Full text of Commercial and Financial Chronicle : June 6, 1946, Vol. 163, No. 4496, Section 1

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2 Sections-Section

Volume 163

Number

Price 60 Cents

xlAm Advocate of The Communist Influence in
Small Business'
American Labor Movemen.
Would rather
ance

Former United Press
"American

see a

companies with four millions

of assets than

assets; and
panies than

hundred steel

U. S. Steel

one

com¬

a
thousand hanks than
National City Bank.

one

President Harry S. Truman, in an
extemporaneous address at v the
■

graduation exercises of Washington

College in Chestertown, Md,, on
June

1st

Those who still think of the "labor problem" as a simple contest
between employers and organized labor over
wages, hours and con¬
ditions of em:1
1
• r • ■
:
1
—

ployment

well

eration behind

at least

educational
and expressed

period

the

long

States

struggle

ex¬

—"the

great¬

tends into

new

est fcountry
that the sun

has

Its battle¬

—f

the

aces

greatest age in

history.
full

the

text

address,

are

President Truman
.

reported by the

Associated Press, is as follows:
Dr;
Mead,
Colonel
Brown,

Governor

O'Conor, distinguished
Senators, Congressman Roe, ladies
gentlemen, and this wonder¬
ful bevy of graduates •— young
men and young women—here be¬
fore me, it is a very great hofior to
me to be here today.
(Continued on page 3091)
and

.domaHrri*
»'
Eugene Ly°nr

■

Frequently, indeed,

dispute between management
labor is in reality the cover
a
deadly feud between two
opposing labor organizations or a

showdown

between

factions within

entrenched

union.

The

v l"

Aerovox

4' ' '(Vf 'uj

"political strike"—in which
employers are innocent by¬
in

wise

Prospectus

(Continued

the

3082)

be doubted whether

strikes

becoming obsessed with this
pect

financial

Exchanges

Teletype NT 1-810

Cleveland

London

-Cenevn (Representative)

Established

■

64 Wall

its

affairs

the

community

as¬

Lond)6n

may

v.; ;

."li/

is;

and

Dr. Melchior Palyi
;

higher
at

bound

■

that,

the

reverse

forced spending.

restraint

itself

1927

Wholesale

Street, New York S

HUGH

prices will rise even more than
they would have anyway, since
a

Exchange have given

is,

course,

very

(Continued

natural.

on page

consumers'

satisfaction

has

been

However, to evaluate the price
(Continued on page 3078)

The

State and

3073)

Bond

Municipal

Brokerage

Jl^Service
for Banks, Brokers
and Dealers

Bond Department

Distributors

Hardy & Co.

w/lONG and-COMPANY

WALL ST.

NEW YORK

Air

634 SO. SPRING ST.
LOS ANGELES 14

30 Broad St.

New York 4

Tel, DIgby 4-7800

*Firth

New England

CANADIAN

Public Service Co.

/- '

14 WALL ST.. NEW YORK 5, N. Y.

Kobbe, Gearh art & Co.

•

INCORPORATED

Members N. Y.

Prospectus

;

REctor 2-3600

Members

New York 5

120

Teletype N. Y. 1-576

Philadelphia Telephone:

Enterprise 6015

/•

•<&

New

York

Stock

Exchange-

Broadway, New York 5, N. Y.
Telephone:

REctor 2-8600

Bell Teletype:

Values

request

HART SMITH & CO.

NY 1-635

ira haupt & co.
Members New
and

Members

Reynolds & Co.

Security Dealers Ass'n.

45 Nassau Street
Tel.

TELEPHONE-RECTOR 2-6300

Appraisal

available upon request

//;////"/■:
■

MEMBERS NEW YORK STOCK EXCHANGE

Carpet Company
Preferred.

THE CITY OF NEW YORK

*New Haven Clock & Watch Co.

MARKETS

BULL, HOLDEN & C2

NATIONAL BANK

Products, Inc. Com. & "A"

THE CHASE

Tele. NY 1-733

*UniversaI Winding Co. Com.

SECONDARY

Bonds

■

Members New York Stock Exchange
Members New York Curb Exchange

FINANCE

rein¬

In final result,

occupation with internal matters

PROSPECTUS ON REQUEST

PHILADELPHIA
Troy
Albany
Buffalo
Syracuse
Baltimore
Dallas
Washington, D. C.
Pittsburgh
S'cranton
Wilkes-Barre
Springfield
New Haven
Woonsocket

..*'?*."'•
•

C<;'

work

British domestic affairs. This pre¬

lose

BO^EUND

request

BOSTON

BROKERS
4t.•„:*V;'••'•►J
v.

wages

SECURITIES

...

all

resumed,

World financial machine; and not
merely on the part it played in

MANHATTAN

INVESTMENT SECURITIES

BOND

•

once

in the post-war sight of the truth
that its past
set-up. There has greatness was built up very largely
true, a good deal of on its functions as the hub of the

the
domestic
future of the London market; and
in fact there is a danger
that, in

around.

delayed.

been,

CORPORATE

_•

depressing ef-

im¬

than

has

of their market

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

areas over-

caused

international

R. H. Johnson & Co.
,

Members New York Stock Exchange

ac¬

poli¬

may

industrial

paralysis

further frustrated, the urgency of
pent-up demand further enhanced,
arid the flow of. supplies further

Pratt's Fresh Frozen Foods

request

EQBSCH, LILIENTHAL A CO.

2-0600,

LONDON, England.-—It

Liberty Fabrics ofN.Y.

Successors to

HAnover

liquid h o 1 dings of store¬
keepers. True,

long experience.

small minority of members of the London Stock
any serious thought to the future #•

equal

Corp.*

Hirsch & Co.
-

power

on page

Prospectus

"iy- mA other

conduct in 1920's—to profit from Britain's

demands, if discussion

tics in many industrial

Nu-Enamel
*

so-

called

any,

spending
potential
but
amount to the

tionism, predicts Britain's day as foreign lender has permanently
passed. With certain transfer of world financial"
leadership to
New York, Mr. Wincott urges us—in contrast to our
irresponsible

and

its fu¬

ture

the

drastically and Irrevocably reduced London's

for

ceptance. Intra-union

Carpenter & Co. *

-•

ble

the

»ployed!family

portance. Because of her inability ever again to achieve favorable
balance of payments, and Socialist Government's financial isola-

ostensi¬

industry affected—is gaming

L. E.

debtor status has

domestic poli:
tics, in the jungles of ideological
warfare.

standers and the labor

Index of Regular Features ap¬
pears on page 3108.

—!"i

securities; :and highly intensifying competition among
j$ members. In international sphere declares shift from creditor to

in the field of

liquid savings by strikers does not affect
The money or bonds dishoarded by an unem-

seasoned

foreign affairs, v' f'\' '■ :

The

the inflation outlook.

Editor, London "Investors'Chronicle"

.strange
dimensions.
grounds

"defcr money" may bring Government bonds below par.

The disbursement of

British publicist cites injurious impact of nationalization
program
on London Stock Exchange causing disappearance of hundreds of.

and

upon"

By HAROLD WINCOTT

the

United

shown

dollar borrowed from

Concludes Federal Reserve will not check bank lending

London Looks to New York

ago.
time

this

v ever

level could rise 50% without "a single

add

ended

because volume of

is divorced from the gold base, but contends wholesale price

banks."
as

that Government deficit financing has

now

automatic credit expansion

reduce

the times. That

the

The World's Investment Centre:

primitive

opinion

money

mobilization,
Sees

are

gen¬

institutions

that

financial

ended.

in their efforts to eliminate Communist influence from the unions.

small
business
as
small

ability of present production to satisfy. Sees end of hoarding propensity, but holds magnitude of inflationary boom will call for vast

Utopia,"

■-

praised

^
*
By MELCHIOR PALYI V./3.
333"
Palyi points out current strikes by reducing output may be an
inflationary influence and, combined with excessive deferred spend¬
ing power; may put demand for goods and services far beyond

from AFL, Communist strength has been concentrated within CIO
and colors its national policies. Warns current dominance of
proCommunist labor leaders in harbors and shipping might be dis¬
astrous in event of war.
Urges public to support labor liberals

Corp.;

and

"Assignment in
Decade," et al.

Dr.

Mr. Lyons declares current strike wave is
political and ideological,
rattier than economic, States since John L* Lewis' original departure

of four billion

one

Author,

"The Red

Correspondent in Moscow; Former Editor

Mercury";

thousand insur-

Copy

Sdf-Propelled Boom Financing

By EUGENE LYONS

—Truman

New York Security Dealers Assn.
52

WILLIAM

ST.,

N. Y.

Bell Teletype NY

New York

HAnover 2-0980
1-395

Montreal

Toronto

111

other

York Stock Exchango
Principal Exchanges

Broadway

New

York

REctor 2-3100
Tele. NY 1-2708

Direct

10 Post Office Sq.
Boston 0
:

Hancock 3750

;

Private

Wire to Boston

■

THE COMMERCIAL & FINANCIAL CHRONICLE

3054

Trading Markets in:

Lithograph*

Havana

pfd,

Com.

•

Sub-committee

*With

•

KING & KING
??

-r

York

New

1920

Ass'n

Nat'l

BELL TELETYPE

Investors

NY 1-423

..•

•/

vv't-

'•

■■■'

Bought—Sold—Quoted

staggered forth with an illogical ppRticaJ.; compromise.
•
,
: This committee had beeft established'by the S eeuirify'Council "as a fact-finding organ, solely and
clearly to determine whether or not "the situation in Spain has led to international friction, and does
endanger international peace and security." On the basis of such.; findings the Security Council itself—
not this subcommittee—was intended to be respond ible, for determining what practical measures, if any,
should
be
—1
'
'
1
'v'
——:-

HA 2-2772

Fl., Mf.Y. 5

Bird & Son

Pacific American

the Spanish question, after. 1& meetings, of.

Security

40 Exchange

political compromise—wholly illogical, illegal, and unsatis¬

HUNTER COLLEGE, NEW YORK, June. SprAgaiiL UN has "laid an egg!" The subcommittee on
wrestlin g with, another "too hot to handle problem," has

Members //■
Dealers Ass'n >
of Securities- Dealers, Inc.

factory to ail members. Mr. Stettinius'withdrawal reflects weakness in the State Department's method of
UN representation.
Economic and Social Council already beSet by national political andiifeorogical
differences.
Coming International Trade Conference and related lofty aims are inconsistent with Coun¬
cil's other grandiose goals for international relief and planning, and with members' autarchic domestic

Prospectus

Established

Spain report represents

Gerity Mich. Die*
American Barge

J UM. Lays-AstcHterEgg' ;

Benguet Consol. Mines
Standard G & E Com,

,Thursday, June ,6; 1946

SlilNERROUSE&C(L
•

Meii}bers.New York Stock Exchange.

25 Broad St., New York 4, N* Y.
HAnover 2-0700

;

1^-1551

New Orleans, La.-Birmlngham^la.

taken.-?.1

ELK HORN COAL

i 11

Common & Preferred

rors

two

commi

and
Bought—Sold—Quoted

er¬

s s

the first

TransportationEquipment

o n

one

Writer hoys financing purchases of railroad equipment

place,

it
has
reasfo n

not
a bl y
answered the

tion whether a

Mississippi Shipping,

subsequent action by

Common

bly;

Vanderhoef & Robinson
31 Nassau Street, New York

itself which takes
"

action.

posi¬

inite

their

for

order

.to

cure

accom-

Se¬

contributions
tion

modation
ceeds

bond

itial
sues.

affirmative

is¬

(Continued on page 3092).
"*

Byrndun

Most,

•'

these
will

Common

hav^to be

Common ;
,

>«•!'- '

"X-V

i..

Ernest H. Weinwurm

Guaranty Go,

their

na¬

time, they will often represent a
heavy drain on scarce resources
of manpower and materials which

Common and. Preferred

Bought—Sold-—Quoted

might be put to better use else¬
where.

20 Pine Street,

^CpONNELL&fh

New York 5

Members

Telephone: WHitehall 3-1223
BeU Teletype NY 1-1843

will have to concentrate uppn

New York Stbck Exchange

most

BROADWAY, NEW YORK

;

2-7815

TeL REctor

the

New York Curb-Exchange
120

urgent projects which

will

the

effective

shortest

Maine

useful

and

possible

More-

time.

Stamped Preferreds

We Maintain Active Markets in V. S. FUNDS for

Employees

'.\yj UA" & Preferred

'■

%;:;://y'pf

'Pi-pS r'P&Pj

mendous efforts

Com.

major

erations.

Members N. Y. Security Dealers Assn.

St., N. Y. 5

I Bell Teletypes--NY

;

Canadian Securities Dep't.

jliem6ers

JV.Y. $toch Exchange and Other

115 BROADWAY

For Banks, Brokers

Bowser lnq„ Common

known

All

Hsues

'-'-j/P

how

Gude,Winmill &Co.
ifembers New York Stock Exchange "
i t' Wall St., New York 5. N. T.
;

Digby 4-7060

Teletype NY 1-055

a
of

•

result, the intricate sys¬

their

prewar

been

done

Companies

capacity. Mqph
during the last

Analyses

Request

I^Oar1 to repair and rehabilitate
:

^.,r.

:•»'

■

NEW YORK

latter

far as tl\e
is. concerned and' the pres¬
enormous

unsatisfactory

ent

& Dealers

situation rep¬

on page

New

120

York

Long Bell Lumber
$5 Par

Common r^i

WAIL ST.,

Western

Trading Market

-p.'J

Union Leased Lint Stocks
Telegraph Co.
Telegraph Co.

Southern & Atlantic Teleg. Co.

WALTER KANE, Asst. Mgr.

BOUGHT—SOLD—QUOXED

Member

Exchange-

NEW YORK

International Ocean
MICHAEL HEANEY, Mgr.

Bought—Sold—-Quoted

Exchange

Assoc.

TEL. HANOVER 2-9612

Pacific & Atlantic

Common

CO,

Stock

Exch.

Jefferson-TravisCorp.

Common Stock

United StoVe Co.,

Curb

York Coffee <£ Sugar

'./'iv*

Securities

COMPANY

York

New

307,7)

Curb and Unlisted

CASUALTY'

Members
New

stumbling block to

resents a main

Teletypt NY 1-072

FAll 11

rolling, stocks., Yet the deficit

jiS still

Principal Exchanges

MARYLAND

Harrisburg Steel Corp.

iy si

well

Minneapolis & St. Louis R.R.

op¬

work of destruction to the best of

(Continued

•.

military

;

ToIephonG BArclay 7-010Q

.>■

film IndL

Assoc. Gas & Elec. Corp. 4/78

made dur¬

thorough a job was done by the
Allies particularly the U. S. Air
Force; In additiqn^ the retreat¬
ing enemy tried to complete the

has

v/,

Goodbody &. Co.

Hanover 2-4350
1-1126 & 1127

Buckeye Incubator

tracks and other facilities as well

fWeue^Companu
37 Wall

Consolidated

In fact, tre>

were

•

larly in Continental Europe, have

& Pfd.
,

58/2000

Assoc. Gas & Elec. Corp. 5/73

ing the war to smash enemy
transportation facilities as a pre¬

STEEP ROCK IRON MINES

Works

NEW YORK 5

HAnover 2-9470

Chicago, Mil., St. Paul & Pac.

been reduced -' to: a2 mere fraction

■

ONTARIO PAPER

MINNESOTA &

J'V

'■ ■/

United Piece Dye

&■ Preferred

BROWN COMPANY, Common

Preferred

BULOLO GOLD DREDGING

Railroad
•

Publications
&

WALL ST.

inland transportation in
the toar torn countries, ^particu¬

ABITIBI POWER & PAPER, Common & Preferred
Common

Toj* priorities.

in peace*and war.

tems

Colonial Mills
Macfadden

■/.

York Curb Exchange

Mcmoers- New

Teletype NY 1-1140

However, there should hardly
be
any
objections
to
priority
claims of the transportation field.
For transportation: is the back-r
bone of every economic system

fAs

Frank C. Masterson & Co.

Transportation Equipment

his ability.
Boston

liminary

In the circumstances the Bank

;

Common

;

|ood deal of com¬

for com¬

In the mean*

tional economies.

H. G. BRUNS & CO.

many

Deserves

long time

contribution

actual

'v«.\

Struthers-WeSJs

ferences.

projects
need

Hotel Waldorf Astoria

promising to reconcile basic dif¬

pletion. A good many years may
pass
until they will make any

Home Title

A. S. Campbell

Too

Required

Corporation

Recordgraph

reconstruc¬

possible.

conflicting
conceptions and viewpoints .are
involved. In the erid, Mhere will

(Va.)

Common Stock

agreement on such a
will not be an
easy

get

matter.

j;;;...

Schedule

toward

soon

schedule

Definite

in¬

Central States ElOc.

schedules of

preferences to
assure
orderly procedures and
early selection of projects prom¬
ising to make the most valuable

Preferences

V-u'S':j. % » Vi 'f"

it will have to set forth def¬

over

NY 1-1548

Teletype

eager
pre¬

get

from the pro¬

because

i| is not the
the Security Coun¬

Assembly but
cil

tion

reference;

terms

M^berg New, York Curb Exchange
50 Broadway WHitehall 4-8120
BeU System Teletypo NY 1-1919

to swamp the World
in the year. Member nations

when it will start operating later

pet projects in

the Charter

under

Telephone, COrtlandt 7-4070
System

Members New York Stock Exchange

inland waterway equipment would be equally important.

ferred

the Assem^
exceeds the

and also is out of order,

Exchange;

Members New York Curb

this

although

committee's

;

will

when the Gen¬
paeets). In the sec-

contradictory recommendation for

W. & J.Sloane

Bell

that it wiU ob¬ Bank

it has made the self-

lond place,

Edward A. Pureed & Co,

A flood of applications may be expected

tain in September
eral Assembly

;

motive and

situation does

stated that such a
not.exist now, but

„

Jockey Club

Contends strength of collateral of equipment obligatiotts is ttnajffected by transfer problems, and states similar financing of auto¬

strangely

Instead, it has in- effect

Common

Monmouth Park

by the World Bank. Says they would be attractive to
commercial banks and others interested inr shorter-term maturities^

A. Wilfred May

been

has

Rogers Peet

Chicago Corp.

than other time-consuming

flotation!

ques¬

brought about.

Adams Hat

projects. Holds sales of equipment trust certificates which are
highly regarded by investors would greatly facilitate initial security

threat to peace

Teletype m Yt W2?tr

Bel)

Textiles, Inc.

pro¬

tioned

-120
,

Would

first- men¬

lllj
Baltimore Stock Exchange
Broadway, N. Y. 5
WOrth 2-4230

Members

early foreign rehabilitahon

mote

Central JPubllc Utii. 5 Vz

By ERNEST H. WEINWURM

(

omission.

brancti offices

Soya Corp.

one

—

our

Would Bank Should Finance

has

e e

made

Direct wires to

■

The subcom-

Empire & Bay States Teleg. Co.

•Vi-'-V:-vSi!••j.y

Troster,Currie (Summers

Simons, Linburn & Co.
Members New

Members N. Y. Security Dealers Ass'n
74

York Stock Exchange

25 Broad St., New York 4, N. Y.
HAnover 2-0600

;

Private

Tele. NY 1-2908

Trinity Place, N. Y. 6

HA 2-2400

r'*'.'.//.. Teletype. NY 1-376-377
;

Wires

Detroit

Buffalo

Pittsburgh

>■

INCORPORATED

Joseph McManus & Cp^
Members

37 WALL
■

Cleveland

St. Louis

Bought

J-G White 6 Company
//■.," /'/

^ *•

StREEf

NEW YORK 5

ESTABLISHED 1890

TeL HAnover 2-9300,

/ Tele. NY 1-1815

New

York Curb Exchange

Chicago Stock Exchange

39; Broadway
Digby 4-3122

; New

//
/"

York 6

Teletype NY 1-1610

Art. hold

•

sold

quoted

and S. Bleichroeder
INC.

30 Broad St.
WHitehali 3-9200

New York 4
Teletype NY

1-819

Volume 163

Number 44S6

THE COMMERCIAL .& FINANCIAL CHRONICLE

The Problem of Interest Rate

Inflation and Interest Rates
Professor Lutz cites stimuli to future inflation likely to arise from

By AUBREY G. LANSTON*

Mr, l^tona^Treasury
(1) 'Ijhe initiation
■'£^^Stcy |i

GM^OI d^Tices,

;

enlarged by new production, from financing of business
^reconversion, and from* inflation-conscious consumers' spending pf

■

their idle balances.
act

avpid facing fact Government interest
control jvifl lead to (l) -further increases in money supply and
(2) national socialism. Concludes situation is sufficiently dan¬
gerous from a financial, economic and social viewpoint to justify '
some relaxation in
rigidity of controls, particularly in the shortThis

would

then

(

for

present

consideration

your

analysis of the
^assets and lia¬

ing

bilities of

forest and less of the trees. Finally

the

commercial

shall-question whether \he con¬
tinuing control of interest rates
by Government is worth the cost.

tie this in with

In the

.reports of the

testimony
given

correct

created

last

alk

stand
the

the

JFederal

Re¬

before

the

weeks

Haven,

that

ago

Conn.
Ap¬
to under¬

some

would

sell

basis,

referring to the prospects for

ing and Cur¬

tbe
hope that by^do-

likely ihat

Treasury made

public offerings of long-term

mar¬
ketable issues would be infrequent
and so limited as to size as to

!:An address by Mr., Lanston be¬
fore the Maryland Bankers Asso¬

require

increased restrictions on
subscriptions.
Under these
cir-

ciation, Atlantic City, N. J., May
28, 1946.

(Continued

page

3079)

Inflationaiy Menace oi
president, American Bankers Association

Government activities which by fostering

dollar.

think

—

for

Personally, X

when

not

^gainsay

.The

fluctuate from
time
in

the

discuss

word

our

insisting,' of

water-tight,

one

each

tor

turity:

ma¬

there

three

for

tion of

present tendency of the long-term
rates to fall. Commercial banks
have recently increased their legal

months' psper,
for
nine

selling
short-term
paper (Treasury bills, notes and
certificates) to the Federal Re¬

securi¬

These
rate

terms

commodi¬
ties, nor .does
•it preclude he
^possibility that

Colorado

Broadway

Piece

the

39 Broadway

New York 6, N. Y.
HAnover 2-8970

PLASTICS

term governments,

which lowered
long-term governments
(Continued on page 3088) 11

"cap¬

Teletype NY 1-1203

MATERIALS CORP.
<>''

.j-i

'v.v

|iopos$d insidei' Allotments Rule
NASD reported seeking to comprpnyse issue with SEC by
voluuturiljr |
limiting action of its own members. 40 .^ale: <pt -mm
^prfegs, 5
Board to consider problem at meeting in Bretton Woods next
Monday and Tuesday.

jSiiio|C^5®T^, ^hichlia?
fi^de^^
.distribu|prs

terms of its

^rah'k'

C. Rathje

page

had

its

39* So. La

TWX NY 1-2733-4-5

Sal^e St., Chicago 3

Randolph 8924'
68

Riohmond 4321

■ ■

" Private

Boston

Los

-j?-

COMPANY

CERTJfJCATES

Bond A Mtge.

proposed
discussion apaorig

MPfeeaied

N. Y. Title &

Mtge. Co.

Engineer? Report
on

request

•

BOUGHT • SOU)

||g

•

QUOTED

Est. 1926

RIO
UtRlial & to.
O

Members New York Security Dealers

some

leaders of the

170

Broadway
Bell

frpin ihe hp^inxiing that

(Continued

interested in

are

WOrth

2-0300

System Teletype NY 1-84

Haytjun Corporation

3106)

page

offerings of

Lea Fabrics
U. S.

Sugar

American Bantam Car

PujbUc Utility and Industrial

Bankers

Punta Alegre Sugar
Eastern Sugar Assoc,

High Grade

Pressureiube,

Inc.

Susquehanna Mills

PREFERRED STOCKS

Newburger, Loeb & Co.
Members New York

Stock Exchange

WHitehall 4-6330

Pell Teletype NY 1-2033

Speucer iJrgsk & Co.

<fL.

DUNNE & CO.
fyembjirs New Yprjc Security

"25 Broad Street, JNew York

25 Broad

Telephone HAnover 2-4300
r

-1

Teletype NY 1-5

/tfcmfecra New York Stock Exchange

•

Dealers Assn.

St.i New York 4, N, Y.

WHitehall 3-0272—-Teletype NY 1-956
Private Wire to Boston

S tr omb erg-Carlson
*

Armstrong Rubber

•.

' t
*

STRAUSS BROS.
Members

Security Dealers

Broadway

iNEW YORK A
*

Dlgby 4-8640
teletype NY 1-832. 83a

•

Y' V

Bought

*•

—

•

:•'•■•

•

Sold

^
*
'+A*•

■

—

Quoted

*
•

-•

•*

y..

Public Nat'l Bank

Wl: & Tr. Co.
'..■

A-ssn

^Prospectus

Board ofTrade Bldg.

Hon. Rose STrqster

CFICAG0 4
Harrison 2075

ESTABLISHED

1914

Teletype CO IM

Direct Wire Service

&Senrice, Inc.

National iRadiator Co.

Common & Preferred
*

....

•

Parks Aircraft

Sales

American Bantam Car

Mobawk Rubber

Prudepce Co.

N.Y. 5

MFG. CO.

proposed rule is undesirable in just about every aspect
conceivable, the feeling in many quarters is that the Gov-

Go*

lawyers Title j& fGuaf* Co*

15 Broad SL,

Chicago
New York

the

[

AXELSON

pi n^w

NASD wrere

Ray-0-Vac

JSuar. Co.

Lawyers Mortgage

Mass^'

yvivesi

Cleveland

Angeles

TWX CQ 616

Devonshire St., Boston 8,

one

3097)

fiatb. JStraus'Diij).

purchasing power.

TITlJ

..'-V/

•

read mqch of the posr

We have

V1' c.v'%

Request

Exchange PI., New York 5

HAnover 2-4785

issues
of the main topics of business to be taken
up by the Board of Governors of the National Association of
Securities Dealers at its meeting at Bretton Woods

Association,
Estes Park, Colo., June 5, 1946.

the

v«\"_ vlY

NASD Governors to Consider SEC's J. F. Reilly & Co., inc.

the dollar will

other

Common;

Members New York Security Dealers Assn.

Prospectus

{permanently
.step from one
•plateau to an¬

Dye

L.J. GOLDWATER & CO.

these reserves, have bought long-

Lutz

the rate

compartments

*An address by Mr. Rathje be¬
fore the Annual Convention of the

.•of

Pfd.

Estate

Banks, and, on the basis of

serve
Friedrich

sepa¬

United

reserves

months' paper,
and for longer
term

A! good
illustra¬
this intexiconneqtion is- the

Real

interconnected.

mar¬

ket

Schulte

can

.vice versa: The interest rates for
different maturities are therefore

thus

separate

not
lenders

eourse,

since

and borrowers

many separate

markets,

are,

bolh
shift from longterm loans to short-term loans and

course,

market"

monetary

"inflation"

(Continued

time

Hotel

Commodore
ital

affairs.

Tact that it will

STREET, NEW. YORK

-S'YiSI Book Cadillac

—

think the word "inflation" should
be stricken from our vocabulary

that

market

Though they applaud the fact that
a

the world. But
does

-Y; • Y:ir'Y

Telephone WHitehall 4-6551...

The interest rate is the
price for loanable funds in the market
and is,-tike any other price, determined
by supply and demand. The

country.

con-

—

sibility of inflation.

:tnade force in

evidence of

is, aqd will

tstronges.man-

the ir:
with

Obsolete Securities Dept.

the American

running

come

rebuilding of foreign trade; and (3) maintenance of ihe American

ttinue to be the

■

89 .WALL

Monday and Tuesday.
^
The rule, which would
classify as "fraudulent, deceptive
of stock to so-called "in¬
siders" in new offerings of .common stock, is called
"unfair,''
an
"unwarranted use of ^police power,'7 and
entirely ^"un¬
necessary" by underwriters and dealers throughout the

<early^1930ra bi this over-extension of ^rivate debt structure. Asks
for careful Government planning, free fyora
political expediency,
and urges: (1) restoration of
£?y&anproduction efficiency; (?)

Nothing that I may say should be construed

.bid, '

ne^ct

private 3ebt sbucture through guarantees, insurance, and direct
Sending, constitute pressures for higher prices. Sees repetition of

.lack of faith in

thatp''

guy

stock.

junk

Federal debt.

months, will be

By FRANK C. RATHJE*

dollar value.

that

you

-and:^J^hange G<^nr^

Government Credit Activities
Mr. Ralhje points out

sold

GUN
for the

gunning

meantime .weUl

nuistfee^ Adopted £ucbas reduction of:

measures

in¬

terest rates, I was trying to point
out that the changing position oi

Lanslon

anti-inflationary

was predicting that
ties
0$$#:ferineligible
Treasury; nt maturities.

stabiliza ion of the long-term

Bank¬

rency
Cpm muttee with the

New

2Vz%

oonds

Board

IHouse

several

«cles

serve

beginning, however, may
an
impression which 1

parently I caused

Chairman Ecof

the

see

can

{

banking
sys¬
tem. I plan to

"Thursday

present

loanable funds

several unrelated

—and

bonds instead of consumers goods. While such anti-inflation¬
ary interest rise jvppld be altogether beneficial, it is held unlikely
because of adverse effect pn Federal budget. Concludes other

morning I would like first to comment

YOUR

rise in interest rates would counter*,

ment

we. cannot

area.

Asserts

;

inflationary tendencies, by discouraging sp eculation, and
ky inducing public to use it? idle balances fpr purchasing Govern¬

maturing short-term jnto
^ank
(3^
plication of pressure on commercial banks for curtailment of specu¬
lative loans; and
(4) giving Federal Reserve jpaore powers of credit

items.'

ANNIE GET

incomes

:M bank ineligible bands
held by Government trust funds and agencies ; (2) the
refunding of;

term

AND COMPANY

The Institute for Advanced Study, Princeton, N. J.

Vice-President, The First Boston Corp.

3055

licHTfnsifin

By PROFESSOR FRIEBRIC1I LUTZ

Control

74
•

New: York-^Uueago----S^
^
Kansas City—Los Angeles

Trinity Place/New York 6, N. Y.-

Telephone?

BOwling Green 9-7400

Teletypesr
NY 1-375 & NY 1-2751

'Sv cv:'■

upon request

C, E. Unterberg & Co.
Members

Security Dealers

Ass'n

Broadway, New York 6, N. Y.

Telephone

BOwling

Teletype

Green
1-1666

9-3565
;

■

;

FI^ANClAt dHRONICLE

CbMMEHCiA

THE

3056

Holds NASD Is An SEC

Subsidiaiy Prospect for Higher Stock Prices

Partner of Detroit firm writes "Chronicle" of irritation and expense
of running his business under four regulating and controlling
masters.

ACTUAL MARKETS
IN 250

Air Cargo

Air Product! "A"t
American Bantam Car

•

Automatic Instrument

Co.

Seward N. Laws on

District Theatresf

Douglas Shoe*

good job well done. Always more regulations, examinations
and supervision with more expense added each time some¬
body has a brain storm on how to run our business for us
more to their liking.
I was one of those who signed up at the start of NASD

Frontier Ind.

Gt Aimer. Industries*

Hartford-Empire Co.*
Jessop Steel
Le Roi

Mastic

Asphalt
Michigan Chemical
Missouri Pac.
Old Pfds.

Mohawk Rubber*

government financial Agencies always refuse to take the
constructive side of controversial questions—or on any ques-

Moxie

N.Y. New Hav. &Hhrt.

(Continued on page 3096)

for

q u

i p

manded and

Now the Maritime Unions demand
a

Gordon

Billard

near-term

minor irregularity, further exten¬
sion of the main upward trend ap¬
pears in prospect in anticipation
of a rather sharp increase in in¬
dustrial activity during coming

miners will mean a further con¬
siderable boost in the price level.
None

basic issues has
that underlying in¬

the
so

Taylor-Wharton*

^Princess

->Thomas Steelf

Simplicity Pattern

Shops

1'Le Roi Company

f Citizens Utilities

Under the present set-up—and
this

likely to continue at
least until after the fall elections
seems

^Statistical Study or Special Letter on Request

—giving labor what it demands^ is
sirnply not enough.. Each w^ge
advance is accepted as a conces¬
sion—more or less as a sort of

FIRST COLONY CORPORATION

partial payment. The significance

*Prospeetus Available

Vacuum Concrete

Members New York

Alabama Mills*

Wall Street

Security Dealers Association

of recent developments will

New York 5, N. Y.

labor.

the rank and

be lost on

Teletype NY 1-2425

•;

Tel. HAnover 2-8080

Aspinook Corp.*

Wage increases have
the rounds but

now
new

about
wrin-

kles have been added in the form
of welfare funds and new working
rules
so
that another cycle of
wage

demands will probably ap¬

pear

summer or

(Continued

fall. The sig-

on page

3076)

R. S. Hudson Elects
&
DALLAS, TEX.—R. S. Hudson
& Co., Gulf States Building, an¬
the election of W. Perry
McPherson
as
Vice-President,

nounces

and O. V. Cecil as Treasurer. Both
were

formerly with Walker, Aus¬
Cecil han¬

& Waggener, Mr.

tin

dling gmunicipals,

and Mr. Mc¬

Pherson corporate issues. Mr. Ce¬
cil

three

served

one-half

and

flationary forces will continue as years in the Navy as a Senior
primary factors in
supporting Lieutenant. He is a member of. the
prices for equities even where Dallas Bond
Club, the NSTA and
earning power is currently lack¬
the Texas Group of the IBA. Mr.
ing.

Purolator Prod.®

Upson Corp.*
U. S. Air Conditioning

22c to 35c hourly rise.

made

perhaps

cording to coal operators, is equiv¬
alent: :t6 a 25c hourly increase.

industry shares which have been
adversely affected by labor and
price problems.

Subject

the grand prize

won

wage boost and royalty for a
welfare fund—all of which, ac¬

ent,

been solved

Pfd.

N. 0. Texas & Mexico

lished

Whitney group .balked 'and got
18Voc; then Lewis rejected every¬
thing obtained heretofore and de¬

estab¬

-—thinking from the propaganda at the time that it would
be run in a democratic manner, with a few helpful sugges¬
tions to members once in a while such as other trade organi¬ months, thereby further accelerat¬
zations obtain from their associations, or like the Detroit ing demand for raw and semi-fin¬
ished
materials
with
resultant
Board of Commerce, to help its members fight their battles
higher prices and restoration of
for lower taxes, simpler methods, clearer laws and lower corporate earning power commen¬
surate with production.
overhead methods of operations.
I am firmly convinced that the NASD is now an SEC
The Solution
subsidiary, in order to help make doing our business tougher,
Solution arrived at for the re¬
rather than cleaner, or easier, or better. Why must these turn of the rail workers and coal

Lanova*

Old

only a little house, but serving
jour masters; all of whom we pay for: SEC,
are

were

NASD, Mich. Corp. and Sec. Commission, and Detroit Stock steel, railroad
e q u i p m
ent,
Exchange. All and any comments we have seen of general farm equip¬
nature are negative; never any encouragement, never any ment
and
constructive suggestions, never any commendation for a other heavy

Diebold Inc.

long list of iss u e s, includ¬
ing auto, auto

exactly.

Deep Rock Oil

■,

highs

new

ments

Chicago R. I. & Pac.
*

.I".

raged Member" to Mr. Fulton in your
March 14, 1946,t issue expresses my senti¬

Cinecolor
r

prices and in rail rates to offset wage increases, but warns sub¬
stantial price rises may lead to buyers' strike with disastrous mar*
ketwise effects. Says advance in stocks is far below rise in real
estate, and contends greatest boon to stock market is repeal of
excess profits taxes.
•
"•
•

Assoc. Dev. & Research

Pfds.

irregularity, further extension
Looks for rise in commodity

Air Products Com.1'

/Old

Analyst holds that, subject to minor
of upward movement is in prospect.

I am a partner of one of our local stock exchange firms,
having been in the brokerage business 16 years, and a regular reader of your paper since its start
(from the old "Financial Chronicle"). You
Selective Aggressive Demand
are to be commended on your splendid arti¬
Settlement of the railroad and coal strikes during the past week
cles, and the position you take on the "5%
brought an aggressive, although selective; demand for stocks.
rule," also on those absurd NASD amend¬
Dealings
•• •—■
——-—"
-—;■ ■
ments on which there are no membership were on a
efforts to negotiate a relatively
somewhat ex¬
moderate
wage
increase, while
agreements, the ban on allotments, the con¬
C.I.O. refused and got the 18
panded
scale
stant assumptions of dishonesty of the
a n
d, despite
pattern; the Rail Brotherhoods ac¬
members, etc., etc. The letter by an "Out¬ profit taking,
cepting arbitration got 16c but the

Transport

Barcalo Mfg.

Partner, J. R. Williston & Co.

Editor, Commercial & Financial Chronicle:

ACTIVE ISSUES

By G. Y. BILLARD

•

Refers to work of "Society of Sentinels" to combat growth

of bureaucracy.

Thursday, June 6,1946

not

McPherson is

and

with

the

committee

the

member of

NSTA

member of
,

District No. 0 of the National As¬
sociation of Securities Dealers.

The

COMMERCIAL

and

FINANCIAL CHRONICLE

file of

Beg. U. S. Patent Office

Last fall A. F. .of L. went

along

executive committee of the

William B. Dana Company

Administration's

Publishers

Textron Wrnts. & Pfd.

25 Park Place, New York 8

REctor 2-9570 to 9576

American Gas & Pow.
Cent. States Elec., Com.

Iowa Pub. Ser. Com.
New England P. S. Com.

Sold

Bought

Quoted

Greater New York Industries

Herbert

Editor and

^Capital Records

EASTERN CORPORATION

*Kaiser-Frazer Corp.

HOTELS STATLEE COMPANY, INC.

KALAMAZOO VEGETABLE

Seibert,

'; $

Publisher

William Dana Seibert, President
,

Thursday, June 6, 1946

Published
every

^Prospectus on request

twice

week

Thursday

(general news and advertising time),

Southeastern Corp.

Central National

Spec. Pert '

ESTABLISHED 1927

Southwest Natural Gas
22 East 40th

Standard Gas Elec.

J.K.Rice,Jr.&Col
Established 1008

Street, New York 16, N. Y.

Members N.

Y. Security Dealers

Bell

and every

System Teletype N. Y. 1-714

records,

corporation,

quo¬

banking,

clearings, state and city news, eto.)
Other Offices;
135 S. La Salle B«*
Chicago 3, 111.
(Telephone: State 0613))
1 Drapers' Gardens, London, E.

Bulletin orCircular upon request

Monday

(complete statistical issue—market
tation

Assn.

REctor 2-4500—120 Broadway

Teletype: NY 1-2948

Telephone: LExington 2-7300

^Prospectus Upon Request

Corporation

]

William d. Riggs, Business Manager.
,

Standard Aircraft Products

PARCHMENT CO.

PugetS'ndP. & L. Com,

-.■*

C., En*,

land, c/o Edwards & Smith-

ACTIVE MARKETS:

'Doyle Mfg. Com. & Pfd.

*Upson Company
Central Paper

^Tennessee Prod.

*We!Iman

Great American

Engineering

Industries

Textiles, Inc.

Columbia Aircraft

Descriptive Circulars on request

Products
N. Y.1-1286-1287-1288

iJartf'd 6111

Buff. 6024

Bos. 2100

second-class matter Feb¬

(New)

ruary 25,

1942, at the post office at New

Y., under the

Act of MareSk

3, 1879.

Subscriptions in United States and
Possessions, $26.00 per year; In Dominion
of Canada,
$27.50 per year; South and
Central
America, Spain,
Mexico, and
Cuba,
$29.50
per
year;
Great Britain,
Continental Europe (except Spain), Asia,
Australia and Africa, $31.00 per year.
Other Publications

Direct Wires to Chicago and Phila.
ENTERPRISE PHONES

Reentered
York,

^Shatterproof Glass

*TempIe Coal Pfds
*

Soya Corp;

Seligman, Lubefkin & Co.

SIEGEL & CO.

Incorporated
Members New York Security Dealers Association

41 Broad Street. New York 4

80 Broadway. N.Y.
•

HAnover 2-2100

Record—Mth.$25 yf.
Monthly Earnings Record—Mth.. .$25 y*.

Bank and Quotation

DIgby 4-2810

Teletype NY 1-1948

NOTE—On account of the fluctuation®
in the rate of exchange, remittances fog

foreign subscriptions and advertisements
must be made in New York fund*.
^

Volume 163

Number 4496

THE COMMERCIAL,& FINANCIALiCHRONICLE

Opportunities in

Tuller, Crary & Ferris

Open New NYSE Firm

Stockholder Relations

According to an announcement
by Robert N. Tuller,. Calvert H.
Crary and Louis A. Ferris, the
Stock Exchange firm of /Ttil—

new

Crary & Ferris has been
following the dissolution
of i Tuller, Crary & Co.
Offices
are at 63 Wall Street, New York
City. •
*
:
«,
Mr. Ferris, the new partner
Ier,

formed

and

member of the New York

Stock

Exchange since 1940, was
recently | discharged : from
the
as a captain.
Prior to his

Army

entrance

into service,

operated

Mr." Ferris
independent f oor

broker and has

never

ciated with any other

been

asso¬

Stock

Ex¬

change firm.

Market 99-99%
PAYABLE U. S. FUNDS

Callable at 100
30 days* notice

Direct Private Wire Service

COAST-TO
New York

Chicago

St. Louis

COAST

Kansas City

•

Los Angeles
52 WILLIAM ST., N. Y; 5

HAnover 2-0980

Bell Teletype NY

STRAUSS BROS.

New York

1-395

Montreal

Toronto

Members New York Security Dealers Ass'n
32

Broadway

Board of Trade Bldg.
CHICAGO 4

NEW YORK 4

DIgby 4-8640
Teletype NY 1-832-834

Harrison

Teletype

GENERAL PANEL

2075

129

*H0LLY STORES

White & Company
ST. LOUIS

Baum, Bernheimer Co.
KANSAS CITY

KAISER-FRAZER CORP,

Pledger & Company, inc.
LOS ANGELES

*L'AIGL0N APPAREL
*TH0MAS STEEL

International Furniture Co.
Southern Advance

Bag & Paper

'V&:Incorporated

Boston

•

HouRsseSTrssier

Chicago

San

74
.

Gas

Co.

Suburban

Propane Gas Corp.*

Tennessee Gas & Transmission Co.*

Recordograph

Chicago

Ilarvill Corp.

V-

Jonas & Naumburg

Xane

Cotton, Mills „Cotp»
XXVX:Radeihaker ':CKemicai^'^y.
Stand. Fruit & S/S Com. & Pfd.

United Public Utility

Bought

—

Sold —-Quoted

.Common

American Beverage

New York

Jfeff. Lake Sulphur Com. & Pfdi

Petroleum Heat & Power

Oil Exploration Co.

Common

$6 Pfd,

Globe-Union Inc.41

Common

American Insulator

Private Wires;
Cleveland

•

Los Angeles

TWX CO 616

St., Boston 9, Mass.
-"v^.'-'JUjfihmjdnd'432l> 'PY,-

Boston

Firth Carpet Company *

* *

1-2733-4-5

St., Chicago 3

68 Devonshire

NY 1-375 & NY 1-2751

Master Tire & Rubber

Carbon Monoxide
Eliminator

TWX NY

Randolph 8924

Francisco

Getchell Mines

Raulang

Preferred &

Teletypes:

BOwling Green 9-7400

Exchange PI., New York 5

39 So. La Salle

Trinity Place, New York 6, N. Y.

Telephone:

Consolidated Electric

Baker

HAnover 2-4785

Established 1914

ri4Teletype NY 1-490

Philadelphia

Request

J. F. Reilly & Co., i*.

"V-

Street,New York 5, N.

Tel. WHitehall 4-4860

Bought—Sold—Quoted

E. H. Rollins & Sons
■

*Prospectus

Common Stock

Tennessee Gas & Transmission

40 Wajl

Bought—Sold—Quote d

Nickel Offsets, Ltd

Federal Water & Gas Common

;

United Piece Dye Works

•

United Stove

* Prospectus on -request

Bougtit---Sold--Quoi;ed
T. J. FE1BLEMAN & CO.

PETER BARKEN
32 Broadway, New York 4,N.Y.
Tel. WHitehall 4-6430

Tele. NY 1-2500

Members New Orleans Stock Exchanae

Established 1888
\

64 Wall St., New York 5

Phone HAnover 2-7872 Tele. NY 1-621

New York 4, N. Y.

MEMBERS N. Y. SECURITY DEALERS ASSOCIATION

11 Broad St.
Bo. 9-4432

63 Wall

Street, New York 5, N, Y.

BeU Teletype NY 1-897

BeU Tel.—NY-1-493

New Orleans 12, La.
Carondelet Bldg.

COMMERCIAL & FINANCIAL .CHRONICLE

THE

The

Versus

Supply/ Demand and Control Eugene Meyer
By J. D. SMALL*

HOWARb McGRATH*
General o^ the United States

By J.
Solicitor

but not
•$ In special advantages for particuIAr classes or in special privileges
for propertied people, Mr. McGfath, in attacking cartels,^holds
Asserting belief in private property and capitalistic system,

reversed
business

international! as well

We want

viduals,

the argument among us moves on

The

pushed

the plane of ways and means

strike

around.

choosing the instruments and pro¬

want free op¬

the

little

the

fol¬

Our machine is

one

in which

government

only
law
b

and

tunity;
special

the machine

freedom.

to the other.

just

to get
the steering wheel

make

to be forever

then

sometimes

it is

would work if it

industrial

•

activity.

driver rather than the machine it¬

rnent. No sizable group of citizens

two-day railroad strike, cou¬

two weeks truce, further

the mechanism.

the

•eral McGrath before the National
'Savings and Loan League, Chicago, May 16,1946.
^
^

machine

had the wheel and the

ness

try

was

steered into

(Continued

pro¬

many,

months

many

continuing

strikes

affect¬

effects

these

they have their impacts

were

operated by
businessmen; others point to the
decade prior to 1932 when busi¬

I *An address by Solicitor Gen-

for

the

believe

Future

coun¬

terrific

on page

eco-

3074)-

*An address by Mr. Small de¬
livered

the telephone to the
Association of Purchas¬

over

^National

ing Agents, Chicago, 111., May 27,
1946.

mously
pointed

ap-T

-by,

op¬

part

directors:

the
of

the

Inter-

Recon¬

struction

and

Development

effect

the

ident

Solar

AND

the

does

not

result

tion

immediate

increase in the flow of materials
Of finished goods.

