that his Committee
23 would start hearings
on the general economic situation,
including wage levels and price
bership
trends. These hearings are sched¬
sidered
uled to last several weeks.
June 2.
on
member
on
of
at
the
annual
Field Day
which will be held on
(June 6) at the Sleepy
Hollow
Country
Club,
Scar¬
borough, N. Y. According to Wil¬
Friday
Frank A.
Frank
A.
Shea
Shea, Jr., will be
by
the
to
con¬
Exchange
on
comment
Street Journal" is
and
at
may
$1
on public sale
be ordered in advance
per
Smith
at
copy
Merrill
from Norman
Lynch, Pierce,
Fenner & Beane.
The Field Day program includes
usual elaborate program of
the
Laemmel, Chemical Bank
Trust
Field
marked
Day
the
after
revival
a
of
the
wartime
Field
five-year
GeraldJ. Weir With
L. D. Sherman & Co.
There is particular interest this
year
in the "Bawl Street Journal,"
the
of
and
sports, including golf, tennis, softCompany, Chairman of
ball and horseshoe pitching.
Day Committee,
the
turnout for the event is expected
to surpass that of last year which
&
the
Transfer of the Exchange mem¬
June
record attendance
a
Streeters
lapse.
May 28,
June 12.
on
Wall
liam G.
Henry C. Keenan,
&
of
"news"
handled with spicy and sparkling
satire.
This
year
the
"Bawl
club's
Which
will
outing.
humorous
newspaper,
distributed at the
be
Those who have had
an
advance look at the paper declare
Gerald
J.
Weir
affiliated with
L.
D.
has
fall
but
& Co.
there
that
of
wage
hours
in
decrease
worked
per
week, higher inventories, greater
plant capacity,
and reduced
profits.
Construction
costs
were
re¬
ported as preventing maximum
employment, while high food and
raw
materials
prices prevented
drop in living costs.
,
As to the tenor of the
replies,
60% from manufacturers of pro¬
ducers'
predicted increase
52% expected an
increase for their industry and
only 37% an increase in general
business; 61% of consumer goods
producers expected increases in
in
net
goods
sales,
their businesses.
Reports from labor leaders were
pessimistic than those from
business. Most groups, outside of
more
labor, favored
raising rent ceil¬
reducing
ings,
Federal
aid
to
housing, eliminating Federal sup¬
port of farm prices, reducing inInto sales contracts for all this capacity, and con¬
Roy Chapin, Others
BRINGING natural gas from Texas and
see,
Join R. C. O'Donnell
D E T R
struction of the necessary pipe lines will begin as
Louisiana into Mississippi,-Alabama, Tennes¬
Indiana, Kentucky, West Virginia, Ohio,
OIT, MIC H.—Roy F.
Chapin, member of the Detroit
Stock Exchange, Charles J. Boige-
AND
its
TRANSMISSION
COMPANY
is
soon
are
GAS
and New York, TENNESSEE
Pennsylvania
From December,
meet the acute need for natural gas in its territory.
were
94% billion
billion
cubic
feet.
Current
deliveries
year ago
and
are
approximately 290,000,000 cubic feet daily.
the
The
Company
application
to
pending
increase
its
serious
fuel
situation
in
the
terminus
with the
at
Agua
important
gas
Dulce,
lines from
Texas,
reserves
to
in the
Rio Grande Valley of South Texas. Upon comple¬
in full swing.
has
present
connect
cubic feet daily, and this construction
now
a
area.
The Company is now extending its pipe
Power Commission to increase its delivery capacity
is
basis, transporting approx¬
One
public convenience and necessity from the Federal
program
emergency
preventing
Appalachian
the Company was granted a certificate of
to 381,000,000
temporary
imately 125,000,000 cubic feet of natural gas daily
cubic feet of natural gas, an increase over 1945 of
21%
1946, to May, 1947, the Company
operated the Big Inch and Little Inch Pipe Lines on
a
to consumers
approval is obtained and materials
FPC
available.
expanding
pipe line capacity and operating facilities to
For 1946, deliveries
as
tion, the line will extend 628 .miles through the
the
before
daily
FPC
entire oil and gas region of the Texas Gulf Coast,
an
East Texas and Louisiana, giving the
through-put to
Company
a
total of 1,364 miles of pipe lines in operation.
600,000,000 cubic feet. The Company has entered
■
Roy F. Chapin
grain, Edward R. Gaynor, and Ed¬
ward C. Smith have become asso¬
Another
ciated with R. C. O'Donnell &
Southern
Co.,
Penobscot Building, members of
em
advertisement in the
industrial
industries,
is
series
ready
to
dc
by Equitable Securities Corporation
featuring
Equitable has helped to finance mkny South'
developments.
its part
in
supplying
others with
capital funds.
the Detroit Exchange.
formerly part¬
Co., with which
also associated.
Mr. Chapin was
ner
in Chapin &
the others were
M
ffll ■
NEW
NASHVILLE
George W. Ward Joins
Staff of Ward &
George
W.
Ward
Co./
has
J^ecome
DALLAS
KNOXVILLE
EQUITABLE
NEW ORLEANS
Ward
was
Mr.
Securities Corporation
TWO WALL
STREET, NASHVILLE 3, TENN.
<►-
CHATTANOOGA
BROWNLEE O. CURREY, PRESIDENT
322 UNION
formerly manager for
Amos Treat & Co.
HARTFORD
GREENSBORO
associated with Ward & Co., 120
Broadway, New York City.
YORK
MEMPHIS
BIRMINGHAM
4m?-
•" '
&
Co., 30 Pine Street, New York
City, Mr. Weir was previously
utility trader for Amos Treat
most goods will
rates will rise. A
majority held there would be a
slight decrease in employment, a
year,
become
Sherman
and the end of the
now
prices
opinion
from
Outing
The Bond Club of New York is
prepared for
May 31.
the
Senator Taft asserted the in¬
labor, farmers and distributors, in¬
quiring into the present economic quiry indicates "talk of a reces¬
situation and trends. According to sion
is
due
more
to
external
Sen. Taft, the purpose of the in¬ propaganda
than internal
evi¬
quiry was to enable the Com¬ dence."
mittee to form "some idea of what
changes:
William H. Hartnett, Edward H.
Morfeld and Morris M. Moss re¬
tired
ever printed
business, financial and po^-
with
litical
Forecast for
17
it is the best edition
Record Attendance Is
The New York Stock Exchange
has
announced
the
following
House-Senate Committee "on the' Economic Report" releases sum¬
(2993)
STREET, NEW YORK 5, N. Y.
vJ> siw.;u
18
THE
(2994)
Thursday, June 5, 1947
COMMERCIAL & FINANCIAL CHRONICLE
Excerpts from' port".. Wellington Fund comments
on, its portfolio changes
during
couple of months. In¬
"The C. & O. is replacing every the past
creased common stock purchases
old sleeping car, day coach and
were made»in
the following isdiner, on all our main lines, with
equipment shares.
the ad follow:
sues./..
modern -streamlined cars.
August one of the C. & O.
"Last
By HENRY
"Dollar
They were wrong
bullish.
+!-»/■**»•
1T-
SHARES
of
,
when
Dow-Jones Industrial
war
four
A
in¬
the
will
pick, about 155
for the low.
few,
your
correspondent
cluded, believe that .we saw
request
investment dealer or
Distributors Group, Incorporated
63 Wall Street,
New York 5, N,
Y.
TRUST FUNDS
Prospectus upon request
your
investment dealer, or
NATIONAL
RESEARCH
fairly low
"
V
and
purchases were made in
Airlines
Initial
United Airlines, Eastern
_■
is; not
equipment
a
Texas
American' Insurance ol
Co.;
Public Util¬
Newark and General
& Co.
Deere
,
-
<
■:
but
:'
A:A. Or Smith
generation
ago—"M.I.T.,. /ranks
as the oldest and largest of
the
mutual
or
"Boston •/.type"
funds.
Partly as a result .ofVits
N
Corn Products
the
•
;
r
from
from
new york 5, n. y.
that
group
.stockholders.
is the group that
third
The
Kennecott
.;
the
is
second
just enough not to disfran¬
does
chise
'/National City
Trust '•
and
The
■:,
Bankers Trust
1.
fully the
understands
importance of giving
the greatest freedom and play to
stockholder relationship.
value
r
r
there are
"a,"
question
that
ments
included:
Stocks sold on balance
to
three groups of managements:
One is the group of manage¬
ities.
./Youngstown Steel Door
economically?
As
all
the stockholders , from
keeps
pAp; ■;
voting.;
,p,
f h ' ■'*
•
This last group,
although I have
10 figures, is in the minority.
The
As of May. 21, the company's
niddle group is in the majority
$39 millions of assets were di¬ and the first group is very much
size
(total assets close to $200,- vided approximately as follows:
:n the minority.
My plea is to
000,000), it also affords thg lowV Cash and Governments 29%; In¬
the middle group and to the third
est annual expense ratio/of any vestment
Bonds t & /Preferred*
group.
The middle group must
fund in the business—less, than 21
Common : Stocks 40V2% •
recognize and very soon that the
one-third of '1% last year£ 'Ay
Appreciation
Bonds
and '■ Pre- greatest help they can give to the
"M.I.T."/ is a commoni stock ferreds 9%.
:
'
maintenance of the American sys¬
.■>";•
r.
fund and follows a policy of be¬
tem and way of life is to act on
'•
ing close to 100% invested at all Notes:
the
principle that every large
times.
Its. portfolio leans?. toward
Captioned "Chester in Wonder¬ public corporation is a part of the
equities of the more conservative land" Selected Investments Com¬
democratic machinery of this na¬
type.
■
" >-7-. pany of Chicago states, "Chester tion...
.-"tjV'yv
Rayonier
y
-
p
,
-
■
,
,
Massachusetts Investors
Fund, with assets of
Second
about $15,-
v
thinks
Bowles
can
we
de¬
avert
prices
back
rolling
by
pression
is under the same man¬ 10% & increasing wages 15c an
"Dollar averaging" works best
agement. Portfolio is similar to hour.":'
'
in a volatile issue or in an invest¬
that of "M.I.T." but a minor porT
IDstributors Group has a new
ment
fund
comprised
of - low
tion of assets is invested in'small,
folaer on "Dollar Averaging" and
priced common stocks which in¬
relatively
unknown
companies. recommends its application to In¬
evitably moves faster, both up
Cash holdings at year-end (17.8%) vesting Company Shares and Av¬
and down, , than the Dow-Jones
were
000,000
It
often
>
also larger.
;
surprises
to
me
see
businessmen quite anxious to keep
the competitive system alive bev-
they want the lift of chal¬
of
pressure,
of
being
cause
'
SECURITIES &
CORPORATION
120 broadway,
taining his shares at a
average cost.
„„/■
' "
■
%
"V
next 10 months
politically and economically?
(c) What is the effect outside
of the United States, politically
American Tobacco
'
averaging" may* be 'de¬ today
in a security
that fluctuates with the general
market and be pretty sure of ob¬
the
attitude within the United
Co.
American
.Standard Brands '
:
Organized in 1324—less' than, a
.
.
'
DuPont
North
What is the effect of that
States,
(b)
;
;
Westinghouse
passenger
Massachusetts Investors
.
IATIONAL
Continental Cas.
previous
THUMBNAIL SKETCH—NO.
Vperiodically in the same
security, thus enabling the in¬
vestor v in
terms- of - acquired
shares, to make his larger pur¬
chases
at
low
prices • and his
smaller purchases at high prices.
In actual practice, the investor
with $10,000 in surplus cash today
could invest $1,000 monthly over
itself into several
Continental Insurance
receipts
equal the, total cost of the
"Modern
dollars
from your
clear to the American
This proposition divides
parts:
(a)
What is tne attitude of
American
management towards
stockholders?
V
public.
Great American
market on luxury that only a few.fortunate
May 17, when the Dow-Jones In¬ systems, like the C. & O. can af¬
Even a bankrupt railroad
dustrial average closed at 163.21, ford.
Assuming that one of the above can borrow money today to buy
groups is right and
that stock such equipment at 2% interest." 1
fined, for the uninitiated, as the
investing of the same amount of
(Continued from page 7) ;
holder very
New- Jersey
of
Fidelity Phenix Insurance
year —
traffic was still swollen by
emergencies.
In less than
years, .at the. present rate,
trains!
Oil
C. I. T. Financial
point of the
low
"Dollar
prospectus on
the
the increase in
prices
rally
substantially after
they
hit
bottom,
the present
would appear to be a good time
for the investor with surplus cash
to start "dollar averaging.":
;
a
of
period
•
V
Commercial Credit
.
same
Average of 125 to 135, more are in
the 135-150 bracket,"while others
the
Group Securities, inc.
/
than old trains carried over
route during the same
gers
the
• •
;•
'
Standard
Rapids.
Since they have
operation the new trains
carried 85% more passen¬
have
prognosticators were
rirflSf +Arlotr
Vot
nimity among their current predic¬
tions.
Some forecast an extreme
AUTOMOBILE
between
'
Management
Standard Oil of Indiana
trains
Detroit and
ultra-modern
in
been
surprising lack of una¬
low for the
run
c
Gulf Oil
Marquette/, ih-;;
Pere
two
«
Grand
then- possibly they are right today. Yet
there is a
its
on
bearish today. A year ago, at
of these same price
the market, many
the top of
stalled
Averaging"
market technicians are
Most stock
the
lines,
HUNT
Is
.
lenge,
watched.
with
But
to
regard
stockholders, they want to be mo¬
nopolists of power.
Most man;-
iation Shares. /
\
agements would be very much
For'the more
"M.I.T." iscurrently offered
The I. C, A. Distributors have better off if they gave more de¬
however, around
$26 a share to yield nearly
new, folder, showing the 13-year tails of their business to stock¬
"dollar averaging" could well be
iV2%r- based on payments, from record of Investment Company ot holders and
brought stockholders
applied to the purchase of a bal¬ investment- income alone during
America.
more
into
the
business
of the
anced fund or a fund designed
the
past 12 months.
The first
".Trust and Estates", Magazine is company, so that the stockholders
primarily for income.
quarter 1947 payment was .27% running a series of five articles could give real aid to manage¬
larger than a year ago, as a result on Mutual Funds written by Alec ments. The day of corporate man¬
Chesapeake and Ohio Sets Pace
of increased dividends on the un¬
B. Stevenson.
Full page ads ol E. K. Young's
agements standing alone is gone.
C. & O. Railroad titled "Why the derlying stocks.
Industrial Average.
*'•
investor,'
conservative
a
Not to Mod¬
good reading last
Railroad Can't Afford
ernize!"
week,
made
for
owners
of
In
railroad
s
"Interim Investment Re-
an
A. M. Kidder
A.
Union
Acquired
Cohu Florida Offices
| gjgi | fM
Preferred
Stock Fund
Co., One Wall
M. Kidder &
Street, New York City, members
of the New York Stock Exchange
and other leading
exchanges, an¬
the acquisition from
nounce
I
& Torrey
Cohu
of all of that firm's Flor¬
offices, which are located in
St. Petersburg, Orlando, Tampa,
Fort
Lauderdale,
Clearwater
ida
Prospectus upon request
Miami,
Sarasota, ' Fort
Lakeland
and Deland.
Warner
Edwin
Lord, Abbett & Co.
INCORPORATED
New York
•—
SHARES OF
Missed
Managements Have
Wellington Portfolio Changes:
Chicago
—
Los Angeles
CAPITAL STOCK OF
Myers
Charles
Rob¬
and Albert
I
Boat
the
Managements have missed the
boat, time after time, in matters
involving governmental regula¬
tion
control
and
matters
in
and
involving their relationship with
labcr by not enlisting the aid qf
It
stockholders.
that
a
T. with
at
its
inconceivable
is
like the A. T. &
stockholders' committee
company
a
elbow, representing 700,000
stockholders, would have as much
trouble with its labor people as it
recently did. It is inconceivable'
that. that
in
could
coal
the
have
railroad
or
happened
situation
of Cohu & Torrey, who or in the electrical industry, or
in the steel industry or other in¬
responsible for the develop
dustries
where
serious
strikes
ment of the Florida offices, be
come
general partners of A. M, have done tremendous damage if
managements
tied
their
stock¬
Kidder & Co.
'
There will be no change in the holders to themselves effectively..
erts, Jr.
are
personnel of the Florida offices
Direct wires will be maintained
to the
principal Kidder offices in
New.
York,
Montreal,
Bridgeport, Conn, and
Detroit,
extent
To' that
have
not
the
stockholders
disfranchised,
been
in its technical
I
can¬
"disfranchised'r
the word.
use
sense.
It must be
used in its broad sense.
:
\
Burlington,
Deal
Must
Vermont.
There
is
With Labor
other
one
thing
par¬
I wanted to men¬
tion.
Take the building industry
today—which is almost flat on its
ticularly that
COMMONWEALTH
INVESTMENT
COMPANY
Diversified Investment Fund
with Redeemable Shares '
A
★
•
Prospectus
your
map
be obtained
Congress Street, Boston 9,
GENERAL DISTRIBUTORS
I
;
PARKER
CORPORATION
ONE COURT STREET.
BOSTON 8, MASS.'
,
NORTH AMERICAN
2500 Russ
millions
are
stockholders
of
holders
uponi
and
se¬
interested
in, the;
building of homes and in real es¬
tate.
Every policy holder, every
steel company stockholder, in fapt:
there is not a stockholder in any*
interested!
all
organized by management, for, in¬
company,
who
in this situation.
stance,
THE
Mass.
Prospectus on Request
★
Keystone Company
of Boston
SO
obtained from
local investment dealer, or
Prospectus may be
local investment dealer or
your
Tke
millions
curity
Funds
from
There
back;
to
SECURITIES CO.
in
make
not
If they were
a
demand
upon
the labor
Building
is
San Francisco 4,
California
the
them
people who are engaged
building industry, asking
on
a
cut out the
man-to-man
basis
to
featherbedding which
Volume 165
'.0mi
Number
in
i'im
11
they
have
been
least
■
ii
4600
'
i
>
i
i
THE
-
(2995)
will
in-for
engaged
would
we
have
ter¬
a
tween
rific
This situation
For
high heaven. Imagine millions of
security holders not only talking
directly to labor and the\ labor
ness
far
,
people
but
Truman and all other government
representatives that this feather-
After
that
very -little
about
problems.
For
.
Protection
of
late.
to
to
•
stance, in the Standard Oil Com¬
of New Jersey, one of the
best-run and operated companies
in the world. It is certainly in the
pany
number
bracket
one
that
I
the
ranks
be counted on
of
The
failure
get
justice
Or
labor
or
already
by
discuss.ng
Hungary and
But
beyond that.
it
We
all
illus¬
the
Ru¬
.
goes
are
parts of the world.
We are going to have to" invest
billions and possibly tens, of bil¬
in¬
lions" in various parts of 'the world
and, it must be a paramount ele¬
to sup¬
of
ment
our
to make it
program
exceedingly clear that the billions
that
the
are
going to be invested and
billions already invested are
.
italists
property of millions upon mil¬
Americans, directly and
indirectly. There are tens of mil¬
lions- of
govern¬
any
lions
of
Americans
who
have
interest in every dollar that is
is to be invested
or
abroad and it is
monopoly cap¬
royalists or
war-mongers
putting their
who
who
cans
own
American
money and American
the
that
even
Fravda
and
Isveztia
could not deny it. Every business
mission abroad might well have
the
world.
hands
of
war
was
management, supported by its own
electorate, to also be the hope of
the world.
some
representative of the little
stockholders going along just for
For without American
production, American machinery,
American
money,
American'
world may dis¬
impressive public relations if for
"know-how," the
ho other reason.
integrate
.
the
These people around the world
must
know that the Americans
are
world."
and
in
'
business
that
it
sense
fullest
and
million
fully enfranchise
that
Americans
when
Rumania
nation
I
wrote
also doinj
mittee
the
asking
Why it is not practical for
of the
a
com¬
stockholders repre¬
senting hundreds of thousands of
Americans to be appointed by the
^management to aid the
in
ment
making
manage¬
A Dollars-and-cents
representations
either the Hungarian, Ruman¬
ian or Russian Governments con¬
to
cerning
the
property.
that it would be far
if
Travelers, Labor and Investors
effective
janitor who owned two
three shares of Standard Oil of
or
New
Jersey,
or
his wife who
textile
a
shares
owns
or
driver
or
five shares
who
owns
or
ten
colored
a
one
taxi
a
owns
worker
two
or
porter who
shares, to iden¬
"
T-S
P
tify their interest with that of the
Rockefellers
or
Jersey.
more
passenger
representative
alone to the
far
officer
or
available
to
the
V and
is
As
to
of
Democratic
want
'.. largest
systems
\
•
•' f
_
:
and
industry afford large outlays for
an
equipment?", ,d
new
i
knows that the rail-r
--
lagging rates. "How," they ask, "can
such
.
our
back serious - deficits -in
caught'between rocketing costs
are
•'.■ The
afford
here is
'
■
:--
answer
is that the railroads can't
not to
make-these
outlays. And
Which will it he—modernization
dollars-and-cents example:
a
They
The Investment That Is Fast
to
get stockholders' annual
over with too quickly,
are often trying to work out
Here is the
than
Returning Its Cost
scheme by which the stock¬
holders could have as .little to say
Last August
bs possible and have as little in¬
formation as possible. This state¬
ment takes into consideration that
time streamliners—the last word in
pas¬
Some
it
is
many
in
only
of
our
companies
businesses
recent
years
that
individually owned
have
become
elective
public corporations.
As to the main point "b"—I do
pot have to stress the fact that
Pere
senger
The
was
the
of the C&O Linesj the
increase in passenger receipts will equal the
tolal cost of the trains!
■.
day¬
proof of the pudding: In less
at the present rate, the
years,
I
Modern equipment is not
a luxury that
few fortunate systems, like the
C&O, can afford. Even a bankrupt rail-,
trains have carried 8$% more
road
can
such-
route
;'
during the
same
period of
previous year—when traffic
swollen by war emergencies. "
was
.*
'
still
borrow money today
to buy
equipment at 2:% interest.
'
Railroads
now
face
a
critical .choice:
ized for the purpose of
'making
the stockholders of American cor¬
\
-
L
•.
as
can
groups.
The Investors League
"
Which Way Do We Go?
organ¬
porations as effective in behalf of
American managements as much
in behalf of any other Ameri¬
If pessimist
deficits?
Terminal Tower,
Cleveland1, Ohio
thinking, old-line practices
and Toonerviile
equipment continue to
be tolerated, then regardless of rate
deficits
farther
certain.
a
than old trains carried over,.'
new
same
new
4
only
attractiveness. *j
passengers
the
one
Marquette, installed two
or
the Investors League
continued
or
are
meetings
^hey
>
1943. And everyone
roads
•
Process
too fearful of stockholders.
;
t
They point out-that several cf
power
They
oil sleeping-par, day
its main lines, with
on
thetindustry.: are still
But lately more
reasonable people have been asking, "How
can the large-scale replacement' of
old
trains be practical?" 1 •
.«
group
the democratic process.
every
'the
open
of travel... The C&O
shaking their heads.
thought
3, that is an easy
proposition. There are too many
managements, although they are
In the minority, that do not trust
over
But Is It Practical? i:
the best management in this coun¬
Distrust
replace
Standpatters in
management of Standard
but nevertheless shows that even
the
replacing
streamlined care.:
the
prestige which only its stock¬
holders have because they are the
masses, for the benefit of the com¬
pany and the country.
on a new era
coach and diner
fact of representative government
In industry, is in effect- disfran¬
chising stockholders of American
corporations.
I am certain that
and
'We have stumped
services,.: railroads could
door
point that
<even, that
management, : by not
using fully the ideology and the
try is still not using
cars.
over we havei. stated that,; given
attractive equipment, and new comforts
It will not be considered too criti¬
the-
•
and
y
cal when I illustrate the
this is furthest from
great
tired, creaking old day coaches; And
j. As a friend of Standard Oil of
New Jersey management, I hope
<of
for sleeping
pass
•
.
a
;
for modern streamlined trains to
man¬
agement in dealing with our own
State Department in a situation
of this kind.
?
'■
•
..
pooned the "rolling tenements" that still
It would
be equally important to have this
committee
"
In print and Li private we'have lam¬
Hungarian, Rumanian
Russian Governments.
or
be
..
equipment—or forfeit
opportunity.
effective than sending some
That would
.V.'r,/.J j
•
long time the C'&O has said that
•
Oil of
New
J
; •'
-
or a
America's railroads must modernize their
the President and
Chairman of the Standard
company
Example That Will Interest
believe
I
more
some
relief,
bankruptcies are
'"
But, if,
bilities
and
on
the other hand, these lia¬
replaced by modern ideas and
trains, our railroads can again be
are
modern
a
credit to
a
bulwark of
as. every
our
country. They can also be
national defense, which,
our
citizen knows, depends
flourishing transportation system.
world1
are
the talking.
Hungary ' and
Russia;
the
speaks, * SO;
still under the domi¬
are
of
these,'
peace,
it
just
that
know
of
for
security
knows
millions of Ameri¬
upon
With
destined
and
the
one
have
blow up.
is
in our
time. American
management will
not come into
its own until it
enfranchises its own electorate in
It is the managements of
in 'their power to
millions
belief
world
prosperity
clubbing their savings to" shoyy
their. faith
or
speak of the company property in
and
Rumania
having
been regained merely under nom¬
We
hope
peace, it is in
American business
Hungary
control.
the
In
to and yet I just had to
write to them because I received
their annual report, in which they
inal
indus¬
industrial
management in
of
referred
Governments
19
trial securities to
become a great
reservoir of power and
influence
for American
industrial manage¬
ment itself.
American
are
know-how for purposes of exploi¬
tation into various parts of the
world.- That fact must be so clear
to the people around the world
American
an
or
economic
or
business
the
other group
is
in
effect
disfranchising the
stockholders by the action or in¬
action of such managements.
or
foreign
great 'many
The stock¬
the
Oil,
(the
not Wall Street
going
to meet the ideological pattern of
Russia- and
totalitarianism in a
of
from
"c"
situation.
much
listing and mobilizing stockholders
Foreign
stock, for in¬
owns
can
in
that
mania
Only the number of
found
point
Standard
management
recognize the importance of en¬
ment
My family
concerned."
to
trated
- owners
.of
country must become articu¬
the
.
Interests
.
is
port needed changes.
holders and security
worry
;
■.
.
business
vestors
.domestic
our
as
of business.
day's
a
need
we
another.
and
As
o
situation)—I have
instance, consider the unfair¬
of some of the tax laws, as
voters
bedding stop and we get down to
work in this country. Believe me,
work.
business
one
Foreign Protection
,■/.
take the matter of too much gov¬
ernment
regulation", and
control
demanding from Mr.
labor would listen and do
»
principle is that no group can
prosper at the expense of another;
out to
cries
fair relationship
a
Our
building boom in this coun¬
try that-would last for years and
years.
fight for
between business and government,
between business and labor, be¬
331/3%
they get,
COMMERCIAL & FINANCIAL CHRONICLE
ii'
11
ii
to begin to> produce at
more for the money
and
years
i«
on
.
a
The World Bank and
Our
CHIPPENDALE, JR.
obligations continue to follow the usual pat¬
Periods of strength occur from time to time, then the au¬
sell securities, the uptrend is stopped and quotations settle
Prices of Treasury
tern.
,
.
.
thorities
procedure the powers that
market well in hand and there are no indications
any changes contemplated in this course of action.
certain issues is strong and the money managers
the trading range.
back into
the
be have kept
yet that there are
Demand for
...
sellers of these
to be the only
appear
By this
...
securities.
economic
. . .
In
many
the
have
not
do
ma¬
they know that the money
in order to keep prices from
authorities have put a ceiling on
in force as long as they supply the market
willing¬
order
to keep
With
full realization of all of the power that the monetary authorities
have at their disposal, the opinion is more prevalent now that some¬
what higher quotations for Treasury obligations are in the making....
This appreciation, according to some money market analysts,
will
first in the restricted bonds, because of the demand
with needed issues.
.
question about their
; There is also no
.
"""
he
securities among
to advance slightly
favorable effect
. . . Sympathetic
price movements have generally taken place in the past among the
two
issues.
However, because of the pressure that can be
brought to bear on the commercial banks by the money managers,
there could be a sharp curtailment in their ability to buy Treasury
obligations, especially the longer-term securities. . . . This would
have
noticeable effect upon prices of the eligible obligations. . . .
However, the question of economic trends comes into the
on
part of the ineligible bonds, would have a
the bank obligations, is open to some question.
the
.
.
to-Chance combinations so essen¬
tial
loan.
Western
factor
risk
Bank
.
this means
that-commercial
institutions are rearranging portfolios
Many of these banks are for all
practical purposes savings institutions, and despite the need for in¬
come, they are disposing of corporate obligations, which give a larger
return than Treasury securities. . . . By putting their house in order
and investing these funds in governments, they will be in a position
to take advantage of the mortgage market when it opens up in the
future.
.
.
.
.
;
.
The
to be the first
ZUs due 1956/59 appear
savings banks.
Life
insurance
restricted bonds
done by
.
.
.
This
applied
the
loan, the
Bank;
to
a
yon
loan to France.
The loan
3y4%
interest
(plus
a
of 1%
per
annum)
carries
commission
will
and
be
fully
amortized
by
maturity.
the
progress
carrying
,
to
out
the
has embarked,
plication
loanable
the Bank
and
made by France
program
recovery
the
upon
available
economic
on
she
additional
France may
an
from
in
and
which
ap¬
be
considered later this year.
But
let
us
examine
companies continue to nibble
at the longest
this first loan will be utilized.
In
of
to
1938
exports to 75%.
was
should
protected until
both the
Bank and the borowing countries
have
had
fair opportunities to
pipefuls of Virginia
and
on
world tobacco
tobacco
ISSUE
World Bank
So
much
for
market fol¬
the
ted
to
will be admit¬
partnership in Carreau &
Co., 14 .Wall Street, New
York
City, members of the New York
Stock Exchange on June 16.
to
be
devoted
to
the
ties it will sell.
tain
agreement, the Bank will ob¬
full
information
concerning
goods to be purchased with the
Street, New York
City, members of the New York C. B. Richard Co. to Admit proceeds ■<, of the/, loan, and. .their
63
Co.,
Wall
Stock Exchange on July
hopes
Barlow
ton, ' a
will
and
1. Henry
Charles V. Ben¬
C.
Richard
B.
merhbef"at3T" the Exchange,
retire
from
the
firm
June 30.
as
of
Beaver
Street,
New
&
Co.,
members of the New
York
60
City,
is dollars that must
Initially, at least, the
Bank must raise the great bulk
of its loanable funds here at home.
sistance,
York-Stock
'
Exchange^will admit Walter O.
Eckert
and
Richard to
Harold
Van
Bitren
Note
that
partnership on July 1. proceeds
the
used
portion
for
goods
of
to
bear
be
the
in
We,
debentures
its
believe
Bank,
the
merit
will
close
scrutiny of the most cautious of
We
believe, > further,
investors.
will
operations
Bank's
the
that
each
ber nations
borrow¬
indirectly. The United
by far the larg¬
enterprise. With¬
States rightly has
est stake in the
out
a
dynamic world economy we
cannot hope to enhance
maintain—our
ceeds
find
will
lives of all of
to
high
It
come.
of
tuous
me
to the foreign dollar loans
one
tions has
—
Bank
suc¬
us
would
to
the
for many years
be
presump¬
attempt
to
de¬
lineate for this audience what the
Bank's
to
the
success can
citizens
we
of
and will mean
the
State
of
do ask for your
continuing interest in what we are
doing and
contribu¬
ev^n
reflection in
your
enthusiastic sup¬
In the first place,
port to the extent that
of the 44 member na¬
made a capital
or
standard 'of
How well the
living.
will sell to
Virginia. But
but slight resem¬
of 20 years ago.
the
before that time. 1
debentures' it
The
blance,
fUnT
Use of Loan Proceeds
which have
be accomplished
can
it
be obtained.
investors
utilization.
things
many
done
ing nations directly and all merp-
'
M.
before
the
mill.
loan
hope to offer the bonds for
deep summer, if all
We
of
de¬
Robert F. Sully
York Stock Exchange.
Bank
being
&
list the
to
benefit both lending and
what
try,
bonds, according to most money
be general obli¬
will
Application has been made
securities on the. New
basis.
sale
including a modern
strip
Thousands of Investors Needed,
The transportation system
Manifestly, the task confronting
is to be improved by the purchase
lowers, will go like hot cakes with the sale of these securities
the Bank is so great that it must
largely a matter of allotting the bonds that one gets. ... Some pres¬ of locomotives and freight cars,
marshal the funds of many thou¬
cargo ships and canal barges, and
sure is being brought, it is understood, to increase the amount of the
commercial airplanes.
Coal and sands of investors if it is to per¬
original offering to as much as $500,000,000, because of the large
form in adequate-measure. And
oil,
essential to
mand and in order to improve the marketability of the bonds.
industry
and
transport, figure largely among since the United States is the
prospective purchases, as do in¬ primary source of the goods and
Melady & Co. to Admit
dustrial raw materials, including equipment needed to restore or
Robert Sully to Be Partner
Adelaide
T.
Driscoll will be semi-finished steel
products and develop the productive facilities
admitted to partnership in Melady
In Carreau & Company
non-ferrous
metals.
Under
the of member nations requiring as¬
The
proposes
debentures
modernization of her steel indus¬
WORLD BANK
of
type
Bank
lets in more
be
econ¬
add a word as to
securities that the
to
issue.
Our
Now, may I
the
apparent that the salutary effects
on Britain will, in turn, find out¬
the
war-torn
of
Bank's operations.
production es¬ portfolio of the loans as the first
reserve and
by a special reserve
a
balanced
of 1 to 1V2 % charged annually
economy, The French expect that
against
each
borrower
for
a
by 1950, equilibrium in the trans¬
actions of the
franc area with period of at least 10 years—it can
be carried longer than that if the
the rest of the world will be re¬
Board of Governors decide it is
stored.
advisable to do so. This fund is
And so, in essence, loans made
set apart, invested separately, and
by the Bank are to place the tools can be used only for the purpose
of
production / which . otherwise of meeting any possible defi¬
would
be
unavailable
in
the
ciencies on the " Bank's own ob¬
hands of people willing to work
ligations. The third reserve is
and to make the sacrifices neces¬
the 80% call to which I have al¬
sary to restore their economies or
ready referred.
increase their standards of living,
We propose that the first issue
Now then, is it not apparent
be made in two maturities, say
that a rejuvenated France with its
one of 10 years and another, say
beneficial reactions on surround¬ of 25
years. They will be callable,
ing countries will find direct re¬ at least the long-term ones will
flections in the state of the Brit¬
be; and they will be sold through
ish economy? And is it not just as investment dealers on an agency
of
and to finance the import of
France's
the soundness and value
prove
attaining
to
portion
of
omy
will be
that he
investor
sum
a
the most faint¬
assure even
well
This loan will enable France to
sential
a
tion
proceeds will
level
Such
subscription).
tal
to
accomplish
through
granting constructive loans for
productive purposes. Equally im¬
portant to you—since the Bank
must necessarily be a heavy bor¬
rower as well as a heavy lender—
is a brief discussion of the securi¬
general, it is for the reconstruc¬
Specifically,
...
the
totals
needed,
ever
continue to expand
how
economic rehabilitation.
the 2s due 1952/54 being
restored
been
of
of the United States,
if
$2,540,000,000 (80% of $3,175,000,000—the total United States capi¬
consumption?
just
call,
gations of the Bank. That means
that they will be secured by the
Executive
May 9,
1947, approved a $250,000,000 30year
had '
90%
this
case
tain essential imports.
a
for;
has
Protection
/•
In the
the
ing all factors, including France's
potential ability to obtain the
necessary ' foreign
exchange -1 ^o
Directors of the
payment is to be made in what¬
currency is required to meet
the Bank's obligations.
ever
accomplished, however,
only through external borrowing
and by drawing heavily on her
meager supply of gold and "hard"
currency holdings in order to ob¬
$500,000,000 loan on Oct. 8, 1946.
After careful consideration, weigh¬
service
obligations to meet this call are
several and they are absolute. The
recov¬
success
have paid in. The
of capital they
hearted
and the volume of
goods and equipment essential to
with some buying of
these institutions.
about
the
restricted
are
Finance
of
funds
...
last week by the
(loans
ister
little
no
debenture
of four times
extent
By the end of 1946, French pro¬
member nations) the French Min¬
Depending
choice of these
coming in for some buying,
as a part of the funds goes into certificates. . . . The longest bank
eligible has been bought but this issue does not seem to be nearly
as popular with the smaller banks, as it was in the past. . . .
Although savings banks continue to add to their holdings of
the 214 s due 1959/62, reports indicate that some of these institutions
are
now
taking on the 2V2S due 1962/67 as well as the 21/2S due
1963/68.
A somewhat larger return is obtained, with an eye
probably toward 1952, when both of these obligations become eligible
for purchase by the commercial banks. ... There were also reports
that a sizable amount of the Vic. 2V2S were taken out of the market
due 1951/53
institutions, with the 2s
is pivotal in
nation. of
member
a
their entirety.
the protection of the
holders, to the
the amount
for
Bank's
been attained.
duction
key country in the creation1 of
dynamic world economy.
restricted obligations.
is increasing and
products,
of surrounding countries
through
an
expansion in
trade, be beneficial to the rest of
the world.
In short, France is a
As
the
call
the member nations, if nec¬
essary
in the rehabilitation of trans¬
port after liberation, in the ex¬
and,
FAVORITES
The
will
The Bank has a mandate to
upon
ery,
Her economic
speed the re¬
Europe.
reached in
opportunity to speed
the
covery
modifica¬
tions in the program, until there is more evidence available as to
where the curve of business is going.
Changes of the type that
would leave more credit available to the member banks, would no
doubt mean that bank eligible issues would have a trend not dis¬
banks, especially the smaller
to meet the new conditions.
operations.
rehabilitation
vestment.
people.
be
possible deficiency in the in¬
any
Yet, the will of the French people
to recover economically is unmis¬
takable.
Where France has had
Because of its size and produc¬
could be temporary
.
already made one
tive capacity, France
ward, to the extent of their un¬
paid subscriptions, to make good
pansion of the production of coal,
electricity,
textiles
and
other
why and for what
see
of
part
obligations of the
to come for¬
countries
member
We, in the Bank, are well aware
That is the best way to
examine its
point and with maladjustments developing, there
is considerable question in the financial district, as to whether
the powers that be will continue deflationary policies. . . .
.
Let's
purposes.
situation at this
pointed out that there
international
thriving
The French Loan
.
similar to that of the
to
trade.
a
It is being
play
designed to
is
The Bank has
buoyant trend with a tendency
a
Bank
is
pool of loans rather
loan, with the
a
single
a
look to the
can
of the fact that the goals set may
not
just that role.
It intends to take
its place in the Tinker-to-Evers-
OBLIGATIONS
Whether
on
Virginian whether
banker, tobacco grower or
the
on
verance
French
every
The
non-bank investors. . . .
While the greater part of the buying will be in the longer-term
obligations, there will be purchases of short-term securities, in order
to meet unexpected conditions that might develop. . . .
BANK
be
Of this proposed
in
strength that such a pool can give;
and in back of this a bondholder
high degree of perse¬
ing for a
storekeeper.
come
that exists for these
to
and
vestment in
ings of the French people and of
corporate enterprise.
The pro¬
gram adopted is a severe one call¬
markets, in Europe and elsewhere,
then it is of direct interest to you
such as changes in short-term, in
prices in line, if there be need for such action. . • •
to use other measures,
ness
-Then, there is the Bank's loan
portfolio behind its bonds. It is
important to note that a holder
of our debentures will have an in¬
.than
expected to come from domestic
resources—that is, from the sav¬
helping to revive productivity in
countries
that
are
her
normal
doubt that the
prices which will be
an
as
factor not to be regarded lightly.
a
,
.
84%
well
as
obligation to the holders
of the Bank's debentures. This is
of some
expenditure,
investment
And
so,
the Virginia tobacco
grower—the innocent bystander—
is caught in the middle.
If our
institution can assist Britain by
CEILING ON PRICES
equivalent
$18,900,000,000.
productive facilities.
to restore
the
of
nations
member
indirect
over
the next four
(1947-1950) the French re¬
covery plan envisages the invest¬
purchases are for return and not appreciation, un¬
easier to control the market because investors are chinery and equipment necessary
no
43
Indeed,
ment
to
is
ligation to each one of the other
years
from
fering
nation assumes a direct ob¬
ing
aggre¬
.
serious weaknesses.
cases,
her traditional
chase prices up, since
managers will make securities available
moving ahead too fast and too Tar. ...
There
items, in the
loan.
doubtedly makes it
not -inclined
program
stockholder in the
a
Bank. This means that a borrow¬
gate, amount to a far greater in¬
vestment than the amount of the
buy
customers
The fact that
/
recovery
is
and
tion
supplied by France her¬
These
self.
essential imports
with their meager hoard of "hard"
currencies while the normal mar¬
kets to which they sell are suf¬
to
forced
the
to
to be
are
themselves
find
British
The
borne in
It should be
sential
has failed to
recovery
appear.
mind that thus far the market has been
an investment affair, with buyers putting funds to work in order
to get income. . . . There has been very little if any buying for
speculative appreciation purposes... .
'
Dynamic World Economy
a
purchased—and this will be true
of all loans made by the Bank—
.is to be used for goods either
year is proving inadequate to per¬
mit of normal tobacco imports for not now available in the borrow¬
two reasons.
First, rising price ing country or available in insuf¬
levels in this country are using ficient quantities to revive pro¬
duction. Note, too, that the bricks,
up those dollars far faster than
mortar, labor and other items es¬
was anticipated. And, second, world
(Continued from page 6)
by our Congress to the British last
Reporter on Governments
By JOHN T.
Thursday, June 5, 1947
CHRONICLE
& FINANCIAL
THE COMMERCIAL
20
lieve
our
you
operations merit it.
be¬
*
Volume 165
Number 4600
THE COMMERCIAL & FINANCIAL CHRONICLE
New York Central
An Eastern Raiload Consolidation Plan
(Continued from page 14)
16,900 miles, while the less favor¬
ably located Erie-Baltimore
&
Ohio System would have
only 13,600 miles of line.
A
Four
System Plan
Another
arrangement
interest add
public
the
favoring the
shareholders of the in¬
bond and
dividual
in
roads and which would
is included in the B. & O. System
lated rates which
because it would provide a good
outlet for the Wabash route to
all
tidewater and since the
has
Trunk
Line
Territory into Four
Systems.
roads
they both compete.
ation ,of the
ern
Erie-Nickel
Fourth
& West¬
around.the
Plate.
System—Under this plan the
It
which
no
traffic
Nickel
years and also the
& Western,
many
Toledo, Peoria
giving it
system of
a
12,100 miles. Trackage rights or
acquisition of the 95 mile Toledo-
two
competitors, but
other
railroads
two
much
by
would
a
Plate
benefit
consolidation.
and
The
it's
subsidiary,
the Wheeling & Lake Erie, would
extend
the
Erie,
which lacks
Wayne, Logansport
Haute, shorter than
and
Terre
the Nickel
Plate line and only a little
longer
than the Wabash.
Chesapeake & Ohio-New York
Central
System—'The
New
York
Central
would be merged with
the Chesapeake & Ohio to form a
syslem of 13,300 miles.
the
C.
But since
&
O, of Indiana parallels
Big Four and the Toledo &
Ohio Central Lines are
paralleled
the
by the Hocking Division of the
C. & O., they would be
assigned
to
the
Nickel
proposed
Fourth
Plate System
in
competition.
preserve
tral Railroad
Erie-
order
The
to
Cen¬
of
New Jersey and
the Catawissa branch of the Read¬
ing
added
are
to
the New York
Central
to provide
the eastern
extension of the Central's Ashta-
bula-Williamsport
New
&
York,
since
Air
the
Line
to
Baltimore
Ohio-Reading
use
System would
the Lehigh Valley tracks from
Bound
Brook
in
order
to
reach
New York.
Baltimore & Ohio and
passenger
trains could
Reading
the modern Lackawanna
pas¬
senger terminal at Hoboken, as
both the Lehigh Valley and the
use
Lackawanna
B.
&
assigned to the
under the Four System
O.
^plo-n
■
•
1
are
:
Baltimore & Ohio-Wabash Sys¬
Third
System would
,
tem—The
consist of the Baltimore & Ohio,
Reading (except the Catawissa
Branch) Monon, Lackawanna, Le¬
high Valley, Wabash, Ann Arbor
and Detroit, Toledo &
Ironton, a
total of 13,400 miles.
It is true
that the Lackawanna and Lehigh
Valley are
competing carriers,
but neither line by itself is suit¬
able as an important link in a
through trunk line railroad. The
Lackawanna route is the shortest
between New York and
Buffalo,
a
dis ance of 396
a
series of long heavy grades
ning
mile.
from
The
60
miles, but it has
to
Lehigh
80
feet
to
Valley
run¬
the
has
a
good low grade line from Buffalo
to
eaten
by the
rules of the standard
featherbed
Up
973
Although
more
no
inclusion
the
of
necessary
the three
Pocahontas coal roads, consolida¬
tion
of
with
the
NewN England
the
lines
in
the
industrial
west,
to
such
important
Baltimore
&
Monon
Erie
lines
Erie, Ashtabula, Wheel¬
Lines with the
best
grade route to
the
possible low
Port
an end
longs.andmg argument re¬
garding the equitable division of
througn rates between them. The
Pennsylvania
would
naturally
take
over
Line
and
the New Haven's Shore
its
of
some
branches.
The Baltimore & Ohio could take
the Lehigh & Hudson
over
River,
of New
the Poughkeepsie Bridge route to
York and to Southern New Eng¬
land via the Poughkeepsie Bridge.
New Haven, the Air Line to Bos¬
As
consolidated system the Erie
Plate would be in a
a
and
Nickel
much better position
to
compete
with the other Eastern trunk lines
than either could alone.
By constructing a comparatively
inexpensive 66 mile low grade
connection
between
the
Nickel
ton,
The
etc.
Erie-Nickel
New, tYork,
fairly good freight
.roul^ would be obtained, avoiding
;the, jseries of heavy grades on the
.J^at&atyanna between Buffalo and
a
•Scfanipn, 33 miles shorter
than
present Lehigh freight route
•apd only U miles longer than the
.the
•Lackawanna.
*
at
—
129
41
550
The-f Wabash would round out
west of
Fort
Wayne and east of Erie, Pa.
This joint route from Chicago via
the Erie to Newton, Ind., thence
by 11 miles of trackage rights to
South Whitney on the Nickel Plate
and
over
the latter via Fort Wayne
and Cleveland to
Geneva, O.,
over
the proposed cutoff to Union City
and via the Erie to New York,
would have ruling grades of less
than half the 25 loot to the mile
grades of the so-called water level
New
south
&
Maine
of
Albany, the Boston
and the Rutland.. The
New
York Central, which is al¬
ready well intrenched in New
England through ownership of the
Boston &
Albany, would take the
Delaware
&
north
Hudson
of
miles of rail lines in
very
in
more
in
would
the
the
public
interest
shareholders
roads
than
be
of
tion of the New York Central, all
the Other eastern railroads have
long grades of 60
or
80
or
more
feet
to
the
mile,
necessitating
expensive pusher service.
The Pere Marquette is added to
Erie-Nickel Plate group to
the
give it
access to
Detroit and other
Michigan industrial centers.
C. & O. of Indiana would
a
The
provide
short route from Chicago to Cin¬
Ohio Central Lines
cinnati/The
and the Virginian would
extencf
the system to Southern Ohio, the
West Virginia coal fields and the
of short feeder lines
including the
New York Susquehanna & West¬
the
of
bond
Total
■«
10,550 miles.
branch
The
Cleveland and
proposed
Toledo,
Buffalo,
Lackawanna-Le¬
high short lower grade joint jine
lines
and
comparatively
little expensive and unprofitable
passenger service, it would, have
distinct; advantages
from
individual
Total
Erie
Erie
Susquehanna
Jersey & New York—
-
129
41
—
New
Ontario. &
.
Western.—
Pittsburg & Shawmut
—
M. Barlow & Bo.
550
To Be Formed in NYC
97
214
Bessemer & Lake Erie——
Nickel Plate
13,400
—-
———
2,377
—
H.
1,687
—
Company,
&
Barlow
M.
Stock
members of the New York
Detroit & Tol. Shore Line
be formed as of
July 1 with officers at 63 Wall
59
Exchange, will
Wheeling & Lake Erie—
507
Pittsburgh & West Virginia
136
Street, New York City,
Western
720
will
Maryland A
Pere Marquette
—
ert
be
F.
—
1,949
Manistee & Northeastern—
112
Heath.
Detroit &
228
a
816
who
——
Mackinac
Toledo &
Ohio
Central—
Partners
Rob¬
Meffert, and William W.
Henry M. Barlow,.
Barlow was formerly
Mr.
Meffert,
partner in Carreau. Mr.
in
membership
holds
Chicago Board of Trade as
Exchange,
in the New York Stock
formerly
tant
portions of more or
included in the
the Erie and the
cases are
less parallel lines
same
system,
Nickel
did business as
an
dividual.
47th ANNUAL
of the
would result from unified
tion
and
to
a
opera¬
combined
the
would be in
tion
Electric Boat Company
•*'
roads
much better posi¬
the corre¬
sponding routes of the other three
systems. There would be little
compete with
shifting of traffic from one line
to another. Finally, the Four Sys¬
tems would be much more evenly
balanced
from
standpoint of
mileage and gross earnings and
competitive position and railroad
competition between all "impor¬
tant Points would be fully main¬
the
tained;
Three System Plan and under the
Four
'
'
.
■
...
Plate
between Buffalo 8c
Cjhicago and, the Lackawanna and
NET
EARNINGS for
1946, after taxes
and including estimated
Profits "carry-back" tax credit,:eame to $1,547,586* against
$2,161,171 in 1945.
The 1946 earnings'7were $1.98 per -share of
Common Stock.
In 1945 $3.11 was earned on the capital stock.
Excess
paid during
Stock, and $1.00 Was paid and
DIVIDENDS in cash, totaling $1.25 per share, were
the
1946
year
declared
on
dividend
stock
on
the
the Common
Preferred during the last six months of 1946. A
in
Preferred Stock,
new
equivalent to $12.50 of
distributed to
for each share of Common Stock, was
stockholders in July, 1946.
stated value
GROSS INCOME FROM
OPERATIONS in 1946 amounted to
$14,369,00,0 against $45,439,500 in 1945.
UNFILLED ORDERS stood
on Jan¬
1946. New
submarine development work is expected during 1947, Canadair
Limited, Electric Boat's new Canadian aircraft subsidiary, had, as
of April 1, 1947, over $30,000,000 of uncompleted business on hand
uary
approximately $4,541,000
at
1, 1947 compared with $10,871,000 on January 1,
in transport
aircraft and
spare parts,
NEW PRODUCTS of Electric Boat, consisting
of offset printing
light weight truck bodies, a new line of motor cruisers,
high speed trawlers and others, are in production and deliveries
presses,
are
increasing.
CURRENT
amounted
to
.
;
.
ASSETS,
including
inventories, less
advances,
$18,300,068, and current liabilities were $1,342,049 at
December 31, 1946, a ratio
liquidity.
"
of 13.6 to 1, indicating
a
high
state
of
...
System Plan:
NET WORKING ASSETS amounted to $16,958,019 at December
Mileage Comparisons
i
9,750
2,127
Lehigh Valley
1,260
2,394
.—
————i—
Ami-Arbor ---i
294
——
—i-
Nickel Plate
1,687
-
f.136
Detroit Toledo & Irontonu-
464
Toledo Peoria & Western;—1
239
Total—.——
.
.t:rr»
.ii'i
share for stated value
TT^T
at
per
December 31, 1945
were
18,858.
per
of the Preferred Stock. Working
$16,825,878,
or
$24.18
per
share of
capital stock then outstanding.
-NET. BOOK VALUE stood at $20,468,414 at the 1946 year end, or
share of outstanding Common after deducting the stated
new Preferred equivalent to $12.33 per Common share,
or a total for comparative purposes of $29.42. Book value at the end
of 1945 was $20,111,820 or $28.91 per share of capital stock.
$17.09
per
value of the
.
507
Wheeling & Lake Erie
Pittsburgh & West Va.____
Common share after deducting $12.33
or
Common
Assets
Pennsylvania
Pennsylvania
Norfolk & Western——
Wabash
$12.05
31, 1946*
THREE TRUNK' LINE PLAN
Copies of the complete 41th Annual Report
while the
supply lasts,
Cotnpany,r; Z&
Pine
on
request
Streets New
to
are available,
the Electric Boat
York
5, .New
*
vj
'
the
well as
A DIGEST OF THE
of
their
employees,
possible Three System
In only two impor¬
the
standpoint of net earnings under
our system of government
regur
46,4
Detroit Toledo & Ironton—
FOUR TRUNK LINE PLAN
combination.
&■
troit & Machinac would bring tjie
Plate
System
to
2,394
294
Ann Arbor
13,648
and
any
1,260
——
and
and
New
Jersey & New York.
Western, Pittsburg 8c
Shawmut, Bessemer & Lake Erie,
Detroit 8c
Toledo
Shore Line,
Manistee & Northeastern 'and De¬
ern,
Ontario
B. & O. has
bwn between St. Louis and
Lackawanna
Lehigh Valley
59
much
interest
the
1,241
541
97 3
—
Wabash
Truqk Line
territory
York Central Route,; prac¬
.Lehigh JTaliey, whi<?h are. both
tically all the way- with the ex¬
assigned to the Baltimore & Ohio
ception of two short seven mile
pusher grades, and would be 46 System, between New York and
Buffalo; but in both these cases*
miles shorter than the
present
substantial
operating economies
Erie freight route. With the excep¬
competitors, but with lower grades
and ton mile costs, fewer
light
;Deifdit,
Monon
214
Detroit & Toledo Shore Line
6,233
—-
Catawissa
except
Branch
—
Ohio System
perfectly without
duplication of facilities, since the
direct line of its
Reading
...
This system would
be slightly smaller than its three
no
Baltimore ,& Ohio
97
Bessemer & Lake Erie
13,321
-----
2,377
Western
662
38
89
Baltimore & Ohio
Geneva,
Erie-Nickel
.
Total
657
Albany. However, a more work¬
Ohio and the
Chesapeake & Ohio of Ind.
265
Erie at Union City, Pa., the Erie- able arrangement would bd for the
657
New Haven, the Boston & Maine Virginian
Nickel Plate System would have
and
the Bridge Lines to New
a joint low
grade line from Chi¬
Total
England to remain independent
10,544
cago to New York, avoiding the
of each other and of the Trunk
long series of 1% grades on the
Lines as at present.
Erie between Galion, Ohio and
The
suggested. Four
System
Meadville, Pa., and the heavy
Plan for consolidating the 50,000
grades on the Nickel Plate
Plate
and'coordinate, the Baltimore &
•
541
-
2,811
Central
N. Y. & Long Branch—
Catawissa Br'ch of Reading
Plate
could take the Delaware & Hud¬
son
9,721
New Jersey
1,330
662
38
*
—
except
O, of Indiana,—
C. &
720
-
„—«■
Virginian
.
,
6,233
Western Maryland
Reading
New Jersey Central
N. Y. & Long Branch
Central
York
Chesapeake & Ohio except
Ohio
to the
as
12,116
-
——
Ohio Central Lines,——
Trunk
,
.Lackawanna from Pittston Jet. to
New
16,875
—
-
Pittsburg & Shawmut
Wilkesbarre, but it has a roundFor the purpose of showing the
about route, from Buffalo to New
port of Norfolk.
The Pittsburgh
York,* 44 miles longer than the qnd West Virginia and the Wes era relative organization positions of
Lackawanna.. By using the low Maryland would provide an addi¬ the consolidations proposed above,
grade, section of the Lehigh be- tional route to tidewater at Bal¬
there follows a tabulation of mile¬
twee# Buffalo and Pittston Jet., timore via the Pittsburgh steel dis¬
.Pa,.,and the short, line of the trict. The addition of a number age of each system under the
•
Total
Baltimore & Ohio
Ontario &
The New England Lines
than
Total
Susquehanna
New Jersey & New York—
operating agreements.
middle
cities
the'
be
feeder
ing, Zanesville, Lorain, Sandusky,
Toledo, Fort Wayne, Muncie, In¬
dianapolis and the gateway cities
of Peoria and St. Louis. The Erie
would provide the Nickel Plate
and
doubtless
proposed Four
Line Systems would put
Fort Wayne branch of the Wabash
short route for
Pennsylvania from Detroit
Toledo to St. Louis via Ft.
short lines
numerous
by the larger roads with which
they connect would be desirable,
the" possible savings would
so
■would complete
a
Oper¬
but
completely supplement
each other, or whose bond and
shareholders
for
that these
of them
by the using
so
Pennsylvania would take over the
Norfolk & Western with which it
has had close and harmonious
arrangements
built
be
the Nickel
and
true
active
are
System—The
would
Erie
is
are
there
Plate
System
239
Toledo Peoria & Western,.
112
as many
already owned
on a pro rata basis.
are
9,750
2,127
New York Central
the New York Central with which
discussion,
&
Norfolk
Companies
this
——-
Western
Pennsylvania
228
Lackawanna
Bridge Lines and Terminal
O.
Bridge lines and terminal com¬
panies have not been included in
lines
Pennsylvania-Norfolk
Manisvee & Northeastern—
falo and New York, this is a more
logical arrangement than combin¬
ing either the Lehigh or Lacka¬
wanna with the Pennsylvania or
not disturb
existing traffic routes
to any extent, Would be
to consol¬
idate
the
railroads
in
Eastern
B. &
Central--:—"—-10,537
Chesapeake & Ohio
3,076
Pere Marquette
1,949
Detroit & Mackinac
direct route between Buf¬
no
the same for
are
Pennsylvania
New York
competing railcarriers.
21
(2997)
York.
in¬
22
Junior bond
Pacific —
the' Convertible 5%s 1949 — the
compromise plan accorded each
$1,000 bond only 10 shares of new
Class "B"
Common •stock, - each
share having no par value but a
Reoganizations Called For
Revised Railroad
disclosed
is
Herein
net cash
a
the
to
Turning
$1,210.86 as of
effective date. improvement and debt reduction
- - r
The Reorganization Plan provides totalling $135,825,663, -count of principal and interest,
YET
the following treatment per $1,000
stated value of $100 each, or a
among other uses of cash.
bond against this claim:
:
•
(2) Allowable capitalization, as $1,000 "stated value"- of treatment
Herein is disclosed a net cash
$143.72 in new First Mortgage shown by comparison of the Jan.1 for a bond having a total claim
improvement,
debt
elimination
1, 1940 and Jan. 1, 1943 effective as of the Jan. 1, -1943 effective
and
claim
reduction
totalling bonds. ".
•
•
••
$454.14 in new General Mort¬ dates (revised in the latter case' date of $1,559.16.
$135,092,196,/
to Jan. 1, 1947 to reflect inter¬
The new plan, patterned after
YET
gage Income bonds.
'
elimination
of
R.F.C., last year's vetoed Wheeler-Reed
$4.45 shares in new Preferred vening
(2) Allowable capitalization, as
Stock.
;
R.C.C.,
Bank, Senior Mortgage Reorganization Plan, was reported
.shown by comparison of the Jan.
Debt and reduction in Collateral
to allocate each $1,000 bond of
$3.36 shares in new Common
1, 1941 and Jan. 1, 1944 effective
Stock.
Trust debt), is $63,381,500 lower—
this Junior issue a total of 86.1
dates
(revised in the latter in¬
the
Jan.
1,
1940 allowed total shares of Class "B" stock having
Not quite 12% of the total claim
stance. to Jan. 1, 1947 to reflect
being $560,478,900 and the Jan. 1, a $20 stated value, thereby more
intervening elimination of R.F.C. of this senior mortgage issue is
1943
(revised to Jan. 1, 1947) fairly meeting the total claim of
satisfied in new. First. Mortgage
claims, and other debt reduction)
total being $497,097,400.
the bonds.
bonds,, yet ~the Road recently was
ds $24,507,619 lower — the Jan. 1,
(3) More than this," a summary
However, it appears that this
shown, to be in the position of
1941 allowed total being $351,of MOP Consolidated's operating, new plan, v/hich would improve
180,912 and the Jan. 1, 1944 (re¬ having available as much as $55,h
records for the seven years, 1940the treatment of all bondholders,
000,000-$58,000,000 for, use in a
vised to Jan. 1, 1947) total being
1945, was
1,- 1944
late
in
(Continued from page 14)
made to creditors on ac¬
Jan.
the
ments
charges,
more
add
inclusive, discloses that gross
"old"
total
the
an
railroad.,
obtaining
First
Mortr
gage Income bonds, Preferred and
Common stocks, appears penalized
Mortgage
which the ac¬
approxi¬
$215,000,000, mak¬
ing for total estimated claims of
roughly $644,000,000, without
taking
into
consideration * the
$429,065,421,
on
and
all intents and purposes, are
of
issues
"old"
Preferred
and
point of this brief summary
be found in the following
The
tion
of
-
nearly
is
"old"
the
«sideration
stock.