Private

should

for

lack of coal.

unfinished

In¬

"I feel honored by my election
the
executive
directors
as

President

14 WALL

•

"The world is well

today

of the food famine:

ishing point.

equally
aware that the world is starving
for/ the products of industry.
! "The
bank was organized to
promote reconstruction and de¬
velopment in both these essential

Hence

once

the coal

strike is settled and fuel reaches
the

furnaces, the steel mills must

(Continued

3087)

on page

time

old.

At the

same

become

must

70 years

born in Los Angeles and

was

attended the University of Cali¬
fornia, Yale University and also1
in Europe.
He long en¬
gaged in the investment banking
business in New York until 1917,
&

Stock

—

SOLD

—

senior partner of Eugene Meyer"
Jfr. & Co..
] Soon after the United States en¬

QUOTED

tered the first World War he en¬

New York Hanseatic Corporation
120

tered Government service
in

BROADWAY, NEW YORK 5, N. Y.

various

atnd

Telephone: BArclay 7-5660

ANGELES

aware

process have dwindled to the van¬

Co.

STREET, NEW YORK

LOS

International

studied

Telephone BArclay 7-4300
SAN FRANCISCO

the

velopment, but above all, I feel a
profound sense of responsibility.
I shall devote my full energies to

steel

Debenture 5/60 with Warrants

;.SAN FRANCISCO STOCK EXCHANGE:
:
LOS ANGELES STOCK EXCHANGE

HONOLULU STOCK EXCHANGE

art

the task.

down

members
EXCHANGE

shut

Manufacturing Company

BOUGHT

filled

Bank for Reconstruction and De¬

Wires

Dean Witter

was

pipe line in
Steel
mills,
for
example,
has
been sucked almost dry right back
to the place where furnaces are

production

$0.55 Convertible Preferred
Direct

institution.

Mr. Meyer, who is now

HAWAIIAN SECURITIES

Meyer

Eugene

informally agreed that the posi¬

activities."

PACIFIC COAST

national Bankd
for

American, and Mr. Meyer's selec¬
much thinner in many fields. And tion, reputedly suggested by Presi¬
dent Truman who is reported to
the necessity for
spreading the
express delight with the appoint¬
thin supplies fairly and
equitably ment, was unanimously
approved
across all industry is greater now
by the Board of Directors of the
than ever before.
world-wide banking institution.
We must all realize that the
; In accepting
the appointment,
settlement of a strike in a basic Mr.
Meyer issued the following
industry such as coal or copper statement:

ventories
,

Post," |
unapt-;

ington

the first Pres¬

outstanding

The

self, and we are constantly accus¬
ing each other of tampering with
Some

the

checked

duction will be adversely

•

;

Small

of the soft coal mines during

jerked

abruptly to the left. Our com¬
plaints are generally against the

property and the capitalistic sys¬
tem, but not in special privileges
for propertied people.
With respect to these basic-prin¬
ciples, most of us are in agree-

head¬

pled with only partial operation

too

ular classes. We believe in private

was

fend of

ing

Faulty

shortages that had been plaguing
industry and to create many new
shortages. The thin supply is now

for the second time since the
war.
In May the paralyz¬

way

side of the road
When it goes too far
one

the

and

watch,

of the "Wash¬

strikes has been to intensify those

tion

beginning

the right, public clamor joins
demands of the opposition,

laws that crestrengthen equal oppornot
laws
that
create
advantages
for
partic¬

struggle

groups

seems

veering from

want

steel

u c

The

drove

■•,

of the

stoppage of one
snarls up the whole works.

down in April

constant

different

their hands

there

can

With ' the

eration

heels

the

p r o

mechanism of

coal

industrial

only difficulty is in finding

among

under

And
v

knqw that

coming

strike

the route to take,

of law because

like;

want to ride.

The

one we

,,...

The events

past couple
of months have certainly demo ti¬
trated the- fact that an American
economy is as inter-related as the

the

soft
the

cedures to attain the ends we all

seek.

low. We want

ate

been

portunity for

has
passing.

and

complex inter-related

our

economy.

country

Most of

seeing
anybody
W

which,

resent

shaking

strikes

any

economic freedoms.

tions, and at
present Editor

was

Board,

Administra¬

through

econo¬

Reserve

Corporation
during the
Republican

ries of

radical departure
the pathways of our political

from

Federal

and Publisher

thro

advocates

indi¬

^:V^

the

and former chief of Farm
Loan
Board and Reconstruction
Finance

I doubt that anyone can now measure with any
accuracy either
or the ultimate damage to
industry that will result
from
the se¬

way of life in which
for us to exer-<S>-

cise

Eugene Meyer, former Chairman
of

the immediate

Americans are in general agree*
there are many free choices

On certain principles all of us

Hment.

minimum of controls. 5

domestic cartels, but
upholds mass production. Says anti-trust laws apply to building
;:v and loan business, despite special privileges they enjoy, and warns ■■■ -j
^against agreements to control interest rates. x
Condemns

recounting effects of strikes on production, asserts
stand at another critical point in period of transition, and calls
»n

purchasing agents to restrict buying to a minimum. Says
there is no evidence of hoarding of materials or commodities, and
ascribes shortages to heavy consumer buying power. Claims pres¬
ent control problem is of staggering sizeand only way to lick it is
by producing and importing enough materials for all. Advocates

control of industry is
there will be ho opportunity in another generatioh for a; j
man to enter basic industries, and competition will tease

to exist.

Smalt,

upon

unless trend toward concentration' in private
-v;

World Bank

Administrator of Civilian Production Administration

Mr.

of Rhode Island

Former Governor;

Named Head oi

# Picture

Free Economy

Thursday, June 6,1940

Teletype: NY 1-583

serving
capacities,

financial

became director

of the

War

Finance

Corporation.
President
Coolidge
appointed
Meyer to the Federal Farm Loan

HONOLULU

President

1930

Board

TO INVESTMENT DEALERS

Send for prospeitus

Merchants Cistiltisg Oorpsralicn
Manufacturers of

Corporation

Bought

—

Sold

—

Quoted

■

,ESTABLISHED

The

presidency
Bank

carries

the Inter¬
a tax-free,

Teletypes:
NY 1-375

—

NY 1-2751

Philippine Mining Stocks
Atok
,..

Expresso Aereo

KOLD-HOLD
Manufacturers

Linn Coach & Truck

tN^lKlES

Bought—- Sold

F« ha Roller & co., inc.
Members

Member of National Association
.

of Securities Dealers, Inc.

64 Wall

1-1026

Quoted

R C. ILSLEY fr CO.

111

—

c;;.*V.: jHAnover 2-1140

Benguet Cons. Mines
.

Big Wedge Gold
M6tker:Ii0de

Mindanao

QuOtationsiand iKfotmdUdn
Circular

request

Furnished

Request

JOHN J. O'KANE JR.

JAMES M.T00LAN&CO,
67 Walt Street, New

Street, New York 5

Mining

Utah Southern Oil

Super-Cold Corp.

BfiOADWAY, NEW YORK 6, N. Y.
BArclay 7-0570
NY

;

Kinney Coastal Oil

Equity Oil

INVITED

N. Y. Security Dealers Ass'n

Balatoc

Common Stock

Refrigeration Plate*

still

salary of $30,000.

Trinity* Place, New York 6, N. Y.

BOwling Green 9-7400

Beach

Post," becoming

editor and publisher.

national

1914

Tele-phone:

Tele. NY 1-2178

Corpora¬

retains this position.

Hon, Rose STrqster,

52 WALL ST., NEW YORK 5, N. Y.
Harrisburg-Pittsburgh-Syracuse-Miami

after the election

1933,

of Roosevelt, Mr. Meyer left gov¬
ernment
service and
purchased
its

Claybau^h &. Co.

WHITEHALL 3-0550

Finance

the "Washington

Members Philadelphia Stock Exchange '

the first chairman, of the

was

tion.

One of the few Companies
making alcohol from potatoes

Blair F.

Reconstruction

Common Stock

"Southern Comfort" etc., and

appointed him Chairman

of the Federal Reserve Board, and

Industrial Electronic

and

Hoover

■\

York 5

Telephone JHAnover 2-9335

'WM^TaMypo-HY^i-2630^

& CO,

'
-

Established

1922

Members N. Y. Security

Dealers Ass'h

42 Broadway, New
DIgby 4-6320

York

Teletype NY 1-1525

iVolume

163

Number 4496

THE COMMERCIAL & FINANCIAL CHRONICLE

Are

Heavy Industry Shows Lag
By L. II. BR AD SHAW*

;

•

Reputed Shortages

;

By DR. C. T. MURCIIISON*

Editor, Investment Timing

vance, Mr. Bradshaw ascribes this to temporary handicaps that
have impeded reconversion in
heavy lines. Believes stocks of com¬

Maintaining

stocks

;

of companies in

the type of manufacture termed
far participated in the stock market advance
since the erid$of the war to ther
strikes,
these
companies

,»

much small¬

extent than

should enter

era

of prosperity

by beginning

tions begin to

point to

from

con¬

goods,

die

pros¬

pects of their
better

per-

formance
once

the

fac¬

tors that have

DowjJones Industrial Stock

"l/nvestment

Timing"

companies

un-

likely

that

consumers'

goods

lines, as a whole, will be able to
accomplish greatly better results
in

future

than

those

being

ob¬

tained at present.
Their profits
have been due to the high rate of

public spending and their fortu¬
nate avoidance of serious labor
difficulties.

goods

manufacturers,
however, have been handicapped
since

V-J

problems,

Day

by
strikes,

reconversion
raw

material

shortages, and price ceilings. With
settlement

(which

the

coal

strike

imminent) and
legislation in prospect to curb fur¬
appears

high

almost

the

desired basic commodities. In most

the

cases

51.4

34.8

cotton

34.5

of retooling or

Dr.

8.0

C. T. Murchison

ing the war.
Only a small
percentage o f
this huge army

Office Equipment
38.1 ;
Railroad Equipment-— 29.7

reconverting.

been

producing

consumption.

The

United

about

Research

DU R1NG

Association,
Lookout
Tenn., May 31, 1946.

STOCK

Government

Services

have

Purchases by
Armed

the

for

reduced

been

negligible proportions, but as con¬
sumers we have greater difficulty
in procuring essential staple fab¬
rics than during; the war when
the Government was taking ap-

(Continued oh

page

3093)

LL B E AVAI LAB LE

EXCHANGE* NEW YORK CURB

BAN FRANCISCO STOCK

address by Dr.

SAN

NEW YORK

EXCHANGE

EXCHANGE*COS ANQCUES STOCK EXCHAHOE

SPOKANE

SEATTLE

FRANCISCO

Mountain,

Bottling Co.

of Cleveland

H
*
•

Victoria Oypsum

>;>••*

Washington Properties

;

American Vitrified Products

the

DAYM GHT SAVI NGS

Red Rock
•

been exported.

Kaiser & Co.
NEWVORK

portion of

Tennessee Products

Commodore

of this huge production

has

UNTIL THIS TIME DAILY

eight

Corporation,

by approximately 12%, Less

important

Murchison at Annual Meeeting of
the Tufted Textile Manufacturers

New York City.

bales,
yardage of pro¬

States

for

months, has not been
"Reprinted from the May 29th
number of "Investment Timing"
issued by the Economics & Invest¬
ment Dept. of the National Secu¬
rities

1939

than 10%

O U R W! RE TO TH E C OAST W!

for

Government,

excess

million

TO AC COMMODATE CUSTOMERS

The

goods

REMAIN OPEN UNTIL 6830 P.M. E.P.S.T.

great majority are producing and
have

COAST EXCHANGES

PACIFIC

of workers

18.8

rate
means

duction in excess of 9 billion. This
is a rate which exceeds that of

consumption by American

has been engaged in the processes

Metal

34.8

29.8

appear to

tained Well above ariy peacetyne
volume. Since the turn of the year

Richmond Cedar Works

shortages

reached dur¬

Building
Chemicalsf
Electrical Equipment
Machinery, AgriculturalMachinery, Industrial

Steel

annual

which

21.9

Fabrication

spindles has been in

em¬

highest

Manufacture—. 23.9%,
12.6

the

Auto Parts

Average Increase—_ 28.2%
(Continued on page 3085)

End of Handicaps Seen

Durable

—

United

been

Average is shown below;
Heavy Industry:
Aircraft

Worse than during the war period!
The question naturally
arises—
where are all these goods going?
States has ex*With respect to the cotton tex¬
ceeded that of tile
industry the situation is typi¬
any
peace¬ cal. Although
production declined
time period. somewhat
from the high peak of
In fact, it has 1942' and
43, it has been main¬
the

typical consumers' goods lines and

Automobiles

Since

Day

ployment

Day to April 30 of
industrv group .stock price
indexes (Standard & Poor's) .with

ar® removed.

Bradshaw

Editor

V-J

capped them
Leslie

created.

volume of

^eavy

tne

appearance

to supply the vast
backlog of demand from a public
hungry for goods and having amipie purchasing power.
A comparison of the increase

those

sumers'

It is my conviction that the<&scarcity of most gdods is more apt- buyer of goods. Vet everywhere
parent than real. The apperance we, as individual consumers, find
of scarcity has been
deliverately it extremely difficult to purchase

of scarcity, has been deliberately,created, Dr. Murchison contends present pro¬
Says OPA by promoting a psychology of
scarcity, has frightened public into excess buying and has fed some producers, by crazy and uneco¬
nomical barter arrangements as Well as by black market subterfuges to foster
irregular and interrupted *
flow of goods to consumer. Holds conditions are similar to
1919-1920, and may result ultimately
ift over-production.

panies producing durable goods have favorable outlook, but holds
''ijBll© -fn inaKmg:']p.iirthaSUis.
While

duction of cotton textiles is wall above any peacetime level.

that'•

Tieavy industry have

President, The Cotton-Textile Institute, Inc.

Noting shares of heavy industries have lagged behind the shares of;
companies producing consumer?' goods in the general market ad- !

Mirage?

•

-.L

•

>v..;

r'it"*

•

Must Dea lers Se

::l'-ft

Bought~Sold-r-Quoted

-.t ^

VI;

:!S|

•*

Statistical Information-on Request

•

;

Hotel

Rhodes

Clockwatchers^

Nazareth Cement

Moore & Co.

Frank C.

42 BROADWAY,

American Felt Co.

Telephone,-

Teletype

>•

WHitehall 3-9784

Certainly, deal—butof the essence the pressure off co¬
time is
when it comes to
closing a
try to take

NEW YORK

i NY 1-2628 i

•

operating dealers by making
11

Broadway, N. Y. 4

of time

Tel. Dlgby 4-1388
Tele. NY 1-86

firm offer and allowing plenty

it, wherever possible.

Occasionally, that policy has cost

Established

us money.

More often,

1926

though, it has resulted in trading that might otherwise have
been lost—and that's

profitable both to

Hawaii Consolidated Railway
Pfd.

and to the other

dealer concerned.

Circular

OBSOLETE
We've found that

BONDS
If there

of value

STOCKS

eVen
—

faint trace

our

let

mutual
us

doing business with other dealers is to

advantage—why not get together with

work with and for

ESTABLISHED

Telephone:

Broadway, New York, N. Y.

R.W.

68 William Street

Steep Rock Iron Mines, Ltd.

Teletype NY 1-993-

201 Devonshire

Members New York Stock

GOVERNMENT,

request

MAHER & HULSEBOSCH
Brokers
In

Telephone
WHitehall 4-2422

Securities

1-2613

Branch Office
113 Hudson St., Jersey City, N. <JV
,

1937

»'

;

,^Teletype: j'-j.
NY 1-1909 fe:

Mohawk Rubber
This manufacturer of tires and tubes

Company
is also a pioneer and

manufacturer of tire repairing and retreading
Company reported earnings of $2.43 per share
in 1945, after provision of $1,076,889 for excess profits tax,
EQUAL TO MORE THAN $7 ON EACH OP ITS 141,638
•OUTSTANDING SHARES, which paid $1 in dividends;

RAILROAD,

INDUSTRIAL

INVESTMENT
fv

•

„

BONDS

STOCKS
;;

•:

Teletype:

New York 5, N. Y.
Teletype

AND

Exchange

MUNICIPAL,

UTILITY,

4k Dealers

Investment

.^4'

leading

PUBLIC

62 William St.

■

;

Street, BOSTON 10

Western Lumber Co„ Ltd.
Circular

materials.

Great Western Exploration

Telephone HAnover 2-1700

NEW YORK 5

V.T.C.

Clayton Silver Mines

•

Report Available:

Pressprfch 8C Co.
.

*Can.

BOwling Green 9-0844

George A. Rogers & Co., Inc.

request

Street, Jifew York 4, N. Y.

25 Broad

buy 'em

II Montgomery St., Jersey City, N. J.

upon

E. F.Waterbury & Co.

and

us,

you?

(No Mining Stocks)

interesting "liquidation"

M'' f

1286

NY < 1287

11288

a.ARD & CO.
;VEst. 1926
:' •
:
JMembers It.- Y,- Security Dealers Ass'n

120 BROADWAY, NEW YORK 5

Telephone?■*%
RE 2-8700

THE COMMERCIAL &

part of a

slovakia.

The

terials

Europe.

Approval by the Board of Directors of the Export-Import Bank
credit of $20 million to the Republic of Czechoslovakia to finance
the purchase of raw cotton in the £
United States was announced to- ' Export-Import Bank in October
day by Mr. William McChesney 1945 to finance the shipment of
Martin,
Jr.,
Chairman of
the cotton to, European countries.

credit

Czechor-

designed to assist that
country in reconstructing its econ¬
omy*.
It will supply the raw ma*

general credit of $100 million authorized

finance cotton shipments to

cotton

Slovakia is

$20 million loan to finance purchases
Rate of interest fixed at 2%%.
Loan

approves

cotton in U. S.

raw

constitutes,

tor

Its

one

important

industries and help to make pos¬
sible the resumption of its former

position in world trade,
entire

amount

the

credit

utilized, it will provide for' the
shipment of approximately 130,000 bales of cotton.

This is

„

Board.

The earlier allocations under this

•

than

credit

the

half

volume

cotton

slovakia is the fourth allocation to

$25 million to Italy, and $10 mil¬

imported annually by Czechoslo¬
vakia;;: fromthe United; States In

be made from

lion

The

the

years

special

the

war

This

$100

credit

cotton

Czecho¬

general credit of

established

million

the

were

$5 million to Finland,

the

Netherlands.

Bank has also extended
cotton

credit

million

$33

immediately preceding

and is estimated to equal

about

annual cotton requirements of the

two-thirds

the

current

China.

BALTIMORE

The

terms

Czechoslovakia
similar

Bayway Terminal

Emerson

will

date

Members ^ew York & Baltimore Stock
Exchanges and other leading exchanges

consideration

port Bank
until

ment

the

facing the production and market-

ST., BALTIMORE 2

Czechoslo¬

emphasized

the

necessary

that

credit

the

A further

the

details

made

that

holding

Preferred

Mfg. /

INCORPORATED

Preferreds

Sioux City Gas & Electric Co.
Preferred

and

scheduled

to sell 1,530,000 shares of
Dayton Power & Light common (par $7), subject to SEC approval
of the winning bid.
Since the offering price is not yet known, this
summary cannot include the usual discussion of yield and
priceearnings ratio — which however^
may be ascertainable by the time company
on
its preferred and
this appears in print.
The follow¬ common stock have averaged ap¬
ing data is largely summarized proximately 80%
of the total

from

the

"bidding"

prospectus,

EQUITABLE
DES

MOINES

Phone 4-7159

A.S.Campbell

dends."

Dayton's capitalization consists
$28,850,000 first 2%s due 1975,
100,000 shares of 4Y2% preferred
stock, and 1,350,000 shares of new
common (the latter being substi¬
tuted for 360,000 shares of old

have been

common

stock). Based;on the bal¬

sheet

capital

of Dec. 31, 1945, the
are
as
follows:

ratios

Bonded debt 52%, preferred stock
18% and common stock equity
30%. The book value of the
stock

$10.84

com¬

approximately
share, subject to the bal¬
ance
sheet footnotes.
However,
book value plays a comparatively
was

BUILDING
9, IOWA

follows in

re¬

After Adj. for

Nashville, Tennessee

Bell Tele. DM 184

cent years (based on the present
number of shares):

Bonds

Year

1945

38% tax rate

reported

$1.37

$2.49

0.73

1.80

1943

0.89.....

1.85

1942

1.16

1944

The ratios in recent years
as follows with respect

to the balance available for comstock

mon

(after preferred divi¬

dends):

1945, 52%;
1943, 80%.
Dayton Power &

1944,

78%;

Light dis¬
tributes electricity in Dayton and
93

some

Other

communities

and

adjacent rural and suburban ter¬
ritories in Ohio, these sales mak¬
ing up about 70% of total gross
revenues.
Natural
gas
is pur¬
chased from Ohio Fuel Gas Com¬
and

distributed

and

pany

other

Dayton

communities

Natural

and

accounts for
26% of gross, with the remaining
areas.

gas

DETROIT

1941

Eastern Racing Assoc.

Electromaster, Inc.

Harris Seybold & Co.

Prospectus furnished

request

there is

Monmouth Park Jockey Club

to future

Stix & Co.

Hampshire Jockey Club

Warren Bros. Class "C"

INVESTMENT SECURITIES
Report furnished

request

Inquiries invited

509 OLIVE

STREET

Mercier,. McDowell

du Pont, Homsey Co.

St.Louis1.Mo*

& Dolphyn

Members

Detroit

Stock

rate,

clear cut indication

policy, though this

clarified

before

the

1945

electric

revenues,

residential, nearly 20%
commercial, and 28% industrial;
the remaining 18% reflected sales
to municipalities, other utilities,
railroads, etc.
The average resi¬
dential revenues per kwh in 1945
(not published in the prospectus)
are
estimated at 3.90, which is
above the national average.
The
residential rate
in the Dayton
City District carries a minimum
monthly charge of 750 which also
covers

the cost of the first 15 kwh

month, the next 35 kwh pet
3%0, the next 50 kwh
at 3y40, and the next 100 kwh at
2 V20, with all in excess of 200
kwh at 20.

may
date of

The utility plant (including in¬
tangibles) is carried at $69,863,015, less depreciation reserves of
$15,090,192. Plant account has not
been written down to "original

public offering (it is conjectured).
In the first half of 1946, two divi¬ cost When first devoted to public
dends have been paid to Colum¬ service," since the Ohio Commis¬
bia — 350 and 700, or a total of sion does not require determina¬
$1.05.
It appears unlikely that tion of such cost. The ratio of net
this indicates a rate of $2.10 for operating revenue in 1945 (after
the year, since this would be a adjustment for deduction of spe¬
rather high proportion of indi¬ cial tax savings) Ho net plant ac- 1
cated earnings for 1946
Inclusion of
(which count was 6.4%.
have
been
estimated
in
some
Working capital would reduce the
percentage, but on the other hand
quarters at around $2.65).
The
prospectus contains a statement adjustment for tax savings under

Manufacturing Corp.

•••?"**:'

the * dividend

the
were

month at

1.56

Regarding

34%

per

earnings available for such divi¬

which is subject to change.

have been about

Common

Stocks

Brown Durrell

Dwight Mfg.

is expected to offer the
subsidiary to the public—

company

important

Electric

In the quarter ended March 31,
1946, 910 a share was reported
earned, compared with 380 in the
same quarter of 1945.
However,
the two figures are not on a com¬
parable basis, since the latest
quarter includes earnings from
certain properties acquired May
31, 1945.
Calendar year earnings

United Light & Railways Co.

Collyer Insulated Wire

stock

utility stock, and it seems likely .4% contributed by steam heat¬
the offering price will be ing, hot water heating and water
service.
several times this figure.

Iowa Power & Light Co.

Wringer

Berkshire Fine Spinning

'.".'••ft

Gas

INCORPORATED

Arnold Brilhart

New

Columbia

minor role in the market value of

NASHVILLE

WHEELOCK & CUMMINS

Boston Wharf Co.

another

common

that

BOSTON

Bird & Son'

week

mon

will

time.

DES MOINES

entire

ance

operative

loan agree-

has been signed.

the

special difficulties

credit will not become

United

the

credit

vakia, officials of the Export-Im¬

announcement

•

the

cotton

the

the announcement of

tation and the

ft Bell
Teletype BA 893
New York Telephone Rector 2-3327

•;V-i-•

from

months

In making

time required for inland transpor¬

STEIN BROS. & BOYCE

Bates

issuance

States,

Noxzema Chemical

The

Dayton Power & Light Company
This

country.

cotton

maturity of drafts under the cred¬

Drug

New Bedford Rayon
1 ClaSS ;.B'.
/'■' '•

American

general

other

The rate of interest is 2Vz %.

Common

6 S. CALVERT

established by the Bank.

credits

Davis Coal & Coke

are

those

credit

the

Thursday, June 6,1946

ing of cotton textiles' by Czecho¬

Credit to Czechoslovakia
Export-Import Bank

FINANCIAL CHRONICLE

Exchange

MILK

Buhl BIdg., Detroit 26

STREET

Cadillac 5752

BOSTON 0, MASS.
HANcock 8200

teletype IBS

Members St. Louis Stock Exchange

Tele. DE 507

424

N. Y. Telephone CAnal 6-8100

GRAND RAPIDS

that "during the 10 years preced¬
ing 1946, the dividends paid by the

SALT LAKE CITY

the
it.

law would tend to raise

new

""ftftft;,.'

Michigan Markets

Utah Power & Light

Southwestern Public Service

ACCURATE

Nu-Enamel

Utah-Idaho Sugar

Southwestern Electric Service

Amalgamated Sugar

Texas Public Service

Boston Sand & Gravel
U. S. Sugar Corp.

DEPENDABLE

Eastern Utilities Assoc. Conv.

v"\

Common

>.|

General Stock & Bond
Corp
11 10 P. 0. Square, Boston 9, Mass. I
1J Tel phone Liberty 8817 Teletype BS 373

Common

8c COMPANY

Exchange

ESTABLISHED 1899

GRAND RAPIDS 2

160 s. Main Street

MICH. TRUST BLDG.
Phone 94336

Puget Sound Power & Light

EDWARD L. BURTON

white, noble & co.
Members Detroit Stock

Common

Inquiries Invited

M. J. Whittall Assoc. 2ndPfd.

Salt Lake city 1,

Teletype GR 184

BELL SYSTEM

.•*•

Utah
ESTABLISHED 1879

TELETYPE SU 464

LOUISVILLE
TRADING MARKETS

TRADING MARKETS
ft

Boston Edison

American Air Filter

UTAH

Merchants Distilling Co.

American Gas & Power

.■

England Lime

MINING

Midland Realization Common

Midland Utilities Common

Winn & Lovett Grocery
Established

Dayton Haigney & Company
75 Federal Street, Boston 10

Private New York
Telephone
REctor 2-5035
r
-

J898

W. H. CHILD, INC.

H BANKERS BOND ££

Members Salt Lake Stock Exchange

let

Incorporated

!§gft;;: BROKERS

Floor, Kentucky Home Life Bid*.
LOUISVILLE 2, KENTUCKY

Long Distance 238-9

Bell Tele. LS 186

3-5,1953

Central Ohio Light & Power Com.

STOCKS

Louisville Gas Pref.

Submarine Signal

for.

BROKERS and DEALERS

Glrdler Corporation

Hollingsworth & Whitney
Megowan-Educator Food Co.
New

American Turf Ass'n

Boston Railroad
Holding Co.
ftft':. 1-'ft':Preferred

Stock

■

Exchange Building
Utah •

Salt Lake City,

Te
Teletype SIT 67
Ornmwmmm

Gilbert J. Postley & Co.

-.'.'I;
..

BROADWAY. NEW YORK 6, N. Y.

29
•'-

■
•

•

Phone 6-6172

•

Direct Wire to Chicago ft

.'•'-

.ft

Volume 163

t&KCOMMMC^

Number 4496

Governors of NASD to Consider SEC

The Loan to Britain—

A Part of
J

Larger Program

HENRY A. WALLACE*

'Secretary Wallace

Mr.

►

Chairman, it is because the financial agreement

you will make

most

learned

country,

the

that

the

ion

con¬

World

War,

mon

with

com¬

Henry A. Wallace

our

at the

were

time

same

basic economic settlement. Eco¬

nomic isolationism the world

contributed

ond, World

War

much

the

did

peace

live

stock brokers all

two

This

issue

over

"consider" the matter!

among

remains to be
that

the

sec¬

political

On the political front, we have
*A statement by Secretary Wal¬
lace before the House Committee

Banking and Currency, May 27,

seen.

world

peting economic blocs is
of inevitable

war

ing its last.

category

subscribed

free

Detroit

chaos

from

by the

effort to

the

financial

which

accompanied
world depression.

the

Henry H. Sanger, Chairman of
the Board, expects the next offi¬
cial

report

condition

the

bank, usually issued around July 1
in

response

call

from

the

Comptroller of the Currency, to
.how capital accounts of approxinately
$14,000,000 — a
gain
of
$8,750,000 in thirteen years.
of

this

growth,"

said Mr.
Sanger, "has resulted from reten¬
of

earnings

stock.

plough
structure

earnings.
years

policy

back

and

into

our

from

been

the
the

substantial

During

not

has

the

bank

capital
part of
thirteen

existence, surplus
eight times by
undivided profits.

has been increased

transfers

from

Surplus
now
totals
$7,000,000.
Capital has been increased only

year.

our

shareholders

dp-

strength

substantial

capital accounts."
Charles

and

President

rectors

the

and L. N. Per-

the

announcements

dent

De¬

them.

stock

tive
'

was

affiliate

held

The announcement adds:

Of these

shares, 6,666 are hold¬
ings of the Edsel B. Ford estate
and represent all of the
facturers National stock'
estate

which

has

not

substantial

part

its

holdings in the bank.
Sale

the

Ford

Estate

and

Kingman

"Secondly,
on

we have contributed
large scale to European re¬

construction.

have

lis,

Company

Monaaj Kalmar WiK
Daniel F. Rice & Co.
CHICAGO, ILL.—Norman jp1.
Kalmaxv ® well-known figure -in"'
Chicago manufacturing, is leafy*;
ing this field to enter the invest¬

Seaboard holdings will be offered

ment

associated

business

headed by M. A. Schapiro & Co.,' InCi, of New York
and Watling, Lerchen & Co. of
Detroit. Associated with them are
First of Michigan Corporation and
M. A. Manley & Co. of Detroit.
The public offering price has been

years

announced at $200 per share.

for' the

has

and

a group

announced.

For

the

past

of 1,276,000,000 kr.; gifts
415,000,000 kr.; Parliament has

been

asked

director of purchases

radar

equipment.

also director and

the Kirk

and

$calqt Company here.. |

Daniel F. Rice & Co., are
memf
bers of the New York and Chi¬

the board of

cago

Stock Exchange.

for

nation

6,000,000 population.
clusive

balances

accumulated
under

the

"Another
Swedish
the

point

income

com¬
prise the total of Sweden's claims,
1 Mr. Sandstrom replied:
"First
j there are the Swedish property
rights in Germany (direct invest.

estimate

636,000,000 kronor, at the last val¬

4V2% Fifteen-Year Sinking Fund Debentures

due

wants

don't

the

During the

war

uncontrolled

Price 100% and accrued interest

Germany.

Our

trade

plans

101,284 Shares

for

trade with that country were dis¬
closed to the Allies and approved

by them, just
the

Allies

our

trade

Common Stock

with

(Par Value $3.50

disclosed to the
that our ships cross¬
ing the Atlantic might have safe

Germans,

was

Swedish

want

assets

some

kr.

There

are

United

of the Prospectus may be obtained within any State from such of the
Underwriters named below and from such of the other Underwriters as
may

Britain,

regularly distribute the Prospectus within such State.

another

In "the

last

mentioned

connec¬

negotiations with Sweden ip

Washington. £
Asked

about

might have

German

been

only ihihoriniport^cel^
negotiations.

Maxwell, Marshall & Co.

Hasan, Moran &Co.

The Ohia Company

Va&g, Lerchen & Co.

sent

...

June 4, 1946

~~r'

Grimm & Co.
.

Eateman, Eichler & Co;
'

}

;

■

•

gold

to
Sweden during the war, Mr. Sand¬
strom .said this question wajs of
rent

A copy

1,700,000,000

thing
Sweden
wants is compensation for Swed¬
ish property in Germany removed
by the Allies."

which

per

deblocking
the

Swedish assets

blocked in France
"Still

Price $10%

Germany Navy.

States, totaling
so

Share)

per

conduct from the

April 1,1961

agree

rent

pC Asked what major items

$1,250,000

agree¬

blacklisting of
for trading with

firms

was

have

sterling

Sweden

blacklisting

with

company

ex¬

the

postwar period.
there

NEW ISSUES

about 16,000,000,-

Germans.

with

national

solicitation of offers to buy any of these

only

which

Anglo-Swedish

Sweden is only
000 kr.

cleared

This is

abroad

Our

ment.

nor a

offering is made only by the Prospectus,

380,000,000 kr. This
2,110,000,000 kr., a

about
sum

offer for sale

The

-He

secretary of

grant another 39,private • donations

tion, it should be noted that the
USSR is pq| a party' to the eur*

billion kronor.

zj.7

A-R^T;lj#£mi£acturihg Gt>4

ducers
was

directors of Capital Records, Inc.

securities.

tool, die and stamping manufac-k
turers, and, during the war, pro¬

Donald Royce, vice-president of
Blyth & Co., Inc., New York City,

elected

Daniel

Mr. Kalmar has been compr

troller and

®2|$itol Records inc.

has been

with

Ripe
Company, Board of Trade
Building, Josepn J. Rice, partner,

Dcnald Roycc Director

credits
of

become

and

This advertisement is neither

granted

by-

president, f6l-~
meeting of the Board of

Directors.

Shares to be sold by the Seaboard
resent

lowing

the

rep¬

made

Harry A. Biil-

Henry

sold.

Company number 18,000 and

This an--

recently

Manu¬
in

been

Commit-:

nouncement

Company, that

which

member

the Execu¬

f tee,

they are offering for public sale
24,666 shares of Manufacturers
National

the.

has
appoint¬

an*

from the Estate of
Edsel Bi' Ford and the Seaboard
an

nduncements

Properties Company,

Company
been

were

accompanied by simultaneous

of The Ford Motor

Mills,.

1
rin, Executive
p Vice - Presi¬

President

of the bank, said that
plans for
increasing the capital structure of
the bank were - dictated by the

bank

General

Kanter,

growing importance
troit industrial area.

of-

addition

of-the

Bpard of Di-

again will be able

the
a

banker

farmers & Mechanics SavingsRank/ has been elected to -the,

now

men¬

<exceeds

was

Sweden

JSwedens claims against Germany

10.

prove the issuance and sale of the

last

census

which

National

August

den
kr.

ments),

business,

once, $1,000,000 being added by a
stock dividend in
January of this

According to

"Further,
amount

Swedish claims

public charges,
of foreign
property which we made in Swe-<

would make them

iSandstrom explained.
While

shall certainly dis¬

between

total

bank

with

The

:ate Edsel B. Ford in

"All

allowed to remain in Sweden

are

ac¬

from

accounts

$5,250,000

consistent

account

•dates from before the war, Sweden
•at that time habitually importing
more

want to col¬

the

1933, it had capital of $3,000,000.
surplus of $1,500,000 and undivided
profits of $750,000.
The greater
part of these capital accounts oi

have set up the Foreign Capi¬
tal Control Office,
although in

sizable

Interviewed by the "Chronicle"

count

recover

totals

many

German

and

bringing

Manufacturers

for

tion

have reached

cludes

Germany
and

war,

When

opened

sales

000,000;

:man

surplus,

accounts

date German interests in Sweden

'Control Office in

Allies

claims also.

our

prepared
present work, becoming
^President of the Foreign Capital

Assets

willing

capital

Henry S. Kingman, Minneapo--

tioned.

1943

his

German

does

"We have done already most of
what the Allies wanted. To liqui¬

the

Upon his return to Sweden
for

not

eliminate

reparations.

are

Supreme
Court to head the Swedish-Swiss
Joint Relief Committee in Greece.
'October

the

assets

prevent
another

interests

Communist.

resigned

relating

the

therefore

lect

law

are

economic

Sweden

starting

Swedish

the

Council

with

cooperate

from

don, handling

that

mean

"The

recognize

external

University of Upon

Sweden

gradua¬

pursued
his

leaving served

•courts

Sandstrom

not

Control

German

Sandstrom

judicial

;Eala,

Mr.

Allied

ernment's Foreign Capital Control

of which
is the head,

other refu¬

from Germany who naturally
not have registered tho^e

gees

The

Hague, and Mr. Tord Millquist,
Secretary of the delegation and

some

four

lis

:—-————:—■■

stock,

bank

around $17,000,000.

selected

are

each

bulwark

ent

stock

for

pro-■

posed set-up, Manufacturers Na¬
tional would

added

<Government

;

new

General Mills Pcsls

tne

3071

-V

; f.

•:■

••

X',:

Straus fe Olossor

Frank Knowltoa & Co.?

;i
•

d i

the commercial & financial chronicle

until -he

around

found

reliable

of investment information

sources

—professional sources^-and then

Thursday, June 6,1946

85% to 90% of his time in actual
production-*and do a better job
for his clients!

Will Join Chase

he went to work.

Having taken these first steps,
Mr. B then made another pleas¬
ant discovery.
He was able to do
a
better job for his clients.
He
had
less trouble holding them.
Even in the blackest of bear mar¬

there

kets

But it

to be done.

thing of
70%

hit

when

Even

always something

was

Mr.

time

of' his

still

was

some¬

miss proposition.
B spent 6(1% to
in

going

over

the various selections provided by
sources of investment infor¬

his

mation,
would
all

every

pull

his

now and then he
boner like selling

accounts

nobody

could

foresee

them!

When
to

mutual funds

the

reach

would

began
point where Mr. B

the

run

some

them

his new accounts, he took a
look at them. But at first the idea
in

didn't
be

seem

to click.

for

o.k.

They might

fellows

for

who

didn't

that

him

written.

this

Well, it

was

column

was

just coming into
the investment business—a grand
business in need of good men! He
can

take

careful look at Mr. A

and Mr. B.

Right

they both

now

look good!
If

Mr.

wants

the

old paths, there will be many who
will help him and he will learn
the business the hard way —at
considerable

cost

his

clients

and himself. He is bound to make
some

Curtiss

some

Wright A just before it passed
the dividend.
Things like that
hurt—but

How about Mr. C?

mistakes whatever he does!

However, if he starts with the
mutual

funds, he will be follow¬
ing
sound,
proven
investment
principles from the beginning. He
will avoid many of the mistakes
which the old-timers made.

he will have

some

And

of the best in¬

vestment brains in the country to

back him

up!

It's up to you,

Mr. C—take

your

pick!

securities—but why should
he need them?
After several of
know

his selections went

sour,

he took

another look at the mutual funds.
In

the

main,

records

their

and

the

Board

National

C h

the

a s e

announced that
McKittrick will join

Thomas H.
the

Bank,

staff of the bank

President in

Vice

the

coming autumn,
giving his attention to questions
of policy involved in foreign re¬
lationships and loans, as well as
to the bank's operations in the
foreign field.
Mr. McKittrick has been en¬

gaged in banking and financial
affairs in Europe for the past 30
years, the only interruption being
four years during which he saw
foreign service in the American
Army during World .War I and
two years in the New York office
.of Lee Higginson & Company. His
first work abroad

was

to assist in

the

organization of the Genoa,
Italy branch of the National City
Bank of New York, of which he
became Acting Sub-Manager. In
1922, he joined the firm of Lee
Higginson & Company in London,
being later admitted to a partner¬
ship, which he retained until 1939.
Since the beginning of 1940 he has
held the office of President of the

management

excellent

were

Winthrop W. Aldrich, Chairman
of

Bank for International Settlements

Baker, Simonds & Co., Detroit,
in Basle, Switzerland, which posi¬
June 4 offered 240,000 shares
of $1 par value common stock of tion he will relinquish on June
of them away in his accounts.
Crampton Manufacturing Co. of 30th this year in order to return
Today Mr. B sells a lot of mu¬
tual fund shares.
He is in the Holland, Mich, at $2.50 per share. to the United States.
Proceeds of the financing, which
best of health and sleeps like a
is a new issue, will be used to ex¬
kitten. If the market is "nervous,"
he hardly notices, and his clients pand Crampton's plant facilities
and to add to working capital.
have stopped driving him nuts
Crampton is a leading manu¬
every time the Averages are down
facturer of plumbing, refrigera¬
a point.
PORTLAND, OREGON. —
The other day he took a careful tion, and radio cabinet hardware.
look at some of his big accounts. In November, 1945 it acquired the Chester B. Johnson has become
In every case the mutual funds in assets of the Grand Rapids Brass associated with Foster & Marshall,
them had given better average Co. of Grand Rapids, Mich, which
Porter Building, members of the
performance than the individual more than doubled the firm's pro¬
New York Stock Exchange. Mr.
ductive capacity.
stocks!
Sure, he had picked a
Johnson has been with Merrill
couple of issues in which the
Lynch, Pierce, Fenner & Beane
profits were fantastic. But there

could

see

cation.

the value of

diversifi¬

So he began putting some

C. B. Johnson With

Foster and Marshal!

INCOME SERIES

several

were

look

others

good.

Then Mr. B took

Priced at Market

■

didn't

look at his

personal income account.
Last
he made more money—over

year

"Prospectus upon request from
your investment dealer or

twice

much—as in the best year

he had

enjoyed back in the
"good old days."
Selling mutual

NATIONAL SECURITIES &

funds

RESEARCH CORPORATION

that

ever

had

relieved

research

him»of

and

detail

all

work

which took up 60% to 70% of his
time before.
Now he could spend

120 BROADWAY

New York 5, N. Y.

that

Chauncey Parker Resumes
Activity at Auchincloss

WASHINGTON, D. C.—Auchin¬
Parker & Redpath,
729
Fifteenth Street, N. W., members
New York Stock Exchange, an¬
nounce that Colonel Chauncey G.
closs,

Parker, a senior partner of the
firm, has been released frdm duty
with the U. S. Marine Corps and
has resumed his activities with
the firm.

for

number

thereto he

partment

was

years.

Prior

with the bond de¬

the

National

First

Bank of Portland..

De Villard in

Chicago

CHICAGO, ILL. —Jean Francis
De Villard is

engaging in the in¬

vestment business from offices

2056 Orchard Street.

REPUBLIC

COMMONWEALTH

INVESTORS
FUND Inc.
A

Diversified Investment Fund

Prospectus

request

upon

Founded 1932

with Redeemable Shares

A MUTUAL INVESTMENT FUND

Prospectus

Request

•Prospectus from

GENERAL DISTRIBUTORS

Chicago

—

Building

•

dealer

Los Angeles

15 William St., New

York 5

Building

Son Francisco 4, California

SHARES OF CAPITAL STOCK OF
INVESTORS MUTUAL, INC.

INVESTORS SELECTIVE FUND, INC
y.-■

INVESTORS STOCK

FUNbfINC.

Prospectuses on request from Principal Underwriter

INVESTORS SYNDICATE
Prospectus
from

your

may

he obtained

Prospectus

local investment dealer
.

lhe
.

your

may

be obtained from

local investment dealer,

R. E.

Macgregor, President

Minneapolis, Minnesota

Iveystone Company

of Boston

Congress Street, Boston 9, JMass,

THE

PARKER

CORPORATION

ONE COURT STREET. BOSTON 8, MASS.

Phila. 7, Pa.

Distributors

INCORPORATED

NORTH AMERICAN SECURITIES CO.
2500 Rum

your investment

220 Real Estate Trust

REPRESENTATIVES IN THE PRINCIPAL CITIES OF THE UNITED STATES

•

■s\

-X■*■-

Volume .163

Number 4496

viii?5':'

'i'Y:-*,

Tfe WmM's Investment Centre;
London Looks to New York
(Continued from first page)
present

British

Government

widely believed to be antipathetic
to the Stock
Exchange, as
all institutions or

it is to

organizations

whose activities facilitate specula¬
tive or "non-speculative" trans¬
actions.

isv in

process

na¬

often anomalous

restrictions, im¬
by the Treasury and the
Bank of England, which make any
free market impossible.
posed

The

the British
economy, which, from
the narrow Stock
Exchange angle,

the

disappearance of hun¬
dreds of securities, to the value of
at least £2,000
millions, in which
the Stock Exchange has dealt for
decades.

(In the

of Bank of

case

England stock, dealings in which
ceased last
March, there had been
a

regular market in London since
Bank's formation in 1694).

the

Thus, these nationalized

stocks and

shares will have their
counterpart

Stock

Reflection

Exchange's

of the Nation's New Debtor Status

tionalizing important sections of

means

All of these

facts

can

marized by the simple

sum¬

that they are the Stock

statement
Exchange

reflections

transition

from

creditor to

would

that- London

has

Britain's

debtor nation.

optimistic

hope

financial center

as a

the end of this period of

seen

change.
Two

examples

will

show

how

the process may continue, even a

after the

year

Under

pressure

end-of hostilities.
from the British

Government, the French Govern¬
ment recently agreed to requisi¬
tion
South
African
gold and
diamond shares, British industrial

stock, the Stock Exchange will be

and "international" securities held

required

make
a

market.

vast

But

difference

between

specializing in and
intimately hundreds of

knowing

stocks and shares in half a dozen
basic industries and in
making a
market in a mere handful of Gov¬
ernment

stocks

differing

by French nationals, the shares to
be marketed to the best advantage
in London. If this arrangement is
carried through — at the moment,
there

talk

possible

from

revision

and until France

Paris

—

then

its

unless

reestablish

can so

each
from the other only in minor de¬
gree. There may be some migra¬
tion of jobbers from the coal and

her export trade that she secures
a
substantial favourable balance

railway, electricity and gas mar¬
kets to the giltedged market to
handle the increased volume of
securities in the latter market.

action

But

major movement of this

kind would be justified. That
por¬
tion of the House
jobbing popula¬
tion rendered unemployed

by the

nationalization

programme

':H

likely to drift into the remaining
"private enterprise" sections of
the House where its
presence will
be calculated to render even more

competitive business which, mem¬
bers already complain, is "cut to

with which to

re-purchase these
requisitioned holdings, the trans¬
will

write

"finis"

the

quite considerable arbitrage busi¬

will do exceedingly well to attain
and hold the colossal export task
which

According to Mr. Virison, it
that of the £3,500

proposed

the

latter

will

before

very

more attention. For
without any doubt, London's posi¬
tion has
undergone, both rela¬

tively and absolutely, fundamental
changes. Before the 1914-18 war,
she held

undisputed

sway as

the

key-stone of the financial world.
World War I brought great shifts
in balance of financial power. But
it. was still arguable, after
1918,

that London

eminent;
risen to

financially

was

or,

New.

pre¬

York

had

equal eminence, London

remained

great

force.