•
account-*
icig lies in the following summary:
crux
of this brief
adjusted capitalize$326,673,293 is $143,902,"short" or shy of treating
"new"
The
Of
'lion
313
-wholly with the $470,575,606
! claims ranking senior to the
1
total assuredly
currently:
.
-
.
(1)
tions
■
tor
ments
the
additions
gross
and
to
property
amounts to somewhat more than
; $168,000,000—or $25,000,000 more
than the $143,902,313 deficiency of
I
[treatment now being experienced
[ by those holding securities senior
to the "old" capital stocks.
I
am not suggesting that the
"new" Rock Island capitalization
f
,
be allowed
be swollen by this
to
measures.
Let
made
betterments
out of
carrying
the
us now
refer to the Missouri
$86,402,864
total
roughly
terest
"Compromise Plan," with an
reference to the Rock Island case,
I am not arguing for the MOP
the
effective date of Jan. 1, 1943.
Herewith attached, in Schedule
is
B,
of
comparison
a
outstanding
talization
effective
various
as
dates,
capitalization
But,
I
do
of these
relief that
together
"old"
financial facts and
selected
if
holders
Congress
bined
and
dates; also given are
the "old"
current figures for
consolidated
capitalization,
selected financial data.
This
a
little
more
that two
than six months ago
proposals were made, one
of the Road's Trustees and
another by the Debtor, using cash
by
:
one
varying between $55,000,000
funds
whereby interest
and $58,000,000;
,
claims
,
.would
and
be
very
largely
reduced
for
the
equity produced
desiring to remain in
more
those
debt
outstanding
and
reorganized
Rock
Island
securi¬
(1)
,
At
the
time
of
the
first
effective date—Jan.
1/ 1940, MOP
Consolidated possessed total cash
and equivalent of $18,626,077, with
net working capital (not includ¬
ing Special Reserve and Main¬
tenance Funds) of $15,411,855;
On Jan.
1, 1947, seven years
later,
the total
$67,147,890,
of cash,
with
net
notwithstanding
eliminations and
,
the
With regard to the contents of
the previous paragraph, allow me
reductions in "old" debt since the
to refer to
Island
4s
1988.
one
bond
of the senior Rock
issues—the
The claim
General
of each $1,000
bond, including defaulted interest,
after crediting the payment made
intervening
Jan.
1,
date,
.totalling
latter
1940
amount
original
•
annual charges required
securities
enabling
pass
to
the
needs
out¬
f
defaulted
interest
meantime
has
which
been
reduced/eliminated.
in
of
the
substantially
annual
"new"
of: these
requirements (referring - specifi¬
cally to the contingent bracket)
includes
either capital fund or
-
connection; press
reports of not many months ago
outlined
a
new
reorganization
proposal
for
the
consolidated
of
assessment—
would care to pay an
it
be
large,
medium or small in
.
available of any
cash fund, be¬
making
The
substantial
extra
yond that already possessed by
the to-be-reorganized roads, for
the
treatment
qualitatively
more
senior claims,
would certainly lessen the objec¬
tions of the bondholders toward
of
having
those
giving the "old" stockholders at
least
a
"look-in" on the new
equity.
reorganization,
Wabash
The
while
consummated
by
way
of
Receivership — as distinguished
from Bankruptcy — was modelled
somewhat along such lines.
.
Lastly, in connection with the
legislation
now
being
revised
sought,;
would
it
not
be
more
simple to merely pass legislation
containing a directive that all
requirements, most pending reorganization plans be
mandatory deduc¬ remanded by the Courts to the
tions when earned, but which are
Interstate Commerce Commission
MOP, which conformed largely to
not allowable deductions
before for that body's new review, in the
the
provisions* of
the
vetoed
provision
for
Federal
income light of:
Wheeler-Reed
j
t:
Bill.-
supportv from
holders, including
capital stocks.
.[new
'
Reference to this
.
Common
plan and
$1,000 bond,
compared
of
the
senior issue
Refunding
Pacific
Missouri
equities
were
The new
5s,
'
•
...
since the "old"
found
without
,
charges and
Reported
Presently-Known
•
New Plan
Compromise Plan
Cash
First
mortgage
bonds.-.
"A"
Income
mortgage
"B"
income
mortgage
Preferred
stock
'
„
_
.'.J.!
!
..j-
bonds...•_i—
bonds_.j_-u._R—
....
;jwj:
U
-
•
much
contin-
equities, with so
less of fixed
follows:
.
possessed
the "old"
the "new"
are
value.
of
;
—
going to them,
ties
Compromise Plan, in terms,-as an
example,
is that the "new"
the Preferred and
stocks
equities were largely utilized to
make up the "package" of securi¬
with the treatment
accorded in the presently known
as
—
today
primarily by
bondholders because
j
>
point
My
equities
new
what it proposed per
are
taxes.
groups,
the
even
which
of
_
This
important
fund
sinking
Plan, reported to have substantial
effective
the
inclusive
and contingent interest
approximate $6,180,000 an¬
.None
$87,303,850,
not
$16,413,today the total of fixed
nually.
discount, and
some-expansion in
a
latter
the
&
charges
com¬
retire
and
000
"old"!
ties.
i
Chicago
the
MOP
cash
for
capitalization.
particularly the
North Western. "Old"
meaning
years,
the
permitting
allowing
been operating
reorganized basis for some
a
on
has
which
accorded
would
of
use
charges required
refer to one of the
now
us
reorganization of their proper¬
giving them the privilege
choosing whether or not they
ties by
price per share?
$12,611,000.
Let
working
Special Reserve and Mainten¬
ance Funds).
This substantial gain in liquid¬
scored
of
fixed
annually; the "new"
contingent in¬
requirement will approxi¬
roads
ex¬
would have benefited all security
in
was
be
the
charges and
mate
etc. was
capital at $66,885,058 (in the latter
instance again not including large
amounts of liquid assets carried
ity
to
contingent
point. to
be
standing claims at
In
schedule shows:
;
again
could
legislation,
the
in the preceding
panded by this $198,306,177.
consolidated capi¬
"old"
Pacific's
Missouir
"new"
Why not afford the "old" stock¬
a chance to participate' in
$23,943,000
y
as
simple
very
a
the "old" stock¬
holders an opportunity to recoup
at least part of what would other¬
wise be a complete loss.
method of giving
Consolidated's "old" fixed
MOP
stocks.
again,
railroad
new
be
to
consider
interest
approxi-
and contingent
requirement will total
matel $4,882,000.
fixed
Here
"new"
the
annually;
000
charges
curities senior to the "old" capital
On
the
fixed
July 4, 1944, the Interstate
Commerce Commission approved
what is currently referred to as
1940.
■
the
for,
visions
reorganization legislation.
Nowhere have I found what I
instance,
Rock
Island's
charges ran $13,361,-
For
more than the
$147,000,000
defi¬
thought
holders
and
of the same
of surplus funds to retire debt and
claims (by call by tenders, if no
other means be found), at a dis¬
count, would easily accomplish
the righting of a wrong, which
now is so patently manifest,
i
In this connection, it was only
•
"old"
or
final
has to do with the
ups.
and
property,
—
#
#
*
earnings'
evasion,
of
because
Not
ciency of treatment now being
experienced by those holding se¬
provide for g combination of some
increase in capitalization, and use
,
"new"
$198,306,177
approximate
newly proposed capitalizations as
am
as
'
additions
to
attract equity
capitalizations and their an¬
nual fixed charges and contingent
interest requirements afforded a
much bigger tax shelter for the
then equities than the new set¬
nearly $51,000,000
pointing
out as
is possible that new
legislation which would allow or
i
gross
made
betterments
stable divi¬
be permitted to
Capital.
payments,
dend
"old"
added to the approximate
crease,
reorganization.
On Jan. 10, 1940 the Interstate
Commerce Commission approved
the
initial Reorganization Plan,
with an effective date of Jan. 1,
with
$168,000,000.
But, ! I
! vigorously
J
adjusted capitalization allowable,
plus the $48,521,813 net cash in¬
sj:
which
is another matter
ties.
(2) Gross additions and better¬
same period totalled
The $63,381,500 lessened
no
railroads allowed to
reasonable return
and, by way of more
results of the reorganized proper¬
ments in the
approximately $86,402,864.
more
a
earn
One
call "tax dilution" in the
(not inclusive of added liquidity
in
Special
Reserve i and
Funds), and
V
operated
be had, were
serious factor.
a
There
Maintenance
Pacific
adjusted capitalization allowable,
added to the net cash increase,
plus
so
#
$24,507,619 lessened "new"
The
77
prevent
these
period, was $67,948,446 and
the
far have
among
Section
(2) Gross additions and better¬
roughly equal $76,000,000
in the same period.
.
specific sanc¬
provisions of
However, lack of
thinking
of
way
—
and this
preferred andl
common stocks of the yet-to-beI feel Congress should take note
railroads.
I
have
of when considering this legis¬ reorganized
searched in vain, in all the testi¬
lation. I have reference to what,
mony
concerning, and the pro¬
for want of a better description, 1
main
$48,521,813
by
larger
earnings.
my
greater assurance of the continua¬
tion of a satisfactory transporta¬
tion service to the public could
jections in Court and because of
of enabling legislation, re¬
found,
holders.
Cash improvement, in the
same
fairly treat with
more
$983.30 deficiency per $1,000
bond-now suffered by these bond¬
is
period
would
issues
bond
new
lack
senior to the "old" capital stocks.
the
"old"
capitalization, beyond which
1941
senior
on
capital stocks.
/
Yet, the latest adjusted "hew"
capitalization is $24,507,619 lower
than the initially proposed Jan. 1,
;
claims ranking
total
the
from
road
cash and compromise.
Here, however, the threat of in¬
terminable delays, because of ob¬
Yet,, the
"new"
adjUsted-toConvertible 4V2S
Jan. 1, 1947 capitalization is $63,1960, instead of emerging with
381,500 beneath the initially pro¬
only $496.70 of calculated treat¬
ment per $1,000 bond, carrying a posed Jan. 1, 1940 Capitalization,
in addition to which, currently:
total claim of $1,480, the elimina¬
(1) Cash, in the same 7-year
tion of so large a total of claims
.Preferred and Common
The
"whole"
the
remove
To
of part
use
Rock Island, the
of
issues
the estimated
needed
to
make
below
$644,000,000
to
the
taxable
without
its
going
reorganization by the
simple means of a combination of
adjusted capitaliza¬
$497,097,400
such
to be fair, that
capitalization be
allowed to include a greater per¬
centage of the total in contingent
series of Debentures instead of
Preferred stocks, or deductions be
allowed for Capital Funds and
Sinking Funds before arriving at
It seems to me,
either
through
•
$147,000,009
been met.
bankruptcy
\
"new"
and charges, consistant
meeting of'the require¬
ment of a satisfactory transporta¬
tion service to the public —•, have
with the
being
are
a
concerns
talization
St. Louis-
steps
actual
Bankruptcy Act.
reasonable capi¬
the
Section 77 of
—as
wholly
appears
I refer to the
Here,
taken
notations:
■
scaling down of his
standing. Yet, the chief tenets of
Southwestern.
The
may
'
it
that
solvent.
distributable
the
accepting
after
—
sacrifice of a
to
MOP, although its finances
today
stock.'
Common
income
consum¬
delay.
crued interest equals an
it comes to
—when
yet
mate additional
of "new"
fixed and general
"pieces"
tion
another railroad
reorganization
which
can
be
pointed to, somewhat in the same
vain as in the case of Rock Island
is
There
,
to
impossible * of
mation without undue
/
•
"old" bondholder,
by way of reorganiza-r
the
Hence,
the
appears
MOP
for
debt
(including publiclyheld
New
Orleans,
Texas
&
Mexico stock) currently amounts
Consolidated
much
favorable, yes almost .dis¬
than in the case ot
equity of a. non-reorganized
less
criminatory,
point of rounding out all
issues and making them "whole,"
approximately $86,402,864. '
Contrasted with this showing,
Capital Funds and
payments appears
dividend
and .quantitatively,
qualitatively
to
income taxes;,
"when earned
Funds—all laudable pro¬
— and
the margin fop
visions
'
1946
in the form of
subject to so much -
of Federal
thereto the
Sinking
_
additions and betterments totalled
are
provisions tor
•
debt
claim
reduction
program.
$326,673,293.
(3) More than this, the Rock One of these proposals indicated
Island's 1946 Annual Report states that the result could equal a re¬
in
total- claims
to- be
that during the pendency of the duction
Reorganization Proceedings and treated with of $127,825,635 — a
up to Dec. 31,
1945, the sum of calculated elimination of $2.32 of
$102,322,946 was spent out of cur¬ debt claims for each $1 of cash
expended.
rent earnings for additions and
Carrying out of such a, proposal
Joetterments;
in
the thrice-ad¬
vanced effective date-period alone would, in my opinion, certainly
cf Jan. 1, 1941 to Jan. 1, 1947 permit those remaining holders of
estimated
gross
additions
and one of the senior Mortgage issues
betterments
equalled
roughly to emerge under a new Reorgani¬
$76,000,000. In each of these cases, zation "Plan with far more than
I
stress
that
these
substantial 12% of their claim represented
amounts are entirely apart from by the new First Mortgage issue.
liberal expenditures for mainten¬ After all, it is a matter of simple
arithmetic
that
those
wanting
ance of way and equipment.
v ■
"out,"
via 'the
tender-request
Contrasted with this showing,
route-^not being forced to dis¬
Rock
Island's
total "old"
debt
currently amounts to $304,597,678, pose of their holdings indiscrim¬
on
which the
accrued interest inately — are creating far more
equals an additional $165,977,928, equity for those desiring "in."
Pursuing this thought down to
making for total claims of $470,575,606, without taking into con- the lowliest bond issue of the
interest
gent
the; Missouri
of
issue
5, 1947
Thursday, June
FINANCIAL' CHRONICLE
THE COMMERCIAL' &
(2998)'
$71.10
$400 (4s)
$330 (4'/2s)
$150 (5s).
2.22 shares
one-half years of post-war
experiences since V-J Day;
(2) The substantial
ments, additions and
..
traffic,;
, . < ? *
debt retire¬
betterments:
properties, and notwith-i
standing large increases in finan¬
made to
Original and
Reorganization
were
propounded by the Inter¬
state Commerce Commission, and.
(3) The change in interest rates,
cial
strength
Revised
not
$25
•
.
(1) Known territory shifts and:
better traffic prospects incident/ to»
World War II and the one- and<
Plans
since
of
forgetting the long succession
bond refundings in
$725
(3V2S)
of-railroad
$647
(4'/4S)
recent years.
0
0
With
regard to this last sugges-
(Volume
165
Number 4600
tion,
may I point
the May.
of
to
THE COMMERCIAL & FINANCIAL CHRONICLE
36-37
pages
12, 1947 letter to the
Hon.
Chauncey W. Reed,:
man,
Subcommittee
\
Chair¬
the
on
Judiciary, House
of
Representatives, by Commissioner
Walter
M.
Splawn,
Legislative
•'
Chairman,
to H.
RFC
Commission
a
for
debt
__
—
far
so
the
as
Total
debt
Total
Cash,
exlc.
defaulted
int.
Net
$10,730,804
!
assets
liabilities
H.
*
R.
*
working
capital__________
3237)
at
the
Fixed
Income
thereof
debt
a
"
.
the
of
corporation
60,000,000
151,242,434
to
$211,661,789
Retirement
RFC
loan
such period
total railway
operat¬
ing revenues, operating
expenses
and
other
the
full
charges,
net
CAPITALIZATION-
effect' of
deductions
leased
Missouri Pacific—
sank
Jan. 1, 1943
,$13,000,000
''
including
and
purchases
?eTiaialvX'
v
:•*'■
New
_
Income
y
Orleans
"•
Texas
trusts
report
refuse
or
debt
excl.
1.1
'
.
,•v
&
to
and
Publicly held
Equipment
modify,
any
plan
233.500
RR.
N.
O.
modify the plan.
Commission, if it modifies the
plan, shall certify the modified
plan to the Court together with a
Total
order
a
copy of its report and
-
approving
the >' modified
plan. Thereafter
proceedings upon
the plan shall .be
governed by the
provisions of subsection
(e) and
of this subsection. If the
Commis¬
sion refused to
modify the
.
it
shall
plan,
transmit to
the
Court
of its report and
order, to¬
with a
transcript of the
proceeding before it.
gether
if
the
Thereafter,
M.
.
refusal
of
modify the plan is based
cient
the
on
suffi¬
findings and is supported by
record, the proceeding
upon
shall continue as if the
plan had not been returned to the
Commission; otherwise the Judge
the plan
skall return the
plan to the Com¬
mission for further
with
modification
his
opinion
in
and
thereafter
further proceedings
upon the plan
shall be as provided in
subsection
(e) and in this section.'
"
public
offering
scheduled for June 16.
Net proceeds from the sale will
for
used
the
redemption at
on Sept. 1, 1947,
$36,055,000 Commonwealth
and
Boston.-
July 1. -William D. Elwell will
on
\vithdraw
June
from -partnership
30.
on
'
•
With Ted Weiner & Co.
new
is
York
■
(Special
to
The
Financial
Chronicle)
;
„
•
SAN
Morgan
FRANCISCO,
Flagg
•
CALIF.—
James
and
H.
Mockley have been added to the
102% and interest
staff
of the
Sutter Street.
,
of
Tod
Weiner
&
Co.,
41
49,339,421
li,251,000
,$406,424,421
$342,676,921
•'
40,616^900
.
.
:t
'.
.ti
-'-.'1
2,354,100
$42,971,000
$42,971,000
859,800
859,800
859,800
28,750,000
13,807,700
13,807,700
13,807,700
$43,469,671
$42,973,700
$42,557,700
f
.
$43,207,000
'*
stock____:'j_:-:iJ
V
40,616^900
'2,354,100
*
"I'
—
debt,
excl.
defaulted
...
interest—"—!
"••••..'!. ''V.,
.
total
T.
$516,369,271
$493,228,921
70.190,100
81,314,343
70,190,100
stock!!——L—i
70,190,100
81,314,343
81,314,343
"ol.d" .consolidated:1 capitalization_~i
$667,873,714
Pacific
preferred
common
•
etc.
stock
-A
Current
Current
.
!__L—i
•*.
assets?
$644,733,364
18,626,077
"76,959,022
„
$429,065,421
$580,569,864
167,147,890
...
i $36,259,130 "$121,566,528 t$108,475,802
liabilities
^■■20,847,275
43,669,725
41,590,744
$15,411,855
"$77,896,803
t$66,885,058
189,445
2,214,251
20,373,928
hilltops
seven
Net
Special
28.7~50J)6O
:,.V
(and publicly 'held
Nj.
stocks), excl. defaulted inti
Pacific
T,otal
Cash,
416^000
debt
& M.
working
reserve
capital—
and
__£
maintenance
fUnds_i—_L
v
.
Airplane photograph of
test use
Total net working capital and.
special re¬
serve and maintenance
funds.—!—_!l
"NEW"
CAPITALIZATION—
Equipment
trust
Plaza-Olive
Building
First
■
First
>
obligations
*; $15,601,350
jlO-year ■ notes
"$80,111,054
$13,715,000
;___li
bonds___—_—-
'•
508,500
135,337,000
121,534,000
:
A
Series
B
debt
:
-
".•■wiv-M-4
V
.__s__L
«>;V
;
s
10,352,000
$193,507,000
11120,676,000
§38,499,000
$120,676,000
$159,175,000
$159,175,000
'$308,221,500
$352,682,000
$289,410,500
$39,189,500
$57,717,000
$57,717,000
'$22,727,000
-a 1197,934,000
A
income
debt
,
38,499,000
.
made interference.
debt
Prior
preferred
$tock__.
:
Second preferred stc'ck__"_
Common stock —
Class A
common
Class B common
z—*
stock—....
91,184,000
91,117,300
Total
among
duction
duction
$207,798,000
$207;686,900
$560,478,900
$560,480,000
"new"
consolidated
other
since
other
capitalizatiop'L
Jan.
1,
periodical interest
payments
against defaulted
cash; also $23,140,350 non-equipment trust
principal
1940.
; • —.
"' — / .
.
-
-for
at
the
next
tower,
periodical ..interest
payments, against
defaulted
cash; also $64,163,500 :non'iequipment trust
-
between. Jan.
1, 1943 and Jan.l, riS47)'? makingequipment trust principal reduction bf
*$87',303,850."
'
$4%.
114 V2V0.
§5%.
'
r
principal
a
total
television programs.
is
~
,
another
more
example of the Bell System's effort
and better Long Distance service.
•»
,
accruals|
BELL
TELEPHONE
SYSTEM
re¬
non-
k
-
relay systems may be used for Long Distance
telephone calls and to transmit pictures, radio broadcasts and
provide
seven-year
man-
These radio
accruals,
debt re¬
debt
most
about 30 miles away.
•
intervening
uses
free from static and
are
job of the four big, square, metal lenses on each
They focus microwaves very much as a magnifying glass
This
t
intervening
uses 'for
beam and aimed
$497,097,400
stock
jReflects
.among
58,852,600
$252,257,400
Total
58,897,000
*
.
But
focuses the sun's rays.
-_i_—
-
That's the
■
tower.
76,311,500
_______—136,756,400
stocki_-2-Ll_L*i_—-l—■"*' !
—
;
they shoot off into space instead of
following the earth's curve. So they have to be gathered into
a
Total
kind of
hilltop tower is a relay station between New York
Boston* for very short radio waves.
These "microwaves"
$130,235,500
bonds.
a new
Each
and
'
$187,560,500'
__________$120,661,000
income
Income
14,433,500
s
31,472,000
'
•?;..
Fixed
Series
by the Bell System, they will provide
Long Distance communication. :
$8,193,000
591,000
126,921,000
31,779,500
____L
.Built
$15,755,000
a:,; 711,500
?•
f
(•
one of seven relay stations—tm
of radio "microtmves" for Long Distance wrvkxm
t$87,258,986
<j
mortgage ,4s
mortgage
"Reflects
accordance
The
New
Exchanges, will admit Wil¬
Whitney to partnership1
—___
consideration
and
49,339,421
432,971
28,750,000
interest-i-lZ
Judge
shall find that the
the
Commission' to
bonds.
the
the
Stock
1,628,000
223,191,500
,
a
copy
distribute
and
of
liam Thaw
><;-236,000
-
loan
....
O.
transcript of the proceeding be¬
fore it and
1,
45,493,000
40316,900'
T.. &
trusts
credit
or
for its refusal to
The
Dec.
233,500
1,628,000
223,191,500
•
$428,832,800
.'L'i
stating the
modification
$25,000,000
due
.'tf'
First mortgage
5s, 6s_i——llL-l-l
Adjustment mortgage 6s__——i
modify
which it has
approved,
for such
reasons
of
bonds
International Great Northern—
that
order
December
BOSTON, - MASS.—Whitney &
Elwell, 30 State,Street, members'
1,140,000
'
Grand
supple¬
in
Whitney & Elwell Partner
"1,699,000
Mexico—
defaulted
re¬
a
sale' last
of
•
1,140,000
12,140,000
justment and reduction of interest
outstanding
The earlier
the
508,500
592,000
1,699,000-
2,354;100
Missouri
made( shall, in
of
24,156,000
■'*
45,493,000
5'/2S-
debt,
Missouri
mental
demption by lot.
be¬
$8,193,000
12,140,000
5s
or
on
consisted
first
5,850,000
2,072,000
45,493,000
—__—
5s,
Total
reasonably be made, ad¬
rates
'
■
.
49:339,421
debt, excl. defaulted, interestLLLL'L'l'
Equipment
First 4VaS,
discount that have been
made
may be
Cash payments will be
applied to
the purchase of bonds or their re¬
*
;
Total
a
can
payable
in bonds?..
or
23,135,000
5,850,000
2,531,579
iZs," i94ZZZlZ-ZZIZZ_Z::
convertible
at
that
semi-annually in cash
14,433,500
net current
assets, retirements and
purchases of debt,
tirements
sinking
a
annum
per
Jan 1,1947
,$15,755,000
23,134,800
ioan____-j—
,
through past or
future payment of
loans, cash and
which
Morgan Stanley & Co. will head
a nationwide
group of investment
banking firms which will under¬
0e
1%
of
■
"IIZllZZlZZ
debt
RR- credit
amortization
collateral
first
which
.
on
earnings of past
improvements to
the
property, the effect of the re¬
and
callable in 1952.
write
Jan. 1, 1940
RpcPfSn tr"StS
,
earnings,
and future
years,
of
■
con¬
including, without limitation,, for
Memphis
are
"OLD" CONSOLIDATED
changes,
developments since 1940,
facts and
&
comparisons of MISSOURI PACIFIC'S "old" consolidated capitalization
(inclusive of New Orleans, Texas & Mexico
and International Great
Northern) outstanding on each of the pro¬
posed effective .dates,
together with selected financial facts and newly
proposed capitalizations as of the same
dates; also given are the
current figures for the "old"
consolidated capitalization and selected
financial data:
"
Commis-4
hearing, if
further
1955
1966, and the sale in February of
year of $45,000,000
15-year
3%% bonds due Feb. 1, 1962.
' -
$326,673,293
Choctaw
and
1949.
corporations.pro-
necessary, and upon
sideration of all such
in
sale
$70,538,290
$351,180,912 $368,127,410
Interim
bonds
$71,728,000 issue of 5% bonds
20-year 3%%
141,123,499
$226,237,728 $226,242,434
-
upon
lars which will remain outstand¬
ing upon completion of this step is
$20,000,000' 10-year
m% bonds due Aug. 1, 1956, the
$115,011,504
$75,000,000
151,237,728
effect
of
will have the benefit of
August
74,007,150
$75,000,000
capitalization
amount
fund
Steps
'
sion,
$38,000,000 principal
ar obligations will have been re¬
funded.
The only prewar Com¬
monwealth issue payable in. dol¬
come
$41,004,354
80,000,000
vided for
by the plan, the Judge
34,508,000
piaza-oiive Building
shall return the
; y ---7ii,5oo
plan to the Com- Cair° & Thebes 4s,' 19 61
_.—l—._±,
,"i.'699.ooa
mission for such further
modifica- '
'
Jion as may be required
■Jai 4233,500
because central Branch u.
p. 4s,
of
1,628,000
changes, facts and
i948__rli___'_r_rr| . develop- First refunding
223,190,500
rnents since 1940.
The
deemed
to
approximately $126,000,000 of dol-
(Hue
$11,499,168
"29,605,186
SCHEDULE "B"
adding
or
36,941,060
relating
are 10-year Zlh% bonds, due June
1, 1957, and $19,000,000
20-year 3%% bonds, due June 1, 1967.
This is the fourth and final
step in the Commonwealth program
for refunding its callable dollar^
debt in ' the United States into , of. Australia
5% bonds, due Sept
bwer interest-bearing obligations.
1, 1957, now outstanding.
Each,
tFpon completion of this program, series of bonds of the new issue
are
this
^Giving
of
is transferred and
conyeyed to the debtor or to the other
•
.
ment
the
As of Jan.1,1947
$124,943;i84 $141,884,976
Following
property^dealt with by
to
'
Stock;.-
Total
'Upon petition of any
party to
proceeding and upon request
the Commission at
any time,
before the
made
interest.
$24,943,916
$64,943,184'' $61,884,976
_
stock
Total
5s,
and
*$77,720,849
$34,279,750
•
.
stock
Common
$79,532,245
totaling
1
■
debt
Preferred
for
,
the plan
•'
4 Vis
Total
sub-section
(f)
paragraph somewhat as
follows:
$40,843,777
$28,002,124
36,941,060
.
an amendment
could
Section 77 by
end
$10,615;519
.
$109,842,900 "$78,679,250
$134,965,331,:,$103,583,147
16,786,348
55,433,086
25,862,298
among
other uses
of
cash, ^ payments,
Oct. 17,1 1945 account combined
principal
on
•
IJSw
$57,630,125
-11,203,288
"New" Capitalization—
Equipment
trust
obligations
_L_
First mortgage
4s__—'—_________
Commission
consideration
and
In lieu of Section 2
be made to
$40,028,645
$21,818,807
___,
''Reflects,
creditors
cn_
•
J__ $459,252;i67 $446,'517,163 $443,941,261
$433,490,190
ditions.
*
293,098,510
f t
Refunding Step
$19,000,000
.
293,860,630
74 359 TO
.,74,359,™
,
provi¬
Commission for further
considera¬
tion in the
light of changed con¬
"
74 359 723
.,74,359,723
_1
1
Current
such
further consideration
could easily
bfe made
by a simple amendment
to Section 77
requiring that the
Court return the
plans to the
*
With SEG in Final
$11,499,168
13,718,700
23
The Government of the Commonwealth of
Australia filed May 29
with the Securities and
Exchange Commission a registration state¬
Jan. 1, 1947
$7,469,419
$330,359j655':$317,624,656 $315,048,749 $30
—
capitalization
etc.
Current
plan
Court, arrangement
Jan. 1, 1944
13,718,700
283,277,956
283,776,955
——-
stock.-Common stock
once
further
Jan.,1,1942
$20,628,000
..
-
modification. If it is
thought de¬
sirable that further
consideration
be given to the
provisions of plans
because
of
changed
conditions
since the plans
were certified to
the
Jan. 1,1941
$32,864,000
13,718,700
sec
—
Preferred
i
are concerned
are
it certifies the
plan
to the Court
unless the Court re¬
turns the plan to the
end
an
trustees'
R.
.
at
and
loan
Funded
3237, from which I
quote the
following excerpts:
[
?" * * * The
Commission has
been criticized for
not
modifying
its plans
because of
changes in
conditions since it
approved the
plans. Under the
provisions of
Section 77 the
function of the
sions of
"Old" Capitalization—
Receivers'
Committee, Interstate
Commerce
Commission, in referehce
(2999)
Australia Files $38,000,000 Bonds
with selected financial facts and
newly proposed capitalizations as of
the same dates; also
given are the current figures for the "old" capi¬
talization and selected financial data:
ruptcy and Reorganization, Com¬
mittee
'
Following are comparisons of ROCK ISLAND'S "old"
capitaliza¬
outstanding on each of the proposed effective dates, together
,
tion
Bank¬
on
SCHEDULE "A", '. y
t
*
We have applied to the Faleral Communications Commission
fur authority
to start a similar link later between New
York and Chicago.
to
;
Thursday, June S, 1947
FINANCIAL CHRONICLE
.THE COMMERCIAL &
(3000)
24
Reserves
Why Business Needs Adequate
(Continued from page 2)
business
prices of bread, meat,
and fats.
In building up reserves
to meet risks and contingencies,
the
in
ed
especially those related
lacks working capital when
prices are falling, sales volume
shrinking, and unemployment in¬
to inven¬
policies tend to
that these
creasing, can only add to the in¬
stability of the situation and in¬
tensify the cyclical fluctuations.
support
prices, and should be pre¬
pared to meet any unfavorable
developments or losses which may
high
ing
healthy
a
their
well as
when
as
businesses,
own
they accumulate adequate reserves
from present earnings for future
Inventories Inflated?
general, the increase in con¬
sumer buying during the last half
of 1946 was less than the increase
in the volume of goods reaching
the distributors.
"The accumula¬
needs.
In
in
the
inventory values when
which
aspect of the earn¬
ings record is the relationship of
earnings
to
rising
commodity
second half
there
indicate that
of 1946
be trouble ahead for
According to the De¬
may
is
inventory
the
and
out
do
beginning.
re¬
valued downward.
of
these
of
part
sisted
and
raw
stocks con¬
semi-finished
estimate of in¬
the Depart¬
recent
more
ventories and sales by
bank
tories
are
rising—but less rapidly,
"Unpublished ad¬
indicate that in¬
accumulations of both
than last year.
figures
justed
ventory
non-durables are in¬
creasing steadily.
At the end of
March, total merchant wholesaler
inventories were up 54%
from
March a year ago."
Wholesale
commodity
prices
and consumer prices continued to
advance during the latter part of
1946 and early 1947.
No doubt
durables and
part of the rise in prices was a
reflection of buying to build up
inventories
from
previous low
funds will have to
tional
be met
to
to
provide
recover
employment to have it continued.
are
of Stabilization Programs
make a
toward
economic
stability
and greater
production if they followed a pol¬
given volume of business means
operating costs.
More
dollars will also be required to
a
increased
old or worn-out equip¬
to expand the size of the
replace
ment
or
plant.
If
prices
rise rapidly and
is sold,
inventory
low-cost
rate of
the
the
profits will move up rap¬
These increases should be
idly.
regarded more as windfall profits,
however, because low-cost inven¬
.
after taxes.
With net
earnings reduced, there are less
funds to be retained in a business
enterprise. The small corporation
is further - bedeviled by the fact
mel & Co.
existing income tax laws are
so as to make retention of
more
than 30% of net earnings
after taxes uncertain. The law re¬
offset
Fluctuations
Many
the
stage
we
have
the
in
tories
businessmen
intelligent
believe that
now
the
reached
business
cycle
in
mark-down
purchased
inven¬
of
adequate financial reserves.
drawn
selling prices of products or serv¬
ices should be large enough dur¬
quires
a
satisfactory explanation
if less than
70% of net earnings is
paid in dividends by the corpora¬
tion.
If
adequate re¬
the investment
the
succeed
small
in
businessman
future
the
as
is
he
to
when
market
prices were higher.
Some relief
in handling inventories, it is true,
be
mav
found
in
the
use
of the
when prices will decline, and that
both inventories and earnings will
LIFO
undergo important changes.
Un¬
der
such
circumstances,
sound
business judgment demands that
adequate provision be made to
take care of any possible losses
which
might develop after the
balance sheet has been issued; and
book value of the inventory under
that
provision
made
be
for
any
other
unpredictable risks, includ¬
ing general market and financial
changes.
A great deal of public discus¬
sion
and
legislative effort has
been devoted to determining ways
and means of
the
eliminating
fluctuations
of
the
some
of
business
of
first-out) method
accounting for inventory. The
this
(last-in,
method
would
not
increase
the
high priced inventory
would be charged off against the
since
goods
course,
sold at high prices.
Of
this method would be of
questionable value if the inven¬
tory were being depleted or re¬
duced for one reason or another.
Regardless of whether the LIFO
proves effective, an alert
management should be prepared
to
take the
necessary
steps' to
method
build
up
reserves
a
substantial backlog of
to meet
or
offset prompt¬
steps in that direction which can
ly the losses arising out of falling
inventory values, without dipping
into
or
reducing capital ' funds.
be
Since
cycle.
One of the most important
taken
by
businessmen
have each business
age
its affairs
so,
concern
is
to
man¬
that it Will al¬
it is
obvious that
most conservative
even
accounting
cedures cannot always
the
pro¬
overstatement
appropriate conser¬
vatism in dividend policy. Capital
profits by
an
recoveries
should
not
distrib¬
be
Stable
from
Essential to
Employment
corporation cannot maintain
stable
employment unless it is
ported
strong
as
because they are re¬
met income." r
Another
be
advantage
realized
which
may
by retention of earn¬
A
enough
competition. '
financially to meet
In order for a
'
"
corporation to be
to
manufacture
cost to compete with
those* of -low cost
producers, it
must be prepared to install new
machinery,
expand,' replace, or
relocate factory buildings.
Such
improvements will be needed most
when competition becomes keen¬
est.
Here again, the existence of
a
reserve fund accumulated in a
position
ings in a business, is the provision
in
of funds for future expansion
goods at a
modernization.
this
of
is
view
turn
In
the
and
long run,"
important from the point
of capital formation.
In
is
it
essential
to
a
broad
growth and expansion of the pri¬
vate enterprise system.
The re¬
,
lation
of
these
earnings
retained
greater
production
is * quite
clear. The greater productivity of
to
a^
be
of the
of the business.
should
income
gross
made, and regarded as one
has
uted merely
To estab¬
regular deductions
lish such funds
economy.
Adequate Reserves
ample
ing good times to provide
in the past, he must adopt a con¬
servative dividend policy in order
of.
The
funds for this purpose.
of money and to retain a large share of net earn¬
the building up ings for future expansion, replace¬
of reserves
against fixed assets ments, and contingencies.
was expressed clearly by George
Guaranteed Employment Requires
Terborgh in a recent study (De¬
Adequate Reserves
preciation Policy arid the Postwar
There is much interest today in
Price Level,1 April, 1947) as fol¬
the subject of guaranteed yearlows:
";v "' / ''V- -''
round employment. Concerns
"Ordinarily depreciation recov¬ which adopt the plan—with all its
ers simply the number of dollars
ramifications—undertake to carry
originally committed to the asset, on
operations
uninterruptedly
regardless of differences in their even
though prices may be fall¬
purchasing power.
This recovery
ing. To assure continuous produc¬
is satisfactory enough in periods
tion, therefore, funds must be ac¬
of relative stability in the price
cumulated to provide an adequate
level, but can be seriously, or even stock of
goods — inventory, raw
ruinously, inadequate during and material and other supplies. Fall¬
after periods of inflation."
;
ing prices may act not only to cur¬
The necessity of providing for tail income but to result in an
establishing
sufficient
reserves actual net loss. Even so, the com¬
especially from the managerial pany must continue operations be¬
point of view was summarized by cause it has assumed the obliga¬
Mr. Terborgh as follows:
tion of maintaining employment.
"The problem of under-depre- Jobs must be provided and the
ciation of prewar assets is suf¬ cost made a part of the operating
the
by
backed
effective if
more
that
power
for
dismissal
be stronger
compensation would
and
unemploy¬
wage,
and
insurance
ment
such as
programs
guaranteed
a
its relationship to
low
.
Stabilization
costs
operating
If
this
for
reserves
purpose
are
in prosperous times,
the program is much less likely to
stand the heavy strain which may
come during depression.
Such re¬
serves should be tax free as long
not built
as
up
and used to
they are retained
support the labor force during bad
times. • •"' ; j. v4',/•; :*.*■•
; • :■ „':'
•
Substitutes for Special Reserves
special
establishing
of
Instead
reserves
of
out
earnings,
business concerns have
some
transferred
earnings to
Others
attempting to accomplish the
same
result by operating under
the "last-in, first out" accounting
procedure already described; , In
part
their
of
.
usual
their contingency reserves.
are
addition
safety
these financial
to
devices, business men are at pres¬
ent contributing to the future sta¬
bility of the national economy by
the term of future con¬
much more
closely than
usual.
A- further
element
of
limiting
tracts
strength in the situation
improved
financial
and
is the
credit
status of the average company.
A
policy in regard to re¬
serves in many instances can con¬
tribute
to
improvement in this
prudent
respect.
Summary
.
Efforts to Eliminate Business
and
the Nunn-Bush
Shoe Company, and Geo. A. HorGamble Company,
:
,
stabilization
labor
similar to that of the Procter
tory will have to be replaced by
during high-cost inventory, leaving the
the period when inventories were corporation less real profit than
growing has resulted in an in¬ that indicated by the inflated
values. The position of a corpora¬
crease in the dollar value of the
inventories—though to what ex¬ tion under such a situation would
tent no one knows.
The Depart¬ be similar to that of the man who
ficiently serious to deserve the expenses. A corporation would be
an
automobile which cost
ment of Commerce warns against sells
earnest attention both of buiness subject to serious criticism if, after
the difficulty of drawing conclu¬ him $1,500 for $2,000, taking a
executives and tax authorities.
telling the workers that it would
sions about the "physical quanti¬ "profit" of $500. He needs a new
guarantee steady year-round em"Since capital investment must
After paying a tax on his
ty of either sales or inventories car.
oloyment, it was unable to live up
from these dollar value estimates. "nrofit," however, he must pay be recovered in real purchasing
to its guarantee.
power, not simply in dollars, unActually the physical volume $2,000 or more for the new car.
One of the necessary stens in
der-depreciation should be recog¬
of food sales is down. Department
the adoption of a plan of stabilized
Inflated Inventories in Relation
nized
for
managerial
purposes
officials point
out that an in¬
employment, therefore, is the con¬
to Profits
whether recognized for tax pur¬
crease
of almost 50% in whole¬
stant
maintenance
of
reserves
poses or not.
In many cases man¬
sale food prices in the past 12
Due to the need for more funds
large enough to carry out the ob¬
months indicates that the current and the difficulties
agement should incorporate in¬
likely to be
jectives of the program at all
creased depreciation rates into its
level of sales represents a sub¬ encountered in
raising such funds,
times. Such a program, if -success¬
regular
cost
and
financial ac¬
stantial decline in the volume of
corporations should retain as much
ful, would not only. increase em¬
food distributed."
counting. Where for some reason
of their profits as possible.
Some
ployment but do much to stabilize
this is not feasible, it should al¬
of these funds will be needed to
our
trend
price
This
levels.
contribution
toward
icy
could
concerns
desirable
.
through the sale of stock or by
borrowing.
Increased capital for
Success
Importance of Reserves to
earnings
importance of the problem of the
purchasing
of view of
sirable from the point
portion of gross income, a part of
under prewar conditions,
would have accumulated as net
The nature and
assets.
fixed
might force discontinuance of ex¬
pansion
and
construction
just
when it would be especially de¬
which,
able businessmen that the
current charges against operations
to cover depreciation are not suf¬
in
difficult to
funds
available
of
Lack
obtain.
quired to carry on a business to¬
day than before the war.
Higher
income taxes eat up a substantial
out.
the considered opinion
is
serves
costs
were worn
markets at a
outside
in
capital
time when it might be
Many
prices
and
avail¬
business may have to bor¬
banks or seek venture
a
from
row
higher, more capital is re¬
much
many
ficient
order to transact
physical volume of busi¬
Higher wage and material
will also necessitate larger
balances. Since capital, sur¬
same
("Journal of plus, and undivided profits cannot
be increased from earnings as fast
Commerce," May 13, 1947) reveals
as prices rise, the need for addi¬
that merchant wholesaler inven¬
of
It
they
be necessary in
Commerce
ment
when
able,
inventory
heavy
by
If reserves are not
losses.
to be as easy to
it was before World
costs
Because
provide the necessary funds to re¬
place the building and equipment
the
ness.
materials.
A
One effect of inflated
now as
Business cannot maintain
of employment if it is
crippled
War II.
How long will
Is the business a
very
this
rate
this
appear
become obsolete. This
or
such assets last?
inventory
business.
values is an increase in the de¬
partment of Commerce, these in¬
mand for additional working capi¬
ventories rose from $17 billion at
the end of Juue, 1946, to $20 bil¬ tal to operate the business. Larger
lion at the end of November.
A inventories in terms of dollars will
large
small businesses by care¬
perous
better-balanced
type which may be seriously af¬
products was
fected by new inventions?
How
prices. To what extent have earn¬
prevented by the continuation of
will price changes influence re¬
ings been influenced by higher
orders generally in excess of theprices?
During the period of ris¬ placement costs?
output of finished goods." ("Fed¬
Let us assume (which we can¬
ing prices, earnings may be in¬
eral Reserve Bulletin," January,
flated by the rise in the market not) that there would be no seri¬
1947.)
While over-all stocks of
ous
value of the inventory even when
pr^ce changes. It would still
consumer goods were substantial,
be a difficult job to estimate what
the physical volume may be the
there was a wide range in the
same
or less
than at an earlier percentage of income, after all
adequacy of the supply of differ¬
period. Gains of this character are current operating expenses had
ent materials.
non-recurrent and may result in been paid, should
be set aside
Substantial increases in manu¬
heavy losses later when prices de¬ from year to year as a reserve to
facturers' inventories during the
cline
quired.
planning and able manage¬
ment have developed large, pros¬
requires careful planning from the
An important
finished
of
stocks
tions
enterprises out of net earn¬
investment in fixed assets such as
ings. Some small enterprises have
building, machinery, equipment, been able to supplement their own
etc., is faced with the problem of funds
by borrowing, though it
replacing these assets as they are
does not
worn
employment, constant addi¬
to invested capital are re¬
nish
ful
engaged in a
requires a large
out such
to fur¬
carry
plans, which are necessary
proprietors
of outside funds,
of many
corporation
Any
business
Earnings, Prices, and Inventory
larger,
-of
tion
adequate reserves concerns
small
sence
High Prices and Fixed Assets
the
for
concern
of the nation,
welfare
for
lem of
business
enterprise,
prices are rising, the need for ade¬ which usually starts out with a
quate reserves. becomes all the limited amount of capital funds.
more urgent.
In view of present The small enterprise frequently
price and cost tendencies, an ade¬ finds it difficult to obtain addi¬
funds
for
purposes
of
quate reserve obviously becomes tional
an essential of sound management.
growth and expansion. In the ab¬
flation
show¬
Businessmen, therefore, are
result from them.
Are
a
org
should recognize
business
tories,
liquid condition. A
that-is weak financially
be in
ways
aspect of the broad prob¬
One
To
equipment.
Small Businesses Need Reserves
In
in
view of the uncertainties
commodity prices, wage rates and
future earnings, it is important to
the future success of business en¬
terprise
make
to
careful
a
re-
check of the volume and costs
amount
and
of
examine the
all inventories and to
of each
fund—whether for
adequacy
kind of reserve
depreciation and obsolescence of
fixed assets, for decline or infla¬
tion in inventory values, or for
benefit
lished
Where
programs.
records are available,
pub¬
each
should compare its
total selling and distribution costs
per dollar volume of business with
those of other similar companies
or
of the industry in general in
order to prevent any leaks im dis¬
corporation
tribution costs.
The
ual
the
concern
risks
that
,
individ¬
will be to determine
involved
the business
has
<
best policy for an
in
operating
and to make certain
adequate financial provision
made, in .so far as is
been
possible, to cover all important
previous, more prosperous period
costs which may be incurred in
with 75 may make possible the carrying operating and stabilizing the busi¬
out of the improvements needed
or
a
100 years ago, is due in no
ness.
This means setting up suf¬
small part to labor-saving devices to mainfain a high level of em¬ ficient reserves out of gross in¬
ployment.
and machinery.
The importance
come during good times to stabil¬
Within recent months* commit¬
of machinery is emphasized by the
ize the business, particularly with
fact
that«labor,, while • working ments have been made by many regard to employment,
and to
businesses for the construction of
much shorter hours th.ari:- formerly,
meet periods of falling prices and
new
buildings and the purchase
is
labor today,
as compared
abl«btpr produce ai mweh Jasger
prevent in¬ guantiity
qhgoodSiuGqx'H
•
,r.
of
additional:
machinery
and
reduced
earnings,
Volume
165
Number
4600
THE COMMERCIAL & FINANCIAL CHRONICLE
(3001)
25
San Francisco Bond Traders Association
Jack
Palmer, Conrad, Bruce & Co.; Bob Smith, Hill, Richards & Co.;
Louis Rich, Schwabacher & Co.
Chick Harkins,
Blyih & Co.; Collins Macrae, Wulff, Hansen & Co.;
Bob Bourne, Conrad, Bruce & Co.
Tony Bottari, Blair & Co.; Jack Egan, First California
Jim Stewart, Wilson, Johnson & Higgins
Co.;
Jack Sullivan, First California Co., San Francisco; Tommy Akin, Akin-Lambert &
Los Aneles: Jack Hecht. Butler-Huif & Co.. Los Aneeles.
J.
Co.,
Kessler, Livingstone & Co.; Rudy Sandell, Shuman, Agnew & Co.;
Art Perenon, Wm. R. Staats Co.
•*
William F.
Belknap, Walston, Hoffman & Goodwin; George Kranz, Kaiser & Co.;
Charles B. Kane, Geyer & Co.
26
THE
(3002)
COMMERCIAL & FINANCIAL
Outing May 24th
and 25th, 1947
Tom
Eart McMahon,
Merrill Lynch, Pierce, Fenner & Beane; Paul
Ken Donald, First California Co.
E. Isaacs, Sutro & Co.;
Price, E. H. Rollins & Sons; Pete Finnegan, Hannaford
Connie Shafft, Shafft, Sncok & Cahn.
Armando Etiopi,
Francisco; Bob Ross, Hill, Richards & Co.,
D. James Company, Sacramento.
Sandy Hogland, Brush, Slocumb & Co., San
San Francisco; Harry L. Schmid Jr., William
Thursday, June 5, 1947
CHRONICLE
guest; Mac McCarty,
A1
guest; Ted Baker, Dean Witter &
Hewitt, First California
At the dinner.
Thomas, Dean Witter & Co., San
Houston Hill, Jr.,
Dick Q'Nejl* ,JFair^an &^ Co., Los Angeles; Earl
Francisco; Bill Davies, Butler-Huff & Co., Los Angeles;
J. S. Strauss & Co., San Francisco
& Talbot;
Co.
Co.;
Volume
165
Number
4600
THE COMMERCIAL & FINANCIAL
(3003)
CHRONICLE,
'
_____
Held at Agua Caliente
John Ford, Bacon & Co.; Earl Parker, Blyth &
Cliff Morrill, Walston, Hoffman & Goodwin.
Walter F.
Schag, First California Co.; Edwin L. Beck, Commercial &
Chronicle; Brooks Weber, Davies & Mejia.
.
Springs
Eddie Levitt, guest (owner of the
Trust Co.; Harvey
Co.;
Financial
Agua Caliente Hotel); Andy Steen,
Franklin, American Trust Co.
American
Steve Turner, Turner-Poindexter & Co., Los Angeles; Larry Pulliam, Weeden & Co.;
Los Angeles; Cecil Alloo, Wulff, Hansen & Co., San Francisco
#?•
Walter Vicino,
Blyth & Co.; Frank McGinley, Blyth & Co.
27
■
At the dinner,
"w-
r^W«'-ACtRAW^U^iiiJ.ij^^wii«^4-Ji^^i'^««-ai/-J?u-J >W#*AMt»I ' .W-A!4.' i. L
£?f^te»*.^M'ni^;vf-A'w-^»wi* r.a^ i,*mmmNmWM»**IK*>W>*W**»**W«** ***>»*,
uW*^ w^apte*
28
THE, COMMERCIAL &
(3004)
Thursday, June 5, 1947
FINANCIAL CHRONICLE
i
Pronounced Huge Success
Bill Hyde, Blair &
Co.; Frank Bowyer, Schwabacher & Co.;
Bank and Union Trust
John
Buick, American Trust Co.;
Pierce, Fenner & Beane.
Quinn, Stone & Youngberg; John
Hodge Davidson, Merrill Lynch,
Bill Work, Wells-Fargo
At the dinner.
Dick Abrahamson,
Weeden & Co.; T. C. Petersen, Jr., Davis, Skaggs &
Davis, Skaggs & Co.
Co.;
E. K. Whitaker,
Co.
Ernie Blum,
Brush, Slocumb & Co.; Louis J. Spuller,
W. T. Silvey,
Jr., Elworthy & Co.
Bank of America, in the covered wagon.
Volume 165
'
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4600
(3005)
State exercises many functions not
(Continued from first page)
age-old traditions of lmtuncuiunal
.comity and goodwill.
The objectives of the
tional
Chamber
Swiss
people.
Chamber
The
has
tne
of
International
long
supported
consistent
measures
Interna¬
tnose
are
witn
the
tended
by 129 delegates from 26
nations
of the
world, many of
whom made the journey to Lon¬
don
at
great personal hardship
and inconvenience.
tendance
the
augury
its support to free competitive en¬
meeting
terprise
cember,
that economic system
as
the
for
of
preservation
individual liberty.
The Interna¬
tional Chamber has advocated all
measures
for enlarging
the scope and magnitude of world
trade.
necessary
These
various
objectives
economic
and
thought
It is therefore appro¬
priate that the first postwar Con¬
of the International
gress
ber
should
ment at
meet
in
Cham¬
environ¬
an
once
hospitable, congenial
understanding.
and
The last Congress
national
of the Inter¬
Chamber
held
was
Copenhagen eight years
prior to the holocaust of
ond World War.
status
by the Economic and Social
Council
the United
of
liaison
office of the
Chamber has
of
therefor
tal."
The
reso¬
an
International Chamber
defined its aim
people
as
that of helping
everywhere
to
convert
their desire for peace,
security and
prosperity into a practical pro¬
gram of economic adjustment and
Jiuman understanding.
The raising of living standards,
the
International
firmed
at
the
Chamber
Copenhagen
af¬
Con¬
is dependent in large meas¬
greater freedom in the
exchange of goods and - services
across national frontiers; the en¬
gress,
ure
upon
of
couragement
vestment;
international
the
and
in¬
economic
velopment
of national
characteristics.
and
de¬
resources
its
Chamber
in
faith
again
economic
avowed
liberalism.
Had the program of the Interna¬
tional
Chamber found
expression
in the policies of nations, the war
might have been avoided.
But
aggressive nationalistic sentiment
proved to© strong and the world
was
plunged into economic and
During the war, Mr. J. Sigfrid
the
acted
President
as
International
Chamber
of
and
kept the organization alive in or¬
der that it might be reactivated
upon the cessation of hostilities.
the
At
time
Business
of
the
International
Conference held at Rye,
Hew York, in November,
1944, it
already apparent that the war
in Europe was drawing to a close
was
and, in consequence, the members
of the Council of the International
Chamber decided to
tivities.
At
renew
its
ac¬
the
request of the
Council I
agreed to accept the
presidency because I was convinced.'that
the
International
Chamber, on the basis of its past
record, presented the best oppor¬
tunity for private enterprise to
make its;voice
heard
in
the
eco¬
nomic rehabilitation of the world.
Goal of. International
si
i
Chamber
Since: the
Rye Conference,
International.
Chamber
has
the
di¬
sions \t of
Council
the
second
and
third
in
Paris.
The
sions
and
numerous
analyses of fundamen¬
economic
issued
ports.
a
problems and have
series
of significant
re¬
The first meeting
of the
Council held, in London in August
1945 coincided with the end of the
War
in the Far East.
affiliated
The International
had
extensive
many
of
within
the
Commis¬
specialized
Chamber has
experience
the
It
was
at¬
Chamber
has
sys¬
—
the
only
system
with
province
of
sufficiently
men
character
to
tire
busi¬
world
express
opinion.
history
ness
Throughout its en¬
the
International
press his personal beliefs and con¬
victions, the right to follow his
intellectual
own
to
work
the right
the right
bent,
not to work,
or
to move his
domicile, and the unauthority to elect the
trammeled
makes
of
the
the
social
dom
Political
government.
human
being and
self-realization
the
main
endeavor.
insures to
objective of
Economic
the
the
of
free¬
the
consumer
available for purchase.
twin freedoms—the
the
upon
other—that
dependent
bargaining
Economic progress is not attain¬
able unless full expression is given
tions
intervention
to
a position of prestige and
responsibility must depend upon
his own abiltiy and initiative.
The economic
titudes
maintain its independence of
pressure or
that
it
number
of
be
the
essential
increase
national
in
the
delibera¬
our
of
the
war
Chamber
has
end
International
been
commit¬
world business opin¬
extent will
Since
happy to welcome
tional
the
maximum
represented
tions.
more
to
committees
na¬
Canada,
economic
and
in
Latin
America, I made
during
March
through Central and South Amer¬
ica.
of
This trip was for the purpose
explaining to the Chambers of
Commerce
ness
the
men
new
of
busi¬
individual
and
the
countries
visited
status of the International
Chamber
enterprise system.
In the
early days of the Industrial Revo¬
lution, the economic theory of the
free
enterprise system was set
forth
by
Adam
Smith
in
his
epochal work, "The Wealth of Na¬
tions."
this
More
study
than
was
one-fourth
devoted
criticism of
mercantilism.
The
to
a
of
re¬
18th Century
mercantilism
consultative
Mercantilism
the
of
18th
Cen¬
International
in
Chamber
their respective countries.
talking to these groups I took
particular pains to emphasize the
fact that there is no conflict be¬
affect the
again
history, come once
the fore in totalitarian
to
"The obvious and simple system
of
natural
liberty"
Smith's
was
for the kind of economy that
use¬
National
economic
with
connection with the purposes for
sumption.
This goal
and
they
formed.
were
This
thoroughly understood
recognized by everyone con¬
now
cerned.
I
am
glad to be able to report
sections
of
the
International
formation
in
Cuba,
Argentina,
Uruguay, and the exist¬
ing sections of the International
trades
Chile and
vested
Chamber
in
in the
Brazil
being reactivated.
and
course
Peru
are
I believe that
welfare
was
greatest
con¬
was
to be ap¬
goods produced, and by permitting
entrepreneurs
and
workers
to
choose
now
the
proached by widening the avenues
of trade;
by allowing consumer
preferences to influence the quan¬
tities,
varieties
and
prices
of
of
are
large.
Rules
intended
to
are
general and not
discriminate
among
individuals. Consumer preferences
still determine the allocation of
productive resources. Competitive
profits continue to be the test of
managerial efficiency and correct
judgment in pricing.
Economic
flow to the channels re¬
resources
There
consumers.
would
little
be
dispute
with the deviations from complete
laissez faire needed to make mar¬
kets truly competitive, to protect
natural
resources
wasteful
from
depletion
and
individuals from
exploitation.
But over the past
several decades numerous depart¬
ures
laissez
from
which
faire have oc¬
have
been com-
petely unjustified and have been
international
of
the
remunerative
most
without
interests
deference
of
to
guilds
the
and
monopolies.
Over the
past 50 years the func¬
tions df < -government' -inj modern
additional sections will shortly be ■demoerdtic1 society '!haVe:'experi¬
formed in Panama and Venezuela enced
great expansion 'arid '!fhe
from the allegedly detri¬
foreign economic
developments, to camouflage in¬
flation through continuous use of
price and rationing controls, and
to peg the rate of interest and to
prevent
it from
exercising its
basic function in the allocation of
investment funds. In consequence,
permitted to
if these processes are
continue, the State is drawn into
the exercise of complete domina¬
,
economic system and
resorts to controls of such a to¬
talitarian character that individ¬
ual freedom and initiative are de¬
tion over the
stroyed.
and
tarded
employment
Full
achieved but it is the
he-
may
specious fuR
employment of a police state and
not the full employment of aa
expanding
economy.
The state
becomes all-powerful.
Freedom,
which is the basfs of economic
longer exists.
progress, no
in Foreign Trade
Freedom
intervention,
pronounced or more
detrimental
to
general welfare
than in the field of foreign tradeSuch interventionism may have
its roots in the political power o£
Nowhere has state
been
more
vested interests or in
ulation
identified
groups
economy
mental effects of
certain ideo¬
By mean®
expanding functions of gov¬ logical considerations.
ernment in a free-enterprise econ¬ of exchange controls, tariffs, cus¬
omy,
often necessary to restore toms formalities, bilateral agree¬
competitive balance, need to be ments, import quotas, export sub¬
distinguished from the economic sidies and a host of other meas¬
controls imposed in a totalitarian ures, many a modern state has
tried to influence and control it»
or in a planned or directed econ¬
The rationale of
omy.
The area of private initia¬ trade balance.
tive
and
responsibility
is still such measures may be that of pro¬
curred
State-subsidized
inimical
production and which may
destroy personal
and economic
freedom.
This action may require
the State to insulate the domestic
The
should replace mercantilistic reg¬
in
regional
vs.
demand of
in the cycle of
and
to full
of
such
character
a
as
to
under¬
mine the free market economy, tc
destroy individual freedom and tc
check economic progress.
Instances of undesirable devia¬
tions
can
Business
be cited without number.
men
have
on
occasion
cartels
prices, limit pro¬
duction, allocate sales and stifle
innovation.
Agriculture has fre¬
furthered
in
order
monopolies and
to fix
quently demanded immunity from
competition by insistence upon
price fixing, bounties, export sub¬
sidies
and
international commod¬
agreements.
Labor unions,
strong enough to enjoy a monoooly position, have prevented the
ity
most
efficient
material
use
of
human and
by restrictive
regulations,
by
"make-work" rules and by other
resources
apprenticeship
measures
to control
access
labor market and to limit
to
the
produc¬
Strongly entrenched inter¬
ests have demanded special pro¬
tection
arid
privilege by tariff
legislation and' other forms of
tion.
stimu¬
tecting home industries, of
domestic industrialization,
Of achieving economic self-suffi¬
lating
ciency or of insulating one econ¬
against the alleged pernicious
practices of another, or, as in the
case of Hitler Germany, of mak¬
omy
in order
ing use of such devices
flecting the most intense market
political and economic
trade,
monopoly, laws
tween the International Chamber
restraining the mobility of labor,
and any existing regional group and the
guild control of prices,
such as the Inter-American Coun¬
techniques of production, and en¬
cil of Commerce and Production;
try into occupations. In the view
that the International Chamber is of Adam
Smith, national welfare
the only organization of its kind was not attainable if
monopoly
which can represent the opinion
profits were realized from the
of the business men of the entire
production of restricted quantities
world before the Economic and of
goods and from their sale in
Social Council, but that this does markets
protected by the State.
fulness of such
Regulation
Totalitarianism
This attitude of mind has,
name
In
Government
of
economies and in the doctrines of
the
special privilege.
affairs.
those who advocate planned or di¬
rected economies.
cil, and to urge- upon them the
desirability of forming sections of
restraints which
those
all
control
body
a
have fully subscribed
doctrines, opposed as he
tury held that individuals existed
for the State, and that the State
must become all-powerful in the
to the Economic and Social Coun¬
as
to
By ham¬
and personal
ciety itself may demand that the
would
these
free
a
April
and
to
the
market.
State take action which is
that Adam Smith him¬
sure
the essential ingredients of the
are
of
that earlier period finds its
Egypt and Mexico, and has been
modern counterpart in economic
gratified by the reincorporation of
which
spread with
national committees from Austria, nationalism,
epidemic furor during the Great
Bulgaria and Hungary.
Depression and culminated in the
In an endeavor to. promote the
conditions leading to the second
organization of national commit¬ World War.
tees
self
any
special interest groups.
make for economic monopoly and
Political and economic freedom
lentless
new
from
political
freedom.
the
Council
the
our
that
so
to
ion
all
by
Social
strive
we
tees
Chamber
of
ac¬
community and that the State
ventive genius of society.
ment
on
the
to the dynamic forces and the in¬
recognition granted to the
makes
State
world
quarter century.
and
desirable
Inter¬
re¬
the
stringing
freedom
contribution.
requirements that its
objective is the welfare of the en¬
tire
of
are
reducing
right.
must
free-market economy are
a
by
"risks"
towards
these
of
others
based
for
attainment
of
directed
All
many
maximum
structure and at¬
economic
and
Economic progress is re¬
the dynamic and re¬
silient qualities of free competi¬
tive enterprise cease to exist. So¬
ciety has surrendered its birth-
community
incentive
limits
was
Economic
the
of
provide
of
The
Advancement
imum to
I am
International
is a
and
of
The
it
of security
which itself
independence
of
economic freedom.
brings to its lease of dynamic forces and the
the background and stimulation
of
inventive
genius
experience gained in its existence can take place only in an environ¬
a
when
desirable
The
solution
problems.
than
various
State
by the individual above this min¬
set
Chamber
more
is
individuals,
condition
tion in
Factors in Economic Progress
among
insures that minimum
The
status
new
power
in the community.
groups
maximum
tional
national
policy which underlie
State activity in rrjany fields. The
control and curbing of natural and
economic monopolies are neces¬
sary to make the market a truly
competitive one and to equalize
individual
world.
desirable
are
of
na¬
portant and constructive contribu¬
tions of the
goals
and
in the free
against deleterious
resources
intellectual
the
the
consumers
natural
ac¬
progress
the
Provision of full educational op¬
have
for
to
re¬
society.
portunities,
It is these
one
material
economic
natural
and
human
of
sources
products, and the conservation of
counted
im¬
the
to
and
complete equality be¬
law, the full right to ex¬
has
given
continu¬
thought and study to interna¬
tional economic problems. During
the interwar period it participated
actively in innumerable interna¬
made
market
free
a
fully operative and to
give the fullest possible protection
individual
Eco¬
ous
and
make
to
economy
which
and
Chamber
conferences
quired
It may indeed be re¬
fore the
"Freedom
spending and saving and to allo¬
cate his spending among the va¬
rious types of consumption goods
in
economic
by giving rise to in¬
sistent demand for complete State
intervention,
they
evoke the
greater risk of destroying the free
enterprise system.
Fearful of unemployment, so¬
liberalism.
nomic Progress."
Political freedom insures to the
for
right to budget his money income,
to apportion his income between
universal
measures
protection
of
workers against occupational haz>ards, of investors against fraud
makes
falling
the Eco¬
problems
only organization of business
Chamber
made
International
given to the free enterprise
individual
that
tal
its
and
agencies.
national
have
I
the
dignity
Council
working:committees of the Inter¬
Chamber
definitely manifested
America, finds its origin,
believe, in the support which
so
Social
fact is
held/, the first in London and the
ization,
in Latin
emphasizes the inherent
this
Three ses¬
have been
The deep interest in our organ¬
of
which
goal.
South
freedom
rected all of its activities towards
important
in
officials
not in any manner
of Commerce
countries
relationship with de¬
velopments at the Economic and
trip
social chaos.
Edstroem
maintain
to
continuous
the
In these declarations the Inter¬
national
Chamber
the
"increasing move¬
goods, services and capi¬
ment of
City to enable the In¬
nomic and Social Council and it is
substitution
the
in
just
At that time the
and
of
International
established
sec¬
Which would render "unnecessary
the movement of armies across
frontiers"
A
the
at a
session, urged the adop¬
procedures and policies
plenary
been
Nations.
ago,
International Chamber, in a
lution carried unanimously
tion
in
Chamber
had been awarded top consultative
ternational
political
announce
International
come
and action.
able to
we were
other
Central America.
and
tem
postwar Council
in Paris last De¬
held
New York
the fabric of Swiss
happy
third
the
that
a
for the future.
the
At
represent policies which have be¬
part of
tangible evidence of
was
vigor and vitality of the In¬
ternational Chamber and
growth of individual freedom. The
International Chamber has given
essential
The large at¬
in
and
State
envisaged by Adam Smith. Inter¬
vention by the State in economic
and social life is not necessarily
contrary to the tenets of economic
Freedom and Economic Progress
intervention.
29
to make war.
the
Whatever
conjured
reasons
by its advocates, economic nation¬
alism interferes with maximum
production and consumption, in¬
volves far-reaching domestic con¬
discriminations
and
trols
among"
to trade
warfare and eventually destroys
the basis of peace.
Full recogni¬
tion
of
these ■ consequences has
economic
leads
groups,
prompted the International Cham¬
ber from its inception to oppose
nationalism
nomic
of eco¬
the devices
unreservedly
to
and
favor
elimination of trade barriers*.
the
International
The
Chamber
holds this truth to be self-evident:
and economic prog¬
that freedom
ress
are
of free
possible only in
a
regime
competition in which the
allocation of
among va¬
resources
place by
system,
rather than by direction from a
central planning authority.
The
interplay of individual economic
rious possible uses takes
a
decentralized
units
pricing
what
determines
resources
shall be used, what goods shall
produced,
duction
be
what methods of pro¬
be employed, and
shall
how much of the
product shall be
of the
distributed to each member
pric¬
and
guide to
community. The competitive
ing of land, labor, materials
equipment
serves
as
a
their most economic use and as a
stimulus for the further
develop¬
employment of skills.,
International competition is one
ment and
of the most
important aspects of
(Continued
oli prige 30)
1947'.
Thursday, June 5,
30
CHRONICLE
FINANCIAL
THE COMMERCIAL &
(3006)
of the need
free from ex¬
Accountants Ignore Economic Costs
in the world economy,
to have an economy
Freedom and Economic Progress
aggerated boom and deep depres¬
v(Continued from first page)
sion, of the need to import the
(Continued from page 29)
?
products of other nations, and of at the beginning of the year cost- reveal that at
accounting there is an assumption
a
free-market
economy.
Only neurial initiative a*e to be stimu¬ the need to share in the economic ing $5 each and 1,000 duplicate
governing all practices other than ,
pairs at the year-end costing $10.
freedom in world trade will bring lated, and if economic progress is rehabilitation of the world.
those of
a
financial institution,
to be furthered.
the past 12 months many
about the most rational use of the
To
adopt state planning and (In
that is quite contrary to demon-;
According strable fact.
economic resources of all nations
controls in an effort to escape re¬ prices have doubled.)
Free Economy and Trade
to standard accounting the $5,000
and the highest standards of life
cession is to substitute stagnation
Depressions
The first private institutions to
difference in value of the two in¬
for all peoples.
Certain resources
for progress.
The economy be¬
Opponents of the free market
ventories is considered a profit. keep fairly complete bookkeeping
do not and cannot move freely
comes
overburdened by the un¬
economy
declare that only farIf the proprietor accepts his ac¬ records were banks. Unfortunately
across
international boundaries.
reaching
governmental
controls productive labor of a growing countant's figures as correct and for the soundness of present day
the base of standard
These immobile resources
include
peculiar geographical endow¬
ments of each region
(its min¬
the
water,
soil,
erals,
climate),
and
with varied
and
the
skills of peoples
the
quantity and type of accumulated
goods.
Not the absolute
quantities, but the proportions in
capital
which different resources are sup¬
to a nation determine the
in which its people earn a
plied
ways
living.
periodic breakdowns. In particu¬
lar,
they point to the United
States as a notorious example of
economic instability and affirm
that, through either unwillingness
or
inability to control economic
individual endeavor—it
ingenuity, dar¬
ing and the willingness to accept
risks.
It is the free play of these
qualities that has developed the
old or
proposed International
Organization.
the
Its creative features
attenuated and ultimately lost,
regulation.
are
is substituted for
multilateral pattern of
freedom in trade. Economic prog¬
ress is stifled, and individual lib¬
and bilateralism
rich
the
tributed to
Restore Multilateralism
present problem is to re¬
barriefs and to restore
multilateralism in trade.
Only if
trade barriers, in all of their mul¬
Our
duce trade
forms,
drastically
are
policies of narrow eco¬
which na¬
tions attempted to insulate their
economies against world develop¬
ments and to improve their own
which
actions
by
position
held
year
at
beg¬
successive
Golf
Foot
Winged
the
cies of
economic liberalism advo¬
the International Cham¬
been adopted, the Great De¬
cated by
ber
presented
is
which
is
annually
to
Lamborn,
H.
elimination of undesirable domes¬
of De Coo-
by the same
a
true profit of $2
equal.
For
things being
—other
dollar was a sound
them the
yard¬
stick.
.
will
yardstick
The
measure
time or
the original illustration
true or a fictitious profit.
a
178% between
end of the year.
the- stated
value of
Gamble inventory rose
Assuming
Procter &
who carded 87- only* 100% and the physical size
permanent possession remained unchanged, then in that
For
22-65.
must be won three times
the Cup
Recession
that date and the
last year
member. Low gross
was a 74, turned in by
Jacobson, Luke H. Rose
period $57
the income
This
million was
statement.
■
•
;
-
;
-
,
-
.*
-
They perform "
the same operation at the end of
the year, and they consider the
difference to be a profit or loss ^
(other things being equal) regard- .
less of any changes in the physical
property. This forces the report-;
ing of a profit in a period of rising
prices even though physical assets.
may actually be declining. It forces [
a
showing of losses when pricesare
falling although assets may.
actually
be
increasing. Stated,
briefly
standard
accounting is
it
Doremus,
&
oet
and Depression
free market
they had
year,
produced a normal profit,
upset the proprietor.
large corporations owned
Fats and Oils rose
player turning in low net
score and which was won last by
Arthur
Distinction Between
a
ning of the year it was replaced .
with one for $7 at the end of the ;
the $2 of
the
avail¬ pression would doubtless have
able to all peoples.
The return to been restricted to a corrective
multilateralism
in international recession.
trade will also bring about the
tic deviations from a
of 500
stated value.
a
Exchange
second
the
for
markets be
and
materials
could
Club, in Mamaroneck, it was an¬
On June 30,
1946, Procter &
nounced
by
James
McKenna, Gamble had an ' inventory they
The multiplication of trade re¬
James McKenna & Co., Chairman
valued at $57 million. The physical
strictions, price fixing, currency
of the New York Stock Exchange
description of this is not available,
depreciation, gold devaluation and
Golf Association.
but we do know what happened
exchange
controls nullified the
At
stake
will be the Gover¬ to major components of the in¬
free market economy, intensified
nors' Cup, donated by the Board ventory—fats and oils.
the
The Bu¬
depression and undermined
the basis of peace.
Had the poli¬ of Governors of the Exchange, reau of Labor Statistics Index of
world's nat¬
ural resources be used most pro¬
ductively and the world's raw
of
per
gared their neighbors.
reduced will the the
and not pa-.
Bankers
safely assume that if they,
note worth $5 at the begin-;
physical transactions
Golf Tournament
nomic nationalism, by
erty declines.
titudinous
narrowly
so
physical property and
the same height at any
by thousands of persons, employ¬
The dollar obviously does
ing other thousands, and selling place.
not measure the same quantity of
to millions run into the same sit¬
uation, then the dislocations be¬ goods at the beginning of the year
come of public interest.
A brief as it does at the end. ConseAbout 200 members of the New discussion of one of the most skill¬ quently it is not a sound yardstick.
York Stock Exchange will engage
fully managed large corporations However, accountants translate all
in their 48th annual golf tourna¬ will show that all three groups physical property into dollars at
ment on Tuesday, July 1, to be have a vital ihterest in whether the beginning of the year and call
N. Y. Stock
.
attempting
these latter cases were
to describe
doubt
When
concentrated. The
length and severity of this depres¬
sion, are, in the main, to be at¬
be
was
the year
no
.
banks.
Overlooked entirely
the fact that the accounts in
the
pairs of shoes in one year although
statement presented by
his accountant assured him that
indivisible.
are
national currency.
the income
economic progress.
"Freedom and Economic Progress"
same
giving an exact statement on
their worth in the
As the affairs
of merchants and manufacturers
expanded and required banking
facilities, they gradually took over
the same accounting practices as
per
their face as to
had
ownership
of
loss
The
individual freedom
full
accounting methods all but a nom- ,
inal amount of the assets and lia¬
bilities of banks are pieces of pa-.
development.
trifling
and maximum
Trade
opponents of the
free market economy blame the
depression of 1931 to 1933 on
the new
American policy.
Blame cannot
These
of
factors
to free market econ¬
omies because it is convinced that
a
free
enterprise system alone
full support
and permits
Development
and
struction
the vital dynamic
individual ingenuity
and
incentive
are
lost.
Trade
becomes.the object of bureaucratic
mercantilism,
economy
International Bank for Recon¬
the
of the world and
either the
American
through such instrumentalities as
the International Monetary Fund,
raised
living standards.
When interna¬
tional
trade
is
state-controlled,
under
an
fluctuating
an
resources
itself to
de¬
con¬
world should not
unpredictable and
that the
clude
tie
they
Therefore,
pressions.
deep
experience
to
destined
straints, international trade brings
an
optimum utilization of
the world's resources, both ma¬
terial and human.
Trade is essen¬
call for initiative,
is
fluctuations, the United States
about
tially
business activity and
subject free market economies to
nationalistic re¬
When freed of
entangled in the web adjusts his costs and selling prices
to produce a normal profit, and
of bureaucratic control.
then withdraws it as is his custom,
The
International Chamber he will find that he must secure
stands for a free market economy
$5,000 in new capital.
In short,
both internationally and domes¬
starting with 100% ownership of
tically and will continue to oppose this stock at the beginning of the
the mercantilism of the modern
year, and following the identical
age, just as* Adam Smith strug¬
policies of previous years, he ends
gled against its prototype of the the year owning just one-half of
18th Century. To this end, it gives the
inventory or 500 pairs of shoes.
its full support to all efforts to
If the new capital is supplied by
restore
multilateralism in trade means of a bank loan, then the
and to
eliminate the repressive bank has in effect a first mortgage
domestic economic controls which on his assets and a considerable
are
a heritage
of the war.
The voice in policy. This will be re¬
International Chamber gives its ferred to again, as it is not a
and becomes
employ¬
ment.
They allege that the inher¬
ent defects of private capitalism
backgrounds,
cultural
government officials
multitude of
eliminate cyclical fluctuations
can
in
added to
corresponds to
"profit" of the original ex¬
Profits before taxes in this
$57 million
balance sheet.
a
based
that
The
|
will
squarely
the
on
premise -
prices never change. /
assumption that a dollar;
buy exactly
the same quan- •
tity of goods at any time or place;
creates a fantasy of figures that :
has been a prime element in our .
One must, of course, make a Robert J.
the $2
Far-reaching domestic
incompatible with distinction between recession and & Co.
ample.
current social and economic dis-;
depression. Recessions are to be
As
in
multilateralism in foreign trade.
previous tournaments, six months were reported as ap¬ order.1
In order to correct this, *
expected in a dynamic economy prizes will be awarded to golfers proximately $50 million—substan¬
The domestic controls now ex¬
businessmen must insist that their:
and represent temporary devia¬ for low net, low gross, runners- tially higher than in any previous
accounts reflect the fluctuation in
isting in many nations are a herit¬
tions from rapid upward growth.
up,
holes-in-one, most birdies, annual report and of course com¬ the value of the dollar as it affects*
age of the war.
In time of total
Since the end of the war, certain
and, also, to the player taking paring quite favorably with the their business. In short they must
war,
it is to be expected that
distortions have occurred in the the greatest number of strokes on $16 million reported in the same
human and natural resources will
know their economic costs.
price and income structure of the a hole to be selected by the Com¬ period in the previous year.
It
be directed into the channels es¬
economy.
controls
sential
war.
ed to
are
for
the
of
winning
the
Economic controls are need¬
implement the plans of mili¬
tary staffs.
such
preservation of the
The goal of all
plans is the
state—a goal
which
is
at
once
and
which
meets with full acceptance.
direct
The
simple
and
and
direct
simple
goal of
planning in war has „ no
counterpart in peace. There is no
state
single, all embracing
goal.
many
place in the purchase of goods.
These purchases establish, in an
ket
essentially democratic fashion, the
economic goals of society, and di¬
rect human and natural resources
into desired channels.
longer
that they be
conceal
quences
the
of
continued, in order to
inflationary
state
policy
may
mittee.
Emil
economy,
Corrective re¬
cessions of this character are not
not
be feared.
to
accompanied by large unemploy¬
ment or great deflation.
They are
President of the
Exchange, and Robert P. Bo.ylan,
Chairman of the Board of Gov¬
ernors,
will be guests of honor.
of
the
New
reduce costs and York Stock Exchange Golf As¬
sociation is Henry Picoli, F.. H.
prices to a level which permits
an
economy to function to best Douglas & Co., and John K. Cloud
,
advantage.
Moreover, they serve is Treasurer.
to increase labor productivity and
Vice-Chairman
basis for further
conse¬
and the
defects of state planning.
improvements in
living standards.
It
should
bered
that
always
it
was
be remem¬
the dynamic
qualities in the American indus¬
trial system which permitted the
United
States
to
become
the
of
during the
these qualities that
democracy
Shepherd, Others :
With Penington, Colket
&
Colket
Penington,
Co.,
70
Pine
Street, New York City, mem-;
bers
of the New York
Stock and
possible
tually leave the company?
of $18,794,000 were paid.
Taxes
If our
inventories is ap¬
there
should
have been paid.
Dividends on the
common
and preferred stock
proximately correct, then
profit and no taxes
was no
$6.5 million.
figures combined are
amounted to
two
of
cess
that thq
These
in ex¬
immediately painful
transition from a controlled
However
the
labor
productivity and entrepre¬
that,
those
are
only
profits
when
those;
can
leave the
I
i
Inventory Accounting
f
A few astute
accountants have"
years
been advising their1
clients of the possibilities of in-:
for
ventory situations
arising such as'
gust described in the case of Proc-:
ter & Gamble.
Many companies:
have, taken steps to reduce the im¬
the stated value of the
stock. Furthermore, if on pact of these major
fluctuation^.
praiseworthy. leader¬
the
Under
physical size inventory
of Senator George, lately
made possible the rapid convert the following have become asso¬ the stated value doubled, then $7 ship
Chairman of the Senate Finance.
sion to war production, that en¬ ciated with the firm as registered million went to subsidize the con¬
Committee, some new accounting
abled the United States to build
sumer.
representatives: H. Rudolph Shep¬
procedures were authorized and
up huge land and sea armaments,
made legal for tax purposes. The'
Effects of Exaggerated Profits
to extend Lend-Lease aid to the herd, formerly a partner in the
It
war.
was
same
,
United Nations and to equip
and
maintain military forces in Europe
and
Asia.
Again,
it
was
these
dynamic qualities that permitted
conversion from produc¬
the rapid
& Co.,
firm of Charles Slaughter
Joseph
T.
Dubreuil
B.
Mattina,
with
formerly
and
Joseph
both of whom were
the
latter
firm.
The
such
social
effects of
profits in a
large
reporting
period of
tion
for
peace.
war
to
production
for
Prior
ter
&
to
what
joining Charles Slaugh¬ with
in the article.
benefit of these
later
Co.
in
1945, Mr.. Shepherd
the
examples,
the
fact
most famous
of
these is Last-in*
This, has be¬
in the ac¬
and among,
Here, businessmen that only passing
mention is necessary.
In brief,
rising prices are, of course, obvi¬
ous and will be mentioned some¬
three
that the $2
to a free market economy, it must
Europe does not need to fear and Mr. Mattina were with W. E. "profit" is truly fictitious can be
be made if consumers are to have
that an American postwar correc¬
Proof will take the
Burnet & Co.
Mr. Dubreiiil pre¬ established.
freedom in expressing their pref¬
tive recession will degenerate into
viously had
been
with Baker, form of describing the beginning
erences for goods and services, if
a
depression.
The United States
of standard accounting.
This will
is well aware of its strategic role Weeks & Harden.
1
costs
profits
ieveal
be withdrawn and.
physical property intact
or substitute
enough fiscal assets,
future price declines.
to restore the physical property to As the. $2 "profit" of our illus¬
its previous condition at current,
tration was in fact reported, it be¬
prices.
Space here permits only-,
comes
of prime importance to
a broad outline of the changes in.
know whether it was disbursed—
accounting practices necessary to>
in
other words, did capital ac¬
show economic costs. ,
$14,500,000 set up against
common
Exchanges, announced
Economic
inventory
"profits" were indeed large, and
this is borne out by a reserve of
assumption on
H. R.
Curb
that
evident
seems
Schram,
to
necessary
arsenal
wartime controls
continue, the more they become
part of the fabric of economic
life and the more difficult their
eventual elimination.
The longer
wartime controls persist the more
insistent is bureaucratic demand
The
which
recession.
Recessions
which correct such distortions are
to
lead
Con¬ managerial efficiency and lay the
preferences
which find expression in the mar¬
have
sumers
American
First-out, or "Lifo."
come
so
well known
counting
Lifo
profession
principles assume there is
a basic amount of inven-
always
later
1 See
by
of
Mr.
the
States
Steel
from a speech
Voorhees, Chairman
United
quotation
Enders
Finance
M.
Committee of the
Corp.
jVolume
tory
a
165
Number
THE COMMERCIAL & FINANCIAL CHRONICLE
4600
company must maintain to
been experienced.
Persistence in
disregarding economic costs as
they occur will eventually bank¬
called income, just as a
change in to the true nature of corporate: rupt many businesses. We should
the value of a
assets..
building owned by
Incidentally,
the, major use our hindsight to improve our
a
company is not income.
By weakness in the Lifo inventory foresight," and he concluded that
charging into the cost of sales the method is that inventories are "failure to establish and present
current cost of raw
materials (or generally carried substantially be¬ today's and tomorrow's costs in
whatever makes up the
understandable
fashion
weakens
inventory) low market values.
then most
inventory "profits" are
A correction
of the
situation and may ultimately destroy the
eliminated.
Management
thus calls for all assets to be carried ability of a business to continue
Keep operating. Consequently
any
changes in value should not be
tnade alive to the real
nature of a
major item of cost would no doubt
their
arrange
policies differently
bo that costs are
kept in line. This
incidentally has a direct bearing.
Which will be
mentioned
Hie
later,
boom
bust
and
on
economic
cycle.
Increased Cost of Capital
t
Replacements
Inventories
are but
cial
to
produce enough
to
resources
properties
on
finan¬
restore
they
as
wear
these
out.
Al¬
though this is the express
theory
of standard
accounting, no allow¬
ance is made for a permanent
rise
in
price
set
levels^
the
on
Depreciation is
basis
of
the
original
cost, whereas only slight familiar¬
ity with building costs is enough
to demonstrate that such
deprecia¬
tion will not provide the
capital
to
necessary
erty. For
replace
such
prop-1
instance, Mr. Charles M
AVhite, President of the Republic
Steel Corporation, said:
"It cost
four
us
times
blast
three and one-half to
as
much
to rebuild
furnaces,
other
coke
equipment
1913
to
.1918,
ovens,
it
as
when
did
most
and
from
of
accounting
only 25% to 29% of the
capital
steel
needed
'basis
a
the
continuing
Capital must'
elsewhere in the future
make
this difference,
up
just
it has had to do in the past.
es
is
maintain
provided.
was
.be found
to
to
on
industry
It
important public matter
'who is to provide the 71% -to 75%
new capital required.
Obviously
a
very
at market prices prevailing on the,
date of the balance sheet.
This is
One
suggested method is that
engineering
generally
replacement costs must be consid¬
arriving at the proper de¬
preciation charge if the theory be¬
hind all depreciation is to be ful¬
this
In
Ernest T.
connection,
Mr.
Weir, Chairman of the
Board of the National Steel Cor¬
poration, in his letter
to stockhold¬
the occasion of mailing the
ers on
1946
annual report recommended
change in Federal tax laws for
depreciation giving recognition to
the fact that replacement costs are
•greatly in excess of original costs.
The final major asset items are
-a
on
any
index
recognized
of
building, machinery, etc.
Such
the
asset
an
first
sheet
would
reveal
time
the
for
true
nature of the company's assets. No
doubt standard accountants will
object that assets
ten
up
cannot be writ¬
to
according
down
or
changes in prices. They ignore the
fact that that is exactly what is
done by them in the case of in¬
ventories.
How it may be done
and still preserve a close check on
operations
can be seen by a glance
liability side of the balance
at the
sheet.
Here three
new
items
can
be shown. The difference between
the base stock inventory and the
market
value of the
inventory
shown
the
; on
shown
side
asset
the dollar
value of the inven¬
tory—$50 million,"
The next
item would show the
surplus adjustment for any charge
to the income statement
necessary
to maintain the position of cash
and
receivables.
would, of
entry
show the differ¬
course,
between
ence
The iinal
costs
and
replace¬
ment
value of property less de¬
preciation charge. In this way the
stockholder would know the exact
impact of inflation
ration,
be
and
capital
is
long
his
on
corpo¬
that
assured
his
no
the
intact
so
losses are reported in
income statement.
as
Mr.
<
maintained
Voorhees'
Criticism
Mention has been made several
times
that
continued
ignoring
economic costs by accountants
of
a
produces dislocations that have
serious social consequences.
The
Chairman
of
the
Financial
mittee of the United
Com¬
States Steel
Corporation,
Mr.
Enders
Voorhees, puts it this way:
"The
main
M.
today is that
American industry is not in nearly
as sound financial
position as it is
Changes in too often prone to think.it is. This
.the prices the company receives' is complacency that is ominous!
for its products directly affects the It is a common fallacy to suppose
size of these two accounts.
The that war breeds prosperity.
But
•
-cash and receivables.
dollar
prewar
is
according
-to the Bureau of Labor Statistics,
worth 65 cents. Businessmen
must,
therefore, find over 50 cents more
for
dollar
each
ceivables
now,
cash
of
held
before
and
the
re¬
war
merely to
maintain
the
same
physical volume.
If it is not se¬
such
of
supposition flies in the face
a
inner
conviction
and
certain
knowledge of the awful wastes of
in
war
lives, wealth,
and re¬
How, then, do people de¬
sources.
rive
the
notion from
the
records
compile that everything
is
happy, healthy and prosperous? I
we
that war
regular income, then it' think the answer is
must be replaced by new
capital. breeds a fantasy of figures and the
(Total requirements will be re¬ fantasy is too often mistaken for
cured
as
duced
by
corresponding rise in
a
bills payable.)
'*
Mention
three
land
has
been made
principle
the
made
in
nomic
each
costs.
'Sumption
that
of
iiiofe
that
case
to
standard
has
is
on
show
be
eco¬
as-
accounting
an
produced
incohsistent and
method
assets
must
The basic false
the; dollar
•yardstick
of
groups
charges
the
of
accurate
an
even
patchwork
.the balance sheet.
In-
fact.
War wrenches the economy
as nothing else does; the economic
changes wrought are of seismic
proportions.
On cost accountants
rests
the
responsibility for ac¬
counting for the cost of economic
change over and beyond their
habitual practices, so that man¬
agement
and
social
decisions,
of
often
rest
the
a
the
on
truth
as
portentous
facts
as
sort,
may
they are and
it is."
noted—"that many companies are
period
discovering
r
tories
of rising
might be
markets inven¬
several million
Aid,
continuing
the cash
to
further,
their dismay
he
that
they thought sufficient is
insufficient to
the in¬
dollars
now
would produce an
crease
in the
inventories and building
programs.
Many companies that
thought their cash would be suf¬
undef market prices. This
automatic profit
following quarter. Property
is carried at cost, which may be
only a very small fraction of its
replacement value.
Cash receiv¬
ables
obviously carried at
realizable figures. In short, in each
are
instance
a
different
method
is
cover
in requirements for
receiv¬
ables,
ficient
have
been
driven
to
bor¬
Some will even have
to go back for more before all the
row
money.
economic
costs
of
war
will
have
The
businessman
it
has
change
to
power
his
in
accounting
picked at random, and the same
of
profitably
The
last
sentence
is
out
borne
by the events of the winter and
early
price
spring of 1946-1947.
The
rise following the end of
OPA brought hardship to many
households.
As corporation prof¬
its for the last quarter of 1946 and
the first quarter of 1947 began to
appear, it grew increasingly clear
that
business
was
reaping the
largest profits in a generation.
The squeeze on the family pocketbook
combined
profits
with
produced
these
large
that
clamor
a
reached the White House. Charges
hurled
were
who
was
tion.
up
all
from
to
blame
"Business
the
Week"
the situation in
April 12, 1947,
sides
for
to
as
situa¬
summed
editorial
an
on
follows:
record, Ameri¬
can business is in
the process of
accumulating a black-eye on the
price front."
"As
as
read the
we
is
It
Serious
is
this loss of prestige
as
coming
business
American
to
just when for the first time in 15
years it was on its own, the full
implications of Mr. Voorhees' re¬
marks on the possibility of busi¬
losing its case at the bar of
ness
public opinion are even more dis¬
turbing.
Until
business
stops
spending its capital in booms, as
it is
doing at the present time, and
trying to increase it in a depres¬
sion, the boom and bust cycle will
continue.
If all the physical rec¬
ords were available, they would
Two
Examples Cited
will
examples
vulnerable
b
u
si
how
became
n e s s
through the figures which they
reported as facts, but which we
have
seen
Gamble
as we
facts.
not
are
last six months of
In
30, 1932 (the very bottom of
depression) in a stronger fi¬
nancial position than at any time
in its history before or since. Real
capital was being added at a tre¬
mendous
rate
throughout
the
the
early years of the depression. This
over-saving on the part of busi¬
generally contributed enor¬
to the downward spiral.
it only the tight credit
and speculative situation prevail¬
ing in 1929 had to be liquidated,
and no long decline was necessary.
noted showed earn¬
mention
Brief
also
should
three
real facts
are
that Procter & Gam¬
a
loss, or at best a very
profit, from operations in
the last half of 1946.
the
Tax
company
Laws
to
pay
Section
102
the
70% of earnings
compelled
out in dividends unless
cause
for
not
doing so could be shown.
As
a
result, management forced by
their accounting methods to show
a
large
fictitious
profit
were
forced
again to pay
"profits" in dividends.
It
seems
out
those
unlikely
that Procter
prices
much in the spring of 1947 despite
the pressure of public opinion be¬
cause
by then the high prices of
the winter
are
finally entering
cost calculations.
For instance,
Mr.
Francis, - Chairman of
the
General Foods Corporation, said:
Gamble
&
"In
could
reduce
major
category
our
goods are priced below present
cash commodity values."
In other
words
the
stockholders'
capital
was being given away and
price
every
rises rather
than reductions
in prospect.
where
inflation
sizable
of
were
meeting where this
said, the annual report given
out at the time showed very
A
Frenchman
large
On April 5 he ran full-page
advertisements in
above
days
the
New
York
expressing
were
the view that
too high and profits
normal.
he
number
Treas¬
the
that
essential
Department recognize de¬
preciation based on replace¬
ment values in computing in¬
)
come.
2.
It
essential
is
in
recent
paid
taxes
that
fictitious
on
years
profits be refunded.
J. R. Postlethwaite
With Davis,
(Special
to
SAN
J.
The
Skaggs,
Chronicle)
Financial
CALIF.—
FRANCISCO,
be¬
Davis,
with
associated
come
has
Postlethwaite
Russell
standard
In
the
emphasized
of
times
next
publicly
that
10
a
"Commercial, &
1S47. :';(j
Financial
in
may
problems
France
by
a
R.
Postlethwaite
Skaggs & Co., Ill Sutter Streeet,
of
the
San
Francisco
members
Stock
and
of
Mr.
Postle¬
formerly vice-presi¬
Exchange.
thwaite
was
of
the
Co.
California
First
prior thereto
was
officer
an
Brush, Slocumb & Co.
make the situa¬
Big Registration for
Bond Club Golf Meet
.
.
.
and
appeared,
such as inventory for equipment
the consumption of stocks and
the
depreciation
of
equipment
were computed, as a rule, at their
original cost.
When, at the
end of the war, entrepreneurs be¬
gan
to reconstruct their equip¬
which
values
.
More than 150 Wall Street
formerly
ers
have
registered
for
golf¬
golf
the
tournament which will be
lead¬
a
.
.
.
ment and
and
.
.
inventories, both wages
had
greatly
risen.
Therefore, the actual cost of this
reconstruction proved to be higher
prices
than the reserves built up to pay
for it.
tal
In
fact, the working capi¬
partially or even totally
and in order to re¬
had
disappeared
constitute it many concerns were
obliged
or
to
their capital
increase
to
borrow."
Bank
borrowings in this
coun¬
try, as Mr. Voorhees warns, are
increasing steadily and are now
50% above a year ago. Economists
well
an
Treasurer
debt
that
arm
banks
of
the
whenever
reaches
large
become
Federal
the
public
proportions.
Should the trend of bank borrow¬
ings continue, the day would
when
banks
the
would
This
3 J.
the
torted
Socialism
is
DeLargentaye,
International
in
the
Chronicle."
in
fact;
Field
Day
the
of
to
.
be
Hollow
Sleepy
Bond Club
held
at the
Club,
Country
Scarborough, N. Y. on Friday,
June 6, according to William H.
Morton & Co.,
golf committee.
in addition to vari¬
ous
special awards will be dis¬
tributed for play in three handi¬
cap
classes.
The ex-President's
cup will be awarded to the player
W.
Morton,
Chairman
H.
of
the
Three cups,
on
the
Sleepy Hollow upper course.
The
in
turning
Hamilton
the
to
Candee
trophy will go
with
the Robert E.
will
trophy
Jr.,
gross
individual
and
score
low
be
net
low
Christie,
-for
given
handicap match play against par.
Mr. Morton announced that
upper
and
lower
courses
both
of the
Sleepy Hollow Country Club
be open for
will
play at 8 a.m. Friday.
the
the
Executive Director
Monetary Fund, re¬
"Commercial and
feature
ing
come
own
liquid assets of business and the
government
control
the
banks.
prices
Chronicle"
'-
J.
progressively replaced in the bal¬
ance
sheets of concerns the real
of
2
Jan. 2,
is
It
ury
Monetary assets, that is
short
term
debts,
".
demand
simply
prices
1.
tion clearer^
Mr. Straus, President of R. H.
Macy & Company, was put in the
same predicament by his account¬
papers
are:
dent
of the
description
businessmen
know
ants.
businessmen may
change their accounting to show
economic costs, two other essen¬
tial changes must be made, over
which they have no control. These
though
be
1946-1947.
of
Yet here, too, at the
stockholders'
was
costs.
nizes costs that are economic
times
ble had
of
Treasury.
made of the effects on business of
the 1945 level. accounting is adhered to. Capital,
The first quarter of the new year as pointed out, leaves a company
in proportion to the impact of
the company declared an
extra
If the capital is
dividend 150% of the regular div¬ inflation on it.
not replaced, then property must
idend.
It then raised prices 5%
be permitted to deteriorate. Capi¬
and in the following quarter de¬
clared
a
second
extra
dividend talists in both England and France
were quite vulnerable to charges
150% above the regular.
For the
fiscal year ending June 30, 1947, by socialists that they were bad
managers
and
permitted
their
more money was paid out in divi¬
dends than was paid in all its long property to become old and out¬
moded.
They could not defend
history of dividends going back
themselves
on
the
ground that
to 1891. Government, labor unions,
housewives, look at the facts as they had no capital as their bal¬
ance sheets showed constantly in¬
the company presents them and
capital.
Actually they
conclude that profiteering on a creasing
were running out of capital just
large scale has taken place.
The
as
businessmen in America were
company is losing its case at the
not making profits in the winter
bar of public opinion.
But the
ings
private
Federal
Even
Without
the
1946 Procter &
capital into
With the
corporate tax of 38% and Section
102 compelling dividends at least
70% of profits, it is essential that
the Treasury Department recog¬
of
amounts
the
probably show that the annual re¬
port of Procter & Gamble dated
mously
show
only in the case of inventories.
Consequently
except
for
those
June
ness
Two
Un¬
corporations
alert
enough
to
change inventory methods before
situation prevails throughout most the war, the entire war and post¬
war
inflation has drained large
of American business.
profits.
-ventorie's are valued at cost or
market,'whichever is lower. In a
Conclusion
com¬
pany
in
England.
producing
job
small
fact
his
had earned $5.94 per share
the past year compared with
follows
name soon
it did in France and
as
goods and services for exchange.
its
"Surplus adjustment for changes
in
that
showing
changing of the
fortunately the Internal Revenue
Bureau recognizes economic costs
be
can
holders
a
perhaps unfair to select
a
few companies for illustration
of the consequences of ignoring
economic costs.
It should be real¬
ized that these companies were
follows:
as
Ten
days
advertisement
report to the stock¬
original
issued
he
reduced.
be
the
after
$2.53 in the previous year.
an
be made every
five years to determine current
worth.
In the intervening years
an adjustment
up or down can be
survey
should
31
methods to show true costs.
easily done in the case of cash, re¬ More than that, such failure can
ceivables, and inventories. Prop¬ cause industry to lose its case at
erty accounts are more complex.! the bar of public opinion."2
ered in
filled.
management,
result
a
owner, and the collector oi
basic statistics are in the dark as
the
steel industry was built."
From these figures it is
appar¬
ent that
using standard
[methods
As
the
made from the fluctuations
item
one
the asset side of the balance
sheet.
,The other major item is
in most
cases the
property account.
De¬
preciation is set up for this de¬
signed
used.
(3007)
With Merrill Lynch
(Special to The Financial
PORTLAND,
Hawley
staff
of
has
Firm
Chronicle)
ORE.—Philip
been
Merrill
added
Lynch,
to
M.
the
Pierce,
Financial
Fenner & Beane,
Wilcox Building.
32
Thursday, June 5,
CHRONICLE
THE COMMERCIAL & FINANCIAL
(3008)
1947j
based on historical ex-
with
The Future of the Steel
(Continued from page 3)
which
has
the
luake
Irofi
The
ished
to
here
because
them
use
had the
initiative
we
the
and
materials
raw
In the decade from 1931
when we went through
a
period of unprecedented de¬
pression during much of which
business practically stagnated, the
average
per
capita
demand
dropped to 576 pounds. This is,
however, a cyclical variation.
go
It has flour¬
States has been built.
that today we pro¬
so
half of all the steel made in
duce
Twice within a gener¬
the world.
these
ation
enabled
great
Census Bureau has
estimated that the population at
that time will be approximately
163,000,000.
1940,
It is im¬
portant that we give heed to some
of the things that lie ahead of us
so that the industry may continue
able
to
adequately in
national
of
the
serve
peace
tion
nation
emergency.
There
the
was
away
Steel Needs
rapid increase
a
demand for iron and
carrier years when we
panding
tries
and
tems
at
cannot
of
transportation
our
enormous
an
steel
will
and
steel
sup¬
able
for
some
place in
years
to
The
In considering the
magnitude of
the export demand, we probably
will not be far wrong if we as¬
that
sume
and
will
it
follow
ima
30-year period from 1911 to 1940,
which included World War I, ex¬
port shipments of semi-finished
and
finished
products averaged
the
this
dominant
iron
1921
producing nation of the world.
The
It
is
true
fluctuations
ward
but
there
upward
dropped
cally
.
deipand
steady.
average.
remained
For
the
'
pbr capita; domestic de- i
for steel, based on ingots
produced from 1911 to 1920, was
€66 pounds, and from 1921 to 1940
mand
it was 668
pounds. When
break
this period down into shorter in¬
tervals we find some interesting
8%
of
our
for steel
21
the long-term demand
that
sume
be
rea¬
at
about
maximum
a
This is
impressive. After a terrific war*
expansion, the productive ca¬
time
pacity for aluminum has settled
650,000 tons a year
back to about
far
so
tons
It will be seen from
this analy¬
present productive
capacity would seem to be ample
that
for
our
our
future
needs
for
1920 through 1940, only
(in 1929) did the per capita
years,
1929) the demand ex¬
In
(1928 and
ceeded
Twice
900 pounds per capita.
only eight years did the demand
exceed 800 pounds per capita.
to about 50,00(5
Since
aluminum
equivalent to three
many
tons of steel.
comparison on such a vol¬
ume basis, which favors the light
excessive because in¬
metals, is perhaps justified. This
So,
a
However, I do not
to come.
gives
or
and
a
aluminum
to 1,950,000
magnesium
capacity
tons of
capacity
equivalent to 225,000 tons of steel
a year.
The total light metal pro¬
duction
capacity,
therefore,
is
equivalent, on a volume
2,175,000 tons of steel or
the steel capacity.
How much of
basis, to
2%% of
this capacity will
eventually compete with steel and
what
steel
products
are
liable
encounter
to
competition depend
large number of factors.
upon, a
The tremendous
expansion in. ingot capacity is re¬
isting uneconomical units
satisfy some special needs.
an
us
equivalent
steel
makes
quired in the near future although,
of course, there may be additional
plants built either to replace ex¬
Other
met.
year.
a
weighs only one-third as much a3
steel, and in many applications
volume, not strength, is impor¬
tant, it is perhaps reasonable to
consider
one
ton of aluminum
establish the general order of
magnitude.
sis
magnesium
and
in the future that any such specu¬
lation is of doubtful value except
to
to
contenders
serious
aluminum and magne*
Capacity to produce these
as compared to steel is not
are
metals
90,000,000 ingot tons, allow¬
ing 10% for export.
material.
•
,
with metals, ana
only
steel
sium.
ol
demand
ductility of glass pre¬
being a satisfactory
This leaves us
the
1975 with an anticipated
population of 163,000,000, we ar¬
rive
from
structural
project this reasoning to
we
it
vent
the year
years
demand exceed 950 pounds.
States, in view of the availability
of steel from wartime developed
productive
facilities
in
foreign
countries, will again revert to low
are
any
tion and low
For normal peacetime pur¬
poses a peak domestic demand of
about 1,000 pounds per capita can
be anticipated which would add
about 2% to the above totals.
course,
with
should
minima
and
once
products from the United
levels after initial needs
of
it is
rary.
If
resistance
resistance one of
the best. * The high cost of f abricacorrosion
and
condition which I feel is tempo¬
a
abrasion
strength,
in
present rate of oper¬
versatility of steel
comparisons
difficulty:
.
Steel did not become the.domi¬
nant metal by accident. There is
no other metal that has the unique
v.
to
properties which make it so
able from engineering and
structional
standpoints.
I
Structural Materials
valu¬
con¬
will
we
reau
of the United States
as
of Jan.
802
pounds
pounds
978
pounds
remains.
The present
scramble fo!
695
pounds!
materials has hidden
the fact that
438
pounds
pounds
pounds
pounds
eventually they must all
576
pounds
806
pounds
798
pounds
pounds
Domestic Demand Per Capita
Bu¬
has estimated the population
years
had
a
Census
904
1930
ten
States
only a few. For instance,
high modulus of
elasticity,
which is much greater than that
in
which
houses,
clothes and everything else will of any other common metal, al*
be made of beautiful, indestruc- lows it to withstand great stresses
ible plastics have been pretty well without
appreciable
distortion.
dissipated.
The solid fact that Another important fact is that
many structural materials, in ad¬ steel has a definite proportional
dition to steel, received tremen¬ strength limit, and if not stressed
dous stimulus in both productive beyond this limit, it will return
capacity and use during the war to its original form and size. This
1929
the
United
874
1928
In
1930, when
The
pounds
pounds
pounds
pounds
1927
comparisons.
from 1921 to
we
less than
greater than the prewar average,
but it is not unreasonable to as¬
practi¬
,instance,
to
War
during the business cycles,
overall per capita, long-
the
term
from
Export demand following World
II may well be substantially
down¬
and
period
to 1940, when there was ac¬
domestic consumption.
wide
were
the
the
problem in¬ believe it is
peacetime demand, the pe¬ cluded in our present nominal
riod 1920 through 1940 has been capacity there is undoubtedly e
selected for analysis.
Ingot pro¬ great amount of equipment which
duction for each year has been is not economical and which prob¬
analyzed to exclude export toh- ably should be discarded. It is my
nages
(converted to ingot tons estimate, and I want to emphasize
equivalent), following which the that it is only an estimate, that
remaining domestic tonnage has our probable real economic ca¬
been reduced
to the per capita pacity in this country is some¬
average in order that appropriate where around 80,009,000 ingot tone
recognition may be given to the per year, which balances up pretty
increased demand of a growing closely with the anticipated, or
population.
possible, demands within the nexl
These figures
In the tabulation following it five or ten years.
should be noted that during the would seem to indicate that no
in the
world markets, the export demand
t
that
During
make
to
maximum demand per capita,
Since the immediate
tive European competition
capita
consumption
during the 30 years prior to the
last war remained fairly constant.
per
or
ation exceeds the above indicated
volves
less than 11% of the domestic de¬
mand.
steel
and
sequence,
established
be
sonably valid.
the same pattern as existed
prior to the last war. During the
is true
origi¬
nated abroad, but it was American
initiative, invention, resourceful¬
ness and general drive that made
yearly
degree of accuracy, but the max¬
much
progress that followed. It
the steelmaking processes
we may
cannot
pretty
developing many of the methods
that enabled us to make the great
for
demand
place some reliance
on the patterns established in
the
past to the extent that the peaks
and valleys can be measured in
terms of a common denominator.
steel,
steel they
its
to take
markets
annual
maximum
come.
or to the rate
prior to the be¬
iron
use
be
it
rather,
of
peaks and
The question arises as to
a
However, we must not be blinded
by this . temporary condition in
considering the future.
In
attempting to evaluate the
It is not likely that Europe
these
ginning of the 20th Century. We
then only learning to fabri¬
and
extent,
matter
we
operate
ability to meet the expected
peacetime needs. We are all fa¬
miliar with the unprecedented de¬
mand
that
confronts
us
today.
United States to a
and most of these
with which to buy the
were
cate
the
need.
We
industry
consumption
by
be
to
our
South
probably
combined with
capita basis, is
per
of six
and the
demand, converted to a
-
While the
the past
basis;
average
been
valleys.
in other
will
in
been able
never
any
has
countries have financial resources
much attention
growth of the iron
of
demand
large
ex¬
sys¬
pace.
up
particularly
plied
in
very
pay
to the rate
and
were
on
with Europe's
It is not likely that
pent-up
America,
manufacturing indus¬
our
establish credit
an
Unfortunately,
resources.
our
countries,
in
steel
catch
con
The
Probable Future
make
we
have
requirements.
we
will be exporting any large
quantities of steel to Europe un¬
less we adopt a policy of giving
in time
and
assumed
required for export in future
will be influenced greatly
government policy and the
ability of foreign purchasers to
needs for some time to come.
ably will, have to remain largely
unfilled until European produc¬
ter in the years to come.
be
purpose,
the equivalent
million ingot tons is used
by
.
not
and conditions that it will encoun¬
to
years
'
only weapons for our own use but
support for those who were fight¬
ing the common cause and who,
.
The amount of steel which will
be
peak domestic demand in the
pay¬
optimistic as¬
ment.
It is not my purpose to following comparison for the lmsumption that the average annual
>
■
1
attempt to estimate export de- mediate future:,
per capita domestic consumption
Maximum Annual Per Capita Demand
of
ingot steel will approximate
-r-(in lbs.) of ingots—
r700 pounds, or 5%
greater than
Domestic
Export
Total,
Year
Estimated
the annual average for the pre¬
978
83.5,
1,061.3
1950
143,896,000
ceding 30 years, and an average
978
81.0 .;
1,059.0
1955148,186,000
export demand equivalent to 10%
of the domestic demand, the aver¬
The estimated annual peak de¬ with the present ingot capacity, of
age demand for ingot steel would mand
in total ingot tons
that
91,241,250 net tons (Jan.,1, 1947J
approximate 54,000,000 tons for might occur in the immediate fu¬
American Iron and Steel Instithe present period with an aver¬
ture, reflecting the per capita de¬
age demand by the year 1975 of mand shown above, is compared tute) in the tabulation below:
h
63,000,000 net tons. Certainly on
Maximum
Per Cent Ratfli
the basis of average operation, we
Consumption
Present
of Operations
Tons Steel Ingots
Capacity
Year
can conclude that the present in¬
83.7
v
76,373,000 ,
91,241,250
got capacity of over 90,000,000 1950
:
85.9 v ti
78,464,000
tons v/ill be adequate to meet the 1955
91,241,250
If
Our exports have varied consid¬
erably in the past, and if we were
only looking at the immediate fu¬
ture, we might anticipate that ex¬
without
our
demands
would
take up
help, would have port
whatever excess capacity
failed.
there
While
we
have fulfilled the might be available in this coun¬
needs of the nation in peace and try; but the problem is not quite
in war in the past, let us have a that simple.
look at the future of this industry
The devastation of Europe has
and review some of the problems brought "about needs that prob-=
provide
and
democracy,
of
the
1975,
tions.
__
to become the arsenal
us
to
In considering production, ex¬
ports must also be reckoned with.
have
resources
War,
pounds.
which the
on
the per capita
demand
averaged
770
domestic
structure of the United
economic
World
First
and steel industry has
been the foundation
Industry
of considerable expansion, 1945, to be approximately 140,y
900,000. Projecting present trends
rehabilitation following the
and
that
properties
steel predominant.
perience, simply to accept ana
apply a figure which might be
reasonably assumed to be a maxi-*
mum in any given year.
For this
a peak per capita demand of
pounds'in 1940, which was
influenced
by prewar prepara¬
period
m
mand but,
338
1920
1,
——
1922
I ooo
___
—
pounds
847
702
____
1925
838
1926
1931
1932
448
—_
236
________
1933
400
1934
____
1935
1936
1937
1938
_
440
__
1939
1940
754
838
________
Average
1920-1929
upon
___
__
—
_
—
Total-
770
576
668
pounds
pounds
pounds
pounds
pounds
demand
often
per
oc¬
immediately
following the First World War,
when
the average
reached 770
pounds with a peak of 978 pounds
per capita in ,1929; whereas in the
second decade of this period the
average- dropped taU57.6opounds
capita demand for steel in pounds.
J
■
*.
..
>
•'
I
h'shutf
it;
.art:*,
L «:j.ii':
0\KV0',0 010 Ji
y.tp't
i|f>
•
•'
i'r,
If) ?<[
■
- ;
.
"■
is
and
characteristic
only possible :witlr;&l;grea.t
ductility. Fromi i hn i engi¬
of
loss
neering viewpoint this- is :a very
great disadvantage.
.
*
The ability of steel to be al¬
materials.'
Nylon
perfect ap¬ loyed with other metals- imparts
to it properties useful in our in¬
plastic; an automo-!
ductile
plication of a
bile fender would
has widened its
application
and ihas
opened the doors to <Pew- indqsr
come
closer
trial developments. Without these
materials, but there is no indica¬
tion that either their initial or alloy steels we could not have air
fabricating costs will be reduced power, we would not be able tp
enough to make them effective required for1 our- planes, and wp
competitors to the metals. They produce gasoline in the quantities
may
very well supplement
the could not carry on many of the
metals.
;
1 <'
'
;
; processes that are fundamental tp
i Glass is .Actually ,a
plastic: and our. chemical industry, .It is onl$
Plastic
be
bonded
to being
dustries
absurd
plywoods
structural
an
field
•
which
,
of
.
:.:jr
'
....
*V
it
structures
third
A
stockings represent a
curred in the decade
Fig. 1—Average
machines.
of steel
is its relatively high ductility: and
toughness compared with other
metals.
While we cart prbduce
aluminum alloys with an:ultimat£
strength approximating) that of (the
mild and common structural-steels,
manent
toughness or low cost required in
structural materials.
They are
corrosion resistant, decorative and
one.
capita
basis
into the position
eventual battle, we
can dismiss some popular contend¬
ers in a few words.
The first of
these are the plastics. Plastics are
not structural materials. They do
not have the stability, strength,
1.
per
a
Before looking
It should be noted also that the
greatest
property is not possessed by other
common
metals or alloys, but it
is of vital importance in all per¬
compete
of properties and
of steel in this
This cycle is shown graphically
in Figure
its
cost.
(Weighted)
___
1930-1940
world
automobiles,
The dreams of a postwar
pounds
pounds
670
—
1923
1924
752
350
:___
_
1921
mention
1
■
;T.j
i
■•■■ri
l.
V
.
i J
i
b
i
'
J
■;
)
■
I
•
U/olume 165
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4600
»
'
to
necessary
back,
look
30
say
years, in any processing industry
to realize how the development of
lower grade
soft
of the Lake
ores
Superior range, but
mains that there
the fact
was
in
ore
re¬
suf¬
period of 30 or 40 years.
the
magnetic taconites
mined
profitably and
.
.
If
.
be
can
gradu¬
"
,* '
'
"
has gradually decreased from the
peak of about 7,000,000 gross tons
formerly
in
ficient quantity to enable the fur¬
Jias
because of
the tremendous open pits on the
Mesabi Range where production
could be doubled or trebled by
may
industry of the range."
Perhaps it is foolish to specu¬
late beyond three or four decades.
the
E.
were
sirable
time
is not
during that period.
The facility with
which steel
Can be
produced in varying de¬
grees of hardness and strength to
*neet particular needs gives to
Steel a greater range of ductility
and strength and other properties
than any other metal or alloy.
Steel is by far the most plenti¬
ful and the cheapest of the com¬
,
metals and the easiest to
mon
duce
from
its
the
and
ores
re¬
sim¬
plest to fabricate.
Although I have mentioned only
few
a
of
the
steel it will
characteristics
be
of
perfectly obvious
to anyone with some technical
un¬
to oontinue operating.
naces
possible
was
largely
addition
of
ore.
I
cannot
let
this
opportunity
pass without paying a tribute to
the broad-minded policy of the
United States Steel Corporation
which greatly depleted its own
readily mined ore reserve so that
the nation could forge ahead in
production.
Without
edict it made
Should not be considered
available
substitutes for steel, but rather
having properties which enable
ihem to meet particular needs
Where their own peculiar char¬
acteristics make possible new en¬
gineering developments.
The light metals and their al¬
loys will not make inroads on the
shovels
trucks and other
equipment necessary to haul the
able to all of
rivals
few
a
and railroad cars,
derstanding that steel has a unique
position, and the other metals
as
This
While
its
to
avail¬
resources
tite ores, a very much
W.
Davis
available
from
taconite
ore
situations
between 20%
centrated
steel
industry.
They will create
their own fields, and their projduction will continue to increase.
In spite of all loose talk of what
the future is likely to bring forth,
after all, the final answer is based
upon utility and economics.
So
..
far
there
appears
to
be
sub¬
no
stitute for steel.
Raw
in
times
This
the
'
The future of the steel industry
successfully during
by resorting to the
present in the open pit
war
the Mesabi Range. How¬
on
that
us
emergency.
these
depleted
reserves
is
which
sufficient
to
cause
of
an¬
noying, if not serious, manufac¬
turing disruptions. In periods of
peace and normal operation, when
domestic and foreign trade flows
Smoothly, we are not conscious
of the myriad of raw materials
C)which are directly or indirectly
necessary for the proper func¬
tioning of the steel industry. But
in times of war, when there is no
longer free movement of these
commodities, we become acutely
aware of the need for them, and
the failure to get tin, palm oil,
Vanadium, etc., resulted in such
major changes in the industry as
took place during the war, with
which
you (are
familiar.
Many
materials, such as iron ore, coal,
limestone and common alloys are
essential for the steel industry if
Certainly, it is the responsi¬
bility of the individual companies
to develop their sources for the
"raw materials that are needed
and
to maintain adequate
inven¬
tories for peacetime needs. How¬
these companies are not in
a position to maintain stockpiles
<of
sufficient
magnitude of the
materials not produced in this
country to carry us through peri¬
ever,
ods
as
national
of
have
we
believe
formed
the
a
emergency,
such
just experienced. I
Metals Reserve per¬
most
useful
function
during the war, and believe that
the bill passed by Congress in
July, 1946, providing for the ac¬
cumulation of national reserves
of
strategic materials,
is an ex¬
cellent means of providing against
:gq<?h future deficiencies. (
! There !are two vital
j;
als
;
materi¬
raw
which attention has been
on
recently < focused and on which I
feel further comment is justified;
<|ron ore: and scrap.
'.K
■
}J
),
-
Iron Ore
We have
just finished a success¬
ful war in which the production
:<qf iron ore jumped from 28,500,^000 gross tons in 1938 to a peak
Cf"over< 105,000,000 gross tons in
r<3:942. In'Spite of the fact that im¬
t?;
]
iron
is
ficient
of
Minnesota, the minimum
royalties and royalty rates on this
result in the operators mining
rapidly
as
possible.
as
While
in agreement with
not
Mr.
Davis' proposal to have the United
facilities
underground
to
to
or
taconite
guarantee
a
and
sales price sufficient
the reasonable cost of
cover
production, I do feel his two
sug¬
gestions to the State of Minnesota
merit consideration.
They
are
as
follows:
correct for
that
of
it
worked
throughout
that seri¬
foreign ores were
replaced by the
had
suf¬
concentration
and
which
be
may
feel
to
serves
up
new
this
that
future
a
developed
were
opened
re¬
material
for
source
the
industry.
the
exerts
on
adverse
the
effect
production
pit, direct shipping
open
ore.
(2) Take the proper steps to
modify the leases on open pit ore
properties so that they do not
exert pressure on the mining in¬
dustry that is contrary to the best
interests of the nation.
most
lem
White
M.
presented
complete study of this prob¬
the
before
Meeting
75th
Anniversary
of the A.I.M.E.
"Iron Ore and the Steel
After
ore
entitled
Industry."
careful review of the iron
a
and
reserves
ore
a
potential
of the United
reserves
iron
States
lation
the
supply
of
ore
available to meet the future needs
of the
iron
in
industry.
Since 85% of the
is
consumed
ore
the
Lake
produced
Superior
region, I
only consider that reserve.
I am impressed with the report
prepared by John W. Gruner en¬
titled "Mineralogy and Geology
of the Mesabi
Range." In this
report he points out that if one
shall
takes
the
Minnesota
Com¬
Tax
mission Ore Reserve figures since
1915 and plots them together with
the
ore
mined each year, it is ap¬
parent that the
declined
idly
on
only
ore
reserves
one-third
as
have
rap¬
would have been expected
as
the basis of the estimated
in
serves
While
were
almost
shipped,
creased
tons.
1915.
only
This
was
In
other
great
necessity.
Hence
to
believe
abundant
low
for
there
that
making
spur
is
a
the
150,000,000 tons of
are
still
to be dis¬
covered on the Mesabi Range and
a similar tonnage of concentrates
probably can be expected to be
produced from Wash Ores which
ore
of
300,000,000
a reserve
of about
tons
1,000,-
000,000 tons he concludes
as
lows:
of
"The
normal
Mesabi Range,
longer,
.will be
a
or
The
such
rate
conclude
that
there
to meet
future needs for
our
turies to
come.
must
in
cen¬
The fact remains
proceed
with
dili¬
the
developing
best
methods of concentrating so
we
corrosion
that
produce usable ore at a
enough cost that the price of
steel to
the
is not
consumer
ma¬
terially increased and that we are
ahyays in a position to supply
the full requirements of the in¬
dustry in the event of
an
emer¬
gency.