After

World War II,

however, the posi¬
tion is very different. As a result
of the transactions which financed
that war, the London market no
longer deals in hundreds of

answer

that

Britain's

overseas

Britain

assets.

is pledged not to utilize the pro¬
ceeds of the American loan to re¬

debts (although the ef¬

pay past

fect
our

here

mere

resources

bookkeeping);
gold and foreign

last

remainder of
ments. The
able
war.

only £400 millions

were

November

our

which to

lend

reestablish

and

overseas

from
thus

London's

position as
capital of the world.
This, of course, is an assessment of
the broad picture.
It does not
the financial

that

mean

London

will

not

en¬

foreign lending. In
fact and in effect, she is already
doing so.
(Witness the recent
gage in some

credit to France and the Hambros

Czechoslovakian

Bank

credit

We must

of course make
foreign loans to credit-worthy but
deal).

backward
sell

countries

are

exports. But on balance it
looks as though Britain's day as
foreign lender is over.
our

Socialist Government is

None of this is the fault of the
British Socialist

deed, it is

conversion
our

Government; in¬

fair bet that

our

re¬

and

consequently our
export drive WQuld have been

much

servative

difficult under

administration,

Con¬

for

should then almost certainly have
had labor troubles comparable to

was

told that Britain would

emerge from hostilities stripped
of most of her averseas invest¬
ments. "And a

retorted.

good thing, too," he
speech after speech,

went

some

from 4 in the afternoon (British
time) sometimes until 8 o'clock in
the evening is a thing of the past.

The

lavish

monumental

tho

during

and

seen*

already a relic of

great number of overseas sej? curities, But already
ownership of
many of them, and of many do¬
a

mestic

■;

British

securities, has
passed to foreign hands, reflecting
in .part investment ^of the enor¬
mous sterling balances piled up by
Britain's
creditors
during
the
war years. And, of necessity* hav¬
ing regard to the British balance

international

London Stock

kept

trade."

home

"What

Dealings
In

■,

other

ways, too, the
back is hindered. I have referred

nineteen-twenties.

member how

the

restrictions

dealings in

foreign securties in London, re¬
strictions which would certainly
have to disappear before London
could hope to reattain anything
approaching its former position.
Similarity, the official attitude in
this

country towards bearer se¬
curities is the reverse of helpful.

great

country during the war, for ob¬
vious reasons, bearer securities
regarded

were

their

undesirable and

conversion

into

market

the

Exchange would

London's

Decline
*

Expected

decidedly

pessimistic

in London

are

marine, for example) which sug¬
gests to British ears that America
still

both

wants

wants to eat it too.

her

future.

axiomatic

traction

formerly
such

several

securities

attached

issues:

"Interest

to
on

this loan will be paid free of tax
to residents abroad." Again, there
are

in London refugees from
extensive

with

Nazi
arbitrageurs,

skilled

oppression,

connections

New

her faults in the nineteenth

tury
did

—

and they

learn

her

payments

exports

175%

were

business

—

her

Her investors time after time took

York, Brussels, Amsterdam,
Paris, India and the Middle East.

her invisible exports more
than made it good. London well s
corned with
open - arms ' goods;

produce and raw materials front
every

country^in.:the;world,knowi4

ing that these were merely dej«[
layed payment. for earlier ex.!
.

ports and that they gave her
people—who had virtually noth¬
ing in the way of raw material!
,

in
their
own
small '" island—ja
standard of living which was the
tions, these individuals could de¬ envy of the world. London rdl
velop
a * highly
remunerative sisted, until 1932, the pressure of
domestic
entrepot
business
in
securities vested
interests
who
from which this country would clamoured for generations for
pro¬
benefit quite substantially in tection and against the free trade
terms of foreign currencies. Yet which
brought Britain (and the
many of them remain "stateless"
world) such prosperity. Will New

individuals because of British pro¬
crastination

granting

them

naturalization, and the Stock Ex¬
change

constantly

the remuneration

whittles
on

down

the business

they bring. Small points in a big
matter?
Agreed, but significant
straws which show which way the
wind blows in London today.

York

play a similar role in. the
twentieth century? Let us hope so.
And if she does, London will be
well pleased. More—if it is, not

presumptuous — London will be
ready and willing to pass on the
contents of the*; unequalled storehouse of her experience,;

London

Passing

the

Torch

Fountain Proprietor

New York

All

seem

all, therefore,
any

PHILADELPHIA,
it would

dispassionate

ob¬

jective survey of the position that
London must pass on the torch of
the world's financial leadership.

offer to sell,

or a

PRICE $2.50
•

O. Fountain has become sole
pro¬

Walnut Street.

Mr. Fountain has

been with the firm since 1938.

solicitation of

offer to buy

Stock

PER SHARE

-:'"v

"■

■■

The Prospectus may be obtained in any state in which this announcement is circulated

only from such registered dealers as are offering these securities
in compliance with the securities law in each state,

BAKER, SIMONDS & CO.
Detroit 26,
June 4, 1946.

Michigan!

PA. —Clark

prietor of Greeley and Co., 1500

that

and

remarkably consistent prodigality.

(as

1938

cen¬

many

as the world's fi¬
nancial leader: She cast her cake
on the waters with
amazing and

$lParValue

accounts.

their

and

With their experience and connec¬

Common

foreign lending can only be done
by a country with a credit on
international

cake

London, for all

CRAMPT0N MANUFACTURING COMPANY

assessment of London's chances

.hedged about with tortuous and level. > Today, with the aid of

Americans, and talk (on synthetic

rubber, and the U. S. mercantile

240,000 Shares

the

plunged

talk of "tied loans" by prominent

New Issue

position, dealings in To balance her account, Britain
the remaining foreign must increase the volume of her
quoted

and

these securities. The offering is made only by the Prospectus.

■

securities

in 11929,

that

Government

have been made shorn of the at¬

retaining a position of any im¬
portance in international financial
affairs) the picture becomes no
brighter when we come to con¬
sider London'& chances pf retriev¬
ing her position at ■; some time in

re¬

the debtor-half of the world into
awful confusion. They hear today

British

taking

hue

they

spate dried

awful canning in the shape of
defaults, repudiations, and expro¬
priations
and came up smiling
each time, ready and willing, to
lend again. London watched; with:
renewed, the official attitude to¬ c om p 1 e t e imperturbability, ...a
wards bearer
securities must mounting and consistent adverse
change. Again, recent issues of visible balance of trade knowing

Continue

If this survey is by now

want¬

responsibilities

was

of payments
many

overnight

And

that

registered
constantly encouraged.
Today, they are still disliked in
official quarters, although many
of the war-time arguments against
them have disappeared. London
has a natural pull over New York
in its geographical situation for
dealing with the Continental
Bourses. But if this trade is to be

form

This announcement is not

remainder

with them.

They wish
and hope

—

ing. But, to be frank, they cannot
be sure. They remember the
spate
j of extravagant foreign lend, ng
road .from American investors in the

ally all the remaining elements of

offices, with their
price-boards, run by

another age, London still deals in

New York good luck

invest¬

currency" investments
and others have political and eco¬
nomic significance which would

the London offices of Wall Street

•brokers,

in 1880 is what matters.

market¬

our

the

useless to kick against the taunts.
They know that the position as it
exists in 1946 and not as it existed

Restrictions in Foreign Securities'

attitude. "British money should be

American, Canadian, South
doubtless render them attractive
African, Indian and other securi¬
to foreign buyers. If the bulk of
ties. The hpisy and thriving Street
these holdings disappeared virtu¬

Market in which, in pre-war
days,
American securities changed hands

Englander

financial machine must look. Wise
men
in London know that' it Is

members of the Socialist adminis¬
tration betray a Little

"hard

are

Her successor is obvious — it is to
New York that all believers in the
benefits of a liberal economic and

that she will not be found

center.

In this

credit

account

almost

are

overseas

cream

holdings
But

and

financial

inter¬

trade

to finance V home
right had we to
lend money to Germany in the
certainly lower now. We must
inter-war years when we had 3
keep some trading balance of these
million unemployed at home." And
assets; hence the threat to the

exchange

lover of bearer securities.

Bevin

can't

done without the sale of more of

national

itself,

The Continental investor is

future, will have

millions owed by this

short

reestablish

able

international

—

long receive

3073

been forced upon it.
Public Relations Offi¬
cer would
hold out the prospect
that this country, in the foresee¬
a

Financially Isolationist

Secondly, if the outline recently
provided by your Mr. Vinson as to
the manner in which sterling bal
ances are to be handled is correct,
Britain may before very long be
calling once more at the pawn¬
shop with a substantial wad of
her remaining overseas invest¬
ments.

has

only

days.

pre-war

un-

parallelled
productive
machine
will swing into its stride. In due
time, sterling becomes convertible
on
current
account, and unless
general expectation is misfounded
many of Britain's trading partners
will thereupon insist on satisfying
their hunger for d o 11 sir s and
American 'goods. .The most opti¬
mistic person concedes that Britain

between Paris and London in

ness

her labour difficulties and her

yours. Nevertheless, it is certainly
country to
true to say that most members of
the* sterling area £700 million
our
Government are averse to
would be immediately convertible
Fundamental Changes in London's
foreign lending and to the liberal
as a quid pro quo for the cancel¬
Financial Power
financial machine which put
lation of £1,000 million and a 50If London
Britain at the top of the inter¬
has hitherto been
year funding of the £1,800 mil¬
national tree last century and dur¬
concentrating upon such domestic lion balance. If
Mr. Vinson is cor¬
matters to the exclusion of inter¬
ing the first decade of this. During
rect
and British opinion hopes
national trends, it seems probable
the war, Foreign Secretary Ernie
profoundly that he isn't — the

ribbons."

that

remarkably smooth war-to-peace so on. Chancellor of the Exchequer
transition; a - - seller's market in Dalton, lecturer in economics who
know
every corner of the globe; and should
better,
recently
the- seemingly endless string of sneered at Britishers who genera¬
strikes in the United States, we tion^
ago
"backed the wrong
are
approximately half way to¬ horse" in investing in Japanese
wards our target. In due time, the loans. It would be optimistic of
sellers' market will be sated.
In the London Stock Exchange to
due time, America will compose look to these quarters for help to

But

in Government
paper in which, so
far as nationalization
compensa¬
tion is not paid in unmarketable

clearly there is

.;-A-

i'i-.

THE COMMERCIAL & FINANCIAL CHRONICLE

■

THE COMMERCIAL & FINANCIAL CHRONICLE
wisdom

essential

floors beneath which

Some

the

that

vinced

system

work if the machine were

the
:

Yet far greater

fice immediately.

that it would be an unwise guar-

than any we are unwill¬
dian of the nation's destinies.
ing to entrust to government are
; Nevertheless, the pressures from assumed daily by combinations of
these divergent groups have not large corporations.
Not only is
shaken our faith in the essential the range of regulation greater; it
soundness
of
democratic prin¬ is exercised in secret, without a
record, v The
power
is
ciples of government and the free public
competitive way of conducting wielded away from public knowl¬
business.
edge, not subject in any way to
!* What each of us wants, of the public interest. This pattern
■

powers

indeed

not
tne

desire, to
foundations

historic

control

the

extends

essen¬

is for the machine to be
tials of life—foodstuffs, housing,
operated by the driver of his own
choice and to be driven along the railroad transportation, iron and
road which each of us wants to steel, heavy metals, chemicals, and
"travel. We all believe abstractly many other commodities and ser¬
1

vices.

not

free economy but we are

what it means. What
mind when we

all agreed on

And

speak of
steer

free economy is free¬

the

avenue

who

drivers

the

from

dom

"not

machine

pens

will

along

the

jurisdiction

that goods

are

often not sold

separately but in combination.

To
get the things you want, you have
to buy the things you do not want.
Could any public government en¬
dure which openly avowed such a

the

particular

own

our

under

these private governments, it hap¬

most of us have in

We do

trol

Yet

and direction of

government

ever

gone

business
supreme,

industry.

agency

tiv&

has

far, in regimenting

have private cartels. A

should

authority subject to

judicial review

public

respon¬

sibility issues licenses to a trade,
keeps out persons it does not
want, assigns particular operation8
tp
different
companies, divides
markets and territories among the
eject, allocates quotas for produc¬
tion, .seU vUpbtigid- schedules of
prices, and, in fact, decrees a pri¬
•

vate code of laws,

In its decisions

made

The

activities

of'1

the choice of

antitrust

Our

than fifty

years

laws

are

claimed
In the

Antitrust
credit

for

its

three

Act

ades.

and

1916

declared

that

and

only the seller idsrepresented; the under a system of a "fair field and
consumer
is stripped .of all the no
favors," they are condemned to
rights he possesses in the open failure by their own arguments. It
market. If any government should

attempt;,jto

than

inconsistent

de-

such

and a free economy on the one
things—ex¬
clude firms from the
industry,
and, and yet advocate measures
carve their markets as
of private restrictive control on
nroprietary
domains, fix the conditions under; the other. Such self-contradiction

which

firm could carry on, place

I bespeaks unmistakably

willing-

elimination

estimated

was

200

the

non-financial

1929

corpora¬

businessmen

think

these

our

say

these

men.

Their total products were valued
at 20 billion dollars. In 1939 there

among

tolerable."

were

late

1936,

the

platform
carried
a
that
"private

Republican

pronouncement

During all those years

prises,

vigorous in its pledges of support.

valued

Not

billion

the public records.

American firms and foreign firms

provided for world-wide division
of markets and fields of operation

in order to eliminate

for restriction

the face of
lion

increase of 36 bil¬

dollars

tion.

a reduc¬
establishments in

84,000

And

value

add

also the

new processes and products; for
production quotas, having the ef¬

that

fact

fect of

for

several particular in¬
Fifty years ago there
were
15,000 tobacco manufactur¬
ers; now there are less than 800,
with four major companies domi¬
nating the industry. Fifty years
ago there were 28,000 manufac¬
turers of lumber and timber prod¬
ucts; now there are less than
12,000. Fifty years ago there were
nearly 700 iron and steel manu¬
facturers; now there are less than

And

existed

the lesson

re¬

can

read

have

expanding

econ¬

omy with a rising standard of liv¬
ing
in
the years
immediately
ahead, we must break up existing
cartel arrangements and prevent
the growth of new ones and the

resumption of those

ore-war

car¬

tels which of necessity were sus¬

other

kind stand in
Moreover, its victims

there will be

hundred

But if the Govern¬

;

policy is realis¬
tic as well as aggressive, it can
revive
competition
in many
It

also

can

downward pressure on
■i

bring

those 'ad-

Unfortunately the
in control

high for maximum volume."
Moreover,

interesting

some

their

private control of industry
again the paths of op^
portunity
to independent busi¬
nessmen, to the veterans; in short,
to

declaration is contained in
every postwar plan sub¬
mitted to the public. Thus it ap¬
pears from a continuous body of

huge

power

within

are

throughout
that in prin¬
ciple there is no division of polit¬
ical or economic opinion on the

tional well-being.

The

use

cent

and

people's
question

the
the
de¬

thereby decrease
purchasing power,
would be publicly

bated for months.

There would be

lifew York S, N. Y.

the action would

be held accountable for it.

On the

im¬

ment

not

these

attack

objectives.

En¬

business.

In¬

between government and business.
,

Rather, it presents

tween

want a free market and those who
want
ket

those
a

issue bewho

privately controlled marlong as they can sit at the

seats

businessmen

control.

The

antitrust,

other hand, if the great industries laws do not involve any plan of
to monopoly and cartel government regulation or direc¬
i control wish to raise their prices tion of business.
Indeed, their
10%, there is no public debate, purpose is quite the opposite.
there is no hearing for those who They contemplate a minimum of
.

subject

the exaction, and those

pay

j who lay the
;knowledge no
bility.

government regulation, with busi¬
themselves free to make

burden, need
public

nessmen

acresponsi¬

the important decisions regarding

production, distribution and price.
In this aspect the antitrust laws
simply seek to protect the free¬
dom of the mrket against the ag¬

International Cartels
The

years

American

tels

public has be¬
aware
in
recent

acutely

of the power exercised

international
were

These

cartels.

used

gressions

ptions

car¬

Germany

German

means

exacted

those

whose

interfere

oper-

with

the

theory that in the modern World a
competitive market can long sur¬

warfare

industrialists

would

free functioning of the market. I
know of no seriously advanced

of waging
during
the
.years preceding .the outbreak of
military hostilities. The record is
replete with illustrations of how

vive

without some governmental
for free competition.

protection

| And in this country the antitrust

agreements from American indus¬ ! laws are the principal* instrument
trialists which, had the .purpose I by which the federal government
and

INCORPORATED

are

deed, it is quite the opposite. And
an antitrust suit is not a contest

democratic

particular, as

DonddVonng&€o.

laws

portant factor in the accomplish¬

forcement of the antitrust laws is

economic

be obtained from, the undersigned.

antitrust

our na¬

Specialty Corp.

Price $3,875

fair chance to make their

If the nation wanted to impose a
sales tax of one-half of one per

developed

(Par Value $1.00)

women

i individual contribution to

way

unthinkable

and

men

manv

the frame¬
government.

work

the past half century

;

the

throughout the country who only

concen¬

power

would

public

open

want

who

men

economic

private

which

poly

of these

trations

kind of mono¬

nearly

testimony

the

and

exist in this country.

ministered' prices which are too

observe that

basic industries in

Qntire industry.
In other words,
competition will have ceased to

markets where it has needlessly

declined.

this country, except by the toler¬
ance and patronage of the three
or four companies controlling the

ment's antitrust

come

war

every

75,000 Shares Common Stock

Exchange Place

our

history and learn that if

cent
are

it goes on through
implements,
shoes,
chemicals, cotton goods, glass, and

■A

4, 1946

agreements

potential, they lowered the stand¬
living and reduced oppor¬
tunity for employment in this
country.

ard of

agricultural

(A Delaware Corporation)

June

these

Consider

non-competitive pricing. We
that, apart from the effect

know

dustries:

may

limiting domestic produc-

| tion and production capacity; and

39 million.

350.

comnetition;

the development

produc¬

during this period the population
of this country increased by some

wares.
In another gener¬ pended during the war. We have
ation, unless the trend is reversed, learned also that if we are to pre¬
no opportunity for a
serve the essential charsfcteristics
the way.
will point out (what: is perfectly businessman, no matter how in¬ of what has been called the Amer¬
genious or well financed or daring ican way of life, we must reverse
true) that a 100% free market
he may be, to enter any of the the trend toward concentration of
is an illusory ideal that never

terests

may

We know that
other things international
arrangements between

cartel

dollars.

cartel opera¬
been spread upon

tion

composed of the edit¬

of such securities. The offering was made only by-the Prospectus.

Copies of the Prospectus

was

about

now

balance, this amounts to

long ago a distinguished

committee

facts

The

tions have

only 184,000 such enter¬
with a total production

the Democratic Party was no less

NEW ISSUE

arrangements

monopoly is indefensible and in¬

punished."

of these shares having been sold this announcement appears as a matter
of record only and-is under
circumstances to be construed, as an offering of these securities for sale, or as an
offer to buy, or

United Utilities

cartel

short-sighted.

solicitation of an offer to buy,
any

in'

their

were
not acting
from
unpatriotic motives, but, to
the least, the policy behind

any

long discussion and hearings and

as a

not

nessmen

control resided in the hands of
much smaller number of

did

transactions

operation against
country's interest. These busi¬

2,000 individuals, but actually the

"all

terms

directed nominally by about

were
.

obtain

advantages.

American

corporations. By 1933
the percentage had increased to
56%. The 200 largest corporations

tne

development in this country
products and processes devel¬

of all such

those who took
All

and

oped abroad, and otherwise to ob¬
tain
monopolistic

Taking another ^roup of com¬
parative statistics, 'in 1909 there
were. 268,000 manufacturing estab¬
lishments in the United States.

businessmen

better

the

alarmthe last several dec¬

competition,

tions controlled 49% of the assets

who violate the laws in regulation
of business should be individually

case should
single producer or

produce

that

enactment.

platforms,

and

iiigiy ouring

and

Republican Party went «even fur¬
ther in its pledges of enforcement,

controlling. If some
enterprising and courageous busi¬
nessman is willing to gamble his
money or his judgment attempt¬
to

mar¬

against the intrusion of out¬

side

business and

over

small business has grown

since 1900,
Republican
practically restated the

platform
Sherman

distributor be

ing

kets

prin¬

domestic monopolies on the dis¬
tribution of foreign products or on

industry

Their strict

olu.

party platform
which
year
the

every

cheaper article than any made by
existing concerns, he is typifying
the very essence of the competi¬
tive system. If the industrialists
already in a business cannot com¬
pete successfully with newcomers

tion, of control

Effect of Anti-Trust Laws

enforcement has been pledged by
both major
political partes in

by theicompeti-

themselves, and in

tition, to preserve domestic

Despite this agreement

ors
of Time, Life, and Fortune
undertook a comprehensive study
not all seem to be in
of "America and the Future" with
agreement as to what we mean by policy? These private governments
withhold inventions from use and particular reference to the post¬
a free economy. Probably we usu¬
war
era.
This committee, after
ally mean freedom from any top even arrest experimental work
two years of work, came to grips
control. But many people identify until all the profits can be sucked
with these basic questions: "How
control with supervision by the out of old processes and outmoded
a policy of freedom can be vigor¬
government. They do hot think of equipment. Again, would any pub¬
control as regulation or regimen¬ lic government which openly in-^ ously applied at home (1) to en¬
tation of industry by private au¬ dulged in such practices be toler¬ courage millions of enterprising
men and women; (2) to stimulate
thority. But private control may ated by the American people?
productive investment; (3) to at¬
be even more sinister in its effect
What Free Economy Means
tack monopolies; (4) to make free
upon freedom than government
markets freer; and (5) by these
control because it substitutes com¬
Under a truly free economy de¬
plete irresponsibility
for the cision as to what shall be pro¬ means, plus intelligent use of gov¬
ernment fiscal power, to maintain
I checks and
balances of public duced and where it shall be pro¬
employment."
duced, where and how goods shall
Jj opinion.
The committee reached the fol¬
be marketed, what prices shall be
Private Cartels As A Regimen¬
lowing conclusion:
charged, would be determined not
tation Force
"A thorough campaign against
by a government agency nor by a
monopolies will require great
/, A cartel, as well as an agency group of industrialists exercising
of state, may seek to impose con¬
skill and courage, for vested in¬
monopoly power. Such decisions

choice.

ltr,,

from
the
vantage
point of the 1920's and 1930's were
merely business deals to secure
them from undue foreign compe¬

ment.

course,

transactions

Upon

ciple, the trend toward concentra¬

administration

national

Any

leadership

labor

prices could
imagine the hue
which would arise.

wlncn persisted in such arbitrary
action would be driven from of¬

past decade has revealed such

weaknesses

of free enterprise.

turned

labor; others argue that

over

would

oOanuon

and cry

con¬

are

nessy

not fall—you can

'!!, (Continued from page 3058)
nomic: disaster.

of the antitrust

this level the only
uiiference is in judgment as to the
method
and
maner
of enforcer
laws.

Thursday, June 6, 1946

effect

of/restricting produc¬

seeks to give

that protection,

preventing
We are told, however, that the
new
industries from developing v antitrust laws are uneertainand
here, restricting our exports, re¬ I that businessmen do not know
stricting our development of new how to make decisions necessary
technologies and otherwise ham¬ to comply with the laws. It is
pering
our
war
potential and true that the Sherman Act Is not
weakening our national security. like an administrative regulation
To American businessmen these which fixes every detail of contion

this

country,

[Volume 163
ducting
the

Number 4496

business.

cnar acteristies'

THE COMMERCIAL & FINANCIAL CHRONICLE

It has some of
ofbur" Consti^

the

Home

1933.

■

iutioii.

The general pubhc policy
whicn the Sherman Act embodies

Owners

Tnis

Loan

Section

federal savings and loan asso¬
ciation snail be chartered unless
no

must be

trie association

wahout undue injury to properly

applied in each case. But
submit mat the application of
the antitrust laws to most

conducted

indus¬

trial practices today can be pretty
well determined by the lawyers
and

economists

be established

can

existing

sion

savings

local

and loan associations.

This provi¬

adopted during the de¬
pression when it was thought that
the
evils
of
competition were

who have stUuieu

the court decisions, and the eco¬
nomic problems involved in keep¬

Act

provides that

was

tition.

cisions

Loan

precedents, and the De¬
partment
fo
Justice
is
always
willing to. try to advise interested

All of

parties

on difficult problems of in¬
terpretation of the law.

fer

one

cient

wants to

mass

producing

but

concerns;

break up

tected

tion.

except

the

abstract.

facts in each
men

know

depends

now

they

did

competition

seek

this
Act.

substantial

the

extend

exception

the

Specifically,

they

to
prevent existing, established
federally
chartered
competitors
from making loans in localities

not

are pro¬

by this law,
loan leagues

and

re¬
sav¬

competi¬

new

the

afforded

Sherman

within the territory prescribed by
law and fully within their char¬
tered

division of markets and deliberate

suppression

existing

should not discourage or attempt'

competitors,

among

from

savings

should

know before, that price fixing ar¬

rangements

that

InJ view

scope

the

in part

local

And business¬

case.

fact

powers.

legal.

Act

a permanent change in the
structure of government' it¬

very

self.

fail

England, where they have

curb

vs.

to take drastic action to

monopolies

business affairs, the alter¬
native will be some kind of gov¬
ulation

quire
it

prohibits

any

organization with
to gather all of the perti¬
about production, dis¬

facts

tribution and

prices. Government

agencies would have to make all
the important decisions affecting
production, distribution and
prices, and then have power to

combinations Which unreasonably

To do this in peacetime, during

period

ample
production,
would be quite a different mat¬

the

Britain

here in November, he. said to

„

land),

but when big business
gets too powerful so that it be¬
comes
monopolistic we hold it

our

mental

power

nent

Great

"There is and1 always will be
for enterprise (in Eng¬

bureaucracy so great that
would amount virtually to a

ern

scope

When

monopoly.

the Congress:

regulation. Effective reg¬
monopolies would re¬

conception of the
function of government. Effective
regulation would require a gov¬

was

reversal

with

deal

Prime Minister

our

ernment

antitrust laws, they have found it

Safe

not

leave

private

hands."
Other

countries

similar

policy.

have

But

followed

are

NY—Exchange Firm

Formation of the; New York
Stock Exchange firm of Marx &

Co.^ investment bankers hnd

deaL

in unlisted

ers

securities, wa£ an¬
jointly today by Otto
Marx, Jr., Edwin H. Koehler and
Raymond de Clairville. Bancroft
nounced

maintain

offices at

Wall

Street? New York Cityr
Mr.

Marx

was

* **»

formerly

with

Ladenburg, Thalmann & Co., the
Lehman

Corporation and Gold¬
Sachs & Co. During World

man,

War II he served

Lieutenant

Commander in the U. S. Navy in
command of the U. S. S. Reybold

(DE

177)'and later

the

Secretary

attached

was

the

Navy's

office in

Mr,
of «T.

Washington, p. C.
r
Koehler was Vice-FresideAt
WelWopd, Inc.) and fot^

merly. President of Retail Depart¬
ment Stores of America and Vice-

approach

our

has been different.

will

Business

Maw&C6[ Opens

Mitchell and Abram J. Feuer will
be associated with the firm which

England's Attitude Toward Big

unnecessary

enforce their decisions.

Antitrust

man

destructive

than

Monopolies
If

While it is true that the Sher¬

il¬

less

public controls.

should realize that this

protection

maybe a monopolist, tries to jus¬
tify combinations formed to gain
monopolistic advantage. The line
between efficient mass production
and arbitrary monopolistic control
over industry cannot be drawn in

economy

work

necessary

ings and loan associations

effi¬

business

one,

to the

you

Government Regulation

other American industries,
Mass Production Upheld

Department of

in the savings
business, deeply believe
in the competitive,
private enter¬
prise system. For private mono¬

Anti-Trust Acts
Section* g.ves your business spe¬
cial
privileges not enjoyed ' by

produced, wnere it

produced) "who shall pro¬
it, and all of the intricate

duce f

loan

free

Associations Subject to

the

poly is

policy of the Sherman Anti¬

trust Act.

agehcleain determiftiftg* how

all

Justice,

the

law. But there is
longer any dearth of court de¬
any

tal-

much shall be

shall, be

Let us first problems
of
distribution
and
monopolistic tendon-, price. We would simply be sub¬
cies and restraints upon competi¬ stituting a regulated economy for
tion in our own businesses before a free economy, and it is obvious
objecting to government compe¬ that such a substitution would

time

will happen in the inter¬

take

houses in order.

own

remove

a market competitive.
Close
questions will arise from time to
as

great issue. I do,
however, insist that opponents of
public housing should put their

and

pretation of

today

this

greater in some cases than its
benefits. It is clear that this pro¬
vision is a distinct exception to

ing

here

not

sides

3075

trying

President of Vadsco Sales Corp. t
M. de Clairville, a member 6f

the -New- York Stock Exchange,
private hands,;
has been associated with Gwynne
principal role of
Bros, end^ TuHef," Craryi & Coi As
government to be the prevention
a partner in both firms;
'
1» - ♦ l
of private monopolistic interfer-'
Mr. Feuer was previously asso¬
ence with the operation of a com¬
ciated with J. R. Williston & Co.
petitive market.

to leave business in

and

want the

■

not

ment

saying

the

that enforce¬

antitrust

laws

will

and

Mr.

man

Mitchell

Bros.,

was

with

Leh¬

Morgan & CO.,
City Bank

and with the National

bring a Utopia. It is obvious that
of New
York, investment advisory
trade, this does ter from doing it in wartime dur¬ a lot of other things are needed to
'
not mean that all cooperative ac¬
create and preserve a free com¬ department.
American
businessmen
are
law
ing a period of shortages. The cir¬
tion among savings and loan asFormation of the firm was pre¬
petitive economy. But if we fol¬
cumstances
abiding. Only a few want to use
requiring
wartime
economic brass knuckles, If busi- soc*at*ons *s unlawful.
If it did, controls are quite different from low a consistent policy of vigorous viously reported in the "Chron¬
some
icle" of May 16.
admirable results of joint
,
nessmen can depend on active an¬
those which obtain normally dur¬ enforcement, we will help pre¬
action by our trade associations
serve
the opportunity to engage
titrust enforcement, they will not
ing peacetime in this country.
in the industry would have been
in private business.
The result
have to resort to monopolistic de¬
When there are shortages, some¬
will be to help small business and
The Supreme Court one must
vices in self defense. They will impossible.
decide who will get
has held that any joint action to
not be compelled to compete in a
what there is, and someone must promote economic democracy. In
divide marketing territories, ap¬
Controlled market.
hold the lid on prices. That some¬ that way we will strengthen our
portion customers or drive com¬ one
obviously must be the gov¬ heritage of political democracy.
The1 Association of Stock Ex¬
Auti-Trust Laws and Housing
petitors out of any particular area ernment.
And wartime controls,
change Firms; has change
or
market is unlawful.
On the
Programs
of course, must continue as long
format of the group's "Newsletter"
Now what has all this to do other hand, and for example, an as shortages exist. But the
purpose
to be issued regularly as a trade
With the btulding and loan busi- agreement relative to hours of of wartime controls is to direct
orgatn for the industry. In Ihe
ness?
We ieel that the antitrust °penlng and cl?slng » long as it the
as
supply
of commodities into
O&rrent issue there is a complete
laws do have a direct bearing on 1 does,. "°t
restrain competition those channels where they are
CHICAGO, ILL. — Kitchen & report of the last Governors' meet¬
the all-important question of pro-1 would be reasonable and there
most needed and to prevent run
Co., 135 South La Salle Street, has ing and news on the Board meet¬
viding homes at reasonable prices
would not violate this Act. away inflation.
admitted
L.
Lydia
Fischer
to ing scheduled to meet on the West
to the millions of Americans who
When ample production replaces nor trier ship
J ® Supreme Court also has held
in
the
firm.
Miss Coast this fall
October 28th to
Stand in need of them; that the 'that alW cooperative action which
scarcity, the necessity for the war¬ Fischer has been with the organi¬ November 2nd is the date tenta¬
practices of lending institutions, tampers with the price structure time type of control no longer zation in the
trading department. tively set.
is unlawful per se. As applied to
as well as their rates, should be a
exists. My point, however, is that
this means that if we are to have
constant concern to those of us our businesses,
regulated mon¬
who are interested in the manage¬ any agreement between savings'
Fahrig Laying Out
Active

enforcement

law-abiding

aids

businessman.

the

restrain interstate

Most

...

•

Stock Exch. Firms Ass'lt

Changes Newsletter

KileRefii&C& Admitsi
Miss Fischer

Partner

—

and loan

ment of these associations.
In

terest

recent

speech before the
Bankers
Association,

Mortgage
Mr.

Foley, Commissioner of. the
Federal Housing Administration,

stated: "There is

pertinent ground

for examination of interest rates.

If lenders find the return in inter,

est

high

enough to permit payment of
high finder's fees, of
kick-backs to builders and high

premiums—as are frequently reported—then they must expect
wonderment

some

interest rates

are

to whether

higher than they

need be."

for

is:

Has

home

the

cost

purchases

de¬

enough?

The high cost of housing is notorious.
In this
connection
we
must realize that as

general rule

the largest single element of cost
to the purchaser of a home is the
-•

interest charge.

For example,

Department

almost all federal taxation.

cial privileges evoke
ties.

For

of lowest

example,

Spespecial du¬

should be
assiduous to pass on these tax sav¬
ings to our customers in the form
;

as a permanent part of our
economy, effective regulation will
require detailed governmental su¬
pervision of all the major aspects

Justice

decisions
overall

are

guided

criterion.

possible interest rates.

controlled interest rate

to call for

one

form

agree.

comes

single

course

To Admit R. Wells

PHILADELPHIA, PA.— Harry
PHILADELPHIA, PA.' — De
H. Fahrig, Jr., Reynolds & Co,* Haven &
Townsend, Crouter &
Philadelphia, has been assigned Bodine, Packard Building mem¬
the task of laying out the Trading bers. of the New York and Phila¬
and Order Room departments in delphia Stock
Exchange, will ad¬
,

the

firm's

Walnut

new

Street
from

moval

quarters at

prior

1528

the

Walnut

1500

re¬

Street

which is scheduled for August.

mit Richard W. Wells to partner¬

ship in the firm

of July

1st.

Mr. Wells has been with the firm
for

some

years as

office manager.

This is not

I heart¬

another."

hope

that the

when

government will

would

absolutist state

set

and dividend rates.

a new

issue. All of this stock

having been sold, this announcement

appears as a matter

of record only.

day

the

Federal

our

interest

•

24,666 Shares

But if private

groups of-savings and loan associ¬
ations should combine to fix and
agree upon interest rates

they are
abandoning our competitive, free
enterprise system.

The Manuf acturers National Bank of Detroit
Capital Stock

Opposition to Housing Programs

Many of those
and

loan

business

the

$50 Par Value

savings

have

of those

the

opposed

construction

the

over

and

Price $200

building

tries, ostensibly iri the

indus¬

name

6 i
•

who demand removal of

controls

M. A# Schapiro & Co., Inc,

competition, in fact desire private
monopoly, to regulate that great
industry.?'; He was careful to in¬

First of

special privilege!* en- dicate that this does not apply to
joyed by some of our associations al! of. the opposition to the Ad¬
is conferred * by Section 5(d) of ministration s
housing program.

What

Reynolds Dept. in
New Quarters

loan executive has stated that "A

Another

competitive
processes.- most necessary for the effective
the savings and loan
prosecution of the war?
But in
business should constantly strive
peacetime, there is no such over¬
to further the same objectives.
all criterion to guide governmen¬
A very prominent savings and

typical, direct reduction, 15-year the
Administration's present hous¬
5% mortgage for % of the ap¬
ing program. Personally, I feel that
praised value, the cost for interest this
opposition, although usually
will have amounted to more than
sincere, has been misguided. The
22% of the total cost of the home.
Attorney General a few weeks
We must never forget that sav¬
ago, before the annual convention
ings and loan associations enjoy of
the United States Chamber of
various special privileges, not the
Commerce, observed that "many
least of which is
exemption from

•

DeHaven &Townsentf

opolies

through
Those

ily

face

rates

loan associations and insuring that
rates of interest are arrived at

never

money

dividend

is. of industry, which will make war¬
guaranteeing free¬ time controls seem minor by com¬
dom of market to all savings and
parison. During war, the essential

clined; the question that those in
the
savings and
loan
business

clined

•

The

interested

the cost of money has steadily de¬

must

1934

unlawful.

seem

While it is true that since

that affects in¬

concerns

rates

June 5, 1946.

Watling, Lerchen & Co*

Michigan Corporation

3076

the commercial & financial chronicle

Thursday, June 6,1946

bond market. In line with

a policy
combating inflationary tenden¬
cies it is unlikely that the Bank

Canadian Securities

of Canada would absorb any

offerings and thereby
augment the total of central bank

By WILLIAM McKAY

credit.

The greatest problem facing the monetary authorities all over
The menace is not confined to past belliger¬
a

natural result of unrestrained and essential

tures. ' During the wan emergency and easy money
comitant low interest rates were a necessary evil.
,

Now the situation has

war

expendi¬

policies with con¬

fundamentally changed.

Moreover, the
^retardation of reconversion to full

——

peacetime production due to labor
troubles, renders it all the more
imperative immediately to set in
motion

Canadian Securities

made

some

Canadian

the

degree

some

continued

aire

theorists

who

Albertas

the doctrin¬

over

advocate

vested
ward

interest

the

ever

of investment

course

and

few

old

mar¬

inactive.

quoted

were

shade

long

term
traded at 99 J/2 but

a *

were

still at

was

internals but in spite of this free

9^%.

funds eased further to

vast

With

regard to the immediate
prospects it would appear than
greater caution than ever should

up¬
mar¬

kets mostly composed of late con¬
verts to the wartime trend. Car¬

stocks

bonds

however

its

low ebb. There were reports of a
renewal of interest in Dominion

exists

dull

activity in general

the

facile policy of the "vanishing rate
of interest" first expounded by
the late Lord Keynes.
/
y
There

•

ket

this

direction, and the
practical responsibility of the Fed¬ High grades
and
eral Reserve Board has prevailed higher
to

dollar

parity.
During the past week the

curbs.
has been

progress

any

of the likelihood of the return of

anti-inflationary

Happily

also

reason

upward revaluation of the Cana¬
dian dollar is unlikely even to be
contemplated while these infla¬
tionary factors are present, for
such a step would automatically
produce heavy liquidation of
Canadian bonds bought in this
country largely on the strength

the world is inflation.
ents and is

this

For

be observed before

extending

com¬

ried

along by the momentum of mitments, either in the external or
the previously officially inspired internal markets.
movement the huge speculative
position is sustained by hopes of
further easy profits. This inop¬
portune market psychology con¬
stitutes an obstacle in the path of
peacetime money market manage¬
Sydney G. Dobson was elected
ment.

MARKETS maintained in

all classes of Canadian

and internal

external

Dobson Elected Pres.

bonds;
Stock

Of Royal

executed

orders

(for dealers, banks and
institutions) on the Mon¬

New York Prices.

Throughout the war, Canada as
now appear, adhered with
far-sighted vision to a fixed 3%
coupon on the long-term Dom¬

Direct Private Wires to Buffalo,

sepculative bull

Exchanges,

it would

net

inion issues. As

Toronto and Montreal

position

Doxihioh Securities

Great

the

Canadian Government bond
ket has been

the

mar¬

negligible scale.

on a

has been the

success

the Canadian authorities in

40 Exchange Place
New York 5, N.Y.

Mr.

how

Dobson

bank's fifth

becomes

the

president, the second

within the bank to have at¬

man

tained

the

presidency.

meas¬

of the progress of the bank in
these years, and of Canadian busi¬
ure

generally, is provided by the
1900, when
joined the Merchants
Bank of Halifax, which later be¬
ness

x Bell

;*■

Consequently, if

System Teletype NY 1-702-3
h

■

slight addi¬
public debt service
is put on the balance against the
risk of an artificially low rate of
interest inducing inflationary
tendencies, the Canadian record of
a

tional cost of

wise

conservatism

management should

CANADIAN BONDS
5
GOVERNMENT

^PROVIN(|ftfe||
MUNICIPAL

CORPORATION

ultimate

indicate the

decision.

financing in Canada ad¬
mittedly would suggest Dominion
borrowing in the fall at a level
no higher than 2%%. The Domin¬

SECTOR 2-7231

NY-1-1045

all

manager,

phases

was

and

Ontario

the

HydroCommission, has
responsibilities other than borrow¬
ing at the lowest possible market
cost; the coupon fixed today on a
Government
obligation
has
a
influence

the

monetary management of the
future.

With

inflationary

constantly
to

become

interest

pres¬

mounting it is
imperative to

use

of the

Mr. Dobson and the late Morris

Wilson

their

began

in the maritime

careers

3-1874

banking days their paths

came

gether,

first

Truro

where Mr. Wilson

was

and young

Dobson

him.

accountant

ledger keeper
their

1916

son

succeeded Mr. Wilson

adian internal market is the large

speculative holding in this country
bonds. Any
pronounced decline in the Cana¬
dian

would

market

precipitate
hquidation from this side. In this
event registered bonds would be
pressed for sale on the Dominion

ager

■

Municipal
Corporate

paths

as man¬

Vancouver

Branch. Mr.
three years

Dobson's appointment
later

office,

General

these two

gether

Inspector at head
again

Montreal,

brought

together, and to¬

men

they

worked

until Mr. Wilson's

team

untimely death

last month.

should

overlooked by investors.

not

Whether

ment economists, have soared sen¬
devaluation, wage infla¬ sationally and, in many instances,
tion, price inflation, or just sim¬ are far above 1929 levels. Statis¬
ply inflation, makes little prac¬ tics of course can be submitted to
tical difference—it all adds up to prove that real estate values have
the same thing.
improved only moderately, as in
Two possible results of the pres¬ tne case of certain New York Cityent situation are of course clearly property and certain large estates,
visible. One is a further desper¬ but broadly speaking speculation

ate effort at effective price con¬
trol which would almost certainly

and

interest payable

in New

yield 1.95%

from

abroad

report even more
trends.
Money every-r
where continues to buy less and

14 Wall

Street, New York 5
to

Toronto & Montreal-r"*'

far

value.

Greatest boon to the stock

mar¬

less.

profits taxes.

In this country, family budg¬
according to the Bureau of

ets,

Labor

Statistics,

are

50%

above

Strikes and cessation of produc¬

tion

account of

price problems

have thus far prevented corpora¬

tions, particularly those manufac¬
turing durable goods, from show¬
ing any semblance of earning
power commensurate with volume
production. Real beneficial effect
of the elimination of

its

thus

taxes

excess

far has

prof¬

been

con¬

fined to

companies more or less in
den price advances in the form of
non-durable goods industries, such
substitution
of
inferior
quality
as
retail trade, amusement, tex¬
goods.
History proves that the
tiles, liquor, food and numerous
only truly great inflation eras fol¬
others. All one has to do to real¬
low great wars—and the present
ize the relationship
of earning
era will prove no exception.
power to stock prices is to look at
prices for these stocks today as
Higher Plateau
Looking at the price advances compared with prices prevailing
at the end of the war.
Doubles,
which
have
been
officially
and in some cases triples, in prices
granted by OPA during recent
weeks; in a last minute effort to are by no means uncommon, • In
the
meantime
prices for other
saVe its political life, is highly il¬
stocks have remained

luminating.

more or

less

unchanged.
Generally speaking,
During the past week or two,
the big opportunities for capital
for instance, ceiling prices on au¬
appreciation from here on will
tomobiles were
increased
from
probably be found in the back¬
4% to 8%, cast iron boilers 15%,
ward groups, such as the automo¬
cast iron pipe 4%% (making 35%
bile, automobile equipment, met¬
in the last six months), small
als,
railway
equipment, steel,
electrical equipment 9.3%, asbes¬
farm? equipment? oil,
building
tos-cement roofing shingles: 35%,
equipment and other heavy indus¬
mail order prices for rubber -tub¬
try shares.
1?
ing 9%, gears 13%, box springs
16%, portable tubes 12%, wood¬
Still Lagging
working and lumber-making ma¬
Still lagging behind the recov¬
chinery 10%, non-ferrous metals
ery movement are the rails, which
20%. bronze and brass alloy ingots
up to
this time have failed to
15-16%, to say nothing of the
penetrate the February top.
coming increased coal prices.
Question might well be raised
Costs are being established on as to whether this is of
temporary
a
definitely higher plateau and or permanent significance. Wage
most
certainly will be passed levels of railroads are now some
along

the public. Unless the
protects his purchasing

investor

48%

higher and other costs are
higher than before
Freight rates, however,

considerably

which, we submit, can
only be accomplished through an
equity rather than credit position,

the

war.

are

at or below

he will surely find himself a vic¬

proportions can hardly be post¬
poned much longer. With indus¬
trial
activity likely
to mount
sharply following the settlement of
the coal strike, traffic should im¬

tim.
we

In the inflationary era

which

in, the best that can
longer run
purchasing
The long term gainer will

now

are

hoped for over the
is the maintenance of
nower.

be the Government which

off

will

pay

the

tremendously increased
debt in depreciated dollars. Un¬
fortunately,
there
is no other
oractical solution since a capital

rate

increase

1939 levels and

commensurate

materially.
With higher
freight rates inevitable, the con¬
clusion: is that ' sharply higher
prove

gross

andtaet earnings must follow.

A brighter

picture is definitely in

prospect for railroads during the
second half year and it is our

firm

conviction that optimism is justi¬

and quite clever.
In
fied towards selected rail equities.
repudiation and depreci¬
Some of the more attractive issues
uo to about the same

add

terms

power.

Stocks

Despite

■Direct Private Wire*

reached

ket in the post-war era will prove
to be the elimination of excess

Incorporated

has

alarming

thing

Wood, Gundy & Co.

estate

advanced

real estate of doubtful

the end,

•

real

Europe,
South
America,
Near
East, Far East, etc.—the same The
Big Opportunities Remaining
thing is taking place. Travelers

ation

York or Canada

stage than the
again paralyze production, and the stock market. And speaking of
other is a perpendicular price ad¬ real estate, if one is so minded the
vance during coming months re¬ obvious way to participate in what
sulting in a general buyers' strike. is left of the boom would seem to
Of the two possibilities, the latter be to share in the purchase of
would have more disastrous ef¬ large estates for. the purpose of.
capitalizing values through subdi¬
fects marketwise.
visions for relatively small hous¬
World-Wide
ing developments.
Without en¬
What is presently going on in tering into a long dissertation, the
this country is simply the coun¬ point We are making is that goodterpart of a world-wide move¬ grade equities represent better
overall
ment.
protection from many
No matter where one looks- points of view than high-priced

honorable

4^2% Bonds, Due April 1, 1955

throughout

the process now going on is called

preciation is regarded as perfectly

City of Toronto

Prices for real estate

the country, according to Govern¬

money

levy is politically impossible. Re¬
pudiation is unthinkable but de¬

CANADIAN
Government

to¬

1904,

again converged, when Mr. Dob¬

possible cause of in¬
flationary disturbance of the Can¬

of Dominion internal

this

power,

anti-infla¬

Price

Provincial

other.
early

A further

Principal

SECURITIES

baking

provinces

within three years of each
At various times in their

under

tionary weapon.