Scrap
The
cost
present scarcity
of
made
iron
us
and
aware
steel
of the
of this
commodity.
been
has
in
high
and
scrap
has
importance
The fact that
short
supply for
the past six years and continues
to be in spite of drastic increase
in
price, indicates that the short¬
age
will continue
present high
is sustained.
All
of
as
level
long as the
operation
of
the
steel
in
in
use
the
constitutes
a
potential
stockpile of scrap, and it becomes
scrap at varying rates.
Most of
steel
already
able
now
scrap
some
to
return
is
further
alloy steels of better
better
pro¬
tective
coatings, and other means
prolong usage such as end hard¬
ening, controlled cooling and the
testing in service of railroad rails,
etc.
Another factor is the increas¬
ing tonnages that are shipped out
in light gage flat rolled
products,
little of which
best
is
the
tin
is
in use,
but
not
is
collected,
some
in dealers'
figures avail¬
scrap
are no
indicate
the-total
scrap
returns.
ever
example
of
this, of
plate which
containers
four dec¬
after which there
gradual decline over a
at
the
is
increase
countryside.
hearth
permanent
in
percentage
in
the
better
charge
mendous
a
materializing
in
used
a
into
goes
eventually are
the city dump or scat¬
over
solution
The
of
hot
hearths.
grade of
would be
ore
asset
open
the
open
tre¬
a
in
increasing the
hot metal used,
percentage of
there is a possibility that the nec¬
essary oxidation may be even¬
tually supplied by low cost oxy¬
gen.
exceeds
that
a
during
forced
coals
to
for
the
war
less
use
de¬
coking purposes
for alarm.
cause
The
re¬
developments of the industry
in the
of additions to the coal
use
mix, including the production and
use of char, use of anthracite and
pitch, the promising results ob¬
2,000,000,000 tons,
hand
and the amount of scrap on
in
creased
the
significantly
With
coke.
I
of
such
make
installations
There
cently
stated
that
"the
total
ranks of coal amounts
to
of
ap¬
due
our
but
it
will
is
be
lution
our
Oil
reserves.
mineral fuel energy
shale
amounts
to
0.8%, petroleum to 0.2%, and nat¬
to
gas
coal
0.2%."
appears
consider that the
of
This
reserve
ample when
we
1944 production
bituminous coal
was 620,000,tons, of which 94,000,000 tons
were
consumed
at
by-product
coke plants and 11,000,000 tons in
steel plants and rolling mills.
While we have adequate fuel
to supply the energy required,
000
there is
a
deficiency in the highest
grade coking coals and conserva¬
tion
of
The
gradual decrease in the
these
fuels
is
important.
The
resource.
self
during
of
trend
the
this
natural
it¬
reversed
war
inferior grade of coal
the coke ovens.
due
to
the
shipped to
The
in
man
hours per ton
It
is
and
floor
permanent
loading equipment.
rock,
etc.
situation,
This
and
likely
decades.
be
developments
of cheap oxygen,
use
more
matter
a
too
of
evo¬
factors
many
not
impossible that there
major developments in
and open
hearth
processes by the use of low cost
oxygen,
but the
rate
of
such
change
will
be
controlled
by
be
may
Bessemer
our
technical difficulties and
ical
econom¬
factors.
The
possibility of
mere
tech¬
a
nical development will not insure
its adoption unless it will result
in an overall reduction in cost or
improvement in quality.
We will
continue to improve our mechan¬
ical processes and thereby reduce
the
cost
of
producing finished
products. Our older and obsolete
equipment will be replaced, but
I think that it
that
there
be safely stated
can
will
be
no
in the steel industry.
will
be
be
process
It will
of continual progress.
achieve this progress there
men
who
en¬
industry through
informal channels, and
and
Steel
this
Institute,
such
programs
hear
as
you
afternoon, will be
of the prime factors in foster¬
ing
progressive
technical
thought.
societies
great importance
and
are
the
Iron
will
interchange of ideas
the
through
of
revolution
The
of evolution.
one
one
To
technical
scientific
in
development,
of
the
Iron
and
Institute
should
take
an
interest
Our
also
are
members
and
Steel
active
and
part in all the pro¬
grams
which contribute to our
knowledge of the art and science
of
making iron and steel.
research, either
Continued
our
own
laboratories
tively, will
or
in
coopera¬
fields. Bet¬
ter quality and low prices will
lead to new uses, and I am sure
that the industry can look for¬
ward confidently to a vigorous,
fruitful and profitable future.
open new
Chicago Exchg. Closed Sat.
CHICAGO, ILL.—The Board of
Governors
is
a
where
of
the
Chicago
Exchange has announced
addition
Exchange
Stock
that in
to
closing May 31, the
will be closed on all
subsequent Saturdays to and in¬
cluding Sept. 27.
25 Years With Firm
re¬
quired has forced the installation
of mechanical
to
involved.
are
high labor cost of mining
coal in spite of the gradual de¬
crease
as
major
to oc¬
our
re¬
quirements of coking coal per ton
of iron from 3,600 pounds in 1918
to 2,800 in 1941 is a real gain in
conservation
Steel
nature
of
not
because
other
98.8% of
and
materially af¬
steelmaking processes,
hardly likely that these
of revolutionary nature.
It will be
fissionable
of
is
the
to
one
comprises
Iron
which in time will
proximately 2,600 billion tons of
13,000 btu coal" which "excluding
material
will have
we
any
may
or
re¬
im¬
develop,
within the next few
cur
the
Fieldner
will
radical
a
formal
C.
of
obsolete
eral
Arno
reserves
other
Improvements in the technol¬
ogy of iron and steelmaking will
continue, but that they will be
in
ural
which
Manufacture
gaged
fuels.
our
metallurgical
and
confident that
am
Midwestern
adequate fuel for the industry for
many, many decades.
country
is fortunate in
having extensive reserves of min¬
all
these
provements
between
Our
of
use
of coal available for
must be free
Fuels
presently available in« the nation. • This not only prevents any prep¬
only; dat& Kve' !haY&> is 'that i aration of coal at the face but
we
knowr that ithe accumulated results in loading the binders,
production of steel in the United partings, machine cuttings, roof
States
fact
were
cent
course,
which
It is fortunate that
the
nation
this is
up,
superior in
that
much
resistance,
can
low
of
low
as
north
iron-bearing material
we
used
the- The
therefore, may1 be!
expected to be three
ades
life
fol¬
unex¬
is adequate
that
been
decreased by other improvements
sources
principal
it
(1) Discovery of new ore,
(2) Reclassification as ore of
material considered waste, and
(3) Advances in beneficiation.
He believes that there
to
me
The
we
fect
While
Lakes, the new and
deposits in Labrador
unproVen
gence
has
longer.
Great
force
this
which, being
quality,
will
last
metal
which the world must depend
its iron and steel supplies,
of the
during the
However,
years.
steel
ores
iron
Coupled with this, the
plored regions of Canada
words,
result of:
supply
of
every
when
grade
have become the
on
of
way
under the
progress
reason
25
potential future scrap
is from the open hearth
buried
a
re¬
1,000,000,000 tons
the reserves de¬
about
300,000,000
of
produced
the
and
tered
have
,
gr&at deal of specu¬
to
as
largely from the Besse¬
steel
mer
trialists
ties.
a
been met
the!,world, Mr. White con¬
cludes: "But engineers and indus¬
engineering
achievements
will
To this should be adde'd pro¬
rapidly overcome present handi¬
visions that encourage explora¬
caps to the utilization of these
tion without incurring tax liabili¬
products."
There is
pointed out that the huge demand
scrap for open
hearth fur¬
naces during the
past 25 years has
for
to
C.
Mr.
a per¬
It has been recently
manent loss.
methods
new
23,000,000
over
tons from 1930 to 1940 was
i
of
1943 and 1944, there never was a
furnace
have
where
or
yards. There
blast
We
arid
(1) Modify the ad valorem tax
to
in
developing
and
ore
concentration,
market
for
there.
is that the
experience in other fields
which waste piles
were
re¬
added to
entire war period
com¬
law
and
single
by known
important thing
am
exporting of
most
concentrated
The
ore
The
be
additions
•the
commercial
Since scrap is now in such short
supply, what of the future? Cer¬
tainly there are strong
indications
that scrap will continue in short
supply for some time to come.
being
are
have not yet been developed and
listed as reserves. So with these
ously lost production due to lack
of iron ore. The production may
have suffered when high grade
con¬
methods," there would be avail¬
able from 30,000,000,000 to
40,000,000,000 tons
of
concentrate
which, at a rate of consumption
of 100,000,000 tons per year, would
ports of ore dropped from about
2,500,000 tons per year in 1939
and 1940 to about 500,000 tons in
■
be
mercial methods is not important.
it is to produce all needed prod¬
ucts.
silica, but
rapidly and that
not be available very
much longer. The ad valorem tax
most
provide
one
any
and
they will
terials,
of
iron
nages.
preceding
Is dependent upon many raw ma¬
lack
open
warn
States Government provide longterm
loans
without
interest to
the
by
"cannot
known
by
clearing up the miscellaneous
that way lying around, be¬
recent high prices have not
brought out any substantial ton¬
merly produced low ash coal by
loading.
hand
tained
fur¬
averages
45%
and 40%
which
these drives were very successful
in
be sufficient for 300 to 400 years.
The fact that such ores cannot
E. W. Davis and others
ever,
I
Steel
last
mines
national
done
was
reserves
it
Materials for
of
of
How¬
that
are
cessity in those mines which for¬
coals, together with the satisfy¬
ing results being obtained with
coking of western coal, have in¬
He
material, which
most
war, the question
ability to meet fu¬
ture needs both in peacetime and
now
in¬
only
cause
pit together with what he termed
arises
the indications
ever,
the
washers
scrap
be mined
and
fected due to lack of scrap.
coal
addi¬
that, taking this tac¬
35%
very successful, and at no
during the war were steelmaking
facilities
seriously
af¬
of
improving high ash, high sul¬
phur coals, now it becomes a ne¬
reserves
an
can
during the past
our
which
ther shows
as
to
is
onite which
or
as
from
range, these
would fill the needs for
tional 66 to 133 years.
between
the
there
this
adequate
was
states that
ore
5,000,000,000 to 10,000,000,000 tons
of concentrate can be produced
by
known methods.
Assuming that
we required the excessive
figure
of 75,000,000 tons of ore per year
Class II
meet
longer life
be predicted for the iron
who needed help.
us
there
government
ally take the place of the hema¬
considered
we
stallation
Steel and its alloys has made pos¬
sible the tremendous progress that
occurred
33
for
January, 1942 to the less than
3,000,000 tons at the end of 1946.
The shortage of scrap became an
acute
problem during the" war,
and twice it was necessary to or¬
ganize country-wide scrap drives
to
satisfy the demands.
These
can
(3009)
.
Ann
Mufson
and
William
A.
Riley of Sulzbacher, Granger &
Co., Ill Broadway, New York
City, members Ney$ York Stock
Exchange,
were
awarded
en¬
graved Tiffany watches in recog¬
nition
of a quarter century of
service.
34
Thursday, June 5, 1947
FINANCIAL CHRONICLE
THE COMMERCIAL &
(3010)
with no representa¬
except in the cus¬
tomary Negro jobs of janitor or
porter. In discussing the,situation
plaint which could be noticed for
a hearing in the usual way.1
and
investigations,
with the officers of the company,
sion
held
it became evident that there were
Whenever
being made by
Negroes for clerical positions. The
that
of employees
Non-Discrimination Law
Developments in N. Y.
Commission's counsel in
exploring the applicability of our
law also made a thorough study of
all of the laws which might apply
in an instance of this kind and it
was his opinion that there was
a
tion. The
(Continued from page 7)
_
the
July,
of
1st
654 com¬
1945,
plaints have been
grieved persons.
filed by
ag-^
Complaints
•
am
violation
possible
that
in every one of these complaints
where the Commission has found
probable cause for believing an
unlawful
employment
practice
existed, justice has been brought
I
glad to be able to say
section 40
of
the Civil Rights Law
and also 700 and 701 of the Penal
of
41
and
lowing V-J Day, Bausch & Lomb
were forced to lay off thousands
of
their national origin and
most
Laws.
I,
to the
which would consist
conducted by three
commissioners
and
in
whose
deliberations. the
commissioner
who
conducted the original in¬
vestigation and made the attempt
at
conciliation would take
no
part. This bespeaks the coopera¬
step
second
of
hearing
a
had on the
which we have
tion
labor organi¬
employment agencies.
part of employers,
zations and
could
reason
A
times a
At
within
the five
if the com¬
plaint was not filed until after 90
days from the time at which the al¬
leged unlawful employment prac¬
tice occurred and the respondent
raises this as a defense. According
to Commission policy, jurisdiction
is assumed in such cases unless
the
•
respondent raises this defense.
are
also closed due to
Cases
jurisdiction if the respon¬
dent
does
not fall within the
definition of an employer, such
lack of
would
as
be
the
with
case
a
charitable, educational,
fraternal,
religious organization, associa¬
or corporation not organized
or
tion
dis¬
have
this
Negro nurse and that
statement together with the
this
had ever
fact that no Negro nurse
employed by the hospital
rather definitely substan¬
been
would
of the
allegation
the
tiate
plainant and that,
com¬
doubt, the
no
in
It
the
further
was
that
explained
complainant undoubtedly did
of a $500
not seek the imposition
against the respondent which
be payable to her nor did
she wish to have the respondent
fine
would
both
of which penalties were provided
for by the law, but that she un¬
doubtedly only wished to have
committed to jail for a year,
the
that
assurance
against
discriminating
not
was
hospital
the
people of her color and I sug¬
gested that a wise solution to the
whole problem might be attained
if the hospital were to offer her
position on their staff. The
hospital was, as I had been told,
desperately in need of nurses and,
as
I explained, this would both
help remedy this situation and at
a
the
same
relieve
time
the
com¬
misapprehension
she had with regard to a discrim¬
inatory policy.
plainant of
This
any
suggestion created quite
consternation.
little
be
Negro
nurses?
employed
the
his employ.
Commission, however, is
in seeing that all the
interested
dealing with
laws
discrimination
operative and
in some cases which have been
closed due to lack of jurisdiction,
other laws appear to have been
violated and the Commission has
sought through investigation, con¬
within the state are
a
a
with white
patients
How could the other
with her
eat
could
would the
What
think of it?
nurses
How
in
the
same
private profit, or
The
almost
run
and
allayed. Finally
asked for a week in
consider
the
problem
usual
fears
the hospital
which
to
and at the end of that time
forth with
an
came
offer to employ the
complainant.
There have been 147
closed
on
vestigation.
the
complaints
the merits after
In
these
an
in¬
complaints
Commission has carefully in¬
the
precisely
same
percentage of those of Italian de¬
dismissed
were
as were
pre¬
and there was
viously employed
evidence whatever of a discrimi¬
no
natory practice. Bausch and Lomb
issued
it
bulletin
a
to
and
distributed
their
employees as
those who had been dis¬
of
all
as
made, " the
investigation
conducted by the Commission, and
then gave to the
community a
pledge of a fair policy in employ¬
ment. The company officials sub¬
sequently stated that they did not
which
charges
were
would have done
for the pres¬
Commission Against
tain
the
cause
conciliation to ascer¬
and to advise the
facts
she
registered in
the real
because of her color.
was
not
vestigated the allegations of the
complainant, reviewed the em¬
Careful Examination of
Complaints
New York State. She felt
reason
was
She, therefore, filed
with the
a
complaint
Commission.
investigation revealed that
the respondent was a non-profit
charitable
institution
and
the
An
complaint, therefore, had to be
closed through lack' of jurisdic-
Therefore,
in
closing
these
cases,
a
careful explanation is
given to the complainants setting
forth the facts disclosed by the
investigation
which
invariably
corrects the feeling of resentment
and bitterness
they harbor toward
J the respondents. For instance, fol¬
qualified
it
if
had
not
the
of
been
in
Discrimination
State.
that
-
New
further .stated
consideration to
procedure would have
They
they
gave
what their
been if the Commission
policy
tion.
would
found any
practice of discrimina¬
They
decided
that
they
undoubtedly have prepared
or
similar
a
York
bulletin
for
their em*
stating the charges, the
findings of the Commission, but
ployees,
including the measures which the
company
their
was
to correct
policies
or
would have con¬
taking
employment
practices
and
inclusion
of
agencies
such
State Employ¬
the New York
Service, the
Urban League
Federated
Employment
the
or
Services will usually bring to
attention of
members
an
of
the
employer qualified
a
which
group
to be barred.
pears
ap¬
,
,
Over-all Pattern of Employment
on
Against
dered
a
service
has
en--
Many of these conferences have
character
this
of
been
the-
and
change has been brought
about through advisory bulletins
necessary
the
on
,
part of the association to>
The Commis¬
bor
organizations
la-:
the result of •
as
information furnished to the Com¬
mission
that
they
discrim¬
have
inatory clauses in their constitu-"
tidnsyand by-laws barring par-;
In all such instances where"
ship.
proved true, the union
have
offi-<
agreed to propose the;
requisite amendment at the next-'
convention.
In 10 instances, this'
has resulted in the elimination of
the
-objectionable
clauses.
■
Commission has conferred
with many State
regulatory
powers
effective
be
can
The
as
well1
agencies, as the
of such agencies
in
abolishing•
practices of discrimination.
The
law itself gives the Commissionv
the authority to obtain upon re¬
and to utilize the service
governmental departments.
What are some of the objections
of the employer when the matter
comes up for consideration
as to
of all
like
would
that
a
to
mention,
too,
pattern of employment fre¬
quently finds its origin a long
way
back in the history of a
company, and that it tends to per¬
the
opening up of employment op¬
portunities for people not previ-'
petuate itself by a policy of con¬
fining the new employment to the
friends or relatives of the present
jections
through the utili¬
of other
employees,
or
zation of the same methods of re¬
cruitment
acts
as
a
past.
This
barrier to the employ¬
as
in
the
ously employed by him?
lated to
arise
would
such
The ob¬
frequently re¬
the resistance on the part
employees which he fears
There
applying for positions
in
become
to
employ
is frequently
the fear in regard to the employ¬
ment of
and
groups
he
were
This
groups.
the
certain
of
most
are
only method by which that bar¬
rier can be reduced is to imple¬
ment
.
that in these 147 cases closed
the
merits the
Commission
represents that
Commission
quest
Examined
I
pledge
men,
which
the
bring about a volun¬
tary change in the practices of the!
industry as a whole.
cials
ment
Commission,
the
deavored to
be
the very
ment the present methods of re¬
of
a
fair
and
cruitment
of
help
so
that all
democratic policy in employment.
groups will have an opportunity
I submit to you, ladies and gentle¬
cluded the bulletin with
same
tiations
this
as
industry,
will ticularly Negroes from member-,
Negroes
and that employment will
given them when they meet all
the job specifications.
The
apr,
industry and through such nego¬
pany
of
apparent
sion has conferred with many
constitutes
therefore,
to the attention of the com¬
come
been
their membership.
know what they
Negroes.
is
to
way
proceed
and
stance
for
well
■
;
right
a
;
.
and
a
'
wrong,
in
such an in¬
it might be
give some con-:
think
I
to
us
Sometimes
this.
sideration to
an
which employer faced with this problem
open.
will call in all of his foremen and
Adjustment by conference and department heads so as to get
Discrimination has ren¬
definite public relations conciliation has accounted for the their opinions as to whether or
to employers and to all closing of 135 complaints. In these not the step could be taken be¬
We have had to
the
cases
the citizens of the State.
date 152 com¬
made
a
have
commissioners
determination of probable
cause for
crediting the allegation
plaints closed on the merits after
of the complaint.
Almost invari¬
investigation, conference and con¬
ably when an individual complaint
ciliation. It is very seldom that
has been sustained, the unlawful
by itself a complaint will furnish
act has been the result of an over¬
sufficient evidence to determine
all
discriminatory
employment
whether or not there is probable
practice and for this reason terms
cause for the allegations. A com¬
of
settlement have usually in¬
missioner
must,
therefore,
ex¬
cluded the adjustment outlined in
carefully the general
employment policy of the
company
as this has
a definite
relationship to the complaint. .,
The policy of the Commission
is, therefore, at all times to ex¬
amine this overall pattern of em¬
amine very
overall
ployment. In many instances, we
that
the
individual
com¬
find
lacks
the
necessary
qualifications or that the position
was filled or that for some other
ployment policy of the respondent
complainant of his rights.
reason the
complainant was not
and, as a result, found that there
For instance in one of the com¬
barred from employment or dis¬
was
no
violation of the law. In
criminated
against
for
the
plaints assigned to me by the
many of these instances, however,
Chairman of the Commission, a
reasons alleged, but nevertheless,
the complainants have sincerely
the
examination
of the overall
Negro nurse, registered in the felt that
they have been discrim¬
state of Virginia, alleged that she
definitely
inated against, in an attempt to employment practices
had been hired by a family for
discloses evidence of a discrimi¬
earn
a living,
due to their race,
natory practice, and, before closing
private duty work and was re¬
creed, color or national origin,
the complaint, the commissioner
quested to report to an up-state and
they have bitterly resented
effectuates the necessary correc¬
hospital. She stated that when she what
they considered an unlawful
appeared for duty she was kept
employment practice on the part tion. For instance, an officer on a
waiting a considerable length of of the
respondent.
ship brought a complaint charging
time and
finally told that she
discrimination against a steamship
could not be employed there be¬
ference and
against
effective barrier to the em¬
ployment of Negroes and the only
way that it can be reduced is to
include in the present method of
recruitment of help, some avenue
whereby
has
Commis¬
conferences.
proceeded to confer with the
association
very
This bulletin outlined the
facts revealed by the
ence
court would so hold.
with an em¬ dining room? All the usual
of problems had to be solved
ployer with fewer than 6 persons
for
that
has
might envision.
This,
it
complaints
the
220 formal
discriminatory practice
a
entire
give him consideration because-of
the
employee
resistance
they
,
the
not only to one company
but was prevalent throughout the
anyone,
showed
to
plied,
a stone wall
else, and further
more, it was pointed out that if
a fully qualified Negro»should ap¬
ply for work in an office such as
this, those in charge of employ¬
ment would be very unlikely to
than
classification made of all of
a
missed.
practices declared to be unlawful
in
Section
131. They are
also
closed for this reason
and
the dismissals. The result
well
complaint is closed
fall
head
State
they
consideration. They
inclination to fun
heads
by - dis¬
charged
employees
and
a
thorough review was made of the
dismissal policy of the company
pointed out, however, that the
family of the patient had made
a
statement that it did want to
be¬
not
the
law as an aggrieved person, The
Commission has considered that
an organization dedicated
to the
purpose of achieving
equal op¬
portunities of employment for
people is to be considered an ag¬
grieved person when filing a com¬
plaint under Section 131.3 of the
law
which
involves
questions
which may not be asked previous
to
employment. Cases are also
closed due to lack of jurisdiction
if the allegations of the complain¬
not
that
want
not
did
that the
the family
to have a
to explain
was
complaints were
Commission
of
the
that
addition
In
no, more
their
Discrimination
Against
crimination in the hospital. It was
lack of jurisdiction
cause
the complainant does
fall within the provisions of
do
on
Negro nurse, and the hospital
disclaimed all practices
of
to
ant
with
scent
reason
itself
plaints are still pending before the
Commission, 17 have been with¬
drawn with the consent of the
Commission; 76 have been closed
due to lack of jurisdiction.
due
she
not be employed for this
so as to
soften the blow
went
It
real
number
filed
complainant that
the
consider¬
was
company
have
positions where
indication
no
receive
will
national de¬
in their jobs
that
is
there
ably concerned.
for her.
present time, 127 com¬
the
At
told
the
and
of
felt insecure
scent,
thereafter, but claimed that
year
it
vehemently. The remaining
employees
and for one
the course of the war
will not apply for
Negroes
that
is
this
for
reason
resented
this most bitterly.
Various organ¬
izations
took
up
the fight and
even
their
churches
protested
applications
no
company was
cleaning house of all employees of
_
required to proceed
employees. Those of Italian de¬
scent felt that the
accordingly, met with the
respondent and pointed out the
protection these other laws af¬
to the complainant and the un¬
forded
the
complainant should
lawful employment practice cor¬
she wish to seek redress through
rected by the first stage required
them. The respondent stated that
by the law, which is one of con¬ it fully realized that the require¬
ference with the respondent. In
ments of registration in New York
no
Instance has the Commission State had been suspended during
been
tion of Negroes
plainant
cause
The
men
of employees' resistance.
department heads or fore¬
will want to discuss the mat¬
ter with their
all
connected
employees and
with
the
soon
business
begin to work themselves up to a
high pitch of excitement over
the'
prospect of having to work with
This is obviously the
wrong way to proceed.
When the
step is taken the less said about it
Negroes.
'
previous category. In addition,
terms of adjustment also in¬
clude measures designed to bring
the better.
justice to the complainant such as
hiring, upgrading, .reinstatement,
back pay or whatever corrections
initiate
might be necessary in conditions
well qualified from a
the
the
or
privileges of employment.
Conferences and Conciliations
The
do
personnel
to
well
the
manager
select
move
fied not only to
would
employees
who
are
to
quali¬
do the work as¬
signed to them but also who are
personality
aspect to bring about the change^
in the employment pattern of the,
If these new employees
culture and refinement of
or higher level as that
of the present employees, > there
may perhaps be a few ripples of
gations wherein the person ag¬ comment at the time the
step is
grieved does not wish to file a
taken, but they quickly:-subside
formal, verified complaint, usu¬
and little is thought of it, after the
ally because he does not wish his first
day or two.
According to a
name disclosed to the respondent.
provision in the law an employer
Forty-five investigations are now
may file a
complaint, against a
pending.
Sixty-eight have been
group of his employees if their'
closed with a finding of no un¬
overt discriminatory acts,are such'
lawful employment practice and 93
that he cannot comply with the
have been adjusted by conference
provisions of the law.
and
conciliation,
wherein
the
Up to the present time, no such
commissioner has found an uncompany. While investigation of 1
awful
employment practice to complaint has been filed under
this provision and only in one
the individual complaint gave no exist. In the event that the proper
instance has it been necessary for
evidence of a discriminatory act adjustment could not be attained
a representative
of this Commis¬
through conference and concilia¬
ihation into the overall policy of
the company
tern
their
of
revealed that
employment
offices
a
pat¬
existed
involving
in
hundreds
complaints,
which number 654, the Commis¬
sion has also handled 206 investi¬
In
addition
to
tion it would be
the
the right of the
commissioner to bring the
dustrial Commissioner
file
the
possess
the
same
sion to meet with
a
group
of em¬
matter ployees in order to correct such
the In¬ a discriminatory attitude. In all
General or
who would
necessary verified com¬
to the Attorney
company.
other
cases
able to
the employer has been
overcome
employee resist-
Volume
165
Number
THE COMMERCIAL & FINANCIAL
CHRONICLE
4600
f
(3011)
with the advice
ance
given to him
ciated
by the Commission.
In
one
case
which
before
came
It involved
large tele¬
a
phone
company
upstate
where
600
telephone
operators
employed.
Two Negro girls
had applied for work with the
company, had been turned down,,
some
were
and filed complaints.
with
investigation of all appli¬
cations made since the 1st of July,
are
and
commerce
,
the forces of communism.
But it
in-> is unlikely that the Communists
asso¬
would
Today, we are considerably dis¬
by the threat of Commun¬
ism and well might we be for if
the Communists do take control,
we
might just as well use our
turbed
Donds
certificates
stock
and
paper
The
who
us
Antidote to Communism
the
a- move.
of
dustry.
the employer was most fearful
dire consequences of such
me
of
all
for
cern
walls, if
our
walls to paper.
have
we
to
any
It would be pru¬
dent, therefore, for us to consider
what
made
it
possible for the
Communists
to
gain control in
1945 indicated that all Negro ap¬
plicants for this type of work had
Russia and other
countries
and
been refused employment.
When
the employer finally admitted dis¬ why they are darkening the hori¬
zon here in America as well.
criminatory practice, he told how;
As J.
difficult it was to recruit the nec¬
Edgar Hoover recently
essary number of
tors and
ever
stated
telephone
opera¬
that if he
should
employ Negro girls, so many
leave, and so few white
pointed out, there was only one
Communist
in
2,000 people
in
Russia at the time
would
trol,
girls would consider applying for
this type of work, that his situa¬
they took
con¬
class
and
working class
tion would become desperate and
that service would collapse in the
community....
was
related
to him to relieve his apprehension
in this regard by showing how
fears in similar situations had not
law
a
which
with.
With
After all there
had
to
fear
be
and
was;
complied
apprehen¬
sion, the company took the step.,
Negro operators were carefully
chosen to initiate the
worked
eral
move
and it
successfully that
so
sev¬
weeks
later, when a shower
was being held for one of the old
^telephone operators who was to be
•married, the Negro girls were in¬
vited along with the rest.
■
I would like to mention briefly
of the observable results of
some
'the
in
Law
New
Against. Discrimination
York
State.
Today
application for
rarely find an
ployment which
tions considered
sion
directly
or
contains
we
em¬
ques¬
by the Commis¬
indirectly to dis¬
close
race,
color, creed or na
tional origin. The Commission has
reviewed 1293 application forms
and
employers of the state have
generally revised their forms so
that they comply with the Law.
In
New
'find
York
State
advertisements
we
rarely
for
help in
[newspapers which directly or in! directly make any limitations as
[to race, color, creed or national
'origin. There is a marked con¬
trast
in
York
State
this
regard
papers
when
are
New
compared
"with those of other states without
similar
munism
only
the
grasped for Com¬
it appeared to be the
as
by which they could
means
liberate
peasant
themselves
from
the
se¬
vere
<
•.Everything possible
materialized.
but
legislation.
oppression which they had
suffered for years.
Other people
in
Russia
sympathetic
were
Communism
appeared
release for them
persecution.
to
a
also from- bitter
This
Communism
as
offer
to
was
the
what
sold
Russian
peo¬
ple and when they grasped at it,
they did not realize that Com¬
munism
solute
also
of all
ab
an
human
rights
right of ownership of prop
the freedom of speech, the
erty,
freedom of
that
or
incorporated
denial
the
worship, to life itself,
everybody
and everything
would become subject to the des¬
potic rule of a godless state.
.
The Communists here in Amer¬
ica realized that they do not have
severe
oppression of a working or
peasant class through which to
gain support but they do have
serious oppression against millions
of people due to
race,
color.
If
creed
or
study their tactics
you can see how they have seized
upon discriminatory practices to
you
enlist support for their cause.
A returning Negro veteran fails
to observe segregation rules in the
rear of a bus. Police officers seize
him and gottge but his eyes. Com¬
munist organizations are out in
front with their vigorous protes¬
tation.
The
American
Bowling
Congress refused to admit Negro
participants at their tournament
in Buffalo.
Communists picketed
their tournament.
A utility com¬
pany is
attempt
frontal attack
a
on
the armed and industrial
might of
America.
Their policy is to bore
from within.
A
fair
policy of
is the best
security
employment
from such
attack and it won't
but will prob¬
an
cost
400
ably
save many
millions
times that amount
in the
process, for all that such a
policy consists of is
to
hire,
up¬
That's
good
a
sound
business
New York
.the
jftate.
be
City
well as all of
throughout the
Usually the last barrier to
large
as
cities
overcome
is the employment of
Negroes in white collar capacities
And
today when
we
find
as
a
result of the law Negroes being
employed in the offices of banks.
-
insurance
companies,
steamship
companies, commercial houses of
"
This
tdkes time
but
it is most
to know today
of employment
to any group in New York State
are being eliminated in all types
©f occupations, and that the sound
important' for
that
;
the
us
barriers
administration
of
this
law
will
inevitably bring a complete equal
ization of opportunity to all peo¬
ple within our state,
r
scholar
and
me
an
after
an
excellent
athlete
and
graduation had
applied, with five classmates, for
position advertised as junior
a
clerk.
The four white boys were
accepted,
while
and
the
he
was
rejected
advertisements
con¬
tinued to appear.
The
lost
pity of it
his
Pacific
father
for
the
fighting
in
security
very
the
of
company, now denying him an
opportunity: to work.
Don't you
in
closing, I would like to leave
before you, ladies and
an
gentlemen
in such
an
instance and show him
the
irreparable damage his policy
doing and how easy it would
is
be
to
God
can
correct
that
policy. Thank
Commission which
go to all the employers, labor
we
have
a
organizations
agencies
done
and
how
aspect of the necessity for a
Today
we
are
spending some
Turkey and Greece
people there combat
400 millions in
believe
to
practice which T
should be of grave con¬
it
would be
for them all to alter that
policy.
help the
easy
and
of
name
gentlemen,
the
for
cies of
in
some
am
and
hearted,
whole
your
few
in effectuating
I
fair poli¬
employment in New York
State.
form
International
Bank
possible for these
and
war
makes
it
bitten, debt
ridden, bankrupt countries to for¬
get
all
about
already
the
billions
down
obligations
by
about
80%."
Doesn't this sound familiar? Isn't
this what we have
today multi¬
plied over-and-over again?
they
Back
in
1932
to us, while it opens
Borah
stood
wide the door for loans at ridic¬
States
Senate
owe
ulously
low
interest
rates
at
a
proposed 3%, to 3V2%.
Quoting some Bank propaganda
just issued: "44 countries have put
money' into " the
capital of the
Bank. But only a small
part of
this capital is loanable funds. Of
this capital a large part is
static,
to
be
used
as
unforeseeable
English they
of
the
cushion
a
against
difficulties,"
(plain
defaults). Out
mean
Bank's
total
"
authorized
capital of $10,000,000,000 by May,
1947, 20% of the total subscrip¬
tions
of
been
free
the
called
members
for
working capital.
total
of
this
tribution
has
now-
payment—this is
Out
of the
original 20%
capital, 2% of
to
subscriptions
is
payable
in
con¬
the
gold
United States dollars. Original
of the bank were re¬
©r
members
quired to
fore
this 2% on or be¬
24, 1946. An original
pay
Aug.
member
whose
invaded
is
territories
entitled
to
payment for five years of %% of
1% of such 2%.
Six members
have
availed
privilege.
themselves
Of
the
that
of
balance
of
the
18%, for the time being, at least,
the only part of the
remaining
capital which is authorized but
issued remains
to
un¬
"pillar of strength''
protect the holders of the Bank's
a
obligations. Here is
a
case
where
unissued, nonexistent, reserve
fund of unsubscribed capital, is
represented as security for the
obligations of borrowers who may
the
course
same
now
will
in the
these
be
ther
first
very
required
funds.
might
call
anteeing
to
defaulters
provide fur¬
contributions
necessary
capital
instance, and
same
That
the
the.
is
what
to
you
bankrupt guar¬
bankrupt.
Under
such conditions is there any doubt
that if there will be
any cushion
for the
subscribers to the obliga¬
tions of such an institution it will
be
because
the
United
States
Treasury
once
again puts up the
cash.
^
After
the first
Stoddard
stated
glance at
our
suffice
to
World War, Dr.
"Even
a
cursory
post-war world will
make
us
realize
that
Keynes put the matter conserva¬
tively. The war half-bankrupted
Senator
the
and
people
United
the
warned
against
which
we
a
vaster and grander scale than ever
before,
he
publicly
was
con¬
even
of
them,
attempted
war
except
to pay
debts. In¬
stead
they began almost immedi¬
ately^ td! repudiate them in various
ways.! ? Somenations,
like Ger¬
many, f
repudiated
by
inflating
a
of
of
all
war
or
did
the
be
asked
to
recommend
sell
and
the
debentures
of
the
Inter¬
national Bank to their customers.
I quote again from a
recent pub¬
licity release of the Bank:
Bank
will
sell
United
of
First
they will
of
world
member
get
then
us,
first
States and later to
some
the
"The
debentures,
countries."
all
the
will get in
they
rest
can
of
the
it.
Can you
imagine in what amounts of these
various issues of debentures will
be purchased
by investors in Eng¬
on
land, France, Italy, Russia,
is
not
Bank
member
a
or
the
Analyze
of
(who
either
the
Fund) etc., etc.?
this
entire
scheme
in
the light of sound
business pro¬
cedure and you will come to one
conclusion.
The
only
the
way
by the entreaties of the vast ma¬
jority of foreign nations is
our
foreign policy today. His
predictions were borne out by
the experiences of time itself. He
said,
"It will
cost
something
to come out of Europe, but it will
bankrupt us to stay in. Since
1915, in one way or another we
have
put
close
us
to
$45,000,000,000
in
Europe. It has not ended Euope's economic crisis and it has
brought
economic crisis to the
an
United
States."
alive
were
If
Senator
today
fie
Borah
could
look
back upon those words pf wisdom
he could have said, "Amen,
and
and
we
doing
are
it
all
over
again."
What
give
good
be when
we
have
been
money?
victors
it
for
if
we
dry
by
war
the
Hundreds
quered.
to
of
dollars
have
to
Germans
already
fiat
supposed
being
nations
are
very
supposed
are
resources
more
the
we
in this last
the
do
natural
our
traded
Today,
milked
we
will
wealth away? Where will
our
have
con¬
millions
been
and
the
of
given
end
is
not in sight. Japan is now talking
about getting a billion from us.
mulcted
through
Bank.
much
the
such
could
his
device
a
be
today
money
this
as
subscribing members
themselves not worthy of
Collectively they are not
credit.
a
of
The
in
are
investor
out
better
risk; except that
taxpayer through
American
the United
States Treasury is the
principal security behind this in¬
stitution. Without our
money and
our
credit the whole idea would
not be possible.
In
1933
the
Congress
passed
laws with the avowed
objective of
protecting the American investor.
If the investment
dealers of this
country wish to live up to the
spirit of those laws they will ad¬
their customers not to
buy
the
debentures of the Interna¬
vise
tional
Bank.
Meanwhile by
so
will
they
perform
a
patriotic service to their
country.
Every dollar we lose in foreign
doing
loans
the
is
eventually taken out of
pockets
of our people
and
from the production of our
fields,
forests, mines and factories.
in New York and went home with
Those nations which have char¬
acter, who come to us with clean
hands,
can
borrow
from
our
people in the open market at rates
of
interest
comparable
to
the
$50,000,000 for
risks
Italy has already received $100,000,000. The President of Mexico
just paraded up lower Broadway
tion
purposes
loan
of
currency stabiliza¬
plus another direct
involved.
only
The
their
recover
family
upon
of
their
own
learn
this
and the
to
$50,000,000
don't
(they
Fund, and don't forget that
Mexico's
ment
record
reeks
default.
of
with
for
repay¬
as
bleak
has
tions which
are
now
been
ear¬
$500,000,000 loan,
but the average Frenchman still
believes
a
we
France is
Uncle
are
Meanwhile
the
Shylock.
government
of
unstable, unreliable and
by Communists. If we
dominated
look at Britain, what can we say?
Here
is
a
stupid
government,
stumbling and fumbling around
in Socialism, that came here beg¬
ging for $3,500,000,000 and got it
just about a year ago. Now even
this
tremendous
cient
—
dling
ging
—
and
—
fund
is
exchange is dwin¬
British production is lag¬
people are discontented
discouraged — labor unions
against the government—
States is already
condemned
man
As
in the
for
by
the
British
street.
Russia,
former ally
has just forced us to send $400,000,000 into Turkey & Greece, in
order to protect the sovereignty
from Rus¬
sian aggression. Because of Russia
we
are
troops
vestment firms
customers
rate
—
is
can
and
of return
vestments
offer
to
their
incidentally the
today
HENRY
New York
June
on
these in¬
more
liberal
Bank.
SCHOUTEN
City
2, 1947
Frank Edmonston With
H. 0. Peet &
Company
(Special to Thb Financial Chronicle)
KANSAS CITY, MO.—Frank J.
Edmonston has become associated
H. O. Peet &
Co., 23 West
Tenth
Street, members of the
with
New
York
cer
way
na¬
eager to take
much
this International
under
the
the
those
than that which it is reported will
be offered by the debentures of
Edmonston
all
for
future will
as
are attractive
opportuni¬
right here at home that in¬
forced to keep millions of
arms
we
refuse
There
ties
our
of these two countries
and
advantage of our profligacy and
our
impulsiveness.
insuffi¬
dollar
the United
being
own
someday be
the
standing
grab-bag
whole world, our
will
in
Unless
now
repudiation and
France
marked
debt
a
by
feet.
lesson
become
others
place
nations
here for the ride). But Mex¬
ico is also a member of the Bank
come
strike
none
win
we
send
we
direction
looks
trol
and
tainly
Britain,
the
American
of the
those astronomical
the
demned by the same kind of In¬
ternational New Dealers that con¬
most of
Europe. It left every one
European belligerents, save
in
In
the very
near
future the
investment banking firms and se¬
curity dealers in this country will
are
on
cooperation
providing
lose it?
taking
blindly following only
an
later
when
in
up
American
were
postpone
government
world
From
this, did
out
this
comes
Germany to
pouring hundreds
of
peace,
billion
Moscow.
we
scaled
here
and
seen,
are
establishing
the
Commission,
borders of
We
Allied nations,
meanwhile Russia is
siphoning off
the
dwindling wealth of these
countries in the form of
repara¬
tions. Now it is
quietly rumored
that Russia may consent to
co¬
operate with us in
never
technical rather than actual. Cer¬
inatory policy and show them all
the
irreparable
damage
being
Ladies
fit
discrim¬
a
ing
the
Korea.
35
of millions of relief
into defeated
as well as
former
to the
this
Britain, obviously insolvent; and
Britain's solvency was probably
have
they could do nothing
effective for him in fertiliz¬
the ground for communism.
from
(Continued from page
6)
right in their currency to the
moon; others
with what is being
attempted to¬ like France and
Italy, did the
day? Default upon default, bank¬ trick
by currency "devaluation"
ruptcy such as the world has which
Doesn't
ones/
employment
and
which
roll
pay
Should Investment Bankers Sell
World Bank Debentures?
default
that he had
was
the
fair employment
<
had
as
both
types, we know that the law
definitely is producing results think that if
you or I wrere that
Necessarily it will take time be¬
boy, we would
become
rather
fore a full equalization of em¬
cynical with regard to our prin¬
ployment is achieved, for those ciples of
equal opportunities for
groups barred from certain types all?
Don't you think we would
©f employment must necessarily
be attracted to the Communists as
become aware that opportunities
the only ones
apparently interest¬
in those fields are nbw open to ed
in
bringing us those equal
them,
and
they
must prepare opportunities?
themselves to take advantage of
Thank God we have a Commis¬
those opportunities.
sion which can go to the
employer
many
'
to
came
better financial
a
the result.
as
more
support
best qualified for the
job.
one
pur¬
Employ¬
ees must realize that
by possessing
a
discriminatory poRcy they are
playing right into the hands of
Stalin; that if they were on his
the
accuse^ of discriminatory
18% due which will be available
and again Communists
to the bank in its
lending opera¬
protest and picket their office.
tions is
the
$571,000,000 which
Now let's put ourselves in the
will have been paid in
by the
position of one of the many Negro United
States. Nevertheless, the
boys who are today graduating Bank's
publicity department
from our schools and colleges. One
claims that the 80% of the Bank's
record
statement
asking
practice
who
it will have
sues
grade, and retain in employment
.
Many people were very much
surprised during the recent tele¬
phone strike to find Negro girls
©n
the picket lines.
They had
never realized that Negroes were
now being employed as telephone
operators so generally throughout
practice and any firm which
Stock
was
Exchange. Mr.
formerly an offi¬
Company.
of E. |W. Price &
THE COMMERCIAL & FINANCIAL CHRONICLE
securities
Sees Treasury Debt Redemptions
Drain on Spending Power
'
1
-
1
their retirement led to
bank
they
tieir
between
balance
Budget
Income
16.4
17.9
Outgo
14.6
1.8
13.5
Surplus,
4.4
loss of most
during
certificate
theless,
the
the
scale
that
has
ex¬
of their government
observers
some
were
Government
Reserve
indicated
when the level of the national in¬
rency
rises.
come
national
The buoyancy of the
and
$1
of the
est
charges, payable to the U. S.
Treasury, on Federal Reserve note
issues not covered by gold cer¬
tificates. This action, which in ef¬
fect reimposes a franchise tax on
billion since the turn
year, and the return of cur¬
from
circulation
since
Christmas
runs
to about the same
These factors, since
by private magnitude.
spending and investing, has con¬ they add to bank reserves, tended
founded theorists who predicted to ease the money market, but
vast
unemployment as govern¬ were substantially offset by the
ment spending came down from public debt retirement and official
its colossal peaks.
It has required counter-moves.
income,
fed
Federal
in
the
upward revision after another
official
fiscal
from
to
forecast
the
estimates
ending June
for
30—
original figure of $31%
an
billion
revenue
year
latest
in
January,
estimate
of
1946
$42%
billion given out April 19, 1947.
On the other hand, there should
be
no
reason
for
surprise
thatr
coincidentally with the develop¬
ment of this billion-a-month cash
surplus,
we
should be reading of¬
ficial reports of a leveling off in
business
more
volumes,
especially
in
overall,
business
and
in¬
In
January and February the
Treasury drained off bank re¬
serves by letting its own deposit
balances
with
the
billion.
$2
In March and April,
easing tendencies
by
a
were
$1% billion reduction in
tificate
holdings
of
bonds
by
Treasury
Federa
by
a
investment
Beginning
continuing
at
them
payment
weekly offerings.
enables
the
May
a
and
22
total
the
of $1
Treasury bills. Since these
the
for
Reserve
Net
result—nothing.
As a sequel to "The
Egg and
Federal handout men
are
1/^
script¬
ing "The Egg and You." The
egg's
the villian.
You're the
taxpayer1
hero expected to
shell
out $181,000,000 to support farm
egg prices
in fiscal year
Haven
and
1948.
Agriculture Secretary Ander¬
stockholders
the
Senate
.
.
Commerce
"there
.
is
no
New
Haven
Railroad,
and
I
do
how the proposed
see
legisla¬
tion can pump any value into the
property
either
by
anticipated
earnings or increase in the value
of assets."
Jjc
!■!
Congress, nonetheless, is about
set
to
give
through
the
ticket
House, to
Reed
to
give
Bill
the
a
White
shareholders
in
the New Haven and other insol¬
vent
carriers
whack
a
at
reor¬
ganization recoveries.
Legislation reincorporating the
Export-Import^ Bank five
beyond June 30 was
,
^
T..
years
on
_
passed
unan¬
imously by the House on Monday.
Previously initialed by the Sen¬
ate, it now awaits Presidential
approval.
*
*
tried
son
was—isn't
never
now—
.
million
egg program."
eteers
later
pected
on
that
to
the
nerves
from
age
discount
to
2
employer
<>n
and
employe.
expect
Banks
legislative
shouldn't
authority
to
loans
instead of relying on dealers and
banks to bid for excessive amounts
for immediate resale to the Re¬
depression
abeyance
eggs,
would
$230,000,000;
grain sorgums, $15,000,000.
In
round
Credit
figures, Commodity
foresees
price
totaling
envisions
on
declines.
support
$1,844,057,000,
$160,870,000 loss
a
on
They hinge their fore^ •
anticipated farm price .p
v
*
*
....
.
.
Rebel Republican
SenatorTobey'
New Hampshire can't
of
get
congressional nod this session
his
bill
arming
Board
the
with
Federal
bank
a
on
Re¬
holding
company controls. He may—prob-
ably will—pry it out of the Senate Banking Committee.
House
Banking Committeemen he'll find
bills authorizing
the banks to lend 75% rather than
Banks at the fixed % % rate.
this
outright loss.
| oooT oatsT $30J)66,OOoYYyer$430',-
serve
Land
Federal
as
(with $10,250,000 loss); dry
milk,
$11,500,000; sweet potatoes, $25,444,000
(with
$8,699,000
loss);
white potatoes,
$101,670,000 (with
$30,000,000 loss); barley, $8,686,-
congressional
Definitely slated for
under
of
(with $16,000,000
loss); rice,
$27,113,000;
wheat, $389,634,000; beans, $1,000,000; chickens, $21,500,000)
unrest
postponement is the Jan. 1 rise
$181,000,000
floor
price supports; corn,
peanuts, $65,000,000
cast
can
the
on
And here's a glance at
other
tidy sums the Commodity Credit
Corporation plans to disburse on
1% social security old
tardiness.
spend
be written off
the
payroll
dollars
Anderson's budgthey ex¬
$42,899,000
the deal.
You
.
testified
price
a
.
will get out with
only
we
few
a
doubt Congress will freeze
as
nonchalant
drama when
House Ap¬
propriations Committee
"we
hope
any
insurance tax.
be
new egg
he casually told the
outlays
There
to
about this
*
erty
65% of normal agricultural value.
serve
In
ready
to
in
billion
bills
buy bills,
not
is
now
or
"remnant"
of
already in the Federal
Reserve portfolio.
of
impending
struction, which are holding up
the supply of real estate mort¬
ment
returns
and
meet
higher
costs of operation.
risk
evidenced
capital,
the
by
picture.
a
as
depression
of
radically different
Compared with the 2.3%
of
long-term
Government
bonds, Moody's Investors Service
calculates
on
200
risen to
a
that
the
common
■
*
Today
average
stocks
has
yield
now
financing
are
for
*
with
Land
only
farm mortgages.
much less acquiescent,
Ditto for the Tobey vision of
8%
Banks
of
all
This contrasts
special
Federal
agency
to
make loans to small enterprise.
Don't look for this proposal to
beyond
progress
at the
depression
peak in 1933 and 1934, with a
12%
in normal times.
average
Combination
for
blamed
of
the
(1)
/average;
present
high
farm
market prices, and
normal
factors
two
is
low
land
(2) the 65%
lim¬
agricultural value
itation.
the
hearings
phase.
*
74%
Take
*
*
it from venerable
Repre¬
Sabath, Illinois Demo¬
crat, four-score-and-one and Dean
sentative
of
Congress, when the lawmakers
farm funds
they "turn the
cut
farmers
back to the tender mer¬
cies of the loan sharks and merci¬
less bankers
and
play into
...
*
*
*
the hands of the
bureaucratic paradox
(1) Agriculture
Secretary Anderson is calling private lenders to Washington June
Here's
two
m
a
cycles:
will urge them to fight farm
land inflation by making smaller
same
Wall Street
sharpshooters who have been
hammering down the prices of
sound investment stocks on the
market.
9,
loans, and (2) Anderson under¬
lings concurrently are boosting
the inflationary scheme for rais¬
ing the Land Banks' lending au¬
thority. Now who's tilting with
You
won't
arm
Legislation
District
of
Columbia
law
the
con¬
trust
funds is being quarantined by
district judges. The bill would
trolling
of
investment
permit trust funds to be invest¬
ed
in
securities
prudent
man
ordinarily
an
would buy.
Local
bankers, the ABA and Bar Asvsociation
argue
that
(1)
the
prudent investment
philosophy
less
investment
lists, and
ment
lists
(2)
rigid
less rigid invest¬
mean
greater safety
yet
waving
for
seen—and
congressional
Mr.
Sabath's
into limbo.
*
But
liberalizing
haven't
see—much
prayer that short sales be taxed
ners,
means
5.1%, highest in three and
half years.
*
Federal
clearly
available to investors by the pur¬
chase
Slated?
us.
are
supply of
stock prices and new stock offer¬
ings, presents
hits
prop-
unless—a
the economic windmill?
At the same time, the
genuine
.
nar¬
the billion
half
a
until—and
stand
to
scope
and
Banks
maximum farm
a
effect, the %% rate, at which
gages, and the pressure on banks
to shift to longer term
govern¬
ments in order to improve invest¬
New
their
negligible. It also reflects the
bottlenecks and high costs in con¬
irom Treasury Daily Statements.
possibly prior to
hike
or
V, S. Treasury Cash Income and Outgo, in Billions of Dollars
ivp
(Calendar years).
Source: Treasury Bulletin except that April, 1947 is computed
certain
equity for the stockholders of the
not
This procedure
Federal
ments where the market evaluates
the risk of non-payment as small
1950
is
Railroad
Committee
new
policy
changes. Their performance, and
the ready absorption of
top grade
corporate, State, and municipal
bonds, bear witness to the abun¬
dant supply of funds for invest¬
1945
Senate
by
Banks, 'the principal holders, to
replace their maturities directly
rumors
1940
okayed
—
stemming
Government bond prices, mean¬
while, have displayed remarkable
stability in the face of many
1935
is
measure
Commerce Commit¬
York,
warned
to permit holders of
Treasury bills to use
in
That
kidding themselves if they ex¬
pect to recover through the Reed
Railroad Reorganization Bill.
So
says New Haven
Vice-President
George T. Carmichael.
He
has
was
maturing
rowed
mid-April
through
on trust funds. Dis¬
justices dissent. Congress,
facto, concurs with the
trict
are
The second action, taken by the
Treasury,
on
Bank
the Federal Reserve
accounts.
billion
apart from
cer¬
resumption of selling government
act
even
the
Open Market Account and
Treasury redeemed
deterrent
countered
New
term Government securities.
Re¬
serve Banks move up from a nor¬
mal one-half billion to well above
vestment. In this latter field taxes
as a
Federal
FPC pincers
Enactment
Hartford
earnings,
would return to the Treasury the
bulk of any increase in interest
earnings of the Reserve Banks re
suiting from the restoration of
some
flexibility of rates on short-
,
one
Reserve
be
eventually
in
the latter part of April. The Fed¬
eral Reserve Board levied inter¬
governments,- to help
imports, have been
around
and returns
ipso
July adjournment.
level, seemed to be confirmed by
two other actions taken during
their
to
tees.
propitious, at least letting
the Treasury bill rate find its own
gold by foreign central
finance
about
and House
in¬
time
credits.
opening
of natural gas.
testimony before the House Bank¬
ing and Currency Committee in
early March, the % % rate on
Treasury bills, set by the Federal
partly re¬
flecting repayments of commodity
banks
House)
Action
end production and distribution
securities.
Board
bill
a
months' gap in
a two
As Chairman Eccles of the Fed¬
eral
end of February level,
Sales of
come
Less likely is postponement of
outstanding amount of bills in
term
vate
been
j
five years, might presage other
steps leading up to an "unfreez¬
ing'? of interest rates on short-
deposits and the associated reduc¬
tion
in
short-term
government
perienced, had been neither ex¬
pected nor planned for.
It has
developed, not out of expenditure
cuts, which are being laid out for
next year, but out of a tax system
which
raises
tax
yields auto¬
matically and disproportionately
'
maturities, when they
experienced a contraction in pri¬
deposits as an incident to
What a radical change this rep¬ the government surplus.
The de¬ Reserve
Open Market Committee
resents from the wartime period, cline in deposits would have been
five years ago, is out of tune with
when in each of four consecutive more pronounced except for gold
tie market. As a result, the Fed¬
years the government poured out and currency receipts and for the eral
Reserve Banks, buying freely
$35 to $50 billion more than it substantial amounts placed to the at this
rate, have accumulated
took in, is suggested in the ac¬ credit of business borrowers in
about 90% of the entire amount
companying chart.
In fact,
it the early months of year. In some
outstanding.
Mr. Eccles, at the
would be necessary to go back areas banks have also been active
same time, suggested that it might
more than
15 years, to a period in extending real estate mortgage
be desirable to allow short-term
not covered in the chart, to find credits and personal loans, though
rates to rise to keep the long-term
sl time when taxes
were pulling at the same time collateral loans
rates from falling further.
have fallen off to new low levels.
more money out than government
That
the
authorities
had
in
expenditures were putting back in. In recent weeks business borrow¬
This counter-inflationary force, ings have dropped back to the mind, when they considered the
■on
the
before next session.
clined to the view that the action,
the first significant reduction in
13
5
surplus, approx.
by
can't
represented the only outlet availble for debt retirement.
Never¬
security holdings, this year have
of
rate
Annual
came
The banks, following last year's
Basis
Basis
shortly
Committee.
The retirement of Treasury bills
Market
Cash
held
Commerce
balances.
reserve
Retirement of Treasury Bills
Easing Influences in Money
(In Billions of Dollars)
(Continued from page 5)
be
were
jurists.
table
19471
Washington and You
on
having to sell
certificates in order to replenish
$13 billion. As the following the
algebraic
brings out, the surplus on cash income and outgo.
In other words, there is a ques¬
&
budget basis came to no more
than $1.8 billion over these same tion of how much of a tax-drag
lour months, which works out to a free economy in peacetime can
No one can predict with
an annual rate of around $5
bil¬ stand.
any
confidence just how much
lion.
that is, but the
biggest present
^Government Actual Cash Income risk is that of undermining the
and Outgo Compared with Net vigor of the economy by over¬
Budget Receipts and Expendi¬ taxation.
tures, January-April, 1947.
of
drain
By mid-May the
back
in
a
position
were
where
(Continued from page 9)
njL
a
reserves.
banks
Q \
°
predominantly held
Federal Reserve Banks,
the
by
Thursday, June
are
for
*
k
here's
*
short
you
selling sin¬
lyrical
a
official House debate
omen
on
from
Sabath's
plea.
Declared Nebraska's
Republican
Representative Buffett:
"He who sells what isn't his'n
Must pay
it back
or
go to
prison."
Responded
Mr.
Sabath
with
equal solemnity:
"He who sells what isn't his'n
When
to
he
is
prison."
catched, shall gh
,
THE COMMERCIAL & FINANCIAL CHRONICLE
[Volume 165' Number 4600
Construction Outlook
Public and Private
35%
likely to work itself out greater than in the 1930 decade.
Which is
in
reasonably short time with a
relatively minor dip in construc¬
tion activity. If this is correct, we
have already discovered among
public construction
of
ume
(Continued from page 9)
ago,
half
a
years
at Dodge made and pub¬
postwar construction
we
lished
and
three
Some
a
some
even then
conservative.
private construction
postwar decade at two and
which
estimates,
we
quite
the similarities between the pres¬
regarded
ent
We estimated
period and the earlier postwar
decade an important difference.
Overall construction volume
in
the 1920-1929 decade amounted to
$91,912,000,000, of which $19,463,000,000, or 21.4%, was for public
construction. That decade
which
in
was one
demand,
construction
both public and private, arose al¬
most
the
from
exclusively
de¬
mands of the free market and the
economic needs for public
build¬
ing and engineering facilities. This
suggests that the construction pat¬
tern of the
1920 decade, in its
brpad outlines, is more likely to
be followed in the coming decade
than either of the other patterns
previously described. This would
for public construction ex¬
penditures within the range of 20
to 25% of the country's construc¬
call
tion total.
clusion
upon an
but
Obviously, such
based
be
cannot
a con¬
merely
earlier statistical record,
take
also
must
into
in the
public construction at
26%.
A carefully studied revision
of our
earlier estimates in the
light of present knowledge would
undoubtedly
result
in
upping
those earlier figures.
To cite any
construction
demand is gen¬
is
There
being, poten¬
would serve no useful
at the moment.
More important than astronom¬
changed,
figures are the
assumptions made about the post¬
war economy in
making any ad¬
vance
estimates.
The
principal
ical
aggregate
will be
next
be
major depression in the
no
10
there
make is that
assumption I
years.
correct,
a
to
amounted
product. In the succeeding decade,
1930-1939, construction accounted
for only 6.5% of gross national
product.
As has already
been
pointed out; the deficit in the later
; period was-due 4o;: a marked de¬
cline ? in i private > construction.
These figures m&y be taken as in¬
dicating a rough I measure of the
^difference in construction activity
as between a period of peacetime
economic expansion' and a period
of
depression.
There
/"•
are
other
some
facts
Worth noting in the
statistical re¬
lationship of construction expen¬
ditures to gross national product,
in 1920 construction accounted for
only 7.7% of the total.
This per¬
centage rose steadily to 12.2 in
1927
for
then fell off, gradually
and
couple
a
of
and
years
then,
precipitously. The percentage re¬
lationship of public construction
to total construction was fairly
constant during the whole decade
My assumption of avoidance of
depression, for at least
10 years,
the similar¬
ity of the present situation to that
is based in part upon
up
Construction Volume and
thus
By
relating
expenditures
product,
to
national
have illustrated in
statistics/ three truths
whose importance is much greater
we
of
terms
than the figures:
\
'
•
-
,
.'(1.)- Construction volume is
lated
what
to
the
economy
afford.
(2.)
re¬
can
v
What the
conomy
can
af¬
ford is measured by its productiv¬
ity.
(3.)
;
,
.
*,
Construction activity, pub¬
lic and • private, is intimately in¬
volved, in economic
expansion, the
activity is part of the expansion,
it produces the physical facilities
of expansion, and its volume is in
the: end limited by the extent and
duration: of the expansion.
If:
we«
care
to
assume
certain
figures:1 representing
reasonable
anticipations
of
gross
national
products in: future
assume
that the
years,
and
to
future construc¬
tion pattern will be
approximately
However, since there was
two-year setback due to price
deflation and adjustment, the net
recovery period was four years.
I
have already stated my belief
the current price adjustment
stabilization
will
be
not
accom¬
by a depression of any¬
thing like, the severity of the one
panied
had
we
1921.
in 1920 and
Many people are currently pre¬
dicting a future depression for the
time when deferred demands haive
been
met.
I
think
these
people
inadequate, comprehen¬
an
in
expand
order
must expand
volumes
tion
living.
to
A
needs
it
and produc¬
standards of
dynamic economy
of activity
and
thrives
survive;
to
to larger and larger
on
and
higher
ventures,
new
new
of
standards
new
its
backlogs of
unfilled orders upon accumulated
blue
prints of potential public
people, not merely
on
works.
was
expected to fol¬
after deferred
up
in
demands were
1924.
happened. Instead of
came
eral
The
a
reverse
greater peacetime prosperity than
the
country had ever previously
enjoyed. Basis of that expansion
was
a
sound industrial develop¬
ment, in which the growth of the
automotive industry and allied in¬
dustries played dominant roles. In
that period, gross national product
was greater than in the preceding
five-year period, and a larger per¬
centage of gross national product
was
expended for private and
public construction. Unfortunate¬
ly,
a
sound growth of basic indus¬
tries
was
tion
of
accompanied by a defla¬
agriculture, speculative
excesses in capital values, and an
unsound foreign policy, which in
combination
produced
the
im¬
balance
that
resulted
in
the
col¬
in
a rough way, without subject¬
ing the results to any critical
study. By this method I arrive at
a
physical, volume of private
con¬
lapse of 1929.
I
do
not
suggest that this pat¬
tern of the 1920 decade is.a sure¬
depression is very much
a
matter
recognizing and correcting im¬
balances early enough to prevent
an economic collapse.
I
would
say
that
the
of whether there will be
question
a
future
three and
struction during the next 10 years
a half times that of the
economic crisis when deferred de¬
mands have been met depends
£930 decade, and a physical vol¬
its
be
one
of
expanding
comparative stag¬
prosperity, of
nation, or depression.
time
fail
that
set
this
at
their
to
order and to
is
bilities
That I
In
sell
to
in
responsi¬
America
expanding
an
assume
house
own
meet their
enterprise,
new
To
people will
our
short.
not ready to do.
am
economy every
every
devel¬
new
answer
upon the
f^r
solutions %e
a
his
difficult
charge
a
to
ness
Federal
transportation all feed the demand
for
structures.
new
ac¬
determine
tor
for postwar
ex¬
rests
in
part
RFC
largely
various
that
governmental
jurisdic¬
tions, Federal, State and local. The
responsibility of industry, business
and finance is to resume its peace¬
services
and
at
lower
lower
and
In considering
the vastness
of the potential demand for com¬
munity facilities and services,'it
costs.
to
that it Is also incum¬
me
bent upon
public officials to see
that
corrfmunity
facilities
and
services are provided with a min¬
imum of extravagance and waste.
It is to be hoped that Federal
will
the
in
minimum.
held
be
future
There
to
a
number of
are a
cogent reasons for this.
The budget now
for consid¬
eration by Congress includes about
a
$1
billion
for
grants-in-aid,
without any
war
or
When
up
depression emergency
programs.
emergency
we
consider that annual in¬
terest obligations of the Treasury
amount to $5 billion, that we shall
have
continued
heavy expenses
for
aid
to
aviation, national
de¬
fense, and veterans' benefits, and
that
we
cation
may
view
and
these
have
new
some
for edu¬
health,
and
programs
public
things in relation to
budget, the present
billions to the shattered economies
of;; Europe and Asia, it looks as if
large-scale Federal subsidies
any
fdf public works would lead us a
lohg way along the road to ruin.
I do not believe our Federal es¬
tablishment
is
prepared, finan¬
administratively, to carry
all these loads plus a large num¬
ber of
dependent local govern¬
cially
or
ments.
More
out by
than $35 billion was paid
the Treasury in direct pay¬
cooperative
ments to States under
agreements and for expenditures
within States for relief and
other
1946.
The peak year of Federal grantsin-aid was fiscal 1939, when such
payments totalled more than $4,400,000,000.
between 1934 and
Grants-in-aid
were
entirely
charged against Federal deficits.
During the fiscal years 1934-1940,
before defense and war spending
started, grants-in-aid for all pur¬
poses
icits
amounted to
thiat
80^ qf the def¬
accumulated
during
turn
sold
the
to
sold
the RFC later
by
facility for state
governments
would
banking
and
local
in
come
handy, at some fu¬
very
munic¬
time of stress in the
ture
ipal bond market.
This deserves
some study by financial
experts.
In passing it is of interest to recall
that one of the functions of the
bureaucracy
French home loan,
make direct
Credit Foncier,
bank
system, was to
municipalities.
loans to
financing
of
Problems
postwar
public improvements will be par¬
ticularly difficult for the larger
municipalities, whose needs for
improving traffic conditions, for
redevelopment of blighted areas
and for expanded services of many
kinds will be very great.
Their
local governments
as it is to
the system of private en¬
problems will be complicated by a
trend of decentraliza¬
continued
Should Pay for Construction With
If
we
are
Federal
going to balance the
and reduce the
will have to pay
public improve¬
postwar
our
ments with real, not phony dol¬
lars; with dollars earned by pro¬
ductive work and paid to our pub¬
lic servants in
It
to
seems
the form of taxes.
that
me
tax¬
local
the taxpayers who
support the governments of the 48
and
payers,
states, will hesitate to send their
dollars to
support
Federal
not
Washington, in order to
overhead cost of a
bpureaucracy which will
the
only prescribe rules and con¬
ditions
which
under
the
money
they
but
solvent,
are
industry and
At the moment they
retail trade.
budget
Federal debt, we
for
population,
of
tion
Real Dollars
going"
are
through the universally necessary
adjustment of pay rolls and other
expenditures to a postwar price
level, which is itself a difficult
They are
adjustment to make.
finding that urgently needed pub¬
lic construction is being currently
their
beyond
figures
at
priced
estimates and their
appropriation.
That, however, is a passing phase.
The
basic problem will remain
after
these current adjustments
made.
are
earnestly believe that the kind
of solutions we find for the post¬
war fiscal
problems of our local
I
governments, the municipalities in.
particular, will have a tremendous
for the dubious
service it per¬ bearing on the kind of economy
and the kind of society we will
forms.
'
have hereafter. I believe it essen¬
Deficit
financing
for
public
tial for the preservation of our
works, relief, aid to agriculture,
liberties, that we preserve the
and other purposes, was resorted
autonomy and independence of
to in the depths of the depression
our
local governments; this we
largely because states and local
cannot do if we permit them again
governments had exhausted their
may
25
be spent, but will; also charge
30
or
cents
on
dollar
every
•
.
financial and credit resources. To¬
situation has changed
greatly.
At the end of the fiscal
year 1944, 34 of the 48 states had
sinking fund, cash and investment
assets exceeding their outstanding
their
day
debt, and total sinking fund, cash
and investment assets of the 48
debt
to
„,
L. W. Smith, Farmer
former
by $633 million. At the same
aggregate debt of local gov¬
had been reduced 20%
for
Smith,
W.
Lloyd
years
the
of
Chairman
and
Head
Weds
Of Harris Forbes,
President
the
of
dependencies
become
Federal treasury.
combined
Harris,
their
exceeded
states
York bond house of
New
Forbes & Co., was mar¬
24 to Mrs. Ethel MerGeorgia of Livingston, N. J.
from the peak of 1933 and 1934,
Mrs. Georgia was the widow of
and further reductions have taken, C. A. Georgia, formerly of East
place since 1944.
Orange, N. J.
Mr. Smith's first
time
ernments
total Federal
debt, and the probable necessity
for this country to advance some
in
were
and
such
terprise.
part on private industry, business
and finance.
Government's role
is
advance
to private investors.
This was a
banking operation of considerable
usefulness at the time.
It might
well be that existence of some
way of
life, to preserve the autonomy and
independence of State
government, in
on
to
to state and local govern¬
which
up,
preserve
governments.
a
ments in exchange for their bonds,
maintaining the American
and
Postwar
for
Expansion
in
authorized
was
money
financial
Responsibility
local
done
rudimentary
in connection with the public
works programs of the 1930's. The
Federal public works administra¬
the others buying lavishly and de¬
cide they might as well get theirs
while the getting is good.
In the
a
and
was
way
spending
or the
political and economic de¬
moralization that accompanies it.
When spenders have no respon¬
sibility for earning or collecting
the funds, it does not take very
long to get the idea that the items
you charge on the bill do not cost
anything.
Those members of the
family who are careful at first see
grows
state
This
of continued deficit
meantime
37,
need to provide credit facilities
for
imbued not only with
the joy of spending for spending's
sake, but also with certain ideo¬
a
demand for new construction.
Each new activity must be fitting¬ logical enthusiasms it wishes to
ly housed in appropriate buildings propagate and with deep convic¬
tions as to the necessity of win¬
suited to its functions. New needs
of families and individuals, new ning the election. I firmly believe
that it is just as essential, for
modes of living, new means of
opment in education, in religious,
social and community life creates
purposes
of
so
demands will
depression grants-in-aid
five-year period of gen¬
economic
expansion
and
a
of
which is worse, the fiscal unsound¬
sion of the dynamics of a free en¬
grants-in-aid, which were resorted
terprise economy. The essence of
to in the depression emergency,
free capitalism is its necessity to
struction volume.
I have done
and
phase of postwar recovery follow¬
ing the catching up with deferred
seems
fire formula for the period ahead.
It does suggest that avoidance of
1920
Sound
that time progress in providing an
and ever-increasing volume of goods
decade,'it takes
only a: few minutes to produce
some
figures for postwar con¬
that; Of: the
relations.
workable solutions to these prob¬
lems will determine whether the
priate roles to be played by our
caught
construction
gross
national
cludes re-definition of the appro¬
low
Economic Expansion
tions, taxes, public debt and inter¬
to the end of 1924, to catch
mands.
family had
is
It
with deferred construction de¬
years,
it took
I
members
count.
six
War
World
After
the
insolvency,
of
verge
all
the
cause
of removing re¬
strictions and
recreating oppor¬
tunities; its responsibility also in¬
Depression
;
pe¬
pansion of the American economy
.
of the 1920's.
recovery
told
family that they might have every¬
thing they wanted at the store be¬
our
Responsibility
Avoidance of Depression
have
f
current
had
immediately pressing
problems of industrial labor rela¬
If this proves to
great many people
a
10.8% of estimated gross national
the
going to be disappointed.
are
re¬
total expenditures for
construction
new
radically
so
of the 1920's.
another statistical
lationship in the 1920-1929 record
that is highly significant.
During
the decade
has
purpose
probable demands for private con¬
period ahead. Pri¬
as
for
lars, whose purchasing power
in
riod for
figures in billions of dol¬
of these
struction in the
vate construction
physical volume in¬
a
in
crease
account
erally recognized
tially, very large.
and
1939,
1930-
the volume of
times
half
a
as
find
the
on
mg
(3013)
in relatively better
May
died
Helen N. Smith,
1944.
wife,
Local Financing
in
September,
While state and local treasuries
are
ried
win
shape than
their total
power
and
birthplace,
Smith
The
1,000-
a
"Boxwood
Hall," at Florham Park, N. J., is
assets,
their taxing
one
of the largest land holdings
their credit resources are small in
in New Jersey and the abundance
comparison with the tax revenues
of old English box wood has made
and the expenditures of the Fed¬
it
a
veritable show place. Mr.
eral government in recent years.
Smith
after
his
retirement
Postwar demands for public im¬
from the Wall Street'investment
provements and community facili¬
field and his directorship in the
ties will be very great.
If the
Chase National Bank in 1931, re¬
states, and, very particularly, the
acre
is the Federal treasury,
local
governments,
are
Washington, it
from
essary
for
shares
of
There is
nized
still
and
as
a
be nec¬
get
national
the
subsidy
may
to
them
iffeet
to
without
demands
these
larger
tax
pie.
need, long recog¬
long neglected,
for
national tax
commission of qualified experts to
make a comprehensive study of
the
several responsibilities and
fiscal
relationships
of
Federal,
State and local governments, and
creation
the
to
recommend
of
a
a
sound basis for
allocating adequate tax sources
to
known
farm,
tired
as
farm
to
his
to
private activities and
collection of over
engage in
hobbies. His
30,000 stone im¬
plements used by the New
and
Indians
ments
of
our
Revolutionary
Mr.
and
col¬
docu¬
first President and
topics is
probably
collection of Washing-
the largest
tonia in
Jersey
Americana
literature
of
lection
his
private hands.
Smith
is
President
of the
Association of New
Jersey and at a cost of $250,000
purchased and gave the 1,000-acre
Washington
governmental units to which site of the Revolutionary army en¬
campment in Jockey Hollow, near
they are appropriate.
•
;It might also be found, after Morristown, to the Federal Gov¬
those
dareful1 inquiry, that 'there is also
ernment.-
-
---
38
CHRONICLE
THE COMMERCIAL & FINANCIAL
(3014)
Expect 1941 Prices With 1947 Dollai!
Don't
Securities Salesman's Corner
of
the hole
By JOHN DUTTON
•]
In
thinking about all this
and
turmoil, I am
vinced
that
if
con¬
Last
week's
mail
brought
he
ended
it
who is
can
all
of Tifft Bros, and
and
work out
is of little inter¬
est to you but I thought you might be interested to know of one
salesman at least, who is not out of ideas."
Well Mr. Perkins, we
not only think you have sound ideas in connection with security
merchandising, but we suspect that your customers and friends
also think
It
to
and
what
"Maybe
I've
that this progressive salesman had been
of his
customers.
These letters dealt with
in
general, such as the outlook for certain
pertinent facts about various securities that
tractive outlook.
writing letters
condi¬
economic
lines
of
industry,
have
now
at¬
an
The burden of
writing personal letters to a grow¬
ing clinetele caused him to suggest to the resident partner that he
might secure the same results through mimeographed digests.
He
offered to spend the time in research and preparation and to make
copies available to other salesmen.
Each month since he started
preparing these bulletins the list of
Other salesmen now find them
valuable.
If you would read some of them you could understand
why they build good will for both the salesman and for Tifft Bros.
Here are typical subjects covered: "A SEARCH FOR VALUE" which
active
users
has continued to
get back
grow.
want.
There is a great deal of mis¬
understanding about the relation¬
ship between money and prices.
ENCE."
is
This
investor
"FORECASTING IS NOT AN ABSOLUTE
written
SCI¬
and
in
style
a
interesting for the
is
that
lay
presents sound reasons why, in the opinion of this
firm, stocks are now in a buying zoner Along with this comment is
presented some interesting well researched data on THE PETRO¬
LEUM INDUSTRY.
On the second page of the Petroleum Industry
short study of two securities namely WELLMAN EN¬
GINEERING and MULLINS MFG. CO.
Another very well done
bulletin deals with "SECURITY YIELDS."
Here is the way Mr.
Perkins starts off: "Money is the most sensitive commodity in the
world, and goes to work for a degree of return commensurate with
risk.
When there is a reasonable spread between the yields on
bonds and stocks so that the latter provide the extra income to
offset the greater risk, the stock market is usually in a favorable buy¬
is
survey
,
axiomatic
is
It
have
cheap
that
cannot
you
and
cheap
time. The very
money
goods at the
same
holding position."
or
between
spreads
stock market
much
was
is presented and the
age return
Then the bulletin points out the closeness
bond
on
and
stock
yields
Now
not
a
way
1941
According
the
to
Bulletin
S.
U.
the
of
A statistical comparison
Barron's 50 stocks is 1.80%
on
200 stocks is 2.00%
greater, than the
"Currently the
says:
summary
greater, and
average return
highest grade bonds, where A YEAR AGO it
0.96% greater, respectively.
was
and
Jan. 29, 1947,
should you be inclined to use these figures.)
At the top
which is also
of the bulletin to the left of the heading is a space
imprinted with the words "Sent with the compliments
of
," where the salesman
rubber
in
8
Also the note
stamp.
size
than
inches.
regular
On
the
paper
letterhead
the
on
the
name
to
lower
send
a
right side.
better.
used by Mr. Perkins
The
This note
clipping to
paper
was
5%
smaller
inches
by
"A personal note from Harry
of his firm and their address is
name
often your
more
customer,
a
measuring
paper,
top left is printed
L. Perkins," at the bottom is the
sign Ips name or use a
can
see
you
your
want
add the personal touch to any
or
included both
deposits in
bank
time
in the money supply at this
when
the
output of con¬
sumers' goods is restricted by
the
delays of reconversion from war
to
time production, it is
really amazing that the prices of
•
products are not higher.
peace
By no stretch of the imagination
it be said that
can
lars
the
are
dollars,
or
our
equal
of
any
of
1947 dol¬
our
1941
other pre-war
top of this is the fact that
we
face
225
billion dollars in the
a
debt since
very
real
increase of
Federal
1939.
short message.
"Bulletins
are
as
well
done
these
as
prospects, to friends of regular customers,
mailing list.
They will
the first time to
the "good
new
see
a
open
the door for
prospect.
can
be
sent
to
those already
or
new
the
on
salesman when he calls
a
They will keep regular customers
will" side of the ledge*.
They will
on
for themselves in
pay
they are used properly. With such
good ideas and the knowledge of investments shown by the writer
of these
bulletins,
we are
quite certain he is
to
sure
be
a
continued
in the investment securities business.
talk
time
,.
and
PHILADELPHIA,
PA. —Kid¬
der, Peabody & Co., members of
the
New
announces
York
Stock
that
Erwin
Exchange,
A.
Stueb-
formerly a Vice-President of
the Fidelity - Philadelphia Trust
Company, has become associated
ner,
with
the
firm
statistical
and
in
ment in
ner
been
research
Philadelphia.
previously had
with
Kidder,
con¬
Peabody
&
Co. when he helped organize the
Philadelphia office of that
in 1934, i serving at
pany
com¬
that
it
double
is a glib and
talk to try to
prices down by official pres¬
business and industry.
''
Prices
of
investment
statistical
research
Following his
status
as
the U. S.
Manager
return
in
advisory
activities.
to
inactive
Lieutenant Colonel in
a
Army Air Corps in 1945,
rejoined the Fidel¬
Mr. Steubner
ity
-
with
Philadelphia Trust Company
which
associated in
company
he
lustration
the
became
1938.
With Harris, Upham & Co.
(Special
to
The
Financial
W.
Argall has become connected with
Harris,
Upham
enteenth Street.
&
Co.,
740
the
value
take a simple il¬
points the fact.
think would happen
"price" of a can
of
beans if you made the can
smaller, reduced the proportion of
and
beans
increased
tion of water?
propor-r
Do you think that
the
economic
increase
would
value
the
or
beans?
the market "price" of the
Of course not. And by the
inexorable rule you cannot
increase the value or the purchas¬
same
ing power of money by increasing
the
quantity and lowering the
the same, time. And
during the past 15 years we have
been doing both to our money.
at
Sev¬
is gold. Gold for
many years has been the inter¬
nationally accepted standard for
appraising the value of, the vari¬
ous paper monies of the world.
on
paper money
prosperity
$35 of American paper money
an ounce of gold, with¬
out a free market where dollars
worth
gold at that
into
convertible
are
ratio.
of
that
goods
find
terms
to
arguing
goods
—
telling
us
ing
and
war
perity,
gold at that price. There can
free markets for commod¬
ities until and unless there is a
be
and national pros¬
In
the
matters
As
stand
is
than
the
now
war
tance
$6,000
amounts to about 40%
burden
standard is
trary price our
of
with
That, brings
me
to
the
income.
its
should'reduce
point the
to
happening in China is
degree, but not in
kind, from what has been going
say
the
It
is
government
increasing
market
you
profits.
raised
she
money
lower
high, and paper money
so
cheap, that she
cannot waste paper by printing it
into
money except
in thousand
volume
not
believe
that
that
our
If
to
the individual, to business or to
rates
helpful
are
either
slow
present so large a part, that they
are
serving actually to reduce
government income by restrictihg
consumer
demand, and thereby
leaving a smaller sum on which
assess
the
tax
rates.
The
cor¬
porate income tax of 38% is an
example. It is so high that it is
gradually drying up corporate in¬
come.
A
stimulate
porate
in
a
lower
rate
instead
dollar
here
would
of restrict cor¬
volume and result
bugger dollar income for the
r
the expansion
our
credits and do not
government money
we
up
presses,
may,
sooner
than
reach the
point where paper will be so high
and our paper' dollar so
cheap,
that we will not be able to afford
seems
one
•
•'
;..
possible
now,
dollar bills.
•"
♦.*
...
The
t*
A.merican, government
should take the lead in
efforts
.
Should Take The Lead
Why We
.
government. The rates are so
high that they defeat themselves.
Taxes are part of all costs, and at
.
.
do not stop
we
of bank deposit
anyone
present
is
dollar bills.
cut volume and
Prices
can
be
to
maintain
so
China
in
profits.
do
of less than $1,000 denom¬
In
other words
white
is
paper
a certain point per¬
when you reach that
point the Law of Diminishing
Returns gets into operation and
the end result is less volume and
up
can
ination.
but
haps,
inflationary
process
where
not afford to print paper
the
lower unit prices and
lower unit
profits. Businessmen
know that when you over-price
reduce
the point in
China has reached
the same practical economic
procedure through which business
and industry increase their vol¬
ume and their total dollar income.
gets
here in America.
on
to in¬
income
way
in
different
by
to
as
index."
What is
Federal *' Government
•
rather,
the
was
arbi¬
dollar has served,
an
international
It Can Happen Here
third
the
This is not to
rates.
tax
tax
gold,
"statistical
step, namely the need to reduce
can
dollar
our
'
come.
that
gold.
since
Ever
pegged to gold at a fixed or
salary and wage in¬
national
currency
by universal practice and accep¬
the one and only universal
first mortgage of
a
against every
family in this country. Everybody
is feeling the pinch and pressure
of high taxes. The Federal tax
I
as
in¬
relation¬
ships. There can be no basis for
such international monetary rela¬
tionships unless there is one com¬
mon standard for all values. And
portance of balancing the Federal
budget so that we can start pay¬
a
functions
also
it
but
ternational
ing off the debt."
debt alone
gold market gold
the standard of
not only as
the statistical standard for all
there
is not much need to stress the im¬
the
free
a
serves
values,
debt
Federal
the
for
As
the
no
free market for gold. ".
personal incentive to get on
job. That is the first
every
while gold is
arbitrary price, un¬
are freely convertible
money,
an
into
have every reason and
we
of
less dollars
destruction, but
for individual
their true economic level in
pegged at
did before. Now
chance to work,
have
we
for
not
a
never
we
as
when
will
commodities
other
all
that
get to work and start produc¬
or
The basic substance of currency
Chronicle)
COLO.—William
include
that
value
quality
DENVER,
must
What do you
■
charge
of the
depart¬
Mr. Steub¬
nected
Assistant
as
charge
Kidder, Peabody & Co.
these
of money. Let's
to
Erwin Steubner Joins
of
maintain the fiction that you can
sure on
business many times over if
success
like
bit
fast
that
to
For
through
In the face of realistic economic
facts
is
Nobody
gold?
values. It is sheer nonsense to say
Business
for Action
A Time
that
how
we
crease
date.
of
terms
or
—
really worth
dollar
our
road
time
more
With this kind of excessive in¬
is
smart
step.
checking accounts.
crease
in
dollars
of
terms
much
had offered us, and we
the
of 60 billions in 1939.
and
in
way
to increase
through production.
no
ever
with
^supply
money
This money supply
On
customers
in handy when
comes
average
currency
Barron's 10
only 0.84%
was
(Date of this bulletin
Moody's
on
on
aver¬
the
ounce.
for American
Tenessee Bankers As-f
that
is
with each
other. The whole world is looking
Re¬
about 168 billions against
the
an
higher) and today.
following
sociation
European black markets
selling at $65 to $70 an
What is gold really worth
some
gold
no
kinds
waste
stated
recently
Treasury
before
official
An
In
re¬
trade.
Money in the economic sense is
the common denominator for all
of 5
pre-war
strains
currency
of the
cause
a
doubt' which
and
enough to figure that out
theoretically,
nor
is «any
one
smart enough to pull a figure out
of a hat and say,'for example,
work.
all
have
the total currency
average
billions.
6
or
an
man¬
is
itself
confusion
_t
28 billion 860 million dollars
against
labor
or
in
American
and
which
are
for
outstanding in December of 1946
was
open and stop
bootlegging of
ing the greatest pent-up demand
purchasing
Federal
the
everybody to
have more we must get on with
the job of making more. It is as
simple as that. Here we are fac¬
all this talk and pressure
reduce prices is useless.
serve
Progress
and
most
in
out
gold
work against them¬
for themselves and
is
is
There
power
to
the
international
the
from production.
except
practical steps to reverse
that and get our dollar back to a
basis
where
it
is
economically
in
market
interests and for every¬
own
There
dollar.
cents
American
help. This is
can
labor
wealth except
take
100
asking
comes,
process
worth
all
body's interest at the same time.
Consumers get their necessities,
and labor,
management, capital
and
government
get
their
in¬
stopped to figure what has
happened to our American dollar
the
of
leadership
their
ever
That
basis
agement to
selves, but
of getting at the
underlying facts of the inflation¬
ary spiral we are in — have you
as
Prosperity
important
things that we as a nation can
do now is for the government to
return to honest money by set¬
ting up the mechanism for a free
gold market. This means that we
should
get a free gold auction
Right there is where labor and
money.
was now
(when
ago
year
a
Make
gold
Honest Money
Markets and
Free
free
a
Among
The
labor
.
ing
production.
,
phrase "cheap money" carries the
implication that all other things
are
high priced in relation to
a
,
.
taxation.
prosperity has been volume pro¬
duction. Nothing can take
the
place of production as a means of
increasing prosperity and of re¬
ducing prices.
r
;
are
bulletin is entitled
a theoretical rate of
Government, just • like
business, can penalize itself by
over-pricing its market.
income, not
Everybody knows we are short
all the things we need
and
of
Money
of increasing the
BORG-WARNER, DOEHLER-JARVIS, LIBBY- quantity and decreasing the value
OWENS-FORD, AINSWORTH MFG., MULLINS, TIMKEN
DE¬ of our dollar is the greatest single
TROIT, MOORE DROP FORGING, and SCOVILLE MFG. Another cause of inflated prices. Until we
Others mentioned
Increase
(4)Establish
Effect of Cheap
with
MOTORS, HUDSON' MOTORS, STUDEBAKER, NASH-KELVINATOR, and MACK TRUCK, WHITE and REO in the truck group.
things
get back
to
Prices
Inflated
The Inevitable
ERAL
own
government
market.
companies indicate
managements, who are better judges of the future than
many so-called outside forecasters, have confidence in the outlook.
Along with these general observations concerning the future out¬
look for security prices, there is comment on CHRYSLER, GEN¬
states that recent increases in dividends by many
order
the
sense
(3) Reduce the tax rates.
together.
during the past 15 years? It has
increased in quantity and reduced
in
value
until
today our 1947
dollar even by the most optimistic
appraisal cannot be
valued at
more
than 60 cents as compared
that their
in
And in a practical
important thing for the
is the actual dollar*
government.
Now
(2) Reduce the Federal debt.
solid ground
on
the job
Steps
Take
feet again are these:
our
(1)
sent you
so.
seems
some
tions
thusly:
an
getting and present¬
real economic facts we
the
Harry Perkins
from
note
a
member of the sales staff of the Hartford office
find
can
must do
we
on
approach to
ing
a
we
Should
We
The four most important
con¬
fusion
Harry L. Perkins of Tifft Bros., Hartford, Conn.,
Has the Right Idea
That
are
we
in.
==^====E====
Practical
Four
(Continued from page 2)
ourselves out
Thursday, June 5, 1947-
to
reestablish
market—and I
mean
practical
free gold
free even to
a
Americans.
Our whole
built
on
—and
for
modern economy is
the basis of free markets
that
means
free
markets
everything—gold included.
the reopening
would cause
price
flurries.
Prices of
some
things would go up—while others
would go down. And that would
be healthy — because it would
be the first practical proof that
we were on our way towards re.
Unquestionably
of free gold markets
•
.Volume 165
Number
THE COMMERCIAL
4600
& FINANCIAL
CHRONICLE
(3015)
establishing
honest
between money and
gold on the
hand, and between money and
The Financial Outlook
one
products
the
on
Without
without
other.
honest
realistic
tionships
monies
(Continued from first page)
international viewpoint, wide par¬
and
money,
,
economic
between
v
of
rela¬
the
terms of
.endangered..',.
is
.
the
inescapable
It
and
impartially adjusts
values to each other
in free;
all
is
the
.functioning
one
of free markets.
How should we do this?
make
us
it once
as
dollar
our
was
let
—
.American dollar
dollars
or
.actly what it is
worth
-and open market.
of
commodities
and
in
level, without subsidies
higher than they
war.
We
are
Just
.
as
we
on
«,
market
would
go
is
that
down,
with the
honest and
an
tionship
This
it
net
would
result
for
a
go
that
reestablish
confidence
would
and
industry
over
the world to
plan with
enable
governments
and
business
all
con¬
All of us—and I
us—
developments. Most
disregarded these
outside
influences
gave
a
and
new
brighter
for
all.
No
amount
of
of America may over
•basis
result
as
a
on
of
Domestic
will
and
get
our
international
on
its feet
•when world markets for all
com¬
modities
are - free
to
establish
values and prices.
know, we
public debt, a
managed
money,
in¬
managed
a
trade, and, in several
credit have
twined
that
viewed
as
of
our
become
money
inter¬
so
they
have
to
single problem.
The most important
tion America
'the
world
can
back
contribu¬
make to
to
help get
constructive
Work, economic progress and
po¬
litical peace is to
go through with
a realistic
program to:
(1) Increase production.'
(2) Reduce the Federal debt.
(3) Reduce the tax rates.
(4)
Establish * a
free
*
market.
a
Of
course, it would be better if credit
control
could function with an
single to the needs of business
rather than to the
policies of the
eye
Treasury; but
our
method
of
fi¬
nancing the
war puts such an aim
the category of wishful think¬
ing.
Added to thh necessity of
handling
our
and our debt
have
now
tion
of
gold
With Marache,
Sims, Speer
(Special to The
Financial Chronicle)
L.
staff
ANGELES, CALIF.—Rob¬
Lindstrom
of
of
the
has
joined the
Sims & Speer,
Marache,
Spring Street, members
458 South
Los
change.
Angeles
He
was
the First California
Stock
Ex¬
formerly with
Company and
R. F. Ruth & Co.
the
/
:
Helton"
Hull & Co.
LOS
win
ANGELES, CALIF.
Page
has
become
—Ed¬
associated
with
Holton, Hull & Co., 210 West
Seventh Street, members of the
Los Angeles Stock
Exchange. Mr.
Page was formerly with- Marache,
Sims & Speer and in the past with
White, Wyeth & Co.
in
of
should
you
great
a
take
the
banking precautions
credit policy,
your
more
the
Has
Recession
view of these
trimmed. Your great Senator Byrd
no
longer a John the Baptist
is
crying out in
traditional
of
tightening
reducing
your
His mighty labors
patriotic courage in spear¬
heading the drive for government
economy are at last bearing good
fruit.
that
as
In
I
the
of
a
venture
to
say
record his efforts
greatest
contribu¬
liquidity, reducing
your
real democracy made
by
Democrat in modern times.
We can, also, look ahead to
reduction although how
expansion, and establishing
I
reserves.
extent,
this
say
because
severity and
rapidity
brought
Started?
fact,
history will
one
tions to
your
credit
in¬
wilderness of New
a
and his
ing
extremely fa¬
I think, is
reason,
encouraging. For example,
budget is not only
balanced;
it
is
being
Federal
being
valuations and
appraisals, increas¬
credit expan¬
consumer
ax
the
duration
Costs
High
Can
Be
some
much,
one
no
of
will depend on the
with which prices are
into line with
purchasing
can
say.
The
monetary authorities have,
the
time
being,
at
least
for
stopped their $200 million weekly
redemption of Treasury bills. The
power.
redemption of these bills was, as
know, designed to narrow the
Cut
you
credit
prices -and
base.
It
deliberate
what I call
the evils of
over-employment are
the principal economic
a
and the
ments which need correction.
ties to prevent government bonds
effort
maladjust¬
clining prices causing
very
controlling
and
money
both
naval
national
in
and
change
In
De¬
was
a
the part of the Treasury
on
Federal Reserve authori¬
some unem¬
other*, goods
of
is
of
running at
$180 billion
a
a
the $82
1929 and
nearly four times the
$46 billion of 1933.
activity in March
Manufacturing
was
running,
quantity basis, 55.6% above
World
were
2.23
peak
War
recorded
II.
the
Moreover, the
output
1935-39
showed
an
on
the
to
goods
rate of
executive's
an
the
controlling factor.
In
event, the change in policy
A little
will
change
ideas
as
what are business necessities and
what are business luxuries! Busi¬
my
any
re¬
the pressure from
govern¬
bonds.
moves
to
ment
Commercial
that $2.00
ness
Loans Will Increase
efficiency necessarily deteri¬
starving orated during the war when vol¬
Looking ahead, I think it safe
ume
became
the
line, but that
sole criterion to say that commercial loans will
the prices of the things the farmer rather than
economy and
effi¬ increase in volume after we finish
has to buy are outrageously
high; ciency of operation.
I mention our little inventory—price shakeand so it goes, state after
state, these things because they indicate out.
Savings deposits will con¬
industry after industry, and indi¬ that there are costs which can be tinue to increase
but, of course,
vidual after individual. Obviously, eliminated. No matter what
at a much slower rate than in the
any¬
when men feel that all prices are one tells you, costs can be cut and
past. The total of demand denostoo high except their own, they will be cut.
Also, abnormal profit its will hold up much better than
will ''slow up buying until prices margins will
return
to normal, many people think.
Treasury re4
and
me
$3.00 wheat in
a
come
in line with their
more
and in many cases to less than
normal.
Reduced costs and lower
profit margins will permit effi¬
cient producers to lower prices
This
has
happened
already
in
most soft goods
lines and is par¬
ticularly noticeable in jewelry,
cosmetics, women's wear, shoes,
nylons, frozen foods, canned goods,
etc. Even more important, it has
happened in the building industry
where
consumer resistance
construction
the
prices
government
number
will
of
be
has
to high
of
private homes,
started
this
the
which
from
year,
Furthermore,
in general is far be¬
low expectations.
High Level Inventories
more.
pick
the
of the volume
some
winners
in
the
bitter
competitive struggle which lies
ahead. Remember: Prices are go¬
ing to
down
come
producers
and high cost
inevitably will suffer.
We shall not, however, despite
many
have been saying,
have a repetition of 1920. We have
what
to
moved
likewise at high levels,
markdown sales have been
and
drastic and widespread.
Undoubt¬
edly, the inventory boom is over.
are
being canceled, fail¬
ures
are
increasing, and unem¬
ployment is beginning to materi¬
alize, here and there, on a local
Orders
There
scale.
are many indications
necessity of a thorough¬
going price adjustment. Beyond
question, many prices have outrun
of
the
higher
a
standard
of
is
of
billion
1946.
greater
credit.
annual
in
is
peace¬
and
power
liquid. wealth
current
of
current
in
be
purchasing
assets
which
quickly converted to effec¬
the International Bank for Recon¬
struction
to
make
such
demand
effective.
economic situation which
savings from
$33
a
to
$16
billion
in
indicated
factors
which
consumer
by
I
could
managerial initiative, a
ingenuity, and
large measure of old-fashioned
dash
a
our
little
of
that prices have reached the point
The
other
countries.
All
in
the
all,
deposit outlook is quite favorable.
In
conclusion,, let me repeat:
Competition has returned: high
cost
producers will fall by the
wayside; but, low cost producers
will reap the profits reward on
their
also
production volume and
own
the
on
volume
they inherit
from
producers who cannot meet
the tests of peacetime competition.
Bankers
will
once
have
more
opportunity to exercise bank¬
ing ability and credit judgment
an
in
the
selection
and
the
handling of loans already
on
the
books.
largest
So
,
far
of risks
as
their
asset, government
American
will not
cerned. banks
the
have
field
effort
and
hard
work
of
government
E. F.
Gillespie 8 Go.
Adds H. Cox to Staff
Harry T. Cox has become
cure.
ciated with E. F.
n
Economic
Situation
Proof of the
our
economic
nished
by the
finance
bedn highly favorable.
American
many
•
I indicated
as
bonds, is. con¬
are in exceptionally
tive demand for goods. We have
good shape. There is nothing to
a
worldwide demand for goods,
worry about in this connection; in
particularly food, and we have fact, all recent developments in
can
earlier,
;But,n' why Tabor the point?
extremely large EverjPrhan in this audience knows
Employment is at
enormous
shape
with
drop
in the volume of
It
the
the
This
power.
This is indicated by the in
statistical
cite.
1945
have
in
purchasing
indicated by the
rate
logs of unfulfilled past wants. We
have price floors under the prin¬
cipal agricultural products.
We
And, above all, as I said
there is nothing wrong
current
crease
Retail
are
demption on the grand scale of
the last 12 months is over.
Loans,
before, will, after a
begin to expand once
unemployment and
of the high cost producers who lower
prices, which are now ma¬
cannot meet the strenuous compel
terializing, should start a return
tition of peacetime.
This means flow of currency to the banks.
bankers must be very selective in Likewise, deposits should be in¬
all credit operations. Be sure you creased by an inflow of
gold from
reduced
estimate
few months,
and take over
ex¬
pectations.,
factory
index total,
1935-39, of 334.5.
trade continues in
volume.
even
an
on
average,
value of the
increase, reaching
based
prior
Durable
being produced at the
times
eliminated.
adversity
many
prices
too high;
are
Ohio friends assured
corn
tories
which is more than twice
billion of the boom year
year,
the
fact,
briefly analyze the
income
that
be
can
economic
Inventories, especially manufac¬ living. In addition to the great
exercise
turers'
inventories, are at high reservoir of future wants arising
on
debt
levels.' Department store inven¬ from this change, we have back¬
influence
excess
but
construction
a
economic side of the
problems to
some idea
of where we are
and whither we are bound.
The
rate
stores,
debt
management.
us
which
four times those of prewar for
or
1,500,000 to 750,000.
get
of
insisted that current costs of
pro¬
duction warrant price levels three
complica¬
economic conditions will
a
(Special to The Financial Chronicle)
possibility
The
principal message I have today
For a
long time to come,
highest
With
one
further
fitting
Now, let
LOS
as
the
credit
problem, we
and
money management to
in economic conditions.
a
We can't have 1941 prices with
the 1947 dollar!
,
ert
money
is this:
"
basis,
backlogs of
Now, let us turn to the purely
financial side of your problems.
Here we find the picture much
Deal spenders.
Well, first, by closely observing
the behavior of
prices, you your¬
self can judge the extent to which
factors, why has' a reces¬
Why are some men
we may have a
repe¬
tition of the 1920 break, particu¬
larly in agricultural and land
prices?
be
in
;
about these adverse economic
developments?
quantitative
a
substantial
down!
individual banker
easier to sell!
world are not out of
management
and
the
back
is
the
in
sion started?
de¬
respects,
a
managed
economy.
Management of our public debt
and
free op¬
erations of economic forces in
free
and honest markets.
trade
a
managed
honest
an
national
Managed Economy?
ternational
talk—offi¬
get
system
and
kept in mind.
have
—
'monetary
level
are
an
vorable
financial
and
A
otherwise
will make our
1947 dollar worth as much
as the
1941 dollar. But we can
or
the
anything
worried that
As you bankers well
-real, not make-believe,
prosperity
cial
on
Why
,
international
be
of
era
do
can
quality, wartime
linger
on
the
products
shelves, but good merchandise,
decently priced, has never been
this recession
In
up
velopments. The controlling ef¬
fect of these outside
developments
on local conditions
should always
can perform no
greater social, po¬
litical and economic
service to
America than to
bring pressure
to bear on our
representatives in
Washington to get on with this
basic job of
restoring an honest
'monetary system as the beginning
of
declined,
above
are
the
is
smallest,
the fundamental
character
underestimate the local impact
or
of
all of
mean
soft
international
on
look
A Job We All Must Work At
•
What
people have more than $150
billion in liquid assets to back
up
these demands. In addition, there
banking business in the early
bankers
fidence.
,
for
ersatz
if
even
fact, outrun
the consumer
literally
True,
are
consumers.
.
stability
•and
demand
And
in
So, gentlemen, the die is
cast; the bets
goods;
by
poor
from going higher
and, at the
homely, down to earth one. In ployment will do more to increase same time, to
were
discourage a con¬
magnified—yes, multiplied Kentucky, my friends told me
the productivity of those remain¬ tinuation of the
very rapid expan¬
many times—in World War II and
that, considering the costs of pro¬ ing employed than
its aftermath,. Our economic des¬
anything that sion of commercial and real estate
duction, the price of burley to¬ management can do. When men loans on the part of the commer¬
tiny is now truly subject to many
bacco is about right, but that other can too
easily shift from payroll cial banks. Whether the monetary
elemental forces over which we
prices are too high; in Georgia, I to payroll,
have but little control.
productivity is bound authorities feel that these aims
Banking was assured that the
prices of to suffer.
is more under the control of these
Competition for the have been fully accomplished or
cotton and peanuts at three or available
jobs will increase the whether they have changed the
basic forces than
any other seg¬ four
times the prewar level are average
output per worker in most policy because of the uncertain
ment of our
economy.
economically justified, but that lines. Also, we must frankly face economic outlook, I, of course, do
In the period of
change we are prices, in general, are far too
the
not know; but I suspect that the
fact
that
high;
there
are
many
now
entering, I am concerned that in South Carolina, they likewise wastes on
immediate economic outlook was
the part of management
the
rela¬
established.
be
make
credit.
can
changes
largely initiated by World War I,
prices
would
95.1%
unprece¬
durable
hurt.
not,
prevails despite enormous
liquid assets and the possibility
of a great expansion of consumer
everything, es¬
pecially housing, and the Ameri¬
credit
of
the
even
bank
who
nomic
functioning
would
would
some
others
up,
an
for
off-brand,
which
demand for nearly
Now we have World War II
back of us; I might even
say .that
we have it on the books!
The eco-,
went
.plateau after World War I.
What would happen in such
free
Put
there
The stock market
thirties!
higher plateau.
to
a
higher
a
of
national
the
before the
were
risen
is
they
had
products at fair prices
fought
purchasing power,
has a deep-seated conviction that
they have, and that is what counts.
There is a psychological resistance
such
sion.
basic
end result would
be that prices would
be somewhat
.
mechanism
unit
bankers
Naturally the
:
commu¬
crease
and
and with¬
monopoly either by govern¬
ments, private monopolies or labor
organizations.
.
local
own
exchange.
local,
out
the
has
far
pendence
free
a
while
1929, the worldwide mor¬
atorium of 1932, and the depressed
prices of the thirties taught, in
ruthless economic
fashion, the de¬
Then let prices
their
own
have
There
consumer
goods
crash of
ex-
decline
a
of
past.
ternational
find
•
and,
changes inevitably meant
nity.
for
called
ways
where
prices
1
that
dented demand for goods, partic¬
First
as
has
consider
sharp
a
1939.
still
.
gold
banking Gardens of
solely to their
good as gold.
Let us set
up in New York a free
.market where any
money in the
; World
can be
bought and sold in
.terms of
to
houses
new
since
that bankers could no longer con¬
fine their attention and concern
make the
us
on
Whether they liked or no,
they had become a vital, integral
honest
part of the great national and in¬
as
Truman
high
had in 1920.
we
ularly
These
so
Prices of old
houses have reached fantastic lev¬
els, and the prices of construction
Eden.
country in position to take leader¬
ship in reestablishing the free
let
int othe
came
as
Prices of farm
soared
President
capital markets and the be¬
ginning of widespread expansion
of security holdings, particularly
government bonds, were some of
the
"apples"
of
change which
•honestly
'topen markets.
i
The United States
have
conference
the
and Demand
regulator.
record levels.
and
sharply increased participation in preventing
•
The Law of Supply
time
ticipation in the great money mar¬
kets, national and international,
various
in
the world
free gold and
money and product
markets, all other freedoms are
,
39.
relationships
Sound
basic soundness of
situation
way
is
fur¬
Inc.,
37
Wall
City. Mr. Cox
asso¬
Gillespie & Co.,
Street,
New
York
was
formerly with
Amos Treat & Co.,
specializing in
good quality j industrials.
40
THE
(3016)
dur¬
It seems to
therefore, that these particu¬
governmental programs have
me,
lar
to all concerned,
beneficial
been
and that the program
of "Bond-a-
about Month," which starts on June 1
essential that the citizens can likewise be beneficial to us,
that, it is
better
become
country
this
by bringing more people into the
bank, getting them acquainted or
better acquainted with the bank's
of
acquainted with the activities
government. They have more
than a duty of just going to the
polls and voting for a candidate
whom they like. They have a duty
to follow up and see that when
that
followed to-
since and are
That
day.
is
Savings
mam
of
continuation
suggestion made
the
ury
times today that the Treas¬
should fund its short-term
debt
by offering a long-term ob¬
many
This seems to be on the
ligation.
theory that the short-term debt
is too large and that the Treasury
should relieve itself of the re¬
sponsibility of constantly turning
debt
over
each
year,
or
oftener in the case of Bills.
In
this
rely more on you and your of¬
ficers
for
financial
advice;
it
my
to
during such a period, debt reduc¬
tion could be postponed and a tax
based
studying \thei President's ;>report$
on economic conditions which are
reduction
amount
the
that
be
automatically by some for¬
in with economic con¬
mined
tied
mula
might well tie in with the whole
budgetary and tax policy of the
Government.
It would be a fine
person
matter
in
can
be
ers
are
is much more interested
project in which he has his
invested than in one in
a
morey
which he has
financial interest.
no
the
during
who continue
those
tional securities as they are
issued
Treasury
(pri4
Savings Bonds are on con¬
tinuous sale), have a very definite
watching the affairs of
Government to see that nothing
interest in
is
done
that
by
in
interfere
it.
They
am
relied
have
financial
well
as
upon
advice.
that by advocating and
sure
promoting the Treasury's program
r* ''BondnAr-Month," you, as lead¬
ers
in- your,- community; will be
performingm\real service to your
institution,
own
public service to
to the
and
,You
also
and
your
a
ever
remember
icies
force
in
program
of the veterans.
accused
was
of the
respect
with
its
would
into
be
boon
busi¬
this
interference
an
ter of fact it turned
greatest
in
action
private business.
had
benefit
government
going
As
a
mat¬
out to be the
insurance
that
taken
to
try.
place in this coun¬
More than four million men
had
become
ever
Likewise
14
or
in
insurance
World
15 million
II,
and
be
the
funded
investment)
permanent
more
non-market
applied
be
to
have
would
or
security issued so
a
as
prevent the shifting of shortsecurities
from
non-bank
sources into commercial banks in
to
term
funds with which
to subscribe to the long-term se¬
curities.
Otherwise there would
be no sense to any such funding
order to acquire
Furthermore, when the
program.
securi¬
Treasury issues long-term
be
humanly
is
it
as
should
it
ties
satisfied as far
possible under
circumstances that these
securities will to a large extent
remain in the hands of the origi¬
nal
subscribers
and
that
they
would not be dumped on the mar¬
present
ket
periodically
interest
the
as
investments for the benefit of in¬
dividuals.
some
addition
In
are
corporations
other
many
there
and
funds which hold government se¬
curities
benefit of
which
crease
investments
as
for
the
individuals, the total of
substantially
in¬
would
But the Treasury certainly
justified in offering
loan).
would not be
These
individuals, and there
millions
of
them,
women
own
a
long-term
whatever
risk
add
a
are
share of
I
them.
to
Savings Bonds, to the extent the
receives excess funds
their sale,
the short-term
is being
retired from t^ie
Treasury
from
debt
banks.
commercial
So there
is. a
going on con¬
I know it will be said
program
tinuously.
that this is funding
into
a
demand
obligation, but I think if we will
look at the
12-year record, we
America, and that" ownership is
taught the value of in¬ in a
type of security which meets
by their government. The their investment needs as near as will find that Savings Bonds have
insurance companies,,
stood the test of permanent in¬
I believe, the
Treasury could provide it in
are doing a greater business, due
vestment fairly well.
Individual
line
with
the
overall
policies
In part at least to the activities of
ownership of the debt is slightly
adopted to govern war financing.
government in
this field, than Two
larger today than it was a year
very
important policies in
they have ever done before. And Public Debt
ago.
Management were
so
it has been with the Treas¬
I
would
like
to
say
a
word
laid
down
when
war
financing
ury's
Savings
Bond
programs. started—and I must
about a sinking fund to be ap-.
say at this
Don't get me wrong. I am not ad¬
point that Public Debt Manage¬ plied to debt reduction, which is
vocating government in business ment had to
a
part of any debt management
begin right at the
by these statements. These were moment war
Debt reduction is de¬
financing got under program.
strictly governmental affairs. But
way.
The first ; policy was that flationary. A sinking fund should
the Savings Bond programs have
the debt should be so constituted therefore be made to operate so
have been
surance
instilled
the
habit
thrift
of
into
as
the
minds
of
millions
and those programs
of
people,
have demon¬
to fit
group,
strated to them the benefits to bet which
derived
from
banks, have
programs
"^Ollars
of
such
habits.
benefited
too. .While
by
The
these
billions
of
^a^ings Bonds have
as near
essential
as
needs
of
practicable the
each
investor
widely
the
.been
as
to
effect
of
the
have
as
possible
people.
-
Those
rstrictly
3
among
policies
all
of
have
nation.
good
On
rals.
are
f
*
*
ft*.*
beneficial
or
boom
retire
times^ or
the
other
hand
spi¬
if we
depression,
reduction at. that, time -plight.
in
the midst of a
*
:; s:,
*
most
We should
during periods of inflationary
adhered. 4o> ever:! debt
" u—
'
the
the economic conditions
on
and
the
second
policy
corollary to the first is- debt in
is
that the debt should be spread as
those
responsibility to do all we can to
help guide and implement sound
fiscal
policies.
It is therefore
our
duty to back the "Bond-aMonth" program of the Treasury;
by endorsing it, advertising it,
encouraging
our
customers
to
participate in it, and by provid¬
ing the machinery in your banks
whereby it can function success¬
fully. You gentlemen did a mag¬
nificent job during the war sell¬
ing Government securities to the
public, and one of which you may
well
be proud.
But the job of
managing the Public Debt will
be with us continuously for a long
sur¬
of $22 and $25
billion, as the case
might be, and the revenue of $28
billion
would
debt
If the national income
reduction.
increase
should
for
used
be
beyond the
basic
$140 billion," the Treasury would
automatically get more revenue
and likewise there would be more
surplus available for debt reduc¬
tion.
On the other hand if the
would
annual
the
country, and its
would
amount
reduction.
gear the amount of
sinking fund to the
of the
economy
debt
less
and
revenue
This
income
there would be less
figure, then
of the
and we just can't
come,
the program^
Treasury, nor can
stop
we
suoporting them in the immediate
future.
We must hold ourselves
in readiness at all times to help
in
the Treasury
can
any way we
vital
and
tremendous
its
in
un¬
dertaking of Public Debt Manage¬
ment. I am sure that the Treasury
continue
can
to
the future for any
count on us in
service it might
able to render just
it has in the past.
think
as
are
we
Taft Lauds Tax Out Plan
(Continued from first page)
today in the United States,
ation
30% of the national
a
serious burden on
individual and every busi-.
practically
income, is
every
ate
can't oper-i:
A free economy
ness.
all
desirable step
further
a
to
stop now supporting
successfully with such a tre-4
Everything ik
automatically mendous burden.
be
determined.
"As
time
decline
national
basic
the
below
should
income
national
advice, have a* deep
for financial
plus revenue representing the dif¬
ference between the expenditures
this
in
right
going
long
as
prices keep
as
but once inflation
up,
stops
program
,
quickly and it would lose
to work
much of its effectiveness if it had
to
while
the
country
lower
and
lower
sion.
into
a
the
expenditures. >1 dont believe
the
and
President
this bill,
depres¬
definitely
and
{
a
on
the
back
hold
govern¬
such
with
their programs,
on
should be
kept
current.
programs
formulated
and
Then if the tax
reduction program
sufficient
not
necessary
forward
proceeding,
for
plans
although
is
local
should be encouraged also
ments
to
and
state
to
provide
the
to, veto'
him'.;
high expenses.
tion of tax
up
and
afford
the side of high taxes
"Furthermore,
works progam should be
during prosperous times, peculiarly
public
held
can
because it would put
sinking
part of this overall policy,
much as possible of our whole
As
as
was
downward, the lower we can keep
Con¬
subject,
the
debated
the
while
months
wait
gress
might
through the medium of
that
funding
this percentage.
The
sources.
of
ans
billion in
including receipts from
miscellaneous
to
de¬
We, as bankers, the custodi¬
the people's money, and
to whom the people look
ings.
$28
revenue,
and
holdings
the commercial bank hold¬
it would be ex¬ a tax burden of this kind might;
tremely helpful if the Congress turn a slight recession into a seri¬
could adopt some method of re¬
ous depression,"
the Senator de¬
ducing taxes automatically when
it definitely appears that we are clared.
"All the spenders-want'to keep
heading into a depression. A tax
individual group. It has been es¬
reduction first under such con¬ the tax receipts up to $40 billion;
timated that they. havec an aggre¬ ditions would in my opinion be
in order to maintain a high stand¬
gate oi about $129 billion in .cur¬ the best and most effective stim¬
rency, checking and savings
ac¬ ulant' that could be offered. To ard of government spending. The
counts
(including
savings
and be most effective it would have quicker we can revise our sights
marketable security
hands of individuals, or indirectly to this group when the Savings
in their hands by being owned by Bonds, continuously on sale, ad¬
meet
the
investment
private financial institutions and mirably
governmental trust funds which needs of a large majority of its
are
holding those obligations as members, and without any market
is either directly in the
standing
conscious.
War
men
be well to point out these
figures and show that 54% of the
total Public Debt obligations out¬
insurance
for the
The
of
that
and
ness
its
continue
to
adopted in financing the war
managing the Public Debt,
it might
criticisms during and after World
War I when the government de¬
cided
investor classes, it
and in
real
customers
some
rep¬
hear anyone criticizing
authorities for the pol¬
you
fiscal
the
public in general.
can
segments
the
by
opinion
should
make every effort
their
increase
crease
thing, it seems to me, if Congress
could adopt some formulas under
which certain governmental poli
cies could automatically be
ad¬
simplify,
the
problem
curve
fluctuates—in other words
some.
For example, individuals
be satisfied that they reasonably
now
own
about $65 billions of
represent permanent investments.
the debt or about one-fourth of
If they did not represent perma¬
the
total;
insurance
companies
nent investments,
it would just
own
about $25
billions; mutual
create a continuous market prob¬
savings banks own $12 billions,
lem for the fiscal authorities.
and government trust funds own
There is one group that con¬
about $31 billions.
I won't break
them down any further, you are tinues to have an accumulation of
familiar with them.
But when¬ uninvested funds and that is thes
for
you
other
as
debt is
would
method you have brought numer¬
ous
customers
into
your
bank.
I
into
down
various
the
of
this
By
if the
Possibly
amount of gov¬
ernment securities owned by each
h*ve preached thrift and the bene¬
fits to be derived by the individ-
practice
only helps to complicate the
resented
Here is where you bankers can
who
Public Debt of close to
a
broken
the
help further.
Here is where not
only as bankers, but aS citizens,
you are interested.
For years you
tra's
collateral
improvement
public relations.
picture..
investment.
soundness of their
*"
with
way
Now
this
to
Government
any
some
$260 billions is hard to grasp. To
emphasize its magnitude, I remind
you
that there have been only
slightly more than one
billion
minutes elapsed
since the birth
of Christ.
But a truism such as
buy addi¬
from time to time by the
get
they
in their
and
war,
to
truly said that the bank¬
leaders in this field.
Of
course,
ernment securities which he or she
purchased
I think it
benefits through an
individual citizen
to hold the Gov¬
Therefore, the
who continues
concerned.
was
partici¬
and to
tors
sinking fund policy
The
ditions.
encouraging.
job before us at the
moment is to keep this huge debt
in the hands of non-bank inves¬
the
But
deter¬
of the
Advisors.
step in the right direc¬
a
tion and is very
me,
should
created
fund
Economic
of
This is
therefore,
of any sinking
to
seems
in¬
adopted
program
It
findings
the
on,
Council
short-term debt justed to current economic condi¬
into long-term
tions. Suppose for example (and
pants and also to the community debt only when there is a suffi¬ the amounts stated here would
lows the mandate of the people,
in general.
cient accumulation
of funds in have to be fixed after careful
and that he advocates the course
During my career in the Treas¬ the hands of long-term investors study) that the Congress should
of action which is in the best in¬
to
justify an operation of this lay- down a national budgetary
terest of all of the people, and not ury it was my good fortune, par¬
kind.
I have seen no statistics
just a few. In order that each cit¬ ticularly during the past 20 years,
policy placing an overall limit on
that show any large accumulation
izen
annual Federal expenditures
of
may
discharge
that duty to work rather closely with Amer¬
ican- bankers. I came to the con¬ of uninvested funds in the hands sa.y $25 billion, or better still a
faithfully, he should keep gener¬
clusion a long time ago (and I of insurance companies and sav¬ range of $22 to $25 billion, leav¬
ally acquainted with the national
ings banks, and they are the main ing some room for unexpected
budget policies and particularly might add long before I became
institutional
sources
for
funds
those that' concern
public debt a banker) that if you could con¬
programs which would have to
which could absorb any substan¬
be adopted from necessity.
management, and he should be vince the bankers that a thing
Then
tial volume of long-term sscurigenerally familiar with all gov¬ was good for the community in
adopt a sound tax program with
ties.
In any funding operation of
ernmental
such
administrative changes as
procedures
affecting general, you never had any diffi¬
this
kind,
restrictions on
the now seem desirable, which would
the
business
of
the
nation, culty in getting them to put their
availability of funds (and I don't raise on a basis of a national
which
in
turn
have
an
influ¬ efforts behind the movement,
mean those funds temporarily in¬
ence
on
his
•income
of say $140 billion, an
employment
or have never found them altruistic
in
certificates
awaiting annual sum of
on
his
individual
business.
A when a .government or a civic vested
would be beneficial to the
provision for receiving and
made-
stead.
Bond program.
hear
You
the
of
one
the
for
reasons
the
officers, and thereby getting them
elected he fol¬
is
candidate
that
,
billions
by
increased
ing the same period.
will, make no mistake
and it
of
knows
deposits
time
individual
have
what the
debt is, and what it means to the
community.
As our Government
grows and becomes more compli¬
cated with the passing of years,
citizen
these programs,
under
sold
been
your
each in¬
esse^ual, therefore, that
dividual
possibly be a deterrent to recov¬
It would in all probability
be far better for the country if
ery...
Responsibility in Debt Management
being
Bankers'
(Continued from page 5)
Thursday, June 5, 1947
COMMERCIAL' & FINANCIAL CHRONICLE
gress
determina¬
the
policy has always been
the function
and the House of
tatives
just
function
The
President.
policy is
foreign
as
the
peculiarly
Con¬
of
Represen¬
of
the
ought
President
bill unless he re-
not to veto this
j
threat tok)
gards it as a dangerous
which i
the welfare of the country,
stimulant, we could go
it obviously is not," the Senator^ j
the delayed public
with
'I'Kuu '..di: ;;d
works program. From the stand¬ said.
;•
lj-_
1
fl
point of the taxpayer, depression
periods would seem to be the most
favorable
time
for
proceeding
bjfc
f i
with these public works programs
because they would be carried on
during a period of lower prices,
and at a time when they would
Kidder, Peabody &. Co.; 17
»
.