Company

WHitehall

the
De¬

Power

taylor, deale
&

notable.

Non-Callable

64 Wall Street, New York 5

$18,1945

and

general

was

expansion

1934

the first 13 banks of the world.

Ontario

Electric

rate

TWO WALL STREET

when

Between

ion of Canada however, unlike the

revert to the orthodox

NEW YORK 5, N. Y.

000,000.

Provinces of British Columbia and

sures

INCORPORATED

the Royal Bank of Canada,

came

assets amounted to less than

posits rose from $637,000,000 to
$1,888,000,000, while assets moved
up from $758,000,000 to over $2,000,000,000, - figures which place
the Royal Bank of Canada among

likely

A. E. AMES & CO.

bank's asset figurest In

Mr. Dobson

bank's business

Recent

fundamental

CANADIAN STOCKS

financial

the

his death in May of this year.

com¬

bating inflation during the war,
even
to the extent of foregoing
momentary advantages, the infla¬
tionary dangers today are even
greater..

|IT: (ORPOEATKM*
?

a consequence

Bk., Montreal

(Continued from page 3056)
nificance

Royal Bank of August 1939 levels. Even so, this is
Canada (Montreal). He rose from relatively moderate as compared
with what has already happened
junior clerk to president in 46
elsewhere and it is small wonder
years,
following
in
the
dis¬
that many of our good friends on
tinguished footsteps of the late
Morris W. Wilson, who travelled returning here express amazement
that the dollar still buys as much
the same pathway, and was presi¬
as it does, even recognizing hid¬
dent of the bank from 1934 until
President

treal and Toronto Stock

Prospect for Higher Stock Prices

large

volume of

vs.

the

purchasing

of
.

St.

Real Estate

four-year

rise

the stock market, the advance, as
we

have

pointed out heretofore,

ous

Paul,

and

for

Atlantic
Pacific

Northern

mitments

the

Coast

and

Line,

Southern,

conservative

Atchison,

com¬

Great

thus Northern Preferred^ LoinsvHle':&
with rises in previ¬ Nashville, Southern Pacific, Union i

has been relatively moderate

far compared

for rather large percentage price

appreciation are Baltimore & Ohio,

-similar pull* markets,,

P.-P

'rirr'''

•

.Volume 163

Number 4496

THE COMMERCIAL & FINANCIAL CHRONICLE
certificates should be exceedingly

World Bank Should Finance

3077;

opportunity to float

issue bf

helpful in. overcoming difficulties

its bonds

hertofore

encountered

and thus to relieve'the American

particular

field

to replace the

this

•

which

have

greatly impeded procurement of
urgently needed equipment.

certificates in London

capital. market..
dures will

the

Similar

is (a: 'matter

portance,:

proce¬

probably be possible in

instance

Canada

(Continued from page 3054)
economic

and

recovery

Obviously,

the

World

and have had

Bank

Long-Term

ticism

agement

regarding the. possibilities
floating large issues, of World
in recent months about difficul-'
Bank bonds
have
been
mainly
ties the World Bank will have to

face in

Much has been said and written

of large scale
purchases
badly needed means of trans} portation.

There

;

investors

are three main groups of

them:

2. Automotive
(trucks and busses)
3.

equipment

moved.

Railroad

the

most

Bank

Continental

I major
rest

.of

railroads

job.

was

the

war

made

repair

with

less in

the

Some

tier.

vided by UNRRA

stock

has

ing foreign credits. But the

needs

course,
secure

large-scale
is

in-

efficient

and

railroad

facilities.

low

their

Unless

funds

Would have to rely

able

-keep

They

the avail¬

obsolete

equipment.
Large
would
be
required to

amounts

efficient

workable

and

low

condition,

cost

operations

Would be impossible.

:t.

standards.

prewar

As a matter of fact, the Bank's
loans will have to be serviced and

"repaid

foreign

exchange.

Therefore,

the ' Baiik
will
interested in helping

•^greatly
debtors

that

earn

without

have-

been

foreign

its
ex-

luring

nercial

and

other

invest

addition

which

prevented
introduction.
Yet
4

••

tation, particularly' rolling stock.
These are exceedingly important

^considerations which deserve *spe*
cial exploration/But they should

P be
>

given

full

attention

present context.

the

World Bank bonds until they
much * closer,
to
maturity;

:erm
ire.

Equipment trust certificates is*
:ued by the World Bank would
represent a convenient

v/"

'v'f Certificates.', v.,
Ahighly "fefficieht 80$ -vSUCt

Z fcessM- technique cf librine^

Bank,

as a matter of

"closing the gap" during the
riod when - long-term bonds
maturity
cial

are

appeal

;^/rBquipment^WstcertificaUs
*

;

strong

railroad

borrower.

f Of 'S&f^ty-lhas '*
';;

-protection

|he ^investor with low Cost
bver;a long
■As^

been

va¬

for the

butstari&iilg

-to

commer¬

banks.

ismcf^ifimdamehtal^^reasbii

connection

•

Available

busses

stocks

have

than railroad

suffered

even

and

re^rding^^theii? ability ^o l maice^
large r^aympnts
^accouritsbf>:

equipment from

re*

principal.

quisitioning, destruction -and de¬
terioration.
Very -little has re¬

Railroad Reorganization

railroad

Waterway Equipmeht

mained in the war torn countries
and what is left is in a
very bad

Waterways: (rivers rind Canals)
very important transportation
arteries /in: ^mtany^cottritties
are

even:

Depends

ihore^importahi ithrin rriil^

roads^ndr?mutom6bites^ln^ isoiriri

•

pur¬

of-trucks

Assistance to Domestic
"Manufacturers

for

shape.

Manufacturers

with, loans

chases pf
why :the- principal: features o|
au.tomqtive. equipment
railroad
equipment ; financing may have a shorter maturity than
should not be applied and Ad¬ railroad-equipipentl' triist certif¬
justed to automotive equipment icates. ;; This • would Jiave the ^ef¬
fect: of attracting: stillrother
as well.
There seems to be now
a-definite need for such a step additional sources: of;; itivestmeht ^
funds. On the other hand,
in the foreign
foreign
financing field.
The whole matter is
highly im¬ countries: have ;been lac'custolhed"
to operaterthejir
portant in connection with re¬
;automptive equips
habilitation of transportation sys¬ merit considerably longer thai&is;
tems in general and of railroads being done in this country; This:
in particular.
may be important in pases where
borrowers should ' feel uncertain
to

Availability bf Automotive

the. order

turers,, theinfortunate

books of

effect
to

The

Baiik

manufac¬

could be very
producers
apd
.

will

have

coop¬

erate with the manufacturers and
;he

domestic

to. work

purchasers in order
out
appropriate* order

chedules which will give prefer¬
the most pressing needs.

ence" to

Such
he l

procedure would provide
industry with a more "- even

'low of orders

over

Most of those^ ibadff had been bin-

ing been the equivalent of many
"river and harbor projects" in this
country. >> More became unprofit¬
able with the increasing
competi¬
tion

automobiles.

the .railroads for

to investors.

-'.

The

special significance^ of' fi¬
nancing of transportation equipment ff onf^^ the standpoint ^'W: botht

Cttci ^ts^^ prosppc-^
sec*| ^hci^rhj
liability |ive jborrdrirers is reridiiy:CPpar ent.

Those

ondary roads have been
to

e^mpmerit.prirticulariy-attractive;

for their construction' hav¬

long time
and the losses have been charged
to the Government budgets in one
a

statrimeht to be- issued- by Hxri
Bank 'to

the

effect: that it pro-

pcrses 'tb

another.

way or

much

.issues' for purchases of waterway

prof itable from the beginning, the
reason

^iyb 'pfibrity^ td loans: f<rir
purchase. :;rif transportation

sim¬

till

country

that

ple

default
in

"transfers"

will

debtors
turn

without

are

sufficient

making

particularly

eager not to
this type of loans. This
will greatly
improve the

financial
ment

another

period

Speed

and,

considerable

number

:oreign orders for railroad equip¬
ment

financed

Bank.

This may give the Bank

the

World
an

lines.

Investors will

lower "interest

But

and busses

reorganization

can

required
-

d^aft

doubt

and

highly im¬

-f;

win-

that ^satisfactory

B. L.

CO., INC.
.

COMMON STOCK

solu-

''found; -through

new

80.000 Shares

agree¬

mu¬

cooperation of'all the inter¬

One

incidental, effect

will

popularize

these

probably \ be

internationally the

purchases

per "Bhare

financ¬
o

transportation

equipment.1 Obviously,' "the loans
Of ;the

$3.62

use

equipment trust certificates
means ;of

Price

World -Bank

will

«. ifWWSISM

-satisfy

minor part of tot"l require¬

ments.

necessary

major.-'

iti:-n>bf-rthe

^equipment

-will

still

have to be produced and financed

locallyi

this

connection

;vHtfe-'

Jurie 5," 15^46

2^ Broadway-

^NewiYork^NcY.:-.:

Un-*

itial steps for a successful
opera--

tion of this

be made available

these

ticular-angle.-However, there is
tions\Can

present doubts and

higher

doubt, much time and effort
which

avoid

certainties and to set forth the in¬

portant institution.

attempt will be made even
to start afty discussion-Of this
par¬

tual

such

trunk

would be impossible unless trucks

and no

profitable

ready to accept

rates 'and

issue-prices as: a result
special advantages.
be

of
the
equip¬
certificates involved.

trust

ments

the

rating

;result,;thbse^^ perjificatw^eea^similar Wcquipmeafc^

too far from

there

very

one

leading. For here

truly "mobile"
^transferred"from

are

can

for only

Their-record

period.*

pe¬

equipment' trust
certifj
ieates.: Apparently: there was- no
equip¬
ment (in this country
need to develop special facilities
usually five
years),; the certificates issued in
in this particular;field.
However,:

fact

pledges

and

ing

p hajs cbeende^t^c^i# thi| bbUn*
•

sale i of.

any difficulty -in case of defaults
on
the loan contracts.
The

field of foreign
the

an. appropriate

; /rihases^of?#aiiro^

Combine

means

Term Certificates

Since the. usual rate of
depre¬
ciation is .muchv shorter for auto¬
motive than for railroad

ested-parties.

■

Therefore-,
commercial
banks
nay
be hesitating to buy long

Possibilities for Issuing Shori*^'

precedent for financing purchases
of -automotive: equipment
through

longer
The present situation with an thb
on the other
hand,
foreign rehabilitation •unprecedented scarcity of man¬ equipment arid ."to finance those;,
Where it is most urgent.
power and rolling - stock' offers ■ a: loans
• •
•
through' the issue vof secure
unique opportunity, for getting;
ities similar to equipment trust
Other Countries May Cooperate > rid
of
those unprofitable
rail¬
certificates should go a long
way
In
addition
to
this -country roads regardless of local pressures
to clarify the policies of the Bank,;
Great Britain should be able to and for
concentrating operations

ma*

Com-

years.

usually have not
been investing in maturities be-;yond 10 years.
" '
•
'

purchasers alike.

will make every effort to
its loans by the best avail¬

endeavors

bonds

Contrary to the case of railroad
equipment there seems to be no

to? rail-*;

reason

methods.

facilities

reasons

provide
in¬
"for international trade and tour-, vestors with all possible -prot" ction. ' Highly- intricate
«ist traffic which in turn
legal and
depend
f on modern and efficient trarispor- technical problems are involved

adequate

others

banks

many

Here is a striking
advantage of
equipment trust certificates in the

Change, particularly U. S. dollars.
But this will be virtually impos-. will
sible

equipment

riety.

cost

;©re provided for purchasing roll^ing stock abroad, it will take a
long time to restore railroads to

not

the World Bank

change of the pledged assets, most

impossible

Without

years.

of which will be of the fixed

■

ad¬

-But," as la rule,
these provisions will not guarantee
the
realization
in ^foreign
ex¬

International Trade Depends
on "Adequate Railroad

trade

The World

«ternational

whic.h for legal

;

banks

able

Equipment Trust Certificates
Facilitate Transfer Problems

Resumption

are

There

general

railroad< rolling

Facilities

investors, particularly

-im-.
fa*.

;

ravaged countries back on their
feet arid to make them self
supsporting ; and
prosperous
once

©gain.

they

reasons

perhaps the most imporitant and pressing step to
put war

certificates

much darger

this

obstacles

stock is

for

Evidently,

greatest

less'3 developed arCas ^auch'^as^Hquipment
squipment; are; very busy these
China and other eastern countries.
Reorganizationf of niany rail¬
days ^ fill-dbniestid ppdersHow-'
dqubt that
Therefore,Cehabilitatioii of Water¬
systems --would " be b-hamever, their productive capacity is road
these difficulties will
be over¬
way cqtdpmentis';mdst"-tirgfeht;m
if
automotive
puite large and the time is' hot ■p'ered ^-gireatly
come. The countries that will ap¬
sdchicases.
^lldwever^uchc^ipHr
1looj far- away- when
they again equipment - could • not be ' made ment -is Usually
ply for World Bank loans will do
depreciated over
will be much interested indoreign available in the- near future. ' A
everything possible -to satisfy the
longer periods:and thus: probably
irders. If the World Bank Would great many secohdaryy.^ail¥ba'ds;
requirements of the lender and
would
have
to
.be nfihahced
.eave it to its borrowers
to; com¬ were; built all over "Europe up to through •'long-term bond
the necessary legal changes and
isslies.
pete among themselves and with the First-World War prior to'large
provisions will be made without
Yet the an^le of "mobility of col-*
domestic purchasers for po&itjtms scale- introduction of motor cars
undue delay.
"
lateral; jriight •makefspedal-boad

•

plenishment

commercial

country
hardly known else¬

their

The?World Bank will have' to
be:aware .of the* fact that re-

confined

there

has

are still
desperate and much remains to: be done to
lput railroad
back -■ to ; prewar effiI facilities

riiency,

Bank

take

many

time,

legal

pro-

markets

less trouble

could

over

other

man-

been

and

this

where.

hand

trust

appeal

lumber

the

o n

are

condi¬

The

certificates have been

less

and

remaining
on

trust
or

;

with

s.art

regular-type equip¬
permit.

issues

•

•.

certificates

beenordered by various countries that; succeeded in
negotiat-

vantage of the particular reputa¬
tion gained by equipment trust

been

makeshift

•.

would

explaining the special features of

the

have

materials

;

will

its

badly run down for lack
adequate repairs.
Great and

i more

trust

was

*'stocks

would

would have much

even

destroyed,

efforts

decide

similar to

tions

inade¬

was

obsolete

During

part

would

ment

The

railroads in

Europe

successful

most

partly

countries.)

the

war.
(Of course, the
is true for China and other

same

job

flotations of securities which
as

important

rolling stock of

the

much easier and many

Equipment Is Most

quate and
before the

these

difficulties
might be avoided altogether if the

Rehabilitation of

have, be-;

with

would

Essential
•-.

familiar

with

long-term
equipment

Probably,

Ships and barges for inland

waterways.

and' markets

new-type securities and various'
legal
obstacles - have
been re¬

1. Railroad
rolling stock
I

ser

to the time when

come

concerned

-marketing;its initial-

mrity issues

the

iary arid a supplementary
road operations.

New

Experiment

Bonds

Those who have expressed scep¬

market.

can

hardly make any more de¬
cisive contribution to
postwar re¬
construction than earliest encour-

Automotive r Equip¬

ment Would Be

Have Broader Market Than

broad and regular

Financing

Equipment Trust Certificates

have become very popular among
private and institutional investors

political

stabilization.

In Addition, there is
naturally'a
tremendous need; for trucks: and'busses to perform -services
subsid¬

well.

services of the'sec¬
Evidently;rthis V?

ondary railroads.

i'ii-

;

"HO
3078

\fiX rtx.-.

of the '20s

!$$$■

Boom

Self-

(Continued from first page)
prospects of the next 12 or 18
momns, it is advisable to take
fresh inventory Of the fundamen¬

services far beyond our ability to
match it by current production.

Exit the Hoarding

Propensity

Financing
millions

call

for

developments at home and abroad.

vigorously. Department store sales
register a monthly increase of

20%, in luxuries 25 to 40%, over

Excess Liquidity

"0 It has become common knowl¬ the same months of 1945. This at
edge—-at last—that the some $235 a time when little could be spent
billions of accumulated purchas¬ on new houses or automobiles,
ing power, most of which is dor¬ even on shirts, men's suits or
mant at present (i.e., has a veloci¬ women's nylons, and while in the
ty of circulationequal to zero), meantime prices have not risen
represents &n inflation potential substantially.
These "durables"
of unheard-of magnitude.
These account for 15% only ol the cur¬
"hoards" have risen almost five¬ rent
spending. Total consumer
fold since 1933, and doubled since buying runs, or did so before the
1942, It is less generally realized coal strike, at the annual rate of
that the implied danger is greatly $120 billions, as against the $100
enhanced by the fact that a num¬ billion peak last year, and scarcely
ber of factors militate against the
$60 billions in 1929.
Business ex¬
need to keep liquid.
In the long penditures on
new
plant and
•|run, business units as well as equipment reached in the first
households tend
to
retain
the quarter more than twice the vol¬
more
cash, or its equivalent, the ume of a year ago, in spite of
more
they are in debt, and the strikes, shortages, and OPA hur¬
less they are provided with fu¬ dles.
Between them, the sympto¬
ture claims on cash, such as insur¬ matic increase in consumer pur¬
ance and pensions. Now then, the chases and corporate outlays, plus
surrender value of life insurance gradually rising prices, keep the
policies has more than doubled national income close to the war¬
;

1929,

and

topped

substantial volume of

new

by a
Social

time

annual

$160 billions.
Note
that it is not rising income from

Security, both reaching down to production that does the trick: the
the

lowest levels

of the income F.R.B. manufacturing index lin¬
They are rising continu¬ gers 40% below last year's-.
The
ously (life insurance assets by increase of spending thrives on
about $3 billions annually), as are the utilization of idle liquid means
other forms of insurance, pension -ron <an
accelerated
monetary

ladder.

funds, etc., too.

The mere exist¬ velocity.

The combination of a
mounting demand and an inade¬
iyzator in helping to convert quate supply reflects itself in
money savings into real invest¬ higher prices and in retail inven¬
ments, by making it appear that it tory turnover figures.
is less urgent to maintain one's
They are significant as indica¬
of such claims acts

ence

cash

own

reserves

as a

cata-

than it would

be otherwise.

| As to private debts, their total
volume

has declined since 1930
by some $30 billions.
Consumer
Credit has been compressed to al¬
most

one-half

the

pre-war

amount; so is the farmer's mortgage debt, of which well over $4
billions
been
had
liquidated;
and corporate
urban real
bonded debts
commercial

greatly reduced;
of barely $30

are

loans

billions owed to

banks still are
far behind the $42 billions of the
last boom.
The burden of debts

(other than Federal) is lowered
in addition by the all-around cut
of interest rates.'

# for
::3

mobilization

vast

than in

;

the

doubling

EvenK'allowing
the ^"demand

iifor cash" due to the expectation
of permanently higher prices, we
are

the

conservative

side

estimating that at least the $90
billions put aside

individuals

tthe last three

years — twoby people

irds of them owned

below the $6,000 bracket!—repre¬
sent deferred spending

that might

inflate the demand for goods and

means.

At further ris¬

ing prices, the demand for funds
bound

enhanced

proportion, due to specu¬
lation in inventories and capital

values, etc.
A substantial price
inflation, another 25 to 50% with¬
in a year, should run into "money
shortage" and rising interest rates,
which' should

if. not break
we

are

dampen

the

boom

it altogether—or

told

the

school

still refuses to be¬
inflationary spiral
could progress much longer.
To be sure, the national output
thought that

lieve that the

has

be financed from

the fol¬

lowing sources:
(a) savings out

a,total

of less than $30 billions
one-fourth of the

and 1929,

financial

Small wonder that people spend

based

was

monetary expansion, between 1915

1929, at practically
doubled factory wages and 50%
higher farm product prices) will

play, and of recent

tal factors at

since

Thursday, June 6,1946

THE COMMERCIAL & FINANCIAL CHRONICLE

of current in¬

come;

(b) corporate liquid reserves;

individual holdings of cash,
etc.;
(d) credit expansion by com¬

(c)

—

than

less

liquid holdings of indi¬
viduals!
This time, a financial
super-structure several times that
volume
could
be
erected, that
would permit "full" production on
a wholesale price level, say, 50%
higher than the present one, with¬
out borrowing a single dollar from
the banks,
and without raising
present

interest rates an iota.

It may be

confusing to the financial copy¬
books, but the spectacle of rising
prices coinciding with record low
or decling interest rates is typical
of "controlled" inflations, in peace

billion, which is not likely
misgivings and
is suHioient to support a five bil¬
one

lion

expansion

may

be all that is needed (for

while).
In short,

bank

credit,

the expectation of

credit control to stop the inflation
is

flood

wishful

sheer

recurrent

the

thinking.

small

talk

about "some" rise of interest rates

by
which
inflation
could
be
stopped. The only effective con¬
trol permissible within this proc¬
the

ess

rates:

control

keeping

interest

over

them

down.
Of
course, the process cannot go on
indefinitely.
But it does not end
in an automatic fashion by run¬
ning short of "money," unless
as in war.
prices should run amok. In other
"Controlled" Money—Without
words, in spite of a balanced
Controls
budget, and even with a moderate
surplus, there* are
budgetary
How, then, could the Federal
Reserve'use its paper powers to neither financial nor psychologi¬
stop this process?
Even if it suc¬ cal safeguards present against the
ceeds in freezing the banks out progress of price inflation.
How
of the credit market, it could not far it may go, depends on factors
be
considered
on
another
refuse
to
support the national to
credit.
It has to provide funds to occasion.
^
redeem
maturing bonds at par
.

value, and to loan on outstanding
Federal securities; it could not
Disregarding a deliberate re¬ frustrate the market by prohibi¬
tive discount rates or by defla¬
course to the printing press and
foreign loans to this country, every tionary open market sales. Such
consumer purchase, every acqui¬
actions,
beyond
narrow
limits,
sition of inventories, expansion of would be contrary to fundamental
national policy.
Both the Central
plants, etc., has to draw on these
sources.
Actually, in all experi¬ Bank and the Government have
ence
of cyclical upturns (under announced time and again their
the gold standard, mind you) a intention to maintain the (issue)
bank
credit expansion precedes rates, i. e., not to let them rise.
mercial

to arouse too much

banks.

accompanies the boom; the Fiscal considerations alone are
drain on the basic decisive, but others weigh even
monetary reserves raises interest heavier. Raising the interest bur¬
rates and sooner or later dries up den by a full percent would cost
the Treasury an annual $2.69 bil¬
the capital market.
That, in turn,
and

consequent

Signing of New DutchBelgian Trade Pact
From

The

Hague (Aneta) ad¬
27, the New York
"Journal of Commerce" reported
the following:
"A new trade agreement be¬
tween Belgium and the Nether¬
lands providing for a further Bel¬
gian credit to the Netherlands of
1,500,000,000 Belgian francs has
been signed in Brussels by Bel¬
gian Premier Paul-Henri Spaak
vices

May

and B. P.

Baron Harinxma

Thoe

Slooten, Netherlands Ambassador
to Belgium, it was disclosed here

lions to be covered presumably by over the week-end. v
.
•
A minor
"The agreement, the outcome of
facing now similar more money printing.
rise of the long-term rate, reduc¬ discussions which took place April
limits of expansion?
Wouldn't, in
ogy,
that favorite of "liberal"
other words, an inflationary tide ing or eliminating the premium* 17 and 18, provides for the im¬
economists, has been overcome—
find its natural end by exhaust¬ does not strengthen substantially portation by Holland from the
if such indicators are needed in
the public's demand for bonds (as Belgian - Luxembourg customs
the face of the Stock Exchange ing the bare $900 millions of mem¬
recently when the union of goods worth 327,000,000
ber bank excess reserves?
If so, was shown
boom, the reduced excess reserves
we
may see "somewhat" higher premium on the 2%s fell by 3-odd
guilders and the export by Hol¬
of banks, the bullish inventory
points) while a major rise may land to the union of goods worth
buying by business and reckless prices, but the vicious spiral could cause a
be stopped by control devices of
panic, with the threat to 180,000,000 guilders.
'
luxury spending by the nouveaux
the
entire
overhanging
the Reserve System. All it has to unload
"Among the Dutch goods which
riches, and many pther symptoms.
of
short-terms, to say will be exported under the agree¬
do is to raise the member banks' volume
These are merely the first skir¬
nothing of less drastic embarrass¬ ment are radio and other electric
mishes, so to speak, in the battle legal reserve requirements be* ments.
Collapse of the country's products, sand and gravel, dyes
of inflation. Consumer buying as yond the present 20 and 14%; or
sharp qualitative credit financial structure, based as it is and other chemical products, salt,
well as business expansion will be impose
on Government paper, might be¬
linoleum, furniture, flaxseed, po¬
greatly fostered at the time when rules; resort to the open market come a distinct
possibility.
In tatoes, agricultural and horticul¬
sale of securities; or to raising
heavy goods and semi-durables
the discount rate (which has been other words, the monetary man¬ tural seeds, bulbs, fish and cattle
will be "rolling out" in quantities.
raised recently, in effect, from % agement cannot escape the un¬ aqd^pogs for breeding, purposes
The crucial test of prices has to
happy choice, Tepeatedly pointed
4'Jli rptprn Holland will, receive
6bmb?fin the "boom," When pro- to'1%)'. In5 either case, if proper*'
this writer, between con¬ textiles, window^glass, woodland
ly »»dosed, incorporate
financing
dpqtion gets under ways - : t
*t
should run into an impasse and/or tinuing to finance a vicious infla¬ paper products, reconstruction
>
: 7?vi; •
tion and risking to bring about a
a consumer strike should emerge.
materials, artificial fertilizer and
Limits of Boom Financing
At any rate, the embargo on new pernicious crisis.1
decorative plants.
r
a
How, then, can one finance full funds should seal the doom of
"The total value of the goods to
"Dear
Money"—bringing
the
production, especially at rising
inflation,
provided the
budget medium and long bonds below be exchanged is over 500,000,000
prices?
The near-balanced state
stays substantially balanced—and par—is as much out of the ques¬ guilders, or 8,000,000,000 Belgian
of the budget excludes the pos¬
that the rules of the orthodox gold tion as is the refusal to redeem francs.
^
sibility of new fiat jmoney in standard
"A commission to regulate de¬
Federal bonds. Consequently, not
apply.
large volume. Evidently, a boom
liveries
under
the
even
a
agreement
complete ; "freezing" of
of such magnitude as is in store
"Automatic" Credit Expansion
bank credit is possible. The banks according to circumstances wUl
(with 52 million people already in
must have sufficient leeway in be formed by the three countries
Theoretically, the central bank
gainful employment, against 36 has the
All deliveries, yvill be
powers to stop the expan¬ extending credit so as to avoid involved.
sion of deposits—raising reserve conditions
under
which
they free, although import licenses will
! jU
requirements beyond 26% for cen¬ might have to
liquidate their remain in force.
"The credit advanced under the
tral reserve city banks would call portfolios.
Political forces, too,
for Congressional action—and it militate
against blocking bank agreement is in addition to the
of
500,000,000
Belgian
facilities.
Or
could
the credit
may be trusted with the best of credit
intentions to do so.
But subduing housing program, for one thing, francs already granted Holland.
"Meanwhile, discussions of
the banks is one thing; controlling be stopped at the financial end for
inflation (in a system in which the
benefit
of
a
"doctrinaire" measures to implement the Neth¬
erlands - Belgium - Luxembourg
the money volume
is divorced stabilization? .; And leeways for.
from the gold base) quite another. credit
'expahsibn
the
baiik$ customs union arte continuing in

tions that the depression-psychol¬

breaks the boom.
Are

not

;•

There

are

ample

funds

avail¬ will have
redemption

able without recourse to borrow¬

ing from banks.
of

Government

The $20 billions
bonds,

last

count, in non-financial business
portfolios alone would go a long
way,
representing net liquidity
over

INVESTMENT BANKERS
Members New York Stock
Other

Exchange and
Leading Exchanges

UNDERWRITERS AND DISTRIBUTORS OF
INVESTMENT SECURITIES
-

BROKERS OF BONDS, STOCKS, COMMODITIES

Private Wires

•

Home Office: Atlanta

•

Phone LD-159

and above current liabilities.

Moreover, a public that has piled
up by the end of '45 $21 billions
in currency, $69 billions in de¬
mand and savings deposits, ap¬
proximately $50 billions in shortterm, or redeemable Government
paper, and more since, could ab¬
sorb new corporate securities and
municipal bonds to the tune of
many billions.
If so, the national
income would spurt upward, too,
in turn providing' fresh savings
on which to
draw, and so on in an
inflationary spiral.
It is worth
recalling that the speculative orgy

backflow

swell

will

excess

rand; when
bonds; or

the
the

hoarded

their

reserves.

currency

deposits
(Ev e r y

and
dol¬

deposited provides 80 to

cents of new excess reserves.)

lar

of cir¬
compel
the
sustain the money flow

The Hague, where the council for
the tri-nation economic ufiiori be¬
gan

Gov. Dewey to

"Fed"

might

by additional open market opera¬

tions^ in that case, a moderate in¬
crement to its portfolio, such as
iNote that raising interest

rates

while they are being re¬
duced abroad (to 2J/2% on 21-year
maturities as well as on "old"
consols and Vz% on treasury bills
in England, arid accordingly irt
Canada)
also would have sig*
nificant
international
implica¬
here,

Address

State Chamber, June 6
Gov.

matter of fact, the force

cumstances

sessions yesterday."

Thomas

Dewey

will

speak at the monthly meeting of
the Chamber of Commerce at the
State

of New York on June

While the subject

6.
of the address

announced, it is un¬
derstood that the Governor will
have an important message for
business and industry.
The ad¬
dress will be broadcast by Station
WEAF of the National Broadcast¬
has not been

ing Co.
of

the

Petei? Grimm, President
Chamber,, will, preside at

tions.

the'meeting which will be held
at 65 Liberty Street at 12 o'clock
noon'.

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4496

Volume 163

oi Interest Rate Control
If the Treasury is will¬

increase.

funds. The amounts of such trans¬

3079

—r*

existing controls had been -Im¬ pressure on the commercial banks
curtailment ,of
plemented, because as long as.non- for
speculative
bank
buyersi hold
substantial loans. There is no public record
amounts of bank-eligible securi¬ as to the1 costs to the holders of

(Continued from page 3055)
fers could well reach 3 to 5 bil¬ ing to
add additional costs to ties^ offerings of long-term in¬
to me that
lions per annum or more.
Most these, then perhaps it would be eligible bonds would simply in¬
regardless of whether the Treasof the funds and accounts cur¬ willing to consider the more di¬ crease the rate at which the pub¬
ury used 2Vz% or 2*/4% coupons
rect and effective means of sta¬ lic debt is "monetized." Some nonin such offerings the market yields rently require a rate of interest
of
approximately 2% or more, bilizing long-term rates: namely, bank holders would seize the
would tend to stabilize at higher
whereas the average short-term to permit an increase in the rates opportunity presented in such re¬
prices—namely, around a 2*/4%
in the short-term market.
rate is close to 1%.
funding offerings to sell some of
and 2% yield level.
In attempttheir lower-yielding bank-eligible
Now let us look at the savings
ing to refine this statement I said
issues at a
cumstances it seemed

•

bonds.

mitted higher short-term

rates 1
Treasury
ineligible
issues
should
head
toward a 2% basis.
In doing so,
I was trying to say that I believed
the average point of stabilization
would be closer to 2% than 2xk°Io

now

believed that long-term

-a/

devoted to

One of the services

issues

discussions of Government securi¬

redemption values.

cur,

ficient

Unless,

discount

issues

will

presumably

represent relatively low-premium

purchases^:M other words, most 1
so-called speculative holders

al*

profit and to invest the

Into

expressed the hope that the Treas¬

oc¬

the future interest costs from

ties recently said that the author¬
ities in the Treasury and in the
Federal Reserve Board have suf¬

ury

would

not

issue

additional

obligations

measurably long-term

The third possibility mentioned
that

was

the the

until

both

Board

the

could

Treasury and
exert

further

relatively strong

their total) are in

hands/
a

Incidentally,; we know of

(Continued On page 308^)
,

and sufficient dehalt any upswing

power

termination to

the annual increment of increase

therefore, heavy redemptions

Victory or earlier

the discount

measured, however,

Short-Term

the

drives. The remainder

Long-Term Ineligible

achieved. The annual interest cost

in the

Control Devices

Credit

Treasury

hope that those
outstanding will continue to
us

to the Treasury, on

ei.her

ready have been offered numerous
Bonds
proceeds ' fii the newly ^offered attractive opportunities to reduce
their commitments.
These: came
The
second
possibility men¬ higher-yielding ineligible issues.
tioned
was
that
the" Treasury The bank-eligible issues thus made first through the unexpectedly /
would
be
purchased high premiums attained in the
could refund some of its matur¬ available
largely by the commercial banks post-drive markets*.
More re¬
ing .short-term obligations into
and, in effect, the Treasury simply cently rapidly falling prices and
long-term marketable ineligible would have refunded some bank fear
provided the incentive.
By
bonds. The Chairman of the Fed¬ holdings of shorter issues into now it would seem that the spec¬
eral
ulative
Reserve
Board
last
week slightly longer ones. *
holdings | (regardless of

be held and "that further large
additions in such holdings will be

under the present outlook.

All of

Refunding

that unless the Government per-

"speculative" purchases. Ob¬
a large amount of these
securities were purchased at par
such

viously

....

in prices

comparable to that which
last spring.
This poini
of view is so generally accepted

occurred

to make it worthwhile to

ment

trol devices that
aids

com¬

four of the possible com
to

were

mentioned

■i) '

the

keep

pattern oj.
borrowing within coupon rates of
%% to 21/2%.
as

The first of these

was

the pos¬

sibility

that the Treasury might
initiate a program for the liquida¬
tion

of ineligible securities held
by Government trust funds and
agencies.
If it were engaged in
at a time when the Treasury had

balance

and

cash

obtained

from

securities
>k;

cash

between

then

outgo,
in

the
the

income

funds

the

sale

market

iliiiiiiiin/

''"""''"'III

'JlWtlt'tftti. A
"???}

might

(»)■

"'"niiiiiiii''

lllillmli

these

S'J-Pi;r
•

■

have

to be used to retire out¬
standing maturing issues. If such
a refunding were carried out then
the costs of interest
would

correspondingly

the debt

increase.

Most of the larger trust and agency

accounts

with

require

special

issues

rate of return equal to or

higher than the average computed
rate of interest

time

the debt at the

issuance.

One wonders,
also, if the Treasury could dis¬
regard the income requirements
of the trusts

...........'."""nMumfW

accounts involved.

For example, if bonds bearing a

rate of 21/2%

coupon

the

market

and

sold

were

reinvestment

made in special issues bearing no

OBERT

higher rate thanf 2^, some questions
might
be
raised
as
to

whether

;

such

trusts

should be used
for

■

Treasury

accounts

fik

already

."
si-

tectural

in¬

represented

major

and

service

when

concern

the

trust funds and the methods

em¬

private,

service

national

for

corporate

'S.

•

••

■

and

quarter-master depots.

and

public

The Company at

of textile mills, power plants,

than 150 architects and engineers

project within their

present is supplying architectural

engineering services covering the construction

bleacheries, airports,

office buildings, hospitals, glass works, food proc¬

own

essing plants, newspaper and radio buildings, port

From time to

developments, penal institutions, schools/ labora¬
tories, water filtration and sewage disposal plants.

ments,

from

preliminary

surveys

field headquarters, completely

staffed

who

remain

charge

until

the

job

exists between; the cash in¬
and cash outgo of the Treas¬
ury (exclusive of trust fund net
receipts)
the problem resolves
itself as follows:

work

This

scattered

over

all

of the

fourteen

Southern states—in fact, Robert and Company

ndtv operating in forty states of

finished.

the Union.

ance

come

Net

trust

fund

Another

the

series

companies,

ready

its

Equitable

Securities

Corporation

Equitable, has helped to finance many Southern

featuring Southern developments.

part

supplying

others

with

capital

funds.

receipts would

Jtepresentsiirplus cash" receipts^
the Treasury/' Against these se¬
curities must be

provided.

Gen¬

erally this requires that the Treas¬
ury issue securities to' the funds.
The
total debt is thereby, in¬
creased and the? Treasury stili; has
the funds.
If the: Treasury uses
these funds to retire publicly held
securities
on

then

the

interest

the debt decrease

NASHVILLE

new

ATLAN

M E M R

T A

KNOXVILLE

ORLEANS

H II

Securities Corporation

GREENSBORO

CHATTANOOGA

costs
BROWN LEE

increase

in accordance wi;h the difference

in the average rate on the securi¬

322 UNION

STREET, NASHVILLE 3, TENN.

O/CURREY/

"-R-

president

TWO WALL
f,

>v -V:

ties retired and those issued to the

v o *k

MART FORD

BIRMINGHAM
NEW

//
^'

America's

by engineers from the Company's different depart¬

pitals, air trainihg stations, aircraft assembly plants

land¬

require

take the investments of
trust funds first. Whenever a bal¬
Let

record

scaping; nothing is "farmed out."

ployed in computing the annual
interest cos.s on savings issues.
.

during the war designed military bases, hos-'

time the Company handles jobs of such size as to

two

investments

engineering

organization,

seem

new

cooperation with the Army; and Navy,-the Com-

pany

•

years

do every phase of every

likely to re¬
peat themselves annually? These
ones

and

A staff of

carrying a substantially
lower average rate. This is a non¬
recurring item, but will the Treas¬
ury resort to another item of in¬
debt

industries,

via issues

additional

works.

the

combination of the Victory Drive
and the current debt repayment

creased

establishes

prominence, covering virtually every kind of archi¬

has

the debt in the refunding

operations

!?f.

twenty-nine

creased the average cost of inter¬
est

COMPANY,

instrument

depressing market prices.

The

;

AND

Atlanta in 191 J, has Blade during the past

STREET/ NEW YORK S, N. Y.

3080i

THE COMMERCIAL &

FINANCIAL CHRONICLE

Thursday,-June 6, 1946

'H'.'niJ 1 J'.H".

securities.

The

to make money out. of common stocks is to
that has management, product, capital, to do the
job, and whose stock is undervalued, THEN BUY IT AND WATCH
WHAT IS GOING ON INSIDE THE. COMPANY, NOT NECESSAR¬
ILY IN THE MARKET.;
That's the. job of the security dealer and
way

find the company

Securities Salesman

the salesman who

By JOHN BUTTON
The opposition that salesmen encounter when they offer unlisted
situations to those who have had no experience with over-the..

counter

securities *is

perhaps the greatest obstacle that has to be
dealing: with investors* Professional security buy¬

overcome-when-

making money out of unlisted situations, both
for themselves and their customers.
That's what you buy when you
buy an unlisted security from a securities firm that knows its busi¬
ness, and watches over the investments
it sells to its customers
If this is the kind of

serv¬

investor receives from his dealer and his salesman, then

balance between borrow¬

and

ers

investors

and

between

buyers and sellers.

•

„

are

AFTER THEY HAVE BOUGHT THEM.
ice that

professional groups,, the effect is
essentially wholesome.
It pro¬
vides

Federal Reserve Use
Credit Control?

Will

The fourth

would

possibility mentioned
Federal

the

that,

was

Reserve

fight for more powers to
credit and, if successful,

have long recognized that the unlisted market abounds in oppor¬
tunities for profitable investment. • But the general public has only

which he

recently become

that have merit is the job of the dealer

in situations
in unlisted securities. If he
doesn't make money for his customers, he'll lose them sooner or later.
That's the best guarantee of conscientious, advice that any security

menting on this, and press reports *;
on Chairman Eccles' recent testi-

buyercaa> enjby;:and Torlthis reason; listing, bigness, or any, other

ers

aware of-* the
The constant efforts of

market.

out the

possibilities for investment in that
security salesmen working through-

-country has been: the- motivating,,educational;force which
many! security -buyers; to: reap, a. harvest, of profits out

has enahled

difference

what

does

make

Profits tell

invests?*

the

size

..the companies in

the story—specializing

^^over-the-counter securities during/ the. past .few-years.,

factor is unimportant in the choice of securities.
The investor's
.
broad market most- important decision is whether or not he has selected the right
house with whom to do business.
Confidence in. the salesman, in
exchanges have been; bought prior to their listing by
.^aiert investors, who knew what was going, on, or. could recognize his firm, can't be built; in a day—it-must be earned. From there on
v an
undervalued stock when they saw it".
Many of these stocks sold you can sell your, customer anything, providing he believes in YOU.
originally in.the unlisted markets;at prices far. below where they
(3)
"Can't follow ,the progress of. the security, etc."
This is
I finally; soldi when they. were listed.- These--situations have-been
just a variation of "can't see it in the papers."
Most, security buy¬
brought to the-attention of investors by security dealers and their ers (if they are honest with themselves) will admit that they don't
salesmen, and those, investors who followed this type of sound actually follow what is going on behind the securities they own.
advice have profited handsomely during the time between their
They, don't even read the quarterly reports to any great extent.
| purchase and eventual listing.
Others seldom read the annual statement, or make any serious at¬
§ I Although the professional knows that some of the best oppor¬ tempt at analysis of the figures that are presented to them from
tunities for profitable, and conservative investment as well, are year to year.
The writer has found few individuals who have kept
| available in the- over-the-counter markets, the main objections financial statements from year to year for the purposes of making
voiced by the average investor toward unlisted securities are such comparisons.
This is the general rule—most people are inherently

For example, many, securities that today enjoy- a.

the listed

the following: (1) Can't see the quotations in the
newspaper.
(2): Prefer the big companies such as Steel,: General Motors, etc.
(3) Can't follow the progress of the security because the only way

f I can find out where it is selling is when you tell me.
*

the surface these objections all
appear valid reasons for
a^irejection of over-the-counter securities. But an analysis of what

What everyone wants when they buy securi¬
thing that they want when they go to their doctor.
They want someone in whom they can place their confidence, who
will assume their problems, and do a job for them.
Once you have
demonstrated that you can do this job, YOU HAD BETTER DO THE

lazy about such things.
ties is the

same

WATCHING.

ALL

YOUR

| lies behind them reveals them to be mainly excuses for not buying.
| An~excuse only means that your customer doesn't understand your

ITS—AND HE WON'T

!? proposition.

CUSTOMER

DESIRES

THE

control

would

He isn't turning

down, he only wants to

you

know

OVER-THE-COUNTER,

THE

BOARD,

picture.
analysis

once

have to be bothered with those three
Now let's take these excuses

is really their
(1)

markets, calls for

get your points

credit

some

ysis

based were derived from J
reports of * the weekly re- J
porting member banks in 101
cities and other figures in TreasThe hisury monthly bulletins.
torical averages given are based
on quarterly figures for the years

the quotations in the newspaper."
What actual
difference does that make?
You are as close to your customer, and
he is as close to you, as the
telephone upon your respective desks.
Do you'want to know-what
your securities are worth, call any time,

want to sell any and all of your securities, it can be done
quickly and with no more trouble or bother, whether you own listed
or unlisted securities.
What is it that you want when you buy a

security?
tmenias/

Isn't it, that you want to,make as profitable ah investIf such, opportunitiesme available in an unlisted

possible?

security,

isn't

that

important

than

figures every night in the newspaper?
stock was offered to the
public at 21,
listed °n the stock

exchange and is

being able to see some
The other day an unlisted

several

1944 and 1945.

The

weeks later it

selling at about 39.

was

For

many years this fine company has been well known to the
followers
of the textile
industry, of which many stocks are traded over-the-

which

sub¬

instances

stantial

purchases originally un¬
profit will be

dertaken purely for

itself

guarantee of profits! when you

are

buying

have

been

taken

manent investment.
found

numerous

for per¬

We also have
where

instances

corporate business holders plan to
continue

2%s

their

investments

2V2S

indefinitely.

and

that the prime question

seems

not whether such

holdings

can

is
be

forced

the market at any

given
point but whether it is not better
on

scale

liquidation, that the average

prices, and today's level in
particular, would have been much
higher. As we look ahead over
the next six to eight months, it
appears that the accumulated and
potential demand for these long-

Mary Lee Candies* Inc.
Prospectus
•

;

S5 LIBERTY STREET,

be much larger
potential supply.' An
orderly market requires - an ade¬
quate supply at successive levels.
If large-scale selling could be en¬
gendered, some, of the accumulated
demand could be satisfied—per¬
haps even' more than satisfied.
But with this potential source of
future
supply thus
eliminated,
what assurances would potential
buyers then have with respect to
their
future
requirements? : At
this time the speculative holdings

Go;, Inc.

NEW YORK 5, N, I.

may

the

than

request

Herrick,Waddell

issues

term

Common Stock

certain

>
4

weekly reporting member
as

of the end of 1945.

are

banks

The results I

given in Tables I, II and III.,
we

' \

thought about the various

current

commercial

bank

effect of these
credit

and
too late for truly construc¬

pastime.

importance,

portfolios,

the

Federal Reserve

were

taken to curb it.

No secrecy

surrounded these facts. The recent

emphasis on speculation can be
accurately compared only to lock¬
ing the door to the stable after
the

horse .has

been

stolen

use,

^
.

j,
r

One of these is that in which

the

result

;

considerations in the operation of

the extension of
credit by the commercial banks,
comes
on interest rates, on monetizatiod
tive purposes.
of debt, etc., it occurred to us that
During the war the amount of
the operations of the commercial
speculation in Treasury securities
banking system really
divided
was
undoubtedly excessive.
In
themselves
into
three
separate
certain War Loan drives it as¬
sumed the character of a national operations:
its

assumptions,

and the
attempted breakdown

inaccurate generalization; is given
a stress wholly out of relationship
to

second represents a projection of
these same figures on the basis

(Continued from page 3079)
several

part covers the hisjust mentioned; the

torical period

of the assets and liabilities of the

Bigness

analysis is really in three
One

parts:

UNDER THE

part, this was the
public
education
in
Treasury security markets, which
counter.
The investors who bought this stock
for such bonds to become avail¬ was a
upon the advice of
counterpart to the necessary
I their salesmen didn't make any mistake simply because at the time able over a period of time in the public participation in war financ¬
they made the purchase they couldn't see it quoted in the
natural course of events.
ings. In some additional measure,
papers.
There are literally hundreds of listed stocks
that are selling at prices
Since the close of the Victory it was also the result of compe¬
many times their original, unlisted price.
Those who bought when Drive the normal market supply tition between the various War
they were unlisted have made some tremendous profits.
of long-term Treasury ineligible Finance Committees and groups to
i J2Lu"Prt?er tlle biff companies such as Steel, General Motors, securities has been augmented by meet or to exceed their quotas.
etc.
There is
sales from some of these tempo¬ Then, too,* the character of the
certainly nd; objection to investing in the marketleaders.
Investment accounts whose
principal objective is security rary holders; It seems to me an issues offered and the methods
i
s"ou*d
to the most conservative common stocks, if inescapable conclusion that had employed in the drives many times
hey buy any common stocks at all.
But if you are buying common; this supply not been available to actually invited and encouraged
•u-i£?n Y: y n?t try and select securities that have the greatest the market, and had we not been speculation notwithstanding the
possibilities tor price
appreciation, especially during a bull market. under the threat of possible large-, fact that other steps sometimes
now

see

if you

was

the

Control

* "'

•

The figures on which the anal-

Tlie Problem oi Interest Rate

intel¬

third is

you

interest

debt.

excuses

answers.