1
'
I
•
,
fL
W.Frank Harlow Now
'
With Kidder; Peabody
Wall|
country
Street, members of the New Ybr^ji
standpoint,
of economic conditions. But I ami ^tpek. Exchange,.. anno^icps' that
afraid even if Congress were will¬ W. Frank Harlow has become ass"o-»
be most beneficial to the
as
a
whole
from
the
|j
ing, we will have to have a more, ciated with the firm.,.. Mr. Harlow ;
peaceful
atmosphere
could adopt any
this.
before
it formerly had been with. Lazard,
Freres &-. Co which vfirm he. be¬
such program as
Yet great progress
made
during, the
wards
long-range
past
has been'
year
planning.
to¬
The>
Congress has reorganized land has
-
.»
came
associated with in 1943 fol?
lowing
a,
General
v 4*;
#5. v •.
12-year association
American Investors
Vf
T
.<■
vy v
with? jl
Co., ]
[Volume 165
Number
4600
THE COMMERCIAL &
FINANCIAL CHRONICLE
rencies, using gold only to settle
The Outlook for Gold Mining Stocks
international
Through
price
of
gold
in
this
relatively
unimportant,
since specie payments have been
abandoned in the principal coun¬
tries of the world, gold still is the
means
of
settling international
obligations, and no really prac¬
tical substitute has yet been de¬
seem
country.
Under the Gold Reserve Act of
Jan.
30,
1934
the
-gold dollar
at
weight of the
fixed by President
was
<Koosevelt
15 5/21
grains
of
gold 90% fine, i.e., 13.71429 grains
pure gold. This action estab¬
of
cies
$8.8
eration.
'
Higher Price for Gold?
There is
jthe
gold
perennial rumor that
of the United
a
has
this
expectation .look
for an in¬
in the price within the next
five years, especially if
crease
four
is
gold
a
as
•Currencies.
|
A good statistical
argument can
be made for; a higher gold price
two
are
sential elements that
On
es¬
the
other
control
the
In
jCredit.
factors
and
may
<
in
of
ceive
raised
Net
of
1941
982,378
1942
315,678
68,938
~
1943
1944
(—845,392)
(—106,250)
1945
1946
Latin American
Kingdom
$158,139
78,653
79,696
412,056
208,917
66,920
46,210
(—695,483)
160
311,494
$1,330,920
25,110
(—
(—218,255)
(— 26,654)
(—130,814)
*
8,272)
22,136
(— 16,820)
20,361
*
•
V
51,174
—-
9
dollar
to
OF
VALUES
exchange
last
July.
$35
$38.50
an
^______
—
—
,
16,932
$20,065
$20,330
403
716
354
.
7,
82
Canada
.
.___
_
Norway
•:
i;
Currency
_
0.020
43.83
0.888
•.
63U
1.00
0.028
0.507
6113
0.017
32
0.185
5313
_
■
_
India
275
Iran
26
Italy
Japan
Java_4-r—r
Netherlands
—
Zealand
__
■TTrr"_tLi—
PeHr>
Polapd
1949
0.268
3.31
12414
131
0.027
32.25
1202
1643
88
754
0.183
4.86
245
270
23
148
0.334
2.65
23
107
«
...
845
•
.
20
■_
24U
r
28
0.179
0.136
Rumania
60
,
.
149
Sbuth Africa.
__
6.50
234
r
\
260
:
.
914
851
-.
witzerland
—
Vkey f_
ni'ted' Kingdon
ruguay __—
enezuela
_____
—_
Countries
j'Dfec.!1944
324
587
1,342
241
S) Feb.1941
1942
It
•
1,432H
"
-'
'
1
68
195
'3.581
1
"""
0.25
20013
202
'
21516
59
155
838
(5) Mar. 1940
(9) Mar. 1939
(10) June 1939
.(11) Jan. 1947
(12) t>ec. 1946
'(13) Nov.'1946
(15)
IV2
million
lei
to
the
U.
{Preliminary.
Federal Reserve Board and
International
Source:
has been given much shall
be ex¬
pected.
It is no surprise that she
is trying to get the most out of
other country
of
been
was our
to
them
save
So
far,
successful
they
and
>
as
ally, she feels that
But the time has
come
for
•
some
action.
General Marshall knows
that Russians two
greatest enemies
Germany and Japan. We hold
keys to the future of those two
Stalin, who is suffer¬
a
heart ailment, is anx¬
peace.
The fact is
have
63.00
S.
The business
another
they
and
1947
Price Range
High
to
survive,
Com¬
.»
of this
men
coun¬
try who have allowed themselves
to be frightened
by the fear of
dollar.
1946
Declared
order
Recent
Price
Low
would profit more if
to put such fears aside
war
were
get down to
fashioned
structive
hard
some
work
thought and
4
61/4
-
4%
us
stop
situation
for
worrying
good oldand
let
con¬
Secre¬
451/2
35%
431/4
we
1.00
127/8
11%
12%
mestic problems to
5.68
4.45
471/2
31
32%
have
ingenuity
thoughts.
0.32*
0.20
"51/4
3%
33/4
0.35
0.40
13%
8%
83/4
1.62
1.00,
51
38%
41%
0.35§
_____
0.20
5
4
/:/
4%
17
____
1.05
143/4
143/4
21
1.15
16y4
18%
Hollinger Consolidated
0.35
0.35
0.22*
0.30 '
Lake Shore
1.15
1.82f
_
Mines, Ltd
Mclntyre Porcupine
Mines, Ltd. Ll___
9
10%
7%
.14%
12%
14%
0.76
15%
11%
13%
1
3.171/4
563/4
46%
52%
0.15$2
4
0.008$
mi llci
.'ti.ipu
1%
2%
3%
.
r
•____
IK..
u:.7
njO.;L4. t
< 7f
,.0.15
.33%'.
'%
%
3
3%
1
ifoD
31/4
30, 1946.
t9 months ended Dec.
§Estimated by Standard & Poor's.
Year ended March 31, 1946.
(3)
31,
ilOperations
Year ended Aug. 31,
*2%
2%
1946.
resumed Feb.
1946.
20,
1947.
more
than
and
them.
about
$1.40
1.26
_1
months ended Sept.
dollars
Communism.
all
1.18
Yuba Consolidated
Canadian
(2)
She
sees
us
un¬
touched by the ravages of war and
rejnembers the Biblican injunc¬
tion that from unto whom much
Russian
Smelting, Refining
Mining Co.
t Deficit.
Monetary Fund.
a current annual income of
billion.
tary of State Marshall handle the
Sunshine Mining Co.
•9
having
that
Dividends
to
Exchange Control Boafd.
tTransferred to British Exchange Equalization
Account.
25% of the world's goods and
munism must have peace.
Mar. 1946
(16) Aug. 1946
territory and only 6% of*
population, turning
world's
out
6.00
$0.11$
Mining Co.
C., Ltd.
enviously at
38.50
*
Mines_JJ4q.
(14) .July 1946
the
looks
she
ma¬
States with only one-
39.50
•
Company
Company, Ltd.
1
Teck-Hugh^s Gold.
ecK-xiugigss MWCt.
236$n
She
the United
15.30
Premier Gold Mining
247
chinery.
half her
17.54$
.
Pioneer Gold Mines of
'
•
about
Co.
Homestake mining Co
B.
any more land, but
need money, food and
in
23.53
27.40
333.33
Kerr-Addison Gold Mines.
*
i,
238H'
1
4
need
to
Joining
Gold Mines
■1
52
(8) Feb. 1941
4) Jan.
0.25
11112
482
(6) July 1939
(7) Apr. 1938
■
2) Dec. 1940
•Transferred
110
357
30
—
3.581
not
does
ious
Winkler.
Bulolo Gold Drdg. Ltd
Dome Mines, Limited
6015
5257
Spaih
ugoslavia
4.96
846
_
Sweden.
'
Party
mem¬
comprises one-sixth of the earth's
dry surface.
She certainly does
ing from
U. S.
2311
made up of many
probably greatly ex¬
aggerated, but still a small per¬
centage of the population. Russia
71.00
Earnings
Platinum Co.
or
him
needs
claims to have five million
44.00
18.18$
South American Gold &
_
"
294
today
bers which is
20.00
per Share
Rosario
2164
\
is
break
ever
Russia
inhabitants,
39.00
23.31
rate
in
the
tribes of peoples, who
speak 200 different
languages and
dialects.
The Communist
20.00
Max
of
No torture
nations and
Table 5—GOLD MINING STOCKS
Natomas
lion
the
27.78
"free"
Dr.
collapse
different
65.00
354.61
•So-called
to
help very badly. She has 180 mil¬
48.00
{Represents premium.
Source:
the
could
But
54.84
N. Y. & Honduras
"
30
69 '
ther
274
164
_
___^
Mexico ____!!—
New
274
—
down.
are
Alaska Juneau Gold
.>
suffering
28.74
•__
Turkey
man
possesses
stay
after
Revolution of 1905.
2.33
_
Sweden
a
He
great courage,
endurance, patience
33.00
Mexico
him
very
and perseverance.
He is shrewd,
ruthless and cunning.
He was the
only one of the old revolutionists
who had the
courage to
;
78.00
*
American
241
'
—
,
confer¬
admires
she also should be considered.
-
1
;
and
lightly.
295.00
0.24
281
25
.
he al¬
President
himself is not
taken
414.00
119.11
291
28
51.83
29.67
-
Stalin
be
Russia
—
61.50
as
representing
they have gotten along
millions
'
—
produced and
various
have
45.00
1946
3.672
0.007
796
18.18
14.29
.006
4.80
52
39.29
37.74
50.00
38
1,090
.51
'
the
ha
that
is doing
One by one,
they are
making requests for hundreds of
35.00
34.49
to
well.
us; every
the same.
'
Egypt
1.00
61
Hungary
oz.)
per
at
from
20.32
__^______u.-
--Rumania'^ *
1.75
0.888
Greece
(in dollars
__
13.79
Neutral and Misc. Countries
-Chile
5.16
31.00
125
22612
2910
(in 7o)
20.18
.84
Switzerland
53
_
•Discount
—
58
Germany
Corpora¬
Price of Gold
Rate
1.82
_
that
men
nothing to fear
respects
ences,
and
ever
accompanied
$176
"Free"
(in cents)
cents)'
21.05
__
India
1.00
127
55
Research
2.28
Netherlands
191
2,709
&
Allied Countries
.
Czechoslovakia-
Egypt
Securities
tion, New York City.
pro¬
Rate
France
Denmark
Erance
29
published by
the Economics &
Investment Department, National
Official
^
(in
PAR
354
7*
/
May
Timing,"
100.00
_
691
36
.
the
"Investment
of
100.00
645$n
615
1
From
—
issue
United States
0.888
449
21
for
generally.
gold-mining
UNDER
Currency Unit
Colombia
prospects
35.00
Units
Feb.
Cuba
to
business
$46.00
per U. S.
Dollar
1947
30
favorably
9.81
Gold per
1945
Chile
somewhat
re¬
38.08
FUND
Dec.
218
now
be expected to
can
89.75
of Fine
Canada
act
improved
ounce.
American
inflation,
currency
250.00
MONETARY
1939
Brazil
wise, they
was
They
a
they should be even more advan¬
tageous holdings and, contrari¬
parity with the Ameri¬
dollar
or
99.50
TIONAL
Sept;
Belgium
a
OFFICIAL & "FREE" EXCHANGE AND "FREE"
PRICE OF GOLD
INTERNA.
Grams
__
pression
them
Denmark
(in millions of dollars)
_____
of
more
Table 4
.Table 3
AND
Argentina
to make it
occur
Former Occupied and Satellite
Countries
GOVERNMENTS
United States
developments
on
20,151
CENTRAL BANKS
Country
goes
403.75
INITIAL
jr'i*
expect an in¬
gold in the
States and Canada to oc¬
in the foreseeable
future, but
time
could
they suffered when
Belgium
GOLD RESERVES
now
in the price of
Great Britain
*Preliminary.
;
not
ways
Roosevelt
Russia
29,143
(— 97,136)
(— 30,119)
30,319
Source:. Federal Reserve Board.
compensate
to
loss
While
*
1 Jan.
'Feb
general
United
some
(—132,905)
97,719
considered
any
H
companies had only limited
'
Us
'•
do
crease
gold
487,891
10,202
53,148
344,130
458
•
Countries
$2,622,330
88
1947
All other
Republics
Canada
$633,083
3,779
1,955
We
Mining
only
an
ounce;
they
received
the
equivalent in Canadian currency
dollars)
United
Imports
$4,744,472 1
and
Conclusion
government
receive
Mexico
1940
in'
Shore
quality.
formerly
and other
Total
that
to
a
the
Canadian
can
'
'
for
from
the
said
are
gold
concessions
,
)'•
opinion
be holding possibility. In the present readjust¬
ment or recession
period, goldhigher price,
withholding newly-mined gold in mining stocks can offer a defen¬
sive hedge. In' the event of a de¬
the expectation that
they will re¬
their
Table 2
(in thousands
the
enjoyed
government
portfolio of securities at this
time,
for
their
defensive
as
for
UNITED STATES GOLD IMPORTS AND
EXPORTS ON BALANCE
to
primarily
offset
Canadian
of
are
inclusion
cur
producers
market,
theory government could
the price as long as it
in
for
may
revalue gold
Canadian law requires
gold be sold to the gov¬
Some
formerly
look
Kerr-Addison, Lake
Mclntyre, should be
Canada
the
they
the domestic
companies
Homestake and among the Cana¬
dian companies
Dome, Hollinger,
pressures.
Gold
premium for gold
among
quarters it is believed
ernment.
limited
the
some
that
free market and the black
decreasing gold coverage for
(Outstanding currencies and bank
these
deflationary
greatest
Stalin knows
him, as
We
frozen
to
or
the
us.
next year.
Since 1934, all the major powers
have resorted to managed cur-
except
be
convinced
am
of
one
as we have him
that
wished.
monopoly,
debts
Canadian
hand, the price
government
Jn support of it. One is the present
high level of gold-mining costs
and the consequent
shrinkage of
output and profit.. The other is
While
national
severe
of gold has become a
be cited
can
down
marked
any
to
position
a
opportunity
General Marshall at work. As
result, I
is
occupy
the
had
long
they must
action.
tary Fund prove ineffective or a
failure, an increase in the price
of gold may be
adopted to scale
a
extent, and
that the black market in gold,
especially in the East, will con¬
tinue to be a drain, there seems
a
possibility of a relative shortage
of gold.
resumption of the use
the basis for foreign
eventually, and there
to
continue
I
this nation has
that we have
which
cies convertible into
gold.
Should the International Mone¬
currencies and credit will not de¬
cline
or
there
of
foundation for
some
backed
government
treasuries, with
neither silver nor paper curren¬
permanently
higher price level, that there will
be
no
appreciable rise in gold
production, that the volume of
may be raised.-Those who believe
is
established
will
a
to
war
where
see
place the 10%
in
On the assumption that the war
States dollar may be lowered; in
ptfier words, that the price of gold
jthat there
gold
Shortage Possible
content
Although partly
(Continued from page 8)
the
earnings trend
uncertain; their costs are high
also, and for compensation to re¬
by gold, it recognizes the preva¬
lence of managed
currencies, and
no doubt over the next
few years
about
over was
40%, is estimated to have dropped
to about 15% at present. In this
country the gold coverage back¬
ing currency is now 25%.
in force today;
i:
the world
marked depression. For the Cana¬
dian companies the
41
Russia and Peace
is
billion
Monetary Fund has
organized and put into op¬
been
their output is
year,
defensive quality in recession and
even
do well in the event of a
International
lished the dollar at 59.06% of its
The ratio of gold to currency
former
weight, and raised the 'and commercial bank credit which
pre-war
currencies, monetary poli¬
been
employed
to
have
•
(3017)
increasing, and, despite rising
costs, the better companies not
only show a more-than-average
yield at present but should show
devalua¬
or
last
now
manipu¬
stabilize domestic economies.
In order to effect some
stability
in exchange rates and free
inter¬
national
trade, the
veloped.
price of gold from $20.67 to $35
an
ounce, the price which remains
balances.
rate
lation and revaluation
tion of
(Continued from page 4)
standard
.trade
exchange
duction
war,
Let
as
enough
do¬
challenge
our
occupy
our
42
THE COMMERCIAL
(3018)
&
FINANCIAL CHRONICLE
Thursday, June 5, 194.7
market
Present Problems of Trust Funds Investment
well
(Continued from page 8)
ments best suited to any
given set
of circumstances.
As
mental
stated, the funda¬
have
we
general market conditions.
These
ideas
may
vary
widely.
However, since for purposes of
this study we have accepted un¬
as
der
a
There
income for the life tenant.
must always
of
be
certain amount
a
interests
the
between
conflict
of the life tenant and those of the
by the
remainderman exemplified
for income
desire
the part of
on
the life tenant and, on
the part of
the remainderman, the desire for
the
preservation of the principal
While it is
amount of the trusts.
belief that the average
who provides under his will
a
trust be set up, is very
my
own
man
that
much
of
fare
interested in the wel¬
more
his
wife
children
and
as
income beneficiaries than he is in
the number of dollars the ultimate
beneficiary may receive, trust law
always required an emphasis
has
safety for the benefit of the
remainderman. Traditionally this
legal concept, inasmuch as it car¬
ried a threat of surcharge, nat¬
urally
affected
the
investment
policies of the trustee so that he
on
likely to confine his invest¬
was
ments
fixed-income
to
securities
in those trusts which
even
terms
afforded
of latitude in
him
the
some
by their
degree
selection
of in-
vestments.( It was a practical
cer¬
period of
tainty, then, that in a
declining interest rates, those in¬
beneficiaries
come
entirely
were
position.
unhappy
have
over
in
period
a
trust
a
income
on
just
a
portfolio
safety
and
time,
of
com¬
it would
fair at least for the purposes
this discussion to give equal
seem
of
weight
to
bonds
and
to
stocks.
Furthermore, if
we set up this ex¬
perimental trust account on the
basis of 50% in bonds and 50% in
stocks
for
it
will
be
relatively easy
is interested to
who
anyone
find
out, by a simple reconstruc¬
tion of the account, what the re¬
sults might be if different per¬
centages
equities
of
and
fixed-
-
income securities were used.
.a
'The
not of
is
in
far
so
portion of this port¬
particular interest
bond
folio
vidual
difficult
for
than
more
the selection of indi¬
as
trustee
a
is
obtain
to
2.65% return
a
It
concerned.
is
issues
any
on
diversified list of high grade corp¬
For this reason most
orate bonds.
trustees have become G men. Fur¬
thermore, if a trustee plans to
place a substantial portion of the
trust fund in equities, he will wish
to so invest the bond portion as
stability.
insure maximum
to
Let
efit
a
will say is for
we
of
widow with
a
children
the ben¬
two young
after her death will
and
benefit
happened over the past continue for the
We will
several years, and the hardship of children.
the beneficiaries' position has been U, S. of A. Series
aggravated by the decided upward due in 12 years,
common stocks.
trend in the cost of living.
what has
the
of
put $50,000 in
G 2 ¥2% bonds
$50,000
and
in
Ten
to
stocks
to
our
April
19,
Industrial
the
1932-37
which
had
been
the
12
high
points
of 194.
earlier
attained
In retrospect, the mar¬
ket was in
downward trend and
a
averages
break
Average
13
some
under
The
1937.
to
destined
were
through 100 within the next
months,
so
commitment
a
in
that day would have
been
poorly timed.
In
stocks
of
as
indeed
fact
the funds under his control
of
to
as
the
serve
income
the
so
interests of
best
beneficiary
in
terms
ments
stock will
of each individual
tion
be
to industries. The selec¬
as
basis
the
on
its
of
earnings,
and at the
the ultimate
dividend, and market records, and
an endeavor will also be made to
value of the fund in terms of pur¬
appraise the future possibilities of
chasing
each
of
purchasing
time
same
power
protect
If this is so, what
will those twin objectives
have upon investment policy un¬
der present day conditions?
power.
effect
Since
is not
the
investment
funds
of
exact science and money
an
invested is always
at hazard, al¬
though in varying degrees, a trus¬
tee can never expect to accom¬
plish perfect results. Further than
this, the circumstances surround¬
ing any particular trust must be
considered in relation to
all
investment
an
over¬
However,
policy.
Consider
-
ten-year period,
stock splits
have adjusted
stock divi¬
we
for
have
selected,
and
our
$50,000 earmarked for stocks has
been invested as of April 18, 1947,
in
outlined
as
attached
the
pro¬
Over the next 10 years it
to expect that some
gram.
is reasonable
of
these stocks will do very well,
will
perform in average
fashion, and some "will be disap¬
some
but our ambition is
produce results, over-all, that
pointments,
conditions, any
be
somewhat
better
than
investment policy that envisions a will
substantial increase, over a period average.
of
time, both in the princinal
At current dividend rates the
value
the
of
income
account
include
the
in
and
therefrom
derived
must
the
purchase of common
stocks because, obviously, the pur¬
chase
their
with
bonds
of
fixed-
$50,000 invested in stocks produce
$2,429 or 56% of the income of
the
fund; and $1,250 or 34% is
produced by the $50,000 Govern¬
ments.
The bond yield is 2Vz%,
interest rates precludes the possi¬
the
bility of
overall
any increase in so far as
the income is concerned and, with
when they die or
perhaps
few
exceptions,
terest
dividend
and
income
bonds amounts to $3,679, which is about
are
39% greater than could presently
suitable for trust investments
presently selling at
or
above their
maturity value.
tirely
Investment
invested
corporate bonds
Program
far, we have talked about
concepts, theories, and objectives.
I think it would be
interesting to
actual investment pro¬
based on the theories we
an
gram,
have been
see
from
what
a
and
the
to
probable
income
probable safety of a fund.
Each
own
discussing, in order to
practical standpoint
a
trustee might expect with
respect
trustee will
arrive
studied conclusion
is the
proper
invested
in
as
at his
to what
percentage to have
common
were
in
high
yielding
stocks,
con¬
sidering the circumstances sur¬
rounding the particular trust as
tinue
en¬
grade
2.65%.
To the extent that dividends
So
set up
be obtained if the funds
con¬
reasonably stable basis
this program has initially attained
at least one desirable objective,
that
a
on
increased
of
income for
the
beneficiary.
If we could step on a magic car¬
pet and arrive in the land of ten
from
years
how
ments
to
had fared.
do
that,
let
we
could judge
various
Not
us
go
invest¬
being, able
back ten
and work forward.
years
you
now,
these
well
I think
will all agree that these last
ten years have been pretty rugged.
While hindsight is not a substitute
for
must
i
•'
w
■.
>
'
•
<
.,
j
I
•
•
r;
of
of
and
$50,000 investment
a
April
19,
dividend
1937.
rates
At
the
as
then
the
income
from these stocks was $2,263, a
4.52%
return
compared with a
2.75%
long-term
obtainable
later, the $50,057
worth $51,115
years
invested in
on
bonds.
Government
Today, ten
—and
gross
then
return
1937 is
that, .my
friends, may be
preserving principal" by
termed
perseverance.
•-
')
<
r
■}
.
(
t..
i
:
-'
'
■
the
they
the
theless,
the
is
account
Dow-Jones
than
they
of
the
of
course
value.
These
the
April 19, 1937Amt. Adj.
'
to Mkt.
their
the
high
SecurityCommon Stocks—
Du
17
$2,669
Kodak—,——.
10
2,280
70
14
2,226
3,192'
Ll
50
2,600
100
87
2,601
4,524
40
2,580
37
2,562
2,3&6
Chemical
<,70
Minn.
Honeywell———
S.
Gypsum,——
Sherwin
Oil
2,520
140
54
2,524
1,944
2,650
100
43
2,634
2,597
25"
2,400
75
21
2,457
2.016
Williams—-
,
20
——
■,
1
80
2,710
Woolworth
same
their low prices
55
that
learned
high-
relatively
75
is important, when
you buy them is even more im¬
portant. Had this investment been
80
40
let
Gamble,
side
the
of
see how
Initially her
37% greater than the
and
ValUe of stocks
at
1946,
Income
in Gov¬
then, we
deduce that while dividend
nayments vary from year to year
it is likely that the income bene¬
may
be better off over
a
oeriod of years it some stocks are
included in the -If just portfolio.
might add that
the
Department of Labor Cost-ofLiving Index stood at 102.7 in
dividend
i
V
income
was
ments
made
five years in¬
These
in
same
invest¬
1942 wo"l^
r%rpS_
ently show an increase of 100% in
market
price
as.,
rireasig in.'the
cost
againstr.ani inof hving^dur-
what
and
calculated
be
interim
arrangements will be made."
.
j
'
•'
- -
*
■
1
/
/
.
»
j
—
hand
the
the
of
$180.82
166.77
in
Treasury
its
.
Further U. S. Help
While
blocked,
since .the convertibility clause re¬
ferred
to
does
above
not
require
accumulating
have
afford
cannot
Some
.
to
Britain
was
converting
loan
the
1946
of
intended
for
use
to
in
wartime-accumu>-
lated -."blocked
of
some
the
understood
sterling" balances,
loan definitely was
be for
to
the
purpose
of
will
the
that the United States may sooner
out with
of such balances.
owners
part of the $3,750,000,-
enabling Britain to* make new
sterling convertible after
July 15. It now appears, however,
convert
arrangement
worked
be
to
no
American
000
current
later be asked for further help
or
Finally, there is the big question
flocked sterling—
in
handling this problem. The In¬
dian delegation at Bretton Woods,
sometimes referred to as Britain's
for
war
debt, although it involves not
only
dominions like India and
Australia, but independent coun¬
tries like Egypt, Iraq and Eire, as
fact that it would not consider it
well
sterling off India's hands.
A re¬
cent example of similar thinking
from Egypt comes to hand in the
in
others
as
hemi¬
both
example, did not conceal the
amiss for the U. S. A. to take the
suggestion emanating from
the
Egyptian Finance Minister look¬
ing toward the application of some
of Egypt's sterling balances to the
to
spend it for whatever they purchase of Britain's shares in
wanted and could buy from Brit¬ the Suez Canal and in the AngloThe
ain. u Witness the fact that last Egyptian Oilfields Company.
spheres.
That sterling has not
been legally blocked, except as to
convertibility 'into hard curren¬
cies.* Its owners have been free
-liquidated
India
year
ting
close
Australians
to,
holdings.
its
of
and
such pressure on
.difficult times, India
and
reached
of'
with
countries
by
July 15, there is a very good pros¬
Minister
nance
lated
that
the
balances
blocked.
long-
expect—
loan
in
to
obtaining
American
an
Iflgypt of like amount1 at
3% interest and equal
maturity.
-
wartime-accumu¬
actually
Indeed,
the
will
urged to
block those batentes ^t once,
both
prevent arv r -"her conversion
tete,nv,d
With Stix & Co.
be
Chancellor
of the Exchequer is being
to
a;
would
nifitw
pect
sterling,"
into
-
according to the report—Britain's
the
such
fund
term
of flesh.
If no
•help,
question
is
pound
settlement
"blocked
the
would
sterling loan bearing 2% in¬
Britain in terest, in return for which the Fi¬
put¬
their
for
of
Egypt
some
from
refrained
rest
services
.
Special to The Financial Chronicle
ST.
LOUIS,
Friedman
has
MO.—Sherling M.
added to the
been
staff of Stix & Co1., 509
members
32%'J'A 15gl^rice woql^ 'show prior tp July 15 and to strengthen Exchange.
,])*•
s
bilateral negotiation of settlements*
July 15 Arrangements
thereof
ing-the five years bf
j1
■
(Continued from page 6)
.
is, at what interval the 'net' will
Egypt in particular are clamoring
back
% x»f average income
59
How Britain Sees It
that the ideal of main¬
10.
1,968
•,
31.07
so
of
% of total income
31.55
income
glanced
% of total Income
66
^
these
stead
62
2,428
—
10% increase in dollar
had
136
2,263
:
a
plished only to a limited degree.
Quite a different story would
have been told, however, if we
of cost
G8.286
1
against
taining purchasing power for the
income beneficiary
was
accom¬
High
'
1937—
have
living
Inc.
49.6% of cost
,1947—
others
of
Est.
.
$24,842
——_
1947—,,
19,
18,
50%
cost
337
—_
April
the
the
-
1937—
April
While
other words, there was a
-
Low
i
Utilities,
millions
in
$50,777.
;
Utilities,
£100
increase
1,638
$50,057
I
Est. Inc.
/■
stocks
i
•
'
„
Industrials, .April 19,
Industrials, April' 18,
$2,263 and at 153 in March. 1947
when dividend income was $2,429.
In
2,541
$2,428
.
,
,_L
from
income
average
Dow Jones Averages—
than she would have derived from
when
2,478
1,2'bO
1937——,
1946,^
?»!*! 1*1-* H
of the so-called
1937
,
—___J
for
stocks
from
period she received an aver¬
age of 21% more income. In no
year did she receive less income
we
2,457
42
42
.■
Cost
year
In conclusion
39
135
$3,678
•
1942
them.
the fund if it had been
entirely in 2%% Gov¬
bonds, and over the 10-
ficiary will
1,598
130
.'1—,—
at
duced by
entirely
2,418
2,310
140
,
Cost
.
stocks
amount that would have been pro¬
investment
2,775
5u,oo0
'
■
Value of
Britain
an
2,407
2,400
$51,114s
balances be made convertible and
ernment bonds.; Perhaps,
2,314
75
2,280-
.
(Adj. stk. div.)
income
ernment
83
-
$50,069
that these presently
invested
.
2,475
the life tenant fared.
was
112
" '
$100,039
in London will have to be
at the income
picture
2,561
*
2-535
July 15 will mean that sterling
balances now being accumulated
look
us
2,380
47
-130
•2,480
&
•
1,937
57
120
120
2,405
& ,Elec.——
2,177
2,534
;
2,320
65
Gas
2,024
,
2,519
-31
2,550
;
cost.
The Income Picture
Now
65
140
2,710
3,559
3,234"
2,403
*
Pacific
made five years ago, in 1942, the
current value would be in excess
of
46
142
Commonwealth Edison—.
what
while
stocks you buy
200%
137
'
2.500
2,400
Electric—2.——.
...
that
learned
-
2,503
'
grade stocks such as a man of
prudence might select, has in the
recent past been subject to-wide
also
'
2,528
162
77
2,420
40
.
Foods,—
10-year
have
of
2,760
-113
2,512
Income from stocks for
we
list
a
on
day.
far,
20
140
2,500
,
Steel—
General
95
2.520
..
60
American Tobacco.—^,^—
General
"
120
.
$3,051
50
Penney
Inland
4-18-47
4-19-37
$120
Co.__—
C.
Shs'.
Est. Inc.
•
■
$2,692
Continental
J.
Cost
f
at Mkt,
on
15
S/O New Jerseyi—
Sears
splits
Shs.
Pont__———-r—
U.
Cost
figures
not have had either
or
Value
and Stk.
Amt.
fluctua¬
tions somewhat because all of the
stocks would
original
the
than
more
,
Procter
overstate
low
lowet
April 19, 1937*
were on
worth
with
today,
Averages
-April 18, 1947-
would have been 274%
fund
of the
investment.
timing policies.
45
During this ten-year period the General Motors———
American Brake Shoe—
65
portion of the
fund, at the low price for each
individual stock, would have de¬
clined to $24,842 or 49.6% of cost. nrorr|Tprr|-.n r..-|.j r"| l '
At the high price, the fund would iii»Fi!Jia»Lun i t;-1
have had a value of $68,286 or
Bonds—
Amt. Shs.
Ser. G 2Vi, 1959" Oo.ouu
136% of cost. The high value of U. p.
the
of" stocks
68%
stood at
original value of the trust; never¬
play havoc with well-planned
can
evep
steps to cut
no
proportion
the
the income beneficiaries
needs of
took
when
show,
value of the stock
foresight, it represents experi- ybar backward
i
funds.
he
back
investment 7 of
trust funds
go on, and the immediate
Monsanto
>f
V.
Like
trust
the
relatively large,
was
though
when they estab¬
lish
terms
stock
yield 4.85%, and the
yield 3.68%. The total in¬
stocks
People, however, are not
particularly considerate, from an
investment
standpoint, ' about
Eastman
been
been
the
the
results.
dends and recast this program in
completed, the following 20 stocks
have
one
pened to our portfolio during this
that the prelim¬
now
least1
derivfe
confidence
and
knowledge
order to see what would have hap¬
of
investigations
inary
to
under present day
company.
at
study,
the
particular
may
in
that even though
timing was far from perfect, even
though the initial investment in
y
evident, that is, that
timing the better
is
better
first decide that
are giving in¬ select we will
creasing consideration, within the adequate diversification is desir¬
realm of prudence and practica¬ able and will spread our risk over
fluctuations in value, and it is
bility, to this'phase of their prob¬ 20 different stocks so that the in¬ therefore reasonable
to conclude
lem and that, as a result, the mod¬ vestment in each will represent
that common stocks cannot be ex¬
ern conception of a trustee's ob¬
approximately 2%% of the fund.
pected in the future to afford any
jective emphasizes the investment We will also diversify our invest¬
degree of price stability. We have
present conditions
this
Timing
Proper
trustee
a
comfort
some
the
of
projected think-
180.82,
that year.
in¬
an
From
Dow-Jones
at
forms
backwards brings us
Monday,
stood
turn
this
of
case
program,
■
Results
years
So
what
considering
in
tegral part of
ing.
even
In
I believe that most trustees under
proceed with
$100,000 fund,
therefore
us
which
is
This
stocks
mon
the investment of
rather
a
have
portfolio, and
attempting to study
what effects the inclusion of
may
the
trust
a
bonds
invested in
Rule
stocks
common
are
funds
whose
.would find themselves in
Man
Prudent
the
trustee are idea that
to preserve the principal for the
place in
remainderman and to provide an
since we
objectives of
which
ence
i
the
In
appreciation of close to
against a cost of living?'in*
crease
of 60%.
220%
of
the
St.
•
•
Olive St.,
Louis
,
-
■
.
Stock«•••
-
•
Volume 165
Number
"
4600
THE COMMERCIAL &
FINANCIAL
Eccles Favors Federal Reserve Guarantee
Congress to repeal Section
loans
amortized
meet
this
nancing
for
need.
of
profits
This
This
type of fi¬
particularly suitable
is
small
businesses
substantial
tire
out
that
need
period of time to
system.
re¬
There has been considerable ob¬
the
the
larger
that
the
bill
banks
from
the
on
smaller
cases
where the amount of the loan
Reserve
not
the
banks.
result
of
The
proposal
long and
was
their
to
legal
the
limit,
is
even
of
Council
the
of
Federal
the
if
bank it
ciple.
It
is
tried
a
and
Reserve
out
convenient
basis
sources."
H.
from
R.
the
3268
contains
language of similar purport, but
it would be
preferable, I think,
to substitute the wording favored
by the Advisory Council and the
Board. "1..
close contacts
ommendation of the
visory
Council
that
the
^nd daily relation¬
its powers permit, make it the
rec¬
appropriate
Federal Ad¬
bill-be
:
As in the
amended to provide that the guar¬
be restricted to "chartered
a
of
this
•'
-
*
pur¬
V;- During
-just passed by both Houses
Congress on the ground that
of
would
of
in
addition
an
the
it
it
for
guaranteed
loans.
maximum
present
rate
The
on
as
brake
a
rather than
inflation.
on
justment
will
The
extension
of
credit
to
loans for working capital
only and
provides that
loans
cannot
be
made for more than five
years
and
be
can
lished
made
only to estab¬
businesses.
Bill No Drain
on
is
13b
is
5%
and
it is
con¬
Eccles told
the
The proposed bill does not
for
government
and,
therefore,
Federal
funds
guarantees,
sustained
out
of
guarantee
would
as
and
they
the
drain
a
would
fees
The
for
the
losses
first
created
charged.
be
If
the
this
not
adequate, losses would
be met out of the Reserve
Banks'
net earnings
or
surplua. I am
sure that this
responsibility
placed
the
officers
and directors of
the Reserve Banks, under
regula¬
tions and supervision of the
Board
of Governors, will not
encourage
easv and unsound credits on
the
part of the private banks.
.
Under section
13b
Federal Re¬
Banks handled some
3,500
applications for commitments and
advances, aggregating about $560
serve
millions.
Similarly, under the
V-
loan program, 8,771
authorizations
for guarantees of war
production
loans,
aggregating nearly $10.5
billions, were handled. The inter¬
est
and
fees, collected
tion with
billions
of
this
and
losses
in
total of
operations
than sufficient to
and
guarantee.
would be
and
*
It is
evident, therefore, that the
lending banks must carry some
cover
to
connec¬
about
were
$11
more
expenses
some
profit. In other words, the record
is not one of loose
lending.
deterrent
their making
risky
undesirable and
loans.
The steeply gradu¬
guarantee fees will induce
banks
to
as- much
carry
of
the
risks
as
possible and thus cause
them to exercise careful judgment
and
prudence in passing upon
credits.
;
Business and credit conditions
at present and at some other times
be such
may not
tensive
this
to require
have
this
of
kind
a
to
stand-by
render
to
business and industry when neces¬
sary.
The amount of long-term
funds
that
individual
enterprises
may need is often
relatively small.
Many loan demands do not exceed
$10,000 and relatively few exceed
$100,000. The bill is intended and
designed primarily -to help the
smaller
enterprises.'
The
larger
ones, as a rule, do not need this
sort of assistance because
they can
go to the
funds
capital market and raise
either
by
bonds
or
equity
financing.
The
guarantee
service, as pro¬
vided in this bill, would be avail¬
able in the future, as it was in
the
past,
all
without
banks,
discrimination
whether members
of
the Federal Reserve System
not.
-
or
-
,
It
would
shortsighted,
be
ished.
out
ill-advised
and
agencies
"If these
cisco
such
Bridge,
conditions
but
such
worth-while
the
as
San
under
in
Fran¬
present
projects
tremely limited
are
ex¬
number."
"If
there
never
the House
ever
was
it is
the
The
now.
main
objection to
getting into the
Government
loan
business
wants
to
is
that
it
get out," he added.
Continuing, Mr. Eccles
"If the RFC is
as
a
never
to
said:
be continued
permanent agency of govern¬
stricted and limited to a
peacetime
operation and to a period of nor¬
malcy or a period of inflation
rather than one of
deflationary
"I
.
don't
thing the RFC should
authority
to
guarantee
have
loans," he added. "And its au¬
thority to make loans other than
to banks should
as
a
standby
should
not
be retained only
provision.
make
loans
But
to
it
banks
since
they can get all the money
they want from the Federal Re¬
serve
System without
use
of their
budgetary funds.
Government
put
into
in my opinion, for should
be
the
funds,"•/ Mini Eccles
banks
paid off.
debentures
by( the RFC
And
if
to infla¬
The
in substantial
in
manner
which
treat
our
national debt and
national income will have an
they
extent
The.interest alone upon
public debt is $5
billion
per
entrance
our
The
obligations
assumed
to
into
to
World
in
our
which
veterans
our
approximately
This
annum.
$7
have
we
amount
billion
makes
per
total,
for
these two items alone, of $12 bil¬
lion. We cannot escape or reduce
this
expenditure
a
until
have
we
reduced the debt
itself, and until
discharged our obliga¬
have
we
to
those who
flag and
the
defended
our
institutions all
our
over
world.
When
other
which
ordinary gov¬
expenses,
not involved in
are
essential
ernmental
budgets, we must admit
will be a long time before
that it
we
can
see
annual
a
below $25 billion
tures
In the midst
of this
confronted
are
of
reduction
taxation,
For
these
rea¬
who
us
most, if not all, of any temporary
surplus to the retirement of our
public debt.
I know
that would more
of nothing
completely and
totally stimulate business
dence than complete faith
financial integrity of our
confi¬
in the
govern¬
ment.
And, by
nothing could
American
the
our
exigency,
same
as
nation
are to
the
growing
obliga¬
a
financial
to
token,
frighten
so
people
that
tions of
the
be made
some
political
unjustified by
wholly
present national and world condi¬
tions.
Prices and Wages
Let
look, for just a moment,
price and wage situation
us
the
It
was
we
are
obvious
ligent observer
if
the
price
tirely
confronted.
to
one
intel¬
every
ago
that
were
en¬
year
controls
lifted,
there would be a
further and rapid
upsurge in the
cost of living. There was a hiatus
from June 30 to the middle of
September, due to the delays in
enacting price legislation. During
that period, prices of
many com¬
increased
abnormally,
modities
and
the
it
though the law provided for
resumption of price controls,
was
never practicable to restore
situation
which
existed
on
the
At this
clothing
stands
in
at
time, the cost of
the
an
United
index
of
States
202%,
compared to
an
1939.
notwithstanding
Yet,
fact that
the
we
as
index of 100% for
the
produce only 35% of
the
per annum.
the
there
we
problem
is now
pending in Congress a measure
reducing the government's income
by approximately $4 billion per
wool
which
we
consume
in
United States, serious efforts
being made at the moment to
restrict the importation and the
are
use of wool from other
countries,
thus crippling their
ability to buy
from
us
the
production of our
American labor.
As
compared
with
the
first
quarter
There ought not to be
any poli¬
tics
in
budgetary
legislation.
ought not to be any poli¬
in a partisan sense, in the
There
tics,
a
temporary
our
situation,
with
and
of
an
about
and a permanent
financial policy for our
government,
which
means
our
people, we should first devote
expendi¬
governmental
to such
bring
reduction,
June 30.
add
we
governmental
fear, wmch
hasty and
and stable
at
I.
their
economy.
with which
War
in
disposition,
sons, there are some of
feel that, as between a
an¬
preceding
govern¬
condition, not
only in the government itself, but
our
num.
This is five times greater
than the total cost of
government
in the year
immediately
e
financial
the welfare of
upon
t n e s
might
as
serious
American business and American
of 1946, the total com¬
pensation of all employees in the
United States as a whole has in¬
creased
13%
during
the
first
quarter of 1947.
matter of
establishing a sound fis¬
policy that will preserve the
cal
faith of
of
our
their
people in the solvency
government.
There
are
Price
Increases
Consumer prices have increased
19%.
Wholesale prices have in¬
creased 35%.
The gross weekly
$50 billion in E, F, and G bonds
held
individually by the American earnings per worker in manufac¬
people. There are $92 billion of turing in the United States in¬
government
bonds,
of
various creased 15%, while their hourly
denominations and series, held in earnings increased 15%. Whole¬
the banks of the United States.
sale prices of manufactured goods
If there should
unfortunately be are 37% higher in the first quar¬
a
recession in the immediate fu¬
ter of 1947, than they were in the
ture,
or
of
much
as
in
any
as
predictable
$10
billion
year,
in
our
national
a
income, this would mean
loss to the Treasury of $3 billion
dollars.
"The banks
certainly have had
a long
enough time to raise such
capital aS they need without using
continued..; "Capital
peace
year.
ment, it would seem to me that its
authority should be greatly re¬
pressure."
national
in part,
are even now
labor.
Mr.
when
the
and unprecedented
abiding effect
committee.
time
a
total
present
result
subservient
we
can't get
these agencies could
dispose of
their loans and security
holdings,
Our
the
previous
any
would
improvident
belief
progress.
abol¬
will,"
of
enormous
tions
be
for
solvency of our gov¬
in its sound budgetary
or
mental
obligations, to which I
have referred, would
immediately
become the victims of
tax
States.
twice
reason, we should destroy
confidence of our people in
the
the financial
which
ad¬
Ended
should
than
sound
tionary causes, which we have not
altogether been able to check, and
Committee
concerns
they
now,
Eccles told
ex¬
guarantee au¬
However, the
Reserve
should
service
as
iending
being and that of
income
income is due,
While under examination by the
House
Banking Committee, Mr.
Eccles expressed the
opinion that
the Reconstruction Finance Cor¬
poration and other similar Federal
the
of
use
thority.
banks
for
show
a
Wants RFC
the
essential
so
We cannot overlook the fact that
-
the
come
by
were
on
been
the
operating procedure.
ated
the
their
use
basis
should
fund
of
antee and this will be
call
on
is involved.
Banks
surplus
This has
on
appropriations
no
budget
Reserve
percentage
is
enjoying the great¬
history
United
income
the
the
maintain
has been thrust
time year, and it is
greater than
that of any period
during the war.
our
Mr.
and
well
are now
more
'
Section
to
running at the rate
approximately $180 billion. This
the less painful it
comes
own
the
be."
under
portion of the loans without guar¬
Federal Budget
for
and
administration,
upheaval
current year is
of
.
the
funds
public projects
ernment,
policy on
United States, if
the
accept
national
pressure
the
long time
a
est national income in the
it come
sooner
this
it, and which
our
of
deflation
on
increased
as
of
to
We
reduction in taxes tends to sustain
see
officials
adjustments
the world in general.
:
deeper and longer will be the pe¬
riod of liquidation. A substantial
later
production
war
the
is
to
sustain inflation through
consumer
credit
the
we
of
leadership which
that's what's go¬
ing to happen this time. We lost
Our economic balance
by taking
off V: controls
too
soon
and
the
expanded
result
part
upon
ways comes and
longer
public
our
own
economic situation has
been beyond human
calculation.
It makes indispensable the
adop¬
tion of a sound fiscal
his examination by the
result
and
Need Sound Fiscal
Policy
only way to get present high
templated that the initial maxi¬
It should be borne in mind that
mum rate under the new
was
through,..the
legisla¬ j^rices down
the Reserve System has had the
tion would be the same.
Within pressure of surplus goods on the
authority under 13b for the past this
limit, which may be subject market. He added that a majority
13 years to make direct loans or
to change with changing condi¬ of the public is being priced out
to make commitments to purchase
tions, interest rates would be de¬ of the market for consumer goods,
loans made by private banks. On
termined by the borrower and the have spent all its savings and are
principle, we feel that the private bank.
Guarantee
fees
charged returning to the use of consumer
banks should originate and make
would be specified percentages of credit and a considerable volume
the loans based on their," credit
the interest rate, graduated ac¬ of mortgage, credit. In addition to
judgment, and that neither the
cording to the percentage of the this, he added the growing list of
Federal Reserve Banks nor any
loan
guaranteed.
The
method foreign loans through the World
other governmental agency should
the, Export-Import Bank
would be similar to that used in Bank,
extend such credits directly.
the V-loan program, when guar¬ and other agencies, since all con¬
Section 13b, moreover, is not antee fees
stituted a demand for goods that
ranged from 10 to 30%
adapted to present day needs. It of the interest rate, according to sent prices ever higher.
limits
member
a
can get all the
money it
from
a
correspondent
nations
The
Committee, Mr. Eccles expressed
strong opposition to the tax bill
prices. I would like to
y
V-loan program,
maximum interest rate would be
set
tered bank" and in another place
to "financing institution."
'
case
loans under
banking institutions" only. H. R.
3267 refers in one place to "char¬
for
agency
pose.
antee
not
to guarantee
peace for
in the future.
assuming excessive risks.
ities/;^/-^
ships' with banking institutions.
responsibilities for maintain¬
ing sound credit conditions, so far
as
Board also favors the
is
to make the
necessary
Opposes Reduced Taxation
a
Its
,
The
to
access,
Congress and responsible to Con¬
gress,
is especially qualified to
provide this service because of its
usual
go
(Continued from page 4)
gent
guarantee¬
"Deflation only comes about the
ing agency if needed. The FedeHjilReserve System, which'is a perr hard way-," Mr. Eccles told the
manent. organization
created by Committee. "That's the way it al¬
enterprise ,is unable
to
obtain
requisite financial assistance on a
the
What Program for America?
.
to the satisfaction of such Federal
Reserve bank that the business
may
be that the RFC
should lend to railroads unable
to
into the financial markets for
reason
tested
$31/2 - billions of - consumer purSystem by inserting in the biU a gional organization through which,
Thasirig ^power and thus would
provision that the guarantee shall local financing institutions in a]i;
lead- to higher prices of commod¬
only be available "when it appears parts of the country would have
reasonable
borrower
a
needs
term
financing
needs
of
the
smaller business institutions with¬
The 12 Federal Reserve banks
and,
their 24 branches provide
/a/,
Advisory
Federal
no
set up as a bankers' bank and
principle exemplified in Federal
Housing Administration loans as
bank.
If approved by the
though the loan was of such qual¬
ity that it could be made without Reserve Bank the guarantee Would
the guarantee by giving
be made promptly available with¬
partici¬
pation -to.' their
correspondent out. referring the matter, .to any
banks or other banks in the com¬ agency in Washington. Each loan
munity. In order to meet this would have to be passed upon by
objection, the Board recommends the Federal Reserve Bank.;. There,
would be no blanket approval.
that the Committee adopt the
sug¬
gestion
see
financing
tion with the loan
guarantee prin¬
could not guarantee any loan un¬
less requested to do so by/the
would
guarantee
can
43
bank."' It
,
extensive
local
beyond
resort
I
now.
Government
was
experience which the Federal Re¬
serve System has had in
connec¬
Credit judgment and re¬
(3019)
going to be paid off, the
capital and surplus of banks.
"The Federal Reserve
System
people whom they know and well as in loans to veterans. This
with whose character, capability bill is a means of
aiding the pri¬
and capacity they would be fa¬ vate
banking sytem of this coun¬
miliar. A Federal Reserve Bank try to meet
particularly the longer
ground
banks, in
time is
local
of
some
does
course,
sponsibility Would remain pri¬
marily with the lending bank.
by gradual repayment
earnings.
jection to
of
Loans guaranteed would originate
with
local
banks
dealing with
loans
from
bill,
ever
for
ternative authority to the Federal
place the Reserve banks in com¬
petition with the private banking
a
are
that the* $139 million
of
government funds thereunder
may
be returned to
the Treasury and
fail to provide this
proposed al¬
16)
page
13b in
order
Of Term Loans
(Continued from
CHRONICLE.
I
recession.
will
not
escape
do
not
predict
such
a
I
fervently hope that it
occur.
But, we cannot
the conclusion
that infla¬
tionary prosperity cannot proceed
forever, without some halting, and
we
cannot overlook
if, for political
or
the fact that,
any
other
un¬
first quarter of 1946.
The real
weekly earnings of factory em¬
ployees in the first quarter of
1947, as compared to the first
quarter of 1946, declined 3.6%.
These index figures for the second
auarter of 1946, as compared to
the first quarter of
1947,
are
ap¬
proximately the same, with some
variations, one difference being
that the real weekly earnings of
(Continued on page 44)
had been a three-
ized there
Markets
Walter
Whyte
Says—
=
WHYTE=
170 level
By WALTER
The
all-important
may
prove
boomerang for
a
Expect early penetra¬
shorts.
I
weekend—the
spent last
(Continued from page 43)
for the first
quarter of 1947 were 5.7% below
those for the second quarter of
around the 170 level. Put¬
or
ting
least
I filled the brief case
tions.
study because
said
full of things to
forecast
weather
the
"Rain."
some
of
materials, in which the cost
The Government's
And because it
you
not
want to do is collapse
study markets.
don'i know in
Frankly, I
that I am certain.
*
*
*
But I
and
long run the pendulum evens
things out.
*
*
*
are
lawn
Taking
long look , at the
will see the im¬
a
market and market you
men to run them.
But my portant high was made a year
lawn mower just knocks the or so ago around 212.
The
tall grass down.
And so far first break took prices down
as getting a man, one of the
to about 163, latter part of
local residents (I'm a country 1946. .Early in 1947 the rally
gentleman, in case you want moved them up to around 184
to know) has promised to at¬ and on May 17 the low was
tend to what is laughingly about
163 again.
Today
referred to as my lawn, since they're back to about 170.
last April. He has yet to come That 170 figure, by the way,
around. Besides at $2 an hour has become a kind of symbol
I can swing that scythe my¬ for far too many traders and
self. It's good for me.
advisers. I believe the impor¬
*
*
tance of that figure has been
the
on
mowers
*
In
driving back to the city,
I became involved in a discus¬
sion
about trading
with my
I think
greatly over-rated.
will go through it
the market
on
comparatively small vol¬
in
If
in the midst of
unnecessary
are
many
problems, which call for
ful attention
respect
obligations,
tion's
collateral
thought¬
the part of
on
busi¬
government, but the
causes
of industrial con¬
and
ness
troversies
been
have
wages
frustration,1
political
and
fear,
fied, in a measure, the sacrifices
we have been compelled to make
in
blood and treasure to attain
this
dominant
position in
the
national con¬
With such a
world.
and such a world consum¬
mation, however long it may re¬
cept,
a
for
a
outstripped wages in the past year
their relative and respective
a
na¬
na¬
wholesome
infinitely in¬
sense,;
may be idealistic, but I am happy
to entertain them and to believe
may
be,
creased.
in their
will
be
These hopes, in a
ultimate
fulfillment.
Observations
(Continued from page 5)
be soothed by the fact that electric power produce
tion, freight traffic, and bank clearings are all continuing at levels
considerably above even the highs of previous active years. And the
supposedly frustrated and impotent consumer last weekend spent
record amounts cramming the baseball stadiums brimful, in betting
on the Belmont Park horses, and in holiday travel.
situation,
we may
Unfortunately, the prophecies of
and
hours, and when we pause to con¬
sider the fact that prices have
our
opportunities and our
tion's
question of wages and
There
hours.
in
inter¬
economically,
and
wholesome
mainly
revolved
have
around the
of the morass of eco¬
and
of their rights.
maintain
can
industrial contro¬
and
hopes
restriction by the gov¬
hand, and government and busi¬
ness
on
the other.
These labor
versies
his
and
the enjoyment
we
litically
question and the problem to every
thoughtful person as to what shall
be the relationship between gov¬
ernment
and labor on the one
stoppages
out
nomic
a
quire, the need for charity will be
wholesome constantly reduced, and the ability
to respond to whatever need there
respect for our government, po¬
legislation, which poses the
labor
world
inter¬
are
any ernment, ^beyond that which is
to be required to protect all the people
what
now
are
we
without
ference or
industrial peace during this year,
outside of one or two industries,
main
there
know
I
life,
have
We
do?
and
preserving what we are
in
ambitions,
his
of the government to
had comparative
is it the duty
suspect that the lows of
didn't rain, I was forced to mid-May are not the substan¬
mow the lawns, first chopping
tial bulwarks we would like
down the weeds ydth a scythe. to think them.
Rallies and
And if you've ever tried using declines will always be with
that long blade you'll know us.
Sometimes one will be
that after an hour or two all greater than the other. In the
didn't rain.
of
Duty
Now,, in the absence of
price controls, which are not
resumed, in my judgment,
who
tions,
farmers,
and
others
respect for the
the possibility of col¬
happy to call the American free lapse, to a firmer foundation upon
which
struggling mankind
can
enterprise system. But, we must
plant his feet again, in the hope
not define free enterprise as the
of peace and happiness, and that
right of any man or group of men
to exploit his fellow man, by the prosperity and well being which
exercise of unwholesome economic are so indispensable in the enjoy¬
ment of what Jefferson,, in the
power. We must understand free
of
Independence,
enterprise to mean the right of Declaration
every
American to be free to called "life, liberty and the pursuit
of happiness," we will have justi¬
pursue his individual enterprises,
ested
calculated.
labor is always
and
sense
subject
variations due to the cost
to
*
*
*
the
the index fig¬
be
identical,
approximately
present levels or will it
start down again?
Or will it
start moving up?
gotten its advance dope
the market because it
from
in wages,
for such increases would
ures
at
bureau must
The weather
have
from
Will it flounder around
what will the market do
here.
only to the extent of the
creased
eight-point
are
$
$
tors
figures
increase
holiday—going break, prices don't start up
the market and the fac¬ just like that.
Hi'
that made it tick.
At
The question of course is
those were my inten¬
men,
men,
all
and
taken from
authentic
governmental reports,
and they show that the costs of
commodities in the last 12 months
have increased more than the in¬
crease
in the cost of wages.
If
the cost of commodities had in¬
Memorial Day
over
fessional
laboring
These
rights of
na¬
wholesome respect
for the transcendant opportunity
philanthropists, which we now have to guide the
complished is a subject for the
thoughtful consideration of
statesmen,
businessmen,
pro¬
1946.
a
that after about an
employees
factory
couple of things to¬
decline.
gether it would be concluded
followed by new
tion
surprising.
But on Monday
the rally seemed to have hit a
snag and while there was no
sharp increase
in volume,
prices started to turn down.
This,
too,
isn't surprising.
Anybody who even casually
looks at the market would
have foreseen an obstacle at
Program for America?
other
What
day rally last week. A rally
which shouldn't have been
Tomorrow's
Thursday, June 5, 19431
COMMERCIAL & FINANCIAL CHRONICLE
THE
(3020)
44
our
other exported products.
United States' doom have
The London
joined
"Economist" issue of May
major article cabled by its correspondents resident here,
marshalls all the arguments to justify its interesting title "Recession
24
in
a
Not-too-deep reflection thereon as well as listening t<>
expounded by our domestic protagonists
quite obviously reveals that their honest mis-guidance is largely
imponderable elements that enter based on their prior reading of the stock-market quotation page*
into the solution of these ques¬ How different would be the public's interpretation of the "economio
tions, that cannot be resolved by facts" if they were viewed through glasses trained against the, back^
any piece of legislation that can
ground of a bull instead of a bear market! Incidentally, we wonder
be conceived by the mind of man.
whether the many writers who are citing the recent alleged stock
To enter into any satisfactory
market "collapses" to prove all manner of pet political and economic
discussion
of
these
problems,
would carry me far beyond my cases, at all appreciate the true perspective of the present
in
Under
increases, we are bound to come
to the conclusion that there tfre
the
Way."
vigorous argument as
market
function
obvious
time, but it is
government cannot
my
or
that
Index
at
helping prices):
to guide business, and labor, and
156 the
agriculture, in the accomplishment
escape
of
a
its responsibility in
sound economy for all
classes
134 in 1931, 164 in the rousing bull year of
in 1939, 107 in 1942, and 173 in the
high)
market year
people. It is obvious that
we
cannot continue to increase
the cost of life to the average
of
Actually, the present "collapsed" state of the Dow Jone$
168 must be seen against the following past levels (meat*
price level.
1936, 138 (with*.
climactic bullj
of 1945.
our
Dishonest Material
Omissions
1
movements ii
of knowi*
ity to meet that cost, with some
factors.
The
omission'*
a
hope of saving something from
(a cause of jail sentence likewise under British Law and New Deal
his annual income for the main¬
certain he knows all the an¬ that much greater.
tenance of a comfortable home, reform here) has been pointed out above. Other misleading omissions
swers.
So I did think about
the education of his children, and in the Public—although not in the private—statements of these "pothe market.
At least I spoke
So what to do?
Well, my
the
accumulation of something
litical"-economists—include the counteracting constructive elements
about
it,
though my son advice is to find a comfort¬ for the proverbial rainy day. It is
didn't think much about my able seat on the sidelines and obvious that we cannot shut our in the present picture consisting of careful day-to-day pruning of
inventories by businessmen, the good condition of our banks, the
replies. A condition he didn't watch. If there is any experi¬ eyes to the necessity for coopera¬
tion between business and gov¬ healthy financial situation of our farmers, the absence of over-expan¬
bother to hide.
menting to do, let the other ernment, between business and
sion of our productive capacity, and the general conservatism of
man do it.
He's now study¬
ing, or rather exposed to the
study, of Economics One, and
young son.
I also think that once it
ume.
through the chances of
sharp break will become
forgetting all
those aching muscles, I actu¬
ally spent considerable time
looking at the market. I real-
labor, between
More next
Thursday.
Whyte
—Walter
[The
article
time
views
do
in
expressed
this
not necessarily at any
coincide
Chronicle.
those
with
They
are
those of the author
of
the
presented as
only,]
'
.
Pacific Coast
Established 1856
Securities
H. Hentz & Co.
Orders Executed on
Pacifio Coast Exchanges
Schwabacher & Co*
Members
Stock
Exchange
Curb
Exchange
York
Commodity
Chicago
Exchange
Cotton
York
New
Exchange,
Board
of
New Orleans Cotton
Inc.
Trade
Exchange
York Stock Exchange
(Associate)
New York Curb Exchange
And other Exchanges
Francisco Stock Exchange
Chicago Board oj Trade
New York 5, N. Y.
14 Wall Street
Teletype NY 1-928
COrtlandt 7-4150
Private
San
N. Y. Cotton
Exchange Bldg.
NEW YORK 4,
Wire}.to Principal Offices
Francisco
Monterey
—
of the significance
of stock market
misguided. But not so is the distortion
perpetration of one* category of "material
—
Santa
Oakland
—
Fresno
Barbara
Sacramento
CHICAGO
DETROIT
culture,
so
as
business and agri¬
to produce a gen¬
erally stable level in national and
individual incomes, so essential to
our domestic happiness, and to the
industry.