"Can't

over

have to contend f

rate and
controls, and managing the.1

exercising

won't
you've heard so often.
apart and see; what they mean, and what
you

purposes
of this ;
to ascertain certain ?

and the Federal

|| Admittedly, selling unlisted securities to investors whose priligent explanations, but

The
was

yardsticks of commercial * bank r
operation with which the Treasury , .

before he makes up his mind.

•mary experience has been in the listed

:
:

com-

which is pertinent, I think ;
would vbe helpful to give you
the highlights of a regent analysis ■'
which We- made of the banking -

TABLE.

ITS

Before;

mony,

PROF¬

CARE WHERE HE GETS THEM—EVEN

them.

use

commercial

acted

banks

temporary

of
large
deposits.

Treasury

The second

have ?

custodians
War Loan I

of these

may be *
operation of a <
savings bank originating in the *
acceptance of time deposits.
The third is the operation of
a commercial bank through the^

said

the

acceptance of demand deposits-'
and consequent functions.
,

I. In acting

temporary custodian of War Loan deposits, dif¬

ferent

banks

have secured

these

deposits with different types of 1
Treasury
securities,, depending '
upon their estimate of the effect
of war expenditures in their ter- •
ritory, the other factors which '
cover the inflow and outflow of ^

fables about burning an old witch

funds, credit needs, etc.
By and ''
large, the bulk of the War Loan ?
deposits have r been secured by >
v
Nor is speculation an animal of short-term securities of approxi- This, ;
only one color. Speculation, when mately one - year or less.
confined within a limited field, is however, was not universal prac- ^
tice, and now that the War Loan '"
a necessary element to the main¬
tenance of orderly, markets.
Pro¬ deposits are being substantially it
fessionals, whose business it is to reduced in order to repay debt,; •
deal in securities; could be said many - banks have had to -adjust
because the clouds refuse to

rain.:*G-

speculate,

afford

give

;

but
so

they

if they

can
are

only 'ihst ^bvernm^nt^ ^(^itiea: iwhlPli's?
suc¬

were

used

security.

some, t

the basic forces instances banks have been forged »
that work in a market.
In the to sell seeurities of longer than r
majority of instances this requires one year in order, to meet Wat1 r
of ; Gdvermftoht^are ia the
purchase
of
securities
in Loan calls. In such eases the calls i
constructive element in the mar¬ Weaknesses
and
their
sale
in have had >to be. anticipated and
ket.
They give assurance of a strength, and thus is a stabilizing the., proceeds,, on occasion!
market supply which, if lacking, market influence.
There is also feeen reinvested in one-year,!;
could cause prices to climb to un¬ another kind, of speculation. Many purities.
It seemed ..to! us^ theae^ ^
desirably high'levels.
"j| of the larger investors ehgage in fore! fhat we migbtiis^; thatv?**^
.'p. •
' V;e
rf v,';$£•/
fsf ■"
.1%
I
'j
it.
I have reference to those in¬ tofar as the- Government portfolio^,
Spj^ulatiau im GoyernmenLi . stances in which. such investors ihd; Treasury . War Loan- depositst^
cessful in judging

.'il'l-IL".,

'I».'

Over-the-Counter Quotation Services

For 33 Years

•

Securities

will withhold purchases from the
,market, more or less in concert,
ment jit.Jhis point about specula* because
they hode • thereby to
...

-I would like to make som^com-

NATIONAL QUOTATION BUREAU, Inc.

i-l;
Chicago

*•'

■

Established 1913

46 Front Street, New York
.

N- Yi
Mi

San Francisco

lion

Government

securities.

This .kind ,of speculation seems, to
have been classed almost as a gray
market.
All speculation is I' not

lie;, concerned, that, the deposits- ^
either

were

ultimately

wilE

have

been secured by maturities,;',

more
advantageous
purr 6fjone year, or less.Consequently,. I
later, either by outguessing we ..decided to. separate. fromAthe?!, j
the market or at the expense of figures of- the weekly reporting, ;,
the borroweK ■ To the degree that member banks both the War Loan ?

make

chases

or harmful.
It speculation in fixed income se¬ deposits -and an equal ambunt of :
pna-yearffor-less maturitids-tois, however, at: times treated with curities Js. .confined;
tq

bad, gray, black

•

Volume 163
wbat

kind

THE COMMERCIAL 8c FINANCIAL CHRONICLE!

Number 4496

distribution

ex-

pares

with the $14 to $18 billions

is|ed in the remaining Govern¬ {oval shown in the banking statis¬
ment portfolio

against the savings
and commercial bank operations.
If you will refer to Table I

tics above.
It

interesting to note, how¬

that the percentage of onewill note from the top tabulation year-or-less maturities in the total
Jhat on an over-all basis the ma¬ portfolio would climb to a higher
turity diversification in the Gov¬ percentage than that which had
ernment

accounts

the

you

weekly

ever,

existed

the

period

two-year

ment

securities

the

over-five-

group

bles I

would

II, you

can see

amount of assets invested in bank¬

difficulties inherent in adopting

ers'

such i measures

per,

system, one finds it difficult in- ;
deed to avoid the conclusion that;
the Chairman of the Federal He- serve Board
may / have / placed; %
bimselfc on phblicfcrecord; as. ad« =#
vocahng .measures which lead to /;
the socialization of the American

acceptances, commercial pa¬
various types of so-called call
loans, etc?
For administrative
purposes, in what classification
would. the one-year maturity of
a term loan be placed?
Or a onethat the year-or-less maturity of a pub¬

allocated
against ihe savings operation and
that the less long securities in this
maturity group be assigned to the
commercial: bank operation.
If
you will now refer back to Ta¬
year

4S>-'

decrease in the amount of over-

licly offered serial note issue? In
terms of actual probable repay¬
ment at maturity can you general¬

banking

our

/
/
:

five-year maturities from Decem¬
banking system#
ber, 1945, to June, 1947, is $7.2
Certainly one must '.hope; that«
billions.
This means that of the ize on when a loan is a one-year
either the testimony of the .Chair¬
ever,
includes holdings of War
,Majorities one year or less-.
-33 to 39%
Where would the
$8.2 billions of such securities al¬ loan or less?
Maturities of one to five years—26 to 33%
man? has
been inaccurately re-;
#
Loan deposits which are becoming
located to the commercial oper¬ necessity
Maturities over five
for increased controls
years
32 to 36%
ported, or that the implications
largely a thing of the past, and
ation, ,$7.2 billions would be "lost"
Table II shows at the top the because banks will probably meas¬
which
appear
unavoidable >ara/4
by moving into the one-to-fivewithout foundation.'" <
"
I ■
maturity distribution after offset¬ ure their portfolio more against
Difficulties of Greater FRB
year group during the 13-months'
From time to time Chairman.
ting War Loan deposits with an their: savings
%
and
commercial
Control/
period.
Thus, by June 30, 1947,
Eccles « has
given < crystal-clear /
equal amount of one-year securi¬ operations than was true in the
the total of over-five-year ma¬
Recently Mr. Riddle and Mr.
ties, and you will note that the earlier period, we. made a similar turities allocated to the
clarity to the fundamental causes^,
commer¬
Reierson of the Bankers Trust Co.
diversification changes to one as projection
excluding
the
War cial operation would be reduced made available an excellent anal¬ of : price inflation problems and :
some of
the basic ..requirements
follows:
>
Loan operation. You will note at
to $1.0 billion.
ysis of the mechanical, practical
the bottom of Table II that the
fpr
a # sound- reconversion
to :.:
Maturities one year or less—____ 1 to 19%
and administrative difficulties in¬
You can also see by referring
peacetime prosperity.Yet, accord- ^
Maturities of one. to five years 35 to 47% amounts of one-year-or-less ma¬
to Tables I or II that between volved in the general suggestions
Maturities over five years—
41 to 53%
turities are close to $8 billion as
ing to the press reports, the sug-v# r ••/
June, 1947, and June, 1948, this offered by advocates of various gestiom for / dealings with #tha
This indicated to us that while of June 30/ 1947, compared with
longer maturity group decreases certificate reserve plans. Any ef¬ problems/-resulting/torn/interest///
a peak of $6 billions in the years
the
weekly
reporting
member
by another $3.4 billions.
In as fective control by the Federal rate controls seem to deal .more>-> /
1944 .and 1945.
banks have been used to,
Further, that the
seeing
over
the
Government
much as only $1.0 billion would Reserve
with symptoms than with causes. <
total of such maturities climbs to
in their portfolio a fairly
large
then he held against the commer¬ portfolios of the commercial banks Effective control
by the Federal,
almost $14 billions during the two
percentage
of
one-year-or-less
cial bank operation, $2.4 billions must be as replete with compli¬
In
Heserve or the /Govefcqmeut oven# /
maturities, that these holdings had years ending June 30, 1949.
as
these proposals and
of this decrease in over-five-year cations
actually been held largely against other words, while the present securities would occur in securi¬ might well require continuous in¬ the*portMos!ofe the/co mmerciaLi
banks might well result in such/*
thfe
demand
Character of their debt repayment operation is tem¬
ties invested
from
savings de¬ creases in the controls until the a <mass.joI red -tape as# to-cause1 £ /
the total of
War Loan liabilities and that in porarily reducing
system
was
rendered the result to be the OPA ot"
posits.
This takes place in the banking
bank-held short-term issues, there
so. far as, their
savings and com¬
relatively short period between completely immobile by the strait- banking.
,
m
''
every
indication that
these
mercial banking operations were is
now
and June, 1948, and leaves jackets of Governmental operating
The Chairman is reported to bey*
concerned, they had held a much holdings will increase to unpreceagainst the savings operations less restrictions.
dentedly large totals in the two
lieve that one effective means of
smaller percentage and amount.
than $5 billions of Government
Several comments seem perti¬
years
ahead.
This situation, in
meeting; the problem would be to
We wanted to see also the dollar
securities over five years.
nent at this point:
combination with existing credit
permit an increase in short-term
amounts of such one-year-or-less
In both Great Britain and Can¬
An
interesting comparison of
control methods, may enable the
interest rates, but that this is im#
maturities which had been held,
systems com¬
banks individually to create re¬ the position of the weekly re¬ ada the banking
practical politically, and undesir-,
both on an over-all basis and after
serves
in accordance with their porting member banks
engaged prise only a'handful of banks, able in that it would increase the ?/;/ .
eliminating those needed to offset
whereas in the United States we
individual needs on a larger scale in accepting savings deposits and
earnings of the commercial banks.'.
War Loan deposits.
If you will than
It is far
that of the mutual savings banks have close (to 15,000.
heretofore.
This has been a generally accepted ?
refer again to Table I you will
With respect to Treasury security simpler to adopt over-all general view and one which I have
sharedty
see that on an over-all basis the
Peak of Bank Long-Term Bond
portfolios may be made by a com¬ operating restrictions where you but I ,am encouraged to believe ;
dollar total, of one-year-or-less
can see the effect
on the entire
Buying Passed
parison of the figures which
that we may have made sufficient, t
maturities during 1944 and 1945
We thought it was also inter¬ have just given and the portfolio banking system by looking at a
progress to enable us to tackle
varied from $14 to $18 billions. If,
of
mutual
savings dozen or less banks than it is when the
esting to find that in spite of distribution
problems
on
more
basic/:
however, you will turn to Table II,
fairly aggressive and widely pub¬ banks as provided in the Treas¬ you have to guess at the effect on grounds.
'
where we excluded from the port¬
licized buying by banks in ma¬ ury bulletin.
The holdings of the 15,000.
folio an amount necessary to se¬
For example, I have been im- *
turities of over five years that the mutual savings banks of Treasury
When one recalls the wording
cure War Loan liabilities, you will
pressed with the progress which ,
dollar totals held had increased securities of over 10 years (not of the Act of Parliament which
has been made in creating an un¬
note that the dollar total ranged
legalized the powers to which the
only $1.8 billions from March, five years) appear as follows:
derstanding of - the problems* of# ^
only from 2/ lOths of one billion
Chairman refers, and adds to this
1944, to the end of December, 1945, 10 to 15 years
31.8%
to around $6 billions.
debt management, the importance ; |
*:
21.1%
Further, that the amount held/on 15 to 20 years
the quite obvious and numerous of interest rates in the inflationOver 20 years..
f^
The holdings in this shortest Dec.
r
23.1
31, 1945 ($151/2 billions) was
mechanical
and
administrative
(Continued on page.3082)
maturity group are of considerable $11 billion less than the peak
.t>j:
Total over 10 years
__-.76.0%
importance because the interest holdings six months earlier.
Perhaps it is worth noting that
rate control methods are employed
Then we were intrigued to find
only four marketable, securities
largely in this area through Fed¬ that
NOTICE OF REDEMPTION
simply through the passage
with a term of 10 years or longer
eral Reserve cooperation with the
of time the $151/2 billion held as
are
generally available, to com¬
Treasury in open market opera¬ of
To the holder, and registered owner* of
December, 1945, would shrink
mercial
banks
regardless
of
tions designed to support the %%
to $8.3 billions by June, 1947, and
whether they accept savings de¬
certificate rate.
It,is these hold¬
to less than $5 billions as early
if I
posits.
Three of these are less
ings of Treasury securities which as
June, 1948.
It seems plain,
than 15 years to call.
Only one
are of the greater importance in
therefore, that unless the Treasury
First Mortgage 4% Gold Bonds, Series A;
may be said to be of a term longer
the so-called monetization of the
offers securities of over 5 years to
due February 1* 1978 . !,;
public debt. Consequently we de¬ ihe commercial banks that their, than 20 years.
5"r
f/- •• '/
H 7v?
•'
cided
to
measure r what
With this backgorund I want to'
might holdings of this maturity group
Pursuant to the provisions of the Indenture, dated first day of February;«
happen to the bank holdings of must continue to
refer back to the fourth possibility,
undergo sharp

reporting

banks

varied

fol-

ending December last.
Since

•

;

over-all

this

basis, how¬

•

such

securities

over

the

namely, that the Federal Reserve
fore, about the necessity of get¬ may seek greater powers and, if
X would like to emphasize that
ting .banks to sell their holdings obtained, would use them. It is
the. figures to which I shall now
of long-term bonds to the public pertinent to tie this possibility
refer do not in any sense con¬
in with the reported testimony of
appears to be an overworked gen¬
stitute- an attempt to prophesy
Marriner Eccles last Thursday be¬
eralization.
what these totals will be. They
We now come to the third phase fore the House Banking and Cur¬
are merely a measure. We had to in
our analysis..
In this we tried rency Committee.
couple of

decreases. The hue and cry, there¬

years.

make several assumptions in

riving at them. One

was

ar¬

that the,

current

debt repayment program
would have been completed prior

tov the

to break

bilities
banks

One

down the assets and lia¬

of
as

the
of

weekly

reporting

this

December,

the

quoted excerpts of
testimony was that "until
adequate control can be ex¬

1945, to some
reflect the
three
major bank¬ ercised over the amount and kind
ing
operations# i.e.,
as
tem¬ of Government securities which
porary
custodian of War Loan the commercial banking system
deposits, as a commercial bank, can hold, it would be inadvisable
and
as
a
savings bank.
We to make available to the market
would not attempt to defend the additional: long-term
securities
exact allocation of the assets and even though they are not eligible

completion of the, fiscal
ending June 30, 1947. Then,
th&t the Treasury working bal¬
ance as of that date
($3y2 .bil¬
lions) would remain .unchanged
for. the two years ending June 30,
19$9,;f that, tlm Treasury would liabilities \ which are shown in for the banks."
continue to refund maturing obli¬ Table III, but we would be greatly
The importance of/this state¬
gations with one-year-or-less ma¬ surprised if a more exact allo¬ ment would not
appear to be the
turities; that there would be no cation produced any materially reference to additional
offerings
year

flow

net

debt

from -nonbank

holders to the commercial banks,
and

that the banks would make
extensions of maturity in their
Government holdings. Under these
no.

assumptions, the-total of one-yearorrless maturities produced un¬
doubtedly is a lower one than the

different results. * In making these
allocations we let the Government

portfolio

eral Reserve Board envisions the

assets

represent
the

the

banks.

residual

When

assigned - these holdings to the
savings bank operation we did so
according to the portfolio distri¬
bution

one-to-five
banking figures may later show years, and over five years, which
unless debt management policies is
given for mutual savings banks
are imaterially altered. ;
/
in the Treasury bulletin. This re¬
The % projected, results on» an quired that we allot to the sav¬
oyer-all basis .will be found at the ings assets $7.3 billions of Gov¬
bottom of Table I. * You' will note ernment securities over five
years,
thalLdue totheshbrtening of? m#- ah4'v ailqt; the;!; remaining
$8.2
turities through the- passage of billions of Such' securities
against
time; that, the banks would
as^

hold

of# June^O;%194Liabeut^$10

billions of one-year securities, and
Ihat thi^iv^obld elihib; fb'$16^ b
lions by June 30, 1949. This com¬

one-year,

dOTiahd;Jdepqsit& r\-X*'/-■
z

long-term marketable securities

but that the Chairman of the Fed¬

necessity for further Governmen¬
tal controls

the operations of

the Government portfolios of the,
commercial

banks.

According to
these press reports (and all seemed
to.,; carry the same story)
the
in mind by referring to powers
comparable to those recently employed
by: Great
Britain ./ and
Canada. This seems to be replete
with serious implications..
powers over

the Gov¬

portfolios ? of

other interesting/ point for con¬ the I American banking system,
templation.
It seems natural to does it follow that they would
assume that the longest Govern¬
also need other controls over the
...

•

The Nashville, Chattanooga & St. Louis Railway,

party of the first part, and. United' States Trust Company of New York;
,

Nashville, Chattanooga & St. Louis Railway has elected to redeem and

...

off, and does hereby call for redemption and payment on August!;
1946, all of the 815,000,000 principal amount, The Nashville, Chat¬

pay

tanooga & St. Louis Railway First Mortgage 4% Gold Bonds, Series A;
both coupon

ing, due

bonds and registered bonds without

coupons, now

outstand¬

the first day of February, 1978, issued under and secured by

the above mentioned Indenture, and that on said
will become and be due and

payable

upon

bonds and

registered bonds without

and of all

coupons

August 1,1946, there

each of said bonds, both

coupon

surrender thereof
for interest maturing after August 1, 1946, the
coupons, upon

principal amount thereof, with a premium of .five percent of such prin¬

cipal'amount, and accrued interest on said principal amount to said ;
date of redemption, at the agency of the Railway, namely, United States
.,

Trust

Company of New York, Trustee under said Indenture, 45 Wall
Street, New York 5, N. Y. Coupon bonds must be accompanied by all
coupons

thereto appertaining maturing after August 1, 1946.

The interest coupons, maturing on

the above-mentioned agency of the
to

August 1,1946, will be payable at
Railway, and those maturing prior

August 1, 1946, will continue to be payable to the respective bearers

of such coupons in.

iii

the usual manner on presentation at the office of the

of the Railway, Room 900, 71 Broadway, New York 6, N. Y..
Proper ownership certificates covering the August 1, 1946, or prior
interest coupons should accompany the coupons when presented for
agency

payment.
Bonds in

fully registered form

coupon

form registered

as to

principal must be accompanied by properly executed instruments oL
assignment and transfer in blank.
From and after
any

August 1,1946,

no,

further interest shall accrue

upon

THE NASHVILLE, CHATTANOOGA & ST. LOUIS RAILWAY

By: W. S. HACKWORTH, President.
Dated: New York* N.

W:k

Y.»;May 28,1946«.>i

PREPAYMENT PRIVILEGE
Holders ands registered' owners of above mentioned The

Nashville;

and after

May 28,1946;obtain payment of the redemption price of said
bondsand interest accrued.tft August! ,1946, uppu sarren^el> of their bbnds.

audthe-August!, 1946, ^niSubsequent.couporia, io the abovotna^ngi^,

■3

of said bonds.

ernmental security,

;

Trustee, party of the second part,-notice is hereby given, that The

Chairman illustrated what he had

v.- given such

j tye /thought >this% produced/ah*:

over

1928, by and between

),'>■

FINANCIAL CHRONICLE

THE COMMERCIAL &

3082
?

lution

The Problem of Interest Rate Control
ary field, and k recognition that
most of the new ingenious reme-

suggested * fail

4ies

cident

rendering of
service are

banking

lien against

provide

the

with

efficient

move

these earnings.

there

are

I have advocated a higher and
unless
more freely fluctuating short-term
bank
credit
expands
under /a
rate structure.
I had in mind the
strongly inflationary environment,
the net operating earnings of the necessity for gaining time to find
commercial -banks may have out¬ adequate and practical solutions
run
the wartime influences and to the interest rate and debt prob¬
lems.
It seems, however, that we
be tending lower.
Under these
cannot avoid facing the fact that
circumstances, and guided by a
continuing interest rate control
proper and aggressive leadership,

that

the Government can lead to
only two probable consequences:
by

I believe that the Administration,

Congress and the people can be
(1)- If we are to maintain the
given to understand that even if
American economy
the annual earnings of ihe bank¬ kind of an
ing System were to expand under which has been outstanding, it is
a

somewhat

higher interest

rate

to maintain a relatively

necessary

the

Government

Portfolio

Classified by .Maturity

....

Banks in

Reporting: Member

101 Cities,

Groups

rates

the

face

must

Date

Amount

Less

Percent

Amount

26.5%

13.7

36.6%

25.6

9.9

14.3

35.3

■;... i4.7

36.9

10.9

27.2

14.3

33.6

14.1

32.7

14.6

33.7

the

na¬

this

also

road toward

tional socialism, and we must ex¬

(personal and
nomic) that go with it.

increase

sequent

defend

in the costs of interest

the pub¬

lic debt, and to defend the posi¬
tion of the American banking sys¬

tem.

the worst,

however, it

a1-

proof that the two

tangible

here

outlined

ternatives

can

avoided, it would appear that
policies and methods aimed to reabandoned

and plans

gradual elimination of
admit that we

controls.

these

controls

rate

enforce ■* interest
should

laid for the

for drastic changes
seems likely that we would end
in the doctrine that it is the func¬
up only with a set of circum¬ tion of Government to control the
stances comparable to that which rates of interest at which it bor¬
already seems to be advocated by rows, but the situation is certainly
the Chairman of the Federal Re¬ sufficiently
dangerous
from
a
Board.

serve

In the face of these alternatives
the burden of proof should rest
not

the shoulders of those who

may

question the

desirability of
continuing the control of interest
rates; it actually rests on the

are

not ready

financial, economical and social
viewpoint to justify some relaxa¬
tion

rigidity of controls.

the

The point at which
must

come

this relaxation
the

short-term

area.

the

In American Labor

con¬

(Continued from first page)

money

pro-Communists have been put on
the

debt

interest

management, and
policies charac¬

rate

33.9

35.6

ill-advised phases.
Additional curbs

14.9

33.1

14.8

14.6

30.1

15.5

32.1

the Treasury Policy of Debt Reduction
by June 30, 1047, and That All Refundings Are Made With
Obligations With a Term of One Year or Less

emphasis

;

the

mone¬

tization of public debt and on our
credit expansion become

future

pressing
the

Maturities of

the long run pays

this

intricate

16.6

37-8

war¬

conflict. To

14.7

34.2

collec¬

time fiscal policies which are cer¬

31.6

32.7

tainly inadequate to the peacetime

30.0

Maturities of

may

is caused by the selfish¬ shadow the employer-union re¬
greed of banks.
15,000 lations.
banks acdng individually cannot
The average American, who in

14.7

Estimated Distribution on the Assumption That

Completed

adoption of such a
make it necessary to
the consequent increases

policy

13.0

give

can

ness

32.8

18.3

advocates

these

adequate assurance, and some

eco¬

monetization of debt and the

36.1

15.4

the

short-

fluctuate.

may

to me unfair, and rather
begs the question to hold that the

15.3

9-30-45

the

seems

15.6

12-31-45

rates

which

Bankers Not to Blame
It

terized by persistent

6-30-45

term

changes

some

within

pect the various OPA's and other
restrictions

3-31-45

and
that

needs

35.9

14.5

•9-30-44

12-31-44

ing controls over banking
credit, we should recognize

tive result which is rooted in

10.3

etc., by adopting further operat¬

be held accountable for

39.1

15.8

at¬

collapse,

Over 5 Years

Amount

36.9%

•

•6-30-44—

tempt to stall inflation,

Maturities of

(Billion dollars)
13.8

3-31-44_

controlled interest rate

1 to 5 Years

Maturities of
1 Year

the continuance of the status quo.

true that the

about

levels

advocate

of those who

shoulders

Maturities of

start to

supply

TABLE I

Distribution

can

Governmental

Unless

indications

tangible

that

from

ing

The Basic Issue
consequences of further increases
I am also encouraged and im¬
In other words, gentlemen, it in the money supply of the coun¬
pressed with the breadth of Sec¬
Only mass psychology can
retary Vinson's approach to the seems to me that the time has try.
determine the velocity with which
problem^ of debt management. finally come to face the basic is¬
this money supply will be used;
My guess is that he would go a sue. At various times I have sug¬
the degree of price inflation which
long way to advance any sound gested that certain moves be made
will result; the scope of its even¬
plan for promoting the national away from the wartime debt poli¬
tual collapse, and the unpredict¬
For example, first I sug¬
welfare in the fields of debt man- cies.
able consequences.
gested an increase in the certifi¬
agement.,
1
(2) If, in order to perpetuate
cate rate to 1%; more recently

also

nevertheless

away

private commercial banking
system.
If we wish to maintain
such a system and attempt simul¬

free

interest

practical, satisfactory solutions:

believe

we
,

control of interest rates by bring¬

taneously to continue ,to control

structure that future losses coin¬

Continued from page 3081)

Thursday, June 6,1946>

JZU.JL:

only

the

demands for

event

that

credit increase.

the

basic

conscious

raiding

the bill for all
warfare, is aware
labor-management

lesser* degree he is
the
"bitter union-

struggle

between

the

alert.

Toward
Agitation

The Public's Complacency
The Ideological

the Com¬
acknowledge in
political trade journals,
is American capitalist society as
But the real enemy, as

munists candidly
their

own

the

public and even of

in¬

whole.

American Federation of Labor and

the Congress of Industrial Organi¬
zations. But he is as yet largely

general

The

disinterest

formed businessmen in the unfold*

smugly in¬ ing ideological war inside the
labor movement is therefore sur¬
fight
strange.
The
future
under way between Communist passingly
and anti-Communist forces within climate of labor-management re¬
ignorant

different

—

and

—

the

fateful

Yet
that lations, we may be certain, will
than the labor-man¬ be more profoundly affected by
or a greater volume of production,
agement tussles on the surface, the outcome of the inner union
6-30-47
10.1
28.6%-.
16.9
47.9%
8.3
23.5%
6-30-48
12.7
36.0
17.7
50.1
4.9
13.9
it seems that we should expect will determine whether American struggle than by any of the great
6-30-49
16.11
45.6
14.6
41.4
4.6
13.0
strikes. The general public, and
will
remain
an
more
freedom and selectivity to trade-unionism
be available to banks and others integrated element of the privater business in particular, cannot af¬
VV".
TABLE II
in their loans and in the rates of enterprise system
or
a
revolu¬ ford a know-nothing neutrality in
Distribution of the Government Portfolio of Reporting Member Banks in 101 Cities
interest paid.'
tionary lever for overthrowing' that struggle. Whatever the rela¬
Classified by Maturity Groups—After Setting Aside Maturities of One Year
tions with organized labor as such,
that system.
or
Less Equal in Amount to the War Loan Deposits Held
f
Ultimately, therefore, if as a
it merits full support in the cur¬
Maturities of
Maturities of
Maturities of
result of price inflation or in¬
1 to 5 Years
Oyer 5 Years
1 Year or Less
rent effort
to rid its house of
The Communist Menace in the
creased production, credit demands
Percent
Amount
Percent
Amount
Amount
Percent
Date—
Communist intruders.
Labor Sector
(Billion dollars)
sharply , expand, then it should
*
*
*
13.7
50.5%
9.9
36.5%
3-31-44
13.0%
American public opinion, ob¬
r
3.5
follow that rates of interest on
51.4 'f
t
11.4
10.3
37.2
14.3,
3.2
6-30-44
John L. Lewis' Departure from V
other than Government securities sessed by an adding-machine view
46.8
14.3
10.9
17.8
5.5
9-30-44
,35.4
"
A. F. of L.
14.6' r n 49.6
2.3
48.1
'.7
14.1
i2-3i-44__.i:::i
will tend to increase. Under these of society, tends to discount the
d .43.2
14.7.
18.6
6.3
13.0
38.2
3-31-45—
of minority, move¬
circumstances we arrive at a point importance
When John L. Lewis bolted the
52.6
16.6
46.7
.2
.7
14.7
6-30-45.
where an increasing number of ments. Because it is numerically A. F. of L. to launch the CIO, he
41.4 ■)
14.8
16.6
42.0
5.9'
14.9
9-30-45
48.2
15.5
14.6
45.1
12-31-45
2.2
6'7
investors may prefer other securi¬ small, the Communist Party seems did one service fox the parent or¬
ffAV
i*
ties to Governments. This prefer* unworthy of serious attention. But ganization. Because virtually all
Estimated Distribution on the Assumption That the Treasury Policy of Debt Reduction
Is Completed by June 30, 1947; That All Refundings Are Made With: Obliga>
ence, under the interlocking char¬ whatever excuse there may be for the unions led by : Communists or
■'p if
tipns With a Term oljdOne Year or Less, and That the Treasury I
acter of
all interest rates
and dismissing the .Communist menace seriously''1 infected with Commu¬
t
f *
Working "Balance Remains at $3,500,000,000
t •>
with a disdainful shrug in other
nism followed the insurgent; mine
credit, is bound to translate itself
Maturities of
Maturities of
Maturities of
into a large supply of Government departments of our national life, leader, it automatically solved the
1 Year or Less
1 to 5 Years
Over 5 Years
?
there is no shred of justification
Amount
Date—
Percent
Amount
Pelcent
securities at that point in the in¬
Amount
Percent
Communist problem for the
7.7
16.9
6-30-47
23.5%
8.3
51.3%
25.2%
complacency in the
labor A. F. of L. A few of the vigor¬
terest rate pattern which is being for
31.5
6-30-48—
10.4
17.7
53.6
4.9
14.9 ^
sector. Here leaders taking their
accorded the maximum Govern¬
6-30-49
13.7
41.7
14.6
ously anti-Red organizations
44.3
4.6
14.0
orders, directly or indirectly, from which joined the CIO stampede,
ment support.
Moscow are already in command
TABLE III
If this pressure point is ade¬
notably David Dubinsky's Inter¬
of significant areas of industry
national Ladies Garment Workers
Dlustrative Breakdown of the Assets and Liabilities of the Weekly Reporting Member
quately supported by the Govern¬
and
engaged in
an
ambitious
Banks to Reflect Three Major Banking Operations
Union, in time returned to the
ment, then it follows that addi¬
As of Dec. 26, 1945*
campaign to dominate far larger A. F. of L. fold. For good or ill,
1 Year or

Amount*

Date—

Less'

Percent---

Over 5 Years

1 to 5 Years

Amount

Percent

Amount

"tBillion dollars)

If the increase

Percent

r,','

cause

occurs

either be¬

further price inflation

the

labor

fight,

movement.

•

„

•'

tional

As Temporary
Loan

War Loan

deposits

Savings

Bank

16.1
Demand

deposits

and

37.6

Interbank deposits

(domestic and foreign)

11.8

Borrowings

1.8

Grand total-—_— 16.1

deposits

9.3

Other liabilities

Total"

5i.g-

Capital

account

4.2

Grand total-

Capital account

55.9

9.6,
.8

Grand Total

10.4

ASSETS

agricultural

and industrial loans
Loans to brokers
and

1 year or less

16.1

7.3

dealers

Real.estate loans
Loans

Real

Other loans

14.1

years

with

3 1

9.6
.g

with

domestic

banks

less

7.3

years

Thereby we would add fuel

A. F. of L. represent the number
one

target.

John

Lewis,

that he has led his United

(net)

$100
.

million

Reserves

Balances with
domestic banks
Other assets (net)

.4
.2

55.8
and

and tactics too well.

therefore

controls it

not

total

seems

ously

head

ourselves

British

10.5

cor-i

that

simultane¬

Philip Mur¬

for a long time a friendly

toward

problems

over

Atlantic City convention of his
own

Government ; because " the

administering ' such
15,000 banks makes

this inevitable.

necessarily"

union,

the

Workers, he was
out

United

Steel

obliged to come

sharply against Communism.

The repercussions

not

of that attitude

shi£," to

pfce

e.uphemism, is(

powerful in sueh New York
locals

City

the Amalgamated Meat

Cutters; the Bakers and

Confec¬

tionery Workers; the Hotel and
Restaurant Workers; the insurgent;
within

faction

Longshoremen's

the

International

Association;

the

Union; and the Waiters,
Waitresses and Bartenders. It is
Painters

strong

though

not dominant

the Actors Equity

American

iii

Association, the

Federation

Musi¬

cians, the American Federation
Radio Artists, and an array

are

being felt in every limb of other locals in the theatre,

the

CIO,

If, as we face these two alterna¬ munists
tives, we can find no adequate so¬ a more

the

that

mean

organization is without its
contingents of Communist borersfrom-within. They do not swing

organizations, "Left-wing leader-

segments

greater degree of socialism than
may be ascribed to the* present

controls
Grand

large

does

This
older

any
strength nationally but do
exert influence in numerous local

neutral in the conflict, is being
of our
public debt. If, to avoid this, we driven inexorably into the antiadopt the Canadian or British Comniunist corner, At the recent
acter

herded into one body,

now

Workers back into the Green pas¬

ray,

largely
the CIO.

the Communists were thus

Mine

If, on the other hand, the pres¬ tures, is the focus of Communist
point in the ihterest rate con¬
hatreds and fears, if only because,
trols is Inadequately supported by
the
Government, then Govern¬ having played on their team for a
ment securities lose their liquid¬ few years, he knows their signals

should realize that

Guaranteeds

2.0

assets

Grand total

nearest

Cash in vault

Federal

Cash in vault

Other

Other securities

Reserve Banks
Balances

to 5 years

Over

8.2

Other securities

Reserves

year

2.1

years

loans

estate

Governments:

Guaranteeds

16.1*

well.

be; multiplied

crisis because of the demand char¬

year or less

of money may

ity; interest rates in general firm,
we face a possible financial

1 g

Over

rounded
totals..

and

Governments:

•Figures

creation of

2.9

banks

Other loans

Grand tdtal—:

in the

2.8

Security loans to others-

respond as to

aided

sure

Commercial,
Governments:

the

to the fires of inflation.

Total

16.1

into

environment in which the velocity
Time

Other liabilities

Total

flow

relationship of in¬
The
Communist
challenge is
terest rates would thus be brought
back to something akin to their directed primarily against the oldstarting pattern, Also we would style, conservative, "reactionary"
have increased the money supply,
unionists. William Green and his

As a

Commercial

Deposits

will

The

market.

LIABILITIES

Custodian of War

funds

areas.

(Billion dollars)

olj

motioii

anti-Com¬ picture and allied fields. That
have been heartened for leadership prevails in the Los
vigorous fight and the Angeles locals of the American
where

the

\*r$'Kr*y\

'■,„

.'V;'

:iim.

••'•V

r-^83

nTHE COMMERCIAL & FINANCIAL CHRONICLE

|63i ;^:Nwinberf4496!
Federation of Teachers, the Build¬
ing Service Employes and a few
others; in the Machinists' local and
Building Service Employes of
Seattle, as well as the Painters of
Cleveland;

.''

held

priority

Com¬
efforts.
The
significance of Communist
domination among organized gov¬
ernment employes is too obvious
to require underlineation.
munist

ratings

labor ^organizing

ism

and

pretended to have

even

found virtue in the private-enter¬

prise

of life.

way

do not constitute a

Communists

majority, or even a large minority,
the rank-and-file

of such unions. In

membership

conflict makes them

able to A.

raids.

F. of

vulner¬

How will this dilemma be met?

virtually every

Not

leadership and

dominant

even those most directly in¬
members: are the volved know the answer; One
inert victims of a dynamic minor¬ highly unfortunate
phase of the
longer needed by Russia and when
American idealism in foreign af¬ ity enjoying the advantages of recent Administration moves /to,
Become Disastrous in the
Communist Strengith Concentrated
fairs became an embarrassment disciplined cohesion and able pro- curb labor is that it plays into
Event of War
Within CIO
Communist leadership. The job— the hands of the more extreme
to Moscow's expansionist program,
We need only think in terms the Line was once more reversed. for
Murray, Green, Lewis the factions, and the Communists in
The overwhelming majority of
Communist strength, however, is of another war crisis, especially if The wartime
conciliation
with great American public — is to dis¬ particular. The Truman Adminis¬
concentrated within the CIO. The the Soviet Union should happen capitalism was denounced. A new lodge that minority. It is a job tration
was
tolerated
by ; the
in
which
the
anti-Communist Communists as
national control, fortunately, is to be tacitly or openly on the instalment of
long as appease¬
ultra-revolutionary
anti-Communist or neutral, but so other side from us, to recognize policy was prescribed. And again union men deserve the conscious ment of Russia seemed official
many of the constituent unions the terrifying implications Of the the left-wing unions fell meekly backing of the whole country.
policy. As the White House and
*
*
sis
are wholly or
the State Department moved away
predominantly left- fact that the American harbors into line. Today they are back to
from appeasement toward a more
wing that they can and do color and shipping* facilities are under an all-out class war basis.
John L. Lewis is "in the Middle" realistic
thumb
of
the politics of the national body. the
pro-Communist
stop-Russia attitude, this
Mt would be a dismal and dan¬
labor leaders like Bridges, Curran
One of the most curious aspects tolerance faded. Today the PartyThey can, in critical moments,
gerous mistake to assume that our
and
of the picture is that John L.
Quill;
the fact
that the
paralyze CIO action when it does
liners are violently anti-Truman.
postwar strike wave is a "Com¬
not correspond with the Party American Communications Asso¬
Lewis, so deeply hated by man¬ The dramatic conditions which
munist
plot."
The
causes
are
ciation follows
the
Communist
Line objectives;
agement, is no less deeply hated forced the Administration to adopt
and they can
manifold
eagerness to main¬
utilize their bargaining power to Party Line on essentials. It was
and feared by the Communists.
a' tougher line on major strikes
tain wartime labor gains, fear of
exact Party .Line
was therefore a political windfall
tribute from Curran who once boasted, at a
unemployment,
insistence upon His re-entry into the American
leaders who, in their hearts, abhor union meeting, that his maritime
for the Communists. Their opposibringing wages into line with ris¬ Federation of, Labor no doubt
union could
"dictate when and
Communism and its works.
tion to Truman is in fact motivated
ing living costs, etc. Many of the signalizes a more vigorous and ef¬
We should not over-simplify the where the Government could ship
by Soviet foreign policy require¬
key strikes, indeed, have been
fective struggle (1) to cut dowa ments, but they are able now to
picture. The CIO includes strin¬ munitions." That power of dicta¬
conducted by the most conserva¬
tion might be a catastrophic real¬
gently
anti-Communist
unions,
disguise this under respectable
tive unions and leaders; witness the strength of the CIO and (2)
labor-union motivations.
among which we may mention the ity in the event of another war.
the coal and railroad strikes, for
to eliminate Communist influences
%
sis
*
Textile
Workers
Union
of
In any case, the internal crisis
instance. Basically the strike wave from the labor movement. For
America; the American News¬
in labor is a fact that should be
derives from conditions which the
The Communist Influence Is
paper Guild; the United Retail,
Murray and his associates the
carefully watched and appraised.
Communists did not and could not
Wholly Disporpontionate to the
Wholesale and Department Store
situation is loaded with dynamite.
America has a gigantic stake in
create.
Size of Party Membership
Employes; the United Steel
the outcome.
Should the Com¬
On the one hand, they are obliged
The
Workers of America; the Utility
policies
prescribed
for
Communists Accentuating Current to
give battle to the Communists, munists succeed in obtaining a
Workers Union of America. It in¬ American Communists and their

With the achievement of

victory,

when American lend-lease was no

the

instance,

—

Strife

Labor

organizations where pro- fellow-travelers by Moscow head¬
quarters may seem, to the naked

cludes

and anti-Communist policies and
domination are shifting and un¬

pensation

who threaten their

policy dis¬

But under the new

Communists

the

are

eye, a matter of little concern to
alert to take the utmost advantage
certain; like the Amalgamated the United States as a whole. At
of this wave. Wherever they have
Clothing
Workers
of
America most, some 75,000 card-holding
headed by Sidney Hillman; the Communists here obey Moscow a voice or a measure of control,
Industrial Union of Marine and directives; perhaps a few hundred the demands are certain to be
Shipbuilding Workers; the United thousand more follow them with¬ stepped up and the chances of

Automobile, Aircraft and Agricul¬

out

tural Implement Workers.

benefit of cards. In
140

nation

millions that would

seem

But the right-wing unions on negligible. Yet {the evidence is
national scale frequently contend overwhelming that the Party Line,
with
intransigent^ left - wing especially as manifest in labor
union activities, affects our na¬
locals. The. Communist-dominated
;

New York local of the Newspaper
Guild is
game

a case in point. By the
taken, there, are left-wing

"internationals

which

local

branches remain under anti-Com¬

tional life where it is most sensi¬

tive to interference. In effect the
Communist influence

through

liberals

The Left Internationals in

the

The most serious problem, for
the labor movement and American

society
by the

whole, is represented
out-and-out Left inter¬

as a

nationals

the

CIO.

These

in¬

clude the American Communica¬
tions Association; Food,

Tobacco,
Agricultural and Allied Workers
df America; International Feder¬
ation ^of
Architects, Engineers,
Chemists and Technicians; United
Office and Professional Workers;
International Longshoremen's and
Warehousemen's Union
(headed
by Harry Bridges); International
Union of Fur and Leather Workers

^headed
>

Ben

Smelter

Workers; International
Woodworkers of America; Marine
Cooks and Stewards Association;
National Maritime Union (headed
by Joseph Curran);
Transport
Workers Union (headed by
Michael Quill); State, County and
Municipal# Workers; United Fedleral Workers of America. This of
course does not exhaust the list,
but it suffices to indicate (the
extent and depth of left-wing pro•

Commtmist penetration.
no

vital to

;

defense, indus¬

tries especially open to sabotage
in time of crisis, figure so ex¬

tensively in the list. From the
days of its forimatioh, the

earliest

Communist International has
Striven

to obtain

the

Fifth

serious

most

So many

dramatic events have

intervened that the national

ory

from

the

epidemic

September,

1939

mem¬

strikes

June,

1941 has been blurred. It needs to
be revived.

During those memor¬
twenty-two months Russia
in-effect allied with Hitler

able
was

The "line"

Germany.

f^r--Com¬

munists in the United States,f:and
over the world,

for that matter all

to denounce the

was

perialist"
Britain

and

any

war

from

other

foothold

the

anti-Nazi

Communists

were

of the Nazi fifth

columns.

American Communists' Early
Obstruction of the War Effort

and

was

are

too, have

labor

to rally

familiar accompaniment of

public sentiment against

the CIO. On the other
are aware

hand, they

that sharpened internal

violence and

political strikes will

be the order of the

day.

sharply
trade

raising the wages and
improving the conditions of his
in

workers. The pro-Communist
uses these objectives

union leader

values, but his real
is to
undermine
the
American system and perpetuate
tactical

strategy

discontent.

and

chaos

comprehend
Communist
union is to think of it as a politi¬
cal instrument of Soviet foreign
best

The

the

way

purposes

of the

policy first, a labor organization
second Hence the growing import¬
ance
of
the
"political strike,"
aimed to accomplish goals with
which management as such has no
concern. Since the debilitation of
.

America's

might

military

primary part of;.the new .Party
Line< political strikes; In indus*
tries related to our military needs
may

be expected.

Mr. Curran's Demonstration

of a

Political Strike
When

the

Maritime

National

Union

staged a one-day work
stoppage in American harbors as
a
demonstration against delay in
withdrawing American troops
from China and Europe, we had
a
clear example of the political

was

strike. It

was

form of pressure

then that the Communist-

the aircraft and munitions indus¬

American forces

tries. It

remains

was

then that the mari¬

—

one

was

—

of the

and still

main ob¬

time unions did their best to block

jectives of the Communist Party

the flow of lend-lease aid to the

and its stooges.

President

denounced

Roosevelt

was

Mr. Curran's union in that in¬

warmbnger^ the stance was using its power to
British were the main target of
promote Moscow's needs in the
Communist
propaganda,
every sphere of foreign relations. It is
American move toward armament one
example of a trend. In fact,
a

and the creation

munitions

industry was opposed and where
possible prevented. /

it is

usually easy to spot a Com¬
union by the
fact that in resolutions and actions
it attacks American

Their

foreign poli¬

Conformity to Moscow's

cies where these come into con¬

Political Interests

flict

called off the attacks

capital¬

If you are

munist-controlled

with

Soviet

of munitions,

the

remains inter¬

policies.
If a
The change did not come when union consistently rails at "Ameri¬
tems
of
the
capitalist world;
There has been no concealment of America was attacked or endan¬ can imperialism," if it presses for
this purpose. Anyone who has gered; that would have : made withdrawal of our forces from
It came when a foreign China, if it stirs up anti-British
studied the history of the Com¬ sense.
munist movement knows that the country, Hitler's erstwhile associate sentiment, if it opposes military
ablest organizers and the largest in plunder, the Soviet Union, was appropriations, if it clamors for
cash resources have always been attacked
andfendangered. The the USA to hand over all atom
assigned to the organizations of Party Line then swung into re¬ secrets to the USSR -r- then it
sailors, longshoremen, communi¬ verse. Communist labor organiza¬ can be safely earmarked as a
cations. workers .and, the like, un¬
tions outdid all others in enforc¬ Fifth Column operating under the
der Red aegis. Industries directly
or, indirectly related to the pro¬ ing the no-strike pledge. They guise of a labor organization.
duction

movement, class war with all its

against the Government, not the
shipping interests. It made sense
dominated
national unions and only for those who were aware
locals pulled paralyzing strikes in that the rapid demobilization of
It

and

control on the waterfronts
and in the communications sys¬

then

ested

na¬

identical with the actions and pur¬
poses

unionist

traditional

The

reduced.

reaching

tions. Though their slogans were
tives

settlement

amicable

position

make it easier for the A. F. of L.

"im¬

prevent

and

reinforcements

Allies.

accident that industries

national

totalitarian

and

Inter- different, the actions and objec¬

Gold),

national Union of Mine, Mill and

It is

con¬

muddled

constitutes

—

Column

magnitude.

CIO

members,

actual

scious fellow-travelers

"sympathizers"

munist control.

whether

—

It is

less safe to assume that

looking for

a career,

your

Bell Telephone Company

may

have exactly what

want—work that's

Wages and working conditions,
good. Associates, friendly. ■ ■ I
Annual vacations with

you

interesting,

Benefit payments.

pay.

Attractive

important and pleasant.

Right

Ask the

openings of many kinds.

Bell

now

many

places

Companies need

young

women to

help meet the
demand for telephone service.

BELL

nearest

Bell

employment office

TelephoneJ

tell

you what opportunities
there are in
your community.

TELEPHONE

SYSTEM

iMwwvcfiwWi'
I»UI

THE COMMERCIAL & FINANCIAL CHRONICLE

1084

buyers of yesterday are the
sellers
of today and
even
short-selling is being indulged

Tomorrow's

in.

Mitrkets

Walter

An account

above

sj:

;Js

ill

the market discounted.

that way

run

the end of the month if you
like red.

Says—

only

secret is how much of this-Mfc

shows nice brilliant colors at

Wliyte

The

secret.

are no

Thursday, June 6,1946

whole, I would

ture to say

the

ven¬

(Continued from page 3057)

that practically all

known

factors

have

thwart business activity and throt¬
tle industrial production.

al¬

people

ready been evaluated by the
But strikes at their worst must
In the past few days the
long-term advance. Here and be viewed as temporary influ¬
==By WALTER WHYTE=
market went up.
Inflation there are stocks which still ences on our industrial progress.
V Bearish outlook of few weeks was again the major subject seem to have some distance Sooner or later the cost of higher
wages and benefits
are
passed
of conversation. The fact that to
go.
I don't believe, how¬
'ago now: replaced by optimalong to the consumer in the form
ism. But despite obvious good that inflation has been with ever, that many of these will of higher prices. 'In' Wall Street
us for the
•*{ signs and
past few years goes go up as far as some people ■there is an old axiom, "Never sell
forecasts, advice is
unrecognized.
I don't know think. In fact, the more I see on Strike News." Investors who
•: io continue > on side! lines.
r

if the balloon will be blown

An
i

elementary knowledge

economics

once

made, it

possible to have

But at least

one

had

some

.Understanding of "why" after
'

bursts.

don't know

take

can

I don't

the event.

"The when"

afterward.

7 Paeans

Today
nothing. All

came

all

this

your

hafd

this

market

blowing the grab and
before

know if

even

now

the

ignore

more'I

of the market

see

bode

too

well

for

recent

buyers.

is the time to

i::J

i -s.

say

because of labor troubles.

the-chances.

pen

♦

As this is

Now what about OPA? To hear

the

Last week

industrials

saw

being written the

tically elementary.

You

ac¬

down

•

ment

thing you buy will go up and
industry as a whole should
profit substantially. Of

99 WALL STREET

where all this

course,

NEW YORK 5, N. Y.

will

come

from

money

all
something
pay

these

else.

SUGAR

increases

But, maybe, it is this

"something

Exports—Imports—Futures

market

For all the

else"

the

that

concerned

with.

Federal1 Home

dealers

Loan

dealer

and

issue, offered at par,
oversubscribed.

The

was

agency,

cartel

Remember

-Pacific Coast

•**

region,

Securities

H. Hentz & Go.

ment:
■

Orders Executed

Members y

Pacific Coast Exchanges
New

York

New

York

Curb

Commodity
,

O hi

ago- Board 'of

7 !New. Orleans
And

»Exchange

Cotton

Exchange
Exchange,
Inc.
Trad;*

Cotton ExchangA-v
Exchanges-

„

./:

N. Y. Cotton

Members

Exchange Bid g.

DETROIT

Private Wires to

Yorfct£ J&Y. 7

Cortland* 7^4150

;.;t

-;ys/

who

leaving

srirvic£ to

Federation

Govern¬

join^th^ National.

Apparel - Associa¬

;His: successor,* according to
advices to the New York "Times,"

the

this

extension

OPA will be followed by

another

LAW

another

and

an¬

are

win

back

the

of free enterprise from

increasingly powerful lobbies

[But

let

take

look

the

ture.
First and foremost is the
old-, fact that taxes have started down¬

trad6

the

should

that

were a

now

was
only a few yea)rs
Federal income taxes

minor influence

corpo¬

ration earning power.
Except for
the years during and immediately

instead of
industrial history

L-O-R-E

But

and

was a

jfact that they will be lower next

much needed reguf
every citizen' a

year,

assure

arid in succeeding

removed the tax

scarce

years,

has

threat from, in¬

to
1

are

reasonable
others

But

level.

who

fear

that

this direction and

a- gradual stif¬
fening of interest, rates would not
be a surprise. Corporations which
have taken advantage of the easy
money
market to refund their
bonds at lower coupon rates, and

there

such

\ a

holiday of reckless price boosts

that

would

spiral

touch

of inflation

off

and

end

vicious

with

Congress will
probably decide to take the mid¬

those which have borrowed money
at rates prevailing during recent!

dle

years,

disastrous

nine

results.

months

OPA

extend

and

course

for

ordering
that
price regulation : be ' lifted
from each commodity as produc¬
tion catches up with- demand.
I
or

year,

not4 make

;much

have

teli you

about ],

demand for goods and
services,'arid *the^eqtially '-huge;
cash savings that are waiting to
buy them,> I am riot talking only
about ; thepent-up - demand for 1
new
homes, f: automobiles, radio
sets, electrical appliances^ house- •
hold furnishings, clothing and the
like, but I would also remind you
of the equally 'large demand fbr
capital goods: new. factories; power plants,.
pent-up

Uapn^ifi£atfo
to

will be the beneficiaries.;

don't

the biggest and brightest star on 7
the industrial horizon—the hiige

price <soiitn)l also te a; temporary
influence.
If be agree that OPA
its purpose wfell during
wartime as art/emergency expedi¬
ent, then its extension with grad-

tions.

rdifference

industry in- the long run.

What-is much more-important

to us, however, is that OPA does
not become a "permanent" instru¬

railroad

equipment, and /so11 on.
MaT 28> will -be /Gol?^ James ; L.
Header, who has been Regional
The^Varir e^traprdiriaryw^r and
mentality/of - the Federal Govemi- tear on * the physical assets;-of' ripr
Deputy Administrator since his;
me'nf. "Along ! this line4.1 have
return fjrom> th#1 Arm
iridustrial facilities.-pluaith^ meed
heard some echoes lately from a
ary. f77?: 7 77
fov^rieyf plan^ ^nd: heavy
\ 7; - S
newspaper column recently writ¬
meritihave biiUt-Hp a:tremendous "
The resignation^ of Mr. Gentner,
ten by bhe -who. is supposed' to;
demand*;^^for''Steel/and^ macriinfery t
^ho ' hks heen^/R6giOftal Adhiin- reflect the
of ^the^ Admin?
that>riiay not be Satisfied for years'
'
Istirator sincAMst;Aug. l^ha's been istratibn. • I quote:
7 ^ I to-come/, // V > ;■ t / ■. / -c;
;'
14<OPA' is the 'only defense that
confirmed ^In^^^^asbihigtbh>v"wM
.

■

PITTSBURGH

GENEVA; SWITZERLAND

Y6rJc Stock Exchange
New York Citrh Exchange*
(Associate)
Chicago Board 'of Trade
/ New

^NEW YOEK 4, N. Y.
CHICAGO

Schwabacher &/Go.

other

ion the fiVe^state" Ne# Ydf

that

see

bright side of the industrial'pic¬

head Served

of the Office 6f PriceAdministra-

ttoh;

executives

statement

the

supply and de¬
beginning to think

word

Gentner Leaves N. Y. OPA '■[ Thus,

1856

Some

of organized labor.

Established

Confess, under; fte

resignation has been an¬

people as.

food, merr
chandise and supplies.
To make dustry, and will go far in off¬
setting higher labor costs.
rationing
work,
price
controls
With taxes continuing to bring
were - essential,
and
they ;did
achieve a high degree of success in a generous supply of cash; arid
With the U./ S. Treasury amply
in
discouraging • hoarding, r and
preventing the cornering of many .supplied with more cash as the
the large oversubscrip¬
commodities.
•
■
* \. result of
tion of the Victory Loan Drivp,
:
Nov^that the war is over, many
action has now been taken to re¬
of our businessmen justly believe
duce the national debt—another
that the overnight lifting of price
constructive sign.
controls would bring a quick rer
The Administration is still com¬
turn to free competitive markets,
because expending production mitted to a policy of low interest
but the end of the war
would drive out the black market rates,
has removed the emergency in
racketeers, and soon restore prices

$68,500,000 April 15, 1946.

The

the

system

Government,

administered

powerful lobbies, ;is
rapidly trying to return control
to big business.
It may be that
individual
Congressmen 1 do not
realize just what they are doing,
but they are heading us straight
for inflation and accepting the
old "Boom and Bust" ideas,/ih?
stead of sticking to the plan of
ironing out the peaks and val¬
leys and trying to keep: us on* a
fairly even keel." End quote.

ago

fair

heavily

nounced of Leo F. Gentner,

influence

ward.

lation

things I outlined

DIgby 4-2727

Now

whole.

tioning

The

issue

economic

teaches us that when ^prices are following the first World War,
regulated, or tampered with, supK never until 1940 did corporate tax
ply will always get out of balance rates ^exceed 19%-r-a rate exactly
with demand, and chaos is usually one-half of the, 38% in effect dur¬
the finale.
ing the present year. ; Tax rates
as they are reduced
will be far
But everyone I talk with seems
from negligible factors, but the
to agree that during the war ra^

debentures

refund rin

can

interests

law of

L-A-W.

dated April 15, 1946;.and ma¬
ture Oct. 15, 1946.
The proceeds
used

the

freedoms

directed

be.5 spelled

are

were

where

ter, if they

Price fixing is bad
by a Govern^

up.

that the

Banks

banks.

long fight to put

our

Maybe thCy are right for
the so-called powerful lobbies Pf
business have got to do a lot bet¬

consolidated debentures of [sudden end of OPA would bring

0.90%

in the hands of the

mand?

Home Loan Bk. Bonds j
Public offering was made on
April
5
last "through
Everett
Smith, Fiscal Agent, of $67,000,000

"It has been

control

fashioned

Offering of Federal

LAMBORN & CO.

looking at OPA

association.

...

sult of the coal miners' wage
lift.
In fact, almost every¬

whether

]

•:'-y:-/>•".4 V

following particularly.

quote:

extension,

Anyone

see

of other

other.

look like

era

economist, and not as a politician,
will agree that price controls in
any form are dangerous—whether
they are intended to keep prices

■

k>\:

legger of the dry
peanut vendor.

■

■k

Note the

black market that makes the boot¬

I know that all the signs are
high and the rails missed it by good ones. Yet I still persist
^ho^rows "hysterical and a hair. It is possible, even in pointing to storm
signals.
imorose in turn.
Both houses
probable, that before you If you followed this columri
; of Congress are full of little
read this the rails will have
regularly you now have sold
men who have thrown
away confirmed
the
industrials!. out all
your long stocks* and
cwHat knowledge of economics All
signs point to it. The rail have a bundle of cash. --My
Cthey once had arid legislate at strike is over. The
wage in¬ advice is to stay that way.
If
;,the behest of pressure groups.
crease granted; to rail workl I'm
wrong, I'll tell you to buy
There is a lot of talk about the
ers will
them back.
But until I
eai^
jaw of sripply and demand, hike in probably lead to a
freight' rates being see the signs in the market
rjnost of which is
repeated as granted. A hike which will
and not in newspapers and
tgospel in customers' rooms as more than make
up any pay? from people's
lips my advice
being the cure all for all our roll boost.
is-to steer clear of the- long
tills. The market, confused by
*
sje
sjs
j
side.
.all these vaporings^ blows hot
*
*
*
The industrial picture is
\
one day and cold the next.
equally optimistic. The dairy
More next Thursday.
stocks should benefit through
£ <",['■■■ •
—Walter Whyte
One day they are going up the raise in milk
prices of lc
[The views expressed in 'this
.to the stratosphere.
Every¬ a quart; cheese, 5c a lb., and article do not necessarily at any
body buys them or is thinking butter, 11c a lb., though latf time Coincide Xoith those of the
Chronicle. They are presented as
: of,
buying them. The next ter, not granted yet, is
exj- those of the author Only,]
day the forecasts are bleak pected
daily. The price of
and gloomy and the objective steel, and
goods made from
|s the sub-cellar. So now the steel, will also go up as a re¬
I

would

you

"Only Prohibition Again."
Per¬
haps OPA is "an" experiment noble
in motive," but it has fostered a

new

make

executives talk,

some

think that these initials stood for

market is dull and what

in effect.

The-White House is occupied by a weak, colorless man

their

sell

that I may

take

are

and

stock back.

Let the other

run.

tivity is generated is on the
According to the Dow advance.
At least that is
^
meaningless. It's politics and
theory, if both averages (rails where the volume is. Techni¬
ij pressure-groups
which rule and industrials) make newcally, this points to more ad¬
ithe roost. 7
highs, the bull market is still vance. In fact, this is pracr
# /Mi;.
*
*
*
learned laws of economics

rule

I have seen this hap¬
time and time again, particu¬
larly since of the first of this
year.
So don't sell America short

fellow

doesn't

now

this

shares, often find that they have
to pay a premium to buy their

this with full knowledge
be wrong and that
zooming cost of living. prices can still go up a zillion
But I do know that what I
points.
the stock market will reflect

tell which way prices would
the

I go.
*

think that

fair idea balloon

of what made markets tick,
i It didn't mean that one could
'

up any more.
I
how much more

to the prices

products."

{

San

Francisco

Monterey

*—

Toletyps NT 1-9Z8 -

Principal Offices

—

Santa

Oakland
Fresno

—

Barbara

Sacramento

■/

regrets,'hyTJi*atil ^A.; Sorter,5;
tiohal7Price ^Admihisti'atOr; 'Who
also u announced

appointment.

Col. ^Header's

nte'p£bpi£*have/dg^
erfub interests

industries

lbbbies,

eaclrSbf,

which is" anxious^to^ittcreas&/the

thdt;
f

«•

■»*

'S •*

opening ;-Up:

aircraft,

^qfabri-;

cated building,, to mehtion a

price of its particular, product, re-

felectrbnics,' plasticspand

feVy,*

jVolume 163 i Number
same' manner

the

automobile

and radio industries did after the

first World War.

-Vr

There are some industrial ex¬
ecutives who actually believe that
labor agitation and price controls
^

will

eclipse

this

13085

4496

bright

signed by the president. Few cor¬
porations listed the names of the'
boards of directors in those days,
and many

not

was

But

future.

Heavy Industry Shows Lag

reports did not give the

address of the executive officeseven

have

Some of you present may be fear¬
ful or doubtful.
But this after¬

since

noon I

come

hidden assets.

Apparel
Drugs and

long way

have

than

word of

encouragement for you.
I do not
believe that America will turn

radical,

that the free enter¬

nor

prise

system
.the window.

will

tossed

many

tthinking businessmen have
imore

the

fact

that

over¬

there

are

part-time capitalists in the
States today, than at any
in our history.
By this I

United
time

The enactment of

influences.

were

say

But

was

management in many
corporations that start¬
ed the ball rolling toward more
complete annual reports.
American

tnean

The more, progressive manage¬
ments of larger corporations saw

own

their

that more of bur citizens
shares in American corpora¬

tions

than

trend

tion of

ever
before, and the
continuing in the direc¬

and

stockhold¬

Do you think for one moment

ers.

that

the

investors

American

stockholder

big

corporations

corporations, and they now num¬
ber around 25
million, are going
to sit idly by and watch the so¬

and smaller investors.

cialization of industry?

holdings

Let

recite

few

Today American

Tel.

statistics.

& Tel.

has

were

holder

day

were

they

This

the
once

around

are

shares.

that

behind the advance in the indus¬

roads for diesel power.

trial
average.
Full-scale oper¬
ations have been delayed by labor

car. builders

109.5

^ Tobacco

14.8

O. P. A. to grant price relief in
the face of substantial cost in¬

production during; the war years
plus the need to modernize equip¬

Heavy electrical equip¬
ment, however, has now-been sus-i
pended from price fixing, and
price relief is expected in other

ment to meet intense

Average Increase

58.7%

Dow-Jones Industrial

Stock Average:
> V-J

Day—
164.38
April 30
-w—206.77
Increase

flncluded
Brief

comment

pects

leading
groups follows:

Aircraft

25.8%

the

heavy

pros¬

industry

Manufacturing.
The
military business

extent of future
as

major

source

revenue

de¬

pends on Congressional appropri¬
ations, but substantial orders have

the

creases.

lines.

Producers' Goods.

extended

period

prosperity seems in store for
ufacturers

heavy

ers, a gain of 140%
General Electric
is

240,000

holders,

will

1929.

third

with

385%.

that these
and should

say

since

You

the

are

"big

three,"
have scored
large gains, but what about the
others? The gains are even greater

;

over

100%, totaling

than 4 million stockholders,

they

knew

final

figures would

new

stock

companies

list

companies

that

privately

added

past

ten

and

to the

North

were

have

public.

American

the

years,

previously

owned,

their shares
sider

the

sold

Aviation

now has 30,000 stockhold¬
compared with none in 1929.

hows about

with

Bendix

Aviation

25,000 stockholders,
in

none

1929?

will

against
take

not

your time citing further examples.
Back in 1929 it was estimated
that there were at least 12 million

security holders, barring duplica¬
tions and not including investors
In U. S. Government bonds.

The

number today can safely be placed
at around 25 million individual

holders who have
free

stake

in the

enterprise system. And they

represent almost the

same

num¬

ber of families, or around 75 mil¬
lion persons figuring three adults
each—more than half of

our

popu¬

lation of 130 million,

p Isn't
most

great
than

Oil

significant also, that
corporations have a

our

many

employees.

stockholders

Take Standard

New

Jersey, for example
with 160,000 stockholders, as com¬
pared with 106,000 employees. In¬
cidentally, back in 1912 when the
Standard
Esso

Oil

had

holders.

nual

"trust"

was busted,
6,000 stock¬
Many similar instances

Would be cited.

management was re¬
miss during the past two decades

in its labor

relations, and permit¬
organized labor to take over
the loyality
and domination of
their employees. But many of our
corporations have done an inspir¬
ing job in their stockholder rela¬
The tremendous increase in

particularly those who are thrifty
enough to
save
money
above
emergency
needs,
have
shown
in

increasing numbers

in free enterprise

by buying the
shares of American corporations.
*

Some

you

v;v-\

will

recall

"index-card" form of annual

port that
ago,

was

featuring

ance

sheet

count

was

the

what

show

days
merely

document

show

Alert executives

their annual

recognize that
reports are no longer

read

by a handful of bankers,
large
investors
and
financial
analysts. Where practically all of

common

with

income

all

manufacturing, production has
hampered by labor troubles,
price difficulties and parts short¬
been

Earnings will be depressed

ages.

for the first half of this year, but
the outlook for the remainder is

considerably brighter.
third

advance

price of passenger

The recent

4%-8%

the

ations in 1947 should reach

annual

reports
were
once
college-trained
and
long experienced financiers, now

and

with

not

too

background in finance
ing.
••
•
/

much

account¬

■

simplifications, and in some
cases in
typographical perfection.
These brochures
to read

are

made

peacetime

high,

cars

with

new

combined

and truck , production
reaching, Xj-lVs' 'millions annually
passenger

•

Today the annual reports of
many
of America's progressive
corporations are going to extreme

easy

for

severai

years* compared

with

the «reviohs peak of 5.6 millions

huge and probably will take

sev¬

eral years to satisfy. It seems
log¬
ical to expect that this
group will
fare better marketwise than the

Auto Parts.

1946

In the first quarter

this industry operated at

depressed levels, the result of la¬
bor strife, shortages of materials
and
inflexible
price
controls.
Many of the adverse factors have

the message of business across to
the small stockholder.
Their let¬

should

ters

so, their actions at an¬
meetings of the corporation
say so, and their purchases of the
products and services of their
companies say so.
say

nual

been

corrected, and the situation

improve markedly.
Most
original equipment parts for pas¬
senger cars and trucks have been
released from price controls, and
the method of

relief

applying.for price
replacement parts has

been liberalized.

ductivity

should begin to be felt. The longterm outlook is excellent, with

Formed in New York
FormationAnderson
& Co., 40 Exchange
Place, New
York, is announced. The new firm
successor

pany,
1936.

to S. H.

originally
Partners

Junger Com¬
established
in
the

firm

are

S. H.

Junger, George T. Anderson
and Robert S.
Junger, at present
on active duty in Korea With the
U. S. Army Air Forces.
Mr, Anderson
manager

was for ten years
of the New York trading
of Dean, Witter & Co.,

re¬

this year.

May 1st of

The firm will conduct a
general
over-the-counter business, main¬

tain

increasing,

the economies of large-scale pro¬
duction
and
improved methods

Junger, Anderson Is

With labor pro¬

gradually

earnings expected to be at record
highs once automobile production
is in full swing.
Building. This group is favored
by a vast accumulated demand of
years.
Until the housing
shortage is eased, all building ac¬
tivity is under the j urisdiction of
the Civilian Production Adminis¬
many

Steel.

Settlement

cars

the

raiU

strike last Saturday .came too late.
save the steel industry from

put this- week is scheduled at
43.6% of capacity, comparing with
49.2% last week, 67.7% a month
and 91% a year ago. How¬
termination of the coal strike

ago,
ever,

makers of radios and small elec¬

should

trical

covery in production comparable
to the one following settlement of

appliances;
have

cerns

many

entered

the

con¬

latter

demand

for tractors, from
industry normally de~
rives half its dollar sales, is esti¬
mated at 300,000 machines annu¬
ally for several years. Increased
ment

farm

the

mechanization and resump¬
of rural electrification, to¬

tion

gether

with heavy foreign sales,
constructive factors, and the
long-term outlook is distinctly fa¬
are

vorable.

business

war

erably

witness

are

reduced

causing consid¬

fast

another

re^

the steel strike in February, at
which time steel prices were ad¬
vanced

16%

average

of $5

per

ton,

than sufficient to offset the

increase then granted.

wage

It is believed that a further rise
in steel prices will be; asked for
and received to compensate for
prospective increases in coal, iron
ore
and
other
costs,
including
higher freight rates. The pent-up
demand for, steel, greatly exceed!?
ing the available supply, is said to

sufficient to force near-capgM

city production for at least three
While earnings for the first
half of this year owing to strikes

years.

and

unsatisfactory; price-cost ra-i

tios will be disappointing,
celerated rate of profits

ac¬

begin¬
ning in the third quarter is indi¬
cated.
' 4v
■

v>'

•..

•.

•

The Importance of Selectivity
While

Machinery, Industrial.
Strikes
plants of both manufacturers
and suppliers added to absence of
in

the

foregoing comments

stocks of companies in durable

goods

manufacture

whole

favorable, they

are

the

are not!#
recommendation of pur¬

blanket

this

chase for every company in each

year,

and first quarter dividends

were

deferred by several compa¬
With improvement in the

industry. : - Some industries
un¬
doubtedly will do better than

nies.

sales

far

suppjy of materials and parts,

pro¬

others, and
are

even in these there
individual companies that will

duction

should

exceed the

and with

less ably managed and of inferior
financial strength.. Too much em¬

expand rapidly,
large backlog of orders
period of prolonged activity is

prospect reaching record peace¬
in which foreign re¬

time levels,

in 1929.

popular magazines, and
are
profusely illustrated in color
with graphic charts and dramatic
photographs.
And this improved
variety of annual report is getting
as

habilitation needs will be

factor.

portant

manufacturers

im¬

Machine tool outlook

tion.

is fa¬

with' competition from
Government-owned
surplus
far
less than anticipated.
vorable,

Fabrication.

Metal

sulting

Strikes

restricted

re¬

production

and
delays
in granting ceiling
price adjustment to offset cost in¬
creases

tailed
but

have

far this year cur¬

earnings

with

handicaps

the

below

last
of

removal

the favorable

year,

these

demand

outlook and lower tax rate should

bring

about

greatly .improved

earnings later in the year, with
prospective better market action
for selected

stocks.

full-scale

capacity.

assure

several years

operation

performance of others

be placed on the
exercising discriminating

cannot

need of

selectivity.
Conclusion

Stocks

companies

the

heavy industries have lagged be¬
hind

those

consumers'

goods,

these manufacturers having been
handicapped since V-J Day by re¬
conversion problems, strikes, ma¬
terial shortages, and price ceil¬
ings. Solutions of these problems
are beginning to appear* With the
coal strike settled
(which seems
likely as we go to press) and la¬
bor abuses
future

doubt minimized in

stocks

legislation;
selected
among
these
companies

should

reflect

their

fundamental

strength and imorovei earnings
prospects by commensurate mar¬
ket

action.

New York Stock

Office Equipment. A feature of
this
industry is the enormous
backlog of unfilled orders, esti¬
mated

phasis

machinery

heavily in the
E. P. T. bracket they will benefit
this year from that tax's elimina¬
were

of
increased

Against this is the fact

its primary goal the construction

that wages, which have increased
about 30% during the war, repre¬

of 2,700,000 houses for veterans by
the end of 1947, so that capacity

Exchange
Weekly Firm Changes
The New York Stock

Exchange

Jhas announced the following firm
changes;
Andrew

Reid

and

Roy

costs, and production has been im¬

tration, which has announced

operations for the industry appear
assured, barring labor and mate¬
rial
difficulties.
Price increases

have, recently been granted in
number

retail

department
and
profit and loss statement, specialize in real estate, public
a couple of sentences written
by utility, railroad, industrial, chain
the company's legal counsel and store and post office securities.

virtually

cation

readers

joining Mr. Junger

ac¬

As with

the average stockholder is a per¬
son of small
means, limited edu¬

the

decade

Automobiles.

29,869 domestic freight
43,903 for export.

another cut in operations, and out¬

which

provides a
stimulus and, coupled with the
operating economies of largerscale production, should permit
widening of profit margins. While
1946 sales are not expected
to
reach
earlier
predictions, oper¬

v'pj department

condensed bal¬

in¬

creases.

the

the an¬
a "mat-

that the independent auditors had
certified the final figures.

ted

their faith

report

advance

those

than

less

P Perhaps

tions.

ter-of-record"

Con¬

which
ers,

yearend.

costs and tend to offset wage

for
and

these products from public utili¬
ties
and
industrial concerns is

—

because

of May 1 orders were reported

masses

statement,

competition

other methods of travel.

man¬

electrical

of the people are becoming stock¬
holders—direct investors in the

compared with 2 million in 1929.
But there have been hundreds

the

from

equipment since the demand for

abbreviated

is second with
425,000 stockhold¬

mean

due to replacement demand* re¬
sulting from virtual suspension of;

conditions and the failure

60.4

tions is well

stockholders,

Passenger

have bright prospects

25.1

precentage-wise
with
smaller
companies.
The average gain for
only fifty of the larger corpora¬

680,000

foreign

Sugar

been received for new transport
fields
(130 radio manufacturers
equipment from domestic and for¬ now
against a pre-war figure of
eign airlines, and there is an esti¬ 57)
that after brief prosperity
free enterprise system.
mated demand of 40,000 private
competition will probably force
It is agreed that back in 1915 planes this year.
Although pro¬ lower prices.
a condensed balance sheet at the
duction this year will be sharply
Machinery, Agricultural. These
year-end was sufficient to serve under wartime levels, sales to the
have
the needs of bankers and large military, commercial and private stocks
lagged- behind the
institutional investors who
you plane markets are expected to be market, reflecting current adverse
factors. With the recent O. P. A.
can bet—kept in pretty close con¬
well over the pre-war level.
De¬
increase of 10% in the manufac¬
tact throughout the year with the velopment
of
new
production
turer's net realized price, profit
corporations in which they were techniques as well as tax relief
financially interested.
All that afforded by the elimination of the margins should widen with ex¬
these, financiers required was an E. P. T. should result in reduced panded operations. The replace¬

than

compared with 470,000 in 1929, an
increase of 45%. General Motors

also

stock¬
100 shares, to¬

average

and

Textiles

passing into the hands of smaller
Where the

domestic

129.7

Pictures

Retail Trade

lists

It meant that the

from

mand

ing profit^/mhrgins. With all fac-~ railroads and suspension of vir¬
tors pointing to a prolonged build¬
tually all price controls presage
ing boom, companies in this in¬ excellent profits later this yea£
dustry face several prosperous for this industry. In the locomo¬
years.
''
tive division there is heavy de-*
Electrical Equipment Electrical mand both from abroad for steam
equipment shares have been far equipment
and
from
domestic

96.2

Motion

expanding
by leaps and bounds. They noted
also that the average number of
shares held by stockholders was
dropping from year to year. What
did this mean?

39.3

Liquor

lightened

46.7

Leather

en¬

Cosmetics-..- 70.4

Household Products

sky laws, the increas¬

stringent requirements for
listing on the stock exchanges,
and finally the enactment of the
happy

48.7%

Foods: Baking & Milling 39.2
Meat Packing—
24.3

ingly

SEC

g.'It is truly amazing how
looked

out

let-the-buyer-beware
closed corporations and

blue

state

steady improvement with widen¬

Consumers' Goods:

those

days

the envelope.

(Continued from page 3059)

expected.
in» the first

price

materials, with more
Production,

restricted

quarter by labor and

difficulties,

should

show

sent

50%

of total manufacturing

Neil

retired

from

partnership in

Wm. C. Roney & Co., Detroit, as

of May 22nd.
peded by raw material shortages
Milton
A. -Holmes
withdrew
resulting from strikes in supply¬
ing
industries.
Higher
costs from
partnership
in
Jesup
&
should be offset by price ceiling
Lamont,
New
York
City,
on
increases and economies of large
June 1st.
'
•
J"
I
scale operation, and most shares
Newcombe
C. -Baker
retired
are far from discounting
prospec¬
tive earnings improvement fully,:
from LairdsBissell & Meeds,.New
.

Railroad Equipment

Large de^

York

May 31st. "1 *'

MMHUZ,

3086

THE COMMERCIAL & FINANCIAL CHRONICLE

Thursday, June 6, 1946
*

collect taxes, but those taxes are

Our Free

'M'M

(Continued from

;

Capitalistic Economy

3057)
the survival of a particular sys¬
tem for carrying on the business
of
a
country.
Our very free¬
doms

stake.

are

page

Unless

our

in mind,

economy

clear to me that
earliest

it seems

should at the

adopt
measures designed (1) to take full
advantage of its natural lusty
vitality, and (2) to moderate its
tendency toward wide fluctua¬

all

possible

moment

history?1 deceives us, we cannot
a free society unless we
maintain
a
free economy with tions in market demand and in¬
free enterprise.
What happened come. Let us analyze the reasons
in the last two decades in Italy, for the natural dynamism of our
maintain

Germany and Spain gives proof of
assertion.

that

first

took

over

was

dynamism in an
economy
is
largely
dependent
upon the extent to which the po¬

the first step; and that

first

step forced a succession of
measures which quickly deprived
all
to

tentialities of its citizens for hard
work

and

straight thinking
the
degree

are

people of these countries of realized—upon

This had
happen because economic free¬
their civil liberties;
civil

and

dom

maintain

freedoms
free

are

that

the fact

view of

In
are

liberties

economy,

maintain

will, it

cynical, may I suggest that it is
quite a problem to get people to
work hard and to engage in tough
thinking.
Some people work for
work's sake, but they are few in
number, and almost no one un¬

our

seems

be well advised to inform
ourselves as to (1) what makes a
free economy tick, and (2) what
to me,

changes

may

effective

be made for its
functioning.
For

I proceed,

I think it is par¬
ticularly vital that sales execu¬
tives acquire such knowledge.
On

overall basis

task

arduous

That has not been

States.

ter

chance.

contributed

the

fundamental

But

it.

mat¬

circum¬

Many

have

stances

can,

the

dertakes

thinking except in great extrem¬
ity.
But we have worked hard
and have engaged in much crea¬
tive
thinking in these
United

that will become obvious

reasons

utilized.

are

At the risk of seeming somewhat

traditional

our

must

resourcefulness

and

Sia¬

which their natural inventiveness

twins.

mese

insta¬

its

The degree of

the

for

also

bility.

the control of business.

That

and

economy

these

government

the

countries

each of

toward
reason

the
take comfort in the facti for
dynamism
which
has
that more of our people have en-' characterized our economy is the
joyed more in the way of mate- predominant role played by pri¬
rial welfare and opportunity than vate enterprise.
Ninety per cent
have
the > people in any
other of our enterprise is carried on
(Country in the world, hut we must by private individuals and con¬
not forget that too many of our cerns.
course,

•

people have had too little in the
way of both Security and oppor¬
tunity.
Rather than dwell too
long on a recital "of past accom¬
plishments, We must, I believe,

^11/
at the

Nothing is more
than

John Stuart

-&V'-

'fft

'lift

ift

100 years

ago

would

cite

these

the

most

important: (1) Private enterprise
can go broke*
That is an advan¬
perils facing mankind as a result tage of inestimable value because
of "leaving great questions do be no one wants to go broke.
To
fought
out
between
ignorant avoid it men must think hard and
change on one hand, and ignorant work hard, and must constantly
opposition
to
change
oil the be alert. (2) Private enterprise
other."
In the decade of destiny has much more freedom in offer¬
which lies ahead, gentlemen};there
ing incentives to both manage¬
is no place for either*" igborant ment and men for working hard
chancre or ignorant opposition to and
thinking
hard.
In
other
change.
words, under private enterprise
p-As
a
background which will the penalties for inefficiency are
bring into clearer focus certain harsher and the rewards for com¬
recommendations
for
As a conse¬
changes petence greater.
.leading to the better functioning quence, ther pressures that make
for dynamism are immeasurably
v of
our
free
economy—changes
Which I shall suggest in & mo¬ stronger than they are in public
ment—I would like to make two enterprise.
observations on the operation of
Parenthetically,
of
all
our

Mi^m^The^gO^ to

our economy.

peacetime

incentives,

none

has

century one major invention after

proved so potent in enlisting the
ingenuity of millions in search of
new
products and services, for
which customers will part with
their dollars, as the profit motive
No other has been so successful

mother—the

Our

(

Economy

Dynamic

and

Unstable
iff

First,

has

if conomy.

the

been a

dynamic

Since the turn of the

telephone, the radio,

automobile, and the airplane
come with dizzy swiftness.

velopment
of mass, production
techniques and of modem mer¬
chandising.
We have seen the
more

that

the

than

our

average

family

double, With the result

America

Second, it has been
with

ft
W:„

which

Planning

for

into which

area

government should

move quickly
great
vigor—namely,
planning for competition.
Too often in the past business and 1
labor, as well as government, have j
directed
their
planning against'
competition by price maintenance
money, they often defer purchas¬ schemes, freezing of trade prac¬
tices, and by similar measures.
ing.
•
We
need
realistic
policies for
And expenditures by business
dealing With monopolistic prac¬
are
even
more
postponable than
tices, for extending the area of
expe ndi tu r es by individuals.
effective
competition,
and
for
Modern competition requires that
promoting stability in ways that
a constantly increasing volume of
will supplement competition and
business spending go into capital,
not restrain or extinguish it.
goods—into buildings, industrial
Of great importance at the mo¬
machinery, office and store equip¬
ment,
and
into
inventories^-to ment, from the standpoint of gov¬
ernment action, is the promotion
make
possible low-cost produc¬

tion and to provide the values and
services which the buyer expects.

with

and

that

new

should

stacles

which

establishment of

dividuals and business firms find

the

their

Government

into the stream of ex¬

way

But businessmen can
afford to increase their holdings
of these capital goods only when
the actual or anticipated volume
of consumption demand promises
a reasonable profit on the added
investment. Therefore, these pur¬

penditures.

chases

postponable; and, when
profit prospects are dreary, they
often are postponed even though
ample cash reserves are avail¬
are

Advertising Promotes Stability
Once there is understanding on

the part of economists and busi¬
nessmen
of the fact that if we

growth

Our

remove

interfere

Only through such capital invest¬
can the savings of both in¬

ments

business.

and small

governments

with

ob¬
the

business and

new

small

business.

also

should

afford

positive help to the small busi¬
nessmen in overcoming their spe¬
cial
handicaps.
One
of these

handicaps is the lack of oppor¬
tunity to secure equity capital
(except at high cost) even after
they have given proof of capable
management.
♦
Another
Federal

responsibility

Government

the

that

promoting international private
trading.
That
is
a
difficult
assignment today because the war
accelerated the tendency toward
making
international
trade
a
state function.
Our government

is taking the lead in trying to
stability people not break down the artificial trade
only must have money but also barriers which have been built
must be willing to spend it, the up between nations and in restor¬
importance of
advertising and ing opportunity to the private
It is my personal belief
selling in the economic process trader.
becomes crystal clear.
Advertis¬ that if this goal is to be achieved,
ing and selling are the unique we must have help from other
countries.
That is why I favor
weapons of a free economy which,
if
intelligently used, can con¬ the British loan. It is a first step
tribute greatly to both dynamism toward international economic co¬
International
eco¬
and
stability.
But
advertising ordination.
and selling can't do the job alone. nomic coordination is in turn a
The Federal Government and the first step toward world peace.
are to achieve

and

bor

groups—agriculture; la¬
business—and

all

Tax

indi¬

System

Stabilizer

important part to

Speaking particularly now as to

play. .1 do not propose to discuss
the responsibilities that the labor
and
agricultural groups should
assume.
I do, however, propose
to give you a thumbnail sketch
of the responsibilities the Federal

how the Federal Government can

viduals have

Government
and

can

and must assume

contribution that

of "the

be made

can

by sales executives.

Responsibilities of Federal
Government

First
the

to the

Federal

Government.

The

which

we;

the people, acting in concert,

has

important role to play
keeping the economy
and also in promoting

most

both

dynamic

stability, a role Which, by the
way, is as yet imperfectly under¬
stood.

Speaking

generally,

the

most

vital function of the Federal Gov¬

is to create conditions
undet which free business and
free labor can function most ef¬
ernment

fectively

the

teract both inflation and deflation.

This

can be accomplished by sta¬
bilizing tax rates Over a fairly
long period. The rates should be
set, in my opinion, at a level
which will produce a surplus in

general

public

level.

exceed the deficits that a con¬

siderable reduction in the public
debt

could be made.

Government may also have an
opportunity, through a proper
study of the credit structure, to
develop automatic controls which
will

tend

counteract

and

depressions. Up to now, our
credit system has so operated that
it has tended to heighten booms
and deepen

depressions.

The Federal and all local gov¬

The

free economy

buy it.

Furthermore, the higher

the standard of living, the greater

the

significant oppor¬
stabilizing our econ¬

for

is through an expansion in
unemployment compensation cov-i
omy

We are just beginning to
appreciate the importance of in¬
erage.

social

tool.

not

only helps to maintain purchasing
power, but it also makes a sig¬
nificant contribution to the confi¬
dence of individuals in their fu¬
ture security.
Our goal should be
the coverage of
every worker. "It
is assumed, of course, that
pay¬
ments should be subject to the
work

test

and

should

ibe

never

large enough to make unemploy¬
ment attractive.

Responsibilities

Sales

Executives

m
*S*;,

I should now like to discuss the

direct

responsibilities

executives for keeping

sales

our econ¬

dynamic and for promoting
The over-all objective
be
stated
quite
simply,
namely, to attain - and maintain

omy

stability.
can

market demand at

so high a level
high production and high
employment will be assured. This
objective, as we have demon¬
strated, can be achieved only if
the government and other groups
meet their appropriate response
bilities.
However, you have> a|
vital and inspiring part to play; m

that

has

one

greater admiration

for salesmen than I.
foot

They are the
troops—
must wage for high
Similarly, I recog-j|

soldiers—the

in this

war we

consumption.
nize

the

shock

contribution

that

sales

through
constantly improved techniques.
Neverthelss,
distribution has'* a
has

management

made

to go before it need
having achieved per¬
here
today for the very purpose of
stimulating better marketing pro¬
cedures; therefore, I shall merely
indicate the areas in which much

long

way

worry about

fection.

I know that you are

improvement is needed.
1.

The -last

research.

Market

vestige of doubt

to the value

of scientific research was removed

by the development of the atomic
bomb.
Today almost every con¬
cern
of any size devotes a part
of its annual expenditures to re4
search
in
the
production and
engineering fields. The last cen
sus taken in the United States by
Manufacn

Association

tional

Na-j

committee of the

special

of 1,231
carrying on|
industrial research, whereas only
showed that 85%

turers

manufacturers

were

35% of those same concerns were

carrying

ffe-|

marketing

any

activities.

There

particular point
in developing!
new products unless they can
be]
should

executive

Sales

distributed.
not

insist upon a
adequate program of marketing]
research, find out where goods can
be sold, and at
what cost, but
only

and

versities

thousands Of

graduate
specially trainee]

colleges

men

opportunity to

prosperity and the lowest volume
in periods of depression.
Vital
to such a program is advanced
planning, and by planning I mean

blueprinting, together with a de¬

I have yet to heat]

duction fields.
of

institution of higher learn

ing which offers a degree in dis
tributiort.

booms

mount

inherent tendency toward

* m

exer-

for work in engineering and pro

help stabilize the economy
through a better timing of the
construction
of
public
works.
Speaking generally, in the past
the
greatest volume of public
works was built during times of

when business is at a high
If rates are soundly es¬
should also encourage universities]
tablished
the
surpluses in any
and colleges to train men for work]
normal five-year period
should in this field.
Every year our uni

years

responsibilities of

Government,

stabilizing the
economy, again I would put taxes
first.
Our tax system should be
so devised that it will help coun¬
contribute toward

counter-cyclical influence.

tunities

pressure

One

surance

Competition

There is another

he wants to spend, what he wants
to buy, and when he wants to

economy

characteristics

business taxes is
hard to determine, but this is cer¬
tain—they are shared by con¬
sumers, workers and investors.
pays

Speaking particularly as to pro¬
moting dynamism, I suggest that
we need a complete recast of our
tax system.
Up to now, tux pro¬
grams
have
been
developed
largely with a view to their im¬
pact upon votes.
If we are to
have
business
expansion,
and
hence high employment, it is the
impact Of faxes on business ex¬
pansion that should be the para¬

instability; that is because, in

inherent

these

who

ernments have the

I have said that

least three recessions.

4Wi—.

many

Just

interest.

has

tendency to¬
ward instability.
Since 1900 we
have had one major depression,
two
minor depressions and at

The Inherent Tendency
Toward Instability

for

has

factor

decisive

cose

determine for himself how much

We have
highest in the world.
this country of ours, wijh
hut 6% of the world's popula¬
tion, produce 25% of the world's
goods.
And in two world wars
it has been the dynamism of in¬
proved the
Victory.

close to a subsistence
individuals
have
little
choice as to what they buy or
when they buy it.
On the other
hand,
the
greater the
margin
above
subsistence
levels,
the
greater the options individuals
have as to what they buy and the
higher the percentage of pur¬
chases which can be postponed.
In the automobile industry, for
example, we have learned that
even
though people
have the
ing at
level,

paid, by ,,peoplefeIn:: the; .final
analysis, of course, people—live,
human people — pay all
taxes.

free economy, market demand is
unstable.
How can it be other¬
wise when everyone is free to

standard of living is the

seen

dustrial

resourcefulness

people. Unless there is a chance
for profit in proportion to the
risks undertaken, new risks will
not be assumed, new production
plans will not be put into prac¬
tice.
The profit motive is not the
only incentive but, unless we get
out of the dog house, the natural
dynamism of our free economy
may be dissipated.

have also witnessed the de¬

income

stimulating the inventiveness

and

—has

With the standard of liv¬

vious.

able.

private enterprise, and there
it should prevail.
Public enter¬
prise also can be dynamic al¬
though the odds are much against
it.
From a standpoint of dyna¬
mism, private enterprise possesses
certain positive advantages over
public enterprise.
Among them

present time than open-mipdedness.

Private

than

for mofe^nfiiif:^Bore of
our people.
Onl^byi^doing can
we hope to tfiainiayfa&ri3z£te en¬
terprise and thus preserve our
:

and

I recognize, of course, that there
are areas where public enterprise
better serves the public interest

security

Public

The reason is ob¬

Enterprise

develop plans aimed at providing
ever-increasing opportunity and

freedoms,

Areas

instability.

the

tion should be so timed

•

2. Product

vance

marked

the

The

field

lUs

marked ad-j
of industrfa

has
also .beer]
in the develop
methods to ascertalr]

progress

wants

consumer

Here

There

design.
ments

shown

has

decade

research.

again,

executives

and

desires

the

however,

are

often

too

safe
disre

garded in the development of i
product
Engineering and pro
duction executives build what;!
comfortable and easy to manufac
ture rather than what the publi
The production and engi
neering divisions are entitled ,h
full consideration, but the sale
division must have appropriate
wants.

consideration.

authority in the determination o

most

product specifications. If we ar
going to expand and stabilize ou
markets, we must constantly b
on the
alert to offer both wha

tailed program of financing.
I
damaging fallacy in know that some
public works can¬
our present thinking about taxes
be
postponed, but to the
is that taxes are actually paid by not
as
such.
Business can greatest extent possible construc¬

'ft*''

•

'•

?■
'ft.-.;, .'ft <ft:v tft
'ftftf'iftft ? ftftft/ftftftft

;j: v.;

Volume 163

the

public

THE COMMERCIAL Sc FlHANCIAfc CHRONICLE

Number 4496

wants

and

and in

new

once

they

now

products they will want
are offered.

eral

given

to do

developing

for

ways

ana

our

business
best

for

develop¬
After all,

als

the

of the strength" of the individuals
who comprise it.
In a very real

than in

man,

*4. Scientific control of sales ex¬
penditures. • A " study
of
sales

expenditures
on
the
part
of
American concerns reveals that
when times are good and
business
easy to get, sales and
advertising
expenditures have been at

high

evels.