Economic
Somersaulting
is to be found
the enormity*
of the public debt—present hair-tearing which was all smiles while
tenance of that
thd Roosevelt Administrations in peace and in war were blandly
America enjoys, but which some
increasing it 13-fold from $22 billion in 1932 to $260 billion, whichj
few of our people seem to be¬
is still smiles when there is a question of Federal spending, and whichj
grudge.
will be completely absent during the Election year of 1948 when it
Voluntary Action
is strategic for the Democratic Party—as a straight party measureThe President has urged volun¬
to hand the voters the tax-cut bonanza.
And even then (in the
tary reductions in prices. I realize,
words of ADA) alleviation of the war-imposed tax burdens must be
and
all realize, that there is
moral obligation resting upon confined to the lowest-income groups which "will leave money at
American business, just as there home in the (sic) right homes." Meanwhile, despite the professedlyis
moral obligation resting upon mortal fear of deflation and the charges against the Republican*
American
labor, and American
"deflationists," tax relief with its stimulation to purchasing power,,
world¬
main¬
leadership which
accomplishment
of our
wide obligations, and the
A
in
the
perfect
manifestation of economic somersaulting
hair-tearing of these gentlemen over
sudden
we
Members
York
New
New
San
Mis judgment
chronic and honestly
$
%
Monday,
New
beyond his abil¬
H:
H:
*
*
American family
goes
N. Y.
PITTSBURGH
GENEVA, SWITZERLAND
a
a
agriculture, not to be stimulated
by greed, though they are entitled is to be postponed.
Hi
Hs
H:
to be stimulated by the desire for
a
reasonable profit.
It is much
The columnist has not the
slightest illusion about scientific;
better for our economy to enjoy
exactitude of economics or even of statistics. Nor, of course, does
a
reasonable profit over a long
he
to enjoy a expect political warfare to be carried on without ammunition drawn,
flusji prdfit for a year or two, to from the arsenals of economics. But he does expect it to be thus
.be followed by an economic crash used by the Senator Barkleys—the recognized politicians—and not by
th&t' will take away all profits.
politicians masquerading under their economist reputations.
How this equilibrium can be ac¬
period of years, than
(Polume
Number
165
4600
,THE COMMERCIAL &
FINANCIAL CHRONICLE
L
(3021)
Securities
0
Acme Electric
June 26
Corp., Cuba, N. Y.
share.
to underwriters. The
selling stockholders
the proceeds from the sale of
63,860 shares.
Company
also will receive proceeds from the sale of
20,000 war¬
common stock to underwriters at an
aggregate
rants for
price of $200.
Of the
net
proceeds
($292,940) $50,000
Will be used to pay current bank
loans; about $20,000
Will be used for machinery and
equipment, and the re¬
mainder for working capital.
0
Air
May
class
Survey Corp., Washington,
28
A
(letter
notification) 3,000 shares ($5 par)
and 10,000 shares
($4 par) class B
Price—$5 a class A share and $4
No underwriting.
For purchase of
?and other expenses.
Allied
May
26
-
Finance Co.,
filed
25,000
a
class B
^equipment
\
Dallas, Texas
shares
($20
par)
5%
cumulative
convertible preferred.
Underwriting—None.
To be offered to present stockholders in
the
Offering—
share for each two shares of
share.
Proceeds—To retire
American
June
27
one
Price—$20
a
present indebtedness.
Broadcasting Co.,
filed
held.
common
ratio of
950,000 shares
($1
common
stock.
publicly.
Price by
amendment. Proceeds—To
prepay notes payable to ac¬
quire radio station WXYZ, to construct broadcast trans¬
mitter for station KGO at San
Francisco and for working
capital.
shares
by
pre¬
com¬
held. Rights expire June 25. Price
by amendment. Pro¬
ceeds—To redeem
outstanding 5% cumulative preference
Stock and to finance expansion
program.
Machinery Corp.
Offering tentatively set for June
10.
American
Maracaibo Co., Jersey
City, N. J.
May 27 (letter of notification) 135,100 shares of
common
/stock.
Of the total 67,500 shares will
be purchased at
$2
share by Suffolk Co., Ltd., for investment
and 67,600
shares will be
publicly offered by Blair & Co., Inc. and
per
A. M. Kidder & Co. at
an
$165,000, equivalent to
a
aggregate price not to exceed
of $2.44 per share.
Proceeds for payment of indebtedness.
maximum
American Water Works
Co., Inc., N. Y.
March 30, 1946 filed
2,343,105 shs. of common (par
$5)
plus an additional number determinable
only after the
results of competitive
bidding are known. Underwriters
—To be filed by amendment.
Probable bidders include
Dillon, Read & Co. Inc., White, Weld &
Co., and Shields
& Co.
(jointly), and W. C. Langley & Co. and The
First Boston
Corp.
by amendment.
(jointly).
Offering—Price
to public
(
Armour and Co.,
Dec.
(par $5).
Underwriting—Kuhn, Loeb &
Offering—The 350,000 shares of first
preference stock will be offered in
exchange to holders
©f its 532,996 shares of
$6 cumulative convertible
prior
rpreferred stock at the rate of 1.4 shares
of first prefer¬
ence stoek for each share
of $6 prior
preferred.
Shares
of first preference not
issued in
exchange will
Proceeds—Net proceeds will be
used to retire all
22
said
"we
have
be
sold
Atlantic
March
City
19 filed
(N.
J.)
stockholders,
for
common, being
Underwriters—
10
five officers of the
company who will receive proceeds.
41,000
shares
of
5%
Offering price
Underwriter—Estes, Snyder
& Co., Topeka,
Kans. To pay
outstanding indebtedness and expenses and
to open five additional stores in
writing—None.
issued and
are
tion
Kansas City, Mo.
use
of
is
enable
the prospectus.
said all of the sharei
purpose of the registra¬
holders to effect sales
by
Berkey & Gay said the shares had been sold in
1944
and 1945 to
a
group of about 50 persons who
represented
they were purchasing the shares for
investment and not
for distribution.
So
far, 231,204 shares have been sold in the
on
which
Pacific
also
Direct
securities,
Brayton
14
WALL
STREET,
NEW
Telephone BArclay
,
,
SAN
FRANCISCO
*
LOS
YORK
Under*
common.
receive
Flying
proceeds.
Service,
Inc.,
Robertson, Mo«
(letter of notification) 50,000 shares
($1 par>
27 V2 cent cumulative,
convertible preferred and 50,0(K>
shares (10c par) common.
Price—$5 per unit,
consisting
one share of each.
Underwriter—White and Co., St.
Louis, Mo. For expansion of operating facilities and for
working capital.
of
Brooklyn
(N.
Y.)
Union Gas
May 3, 1946 filed 70,000 shares
($109 par).
of
Co.
cumu.
Underwriters—To be filed
preferred stock
amendment.
Dy
Rejected—Company July 23 rejected two bids
re¬
Blyth & Co., Inc., and F. S. Moss-
ley
Co. and associates submitted a bid of 100.06
for *
4.30% dividend.
Harriman Ripley & Co. and Mellon.
Securities Corp. bid 100.779 for
definitely postponed.
4.40%
a
dividend.
In¬
Electric
Power Co.
.
i
include
Dean Witter & Co.;
Blyth &
Co., Inc.; Otis & Co. Proceeds—To finance
expansion
and improvement
program,
Bids—The company asked
for bids for the purchase of
the bonds
sale was postponed.
June
on
3, but the
California
Oregon Power Co. (6/10)
,March 26 filed 60,000 shares ($100 par) cumulative
ferred
and
408,000 shares
($20
(Continued
on
par)
common.
'»
■
1
,
,
46)
page
Underwriters and Distributors
:
pre-
Under-;
'■
of
'
Corporate and Municipal
Securities
&
Co.
Exchange
San Francisco Stock Exchange
Honolulu Stock Exchange
Los Angeles Stock Exchange
and other
principal Security and Commodity Exchanges
.
($1 par)
March 24
markets.
York Stock
New York
Co., Inc.
30,000 shares
and
MEMBERS
New
per
Wires
Dean Witter
&
Alstyne, Noel & Co., New York. Price—
share. Proceeds—Stock is
being sold by share¬
including
eastern
Stroud
are reserved for
attached to preferred
reserved for issuance upon exer-'
■
have
Private
Exchanges
brokers, dealers
Coast
The
CORPORATION
$7,125
open mar¬
(E. D. S. T.)
for
Co. and
May 5 filed 80,000 shares ($50 par) preferred stock.
Underwriting—To be determined by competive
bidding.
($1 par) capital stock. Under¬
to
*
Gum, Philadelphia
California
Offering—Company
re¬
Offer¬
outstanding. The
statement
&
writer—Van
Probable bidders
Feb. 3 filed 733,575 shares
in
will
are
ceived tor the stock.
cumulative convertible $6
par preferred.
a share.
ing postponed indefinitely.
expended
upon exercise of warrants
Bowman
Bids
Berbiglia, Inc., Kansas City, Mo.
$6
Davis
holders who will
Co.,
notification)
H.
Sept. 27 filed 268,875 shares
Canajoharie, N. Y.
Inc., New York
April 24 filed 150,000 shares ($1
par) common.
Under¬
Stone & Co., New York.
Price by
amendment. - Proceeds—The shares
are
being sold by
of
thereof.
reimbursement
outstanding warrants.
Price
By amendment
Proceeds—Net proceeds,- together with other
funds, will
be used to pay the
company's 2% subordinated note
the principal amount of
$5,268,750 and accrued interest.
•Offering date indefinite.
working funds.
writer—Hayden,
(letter
shares
For
—
—
general
1957.
Underwriter—
Price by amendment. Pro¬
OPEN TO 6:3) P. M.
FIRST BOSTON
issuance
J
12
30,000
funds
Chicago, Inc.
Preferred
—
and 95,000 shares
cise of
140,000 shares ($10 par) common.
Under¬
writer—F. Eberstadt &
Co., Inc., New York.
Price—$40
a share.
Proceeds—The shares are
being sold by execu¬
tors of the estate of Bartlett
Arkell, a founder of the:
company and President until 1940.
\
v
Sept.
for
offered for sale for cash.
filed
Watch
-
have non-detachable stock
purchase warrants for purchase of
30,000 shares of com¬
mon stock of the
total common,
375,000 shares will b#
working capital and used to fi¬
airplane production program.
Business—Manu¬
facture of airplanes.
Benrus
May 12,
filed
writers—Paul
nance
June 3
on
30,000 shares ($50 par) 5% cumulativ*
preferred and 500,000 .shares ($1
par) common.
"Under¬
due
Beech-Nut Packing
Co.,
to
Proceeds
treasury
Boston Store of
Corp*, Wichita, Kan.
May 2 filed $2,000,000 of 4Vk% convertible
sinking fund
•
None.
—
company's
Sept.
Aircraft
(subordinated),
stockholders of record
to withould action.
& Co. and J. W.
Brady
Price by amendment.
Proceeds—
Blair & Co.,
Inc., New York.
ceeds—To be added to
Gordon
demption of 3,907 shares of 7% cumulative
preferred o»
April 1, and for funds deposited in trust
for redemption
on Oct. 1 of
remaining preferred shares. Although it wai
proposed to offer the stock for
subscription to stockholders at $10 per
share, company on Sept. 20 decided
Underwriters—Dempsey-Tegeler
Beech
common
scription^ warrants relating
May 8 filed $500,000 of first mortgage
4%% serial con¬
bonds and 60,000
shares
($1 par) common.
for
(no par)
—
purchase assets and
on
Underwriting
of
vertible
and
To
Blumenthal
bonds.
loan
Memphis, Tenn.
(Sidney) & Co. Inc., New York
Aug. 30 filed 119,706 shares (no
par) common and sub¬
In lieu of cash
payment of the bonds the'
Commonwealth will accept the 30-year bonds
in ex¬
bank
shares
Underwriter
working capital.
1927.
repay
share.
a
the basis of one additional
share for each five
shares held. Rights
expire June 13. Unsubscribed shares
will be offered
publicly. No underwriting.
For addi¬
tional
Australia
those
Pittsburgh
Chicago "grid othef eitiesF * ;'d!
1947,
(Commonwealth of) 6/16)
May 29 filed $19,000,000 10-year 3V4%
bonds, due 1957,
and $19,000,000 of 20-year
3%% bonds, due 1967. Under¬
writer—Morgan Stanley & Co., New York.
Price by
amendment.
Proceeds—To redeem 30-year
5% external
Co., St. Louis, Mo.
$10
—
Miss.
30,000
working capital.
scription to
common stock. This dividend
policy will become effec¬
tive June 15 and will continue to
the end of 1948.
&
Inc., Corinth,
Bird
bidding.
offering is part of American's
plan to
dispose of its holdings of 1,150,000
outstanding shares
of Atlantic City. The shares
remaining after the public
offering will be distributed as dividends on
To
10
Machine Co., South
Walpole, Mass.
May 15 (letter of notification)
20,000 shares of (no par}
common.
Price—$12.50
a
share.
Offered
for
sub¬
Proceeds—The
new
Price
Meeks & Co.,
Smith, Barney
& Co.
(jointly); Blyth & Co., Inc.; Union "Securities
Corp. Price—To be. determined by competitive
loan of
as
the
(letter of notification)
common.
competitive bidding. Probable
bidders include: The First Boston
Corp., and Drexel &
Co. (jointly); Shields
Co., and White, Weld & Co.
(jointly); Dillon, Read & Co., Inc., and
•
Commission had raised the
question
Berry Motors,
May 27
Electric Co.
522,416 shares ($10 par)
institutions
the
offered by American Gas &
Electric Co.
To be
determined by
i
rf
,i
•
and to redeem its
conclusion it will
not be necessary to issue
any additional shares of com¬
mon stock" as
part of company's
Pacific Coast Stock
Corporate and Public Financing
Boston
to
come
Quotations and executions
i v
Unsub¬
Mich.
Co., New York.
V
one-third
held.
Berkey & Gay Furniture Co., Grand
Rapids,
cumulative first
preference stock, Series
A; 300,000 shares of convertible
second preference
stock, Series A, and 1,355,240 shares
J
share
outstanding 7% preferred stock.
George Eastwood, President, in letter to
Chicago
July 12 filed 350,000 shares (no
par)
common., stock
common
the
effect of
making the entire
offering public. The Commission staff
stated that regis¬
tration is required if
any of the remaining
733,575 share*
are to be sold.
Price—At market. Proceeds—Go
to sell¬
ing stockholders.
common
common will be purchased by the
Price—Public offering prices
by amend¬
unexchanged shares of $6 prior stock
debentures
(6/10)
Mar. 31 filed 133,000 shares (50c
par) common, of which
10,000 will be offered to officers and
key employees.
Underwriter—Townsend, Graff & Co. and Gearhart &
Co., Inc. Price—$3.50 per share. Proceeds—For
general
corporate purposes including reduction of bank loans
and
outstanding notes.
each
of
and
whether such sales had
Bearings Co. of America,
Lancaster, Pa.
stockholders of record June 10 on the basis
of one
share of new preferred for each seven
shares of common
mon
American
for
to
ket
of^
underwriters.
ment.
for
subscription
company in the ratio
the
share
new
offered
Offering
ferred, Series A. Underwriter—White, Weld &
Co., New
York.; Offering—To be offered for subscription
•:
of
change for the
American Cyanamid Co., New York
(6/26)
May 13 filed 391,076 shares ($100 par) cumulative
•
a
be
300,000 shares of second
preference
publicly.
The 1,355,240 shares of
American's
Inc., N. Y.
par)
Underwriter—Dillon, Read & Co. Inc., New York. Offer¬
ing—A maximum of 100,000 shares may be sold
by com¬
pany to persons, firms, or corporations with whom the
corporation had network affiliation agreements on March
01. The remainder will be offered
0
of
scribed
of
common
ISSUE
refinancing plan.A
D. C.
common.
share.
stockholders
four
offered
will
common
Proceeds—Company will receive proceeds from
and
Registration
INDICATES ADDITIONS SINCE
PREVIOUS
stock will be
132,740 shares ($1 par) common stock.
Underwriters—Herrick, Waddell & Co., Inc., and First
Colony Corp.
Offering—To be offered publicly at $5
a
in
<>
(6/23-27)
filed
Jhe sale of 68,880 shares
Now
45
5,
7~430<}H,
N.
Y.
,
Kidder* Peabody
•
Members
New York
Co.
Founded 1865
of the New York and Boston
Boston
Stock
Exchanges
Philadelphia
Chicago
ANGBLE^, fHONOLULU
-7- *
.*
•
"
^
1
*
h"
—■
■
>
-
-
-
i
46
o
June 9,
Bonds
Agreement
California Oregon Power
Claude
Common
Preferred & Com.
Co
Common
Corp
Co
California Water & Telephone
Consolidated Edison Co. of
New
Bonds
Preferred
Bonds
(EDT)
York, Inc., 11:30 a.m.
11, 1947
June
($1 par) common. Under¬
Offering—Shares will be offered for
subscription to common stockholders on basis of one
share for each 10 shares held.
Price by amendment.
March 28 filed 223,954 shares
writing—None.
13, 1947
...Preferred
Central Arizona Lt. & Pwr. Co
16, 1947
..-Bonds
..Preferred
Bonds
Coast Counties Gas & Elec. Co
...
Toledo Edison Co.
11
....Bonds and Preferred
June
61%.
owns
Equip. Trust Ctfs.
June
19, 1947
Equip. Trust Ctfs.
Wheeling & Lake Erie Ry.June 23,
Feb.
Acme Electric Corp
.Preferred & Com.
June 24, 1947
Telephone Co.
11:30 a.m. (EDT).
New York
Debentures
26, 1947
Preferred
the extent of
one
subscribed for. The remaining
were
to
are
be
by
bidders include
Clopay Corp., Cincinnati
(6/10)
construction.
14 filed
Underwriting,
200,000
none.
Ltd., Toronto, Canada
(no par) 'common stock.
Offering—To be offered to common
for
each
10
shares
held.
on
basis of
one new
Proceeds-—For
share
general funds
to finance expansion program of company and Canadian
subsidiaries or to reimburse treasury for expenditures
amendment.
Proceeds—Company is
selling 35,000 shares and 215,000 shares are being sold
by stockholders. Company will use its proceeds to repay
bank loans, retire outstanding closed mortgage 4% regis¬
tered serial bonds and to purchase plant property at
May
filed
$2,000,000, series 6, 4% first mortgage
5-year bonds, and $2,000,000, series 7, 5% first mortgage
10-year bonds.
Underwriters—None.
Price—At par.
Proceeds—To finance improvement program and to re¬
deem
Co.
($25 par)
shares
140,000
4%
outstanding bonds.
Balance will be added to work¬
ing capital.
ing.
being sold by Harry R. Drackett, President (6,929
Charles M. Drackett, 7,371 shares). Price
Mines, Ltd., of Toronto.
Duraioy Co.,
common
publicly. Price—$26 a share. Proceeds—To
.retire all unexchanged shares of 5% preferred and to
repay $1,150,000 of short term bank loans.
'
&
in
total,
for the
exchange
be offered
Cohart Refractories Co.,
common
common
Mrs.
$3,25 per share).
Underwriter—Johnson.
Pittsburgh, Pa., and The First Cleveland
Corp., Cleveland.
The company will use its proceeds
for working capital.
■ ■■
\.
:
1
proximately
of the company.
Connell
(W. W.),
-
oil well
a
on
Inc.,
(letter of notification)
21,900 shares
($10 par)
5%% cumulative preferred and 10,000 shares ($1 par)
common.
Price—$10 a preferred share and $8 a com¬
mon
share.
Underwriter—Johnson, Lane, Space and
Co., Inc. To retire short-term bank loans and for addi¬
tional
share.
No underwriting.
property.
Y.
(6/10)
redeem at
debentures
$24,050,000 short-term bank loans.
Inc.; Morgan Stanley & Co. Proceeds to
101 Vz company's $35,000,000 20-year 3^2%
due 1956 and to repay
The
are
balance will
be
Invited—Bids
invited
on
or
added
the
for
before 11
the
to
company's treasury.
of the securities
(EDT) June 10 at com¬
purchase
a.m.
Consolidated Natural Gas
15
filed
fered to the
one
purchase
(6/13)
May 20 filed 160,000 shares ($25 par) »$1.10 cumulative
preferred stock.
Underwriters—The First Boston Corp.
and Blyth & Co., Inc.
Offering—Company will offer
four shares of new preferred in exchange for each share
of $7 and $6 preferred.
Unexchanged shares of new
preferred will be sold publicly.
Price by amendment.
Proceeds—Proceeds will be used to redeem unexchanged
shares of old preferred at $110 plus accrued dividends.
The. balance will be used to finance the company's con¬
struction program.
Central Soya Co.,
Inc., Fort Wayna, Ind.
Aug. 21 filed 90,000 shares
writer—None.
^
(no par) common. Under¬
Offering—Common shares Initially will
be offered for subscription to
rate of
one
common
stockholders at
share for each 7% shares held.
shares will be sold to underwriters.
Unsubscribed
Price by amend¬
9
filed
300,000
.
par) 5%
non-cumulative;
equipment.
;
Edgecumbe Exploration Co., Los
preferred
20 on
presently held.
Materials
Corp.,
New York
10
and
shares
of common.
Underwriter-
Dillon & Co., New York.
To purchase ma¬
and equipment and for other working capital
Eastman,
chinery
'
requirements.
will be used
,
,
.
!
Feb. 26, filed 150,000 shares ($1 par) common class A.
Underwriter—E. F. Gillespie & Co., Inc., New York.
Price—$7.25 a share.
The registration states princi¬
pal stockholder has granted the underwriters an optiou
to purchase 45,000 shares of class B ($1 par) common
Federal Electric
com¬
'
L. I. City, N. Y.
Products Co., Newark, N. J.
share, exercisable for a period of three years:
Proceeds—Proceeds of approximately $870,000, together
at $7.25 a
($5 par) common stock.
Underwriters—First Boston Corp.; New York.
Price by
amendment.
Proceeds—Go to Joseph Levy, President,
selling stockholders. Offering date indefinite.
Aug.
(
(letter of notification) 2,250 shares (no par):
$5 cumulative preferred and 22,500 shares (lc par) com¬
mon.
Price—$100.50 per unit, consisting of one share of
panies, Peoples Natural Gas Co. (Penna.), Hope Natural
Gas Co. (W. Va.), East Ohio Gas Co., and New York
Crawford Clothes, Inc.,
„
April 29
shares of four operating
State Natural Gas Corp.
.
mining claims.
stockholders of record June
additional
^
Angeles, Calif.
May 26 (letter of notification) 137,386 shares ($1 parjcommon, of which 68,693 shares will be offered publicly^
at $1 a share.
The remaining shares are for promo¬
tional purposes.
No underwriting. For development of
#
Rights will expire July 11. Price by amendment. Pro¬
to
■
plant and machinery and
Fairport
ceeds—Proceeds, together with other funds,
_
~
Brooklyn, N. Y.
Decu.31 filed 5,000 shares ($100
Co., New York
share for each five shares
.
preferred. Underwriters—None. Offering—To be offered
at par to customers, officers and employees of the com¬
pany. Proceeds — For corporated purposes including
modernization and improvement of the manufacturing
shares ($15 par) capital stock.
Offering—The shares will be of¬
545,672
common
,
f
Kidder, Peabody & Co. The stock is being offered
by' East Coast Public Service Co., parent. Bids for pur-,
chase of the stock scheduled for May 19 has been post¬
Cdelbrew Brewery, Inc.,
For drilling test
t
Co^
working capital.
Central Arizona Light & Power Co.
,
shares of $10 par common. Under¬
writers—To be determined by competitive biding. Prob¬
able bidders include Harris, Hall & Co. (Inc.); Otis &
Fort Worth, Texas
May 21 filed $60,000,000 refunding mortgage bonds series
C, due 1972. Underwriting to be determined by com¬
petitive bidding. Probable bidders: Halsey Stuart & Co.
the basis of
2
'
Mar. 28 filed 60,000
May 26 (letter of notification) 40,000 shares of common.
Price—$5
May
Castleberry's Food Co., Augusta, Ga.
,
Co.
poned indefinitely.
•
Underwriting—None.
in connection with exploration, sinking ofshafts, diamond drilling and working capital.
Johson,
.
pany's office, 4 Irving Place, N. Y.
purposes
Scottdale, Pa.
12$00 shares ($1 par) common for the account of
Thomas R. Hayward, Jr.
Price—At market Cap-- v
and
Louisville, Ky.
shares ($5 par) common. Under¬
writers—Harriman Ripley & Co., and Lazard Freres &
Co., both of New York. Price by amendment.-, Proceeds
—The shares are being sold by Corning Glass Works,
New York, and represent 88.8% Of the total outstanding?
of
,
By
—
(letter of notification) 25,000 shares ($1 par)
on behalf of the issuer, 12,500 shares
($1 par);
for the account of Thomas R. Heyward, Jr.,
East Coast Electric
Mar. !28 filed 182,520
400,000 shares of common stock.
Under¬
writer—No underwriters.
Offering — To the public at
$1 a share in Canadian funds.
Proceeds—For a variety
•
shares) ;
March 12
June 24 filed
June
Co., Cincinnati
Drackett
April 28 filed 14,300 ($1 par) common shares. Under¬
writer—Van Alstyne, Noel & Co. Proceeds—Stock is
75,000 shares will be:
company's ($25 par) 5%
first preferred stock on a share for share basis, plus
accrued dividends on the old stock. The remaining 65,000
shares and all unexchanged shares of new preferred will
the
Offering—Of
cisco.
offered
Bids
Carscor Porcupine Gold
Ontario
shares of capital stock of G. H. Cherry,
such shares presently outstand-
Inc. out of a total of 625
(6/16-20)
preferred,
Underwriter—Dean Witter & Co., San Fran¬
Consolidated Edison Co. of N.
Capper Publications, Inc., Topeka, Kans.
28
5V4% cumulative convertible first preferred. To be of¬
at a maximum of $26 a share. Underwriters —..
Pacific Co. of California, Cruttenden & Co.,
Pacific
and
Ohio.
Counties, Gas & Electric
filed
22
Series A.
already made.
May
Calif.
of notification) 11,500 shares ($25 par>
fered
Price—By
shares
stockholders of record June 2
all proceeds.
Douglas Oil Co; of California, Clearwater,
March 13 (letter
purchase 493
May 28 filed 250,000 shares ($1 par) common.
Under¬
writer—Merrill Lynch, Pierce, Fenner & Beane, New
,
California Water & Telephone Co.
May
sold by a stockholder. Twin Coach 'Co.,.
Capital Corp., all of Los Angeles; Brush Slocumb & Co.,
San Francisco; and Adele W. Parker, Clearwater. To
American.
of North
notes
>
Kent, O., which will receive
& Co. Inc.; The
Read
Corp., Detroit
Shares are being
sale.
competitive
Boston
Coast
competitive
May 22 filed 15,200 shares ($25 par) common.
Under¬
writers—Blyth & Co., Inc., San Francisco; and H. M.
Byllesby and Co. and Central Republic Co., both of Chi¬
cago. Price by amendment.
Proceeds—To finance new
Breweries
Dillon,
133,383 shares
Divco
April 30 filed 34,963 shares ($1 par) common. Under¬
writers—Reynolds & Co. and Laurence M. Marks & Co.,;
both of New York. Price—By amendment. Proceeds—,
amendment.
bidding.
Probable bidders include: First Boston Corp. and Blyth
& Co. Inc. (jointly); Merrill Lynch, Pierce Fenner &
Beane and Har'riman, Ripley & Co. (jointly). California
Oregon will sell all of the preferred and 18,000 shares
of the common, Standard Gas & Electric Co. (parent,)
will sell the remaining 390,000 shares of common. Bids
—Bids for the purchase of the .securities scheduled for
May 20 has been postponed to June 10.
Canadian
through
probably
sold,
Chicago,
of three
officers of the company.
Corp.; White, .Weld & Co. and Shields
& Co. (jointly); Kuhn, Loeb & Co. and W. C. Langley
& Co. (jointly); Otis & Co.; Blyth & Co,, Inc.; Smith,
Barney & Co..
Proceeds—For prepayment of bank
First
(Continued from page 45)
determined
be sold through Bennett, Spanier & Co.,
agent. The shares are being sold on behalf
(no
of
to
Cleveland for every five North Ameri¬
Rights expired May 27 and 1,648,275
shares held.
can
Elmwood Place,
be
shares
1,847,908
offered 1,714,524 shares to common stockholders
North American of record March 19 at $15 per share
York.
American Cyanamid Co
writers—To
Disticraft, Inc., Chicago
par)
common.
Offering—The North American Co. owned all the shares
Common
June
(O.) Electric Illuminating Co.
filed
21,
loan
1947
Seaboard Container Corp
preferred at $107.50 a share.
as
Probable
18, 1947
Illinois Terminal RR._.
preferred. Price—By amendment. Proceeds—To finance,
construction and to redeem unexchanged shares of old
may
shares
(EDT)—...
a.m.
„
May 8 (letter of notification) 15,000 shares Class B com¬
mon.
Price—At market.
All or part of the securities,
and
Australia, Commonwealth of
Hawaiian Electric Co—
ently outstanding 100,000 shares of cumulative preferred,
41/2% series, while the Series, B preferred will be sold
to the public through the underwriters. The underwriters
also will offer publicly unexchanged shares of Class A
acquisition
and development of oil properties.
Company also plans
to advance funds to Summit Airways, Inc., of whose
Cleveland
June
& Co., Cincinnati. O.
will be offered on a
basis to holders of the company's pres¬
share for share
Proceeds—To finance airline operations and
..Preferred
——
June
New York
Inc.,
Co., New York, and W. E. Hutton
Offering—The Series A preferred
stock it
Dayton Power & Light Co..——
Mississippi Power & Light Co
Jewel Tea Co
Neon,
&
cumulative preferred. Underwriters—Morgan Stanley
(letter of notification) 1,000 shares $1.25 divi¬
dend prior preferred stock, being offered on behalf of
Harry Hyman, Chairman of Executive Committee of
company, and Jack Hyman, President of the company.
Price—$25 a share.
No underwriting.
10, 1947
June
Machinery
of New York, N. Y.
Citizens Casualty Co.
May 29
(Showing probable date of offering)
(6/10)
($100 par) Series A, cumula¬
preferred and 75,000 shares ■ ($100 par) Series B
May 16 filed 100,000 shares
tive
NEW ISSUE CALENDAR
American
Dayton Power & Light Co.
Proceeds—Working capital, etc. Offering indefin¬
ment.
itely postponed.
1947
Michigan Consolidated Gas Co
Great Northern Ry
Conditional Sale
Thursday, June S, 1947'
& FINANCIAL CHRONICLE
THE COMMERCIAL
(3022),
shares
of other bonds, will be used to repay
with $755,000
the
a property mortgage, to pay off
amount of $1,295,000 to Bankers Commer¬
cial Corp., New York, and for additional working capital:
balance
of $34,000 of
loans in the
•
Crown
Point Mining
& Milling Co., Spokane,
Wash.
Ferguson
May 26 (letter of notification) 1,000,000 shares of com¬
Price—25 cents a share.
Underwriter—To be sold
writers—F. Eberstadt & Co., Inc., New
Cyprus Minos, Ltd., Montroal, Canada
land, O. plant. Offering postponed.
May 31 filed 500,000 shares of common stock (par $1).
Underwriters—Sabiston-Hughes, Ltd., Toronto.
Offer¬
Films
ing—Shares will be offered to the public at 75 cents a
Proceeds—Net proceeds, estimated at $300,000,
■
Hl l
■
II
'■'
-L;
,
f
•,»
and
stock, of which
• }-'
filed 100,000 shs, ($5 par) CI. A stock
300,000 shares
will be used for mining operations.
1
Inc., New York
June 25, 1946
share.
h
100,000 shares ($50 par) 4%%
preferred and 250,000
through officers of company.
For mine development,
working capital and other expenses.
1
(Harry), Inc., Detroit
cumulative
shares ($1 par) common. Under¬
York, and Watling, Lerchen & Co., Detroit. Price by amendment. Pro¬
ceeds—To equip and improve recently acquired Cleve¬
Mar. 31 filed
mon.
(10, cent par)
I.< J
common
A
JVolume 165
Number 4600
THE COMMERCIAL &
200,000 shares reserved for conversion of class A. Each
shares of class A stock is
initially convertible into 2
•
shares of
stock.
common
share; remaining proceeds, together with
films.
used for production of educational
.
•
•
•
shares will
be
filed
by amendment.
be offered for
subscription to
holders in the ratio of
Price—By
one
amendment.
(letter of notification)
Price—$1 a share.
development of mining claims.
Foote
Mineral
common stock¬
share for each 10 shares held.
Philadelphia
writer—Wagenseller
of
stock
Company has asked the SEC
Probable
Sachs
upon the exerUnderwriter — Van
ceeds—For
•
•
.
a
share.
Grolier
—
Society, Inc.,
New
York
1947 (by
amendment), 30,000 shares at 4%%
cumulative preferred stock
($50 par) and 170,000 shares
-of $1 par common
stock.
Underwriters—Riter & Co.
jand Hemphill,
Noyes & Co.
Offering—Underwriters to
purchase from the
company 30,000 shares of preferred
and 70,000 shares of
common; and from Fred P.
Murphy
and J.. C.
Graham, Jr., 100,000 shares of issued and
out¬
standing common.
Proceeds—To retire $6
cumulative
.preferred, balance for reduction of bank
loans.
Gulf
States Utilities
Co., Baton
Commission.
Hartflald Storas,
Inc., Los Angalas
120,000 shares ($1 par)
27, 1946 filed
common.
Underwriters—Van Alstyne, Noel &
Co., New York, and
^Johnston, Lemon & Co.,
Washington, D. C. Offering—
To be
offered
to
the
public
at
$5
a
share.
Proceeds—
Company,is selling 50,000 shares and stockholders
selling ,75,000 shares. The company will use its
are
proceeds
to pay the costs of
opening additional stores and to ex¬
pand 'merchandise in its
existing stores. Offering tem¬
porarily postponed.
debt
Hawaiian Electric
Co.,
Ltd., Honolulu (6/16-20)
vious construction
expenditures.
•
Helena Mines,
Inc., Eugene, Ore.
May 26 (letter of notification) $90,000
10-year 4% first
mortgage bonds. Price—Par.
To be sold
through of¬
retirement,
bid¬
Goldman,
Corp. (jointly);
finance
construction
new
Jahn
& Oilier
balance will
be
mort¬
added
to
Engraving Co.
•-
Inc., New York
Proceeds—To
May 16 filed 75,000 shares ($100 par) cumulative
pre¬
Underwriters—Lehman Brothers, and Goldman,
Sachs-& Co., New York.
Price—By amendment. Proceeds
reimburse company for
redemption
of
old
pre¬
ferred and added to general funds for
general corporate
purposes.
Hainan
Aircraft
(letter
of
Corp., West Hartford,
notification)
6,196
Conn.
shares
(no
class B
class A
par)
common and 400 shares
(no par)
com¬
Price—$25 a share each. Underwriter—Henry C.
Robinson and Co.,
Hartford, Conn.
To pay research
expenses for development of aircraft.
mon.
Lexington,
Ky.
May 9 filed $24,000,000 of first mortgage bonds, Series
A,
due 1977, and 130,000 shares
($100 par) cumulative pre¬
ferred.
Underwriters—To be determined by competitive
bidding. Probable bidders for securities include Blyth &
Co., Inc.; The First Boston Corp.; Halsey, Stuart & Co.
Inc. (bonds); Union Securities
Corp. and Merrill Lynch,
Pierce, Fenner & Beane (jointly) and^Lehman Brothers
and Lazard Freres & Co.
be offered
(jointly). Offering—Bonds will
publicly while preferred stock initially will
offered in exchange for its
outstanding ($100 par)
6% preferred and ($50 par) junior preferred.
The basis
exchange will be one share of new preferred for each
share of 6% preferred and one share of
new preferred
for each two shares of
junior preferred.
Shares of new
preferred not issued in exchange will be sold at
of
tive
tive
competi¬
bidding.
Price to be determined by competi¬
bidding. Proceeds—Proceeds from the sale of new
bonds
will
be
used
to
redeem
$21,000,000
mortgage bonds, due 1970, at $105.
sale
a
of
new
preferred
of old
share.
will
be
rate
of
one
share
of 4% first
Proceeds from the
used
to
redeem
un¬
preferred.
cor¬
bank
indebtedness
and
Price—Par.
Underwriter—S.
K.
Cunning¬
Inc., Pittsburgh, Pa., and Warren W. York
Co., Inc., Allentown, Pa. For payment of bank loans.
Purchase of new machinery and for working capital.
&
La
Plant-Choate
Cedar Rapids,
Manufacturing Co.,
Inc.,
Iowa
April *30 filed 60,000 shares ($25 par)
vertible preferred.
to
and other plant equip¬
Mays
(J. W.)
Business—Mining.
Inc., Brooklyn, N. Y.
Feb. 28 filed
150,000 shares
writer—Burr
&
($1 par)
Under¬
Price by amend¬
total, 100,000 shares are being
sold by sevens stockholders. The
remaining 50,000 shares
are being sold
by the company, vwhich will use its pro¬
ceeds for general
corporate purposes.
ment.
common.
Co., Inc., New York.
Proceeds—Of the
Metalumber Corp., Columbus, Ohio
May 28 (letter of notification) 1,000 shares of common.
Price—$100 a share.
No underwriting.
For organiza¬
tion and operating expenses.
Michigan Consolidated Gas Co.
(6/9)
$6,000,000 first mortgage bonds, due 1969.
Underwriting—To be determined by competitive bid¬
ding. Probable bidders—Dillon, Reed & Co., Inc.; Hal¬
sey, Stuart & Co. Inc.; The First Boston Corp.; Harris,
Hall & Co. (Inc.). Price—To be be determined by com¬
petitive
bidding. Proceeds —Net
proceeds,
together
with funds to be
received from the
sale
of
additional
shares to Michigan's parent, American Light &
Traction Co., will be used to finance its property con¬
and equipment
program
and to reimburse
struction
its
treasury
for
previous construction expenditures.
purchase of the bonds will be re¬
company's office, 415 Clifford St., Detroit,
to 11 a.m. (EST) June 9.
Bids—Bids for
ceived
at
Mich, up
the
Airlines,
Inc.,
Kansas
City, Mo.
May 14 (letter of notification) 30,601.4 shares of com¬
mon. Price—$7.50 a share. No underwriting. To be added
to working capital.
•
Midland
Cooperative Wholesale,
Minneapolis
May 29 filed $1,000,000 4% non-cumulative preferred
Stock "D."
Underwriting—None.
Price—$103 a share.
Proceeds—For
purposes.
•
operating capital and other corporate
Business—Cooperative wholesale business.
Mile-Hi Games Co.,
Denver, Colo.
May 28
(letter of notification) 25,000 shares ($1 par)
capital stock.
Price—$1 a share.
To be sold through
officers of company.
For manufacture of card game
known as. "Ball Up."
Mission
Appliance Corp.,
Los Angeles
March 25 filed 58,000 shares ($5 par) common.
Under¬
writer—Lester & Co., Los Angeles.
Price—$11.50 a
share.
Proceeds—For construction
of
new
plant build¬
ing and an office building and for purchase of machin¬
ery and equipment.
•
Keystone Driller Co., Beaver Falls, Pa.
May 29 (letter of notification) $300,000 5% first mort¬
gage bonds.
ham & Co.,
of
Proceeds—For exploration and devel¬
Mid-Continent
Co.,
retire
of machinery
opment of mining claims.
,
Kentucky Utilities
the
Manontqueb Explorations, Ltd., Toronto, Can.
April 10 filed 300,000 shares ($1 par) common.
Under¬
writer—Name to be supplied by amendment.
Price—
common
May 28
at
ment.
March 7 filed
(6/11)
ferred.
•
stock
•
102,000 shares ($1 par) common. Under¬
writer—Sills, Minton & Co., Inc., Chicago. Price—By
amendment. Proceeds—The
shares, which constitute ap¬
proximately 48.5% of company's outstanding common
stock, are being sold to stockholders.
•
Jewel Tea Co.,
each.
finance purchase
40 cents
pay
$10,578,000 and
exchanged shares
Mar.,31 filed $5,000,000 first
mortgage bonds, series F,
due 1977.
Underwriters—Dillon, Read & Co., Inc., New
York, and Dean Witter & Co., San Francisco.
Price by
amendment. Proceeds—To
repay $3,000,000 of short term
•promissory notes and to reimburse its
treasury for pre¬
competitive
new
ble preferred and 85,000 shares
($1 par) common.
Un¬
derwriter—Kirchofer & Arnold, Inc., Raleigh, N. C. Price
—The debentures at 102.507, while the
preferred shares
will be offered at part and the common shares at
$4
Brothers;
Feb. 26, filed
be
j.
by
Lehman
the
Manhattan Coil Corp., Atlanta, Ga.
May 20 filed $500,000 5% serial debentures, due 19491957; 12,000 shares ($25 par) 5%% cumulative converti¬
funds.
working capital.
debt of
gage
Rouge, La.
Jan. 20 filed 1,909,968
shares (no par) common.
Under¬
writer—None.
Offering—The shares will be offered for
subscription to commoif stockholders of
Gulf States'
'parent, Engineers Public Service
Co., New York.
The
subscription basis will be one share of Gulf
States stock
for each share of
Engineers common held.
Price—$11.50
a share.
Proceeds—Purpose of offering is to carry out
a provision of
dissolution plan of Engineers
approved by
the
June
determined
—To
-April 2,
-
be
bidders:
to
complete a plant at Sunnyvale, Calif., and for other
porate purposes. Offering temporarily postponed.
its fi¬
on
general funds.
Griggs, Coopsr & Co., St. Paul, Minn.
Sept. 3 (letter of notification)
12,000 shares ($1 par)
common.
Underwriters—Kalman & Co., Inc., St. Paul
Price—$25
treasury
Inc.; Harriman Ripley & Co.;
Harris, Hall & Co. (Inc.).
Proceeds—Part of the proceeds will be used to
Proceeds to buy all assets of Mid-State
Inc. of Bedford, Ind., which makes a
Proceeds
For improvement and
modernization program.
Offering indefinitely postponed.
to
to defer action
$22,000,000 of first mortgage bonds due 1977.
Underwriter—To be determined by
competitive bidding.
Probable bidders include
Halsey, Stuart & Co. Inc.; The
First Boston
Corp.; Glore, Forgan & Co.; Blyth & Co.,
complete line of over 150 drug
items, and for additional
working capital. Offering will not be made
until company has qualified the sale of its shares
in various bluesky states.
'
added
Iowa-Illinois Gas & Electric Co.
Drug & Chemical Co.,
Pittsburgh
May 5 (letter of notification)
150,000 shares of common"
stock. Price—$1.
Underwriter—Willis E. Burnside & Co.,
Co.,
be
Feb. 15 filed
Greil
Pharmacal
will
&
and for
stockholders. Company has also issued
55,000
purchase warrants to the
selling stockholders at
a share
entitling them to purchase up to
Aug. 1,
1949, common stock of the
company at $11 a share. Price
by amendment. Offering
4
re-
Co.,and The First Boston
Halsey, Stuart & Co. Inc. (bond only); Harriman
Ripley
& Co., and
Dillon, Read & Co. Inc. (stock only). Pro¬
10 cents
Inc., New York.
balance
ding.
stock
•
The
Underwriters—To
Co.
temporarily postponed.
be applied for
Interstate Power Co.,
Dubuque, Iowa
May 13 filed $19,400,000 of first
mortgage bonds, due
1977, and 3,000,000 shares ($3.50 par) capital stock.
.
of certain
*
scribe
preferred for each 36 shares of common owned. Rights
expire June 2. Proceeds—The money will be used to
nancing program because of present market
conditions.
Offering—The 300,000 shares are
Issued and
outstanding and being sold for the account
;
will
common
date.
warrants.
—
pro¬
($25 par) 6% cumulative
($5 par) common.
Under¬
&
purchase
Alityne, Noel &
Libby, McNeill & Libby
demption of 5% cumulative convertible
preferred stock
not converted
into common
prior to the redemption
Qlansder
die
$4,500,000 bank loan. Offering temporarily post¬
April 30 filed 100,000 shares (no par) preferred stock.
Underwriter
Glore, Forgan & Co. Offering — Stock¬
holders of record May 19 will be given the
right to sub¬
Corp.;
ceeds from the sale of
Textile Corp., Naw York
Aug. 28 filed 355,000 shares
($1 par) common, of which
65,000 shares are reserved for issuance
'
common
Lerner Stores Corp.,
Baltimore, Md.
May 2 filed 100,000 shares ($100 par) cumulative pre¬
ferred.
Underwriter—Merrill Lynch, Pierce, Fenner &
Beane, N. Y. Price by amendment. Proceeds—To retire
31,870 shares of 4J/2% preferred at $105 a share and to
Proceeds—Net proceeds from the
sale of preferred will be used
to reimburse the com¬
pany's treasury for construction expenditures.
Net
Durst, Inc., and Lester & Co.,
Price—$25 a preferred share and
Proceeds—To repay $750,000 note
and for
working capital.
„
Inc.,
Offering—All but 3,000 shares of the
poned.
W. E. Hutton & Co.
both of Los Angeles.
$33 a common share.
.
Inc., Atlanta
Offering indefinitely postponed.
Decatur, III.
Glendale, Calif.
30,000 shares
For
17, 1946 filed 200,000 shares ($50
par) cumu. pre¬
966,870 shares (no par) common stock.
Underwriters—By competitive bidding. Probable bid¬
ders include Blyth &
Co., Inc.; The First Boston
•
10,000 shares
& Co.,
part to reduce
June
working capital.
preferred and
(H. W.)
Atlanta.
ferred stock and
ceeds—For purchase of sweet
potatoes, plant expansion,
additional storage
facilities, research and development
.April 24 filed
'
Proceeds—To be added
will be sold publicly at $6.50 a share. The
preferred will
be offered to the public at $50 a share.
The 3.000 shares
of common not sold publicly will be offered to
company
officers and employees at $5 each.
Proceeds—For con¬
struction of new plants at Atlanta and
repay
Inc., Columbia, S. C.
Controls Co.,
share.
($50 par) 5% cumulative
and 15,000 shares ($1 par) com¬
Underwriter—Clement A. Evans & Co.,
mon.
($1 par)
underwriting.
per
convertible preferred
•
Illinois Powsr Co.,
Aug. 30 filed 450,000 shares (100
par) common. Under1 writer—Newkirk &
Banks, Inc. Offering—Of the total
company is selling 350,000 shares and
two stockholders,
Roland E. Fulmer and
Louis H. Newkirk,
Jr., are selling
the remaining
100,000 shares.
Price—$6 a share.
Pro-
General
Lay
convertible preferred and
50,000 common stock purchase
Price—$5.50 a preferred share and 2
cents a
warrant.
Underwriter—Amos Treat &
Co., New York.
It is expected that a full
registration will be filed later
with the SEC.
~
share. No
underwriting. For general corporate purposes.
work and
No
Price—$25
April 18 filed 16,000 shares
warrants.
(letter of notification) 1,500 shares
($2.50 par)
common.
Offering to be made to employees at $35 a
Dry Foods,
Chicago.
to working capital and will be used in
current bank loans.
Memphis, Tenn.
May 26
Fresh
from
Hy-Grade Supply Co., Oklahoma
City
Dec. 3 (letter of
notification) 54,350 shares of cumulative
Proceeds—To be used in $9,450,-
Co.,
80,300 shares
common.
Offering—The
•
•
minerals
Mines, Inc., Boulder, Colo.
May 20
.
000 construction
program.
.
Henna
-
Florida
Power Corp., St.
Petersburg, Fla.
] June 4 filed 100,000 shares
($7.50 par) common. Under¬
writers—To
of
March 14 filed 270,000 shares
of capital
stock. Under¬
writer—Strauss Bros., Inc., New
York. Underwriters
may
withdraw as such.
Price—$3.50 a share. Proceeds—Net
proceeds will be used to pay
obligations, purchase heli¬
copters and equipment and for
working capital.
one share of common stock.
Proceeds—$201,000 for retirement of
2,010 shares ($100 par) preferred
stock at $100 a
other funds, will be
production
Helicopter Air Transport,
Inc., Camden, N. J.
'
stock and
,
FINANCIAL CHRONICLE
For
company.
issuer's mines.
Co., Inc., New York.
Offering — To be offered
publicly at $8.10 a unit consisting of one share of class A
'
of
Underwriter-—Herrick, Wad-
dell &
■
ficers
cumulative
Underwriter—Paul H. Davis &
Mississippi
Power & Light Co.
tion.
The
remaining $2,500,000 will be put in trust under
con¬
Co.,
(6/10)
May 2 filed $8,500,000 of first mortgage bonds, due 1977.
Underwriter—To be determined by competitive bidding.
Probable bidders include Halsey, Stuart & Co. Inc.; The
First Boston Corp. and W. C. Langley & Co. (jointly);
White, Weld & Co. and Shields & Co. (jointly). Proceeds
—Approximately $6,000,000 will be added to cash funds
and will be used in part to finance additional construc¬
(Continued
on page
48)
48
mortgage and deed of trust. Bids
—Company will receive bids up to noon
Room
the bonds.
»
York.
—Blair & Co., New
—Shares
York. Price—$10.50
share. Proceeds
a
sold by L. F. Rodgers, Dallas, Tex.,
and principal stockholder, who will receive
•
being
Treasurer
Dillon &
man,
Underwriter—East¬
Price by amendment.
New York.
Co.,
•
Ramie
National
May 29 (letter of notification) $100,000 ($100 par) com¬
mon.
Price—$100 a share.
No underwriting.
For
planting Ramie Roots.
•
National Securities & Research Corp., New
York
trust fund,
open-end diversified management type. Underwriting—
National Securities & Research Corp., New York. Price
—$10 a share.
Proceeds—For investment.
Business—
May 29 filed 2,000,000 shares in investment
Investment business.
•
National
June
$15,000,000 debentures,
Under¬
1967.
due
Price
writers—Goldman Sachs & Co. and Lehman Bros.
Proceeds—To
amendment.
—By
stalment
which provides for refunding of all
the company's funded indebtedness and all presently
outstanding 7, 6 and 5% first preferred stock. In addition
part of the proceeds will be used to finance a $9,000,000
bank
loans
oil
and
of
•
Mines
Nevada-Wyoming
corporate
other
and
Business—Manufacture
$11,250,000 in¬
repay
May 26
New York
stockholders in the ratio of $200
principal amount of debentures for each 20 shares of
common held.
The debentures will be convertible into
scription by
For working capital.
Co., New York.
Telephone Co.
•
received up to
be
Co.
and
Cadmium
Co.,
11:30 am. (EDT) June 24
Battery
•
2
porate
Co.,
Chicago
Nov.
,
•
Olamont
Mining
Co.,
Mar.
31
filed
shares
50,000
Louisville,
par)
($20
Oneida,
N.
of
competitive bidding.
Prob¬
new
100,000
be
of
as
common
Issue 454,465 shares of common stock
offered
one
be
one
Airlines
&
Electric
basis of
one
new
share
for
each
expiry'June 30. Price—$33
a
10
ceeds—To redeem all of its outstanding
and to repay $3,500,000 bank loan and
Feb.
28
filed
applied to working capital;
' '
i
and
300,000 shares
($25 par)
5%
jl
n;-i ni
j.pi
convertible
& Co., Los Angeles,: Price 'by
payment of $3,950,000j*of;
notes; purchase of two notes issued by a sub¬
Maxwell,
amendment.
bank loan
Providence, R. I.
Underwriters—Blair & Co., Inc., New York/
preferred.
Marshall
Proceeds—For
sidiary, Textron Southern Inc. in the amount of',$j-r'
000,000 each, and for working capital. Offering date,
indefinite.
"4
'
/
$7,675,000 bonds
to finance new
28
Salant, Inc., New York
filed
240,000
shares
($2
(O.)
Edison Co.
(6/16)
u
capital stock.
Price
being sold by 13
par)
Probable bidders include The First Boston Corp.;
Stuart & Co. Inc.
,
Seaboard Container Corp.
to redeem
r
I
t
iff)
'■
i
j
jn
outstanding; debt and preferred stock,
payment,;p|
pr^|e^ed share and $9.-a common,share.
1
competirj
Proceeds—Net proceeds together: with.
500,000 bank loan and if necessary, the $5,000,000 to u~s
contributed by its parent, Cities Setvice Ca, will he .us
tive bidding.
(6/23-27)'
May 9 filed 75,000 shares ($20 par) 5% cumulative<con¬
vertible preferred and 75,000 shares ($1 par) common..
Underwriter—Herrick, Waddell & Co., Inc., New York.
Price—$20 a
i
Halsey,
(bonds only); Blyth & Co., Inc.; and
Smith, Barney & Co. Price to be determined by
.
tR!
$32,000,000 first mortgage bonds, due(.1977aj
and 160,000 shares of ($100 par) cumulative preferred.]
Underwriters—To be determined by competitive bidding.
Oct. 25 filed
Proceeds—Shares are
stockholders who will receive proceeds. '
held,
for plant "expansion, and improvements and for ^general
Corporate purposes.
i
be
•
Textron Inc.,
Toledo
Salant &
by amendment.
share. Proceeds—
will
Offering date indefinite.
construction.
Fla.
shares
company
Corp.
Inc.; Glore, Forgan & Co.; Merrill Lynch, Pierce, Fenner
6 Beane; Harriman Ripley; Lehman Brothers; The First
Boston Corp. and Smith, Barney & Co. (jointly).
Pro¬
May 12 filed 16,079 shares (no par) common.
Under¬
writing—None. Offering—The shares will be offered for
subscription to common, stockholders of record June 9 on
.Rights
by
*
Gas
March
,the
ry
(par $1).!
Offering—Com-!
pany
Underwriter—Eastman, Dillon & Co., New York.
•
stock
holders
sold
(N. Y.)
until 1950.
Tampa,
working capital.
Co., Trenton, N. J.
is selling 45,000 shares, and eight selling stock-j
are disposing of the remaining 150,000 shares.
Price—$10.50 a share.
Proceeds—From 45,000 shares^
only, which will be
Underwriters—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Blyth & Co.,
Co.,
&
Aug. 28 filed 195,000 shares common
Underwriter—C. K. Pistell & Co., Inc.
May 26 filed $16,677,000 first mortgage bonds, Series L,
due 1977, and 50,000 shares ($100 par) preferred stock.
Washington, D. C.
Telephone
unit, consisting of one $500 bond and 150 shares j
No underwriting.
For retirement of out
Swern
to stockholders of record Sept
share for each five held. Issue will
May 29 filed $9,850,000 15-year 3 M>% convertible income
debentures, due 1960.
The registration was filed as a
step in obtaining consent of two-thirds of the holders
pf the outstanding income debentures to changes in the
indenture to permit extension of a $4,000,000 bank loan.
White, Weld & Co. will act as dealer-manager to engage
in proxy solicitation.
Holders of the outstanding deben¬
tures will be asked to approve changes in the indenture
to eliminate present restrictions against creation of debt
and give relief from any obligations to the sinking fund
Peninsular
per
initially.
Corp.,
\|
Inc.,
common.
standing loans and for additional
underwritten.
Rochester
Distillery Co.,
benture bonds and
for subscription
5 to the extent of
aot
share. Proceeds—For additional
(letter of notification) $180,000 10-year 7% de¬
54,000 shares ($2 par) common. Price-
May 7
of
Company has decided to
underwriters.
a
Quarryville, N. J.
stock, with Sterling
277,231 shares (50c par)
Grace & Co.
July
Unsubscribed shares of preferred will be
County
Sussex
31 covered 184.821
preferred ($10 par)
filed
held.
publicly at $10
working capital.
$800
originally
Ij
0
J
of preferred for each 30 shares of Segal
share
one
offered
organization
in
used
York
New
cumulative con¬
Underwriter—Floyd D. CerPCo. Incj
Chicago.
Offering—The shares initially will be offered
for subscription to common stockholders of Segal Lock
& Hardware Co. Inc., parent/ at $9 a share in" the ratio
.
Proceeds—To
Inc.,
vertible preferred.
Martin
common.
Fasteners
March 25 filed 25,000 shares of 60 cents
Montreal
shares (500 par) capital stock.
B. Soden, Montreal, director ' of
.
Pennsylvania-Central
organization and other expenses.
.
of
10 shares held, exercisable within a
No underwriting. For additional working
capital.
•
for
Republic Pictures Corp., New York
share for each
60-day period.
Price—$125 per unit, consisting of one share of each;
No underwriting.
For investment in oil securities and
Strauss
and
of
1
May 28 (letter of notification) 2,000 shares each of $100
par cumulative preferred and $25 par class A commoru
business.
Y.
at rate
For working
Sterling Royalties Co., Tulsa, Okla.
company.
5"%
13
Manufacturing Co.,
4
Rolph, Vice-President and director of
Price—The stocks will be sold at $105 per
unit consisting of one share of preferred and one share
Ky.
Registration
stockholders of record June
Furniture
Statton
•
shares ($100 par) 6% cumulative pre¬
ferred and 25,000 shares (no par) common. Underwriter
May 27 (letter of notification) 20.500 shares ($12.50 par)
common.
Price—$12.50 a share. To be offered at par to
common
' /
writer—Joseph H. Dagenais, Hagerstown.
capital.
Mexico
New
shares of $1 cumulative convertible
Ltd.,
Inc., Greensboro, N. C,
May 28 (letter of notification) 709 shares ($100 par)
6% cumulative preferred.
Price—$100 a share. Under*
Feb. 3 filed 25,000
—To be added to working capital.
Oneida,
Hugoton-Panhandle Fields, Texas, and to
for construction expenses. |
Hagersiown, Md.
Refrigerated Cargoes, Inc., New York
cumulative preferred and an unspecified number of
•
•
common
convertible
($1
par) common shares into which the preferred is conver¬
tible.
Underwriters—F. S. Yantis & Co., and H. M.
Byllesby & Co., both of Chicago. Price—At par. Proceeds
.
filed
13
—John
Inc.,
(Inc.);
Pierce,
liabilities.
Price—500 a share.
Proceeds—For explora¬
tion and development of mining property.
'
Distillery,
Los Angeles
May 20 (letter of notification) 16,215 shares ($10 par)
capital stock.
Price—$10 a share.
No underwriting;
For
reduction
of
bank
loans and for other current
expansion program.
Underwriter—Robert
(letter of notification) 87,500 shares ($1 par)
common.
Price—$1 a share.
To be sold through W. D.
Tidrick, Butte. For development of mining property.
Poindexter
& Co.
Mont.
Butte,
Co.,
Fenner & Beane; White, Weld
Proceeds—To construct natural gas pipe line con¬
Lynch,
nection to the
company.
May 26
Old
of
Co.
Quebec Gold Rocks Exploration Ltd.,
May 8 filed 100,000 .shares ($1 par) common.
Under¬
writer—Stifel,
Nicolaus
&
Co.> Chicago. Price
by
amendment.
Proceeds^-The offering is being made by
three stockholders who will receive proceeds.
.
Service
Public
funds to be used for
Candy
Gas
reimburse company treasury
include,Blyth & Co., Inc.; The First Boston
Corp. and White Weld & Co. (jointly); Otis & Co.; Glore,
Forgan & Co.; Halsey, Stuart & Co. Inc. (bonds only).
Proceeds—For redemption and prepayment of $6,684,220
of indebtedness.
The balance will be added to general
purposes.
Nutrine
Merrill
proposed construction program.
writers—To be sold through
shares
30,000
California
filed
15
Inc.; Halsey, Stuart & Co., Inc.; Harris Hall & Co.
able bidders
($10 par)
6%
cumulative convertible
preferred.
Price—$10 a
share.
Underwriter—Harrison White, Inc., New York.
Proceeds—To be added to general funds for general cor¬
(letter of notification)
of
$12,000,000 first mortgage bonds, 27/s%
series, due 1977.
Underwriting—To be sold at com¬
petitive bidding.
Probable bidders include Blyth & Co.,
bonds and
20,000 shares ($100 par) cumulative preferred.
Under¬
Mass.
June
(letter
19
May 29 filed $6,800,000 30-year first mortgage
Easthampton,
Corp.,
notification) 81,500 shares ($1 par)
common. Price—$1 a share. No underwriting. To reduce
bank loans and to increase working capital.
/
Hampshire
New
of
Co.
1
Airways, Inc., Birmingham, Ala.
Southern
May
Stuart &
Inc.; The First Boston Corp.; Lazard Freres & Co.
White, Weld & Co. (jointly); Kidder, Peabody &
and Blyth & Co., Inc. (jointly).
Proceeds—To
finance in part a
company's office Room 1600, 140 West St., New York.
Nickel
expansion program.
Probable bidders include Halsey,
tive bidding.
ments. Bids Invited—Bids for the purchase of the deben¬
at
Service
Public
York, plus $25,000,000 it expects to borrow from Chase
prior to the sale of the debentures.