Some

those expendihave been of a dubious na~

ures

ure,

Conversely,
has

ess

been

when

slow

busi-

and

sales

ough to get, sales and advertising
xpenditures have been
evel,

are to

ized market

dvertising

low

stabi-

aintained—perhaps
sign of

should

increased—
decline

usiness.
s

demand, selling and
pressures

| the first

have

One way to
to avoid
spending

assure

this

sprees when
usiness is good so that reserves
ill be available when extra
presUre is needed.
I know of no

ingle
tives

can

contribute

exec-

toward

tabilizing market demand than
hrough a far greater stabilization
f sales and
ures.

advertising expendi-

That is enough discussion of the
esponsibilities which sales exectives must assume in order to
ake distribution

effective,

fhave purposely made it
ecause I

ied

know that highly
quali-

men

ensive

t the

brief

are

giving
to

coverage

subject

compre-

all

aspects
this con-

during

Now I want to present the most
mportant responsibility that you
hould ,undertake on behalf of
free

You

economy.

must,

iates

that

thinking

the

wholesalers

August, 1945.

business

committed to collectivism.
countries

ventories

If, in the
we demonstrate,
that our free economy
can produce a better life for our
free people than can collectivism
we

its

adherents,
after

failed

World

War

will

World

War

Similarly, retail in¬
March 31, 1946, were

the world

will

safe

and

fact

ting

democ¬

inished

the

work-in-process
they can ship

steel.

That

case

it will take from

much

hard

work

straight thinking.
and

onths

after

two

settlement

dare not do

lives

what

wants

raw

copper

products—wire,

rod—to the fabricators of end
rodiicts using copper.
;It must be clear then that the
hortages of metal shapes that
ar,

and

the fortunate, fact that

been

ntil

the pipelines are refilled.

During the
onths

these

two

three

shortages
will
Supplies of
shapes will of necessity be
scanty that no one will be* able
,

lague all industry.
etal

read

allocations.,

been

spent

Millions
of

dollars

diate

satisfaction

their

wants.

Staggering Size of Government's*

cause,

not

must

embrace

heard

be¬

minister

say

Control Problem

long ago:

"There

soon.

help badly. I

June

Detmer &

greater

sacrilege

than the waste of sacrifice."

Administration

Armarid L, Primeau has become
a

member of the firm

must once

again urge the

pur¬

chasing agents of industry to
their

two
in

purchases

the

absolute

companies
during the

minimum

get

can

re¬

scarce

highly

along
critical

three months ahead. Only

this

way

can

disastrous

scramble be avoided.

wholeheartedly and

become associated with the sales
organization.
The firm

has moved

The only

Building,

Address

substantial

explanation

current

same.

Glaybaugh to Open
Retail Dept. in N. Y.

you

have in the past.

open a

retail sales department.

THIS YEAR IN
the

work-in-process is so huge that it
absorbing all of the increased
production. A review* of the in¬
ventory position of * the different
groups shows that;: 'except for oc¬
is

casional items which
ficant in the overall

On March

value

PACIFIC

NORTHWEST

Make Your Plans
to

Include the
'

are

31, 1946, the dollar

manufacturers'

tories was 70 %

NATIONAL
SECURITY

no one simple
increasing produc¬
tion, we have no one panacea
which can be prescribed in ad¬

ASSOCIATION
CONVENTION
In

possible
In the
for

the

some

inven¬

above that at the

SEATTLE

for

vance

TRADERS'

way
the

We in CPA have

formula

correct

all

present and

difficulties.

Sept. 17 to 19

period of acute shortage
next few months ahead,
our

controls must be

ex¬

ercised—some strengthened. How¬

;

If there is

one man

Washing¬

ton who believes in the American

system

free

enterprise—who

and

telephone number will remain the

to end
Sees No Hoarding
controls
is
to
lick
supply;
The question has been raised in problems by producing and im¬
many peoples minds as to wheth¬ porting enough materials for all.

to larger

quarters on the 14th floor of the
Borland

Blair F. Claybaugh & Co., 52
Wall Street, New York City, an*
sincerely nouhces that th^ flfm shortly will

which determines the controls ap¬

plied to it.

Secretary

& Treasurer, R. W. Jenkinson has

•

watching
closely and in which purchasing
agents might be interested. This
isn't a complete picture but it
may serve to emphasize the com¬
plexity and the staggering size of
the
government's control prob¬
lems.
More complete details are
given in the Civilian Production
Administration's monthly reports,
which may be obtained by writing
to me in Washington. It is the
supply position of the material

Co.

given you a quick round¬
up of the supply, demand, and
control picture in
some
of the

,o£
1,

general invest¬

ment business under the name

I have

Only by whole-hearted and un- corresponding date in 1939. The believes in
doing busiuess with a
cooperation and restraint dollar value of manufacturers' minimum of controls—I am that
the part of
buyers and sellers shipments, however, was 100% man. The men who work with me
n these
dangers be avoided. So greater than in:;i939,^Thhs^dhan^ in
CPA; nearly all oi Whom have

Ifish
n

your

mini¬

State

consumers

insigni¬
ever, let's understand one thing
obtain anywhere near what he
picture, no
cleayiyr-^it is our purpose to ex¬
ould, like to have or could use^ large-scale
hoarding is taking
ercise! controls only where, when,
he: thin supplies, as I said he¬
place and: that finished goods are
and to the minimum extent that
re,.'must be spread thinly and being distributed and sold almost
qiiitably across J all industry if as soon as they come off the as¬ they; are absolutely necessary.
e are to avoid industrial
chaos, sembly line.
Wants Minimum of Controls
nd probably irresistible demands
r
the reintroduction of wide-

I need

holding
a

1946, to conduct

the

possession of large amounts
of
purchasing power and that
they are determined to use that
purchasing power for the imme¬
are

normalcy.

so.

billions

shortages may not lie in
holding up production
large scale hoarding by manufac¬
f end-products will not
disap- turers and distributors or whether
ear
over-night but will persist the
pipeline
of
materials
and
ave

know that you will give it just as

in 1939, and physically are
50% greater. The reason
for the shortage of goods lies in

with

^establish the uninterrupted flow

mum.

restraint

purchases to

least

dom.

to six
cur-

Laws

effective

when

They want too much too

their

ent strikes in mines and refiners to refill the
pipe line and to

of
.

pet-»

Company has incorporated
the

explanation for the short¬

give us our
opportunity to maintain our free¬

cop¬

were

myself—would, I
much prefer to indulge
bit of watchful waiting for

But
of

sure,

comfortable return to

much

include

and

This is not an
Many of us—

alluring prospect.

duce

use

it,
cannot
therefore
be
blamed on hoarding.
Goods are
this goal can be being produced in greater quanti¬
if, in the next five ty now than ever before in peace¬
years, we in business really ex¬ time.
Manufacturers'
shipments
tend ourselves, by engaging
in dollarwise are double what they

items

Similarly, in the

instead
,

course,
reached only

take

weeks.

any

will

the

down your

under

(Continued from page 3058)
before

freedom

racy.

Snpply, Demand, Control Picture
rebuild

from

Announce*1

—

inventory

items which the Civilian Produc¬

irst

away

Illinois

If, however, demands for spe¬
cial help, for preferential treat¬
ment, are put upon us by indus¬
try, we can satisfy them only b;*
increasing
controls — by
going

wants

tion

nventories

too many.

ages which plague the consumer,
and the difficulty he has in get¬

after

for

by having too few controls than

CHICAGO, ILL.

ment is made that Howard F,
mer

much less in

The

what

accomplish

err

very lit¬
dollarwise,
physical terms.
Furthermore, the inventory they
now have is seriously unbalanced.

tle

accom¬

rather

they did in 1939 with

can,

plish

would

five years,

inevitable—we

Defmer & Co. Has Been
Formed in Chicago
!

thus being called upon to do
than twice as much business

are

Russia

and the United States.
next

minimum of controls in do¬

March

Other

watching

are

use a

ing our job.If we have to make
mistakes—ahd some mistakes are

toward it.

only 15% from the level of
March, 1939, and were actually
3% lower than they were in Au¬
;
At the opening of this address gust, 1945. The 125% increase in
I spoke
of the world drift to¬ retail sales, coupled with an in¬
ward collectivism and the menace crease of
only 15% in inventories,
it holds for all of us.
As a final means that the rate of inventory
word I would like to say that it turnover
has
actually
doubled
is my studied conviction that this since
1939
and
is
greater now
trend can be reversed.
Only Rus¬ than at any time in the past seven
sia at the moment is definitely
years.
Wholesalers and retailers

irst, convince

your business assoin all their

child

indulge in ignor¬
ant opposition to change; we must
be positive, not negative.

have

erence.

States.

now

with me,

government from busi¬
from industry, agree,
It is our basic policy to

Let us instead, during this pe¬
riod of shortage, rely on our own
31, 1946, was 20% greater than
resourcefulness, upon our own in¬
in
the
corresponding month in genuity and
effort, and not call
1939 and 15% greater than in Au¬
upon government for help.
It's
gust, 1945. Retail sales, however, tough
but
we
can
sweat
it
were 125% higher in March, 1946,
through.
than in the corresponding month
I ask your help in this and in
of 1939 and 20% greater than in

cannot afford to

make

in which sales

way

and

woman

United

not much fuller

are

August, 1945.

and

The dollar value of inventories

held

goal we should constantly
keep in mind is that of providing
certainty of opportunity for every

sales force.

full and

the

sense,
the sales manager is a
trustee of the capabilities and
po¬
tentialities of the members of his

materi¬

work-in-process was up
than 100%.
Manufac¬
turers' pipelines of finished goods
are
certainly not anywhere near

people,

should
be
given to any
proposal which offers a hope of
providing more opportunity for
more people.
As a matter of fact,

substantially

raw

and

speaks in the

all

for the purpose of pleading

ation

selling organiza¬
a composite

speaks it

interest

ness

12% since 1939 while

position of special privilege.
Second, you should persuade your
associates,
perhaps particularly
those in positions of top manage¬
ment, that open-minded consider¬

their first
responsibility is to
provide conditions that will
pro¬
greatest

tion

to the end that when

power

never

me^O emphasize that

mote
the growth and
ment of their salesmen.
the strength of a

We must put forth every effort in

di¬

necessary

ahd

It is not

come

ness

It is exactly the reverse.
What is good for all the people is
in the long run good for business.

giving

salesmen btfth inspiration
rection.
Nor is it

doing mOre busi¬
relatively less total in¬
ventory than in 1939.
Further¬
more, if we break down manufac¬
turers' inventory into (1) raw ma¬
terials and work-in-process, and
(2) finished goods, we find that
the dollar value of finished goods
inventories
had
increased
only
ufacturers are

gen¬

people.

the necessity of continued
empha¬
sis on creative
selling, on lower¬
ing the unit cost of selling, and
of

top priority.

the

should

is good for you—meaning all the

than call attention to

welfare

of what is good for business

case

3. Scientific sales management.
It would be presumptuous of me
in the presence of
many experts

all their actions

public

BOND TRADERS' CLUB

of Seattle
Host

Organisation

•

..."': 'v
itt® £6M^EI&IA£:'&FINANCiMc^

30SB

Thursday, June £^194$

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have inflationary effects of

may

Inflation and Interest Rates

its
'

?:H r-rt

(Continued from page 3055
(15 years and over/ Loin an aver¬
age of 2.48%' in. 1944 to 2.08% in
April 1946.
Here we are not so
much concerned with Changes in
the structure of interest rates as
we
are
with the average level
of interest rates. And the question
which we shall try to answer is
wether a rise in the average level

relatively small, because the rise
in national output and the greater

that

its

bonds

cash

will

balances

lose

and

war

own.

Rising Interest Rates

liquidity preference of the public power and it will sooner or later
absorbed the larger part of the dispose of them, in order to avoid
increase. It is evident that, should a loss through the rise in the price
the monetary circulation increase level. There can be no doubt that
further, the first factor, the rise the public has become more and
in the national output, cannot be more inflation conscious over the
counted on to counteract the in¬ last year. A study of special mar¬

billion

Remedy

purchasing

level of the interest rata
would raise the interest charge or*
the public debt from roughly $5

average

per year to $11
billions
government is probably not

The

Gould these inflationary forces

willing to take on this additional

be stopped by a rise in the aver¬

burden. The average level of the

age

level

the

interest

rates?

The

prevailing opinion is that
they could not. The problem is
usually posed in the following
way: If consumers are given the

interest rate is therefore likely to
be kept low for some time to
come, although it is quite possible,
that the structure of the rates may

change in the sense that longchoice on the one hand to invest term rates may come down and^
level of a rise kets such as the real estate mar¬
their idle balances in government short-term rates may go tip.
in the monetary circulation.
It is ket and the stock market, shows
of interest rates can contribute to
If this analysis of the present
clearly that investors now prefer bonds (and to hold on to the war
stopping the inflation which is at hardly possible that the output real
bonds they now have), and on the situation is correct the most urvalues to cash.
will, in the near future, expand
present going on.
other hand to buy refrigerators, gent problem today is to find
Not only consumers but also in¬
beyond its wartime level.
Nor
automobiles and
the like, it is methods of stopping the inflation-*
I. Wartime Inflation and the can
we
assume that
the public dustrial concerns are at
Level

Price
In

spite of the

will

enormous

ex¬

pansion of the government's de¬
funds, interest
during the war could be
kept stable at a low level because
the supply of loanable funds was
made
infinitely elastic
through

mand for loanable

rates

the

monetary policy of the Fed¬
eral
Reserve
Banks.
Whenever

the

necessary

increased

Banks

member

banks

Federal Reserve
the liquidity of
thus

and

enabled

them to buy, in exchange for de¬
posits, all the government bonds
which

could

not

fluence on the price

sold

the

indefinitely

idle

balances

to its
increase them

hold

should the volume of money ex¬

pand still further.
Inflationary Tendencies in the

Immediate Future
Is there any danger

that the rate
spending, and with it the price
level, will rise in the more im¬
of

mediate future?

rate

The

crease

spending will in¬
decide
to

consumers

spend their idle balances and to
cash in their war bonds to buy
consumers'

goods.

they

only

spend their idle balances, the to^tal volume of money would not

hold. The re¬

increase, but its velocity of circu¬
lation would rise.
If, in addition,

sult

desired

was

almost threefold ex¬

pansion in the volume of money.
On the average, in 1939 total de¬
posits adjusted; plus currency in
circulation, amounted to 62.5 bil¬
lion ^dollars; on the average, in
1945 to roughly 169 billion dollars;
and, at the end of March 1946, to
173 billion dollars. This increase

cash their war bonds, the
deposits of the banking

they

demand

system, and thus the volume of
money, would increase also.
It is usually argued that the

spending
which

goods,

output of
the American economy required
a
corresponding increase in the
volume of money for transaction
purposes. The national net output,
which

tional

identical

with

the

na¬

income, rose between 1939

and 1945 from 70.8 to 161.1 billion

dollars,
dollars
•

Once

short-run.

sorbed in three ways:
increased

roughly to 119 billion

in terms of the dollar of

.1939. ^This

increase by

the

increase

money
crease

was

ap¬

Thus 70%

proximately 70

volume

the

absorbed by

the in¬

in output.

consumer

balances,

formerly held idle, is
inflationary
only in
the very
were

in the volume of money was ab¬

First, the

very

unlikely that *

terest

rates

forego

rise in in-,

will induce

these

durable

them

consumers

ary

tendencies which do not in¬

volve

rise in the average

of the interest rate.

level

It is beyond

in favor of investing idle balances the scope of this« article to dis-*in
government
bonds. But we cuss this problem, but it may be:
possibility. By
have seen that this is not the pointed out that a surplus in the:
spending their idle balances or
choice they have to make.
We Federal budget and a reduction,
selling war bonds to banks and
have emphasized above that these in the public debt would be a stefiusing, the demand deposits ob¬
durable consumers' goods can be in this direction. To what extent,
tained in exchange for them, cor¬
reduction
is politically
bought with incomes created dur¬ such a
porations can finance their recon¬
ing the process of production, so feasible cannot be decided here. >
version costs. The money paid out
that there is no need for con¬
by the industrial concerns in this
sumers, in the aggregate, to draw
way will finally become income
on idle balances for this purpose.
of* productive factors, such as la¬
The choice is actually between in¬
bor. In other words, this method
(Continued from page 3067)' «
of financing creates an income vesting in government bonds and
tency of individual stock move¬
an attempt to purchase consumers
stream for those engaged in the
goods in addition to, the durable ments can be observed by tracing
process of production of consum¬
commodities which can be bought the year by year price changes o£
ers'
goods—an
income
stream
For example, Fire
out of current incomes as fast as cer.ain stocks.
which, as we pointed out above,
Association was next to the lowest
is roughly sufficient to buy the they are produced. If this is the
in 1942
real choice, there is a good chance in market performance
additional consumers' goods pro¬
that consumers would invest in with a depreciation of 13.2%; but
duced. As we have already count¬
government bonds if the interest in 1943 it was highest performer
ed
the idle balances
and war
rate were made sufficiently at¬ with an appreciation of 18.0%; in
bonds in the hands of consumers
tractive. This is all the more true 1944 it was in fifth place with

accounted for this

public, and in addition, to provide
the public with the volume of
cash it

present in
possession of idle balances which
they can spend, and of war bonds
which they may sell to the bank¬
ing system. But we have already

other

the

consumers'

automobiles and
durable goods, appear on the
such

Bank and Ins. Stosks

as an

not

inflationary source, we can¬
the idle balances and

count

bonds in the hands of indus¬

war

trial

concerns

additional

The flow of

source

of inflation.

money

which the companies

the argument runs— out during the process of pro¬
absorb these balances ducing new consumers' goods has
and
no
long run
inflationary no effect on the price' level in¬
tendency will result. But this ar¬ asmuch as it is counterbalanced
gument does not seem to be cor¬ by an additional flow of commod¬
rect. In the process of production ities. But this statement must be
of these new consumers' goods, modified in two ways:.
manufacturers pay out income to
First, there will be some busi¬
wage-earners and others engaged ness units which will
contract
in the productive process.
The their, output in the future far be¬
total sum paid out as costs to
low its war level. These units will
productive
factors,
plus
the have cash and war bonds above
profits
of
the
manufacturers the amount, required for their
themselves, are roughly equal to peace time output. Theoretically,

will

rise in the interest rate

sign that the

follow an
policy
which

government intended to

anti-inflationary
reduce

the

reluctance

the

invest its idle balances in securi¬

ties, the securities could be sold to
them by the banking system. This
would
cancel
a
corresponding

value

Haven last; in 1944, St. Paul

Fir$

& Marine was first and Franklin

last, and in 1945 Fidelity-Phenix
was first and
Springfield Fire &
deposits. The idle bal¬
Marine last*
,v^ ? •
■
*
■ .
ances would disappear (the vol¬
Home Insurance,
one
of the
ume of
money would decrease)
most popular of firse insurance
and a larger part of the govern¬
performed
considerably
ment
bonds
would
be firmly stocks,
above average in 1942 and in 1943,
placed in the hands of the public.
but lost 12.8 % in 1944 and stood
Moreover, a rise in the interest
next to the bottom of the list.
It
rates would lower the value of all
volume of

consumers'
goods these firms could lend their bal¬ capital assets and so discourage
other words, the ances to those concerns which speculative buying. It would have
a direct effect on the price level
other part of the increase in the very process of producing these have
insufficient
cash
or
war
quite apart from its influence on
volume of money. A greater liquid¬ new consumers' goods creates in¬ bonds
to
finance
reconversion, the movement of idle consumers'
comes which are sufficient to buy
but it is not likely that this will
ity preference on the part of the
balances..
,
•
them at current; prices. In the ag¬
be done to the last cent.
Cash
public meaps that the public is
We conclude, therefore, that, a
Willing to hold more ,idle bal¬ gregate, therefore; there is no balances not required for transac¬ rise in the interest rates would
ances
than before. Thje greater need for the public to draw on tions are therefore likely to arise
counteract the inflationary tend¬
their idle balances in order to ob¬ in
the hands of those concerns encies which are at
liquidity was partly forced upon
present at
the public which could not* buy tain, • at current prices, the dur¬ which have to contract their out¬
work, by inducing the public to
able consumers' goods which are
the consumer's goods
put. Their liquidity will increase. invest its idle balances in gov¬
(such as
currently produoed; they can buy On the other hand, there will be
automobiles, washing machines,
ernment bonds instead of spend¬
them with the
income created
refrigerators) hot being produced
many concerns which during re¬
ing them on consumer goods, and
during the war. We can obtain a during the process of production. conversion will not only spend
by discouraging speculative buy¬
To be sure those who want new
such idle balances as they have
rough measure of 'the Idle bal¬
ing.
•
durable consumers' goods are not
ances
by the following method:
now, but will also sell govern¬
To say that the public holds more necessarily the same people as ment bonds to the banking system
4. Is a Rise in Interest Rates
those engaged in producing them.
idle balances than before is just
Likely?
and/or borrow from the banks. It
;
another way of saying, that - the It is therefore likely that many is therefore likely that idle balAs far as the effect of a rise in
consumers will actually use bal¬
balances will arise in the hands the interest rate on economic ac¬
velocity of circulation of money
ances which they have held
idle of some
has decreased. If we compare the
concerns whereas others
tivity is concerned, we need not
in the past. But new idle bal¬
total volume of money in
will spend their balances, which fear that the higher level of in¬
1939
ances will then tend to accumu¬
with the national output (national
they previously held idle, or use terest rates will effectively cur¬
late in the hands of those engaged
their war bonds to finance the tail investments.
income), we find that the ratio
A difference of
in
producing
the
consumers' costs of reconversion. The fear of
was .88.
In 1945 the correspond¬
1 or 2% in the interest rate does
ing ratio was 1.05. With the in¬ goods: and the statement that in inflation may induce the concerns not affect the investment of man¬
the aggregate the idle balances
come velocity of 1939, the volume
which have to contract their out¬ ufacturing concerns. They finance
of money requ'red to transact the will not be absorbed by the pur¬ put—and therefore hold cash bal¬
either none or only a small part
chase of these durable consumers'
ances
vplume of business in 1945 would
(and war bonds) beyond of
their
assets
by
long-term
goods at current prices remains their transaction needs—to
have to have been 142 billion dol¬
spend debts; interest charges are a negrvalid. It follows that if the idle
lars, In fact, the volume of money
them in one way or another, just
ligible part of their costs.
The
balances and the cash received as
was 169 billion dollars. The dif¬
the consumers may decide to interest rate is only effective in
through the redemption of war spend their balances for the same
ference between, this figure for
the area of housing, but housing
the volume of money in 1945 and bonds are spent, they are spent reason. Such action on their part has to be subsidized even at the
on top of the income created dur¬
the volume required in 1945—if
would have inflationary effects.
present low level of interest rates,
the income velocity had remained ing the process of production and
V Second, the increase in costs re¬ so that a rise in the rate cannot
are
therefore
definitely
infla¬
what it was in 1939—is 29 billion
sulting from a rise in the wage be considered as a serious check
dollars. This figure roughly meas¬ tionary even in the long run.
level requires a larger flow of to investments in housing.
The
ures
the
accumulation
of
idle
"If they are spent";* but will money to be
paid by business fear that investment would be re¬
balances between 1939 and 1945.
concerns
to
they be spent? If consumers can
productive factors. duced by a rise in the interest
'Finally, a large part of the in¬ buy the new durable consumers' The total income received in the rate should not therefore stand
in the way pf an anti-inflationary
crease in
the volume of money goods with their current
incomes, process of production will there¬
interest rate policy. Nor would a
was absorbed by a rise in the
price it may seem that there is a good fore rise above the level which it
rise create insurmountable diffi¬
level, which amounted, if we take chance that the public will
absence of culties for the banks. Yet, because
go on would : have in the
the wholesale index as our meas¬ holding its balances idle indef¬
wage rises. This, in turn, means of the adverse effect of such a
the

'Second, the public's greater
liquidity preference absorbed an¬ produced.

+6.3%, in 1945 it was in third
place, while thus far in 1946 it i$
in nineteenth place.

In 1942, the best performer was
Fidelity-Phenix and the worst,
public to invest in long-term Boston; in 1943 Fire Association
securities. If the public chose to was best and Security of New

would

pay

market—so

they

because

would be taken as a

13.4%

gained

but was

1945,

nevertheless below average, and
thus far in 1946 it has done con¬
siderably better than average,
stands fifth in position.
Aetna

Insurance

and

Security

and

of New Haven
tent in

to 37.5%

1945.
crease

Thus

the

between 1939 and
effect; of the in¬

in the volume of money on

the price level during

the

war was

initely. It.:would be foolish^ how¬
ever,

to take this for granted.lAs

soon

the public becomes

scious of

inflation it will

con¬

realize

that

new

inflationary

wage-level.

the

as a

source

result of the rise

opened

balance

then the financing of reconversion

policy on the Federal budget, we

ihfir market performances*

having performed below average
in each year, including 1946 thus
far. Hartford has also been

consist¬

performed better than
in each period, while
has
also
consistently

ent having
average,
Hanover

done better than average,

except¬

ing thhs far iti 1946,
National
Fire, on the other hand, has per¬
formed below average in eachj
year, but thus far, in 1946 has ad*
yahced considerably better thai*

ure^

hay£ been consis-

average.
But these five stocks are excep¬
tions to the general

rule that the

market performance of

individual

insurance stocks is highly irregu¬
lar and variable.
Because a cer¬
tain insurance stock outperforms

this is no
guarantee that it will repeat the
performance in subsequent years;
and this fact makes "picking the
winner" a difficult if not impossible task.
Thus we are lead. to
conclude this brief discussion with
our
opening statement, to wit:
diversification is a principle of
all others in one year,

sound investment.

John D, HiJtes Wi
Kaiser Go. 1st H. Y. 0.
Co., 20 Pine Street,
City, announces that
John D. Hines is now associated
with their: firm. Mr. Hines was
Kaiser

New

York

formerly

manager

bond

the

the government to trading department of Schwafollow an anti-inflationary inter¬ bacher & Co. and prior thereto for
est rate policy. It has been calcu¬ many years was with L. F. Roths¬
cannot expect

lated

that

risp

the

child & Co.

,•,

(Volume
V-

.-V

THE COMMERCIAL

Number 4496

163

&
FINANCIAL CHRONICLE

3QS9

this happening as long as investors still have large sums that

gram to aid in the

fight

infla-

:|"must;;be;but;to^ork£^*v

i'Our Reporter

The impending drive by the Treasury, according to reports, will
be concerned wiih. the, sale of savings bonds, as well as a campaign

Governments''

for

continued

holding

bonds

well

individual

tial inflation forces.

V' Although the market is showing signs of stabilization, a good
trading market is still expected, with periods of irregularity to be
tised to acquire securities that meet one's needs.
A much better
.

price fluctuations.

The World Outlook

ably

floating supply will have

investors.

that in

means

banks

the

not

too

distant future

quite

been

fully

ness

speculative

the

distributed

is marketed

holdings

tween

world

difference

and

be¬

failure.

is determined to restore

trade.

Foreign Exchange
is
a

The first problem to be solved
that of foreign exchange. For

quarter of

financial
even

century the world's

situation
semblance

has
of

not

seen

systematic

Likewise bond

the

Of the $1,855,000,000 of 3s and 3V6s that will be paid

showed

that

the

commercial

banks

held

$916,000,000, savings
hanks $11,000,000, life insurance companies $2,000,000, fire and.

.]? casualty companies $27,000,000, Government Agencies and Fed,:
.

The member banks as a

bonds

obligations.
March 15
on

were

The amount of bonds these institutions lost on
considerably smaller than will be taken away from

June 15.

/If "the deposit hanks should follow the

same

course

after the

u^Jun^ 15 call, as they did following the March 15 retirement,
the

! Ctheh

bank

eligible bonds

should

in Jdemand.

...

ernment bond market.

pressure

selling

which

had been expected to be
Called.
These renewals have helped speculative purchasers to
retain their holdings and at the same time have taken some of the
.

felling

pressure off the market.

...

A change in attitude

be carried

the part

Cf the banks, despite the recommendation of the American Bankers

^Association that speculative loans for carrying Governments be called

j
*

;

u.v
The effect of this extension of credit to individuals and
Institutions is to allow them to hold their positions in Govern*
ment. bonds* which means that forced selling will not have to
take place and the floating supply will be decreased, if • only

temporarily.
*

come

•

It may

mean

that selling by these holders will

at somewhat higher levels and at a time when the market

basis that will

!. DILEMMA

in America to realize the

land

bombed

was

almost

the

point of extinction; the occupied
countries

stripped,
and when D-Day came, the de¬
struction, of necessity, was multi¬
plied many fold.
were

over-run;

Europe, to have goods to sell,
rebuild

must

her

factories, her
system
and
her
roads. All of this requires the ex¬
penditure of enormous capital,
and surplus capital
it does not
have in great quantities. So ma¬
chinery is being set up after care¬
ful study to remedy this situa¬

the

The dilemma in the money market caused by rumors of an
increase in reserve requirements 4h\New York and Chicago along
;

with the utterances

of the

has created

money managers

some

hesi¬

tancy among portfolio managers in building up positions in Gov¬
ernment

obligations.

Nevertheless,

in all of this, and that is not

one

thing

seems

us.

is necessary that the Treasury,

One

the most serious

prob¬

moment

whether

not

the

to be clear

the fear of higher interest rates, but

of any article over normal

excess

demand,

its value falls

equilibrium

International

Bank Tor

is
the

comomdities increase.
there

only

until

established,
or
values of other

excess

At present

money

not

deposit, but also in circu¬

lation.

addition to the Savings Bond -is¬

make offerings of
that have a maturity and

should

sues,

bonds

rate to

appeal to such investors. v:
four urges steps

Point number

be taken to reduce speculation in

Government securities. Banks

can

something to improve this con¬
dition,
by reviewing carefully
their own loans

these securities

to see that

they are not encourag¬
ing such speculation.
■/•'ifr
If

lems confrontnig the U. S. at the

„

the

wishes ,to

Government

control; the

inflationary

factors

which

are at work, in the course
of time it must see that the most

effective

way

within

its

own

fiscal policy. It must make its ob¬

ligations so attractive in rate and
maturity that the private investor
will be willing to part with his
spending power for a Government
bond instead fo. consumer goods.
The objection is, of course, from
the Government's point of view,
that it

will

increase

interest

the

the. public debt and. that
it will disturb the market on ex¬
-

..on

choice

our

lies

between

ruinous inflation of the price level
on the one hand, of which we can
find

numerous

examples through¬

the world today, or a higher
interest cost to the Government
out

good illustration of how this
supply and demand works
may be found in the prices resi¬
dential properties are selling for
today. The population has prob¬
ably increased 8 or 10 milUrn
during the last seven years. Also
marriages have increased,
and
new homes are needed.
In addi¬

on the other hand, an understand¬
ing public will much prefer such
higher interest cost.
< '• ;

tion, repairs have been bold up.
As a result of wartime restrictions
on materials used in home build¬

obligations. The customers objec¬
tion
has always been
that the
Government bond yields are too

ing and the trend towards home
ownership, we find the demand
for residential properties far ex¬

low.

law of

excess

the supply, resu^mg in
in properties selling in
of 100% of their original

cost

true value.

ceeding

many casse

knows

one

the

than

better

bankers how difficult it has been
to persuade

ing

those customers hav¬
surpluses on deposit,-to
at least a portion of their

excess

take

funds

and

*■

There
weapon

is,

another
Government

the

curb

against inflation

highly politically

that is the

unpopular

-3^5

course,

which

can use as

and

Government

invest in

method

increasing

large taxes.
construction
Development
may portion of the Government debt
There is no one in the business
guarantee the loan. If local banks has led to a very extensive pur¬
world who wants additiorial taxes
cannot furnish
the capital,
but chasing power in the hands of the
placed on him. The business com¬
will recomend loans, the Interna¬
people.
;
tional Monetary F»nd may make
munity as d whole would be op¬
Total deposits (exclusive of in¬
loans directly.,;
terbank deposits) plus currency posed to an increase in taxes, ex¬
In addition to the foregoing, rose from
$42 billion in June 1933 cept as a part of a definite and
and
as

Jiow to devise means to

from

In this post-war period and the
era of reconversion that still lies

agriculture, hor¬ vice-versa,

tion.

action

isting 'issues.'*

ap¬

the Govern¬
has the

repay

This

dost

/v will nee^ bonds to meet the large investment demand.• «
0
When
it is found that local
t
| ?While the elimination of speculation, from the Government bond banks can take care of a
partic¬
market is a desirable development, it is becoming apparent that it ular
situation, but cannot trust to
should be done in such a manner as not to undermine the confidence the
possibility of a foreclosure,
of investors,

debt.

protect both the buyer and the forces of inflation can be defeated.
seller during the time necessarily The
present indication is that we
elapsing in the process of trans¬ are losing the battle.
,
portation.
The inexorable law of supply
The second great area of diffi¬ and demand is that if there is an

Rafter the six months' holding period has elapsed, seems to be indi¬
transportation
cated by this development. . !■ fc* • /;
£■■

./,■/

states

non-bank investors. To do this it

Inflation

cur¬

that foreign trade may

ticulture, animal husbandry and
particularly industry, suffered be¬
cause of the hazards, of war. Eng¬

eased

bonds

will stabilize

Fund

extent to which

...

Government

rency

for

//^It is indicated that banks have been renewing loans for the
-carrying

find it difficult to buy

less of fairness and sta¬

verted

The

y replacing of called bonds with high income obligations in order
•:; to maintain earnings could have an important effect on the Gov\

banks

culty is that jof destroyed or con¬
industry. It is impossible

them, but added substantially to their positions in these

jaway from

them

whole, after the retirement of the 3%%

March 15, not only replaced all the bonds that were taken

those who sell and those
buy internationally may be
assured of prices that will have
Thus,

national

demand

exchange

who

seen

the

below

value which has been set by those
in authority as fair and equitable.

ahead our banking system has a
challenge almost as great as it had
bility; in other words, the Inter¬ during the war.

eral Reserve Banks $292,000,000, and all other investors $607,€00,000. . .

bank eligibles

falls

son

off the

r,' 15th of this month, the latest available figures (Feb. 28, 1946)
*

two

anti-inflationary effect of reduc¬
mass
production at high wage ing bank deposits which in them¬
rates.
The
rest
of
the
worm
selves constitute potential buying
wants and desperately needs our
power.
This is a sound step, al¬
products but practically stripped
though it does have the effect of
of gold before the war and unable
reducing the earning assets of the
to compete with us because we
banks, and so reducing to some
refuse to buy her products, must
extent the bank's income. It will
have credit, and we alone can
also call for a re-appraisal by
furnish the credit. It may be a
each bank of its Government bond
vicious circle. We produce a sur¬
portfolio to see that it thas liquid-;
plus, we loan the money with
ity to meet Treasury calls on War
which to buy the surplus, deliver
Loan Account and other possible?
the goods and receive back the
demands,
;
.v»«
money which we lent. It may be
Point number three relates to
a
stimulus to recovery.
It may
the offering of bonds to non-bank •
cure the licensing system so gen¬
investors.
Refunding bonds of
erally practised in Latin America
against us for so long. It may re¬ long term should be offered from
vive and reorganize a real world time to time to non-bank invest*;
Ors.
Accumulating
institutional
trade so that all may benefit.
and private funds provide an opr
The alternative is a self-suffi¬
cient economy in America. This portunity for the Treasury to carry
will require drastic changes in further the refunding of debt held
taste
and
fashions, and drastic by the banks into the hands of

number

large scale

...

program
should; include
plans to persuade bond holders to

ment

America is geared to

holdings of the member banks in the 12 Federal organization. There has been no
Deserve Districts continue to increase, although this expansion has norm of values and the various
riot been uniform.
Member banks in the New York, Boston, yardsticks that were supplied in
^Cleveland, Chicago and Minneapolis districts have at least replaced determining exchange before the
all the bonds lost through the paying off of the 3%s on March 15.
war
have all been broken, and substitutions of synthetics for nat¬
Those member institutions in the Philadelphia, Richmond, Atlanta, while we in America think in ural products.- All of this is of ex¬
£>t. Louis, Kansas City, Dallas and San Francisco districts have not terms of
dollars naturally,
interest
to
bankers
as
the treme
yet fully made up the loss of bonds that took place the middle of force of economic and financial guardians of credit and stimulat¬
March.
necessity
makes everyone
else ors of industry, particularly in the
think in terms of dollars.
Hence light of discussions on inflation in
DEBT RETIREMENT OPERATIONS
there has been created the Inter¬ this country. It is not so much our
The retirement of the 3s and the 3Vss on June 15 will be the national Monetary Fund and the power to buy internationally as
last of the high coupon obligations that will be repaid by the Treas¬ International Bankfor Reconstruc¬ our power to sell in the markets
tion
Development Fund, of $8 of the world, A runaway inflation
ury until Oct. 15, 1947, when the 4*4s can be called for payment. . .
Bor the balance of the year debt retirement operations will have billions. When this Fund is in in America would drive our prices
(to be confined to certificates, aside from $3,261,000,000 of 1^2% notes operation, loans may be made to so high that foreigners, even with
nations whose money for any rea¬ the aid of the World Fund, will
jivhich mature on Dec. 15.
.

of the greatest impQt^v
combating
inflation.?;

■

Tms

which

the

high last week, while notes dropped to a new low. . . . These
institutions have shown no tendency to replace notes and certificates lost through the debt repayment operation of the

Treasury.

abroad, the matter is
but the
cent of all enterprise

success

America

have been increasing for several weeks went to another all-time

those who

Bond holdings of the New York City member banks
.

are

vital importance,

last ten per
often makes

not

there

course,

only about
one-tenth of American production

the ineligible obliga¬
tions, while dealers in some instances have been expanding inven¬
tories.
The, deposit institutions continue to lengthen maturities
Ly adding to their holdings of Government bonds.
.
This may be
in anticipation of the high coupon holdings that will be lost on
June 15 through the retirement of the 3s and 3VsS.
;

claim that inasmuch

increase

is to be rebuilt.

among

...

ii,•/•{ Non-bank investors have been picking
.

will

removed, if
not permanently, at least tempo¬
rarily if American export busi¬

The technical position of the market continues to Improve
are going from weak to strong hands, which prob-

it says,
tance
id

proval of the Treasury's policy in
using its War Loan balances in

(Continued from page 3063)
have to

war

...

and securities

...

owners

Point

Jiappenings.

keep their bonds.

The fact that prices have been able to
rising tendency may mean that the anticipation of what
might happen to the market may have been worse than the actual

show

tone has been in evidence recently in both the bank eligibles and
the restricted obligations, and this has resulted in a narrower range
of

of these

obligations.
Holders of these
of bank deposits are great poten¬
Accordingly, any plan to neutralize these
forces is very constructive because it would be helping to eliminate
one of the real threats to monetary stability.
*•
v

By JOHN T. CHIPPENDALE, JR.

^P$nf*mmber one calls for the
"vigorous sale of Treasury Sav¬
ings Bonds by the banks," which

prevent yields of long-term bonds "from

aid

Re¬

The

specifically recognized

to. an

the

restoration

monetization

estimated $168

the ; end

b^Jion at

of November,

1945.

affirmative program by

the Gov¬

ernment designed to control in¬
world! trade, is the dollar credit this 400% increase in the last 12
going lower, while at the same time maintaining the present pattern to Great; Britain. Unless Great years, $95 billion, or 318% repre¬ flationary forces.
- f
of rates.
The debt burden will continue heavy; for so" long a Britain regains a significant posi¬ sents an increase occurring s'nce
None of us would be disposed
♦

time that there

seems

to be

little need of fear of

'the debt COst, which means interest rates.

increase

While there could be some narrowing of the spread between

market rates and issue rates, there is not much likelihood of

tion in. world trade there is not
much hope of revival.
All this

adds up

some

"Vyprld War II.

ABA Proposal

very

simple facts which appear to be
complex;
; / -; :
:
' -

very

the outbreak of

The American"Bankers Associ¬

ation proposes a four-point pro

to concur in this second

less
with

the

step

un¬

first'step having to do

Federal

policy were

Fiscal

nut into effect.

THE COMMERCIAL & FINANCIAL CHRONICLE

13090

I expert

American Position in
,

(Continued on page
Sn extremely serxOus matter, as it
hits that nation at its weakest

contract and

When the loan

As there was every reason

mark.

loan

its
to

annexes.^

England has

Was'hmgton, shows inn#h"^t de¬

gree the, significance of the term
"rise of wage rates" shifts accord¬

Congress and

ing

as the

when additional facilities for.bor-

the

one

exchange markets, managed with¬
in a few years to attain a volume

rowing (available in the form of
loans and credits from the Ameri¬

foreign trade comparable with
that during the peak year 1929,
problems, but modern productive
whereas Germany, in spite of all
(capacity is so great that it might
artificial contrivances in the form
soon bring about a miracle of reof export premiums, etc., never
construction, if only it were alsucceeded in bringing her volume
lowed to develop freely. For Engof trade even up to 65% of the
lang it may be more difficult to
find a compensation in her bal¬ figure for 1929.
In order that a country may be
ance of payments for the loss she
able to restore a free foreign-ex¬
has sustained by having to sell so
market, it must firstly
much of her foreign assets and in¬ change
have at its disposal sufficient re¬
curring indebtedness to so many
serves
in gold and foreign ex¬
countries. In order to balance her
change, and secondly have estab¬
payments to. foreign countries,
lished a fundamental equilibrium
England, in. the future as in the

Export and Import Bank and
of monies supplied by the Bretton Woods institutions) have been
turned to account, there is a pros¬
pect that shortage of foreign cur¬
rency reserves will not stand in
the way of a rather speedy settle¬

BP0t.;^,:;,
The

destruction

physical

number of other
countries will raise very difficult
Germany and

■

German

labor questions ;om the

to
expect,
the
sterling-group
countries, with their free foreign-

Monetary

in order to "protect" the

in relation to the economy of other

been

approved

can

ment of the

monetary problems of

the various countries.
about

the

But what

condition—the

second

restoration of "fundamental equi¬
librium"?
In the statutes of the

International Fund

(according to
the Bretton Woods plan) the ques¬
tion of "fundamental equilibrium"
(or rather its opposite: funda¬

past, will doubtless be greatly de¬
countries (which implies, among mental disequilibrium) assumes a
pendent on her trade and ship¬
other things, that its own budget very central position, but without
ping, and must therefore hope for
does not give rise to inflation). any attempt being made to define
the earliest possible revival of
The second condition is indeed the implications of the term.
World commerce.
But increasing
more
important than the first.
It is not possible to deal here
exchanges of goods and services
between the different countries During the 1920s a number of with more than one aspect of the
countries, by ordering their in¬ many-sided problem of "funda¬
implies the restoration of balance
ternal conditions, managed to es¬ mental
in the delicate system of equilib¬
equilibrium."
The ques¬
rium

tween costs

rates

maintained be¬
and prices, exchange

normally
and

movements

It should be borne

capital.

in mind that

dislocation may lead

to losses far
exceeding the sum-total at which
the other damage caused by the

War is estimated.

In this connec¬

tion it may be of interest to note
that direct war expenditure dur¬

tablish
and to

system

sound monetary

satisfy all current demands

for

payment in foreign, currency,
although their own reserves of
gold and foreign exchange were
very limited, and that too without
being compelled to eke them out
with
foreign
"reconstruction
loans."
Access

to
foreign
exchange
naturally conduces to
reckoned at a total amount of ap¬ lighten a country's own financial
As regards such as¬
proximately 185 milliard dollars, difficulties.
whereas the losses incurred by sets, the present situation is cer¬
the American people in the form tainly better than is generally
of. diminished
production, etc., supposed, even in rather well-in¬
The gold move¬
during the severe slump in 1930- formed circles.
1933 and the subsequent stagna¬ ments that have occurred since
tion in 1934-1939 has been esti¬ 1941 have reduced the share of

ing the first World War has been however,

mated at

less than 200 milliard

dollars.
.

( Capacity for creating wealth is
enough: this capacity must be

pot

given opportunity to manifest it¬
self under favorable conditions. If
thq payment of Preparation-" is
unwisely ordered {for example,
by laying down a financial ob¬
ligation whilst impeding a corre¬
sponding influx of goods), the re¬
,

sulting disturbances may entail
which, in the aggregate,

losses

Will amount to

sums

far exceeding

fixed in¬
demnity.
This was the leading
idea in Keynes' attack on the pro¬
visions in jhe Treaty, of. Versailles
even

very

highly

Regarding the; exaction of Repara¬
tion from Germany.
It would be
Well worthwhile today to re-read
the two first pages of his book,
*The Economic Consequences of

But, unfortunately, the existing
of gold and dollars are

reserves

not

evenly distributed among dif¬
Europe will nat¬

ferent countries.

Britain this time has
exposition of the deli¬ continent.
cacy
of
the
economic
system been compelled to stake her en¬
which had gradually developed,
tire financial resources and is now
and which received such a severe trying to repair the damage.
In

masterly

view of Britain's world-wide

em¬

When now, after another World pire and the position of London
"War, we proceed to resume the as a financial center, it is diffi¬
work of reconstruction, one of our cult to see how a monetary order
first tasks will be to restore order
in the monetary
system. For,
even if a sound monetary system

the

could

world

restored

without the pound

power
knows

sterling again
becoming an international cur¬
rency.
American
financiers
in
New York for several years have
been emphasizing the importance
for the economy of the United
States of assisting England with a
loan on cheap terms and the Gov¬
ernment at Washington have on
the whole approved this view, the
practical outcome of which is the
agreed loan amounting to 4,400

wheh;confidence in the value of

great concessions which England
has made, (especially-on matters

implies

sound economic basis—

and if there is thus an

interplay

between the monetary and eco¬
nomic factors2—anybody who has
lived in a country where the pop¬
ulation in their daily pursuits,
manifest a profound distrust of

the constancy

the purchasing

of their own currency,
how impossible it is to
build "up" a flourishing trade on
the : Quicksand
which spreads

gives way. But even where
confidence prevails, a real revival
money

million

dollars.

view

the

commercial policy, it must be
considered that the low rate of
of

2% (or, more
brought about without liberty to strictly, 1.62%, if allowance is
made for the exemption from in¬
buy and sell foreign exchange, at
any rate for current transactions.' terest payments during the first
During the crisis which began in five years)
involves a rather
1931 the countries which eventu¬ meagre compensation for all that
ally formed the sterling group the American negotiators haye at¬
Congress will doubtless
preferred to allow their curren¬ tained.
cies tb be depreciated, rather than ratify the deal—certainly a very
of

world

commerce

cannot

interest, fixed

good

submit to

system of compulsion

bargain from

point of view

—

which

American
was

con-

coj-responding to thai introduced eluded by the signature of the

concerns

the relation between the

prices and costs in

country,

hand, and the

prices

the

one

costs

and

individual

the

the other.

market,"

"world

understood

But what

by the term
during the next
few years, those which for us, in
this connection, will be of crucial
importance? Without doubt, the
level of prices and costs in the
States.
United
This, however,
does not imply that other coun¬
tries can let their wage rates rise
as high as in the United States—
such a thing will not be possible
before a
similar efficiency has
been attained—but it does signify
"world

market"

comparison is based

the cither figure series.