The balance of pro¬
ceeds will be used to meet further construction requiretures will
(by amendment) filed 110,000 shares of
cumulative convertible preferred stock, series B (par
Southern Webbing Mills,
May 12 filed $4,500,000 of first mortgage bonds, Series B,
due 1977.
Underwriter—To be determined by competi¬
$79,300,000 of demand notes to its parent,
American Telephone & Telegraph Co., and a $3,000,000
short term note owing the Chase National Bank, New
j
Manufacturing Corp.
19
March
notes.
used to repay
■„
April 30, 1959. Price—Par
$11,500,000 of bank loan
from May 1, 1947 to
Proceeds—For repayment of
Stanley & Co.; Halsey, Stuart & Co. Inc.;
Co (Inc.).
Proceeds—Proceeds will be
&
Hall
Harris
common
common
(6/24)
May 23 filed $125,000,000 of 35-year debentures. Under¬
writers—To be sold at competitive bidding.
Probable
billers: Morgan
$11,077,800 15-year 2%% convertible de¬
— None.
Offering — For sub¬
Underwriters
bentures.
(letter of notification) 250,000 shares ($1 par)
common.
Price—$1 a share.
Underwriter—Steele and
»./
!
par)
Fojf
?
750
$5)
Underwriters—Van Alstyne, Noel & Co. Price per share
$12.50 Proceeds—Net proceeds will be applied to re¬
demption of bank loans and to cover part of cost o3
Solar
Southern
Public Service Co. of Indiana Inc.
March 26 filed
Precision Corp.
(N. Y.)
(letter of notification) 125,000 shares (40c
common.
Price—$2 a share,
No underwriting.
working capital.
May
Wyo.
Casper,
Co.,
Silver Creek
construction program.
purposes.
well equipment.
gas
program
1
Corp.
May 23
comprehensive
offering is in connection with a
refinancing
Supply Co., Pittsburgh, Pa.
filed
4
—The
provided by a term bank
loan, will be used to discharge indebtedness to Domestiq
bonds, due 1977,
debentures due 1962 and (by
amendment) 160,000 shares (par $100) preferred stock.
Underwriters—To be sold at competitive bidding. Prob¬
able bidders include: Halsey, Stuart & Co. Inc. (bonds
only); The First Boston Corp.; Blyth & Co., Inc., and
Smith, Barney & Co. (jointly); Glore, Forgan & Co. and
W. C. Langley & Co. (jointly).
The debentures will be
offered for subscription to the company's ($20 par) com¬
mon
stockholders on the basis of $8 of debentures for
each share of common held.
Of the preferred, 62,199
shares will be offered to holders of the outstanding first
preferred on a share-for-share exchange basis. Proceeds
Proceeds—Pro¬
$10 a common share.
ceeds, together with funds to be
Credit
convertible
$7,000,000
share and
ferred
For
Denver
Colorado,
of
Co.
May 16 filed $40,000,000 first mortgage
Fla.
Corp., Tavares,
Service
Public
loans.
Proceeds—To retire outstanding bank
par)
development of mining claims.
$3,000,000 debentures.
H
par) $1.40 convertible!
preferred and 53,962 shares ($1 par) common.
Under¬
writer—Smith, Burris & Co., Chicago. Price—$25 a pre¬
Mining Co., Missoula, Mont.
Princeton
(letter of notification) 600,000 shares (100
common.
Price—250 a share.
No underwriting.
Corp. of America, N. Y.
Plan
Morris
Mar. 31 filed
,
Albion, Mich.
Service Caster & Truck Corp.,
April 10 filed 32,000 shares ($25
May 23
proceeds.
of 5-year debentures and to repay a
$450,000 bank loan. The balance will be used to finance
construction of a new plant at Bristol, Pa.
u
$250,000
deem
factoring, to
advantageously, for
purchase packaging materials more
working capital, etc.
Underwriter
May 7 filed 80,000 shares ($5 par) common.
to re¬
Company will use its proceeds
by stockholders.
subsidiary, and used to eliminate
owned
Louisiana, Mo.
Missouri Edison Co.,
mon.
Price—$3.75 per share. Underwriter
& Drevers and Hill, Thompson & Co., Inc., New
Proceeds will be advanced to Staze Inc., a wholly
Spector, President.
—Eric
proceeds from the
and 25,000 shares of the com¬
The remaining shares of common are being sold
sale of all the preferred
May 9 (letter of notification) 75,000 shares of common
stock (par 25c.) and 5,000 shares on behalf of Raymond
Invited
EDT June 10 at
2033, 2 Rector St., New York, for the purchase of
the terms of its
Proceeds—The company will receive
N. Y.
Popular Home Products Corp.,
(Continued from page 47)
—'•
.
Thursday, June 5,1941J
FINANCIAL CHRONICLE
THE COMMERCIAL &
(3024)
f
.
■ i,,
V-r
Ur
.
"h:
b'.i;»
^
t-
f
.' hv !
invol
I
[Volume 165
dividends.
Number 4600
THE COMMERCIAL &
tentatively
Victory Gold Mines Ltd.,
Montreal, Canada
Tucker Corp.,
Chicago
May 6 filed 4,000,000 shares ($1 par) Class A common.
Underwriter—Floyd D. Cerf Co., Chicago. Price—$5 a
share. The
underwriting discount will be 70 cents a
Proceeds—To
lease
and
equip
plant at Chicago, and for other operating
ness—Manufacture of automobiles.
filed
Turner
May 26
Construction Co.,
(letter of
notification)
shares (no par)
underwriting. For
No
be
•
Dec. 20 filed $700,000
15-year convertible debentures due
1962, and 225,000 shares ($1 par) common. The state¬
West
Steel
preferred.
ment also covers
112,000 shares of common reserved for
conversion of the debentures.
Underwriter—Carver &
off
pay
property.
par)
Price—$10 a share.
No
underwriting.
To
balance of teal estate
mortgage on plant
of
the
Western
Electric
Co.,
New York
Dufault Mines, Ltd.,
Toronto, Canada
Mar. 31 filed 500,000 shares
($1 par) common.
Under¬
writer—Name to be filed by amendment. Price—50
cents
a share.
Proceeds—For general operating expenses.
ratio
of
one
for
new
each
five
Rights expire June 27. No
shares
underwriting. To
reimburse its treasury.
debtedness and to
to
are
be
sold
by
Middle
West
Corp.,
elect to sell such
shares of Wiscon*i»
be distributed to
them upon the
North West Utilities Co.
which
of
will
Workers Finance
Co., Newark, N. J.
May 26 (letter of
notification) $225,000 6% 20-year de¬
bentures.
Price—$100
April 16 (letter of notification) 1,500,000
shares (no
par)
common. Stockholders of
record May 14 are
given the
right to subscribe for the additional
shares at $40 per
share in
Vauze
Underwriters—By
Wisconsin, who
dissolution
Price—Debentures 98; common $3.75
Proceeds—For plant
construction,, purchase
<of equipment and for
working capital.
bidding.
Proceeds—Part
shares
common
Co., Inc., Boston.
share.
competitive
top holding company of the
System, and part by pref¬
erence stockholders
of North West
Utilities Co., parent
Casting Co., Cleveland, Ohio
(letter of notification) 7,500 shares
($10
May 26
at
Probable bidders include
Glore, Forgan &
Co., and Harriman Ripley & Co.
(jointly); The Wis¬
consin Co.;
Dillon, Read & Co., Inc.
of
Utah Chemical & Carbon
Co., Salt Lake City
per
sold
amendment.
offered publicly through
underwriters. Price by amend¬
ment.
Proceeds—To retire preferred
stock and to reduce
bank loans.
5,871
common.
Price—$14.44 a share.
additional working capital.
Salt Lake City,
Wisconsin
subscription
New York
49
Power & Light
Co., Madison, Wis.
May 21 filed 550,000 shares
($10 par) common stock so
subscription to Weber's
stockholders. Certain
shareholders have waived
rights.
The unsubscribed
shares will be
common
<•
Industries, Inc.,
Utah
Fixture Co., Inc.
108,763 shares ($5 par)
common.
Underwritefs—Blair & Co., Inc. and
Wm. R. Staats Co.
Offer¬
ing—Shares will be offered for
Busi¬
Western World
May 26 (letter of
notification) 200,000 shares (20c
par)
common.
Price—30 cents a
share.
To be sold
tnrough
officers of the
company.
For
prospecting and other
purposes.
Weber Showcase &
Mar. 31
manufacturing
expenses.
•
Nov. 13 filed 400,000 shares
($1 par) capital stock.
Un¬
derwriter—Paul E. Frechette.
Price—25 cents a share.
Proceeds—For developing
mining property. BusinessAcquiring and developing mining
properties.
70 Pine St., New York City.
share.
FINANCIAL CHRONICLE
(3025)
Bids—Bids for the purchase of the securities
set for 11 a.m. (EDT) June 16, at Room 1600,
unit.
per
be sold direct
held.
in
or
and debentures.
reduce in¬
No
underwriting.
To
exchange for outstanding preferred
Purpose—To eliminate
outstanding pre¬
ferred and debentures and
to carry on
business.
Prospective Security Offerings
(NOT YET
•
IN
REGISTRATION)
INDICATES ADDITIONS SINCE
PREVIOUS ISSUE
(Only "prospectives" reported during the
past week are
given herewith. Items
previously noted are not repeated)
•
Central
June
3
RR.
Co.
of
New
Jersey
Great Northern
Ry. (6/9)
Company is inviting bids for the lowest interest
applied to ICC for
authority to issue
$1,605,000 equipment trust certificates, Series A. Prob¬
able bidders include
Halsey, Stuart & Co. Inc.; Salomon
Bros. & Hutzler.
company
which
the
bidder
will
provide
trust
certificates, in connection with the
purchase of new
equipment.
Probable bidders include
Halsey, Stuart &
Co. Inc.; Salomon Bros. &
rate at
$2,460,000 for financing
Hutzler.
approximately 75% of the purchase of certain
specified
equipment under conditional sale agreement
dated June
16, 1947. Bids will be received
by F. L. Paetzold, Treas¬
urer, 176 East 4th St., St.
Paul, Minn., up to noon (CST)
•
July 15 stockholders will vote
75,000 shares of preferred stock
June 9.
United States
Government,
State, Municipal
•
and
Illinois Terminal RR.
Bids for the purchase of
*
Wheeling & Lake
(6/18)
Co.
•
\
BUFFALO
•
Telephone
sell
about
80%
CHICAGO
•
PITTSBURGH
•
ST. LOUIS
•
•
FRANCISCO
New
York
New
Haven
&
Hartford
RR
fied
a
2%%
rate,
coupon
total of
a
derwriting
215
some
and
ment
em¬
banking interest next Tues¬
day when bids, just called
for, on
un¬
distributing
$60,000,000 of Series C, first and
refunding 25-year bonds will be
firms.
The
debentures were reoffered
publicly yesterday at a price of
102% to yield the purchaser a re¬
opened.
Indications
pany
half
sold
several
Investment bankers
are
| a keen eye on the manner in
Kvhich the purrent
$200,000,000 of
fiew American Telephone & TeleIgraph
Co.'s- 40-year
[jnove out^to
piece
>retty
issue
much
to
limed out, not
>i -the
the
itself
between
ires,
Virtually
for
iL'
•
•rj
paid
the
them,
*
■
102.2199
representing
est cost to
an
Was m^de ,up of some
The
offered
i
bmaJoiq
a
price
I like the winning
of
group,
cost
coupon or an interest cost
basis
to
>
the
now
of
$100
with
pany
capital
sary
as
to
•
company
of
Y
w
Senate
^Uoiisoiiddterf Fdisbft^NextWeek
Consolidated Edison Co. of N. Y.
Inc., will be the center of invest¬
contemplates
issuance
of
Probable bid¬
has been told by executors
of the
Roosevelt estate that
they will
not turn over
any of the wartime
President's papers unless
specifi¬
cally asked to do so by President
Truman.
Mr. Truman has
to
by
Investigating
is
inquiring
charges that the Navy paid
seeking to
papers' of
Franklin
the
D.
such
far declined
so
permission,
Roosevelt's
and
Press
reported
executors,
Washington advices
May 21, that tl^e late
on
President directed that certain of
U
>
his personal and
confidential files
ex¬
should
late
be made
public and
that others should be
Roosevelt
for possible light on the
Mr.
United
too much for Saudi Arabian oil in
1945 and has been
the
request
the Committee has been
informed
War
impounded
for
situation,
never
period of years.
a
on
par
of
75,000
value
As publishers
pre¬
ica,"
com-
bank
additional
working
well as funds
take
up
the
than
neces¬
old
we
have
you
There
can
are
metal
this
stencil
for
publication,
every
which
firm
puts
and
us
in
list
obtain elsewhere.
approximately 6,600 names in the United
States and 900
pre¬
of "Security Dealers of North Amer¬
a
in
listed
position to offer you a more up-to-the-minute
a
in
Canada, all arranged alphabetically
by States and Cities.
Meanwhile
there
were
Addressing charge $5.00 per thousand.
indi¬
Special
just
ing Dayton Power & Light Co.'s
outstanding
4i/2%
on
a
for
for
* new
pro-rata basisPjRus
with
N.A.S.D.
they
list
(main offices
appeared
N.A.S.D.
in
"Security
List,
$6
per
only)
arranged
Dealers."
Cost
thousand.
Herbert D. Seibert & Co., Ixie.
Publishers
of
"Security
Dealers
of
North
prdvlcfe
25
company
as
addressing
preferred,
,exchange
cash adjustment, and to
the
than
bidders:
Light' Co.
expansion purposes.
which
cations that the task of replac¬
shares
more
Probable
in regis¬
ferred. It will provide the
.
cer¬
Halsey, Stuart & Co. Inc.;
Glore, Fofgan & Co.;
Corp.; W. C. Lanley & Co. ;
ferred.
.r,OEb:*i oi
-
issue,
tration, is comprised
then
(6/19)
Addiessing Service
new
shares
of
The First Boston
Committee,
President
June 11.
The
ders:*
&
company
Roosevelt Personal
Files Held Private
into
Ry.
$2,940,000 equipment trust
equipment.
Power
reported
The company has
100,000 shares
new $100
par series A cumula¬
tive preferred stock in
registra¬
tion and
nearing the end of the
required period.
*
Th
issue
Inc.; Salomon Bros. & Hutzler.
of
amine
through
'sCvb
speci¬
was
The group which lost out in the
March competition offered to
pay
102.4709
for' a
2%%
coupon,
which
would
have
indicated a
un¬
102.13, and
occasion
months
some
ferred stock will reach market
Virtually
the
banking syndicates
this
senior
35-
a
basis of 2.737%.
of
competing1 grOUp' Wbicli'^
on
its
reports indicate
that
the new preferred issue
projected
by Jewel Tea Co., to replace its
currently outstanding 4%% pre¬
the company
specified
two
234%
2.78%
nm?
it
reshaping
Current
pre¬
the successful bidder
paying the
company a price of 100.50 for a
firms and distribute,
ing houses,
the
the
Stock Issues Ahead
maturity.
out
inter¬
106
But
financing out of
of
& Co.
at
by
ago.
the
bid for the business at that time.
The group which was nosed
deben-
price
the issuer of
derwriting
of
similar sized block of
same
syndi¬
embraced
a
a
year
i u'
company
2%%.
debentures,
the entire top-layer of
the
bids
current
In March when
the!Country's underwriting firms.
rf^Tfre .successful group which
i n
*
the
this
task
competing banking groups for
offered
field
surprising in view
bid
separated
headed
banking inter¬
capital undertaken
$1,000
tendencies.
things
as
fact; that the two
cates which
the
a
same
the
com¬
bids from
groups
the big metropolitan utility
will have pretty well cleaned
up
i
on
at
way
vailing market, on the basis of
deal, shows silghtly firming
"touchstone"
had
With
sizable
this
which could readily
give a real
I cue to the
temper of the market.
This1 vast
insurance
down
the
that the
are
get
ests as competed for the Amer¬
ican Telephone issue.
with
the
of
such
K
day
two
and
tremendous
proportions
this undertaking is regarded as
a
larger
taken
Only about 90 cents
debentures
top-rating
in the nature of
the
first
two
much
Slightly Firmer Note
investors.
]L. Carrying
of
companies
blocks.
keeping
the
on
will
least
turn of 2.76% to
maturity.
Late reports indicated that the
issue was somewhat more
than
2
of
$3,000,000 bonds for
June 3 company applied to
Interstate
mission for authority to issue
Commerce Com¬
$5,955,000 of equipment
braced
cost
Wisconsin
June
CLEVELAND
SAN
of the
Halsey, Stuart
15,000 shares additional
stockholders.
•
an
not
-
Corp.
common
stock, to provide funds for construction in
1947.
Stock would be offered for
subscription to
•
PHILADELPHIA
<'•-*/
Crosse
Company expects to
INC.
NEW YORK
BOSTON
La
creating
(par $100).
tificates will be received
by the company up to June 19.
certificates will mature
semi-annually from Janu¬
ary, 1948, to July, 1957, and will
finance
"
•
on
The
ments.
Blair
Erie
Bids for the purchase of
$1,030,000 serial equipment trust
certificates will be opened June 18.
Certificates will be
dated July 1 and will mature
in 20 semi-annual instal¬
Corporate Securities
Simmons Co.
more
work¬
ing capital is nearing market.
Park
Place
—
REctor
2-9570
—
America']ijjq
New
York
'
City
-
,
^
^At
\
50
Concern Grows Over Unwholesome
Effects of '34 Securities Act
(Continued from page
branch
out, it is more
in
a
our
economy
description, industrial,
governmental, or otherwise, cut
right out of it bodily. The actions
important of monopolistic groups and bu¬
reaucratic agencies, if such are to
type
certainly, that criticism
realistic vein, and under¬
than ever,
3)
would be to have
monopoly—bureaucracy—of every
to
judge of
what is best for society, particu¬
larly where its own powers are
concerned.
At this time, when
the SEC is obviously trying to
SEC—cannot be the best
standing mood, be exercised
direction in which the SEC
and
permitted under any pretext
whatsoever, should be restricted
within the narrowest of bounds.
political than an economic body.
It is difficult to separate the po¬
from
litical
the
in
but
Any institution, any force, which
concentrates the decision-making
move.
people who functions of the economy in bu¬
have done some solid thinking on
reaucratic hands, that is, in the
the subject, desire by the SEC for
hands of a few who think they
additional power is without the
know better than anyone else how
slightest doubt involved in the to administer the twin mechan¬
complex of motives moving the isms of finance and production, is
SEC to ask Congress to extend
inimical to the American philos¬
certain features of the '34 Act to
ophy of government, of business
the officers and directors of the
and of life. If there is anything
unregistered companies, as men¬ the
people of this country do not
tioned above.
The top layer of
want it is Bureaucracy.
the SEC bureaucracy would prob¬
Provisions of the '34 Act apply¬
ably deny this since the turnover
in its personnel has undoubtedly ing to the operations of the offi¬
directors and 10% stock¬
been too swift to permit of much cers,
continuity in its
makeup. But holders of the registered com¬
deny it or not, the top layer would panies in the stock market were
of
course
to
prevent
like more power nevertheless. As intended
manipulation by "insiders" to the
we said, to most people who have
done any thinking on the matter, detriment of investors. Concerning
this is all just too plain.
It id the manipulation itself, no one will
lower staff, suffering from a com¬ argue about
the merits of the
bination, on the one hand, of the law. The complaint, however, is
that the SEC, which administers
inertia, the petty fears and jeal¬
ousies and inefficiency
of civil the law, does not always dis¬
servants in general and, on the tinguish
between
manipulation
other hand, of the insatiable de¬ and the legitimate processes of the
markets.
The
SEC,
sire of bureaucratic agents for securities
dominated apparently by lawyers,
more and more power in order to
solidify their positions, individu¬ that is, dominated by the legal
ally and collectively, that is less mind with all its sophistication
able to conceal its intentions in and verbosity,
sometimes unin¬
the matter.
telligible versobity with double
or hidden meaning and confusion
If monopoly, bureaucracy—it is
all one and the same thing—is running through its every line of
thought, is prone, according to
wrong in industry, and no one
sources
experienced in
denies that it is, no one can deny certain
either that it is wrong in govern¬ matters pertaining to the SEC, to
ment when government
acts in give more consideration to legal
the
capacity of business agent, niceties than economic considera¬
regulatory or otherwise. It natur¬ tions. In other words, though its
According to many
*
decisions
ally follows that one of the best
things that could happen
are
nomic trends,
things
likely to affect eco¬
the SEC is more a
true,
SEC the
the
always
has
be political.
Where
harm, however, insofar as it at¬
tempts to put restraints on the
actions of the so-called "insiders,"
the
and 10%
registered
directors
officers,
the
of
stockholders
it were, and officers and directors
of
one
company
therefore may
become more interested in the
success of
another, possibly com¬
peting, firm than in the success
their
own
company
for the,
short-term period. With the
world;
of
stock market and those who enter
it
companies within any six month
nies
period to "recapture." A chief ef¬
fect of this part of the Act it has
become clear now, has
been to
divert the interests of these "in¬
siders" from the securities of their
never
companies about which they
know something to the securities
of other companies about which
sibility
buyers and sellers of securi¬
ties with deep suspicion and dis¬
as
trust.
first place,
the
In
'34 Act,
the
by intimation has probably ex¬
aggerated the influence of the
so-called corporate "insiders
in
the stock market. As some put the
management
proposition,
not
own
the
directors—does
much of the securities of
the
and
officers
companies it manages.
reason
for this is ..that the
the various
The
progressive tax laws have
to
prevent any. .sizable
accumulation of capital in man¬
Federal
worked
agement hands. The lower man¬
agement especially, it has Pr°k~
ably been very well pointed out,
lives up to its income.
Income
after taxes for them, that is, is
the
not
big swollen
figure^many
people think it is.
thoughtless
the Worts
sales of the
own
they
know
little
or
nothing.
Sometimes, "insiders" will look
and
purchases
securities of their own companies
directors
must make
are
held by some
to be "useless." The reports give
the "what" but not the "why * of
the
stock transactions
of these
the
which
and
officers
the
for
Naturally,
"insiders."
reports to list all
the "why's" would be practically
speaking
an
almost impossible
task. The SEC, thus, in trying to
give investors all the information
it thinks investors should bave
SEC's published
is
attempting
something
do
to
which it is actually impossible to
"why" is as much if not
important than the
what.
It is the qualitative angle of a
quantitative transaction. Without
giving the reasons for the pur¬
chases and sales made, the reports
The
do.
more
are
just about meaningless.
officer
An
or
a
director
may
sell the stocks he has of his own
not because he l3cks
faith in the earning capacity of his
for instance, contrary to
average investor would
in learning about his sales,
company,
but because he wants to take ad¬
a "loss" for tax pur¬
Some men in management
have attempted to build up their
vantage of
their
or
in their
interests
com¬
own
panies by borrowing money from
their banks £>n their own personal
,
their
of
business
the
own
com¬
it
is,
however, even,
buy the"
officers and directors who
securities
of their
own
long-term
as
know when
compa¬
investments*
they
have-
may
sell within six months of
pur-;
for
entirely personal
to
chase
Thus, they are called'
to risk funds with the pos¬
reasons.
upon
that, if they must sellmonths, they might
within
six
have to turn
companies
that
assume
directors
their profits to
didn't have to
over
which
risk.
Officers
and;
inclined to feel,
con-f
sequently, that there are enough
uncertainties surrounding the in-'
are
vestment of funds
already without^
and so they
and so, to avoid possible
"recapture" of profits, will invest
adding
in the securities of the other com¬
short-term prospects for gain are,
panies rather than in the securi¬
ties of their own companies. Capi¬
just
as
are.
"
panies
tal, after all, always seeks fields
for the
most profitable invest¬
ment.
The Securities
does
1934
interests
when
it
and
Exchange Act of
function
not
the
in
investors
Of
ficers
generally
to discourage of¬
serves
tend
some
to
more,
put
their
good
where-
money
the long-term ones
as
'
-
'
Congress, it is felt by many
thoughtful observers, could do
worse than to
subject the Securi¬
ties Exchange Act of 1934, as well
also the Securities Act of
all
the
1933, and '
of the SEC
powers
itself
in the companies
they are themselves direct¬
managing. Funds which
ommendations for any further ex¬
tension of power over the
companies
their
own
which
ing
men
investing
from
money
vari¬
the
and
the
of
in management may have
available
ment
for
short-term
invest¬
especially thus flow almost
finan-^
cial
industry,
business
corporate
and
business executives,
vestors generally.
and in-
RETIREMENT AND REDEMPTION OF
SOUTHERN
CALIFORNIA EDISON COMPANY
PREFERRED STOCK,
SERIES B, 6%, AND
PREFERRED STOCK SERIES C,
5 Vz%.
credit and
the funds,
the
buying securities with
depending on a rise in
values
market
the
of
ticular securities to pay
par¬
off their
Morgan Stanley & Co. headed a nationwide group of investment
which publicly offered June 3 a new issue of
$200,000,000
American Telephone & Telegraph Co. 40-year 2%% debentures, due
bankers
June 1, 1987.
The securities
HOLDERS OF PREFERRED
THE HOLDERS OF PREFERRED
TO
STOCK, SERIES B, 6%, AND
indebtedness to the banks.
STOCK, SERIES C, 5K%.
Board of Directors:
(1) Southern California Edison Company (former name: Southern California
Edison Company Ltd.) has exercised its option to retire and redeem, and does
hereby call for retirement, redemption and payment, on June 23, 1947, each
and all of the shares of Preferred Stock, Series B, 6%, of said corporation not
exchanged pursuant to acceptances of the Exchange Offer made under date of
May 8, 1947, to the holders of such stock; and, by the terms of the Articles of
Incorporation, the certificates for said stock and the resolutions of the Board of
Directors, there will then become due and payable upon each of said shares the
sum of twenty-eight dollars and seventy-five cents
($28.75) and accumulated
and unpaid dividends on said shares to and including June 23, 1947, and no
dividends will accrue or will be payable on said shares after June 23, 1947; and
(2) Southern California Edison Company (former name: Southern Cali¬
fornia Edison Company Ltd.) has exercised its option to retire and redeem,
and does hereby call for retirement, redemption and payment, on June 23,1947,
each and all of the shares of Preferred Stock, Series C, 5V2%, of said corpora¬
tion not exchanged pursuant to acceptances of the Exchange Offer made under
date of May 8, 1947, to the holders of such stock;; and, by the terms of the
Articles of Incorporation, the certificates for said stock and the resolutions of
the Board of Directors, there will then become due and payable upon each of
said shares the sum of twenty-eight dollars and seventy-five cents ($28.75) and
accumulated and unpaid dividends on said shares to and including June 23,
1947, and no dividends will accrue or will be payable on said shares after
notice is hereby given
that by vote of the
the balance of the securities
banks
themselves, in uncertain times, to
maintain their own liquidity, may
force
sale
securities
of
so
liquidation
of the debt
some
in
by
whole
•
f-
said
on or
payment
will be made to the holders of said shares, upon
after June 23, 1947, for cancellation of the certificates repre¬
senting ownership of. such shares, at the office of California Trust Company,
629 South Spring Street, Los Angeles, California.
DATED at Los Angeles, California, this 3rd day of June, 1947.
SOUTHERN CALIFORNIA EDISON COMPANY,
:
'*l
r
all
of
the
demanding
or in part
they hold in this way.
Bank credit of this sort for the
financing
defeating
of
stock purchases, by-
the
Federal
Reserve
margin
requirements
on
stock
purchases, in a real sense repre¬
sents
a
breakdown
of
the
whole
of margin buying which
has been in practice in brokerage
circles since the imposition of the
system
100%
more
than half of the
by a few large institutional in--,
vestors, including two of the~"big^
five"
life
insurance
companies.
Out-of-town insurance companies
and Massachusetts- and New York
telephone
more
requirement and
recently of the 75% margin
requirement by the Federal Re¬
Board. Transference of ex¬
.
By w. c. MULLENDORE, President
And o. V. SHOWERS, Secretary
credit for the
financing of margin purchases of
stocks from brokers who under¬
stand
the
whole business to the
but more likely
do not of course can only intro¬
duce another element of instabil¬
ity to the stock market, revealing
another place where governmental
or quasi-governmental controls on
bankers who may
*
subsidiaries
and
telephone
by
other
telephone
companies.
It
"
' *
also operates wire and radio cir-
banks
savings
also
were
sub¬
scribers, besides trust funds and
other fiduciary, buyers, of primerisk
investments.
an issue of A. T. & T.
debentures,, also of $200,-
Except for
.
cuits for inter-connection between
systems
States, and
in
those .in
United,
the
other#
many
countries throughout the world, as
well
for
as
ship-to-shore
tele¬
phone service. The company esti- "
mates that approximately 95% of
toll messages originating in the
000,000,
which
was
sold.. last United States# are routed in whole j
March, the present offering, it is or in part over its lines or those
' ;•<<
said, represents the largest single of its subsidiaries.
bond
issue
sold at
competitive
On March 31, 1947, subsidiaries
2%%
-
bidding in the history of corporate
of the company had
financing.
the
26,500,000 telephones in service, or
about 80% of the total number in
for
service in this country.
■
Proceeds
offered
of
sale
will
be
used
subsidiary
companies;
for
its
to
associated
purchase
the
from
securities
advances
stock
of
and
if
subscription by
for
and
the
.
when
such
companies; for extensions, addi¬
improvements to its own
tions and
telephone
plant; and
for general
corporate purposes.
Diversion
cilities
of
during
approximately
-
manufacturing fa¬
the
war
period to"
resulted in a back¬
log in September, 1945, of 2,100,-;
000 unfilled applications for tele¬
war
purposes
phones.
March
of
From that date through
this year,.the number
in service increased
of telephones
; The company expended $690,- about 4,600,000* resulting in over¬
000,000 for new construction in loading of facilities. The company
1946 and $160,000,000 during the
reports that, as a result of the
first two months of 1947.
It is
large number of new applications,
expected that new
construction there were approximately 2,000,r*.
expenditures will continue at a 000 unfilled orders for telephones
high level over the next few at the end of March,
principally
years.
from
Upon
completion of the present
20,789,928 shares
stock, par value $100.
areas
where sufficient
out¬
side plant or central office facjli^
financing the. company ,will ties
have outstanding $1,456,359,200 of
are
not yet available.
-
1;
jj
funded debt and
of common
per
margin
tension of necessary
In each case,
or
held
serve
June 23, 1947.
surrender,
they
hold. On the other hand, the
-
were
maturity.
day on a bid of 102.2199. It was reported that
issue was taken up the first day€>-
Thus,
management, without any lack of
faith in their own companies, may
sell some
securities to pay off
their notes at the bank, acquiring
by this act outright possession of
*
priced at 1027/g, to yield 2.755% to .
The issue was awarded at competitive bidding earlier that--
new
TO THE
•
Morgan Stanley Group Offers $200,000,000 :i
Bell System Bonds—Priced to Public at 102%
„
NOTICE OF
>.
The
emanating out of these Acts and
out of judicial tradition, to care¬
ful scrutiny and examination be¬
fore giving heed to any SEC rec¬
directors
ous
poses.
own
the status of the business of
competitors as being more
less indentical to the status of
upon
In the second place;
of
think
EDISON COMPANY
of
Act
inevitably into the coffers of other,
or even competing
companies, as
being what
what the
SOUTHERN CALIFORNIA
have
unmixed blessing to
companies* is to subject the profits
accruing from the purchases and
sales
of the securities
of their
company
REDEMPTION NOTICE
not been
investors.
the Securities Exchange
1934
does
the
greatest
market
stock
the
an
economic,
of
With cer¬
tain prejudices towards the finan¬
cial community coloring its think¬
ing, it has come to regard every
thought and deed of the men who
operate the mechanism
of the
seemed to
be
in the
would
the
case
consideration
chief
Thursday, June 5, 1947
FINANCIAL CHRONICLE
THE COMMERCIAL &
(3026)
share.
The
.
at
deemable
company
105.88
debentures
new
at
the
prices
if redeemed
■
"
•
of the
ranging from
on
New
or
before
redeemed
after June 1, 1982.
(
American
graph
re¬
option
May 31, 1952, to par,, if
on or
are-
Co.,
York
operates
a
Erwin Eisen Officer
6f Lucas, Farrell
KANSAS
CITY,
is
nouncement
made
MO.
that
—
j
j
An¬
Erwin
H. Eisen has
acquired an interest
in and has become an officer and
.
Telephone and Tele¬
director
of
Lucas, Farrell & Sat-
under terlee* Inc., Columbia Bank Build-?
State laws in
1885, ing. Mr. Eisen was formerly with,
network of toll, lines the sales department..of Geo. K.
incorporated
equipment for tele¬ Baum <& Co. for the past 10 years,
phone
service between*' and except for five? years in the U. S.
through territories served by its-Air Corps.
and
related
Volume 165
THE COMMERCIAL &
Number 4600
FINANCIAL CHRONICLE
(3027)
has been in charge of
the. real
Our High Exports Continue
Only small part of export-import
The
■
Bureau
of
the
Census
has
closed in April.
gap
between
exports
im-
and
ports.
■
,
ments under the UNRRA and the
Lend-Lease
programs, were val¬
ued
at
$1,230 million in April,
$23.5 million less than the previ¬
month.
ous
UNRRA
$64.1
:
Exports
the
under
amounted
program
million
to
in
April, $6.2 mil¬
March, while
Lend-Lease shipments were val-?
lion
with
paid in 20
Commercial
exports,
which
comprise all exports except ship-
■
ments
less
than
in
iued at $2.0 million in April,
the same level as March.
about
the
remainder
to
ber
total
shipping
weight
of
April exports amounting to 25,693
million pounds represented an in¬
crease of
approximately 6,%. from
the
March
figure.
The
increased
approximately "1%
12,441 million pounds.;
None
of
the
to
"
n
under
Lend-Lease
the
Mr.
be
and
years.
States
and
the
made
sions.
Data
for'April
are
pleted prior to the exportation of
In
many
of
Alabama, Georgia, Mississippi and
Florida, obtaining the bulg of its
the
He
Beneficial
Foreign
nitions—
Jersey company.
E. H. Mackenzie Heads
as
Saving
Trade
Terms
&
Defi¬
Foreign
Division, The
First National Bank
of Boston,
Boston, Mass.—paper.
Fidu¬
serves
Hirsch & Go. Departm't
Jersey Oil to Sell
Kentucky Oil Shares
The Standard Oil Co.
associated
main
Standard
Cousley President of
Oil
Co.
consisting £ of
capital stock.
of
(N. J.) is
is
shares
Marshall
as an
S.
Morgan, who
the
of
bank.
Association
May
and
-Mr.'
the
the bank 27
The
The
STOCK
York,
Directors
Rail¬
a
v-
New York, June 4, 1947,.
Directors
has
this
day de¬
record
at
dividend of Three Dollars
($3.) per share on. the Capital Stock of
this
Company for the quarter ending June 30,
1947,
payable on
July
1,, 1947
to stockholders
of
AND
May 27,
1947.
net
profits
for
the
year
ending
30,
1947, to holders of said Preferred
Capital Stock registered on the
books of the
Company at the close of business June
27, 1947.
Company, payable
Dividend
checks
will
be
mailed
Preferred
Capital
Stock
who
of
suitable: orders
1
D.
BUR0ER, Secretary.
C.
therefor
at
this
to
holders
have
filed
office.
WILSON, Assistant Treasurer,
Broadway, New York 5, N. Y.
120
the
close
of
business
June
MATTHEW T. MURRAY,
11,
1947.
Secretary.
this
day de¬
Dollars and
Fifty
a
undivided
of
quarterly
has
June
mailed.
R. A.
of
Board
clared
dividend of: Two
Cents
($2.50)
per
share, being Dividend No.
97
on
the
Preferred
Capital
Stock of this
Company,
payable
August
1,
1947,, out
of
July 1, 1947, to Stockholders of record at the
close of business June 12, 1947. Transfer
Books
will remain open. Checks will be
years
cases
Board
clared
1947, a quarterly dividend of
three-quarters per cent was declared on
this
American
GUARANTY TRUST COMPANY OF NEW YORK
RAILWAY COMPANY
New
27,
Preferred Stock of
of
DIVIDEND NOTICES
as
ATCHISON, TOPEKA
SANTA FE
company
PREFERRED
On
one
Railway Operations
.
TEE
can
of
roads, Bureau of Railway Econom¬
ics, Washington, D. C.—paper.
DIVIDEND NOTICES
AMERICAN
officer but continued
director
Review
in 1946, A—Julius H. Parmelee—
r,v"
has been named President of the
organization.
Mr. Cousley
suc¬
a
its
the
registered repre¬
sentatives at the branch
office at
499. Seventh Avenue.
of
expected that
Cousley, Senior Vice-President
Fidelity-Philadelphia Trust Co.,
as
in
of
Simon Joel Messitte and
Irving
have become associated
with the firm
DIVIDEND NOTICES
PHILADELPHIA, PA.—Stanley
firm
manager
Hofstein
Kentucky,
243,557
It
the
as
Mr. Mac¬
kenzie in the pagt was
with Goodbody & Co. and Dyer, Hudson &
Co.
group of under¬
a
with
office
commodity department.
writers headed by Lehman Broth¬
to sell its entire interest in the
preliminary.
in various capacities and- as
President since 1937.s
Mr.
these arrangements apply to mer¬
Cousley "has worked in
chandise
which
was
in
Lend- many departments of the bank and
&ease procurement channels at
the cessation/ of hostilities with
DIVIDEND NOTICES
merchandise.
Corporate
a
requirements from subsidiaries of
ers;
Morgan has been with
the
director
arranging-with
ments
com¬
small
a
non-operating in¬
non-affiliated company.
Kentucky unit distributes pe¬
troleum
products
in
Kentucky,
Executive
New
.
ceeded
were
of
the
Fund
and
shipments be¬
tween the Territories and Poses-
retired
repayment
sents
The
Past President
a
of
ciaries Association.
a
Possessions,
program
.
for
Cousley is
Member
Committee
and
.Territories
represent
with
few
exceptions
merchandise for which arrange1
American
Exchange.
States armed forces abroad, ship¬
W.
being
of
j
Coverage
of stock
represents 9.35% of the
total shares
outstanding.
The Jersey
company decided to
sell the stock because
it repre¬
Pennsylvania bar, the
Bankers Association and the
pub¬
licity and public relations com¬
mittee of the
Philadelphia Stock
ments between Continental United
of
currently
made after the close of
the mar¬
ket today
(Thursday). This block
Foreign-Trade £one for Puget
Society, Botfield Refractor¬
ies Corp., Murphy Oil
Sound, A: It's Economic Desir¬
Co., Smith,
Kline & French, John B. Stetson
ability and Feasibility—Charles J.
Hirsch & Co., 25 Broad
Street,
Co., Tacony-Palmyra Bridge Co New York
City, members New Miller—Prepared for the Depart¬
to export.
and F. W. Tunnell Co.
ment of Conservation and Devel¬
York City, members
New York
opment of the State of
Excluded from all export fig¬
Stock
Washing¬
Exchange, announce that
ures are shipments to the, United
Edward H. Mackenzie
ton, Seattle, Wash.—paper.
has become
export or- import
been adjusted for
vfigures have
changes in price level.
Exports
the
executive, council
shipping
weight of Aprils general imports
of
51
secondary distribution, will be
sylvania Bankers Association, the terest
in
s
The.
Hq
departments.
elected
council of administrators of Penn¬
In other
cases
the arrangements involved
the full cash payment prior to. the
export shipments being made. In
only a small percentage of the
Lend-Lease shipments made dur¬
ing the war period were arrange¬
ments for repayment made prior
30
to
trust
a
Vice-President
in
1929 and to the board of
directors
in 1941;
He became Senior
VicePresident in 1945.. He is a
mem¬
,
,
gap
and
was
announced
today that United
States foreign trade in April continued to show an outstandingly high
level of exports. The dollar value of exports reached $1,296 million,
only a slight decrease from the March postwar high of $1,327 million,
but higher than" the
$1,115 million for January and $1,151 million for
February. At the same time, general imports in April showed an
.increase
from $444
million, in^
'
March to $512 million in April, Japan and call for a substantial
.closing up a small part of the down payment by foreign govern¬
.
tate
!
es¬
HOMESTAKE
MINING
DIVIDEND No.
COMPANY
864
The Board of Directors has
declared dividend
No.
864
of
fifty cents
($.50)
per
share
of
$12.50 par value Capital
Stock, payable June
20, 1947 to stockholders of record 3:00'
o'clock
P., M., June 10, 1947.
Checks will be mailed by
Irving Trust Com¬
pany, Dividend Disbursing Agent.
JOHN
May
20,
W.
HAMILTON,
Secretary.
1947
..
,
J.
I. Case
THE ATLANTIC REFINING CO.
7
HELP WANTED—MALE
A
dividend
Racine,
Bank Note
TRADER-SALESMAN
Active over-the-counter
tele.
Good
with
clien¬
salary,
liberal
quarter
dend
York
8,
N.
of
ending June 30, 1947, and a divi¬
40(if per share on the Common
Stock have been declared. Both
dividends
are
Financial Chronicle, 25 Park
payable July
record June
books will
Y.
I,
1947, to holders of
10,. 1947. The stock transfer
remain open.
W. F.
Colclough, Jr.
May 28, 1947
SITUATIONS
June
Secretary
Convertible 4% Series
A ot the Com?
payable August 1, 1947/r to
stockholders of record at the close of
business July 3,1947.
At a meeting of the Board of Directors
held May 26,
1947, a dividend of
ninety-three and three-focrthi cents
($.9375) per share was declared on the
Cumulative Preferred Stock 3.75%
Series B of the
Company, payable
August 1,1947, to stockholders of rec¬
ord at the close of business
July 3,1947.
Checks will be mailed.
WANTED
immediately.
W
55,
Can "furnish
Commercial
*
close
of
business
P.
L.
eaton
&
howard
STOCK
Irving Trust
Company
The Trustees have declared a
dividend, of ten cents ($.10)
share*, payable Tune 25,
1947, to shareholders of rec¬
One Wall
a
ord
the
at
June
1.6,
close
of
Street, New York
business
May 29, 1947
1947,
24 Federal
The Board of Directors has this
Street, Boston.
day declared
a
eaton
&
stockholders of record
howard
BALANCED
the capi¬
the close
Company, par
$10., payable July 1, 1947,T to
FUND
STEPHEN G. KENT, Secretary
record at the close of business
i
June. 16, 1947."
Financial
7.
1
PLASTICS
24 Federal
f
Street, Boston
OTIS
CORPORATION
ELEVATOR
SOUTHERN
General Offices
CORPORATION OF AMERICA
180
20 North Wacker
Madison Avenue, New York 16, N. Y.
experience. Well
with
THE Boardthe Directors has this day
of following dividends:
declared
unlisted
FIRST PREFERRED STOCK
dealers in and out of town.
84.75 SERIES
The
Salary and Commission. Box
S529
Commercial
the
and
quarter
holders of record
Place, New York
ness
8, N. Y.
>1
'
at
ho
for
the
rincipal
ureau
.jned
ngage
of
record
ten
and
years
C.
has
accountant
P.
A.
been
in
a
the
Securities of the Department
the State or New
York,
at
the close of business. June
-
N. Y.
at
291
Broadway,,.New
.*■
.
York.
:
cents
30, 1947
per
to
20th
Forty Cents (40c)
Both dividends
at
per
the
close
of business
June
13,
Checks will be mailed.
Robert
the
P.
Resell
Vice President and Treasurer
June 14, 1947.
Preferred
been
Union
Gas
$1.06 V4
Company,
share
Checks
Stock
June
of
will
the
be
of
at
the
1947.
close of business
t
1;
June 3, 1947
'm'
,
i
r
Secretary.
the
Gas
15c per
of
Company
regular
C. A. Sanford, Treasurer
New York, May 28, 1947.
:
the
1947,
share
Company,
to
the "close
Checks
on
of
payable
business
be
declared
dividend
Wichita River Oil
of
the Common Stock
stockholders
will
Southern
has
quarterly
of
June
Corporation
15,
record
at
June
4,
1947.
mailed.
H. V.
Mining and Manufacturing
Phosphate
*
Potash
*
Fertilizer
f
June
.
4,
Dividend No. 5
A
dividend
share will be
i
on
Checks will be mailed.
I
the
mailed.
The Board of Directors of
Union
R. O. GILBERT
"
payable June 20,
'
1947,
June
declared
9,
of
4V4 %
15,
record
194
1947, to stockholders of record
declared
dividend
on
Preferred
payable
stockholders
1947.
has
quarterly
per
Cumulative
to
Directors of Southern
Company
the. regular
No.
quarterly dividend of $1.50 per
j share on the Preferred Stock has
and Common Slocks
The Board of
Dividend
A
sharp,
are
payable June
30, 1947 to stockholders of record
1947.
holders of record
Stock
$5.00 Par Value Common Stock
Regular Quarterly Dividend of
share, payable June
close of business
Preferred
Consecutive
Regular Quarterly Dividend
of One Dollar
($1.00) per share.
at
COMMON STOCK
25
Cumulative
COMPANY
Preferred
on
re-,
effective June 2, 1947 and will
in the practice of law and ac^
onntancy
♦.
last
securities
of
Lawv
Attorney
to*
the close of busi¬
June 14, 1947.
14, 1947.
Roggen,
per
quarterly dividend for
the current
quarter of $1.75 per share,
payable July 1, 1947 to holders of,
RESIGNATION
acob
4%
of $1.18
7% SECOND PREFERRED STOCK
The regular
•
were
declared by the
Directors on May 22,
1947, as follows:
of
regular quarterly dividend for
current
share, payable July 1, 1947
Financial Chronicle,. 25 Park
Dividends
Board
UNION
CAS COMPANY
Drive, Chicago
Dividends
years
at
of business June 9* 1947.
MINERALS & CHEMICAL
Many
quarterly dividend
of 15 ctents
per share on
tal stock of this
available
Chronicle, 25 Park Place, N. Y. 8, N. Y.
acquainted
Treasurer.,
FUND
Trustees have declared
a
dividend of twenty cents
($.20) a share, payable Tune
25, 1947, to shareholders of
Unlisted Trader
BONNYMAN,
PETERS,. Secretary.
The
references,
and
the
B.
Secretary
Unlisted Trader
trader
at
WM.
RICHARD ROLLINS
unlisted
record
r
dividend
fifty cents per share on the Common Stock
of
the Company to
stockholders of record at
the close of
business June 14,
1947, payable
June
30,
1947;
Transfer
books
will not be
closed.
of
dollar ($1) per share was declared
the Cun uiative Preferred Stock
May 26,1947
Experienced
of
Louis, Rocky Mountain & Pacific
Co.
Raton, New Mexico, May 31, 1947. "
COMMON STOCK DIVIDEND No. 93
above
company
has declared a
The
12;, 1947.
pany,
quarterly dividend of 75$ per share
(11/2%) on. the Preferred Stock for the
Box G65, The Commercial &
New
:•
A
commission, full cooperation.
Place,
on
Common Dividend No. 152
meeting of the Board of Directors
May 26, 1947, a dividend of
a
one
Preferred Dividend No, 165
experienced
salesman-trader
June 3, 1947.
share upon the out¬
of this
Company has
declared
holders
At
held
Company
St.
Wis.,
per
Stock
payable
July
1,
1947,
and
a
dividend of 40c per share
upon the outstanding
$26 par value Common
Stock of this. Company
has
been
declared
payable July
1,
1947,
to
American
an
of $1.75
standing- Preferred
been
house desires
Company
(Incorporated)
i
<
Chemicals
McCONKEY,
Secretary, and Treasurer
May. 28,
of
Twenty-five cents (25$) per
paid July 15, 1947 on the Com-
Stock of the Corporation, to stockholders
record at the close of business June
30,
mon
of
1947.
Joseph L, Martin, Treasurer
1947
May 28, 1947.
>
*—'•-^•r^-'ifnrimiiwunr, n»< »
Uumuwi.
■
THE
52
Army Bans Cigarette
Convertibility
Teims of Sterling
for
a
second loan from U.
Washington, June 4
(Special
"Chronicle"). — The Army
is to soak rich.
that it would shortly forbid
the mailing of cigarettes to APO
many
Washington, in the hope of reward
in the form of a second dollar loan
converti¬
the
bility of ster¬
mitted, however, in
cial
to
+ t
tion,
presum¬
ably
because
they
them¬
selves
not
.
were
abuse
beginning,
the
From
of
of
currency
have
steps
time
pressure to
no
to
To
ply
authorities.
"Financial Times" of May 28.
(2) There will be an increase
that convertibil¬ of demand for sterling, owing to
ity will be given a very liberal the fact that under the scheme it
interpretation. It is true, only will become once more an inter¬
sterling balances acquired through national currency.
Holders will
current trade transactions after receive no dollars but will be able
July 15 will benefit by it. But to spend their sterling in hard
holders will be able to use their
currency countries.
(It is the lat¬
-new
sterling balances for pur¬ ter that will convert their sterling
chases in hard currency countries, into their own currency.)
Soft
irrespective of whether they pos¬ currency countries will have to
sess any hard currencies of their
pay in sterling for their import
own. Until recently the view was
of British goods, so that there will
strongly held that, according to be a demand for it.
the Treasury's interpretation, only
(3) Owing to the way in which
countries
without any dollars Britain fulfills her obligation un
would be allowed to use their
der the American loan agreement
sterling
for
purchases in the
sterling is expected to inspire
United States. Now it appears that
confidence. Holders will therefore
this interpretation which would
be in no hurry to liquidate their
have safeguarded the British dol¬
holdings.
lar reserve against excessive drain,
On the other hand, the existence
had to be abandoned. After July
of a vast unfunded sterling debt
15 soft currency countries holding
the
••
will not only
husband their own
dol¬
drawing on
Britain's dollar resources, but wil
even be able to increase their own
dollar reserve at Britain's expense
It is true, their sterling will not
be directly usable for that pur¬
pose. But countries holding new
sterling will be able to finance
their' entire
imports from the
United States with the aid of such
sterling, and will thus be able to
retain the full dollar proceeds of
their exports to the United States
Another point on which
the
Treasury had apparently to give
way was in respect to its inter¬
pretation that only net sterling
balances should become convert¬
ible after the end of a given pe¬
riod. This would have meant tha
holders would not have been able
to use their sterling for purchases
in the United States immediately
they have earned the sterling;
only if at the end of, say, three
months they would possess a net
balance it would have been re¬
leased for that purpose. As it is,
countries acting in bad faith wil]
be able to spend their sterling in
resources
by
rise.
cur-
high
rates?
this
I
that
can
b
re¬
pro¬
costs
r e-
e
duced
by in¬
creasing the
investment
labor
m a
will
This
Roger
raise
Babson
W.
in
saving
chinery.
-
real
the
wages
for
all
not for just the
strongly organized union groups.
the
people
—
out¬
heretofore
has
America
produced the world with steadily
falling prices by continually rais¬
ing the amount of money per
worker invested in labor-saving
machinery. To keep up this pro¬
of its selling
i
if
and
in relation to hard currency
has done
so
under pressure from
the
price for its service.
jump in total tax
collections from
a
stimuated na¬
Should soon bal¬
ance the budget and leave enough
to start a real job of debt retire¬
income
tional
ment.
If
and
only
Congressmen*
study
Senators
would
history in»
would see at
greater detail, they
once
how many nations
have been
brought to their knees by burden¬
some taxation. More empires have
been
destroyed
by
oppressive
taxes than by enemy
armies. To¬
day's heavy burden on enterprise
if continued will surely lead us
along the road
followed by Egypt,
Spain, Frapce and now
England — all sunk by taxes.
The New Deal tax policy is t<3>
soak the rich -a- to fleece the
Rome,
gress we
To
save
Department
Revamp Rumored
ture of U. S. voters, who sincerely
workers under such conditions.
WASHINGTON, June 4 (Special
likely to weaken
hope that every Senator and Con
Wiping out of capital by death
confidence in Britain's ability of to the "Chronicle")—It is rumored
gressman feels the same way.
taxes would not be so bad if our
maintaining the convertibility of that the Commerce Department
ance
countries
are
sterling in the absence of a seconc
The result of convert¬
dollar loan.
ibility will be that the imperative
for such a loan will arise
need
than it would have arisen
sooner
otherwise.
may
be reorganized
into two of¬
fices, one domestic, other interna¬
tional.
Present set-up includes
five offices:
Small Business, Do¬
Business Eco¬
Commerce,
mestic
nomics,
Trade and
International
Field Service.
Ask
Exchange to Lower
limit on Fully-Paid Stks.
Revision of the rule which pro¬
hibits'
extension
credit
of
on
below $10 per share
requested of the Ex¬
stocks selling
has
been
Customers,' Brok¬
change b.y the
ers' Committee of the Association
of Stock Exchange
ing to "Association Progress'' is¬
sued by the Association of Cus¬
tomers Brokers. This publication
reports
"It
that:
proposed
is
that the limit be reduced
so
that
these
so,
er
firms
stocks
that
on
Also likely is
of
better integration
personnel between offices.
to five,
wish to
carry
margin might do
and it would also permit great¬
latitude in making subsitutions.
income taxes were
not also dam¬
ming up the flow of new capital
into industry. The bulk of savings
must come from those of suffi¬
Old
Domestic & Foreign
paying 5% because his net
from that stock is re¬
stock
xchange's
order,",
,..
rule
would
,
„
be
in
'
Reorganization
Rails
ciently large incomes to create
a reservoir of capital. Yet, today
an
executive with a fair salary
has no urge to invest in a sound
Securities
income
in¬ duced by two-thirds through in¬
troduced
to
Commerce Depart¬ come taxes. All incentive has been
ment officials as next Assistant
destroyed.
David Bruce was yesterday
Secretary, as predicted
week's "Chronicle."
in
last
Bernard Cahn With
Silver &
Saperstein
Silver & Saperstein,
New York
way,
150 Broad¬
City, announce
formerly a
that Bernard D. Cahn,
member of the staff of the Secu¬
rities
and Exchange
has
recently
to lower prices
so
as to increase the volume of
production. I believe the Presi¬
dent should direct that same ad¬
vice to Congress. Just as a busi¬
ness can sell a greater volume of
products at a lower price, so can
the government expect a higher
tax-take if it can increase the
national income. I believe the
best way to increase the national
income is by lowering taxes now.
The
New Issues
President
asked businessmen
Firms accord¬
States as soon as they
"The $10 rule was promulgated
have earned it, even though their
favorable balance is purely tem¬ by the Exchange when specula¬
tion
in
low-priced issues was
porary. It is true they would run
It was designed
short of sterling later, but if they quite rampant.
to reduce the possibility of criti¬
will have urgent purchases to
cism being leveled at the broker¬
make in the United States they
will not be deterred from doing age community that it had been
encouraging
such
speculation.
so with the aid of their provisional
However, since that time many
sterling surplus.
There can be no doubt that as split-ups and the decline in the
market
have
placed shares of
a
result of this liberal interpre¬
tation, Britain's losses of dollars many long-established companies
in the below-10 class. Therefore,
Will increase considerably after
even with the possibility of mar¬
July 15. It sesems strange that the
being reduced to 50%, it
Treasury should agree to such a gins
costly
interpretation.
In many would seem that an easing of the
quarters the view is held that it
Let
revenue.
resulting
The
Commission,
The stimulus
is associated with their firm.
to incentive
will be
m.s.Wien&Co.
ESTABLISHED
Members
40
N.
Y.
1919
Security Dealers Ass'n
Exchange PI., N. Y. 5
HA. 2-8780
Teletype N. Y. 1-1397
"Seaboard Fruit Co., Inc.
the United
'
Federal
total
government take its own advice
and lower the unit cost( i.e. taxes)
must have incentive: (1)
and (2) To invest sav¬
ings
profitably.
Unfortunately, sheep that have the fewest votes.
This may
be considered "good
our present system of taxation is
If the full story is ever told, it not
only destroying capital that politics," but it certainly is bad
will
be
before a Congressiona" has
already
been accumulated, business. If Uncle Sam confis¬
Committee.
The story embraces but
it
is
also
preventing the cated all incomes above $10,000 $
not only Germany, but wherever
gathering of new capital. This can year, the total amount of money
our troops were in Europe; not to
only end in a declining standard taken in would pay less than half
of the current annual expense of
mention China, where reportedly of living for all.
individual "killings" were made
government! Of course, if that
As an example of the destruc¬
by converting troop pay—which tion of accumulated capital by were done, there would not be
any incomes above $10,000. That's
was
there made in U. S. cur¬
taxation, I like to cite the story
rency—via black market currency of the House of Morgan. When the what would happen to incentive.
However, I warn you — our pres¬
deals
into
Chinese Government
elder J. P. Morgan died in 1913
certificates and bonds'payable in he left more than $70 millions to ent tax course is less spectacular
than such
outright confiscation.
New York in dollars.
It would his son.
Thirty years later this
But it is none the less certain in
take a Congressional Committee to
son died and, after his death taxes
the long run.
pry out the reason Uncle Sam is were settled, he was able to pass
called "Uncle Sugar" in China.
When writing the above, I am
on
only $5 millions to his heirs.
Such a destruction of capital may not interested in saving money for
be
good for the morals of the taxpayers. That is purely second¬
Commerce
heirs, but it bodes ill for you and ary. The less money my heirs in¬
me.
There is little incentive to herit, the better off they may be.
the large adverse trade bal¬
invest more money and hire more I am interested solely in the fu¬
It now appears
sterling balances
given, with the obvious purpose of
allowing the boys just a little
while longer to "make hay while
the sun shines."
so
be
duction
of other countries
"
lar
wage
taken from:
loopholes
Uncle Sam was
close
*
great that national income will
Then a smaller percentage
tax rate would produce a greater
can
of
rent
been
to
time
face
reduced. My answer is
producing more goods
cost.3>
how
lowered in the
by Army per¬
sonnel
and
others has been
a
troublesome question.
A number
military
lower
But
costs
"
he able to
at
(1) The
quite sure
new
Many ask how present high prices can be
that the best way to reduce high prices is by
currency.
monetary authorities times the "few dollars" ran into
will collaborate thousands." The scandalous story
how the new
whole-heartedly and in perfect has never been fully told, nor have
system would
Dr. Paul Einzig
good faith in the working of the the government's losses from the
work.
With
currency
racket ever
system, and will ensure that only military
only six weeks
sterling originating from current been acknowledged in dollars and
to go before the fateful date, the
trade transactions should benefit cents, although the War Depart¬
Treasury has now become more
ment
has publicly confessed to
"communicative. Even though no by the change, and only in so far
as it is needed for current trade
being "long" of reichsmarks.
official statement has been issued
In the case of cigarette mailing,
purposes.
Indeed
the
British
up to the time of writing, an ap¬
authorities rely implicitly on the as in various other steps taken
parently officially-inspired sum¬
good faith of foreign monetary earlier, a period of warning was
mary
of the terms appeared in
~
•
it is claimed
States Treasury
stop to the use
a
the
soughtinforma-
or
United
put
of cigarettes as
The purpose is to
addresses.
influence
interpretation of convertibil¬ through which
ity. Indeed, the British Treasury being made a "sucker" by in¬
professes to be remarkably opti¬ genious GIs • and their officers,
mistic about the working of the who all too often saw nothing
new system.
Its optimism is based wrong with the fellows abroad
on three assumptions:
making "a few dollars."
Some¬
brought
provide the
much
f
.
the
British offi¬
where
circles
that
circles
reluctant
ficial
were
This is not ad¬
later.
or
sooner
ling on July
15. British of-
and damming
Says New Deal tax policy
capital into industry.
new
recently sent out word from Ger¬
S.
of
of flow of
up
toward
and to invest.
taxation impedes progress
greater production, since it destroys incentive to save
Cites destruction of investment capital by death taxes
to the
months speculation has been rife in Brit¬
political and financial circles about the exact meaning of the
restoration
Mr. Babson points out present
Currency.
LONDON, ENG.—For
ish
By ROGER W. BABSON
Purpose to stop their use as
Britain regarding exact
it will be given a very
liberal interpretation. Predicts after July 15, soft currency countries
will increase their dollar reserves at Britain's expense. Sees need
calls attention to speculation in
meaning of Sterling convertibility and says
Dr. Einzig
Incentives
Taxes Destroy
Shipments to Germany
EINZIG
By PAUL
.
Thursday, June 5, 19471
COMMERCIAL & FINANCIAL CHRONICLE
(3028)
General Products Corp.
Teletype—NY 1-971
HAnover 2-0050
Firm Trading
Susquehanna Mills
Markets
Empire Steel Corp,
'
1
i
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