Increases in Pay of All Non-Agri¬
cultural Employees as Shown

by Various Methods of

Measurement

Increase

payroll

104

Average weekly earnings..
Average hourly earnings.
Average straight time
hourly earnings
Average straight time
hourly earnings with
constant industry weights
Average wage rates
-

The

regard to the United States, cer
tain reservations must be
made
very fact that in 1939 ther

The

9,000,000 unemployed in th
States

indicates

that

life of the country wa.
by no means in equilibrium. Dif
ferent explanations
may be givei

which is of special inter¬

view

est

here,

namely the relation >
the - economy of other
countries
it is important to draw
attentio

due, inter alia, to the in¬

in the number of employ¬
when unemployment practi¬

cally ceased during the war. In ad¬
dition, it is affected by the increase
the

e.g.,

relatively both to the pound ster
ling and the dollar.
But also i

of
41

crease

ees

raies

undervalue

regarding the disturbance of equi
librium that had occurred in th
United States, but from the
poin

63
47

increase in the "total pay¬

was

economic

Method of

roll"

French, franc

United

1940 to 1944

Total

cording to the existing
exchange, indicates that

were

Measurement

the

difference

which

existe

during practically the whole 1930s
in
the
development
of
costs
and

particularly

the

United

wages betweg.
States, on the ope
the countries of th

hand, and
sterling group,
The

the other.

severe

and

quite

unex

average weekly earnings,
which in turn was due to the pro¬

pected fall of prices which bega
to assume alarming proportions a

longation of the working week as
higher pay for overtime

marked

well as to
work.

The increase in the average

straight time hourly earnings re¬
flects, for example, the transfer of
workers
from
agriculture
and
other relatively poorly-paid work
to industries with relatively high
hourly rates.. From the viewpoint
of costs of production the changes
in
the
average
straight
time
hourly earnings play the principal
♦pari,, but not until adjustment has
been

for

made

the

transfer

workers to industries with

higher

wage rates.

but

one

The last figure series
in the above table shows

approximately the- same result as
the change in "wage rates," which
refers to the wages paid for a cer¬
the United States in the world's that the fluctuations in the.Araerr tain quantum of work (or quan¬
monetary gold stock from about ican price level will be regulative tum of time, when time wages are
three-fourths to somewhat more for the changes in the price quo¬ paid).
In any international in¬
than half, which involves a con¬ tations on
the world market- vestigation care must be taken to
siderable improvement in the dis¬ there is at present no other coun¬ compare like with like. The per¬
tribution of the world's supply of try, or group of countries, that centage increase, in fact, varies
gold for monetary purposes. The could in any way check the ups- considerably from the one series
holdings of gold and dollar ex¬ and-downs in the American level to the other.
If we study the changes in the
change in countries other than of prices. For different countries
United States amount, altogether, it will therefore be necessary to exchange rates and price levels
to about 20 milliard dollars, which endeavor to attain a certain equi¬ for example during the 1920s, we
is quite a handsome sum, espe¬ librium relatively to the Ameri¬ shall find that* .the changes in
In the summer wage rates in the-different coun¬
cially when we bear in mind that can price level.
the large
American lending to of 1945 a couple of Swiss econo.«» tries provide the best basis for
foreign countries in the course of mists, on the basis of the then judging the real value of the dif¬
the years 1920 to 1930 totaled 11 % available figures, computed, the ferent, currencies.
For, even if
milliard dollars.
"purchasing power parity'H be- the costs of production in the dif¬

urally have to pay the penalty for
having allowed a world war—for
the Peace"
{published in the the second time in one generation
dutumn of 1920), for they give a —to proceed on her old stormy

shock in the first World War.

tion which will be discussed here

Thursday, June 6, 194

far

back

1930

lack

prices, with

sequent reduction
of

employed

led

soon

equilibrium

tween costs and

be¬
con

the number

workers.

first

attempt was made to restore
equilibrium by reducing wage*

other costs (including inter¬
charges), but the fall of prices
was so marked that a
satisfactory

and
est

result could not be attained solel

these

England

means.

other

countries

were

devaluated

1931

whose
in

obtained

currencie

the

autum

thereby

som

support for their respective pric
levels; and, as those countries con
tinued to force down wages an
other

costs

rencie s

even

had

after their

been

cur

depreciated

they succeeded rather soon in r
storing a high degree of equi
librium
in
the
cost and
price
structure and thus in attaining an
improvement of the economic sit
uation,

which

led

national

income

standard

larger rea

to
and

Slowly' bu

living.

surely, normal wage rates rose ae

cording

the demand for labo

increased...
In

United

the

States,

other hand, the dollar was main
tained at the former gold parit
down to the

exposed

the

spring of 1933, whic
domestic prices an
terrible pressure

wage rates to a

were affected by
changes in the efficiency of the
productive apparatus in question,

The

consequence,

dollar and they came. to. the con^
elusion that, in view of a greater

that

price advance in Switzerland than

it seems that the relation between

sure

in the United

States, the foreign
exchange value of the Swiss franc
ought to be reduced as soon as
possible. To this, however, it was
objected from different quarter?

the countries in this respect had
strong reaction set in agains
remained relatively constant.
In' the wage policy hitherto pursued
the nominal wages were in f°c
fact, we find a high degree of cor¬

that at any rate certain prices in
Switzerland would certainly fall

tween

the

Swiss

franc

and

the

ferent countries

been

soon

devalued,
from

outside

however,
the

dollar "ha

that the pres
had

lightened

respondence in the changes of the

Raised In 1933 and 1934 practical!-

price levels in different countries,

soon

the

fundamental

the

to the level of 1929.

other

hand,

Prices,

remained

factors had been

given an oppor¬ considerably lower level.
tunity to make themselves felt.
In 1936-1937 a new wage move
Many theoretically justified ob¬ ment set in, although there wa
insurance
jections may be made against the still considerable
war were adjusted to a more nor¬
unemploymen
mal level, whereas, on the other theory of the "purchasing power in the United States; w*<*e rate,
hand, the American price level parities," but an examination of were raised by about 15%; com¬
would presumably rise, for one the figure material of the last 30 modity prices at first showed |
years shows that Jn practice the tendency to rise,
reason because everything pointed
but a setbac
to a rather considerable increase said theory has worked astonish¬ soon occurred, and the lack q
in
the hourly
between
costs an
rates of wages, ingly well. It is, one may say, a equilibrium
which have such an important rather
peculiar
theory,
which prices was thus still further ag
turns out to be more, tenable in grava ted. In short, the result wa
bearing on the costs of produc¬
tion.
After the settlement of the practice than from a purely the¬ that the American nominal wages
steel strike in the middle of Feb¬ oretical point of view.
•j
owing to purely - interh^l ^^i
ruary, 1946, it can be taken for
In order thai a. comparison be¬ Pons, ,were raised in a degree
granted that the American hourly tween the level of prices and posts which had no correspondence jr
wage rates, at all events within in different countries may give the
wage
movement
in., et^e
the principal branchesindus¬ reliable results, it is necessary countries. World prices, however
try, will be immediately raised by that the base year selected as a were determined during the 30.
about 15%
As these rates appear starting ooint for the comparison mainly by developments in th
to have risen on an average by should show a state of sufficient sterling group. They* in fart. fol
as

soon

the

high freight and
rates entailed by the

30-35% since the first half-year of

expected that
wage rates- in the United State*
towards the summer -of 1946 will
be about 50% higher than during
the first half-year of 1939. r
-

1939,

may

equilibrium.
The vear 1913 was
In this resnect satisfactory;, from
an

economic point of view it was
a

foremost that really compar¬

following table, which was drawn
up

Kenneth B.

Williams, an

economic

immrta^e

of th

characteristic vear, marking

-When other countries proceedia isp^owiwe^ ngqod- reason to prer
comparison between the rise in sume that the.different countries.
their own wage rates and the rise after a long period of peace, had
which has occurred in the United, stained in 1913^ state uf eoiui*
States, care should be taken first libnum in- relation to one another,
and

the

sterling grouo at that time. TJii.
rather an intermediate - stag* be- fact has not been sufffdentlv ob
in
the
United" States
fween a boom and a slump. There served
not

able figure series are used,-. The

lowed neither •^i*iaey:.fhe dollar
buOhe pduhtl f^lin^ in view: o

Where, to the perpetual astxWsft
ment of

tibns * are

European, wa<*e qims

R»nMhtly: %inedis,
Regard id

developments in

other countries

The fact that under normal enndi

It is not, however, possible to
corresponding assump¬ tioiis merely 10% of the America
tion in regard to the situation In: production of goods is exporte
1939.
Even-a superficial exam- has evidently Zed to an underesti
v

make any

•'

;$ b

Volume 163

—

nate of the-economic influence of

foreign countries on American in¬
dustry.
It is, however, incon¬
testable that, at any rate during
the 30s, the world price level, and
thus

also

American

prices, were
determined by price

practically
movements

sterling

the

within

A "unilateral

group.

increase

price increases wilL^e .aUpwed in
order to enable a remunerative

maintained.

production

When this has been done two

im¬

portant tasks remain, which here
can be merelV indicated.
Firstly,
care
should be taken that the
level of costs attained after the
present adjustment of wage rates

maintained fairly stable

wage

shall

was

for

considerable time ahead, so

costs in the United States
bound under such conditions
to; lead to a lack of equilibrium
also in the internal American cost
ind price structure—and here we

find a natural explanation of the
high degree of unemployment in
jAmerica which still existed in
19.39, and which shows that the
.

working classes

whole may
be the chief sufferers from a mis¬

guided

wage

policy.

'Here, however,
concerned
from

with

the

are

chiefly

developments
an inter-

viewpoint of

verything

indicates that this is

he case—the European countries,

comparing

ithin

their

increases
own

that, ■ nationally
and
interna¬
tionally, a firm basis is laid for
the adjustments necessary after
the war.
Even with a stabiliza-.
•

tion

the

nominal

Income,

increase of the real income can be
effected

by suitable price-reduc¬
tions and especially by a general

improvement in quality after 4h§
deterioration entailed by the' war.
.

ational state of equilibrium.
If
he above analysis is. correct—and

3091

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4496

costs

economy

with

hat which since 1939 has occurred

n-the United States, may proceed
the assumption that they

from

ave, so to speak, a certain margin
tcnthe good, owing to the fact that
the American level of costs was

too high in 1939.
An exact gauge
£ this margin
can
scarcely be

the price-controlling
particular should
realize that the purchasing power
of
money
during the war has
changed
in such a way that,
broadly speaking, it is likely, to
become permanent.
The average
rise in wage rates by 50% since
1939, compared with a-rise in the
price level amounting to. some¬
what more than 40%, reflects a
fall in the purchasing value of
money by at least 25-30%.
This
change must be accepted in widely
Secondly,

authorities

different

fields,

order

that

natural

greatest country that the ?.sun has
ever shown upon, and I think it
is facing the greatest age in its
history. And I think that is due
(Continued from first page)
to the fact that .the country is
I can't tell you how much I ap¬ Every one of those small insti¬
going to be in the hands of you
preciate it. The honor that is tutions gives some two or three
young
people here before me
given to me today by this vener¬ men a chance to be "big shots" in
today who are going to carry on
able institution—and it is a ven¬ their communities. When you go
in the tradition of the great man
erable institution according to our to the National City Bank or the
who was a trustee when he be¬
standards in this Western Hem¬ United States Steel Corporation
came
president of, the United
isphere—is one that I'll treasure or the Metropolitan Life Insurance
States, the man wjio helped to
all the rest of my life.
Company, you will find one "big
institute the greatest government
This college has a wonderful shot" and a hundred or so vicein the history of the world — a
background and history. I listened presidents—vice-presidents—viceto President Mead a while ago as presidents. So many vice-presi¬ government, .as I have said time
and again, which has a diffusion
he discussed that background and dents that you can't tell how the
of powers and which prevents any
il
history. One of the things I like institutions run.
I believe
about this college is that it is a
that an (institution one man or any one group of men
from
gaining absolute control.
small .college
in a rural com¬ such as this will contribute more
in the long run to the welfare of Sometimes they think they have
munity.
I was born in a small town.
I this great nation of ours than any control, but it has never turned
other thing that is in this country out that way—and it never will.
was raised in a small town. Don't
Now I can't tell you how very,
quote me on that in Independence. at this time.
much X appreciate
the honor
(Laughter.) I spent the best ten
Facing Greatest Age in History
which you have conferred upon
years of my life operating a 540You know I am an optimist so me. J Can't tell you how much I
acre1 farm
in
Jackson
County,

I Am Advocate of Small Business'

Missouri,
home to

This

and

that

farm

wonderful

far

still

me.

States.

was

appreciate it, but from the bottom
of my heart I thank you.

the United States of Amer¬

ica is concerned. I think it is

the

institution

pp.account of its connection with
the' firSt President of the United

privilege

The Dehl Reduction Program

the

other

night to be present at the
graduation of my daughter — at
another Washington University in
which George Washington was in¬

equilibrium may be re¬
terested, and in which he had
that industries may
some
measure
of
helping the
given; presumably it lay between one day be freed from the straitfounding. In fact, he directed that
10 and 20%; but the important jacket of price control.
Every¬
that institution be founded in his
thing is that its existence should thing cannot be attained at onee,
will. I understand that he was a
not be overlooked.
For it may but official and other prices, taxes,
trustee of this great institution
stand in good stead.
Most Eu¬ rents, etc., can be gradually ad¬
when he was made President of
ropean
countries are suffering justed to a new normal level. In
the United States. A great honor.
rom high
coal prices and other this way the intensive force in¬
My great predecessor whom I suc¬
dverse
circumstances
resulting herent in American economic life
ceeded at his death was also an
rom the war, which tend to inmay again have an opportunity to
honorary graduate of this great
fease the costs of production. For assert itself.
institution and he liked small col¬
his a certain compensation is re¬
In the memorable speech with
leges and small communities and
hired; perhaps we have already which Lord Keynes on Dec. 18,
rural
communities.
He
always
ttained it as a legacy of prewar 1945, took part in the debate in
called himself a farmer. Although
.qnditions.
the House of Lords on the Amer¬
he was graduated from Harvard
'-As regards England, it must a l«c ican loan, he stated: "The United
and
Columbia
in
a
community
be borne in mind that the foreign States is rapidly becoming a highthat is very large in population,
xchange value of the pound ster¬ living and a high-cost country. I think his heart ran to the soil.
ling (reckoned in gold or dollars! Their wages are two and a half
stored,

...

and

I know that mine does.

duction

reduced by

end

"The heavy

and the fact that this reduction in

that the current program of the
not offset
Treasury is in reality a refunding
deposits as
program and not a debt reduction
had
occurred
during the
war,
caused some' banks to sell inter¬ program. Moreover, a large part of

Treasury deposits was

gains

private

(usually
all

forced

effect

stantial

good
to

banks

profits)
consider

Loan

and

are

scarcely

con¬

being concentrated almost solely
□n the question of the increases

proceeds will be aporoximately
$1,525,300.' Of this, $606,500 Will be

expended
14,899

for

the
of

of
preferred
share plus ac¬
retirement

first

That is true all
States in

institutions.

rather

over

the United

these small educational
You

know,

advocate of small busi¬

retirement of short-term

stock

metal OneNational -City ©ankr

.*&&&$

You know the

reason

\ 4

for that?

banks ha^feeen
inflationary

todeemedbefore
built

potential

the

during the Victory Loan Drive
has been undone. It appears that
up

will be reached in the
redemptions.

this point
June

"Even after the cancellation of
the

expansion

credit

bank

occurred

the

Victory

that
Loan

Drive, the debt retirement does
not currently have an anti-infla¬
tionary effect on private purchas¬
ing power. A refunding program,
involving the sale of long-term
issues tq the nonbank public and
retirement of short-term .debt held
by the banks, is anti-inflationary
because a part of the cash ac¬
of the
public are

cumulations

channelled into Government bonds
and private bank deposits are re¬
duced. But under the current pro¬
gram

the jreduction in private de^

posits occurred several months
ago. and what is now being re¬
duced is

simply an idle Treasury

deposit. It is, however, better that
the Treasury deposit be used to

off debt ^han ; to meet larger
expenditures.

pay

true

anti-inflationary

pro¬

by the Treasury, aside from
the question of the level of inter¬
est rates, has two facets. One is
an extension of the refunding pro¬

gram

involving the sale of new
issues to nonbank in¬
vestors to the extent that such

gram,

long-term

investors will absorb them,

using

the proceeds to retire ^ort-term
market—changes in the liquidity debt es it matures. The other is a
requirements of the banks and in retirement pf shortrterm debt out

tho outlook for shorMerm rates,/ qf 0 surplus of receipts over bx-'
speculation, changes in institu¬ penditures. The latter is the bnl^
tional demand, etc. Out of the un- program that actually ..means a

crued

scarcely; adopting, any concerted company manufactures
policy.
Presumably,
sufficient; polishing machines.

the

Also,

ness, and small educational insti¬
$40 per
dividends, approximately tutions, and small communities. settlement came the elimination
$600,000 for the payment of exist¬ I have said time and again that I of the preferential discount rate,
low in. order to givp industrial,
would much rather see a thousand the removal of-the.limit of onecompanies a sufficient margin. In ing bank indebtedness, and about insurance
companies. with four quarter point on changes in the
bis respect there is a considerable $187,300 for other general cor¬ million dollars in assets than one price of a Treasury bond in
apy
divergence;.r--p^ic
porate purposes. The balance will insurance company with four, bil¬ one day, and a clear statement by
the representatives of industry* pit
be use&£o payfor the additional lion. I would rather see & hundred officials of the Federal Rererye
he one hand».:.and the.price-cpnsteel companies than one United
land and buildings in Matawan,
System that the 7/&%-2l/z % patrolling authorities on the other,
States Steel Corporation. I would
N. JM and Stratforci," Conn. The
term .of interest • rate? will ;be
ivjhilst ,the labon^organizations:
rather see a thousand banks than

it) price
Qntrolhng authorities

participation in the Drive.
the period of the Drive
commercial banks purchased

about $6 billion of Government
since a part of the
securtities and also substantially
maturing securities were held by
increased their loans on Govern¬
the Federal Reserve Banks, the
ments. Thus retirement of debt
commercial banks had to transfer
must proceed to the point where
more
to the Federal than they
over $6 billion of debt held by the
received back on maturing issues

issues.

pomts of view

result

During

Securities Offered

sidered at alL. There attention js

were

bank

the

their portfolios of sub¬

Hapon-Van Winkle

previously .indicated, international

in the Victory
of indirect

the funds obtained

Governments

mediate-term

particularly the importance of

current and prospec¬
the program as an anti-inflation¬
withdrawal, of funds by the
ary
weapon. The fact that the
Treasury from the Government
funds now being used to "retire
deposits in commercial banks in
debt were obtained by sale of is¬
order to pay off maturing debt,
sues in
the Victory Loan means
tive

summer

has to do with
the economy

program

the broader effect on

These are the his¬
about 14% during times ours.
I think this country is great on
and autumn of toric, classical methods by which
held by them and their customers.
account of its small educational
in the long run international equi¬
1939.
In this way an additional
In technical terms, reserve bal¬
librium will be restored."
These institutions, more than anything ances were reduced and this had
margin* was produced — a fact
which is often overlooked in mak¬ words of Keynes should, how¬ else. You know James A. Garfield a
tightening effect on the money
said that his idea of a college was
ing comparisons between price ever, be interpreted with some
market.
The
Federal
Reserve
movements in England and the reservation.
Experience
shows a bench in a log house with him¬ Banks relieved this pressure by
that in the United States the im- self pn one end of that bench and
United States.
purchasing bills and certificates
Mark Hopkins on the other, and
.As American wage rates are port surplus of foreign raw prod¬
to
replace the redeemed issues
manufactures
and
semi¬ his idea on that was that Mark held
qw
rising by about 15%, we ucts,
by them.
Hopkins was famous as an educa¬
manufacturesis
largest
when
ist,
however,
ask
ourselves
"The banks have not, of course,
tor because he was an individual
Aether this rise can be borne by American industries are favored
been the only influence
in the
educator..
'
ndustry without an economic de- by a boom with a high degree of
market. The prospect of a bal¬
In institutions such as this, the
But a sudden, .pise
Line > supervening.
Contrary to employment.
anced budget and of an indefinite
n .wage costs, as was the casein
teachers and the professors can
hat happened in 1936-1937, it
period of time before new Treas¬
1936-1937,
lead to
to
4n| be taken for granted that .setback in may economican abrupt give individual attention As each ury offerings of long-term issues
the
situation member of each class.
you
rice movements on the Ameriwould be available, led to a bid¬
and thus also to a considerable were receiving your diplomas, I
an. market this time will be deding up of the price of these
decrease in imports.
The world listened to Dr. Mead, and he had
ermined
primarily
by
purely
issues, and speculative buying ac¬
as a whole will derive most bene¬
a special salutation for each and
American • factors
or,
in other
celerated the rise. As in all mar¬
fit from such a balance between every one of you.
words, that there is no group of
kets where speculation is impor¬
ountries outside the U n i led costs and prices in the American
Now I would like for the presi¬
tant, the movement probably over¬
Sfates which in regard to prices economy that a steady course of dent of Harvard, of Yale, of Co¬ reached itself. In
any event, the
economic
development will
be lumbia or Princeton to have that
s strong enough to check a rise
sobering fact that a large poten¬
facilitated.
individual touch that your presi¬
bp the American market, due to
tial supply of Government issues
an
increase in the costs of pro¬
dent
had
here
today. That
is was being carried by means of
duction. • Th'S; -however*
what
holds
young.-men
and
young bank loans led many investors to
-pod only. within certain limits.
women need
when they are get¬
defer further purchases of the
arious American prices are even
ting an.education. They want some long issues at the high prices
npw" at a'rather high level as comoh^-'WhoM-iffiey can trust, and reached. Moreover, some institu¬
pared with corresponding quota¬
An underwriting group headed they want some one in whom they tional investors had been obtain¬
tions abroad, but, in view of dif¬
can
have confidence,
to whom ing funds to buy long issues by
by Maxwell, Marshall & Co. on
ficulties. jn delivery and. other cir¬
June 4 offered to the public $1,- they can take their problems and selling intermediate bonds to the
cumstances which tend to retard
have them solved.
250,000 41/2% 15-year sinking fund
banks, and when many of the
production
in, other
countries,
This looks to me as if it is a banks stopped
debentures and 101,284 shares of
buying and did
American industries will oresum""mmon dock (par $3.50)
of the wonderful class. When the roll some selling of such issues be¬
ably be able to maintain their inwas
called I thought I was in cause of heavy war loan calls,
Hanson-Van Winkle-Munnirig Co.
ernational position despite the
The
debentures/ due
April
1, Jackson County, Mo. The names this shift to the longer issues by
increase
~costsr fo. which they
other institutions was also cur-1
1961, are priced at. 100% and ac¬ are exactly the same. *
are at present exposed..
crued interest, and the common
tailed. Thus a combination of in¬
Advocate of Small Business
jjn
American
discussions, , as stock at
fluences has been operating in the
$10,625 a share. The net
was

the: late

3069)

(Continued from page
ties eligible for bank purchase and
the market rose (yields declined).

maintained.
"Another

reduction of the public

1947.

The

general economic

enr

vironment would seem to require
a

large excess of receipts over ex¬

penditures
tionary

measure.

jcounter.rinflaThe

country

Should be thinking in .terms of a

$5-10 billion surplus, not

aspect of the debt re¬

debt. Cur¬

rent forecasts are that the Fed¬
eral budget may be balanced in

balanced budget."

merely

THE COMMERCIAL & FINANCIAL CHRONICLE

3092

colored by

array of proposals being brewed in the Economic, and Social Council,
and within various member countries, for steering the world in the
opposite direction.
7
'« •'
For example, the Council's own Economic and Employment Com^
mission in its formal report last week advocated as a major tenet

a basic con¬

the distribution of the world's raw materials on the basis of need-

(Continued from page 3054)

•

between the current ideals being propounded for the liberalization of
international trade on the one hand, arid on - the other the entire

Another Egg

UN Lays

Thursday, June 6,1943

report's data "supporting" the finding that even a
^threat to peace exists, is replete with dubious reasoning,
The

political inconsistencies. For example it is stated as
clusion that "the allegations against the Franco regime

"potential"

involve mat¬

rather than of ability to pay. International WPA technique for which

domestic jurisdiction and which concern governmental and Intergovernmental planning is strictly indispensa¬
the maintenance of international peace and security, and the smooth ble! Central planning and authoritarianism on a- worldwide scale
and efficient working of the United Nations as the instrument mainly will likewise be necessary for the implementation of the giant inter¬
responsible for performing this duty."
But the foremost proponent national relief and rehabilitation operations that are being fostered.
Even the American economy, which is less Socialistic than most
of v these charges, namely the Soviet government, surely has itself
of the other nations of the world, is domestically operating under so
much more violently and effectively played just this role, m seizing
territory and power all over Europe, and in infiltrating into the sov¬ many controls, that our pleas for the relaxation of the barriers to
ters

which travel far beyond

Moscow's contribution to the smooth , working
of UN has been strangely demonstrated in objecting to every cooper¬
ative measure at Yalta, San Francisco, Potsdam, London, Paris, and
here at Hunter with her initiation of the filibuster-walkout technique.
Also Franco's wartime attitude toward the Axis powers is a
basic item of the quasi-guilt finding. But what of the Soviet s correereign nation of Iran.

record? As copious quotations from
correspondence with Hitler and
Mussolini are offered in this report, it seems rel¬
evant likewise to cite some of the
concurrent
dicta from the sainted men of Moscow. The fol¬
lowing pronouncement did not emanate from
Madrid, but from the lips of M. Molotov in Mos¬
sponding

Franco's

past

world trade, are no more than high-sounding lip

service. For exam¬
ple, our OPA price controls, make the continuance of restrictions on
both exports and imports indispensable. In England the coal and
steel industries are being nationalized; ensuring the control, through
subsidy or otherwise, of these industries' exports. Her Socialist gov¬
ernment has abolished a free market in cotton. And, as Harold Wincott so ably points out in his article from London in this issue of the
"Chronicle," the Labor Government's basic philosophy is completely
opposed to internationalism in finance.
,i
So the agencies of UN itself, as well as the member nations, must
change their controlling current philosophies, if the International
Trade Organization, or any similar efforts, are to have any semblance
of

significance.

integration.

When that stage 13
reached there rapidly follows the
'man on horseback' under whose
regime

all vital

personal; rights

would be scrapped and the. labor
unions abolished.
"It is to be hoped that the ter-*
rifying experience we have passed
through will shock the American
people out of their lethargy and
that an aroused public opinion
will insist upon the Government's
safeguarding, the public interests
so that never again will it be
pos-*
sible for any individuals or groups
to

throw down the gauntlet

challenge
"The

society.

our

President

has

and
' 1

requested

Congress to enact stringent legis¬
lation to meet the emergency sit-i
uation and to recommend a long-;
range program on labor relations.
Consideration
will
undoubtedly

be given to the

overhauling of the
Wagner Act, to make labor un¬
ions legally and financially re¬
sponsible for the violation of their

contracts, as now. applies to man¬
agement, as well as to outlaw any
strike in Industries dealing with

*
si:
s':
"Ideological wars are rem¬
.
.
.
that brought
the essential needs of the commu¬
Political and Ideological Differences Resetting
economic ruin and savagery; ... a war of
nity. Provisions may also be made
Economic Council
this kind has no justification whatsoever; ...
for enforced cooling-off periods it*
the ideology of Hitlerism, like any other ideo¬
Already at this early stage of its career the Economic and Social labor disputes, and for compul¬
Council is running into a bevy of squabbles springing from national- sory arbitration in case mediation
logical system can be accepted or rejected—that
is a matter of view
everybody will under¬ istically differing interests and ideologies. One altercation has been fails.
stand that an ideology cannot be destroyed by started by Russia's opposition to the goal of freedom of information.
"There is danger that underi
force
Therefore it is senseless and crim¬ This was expressed vigorously at an open session last week by Nikolai emotional stress and public pres¬
inal to wage a war for the destruction of Hitler¬ I. Feonov, the Soviet delegate.
He criticized Mrs. Roosevelt's recom¬ sure reactionary legislation may
V. Molotov
ism, covered by the false banner of a struggle mendation for a special sub-committee to promote freedom of the be imposed which would not only
...for democracy."
press and of general information; thus demonstrating the unyielding be unworkable but might be the
% Similarly inconsistent is Moscow's currently announced inten¬ technique of Russia's officials conducting themselves—even in quite cause of endless friction. Hence
tion of adopting diplomatic relations with President Peron of Argen¬
unimportant phases—as proponents of particular national policies, the necessity of our legislators
instead of idealistic world citizens.
In fact, Mr. Feonov frankly came proceeding with judicious calm
tina—scarcely imaginable as a noble ideological act.
out with his opinion that the Commission would be very much but keeping uppermost in mind
To act logically, perhaps the General Assembly should establish
"stronger" if its members were to act as the representatives of their the protection of our common
a subcommittee to investigate Russiar—at least her right to member¬

cow,

in October 1939:

iniscent of old religious wars

welfare.

respective Governments.

ship in UN!

Another matter which has set off an altercation

"On the other hand, leaders of
assumption by the Economic and Social Council of the administra¬ labor should now fully realize that
tive functions which the defunct League of Nations formerly per¬ the interests of their groups are

Exit Mr. Stettinius
Wholly irrespective to what degree Mr. Stettinius' resignation
resulted from his progressive demotions since he was Secretary of
,

tive---both per se

U. S. representa¬

arid relative to the delegates

the

cisco.

while

Apart from the factor of his bad health,
he was not quite playing a messenger-

by orders.
Thus during much of the
give-and-take
extemporaneous
debate,
often
brilliantly engaged in by supposedly lesser lights
such as Hodgson, Van Kleffens, and Lange, the
American delegate remained exasperatingly in¬
hibited.
^TP
strung

The

delegates

"under

wraps"

from

home—such

broad

outlines

all nations act to some
pursuant to instructions

instructions

was

international loans. Inclusion of this on the Coun¬
objected to at length by the Soviet delegate on
Significance is added to this disagreement

by placing special above

UN power.
nil

£.

Stettinius,

wsjaaawwa '*

Jr.

from
details, as in the

Sword Over Our Heads

Nationwide Strikes Are

attacked

when

extent Col. Hodgson

vulnerable

not

•

7.7

♦

;

.v7

Inconsistencies Regarding International Jrade

convene

this

Preparatory'!? Committee

meeting for the much-heralded
Trade and Employment will definitely
October 15. The lofty aims propounded by

Conference

in London

group,

general

Legislation No Final Remedy ;
"While sound legislation accom¬

panied
ment

will

courageous
enforce¬
be helpful in dealing

the critical industrial

with

prob¬

provide
protection against

lems, in itself it will not
the

necessary

assaults upon the life

of the com¬

In the final analysis, the
most effective safeguard is to be
found in the spirit, high sense of
social responsibility, and loyalty
of people and Government offi¬
cials to the underlying principles,
munity.

in
the
Wagner Act, which is
operated on his own
points,
such
as
transportation, known as the Magna Carta of La¬
easily determinable—for he himself
electric light and power, mining,
bor. This act is grossly one-sided
passed the word that his home office ? only was water
supply, sanitation, and the for under its provisions labor
apprised of his doings by delayed cable; while
distribution of food. Soft coal, for leaders can with
impunity violate
on
the other hand, Foreign Minister Evatt on
instance, supplies fuel for about collective
Herbert Vere Evatt
bargaining
contracts
his arrival here last week created the imnression
onevhalf. of the factories, two- while management, on. the other
that he himself had been "keeping £ tight rein"
thirds of our electric power, and
hand, is held strictly accountable
on both Hodgson and the able Paul Hasluck.
practically all of our locomotives. and is subject to severe penalties
The Polish delegate, Mr; Lange, is perhaps Jointly influenced
Areas so vital to the life of the
for violation. The granting of spe¬
by -Warsaw and Moscow; but such restriction appears to be limited
country, should be effectively pro¬ cial
judicial privileges breeds con¬
to fundamental policy; giving him free rein to persist in lengthy,
tected against interruption.
tempt arid disrespect for law and
able, and frequently humorous dialectics.
"It has been said that you can- government.
It appears that Messrs. Cadogan of U. K. and Van Kleffens of
riot 'dig coal with bayonets,' and
"This legislation coupled with
the Netherlands have manifested a happy medium of home-control
you cannot force; people to work. general indifference on the part of
policy. They have exhibited rare ability in debating legal points and Because of the
implication in¬ our officials and the American
in making extemporaneous decisions and compromises, seemingly
volved, this is a specious and dan¬ people permitted the forging of a
based on continuing deep rooted understanding of their respective
gerous doctrine as it entirely ig¬ vicious weapon, which was seized
nations'concept of sound policy.
nores
the
fundamental
concept by reckless and irresponsible lead¬
.9f course,, the reductio ad absurdum in the home office-delegate that society rests upon an implied ers, who, puffed with power, and
relationship has occurred in the "liaisoning" of the unfortunate Has- contract that all groups will co¬ with callous and brutal disregard
sein Ala with his government in Tehran—-with his final
"scuttling." operate for its welfare. In fact, for the life of the community, at^

The'

and not

interests.

a
traditions, and ideals of the coun¬
"marching
try.
Such an amorphous relationship is
(Continued from page 3069)
"On the other hand, we find
bound
to
harbor
dissension.
For
example,
cern the health, safety, or welfare
that emphasis has been placed
the Australian liaisonship has continually ap¬ playing their parts. The distinct
of the nation.
upon
rights instead of duties,
peared to embrace internal jealousy.
In • San advantage of this co-operative
Crisis Outgrowth of Union
wages rather than output, spend¬
Francisco the colorful and voluble Foreign Min¬ economy is shown by the fact
that the average person today has
ing without regard to means of
Coddling
ister Evatt stole the show from his fellow-dele¬
command over about ten times as
"The
current
crisis
did
not payment,
and
group
interests
gate, Frime Minister Forde, to such an extent
that the respective personal entourages of the many goods as during the period
spring up overnight but is the above the general welfare. I'or
of family self sufficiency early in
two gentlemen were scarcely on speaking terms.
outgrowth of more than a decade more than a decade we have been
our
history, while the working of pampering and coddling labor dominated by the false philosophy
Here
at Hunter the earlier proceedings were
schedule has been cut in half; But unions and
granting special rights that the Government should play
materially enlightened and enlivened by the
our system is a delicate mechan¬
and privileges which were incor¬ the part of Santa Claus and guar4
Australian
Hodgson's vigorous statements and
ism that can easily be disrupted
resolutions—both direct and in repartee. But to
porated in legislation, particularly antee security and an abundant
what

International

of public welfare

realm

Gromyko.

was

with
that, in
labor gains and bet¬
interwoven

those of the public and
consequence,

governmental agency like 1LO. In any event, an agreement has just
been signed, providing for the latter's affiliation with the UN as a
specialized agency.
But this#of course has not stopped continuing
agitation by the WFTU, as is witnessed by this week's voluble out¬
burst by Sidney Hillman reiterating the CIO's renewed demand for

ranging

of policy to specific

orders" given to Mr.

y;~

inextricably

terments must be won within the

Again the labor agitation respecting representation for the leftwing Soviet-supported World Federation of Trade Unions, has come
up.
It will be recalled that this matter, with particular reference
to the conflict with the A. F. of L-backed International Labor Office,
was fought over at great length both in London and San Francisco.
The CIO's representatives and Soviet elements agitated for full repre¬
sentation of the WFTU, despite the fact that it is not an inter¬

boy role he has appeared to be completely ham¬

extent

cil's agenda

several technical grounds.

thereto.

o.ther nations. To Security Council ob¬
servers, it has seemed that Mr. Stettinius com¬
pletely lacked both the vigor and enthusiasm
which he so constantly displayed at San Fran¬
of

formed respecting

by the connotation that Russia's traditional feud with the League will
similarly govern her attitude toward all other matters relevant

State, his departure highlights the general ques¬
tion of the independence of the

is the proposed

however,

highlight the sharp and basic inconsistency

this

the

basic

law

civiliza¬

tempted to y club the American
people into submission in order to
gain their selfish ends. ^

tion itself.
It naturally follows*
therefore, from the essential na¬
ture of organized society that no
group
through concerted action

should have the power to
or

threaten

interrupt facilities that

con¬

;

When

any

group

becomes so

powerful that it can rise above the
fundamental law of the land, so¬

ciety is

the borderline of dis¬

life to
ware

all, while pressure groups
encouraged to make shame¬

ful raids on the Treasury to
their, share of the spoils.
Government

strument

get
The

has become an in¬
grant special favors

privileges to groups rather
a protector of common inter¬
ests. In consequence, the nation
has been split into classes that tear
and weaken the fabric of our so¬
and

than

ciety. Thus, when the crisis came
were helpless to protect our¬

selves.

private enter¬
democratic form of
government is dependent upon an
"The survival of

prise and our

over-all. constructive

approach W

challenging problems. We
must find a basis for co-operative
action in the areas of common in¬
our

terests,

which

.fortunately

'are

and* fundamental
than the fringes of disagreement
among the various groups. Above
all, we must join forces in being
eternally vigilant to safeguard the
public
interest against ; assault
more

numerous

from any

source."

J/olUme 163

levies, exist in Salina, Kan.,
Kearney and Taterson, N
J,

eager to
of need,

kocnesier and

Municipal News and Notes

sale.

This week the municipal mar¬
continued to improve, after

ket
its

steady

retreat from an alltime high set in early April, the
long-term bond index recording

advance for the second week

row.

tnarket is

that the
again heading for
appears

once

Untroubled waters after the strike
furore and the approach of a new

trial period for long-term govern¬
ment

issues, tending to encourage
period of watchful relaxation.

Main

attention

focused

being

the new issue market with
initial reception reported gener¬

ally

good.

Some

Were

marked

•points

and

flected

due

there

from

re¬

optimism,

are

among

be¬

now

It is

few

past

individual

weeks

holders

Jbonds, with recent trading
ally

light
character.

and

BIDS

re¬

has been

pressure

the

gener¬

professional

WANTED

A RESOLUTION

PIRECTING THE PUBLICATION

NOTICE

INVITING PROPOSALS TO
PURCHASE $5,700,000.00 OP PUBLIC

IMPROVEMENT GENERAL REVENUE
BONDS OF THE CITY OP SAN AN-

H TONIO,

TEXAS.

THE

CITY

SAN

AN-

JXONIO—

1. That sealed

bids addressed to the
iCity Clerk of the City of San Antonio

Will

received

there

expected to eventuate in the
future.
Among these
is
a
$78,000,000 flotation for the
City of Philadelphia, in addi¬
tion

to the

ready

•

$29,000,000 al¬
for
that

over

the

metropolis. Allegheny County, is
expected to seek bids on over

$30,000,000; various Ohio local
more

bonds,

and

than

the

Bridge Authority
build

the

Bridge at
500,000.

$70,000,000
Washington
to

plans

a c o m a

re¬

cost of about $8,-

10:00

o'clock

office

the

27th

«day of June, A. D. 1946, at which time
Und place bids will be opened for the
sale of all or any part of $5,700,000.00
©f

Public

Improvement

General

Rev

Bonds to be issued by the City of
Antonio, Texas,
and
dated
the

enue

Can

1st day of

Being

July, A. D. 1946, said bonds

in series

and

numbered

fol¬

lows:

A-45
>

INTERREGIONAL

HIGHWAY

JB-45

BONDS

AIRPORT

TRATION

$1,750,000.00

ADMINIS¬

BUILDING

BONDS

1,500,000.00

£-45 STREET AND BRIDGE
BONDS

P-45

2,000,000.00

GARBAGE

j"BONDS

JJ-45

0
306,000.00
k
>150,000.00

DISPOSAL
.......

........

FIRE

STATION

| BONDS
2. The

Bonds

are

the

denomina¬

tion

of $1,000.00 to mature within a
period of 20 years, to be paid serially
In yearly installments, as nearly equal
ifts practicable, to
bear Interest from
date of not more than 2 lk per cent
|per annum, payable semi-annually.

Both

payable

compared to other bond holdings.

Foreseeing

great amount of local

principal
and
Interest
the
office
of
the
the City of San Antonio,
fiscal agency of the City of

the

J3an Antonio in New York, N. Y.

f tor,
and accompanied by a
check for $10,000.00, payable

Cashier's
uncondi¬

tionally

to the City of San Antonio
guarantee the performance of the

proposal.
5. The

shall

Bidder

interest

state

which

the

rate

Bonds

are

■

Bonds

are

delivered

paid

for by the City Treasury
Antonio, Texas.
No

bid

for

less

than

City reserves ; the
freject any/ and all bids.
information

10.' Further

this

sale

and

San

kL
and

par

right

relative

obtained on applica¬
Auditor of the City
| of San Antonio, City Hall, San Antonio
tion

may be
the City

| 5, Texas.
1

PASSED

AND

APPROVED

jflay of May A, D, 1946.
;

GUS

23rd

MAYOR.

•

FRANK W.

BRADY, "A
City Clerk.~

State

an
addi¬
from a one-cent
gasoline tax increase imposed by
tne
1945 State Legislature,
but
now being challenged in the courts.
If this extra cent of tax is upheld,
he said the expenditure for Iowa
may

obtain

tional $18,000,000

roads

in the next two and

years

can go

half

to $124,000,000.

The Governor said the program
would exceed the

primary paving
originally begun with the
voting of $118,000,000 of bonds by

tax factor),
obligations.
come

Cities

and municipal

Spend to
Industry

Legislation authorizing munici¬
pal bond issues to finance the ac¬
quisition of buildings for lease to
private industry, use of city funds

advertising and pro¬
motion, and special taxes to main¬
tain
city development commis¬
sions are cited as examples of the
nation-wide interest in cities

new

attracting peacetime industry, a
report of the American Municipal
Association says.

City promotional activities are
being initiated on both state and

municipal
states

levels.

have

comes

effective June 15.
are

publishing

promo¬

tional pamphlets designed to at¬
tract enterprise and boost exist¬

ing industry. Several, including
Cambridge, Ma«s., advertise di¬
rectly by mail. City-financed
industrial

commissions,
some
by small industrial

supported

Are

of the entire country a
previously undreamed of
set of methods in the trading of
and

commodities.

Seek Veterans' Bonuses

ferring

Joining the ranks of those States

not

all

The current situation is

reminder

these

vivid

what

d est r.u c live

same

which
mer

v/e

possibilities

witnessed in the

sum¬

of 1920. The strongest claim

which, the- Offiqe/of Price Admin¬
istration is making for its con¬
tinuance

and

that

the

is preventing
eventual

eco¬

brings. The evidence which
us proclaims to the
contrary;v.:; V
ways

raw

of regulating the value

material. It is not neces¬

that prices be so constructed
produc¬
tion from one commodity to an¬
other for the sake of obtaining a
sary

to force the transfer of

higher profit. It is not necessary
that legal interpretations of exist¬
ing or imaginary laws be placed
above economic facts in the de¬

distorted
short-sighted proced¬
ure, /Can destroy the value bf the
soundest principle in government.
policy.
termination of prices* A

objective,

Conditions Similar to 1919-20

Comparing the present situation
with that7 which existed in 1919
,

and 1920

find little to contrast

but much which is SimUar. Then,

and prices were
Then, as now, all es¬
sential goods appeared to be ex¬
tremely scarce. Then, the reputed
scarcity turried out to be a mi¬
rage. What will it be now?

costs

now,

moving

up*

here

re¬

single trade which once sufficed.
Alongside the usual channels of

Sell

$30,000,000 Issue

distribution

Arrangements have been

com¬

held in New York. All of the

were

sugar experts testified. The com¬
mission
reported officially that

the

real and/

sugar: scarcity; was

black that the housewives must resign
of cir¬ themselves to the extremely high
which* are prices, and/the? great scarcity fee
but which at least another year or two. With

seek

Ontario

have

been

built

all

few weeks after the issuance of

this

official

report the price pf
broke and went down to
pound. Sugar appeared from
all quarters in mountainous vol¬
ume.
Warehouses, attics, base¬
ments throughout the entire met¬
ropolitan areas disgorged sugar.
Scores of barges in New York
harbor were found to be loaded
sugar

American Sugar
Refining Company ^ closed^ d
completely and did dot refine a
with sugar. The

pound of sugar for a-period of si*
months,- waiting for the American
public to consume the enormous
surplus.

kinds of auxiliary

reservoirs and
detours which have the dual ef¬

Precisely the same experience
was had with respect to silk.
It
and prices was thought to be as precious as
on the one hand and retarding the
gold. It was transported across the
flow of goods on the other.
Over country in armored, cars accom¬
May 31. The issue, to be sold at the entire area of industry and
panied by guards. It was priced hi
par
and accrued interest, com¬ trade men are being forced into the
neighborhood of $20 a pound
prises $5,000,000 of 2%%^ bonds, the use of these questionable de¬ and almost
impossible to get at
maturing $500,000 annually from vices in order to remain in busi¬
that figure. And then all of a sud¬
1957 to 1966; $20,000,000 of 2%%
ness.
This development has be¬
den the truth was discovered re*
bonds, maturing $2,000,000 annu¬ come a mighty sinister force strik¬
garding silk. The markets were
ally from 1967 to 1976, and $5,- ing at the very heart of business
suffocated with silkl Silk dropped
000,000 of ZVz% bonds, due 1947 morality in America.
to $3 a pound. Within a period of
through 1956. Proceeds are to be
a few weeks almost exactly the
The Black Market
used for refunding purposes.
same fate befell every other basic
The final
consequence
is the
black market which has slimed its commodity, leaving In its: wake?!
pleted with a large syndicate for
the sale of a new issue of $30,000,000 Province of Ontario serial
debentures, it was reported on

fect of increasing costs

(Continued from

are

as a means

of its

so-called

the

to
remember
their cuitous
subterfuges
who served the coun¬ legal in themselves
try during the late and unla- would not be tolerated for an in¬
mented World War II, are Louis¬ stant
in
any soundly
operating
iana and Michigan. A proposed economic system. Distribution is
State
constitutional
amendment being encumbered by every con¬
was
introduced in the Louisiana ceivable type and variety of sales
In
Senate, to clear the way for an condition.
many
instances,
$80,000,000 bond issue for such money transactions are completely
bonuses. If approved by the Legis¬ eliminated. Crazy and uneconom¬
lature it is to be submitted to the ical barter arrangements are set
voters at the election next Novem¬ up. In passing from one level of
ber. Governor Kelly of Michigan processors to the next or from
is being urged to call a mid-sum¬ one group of distributors to the
mer session of the State Legisla¬
neit, ghbds are often traded two
ture for the same purpose i Mr * or three* times* in place
of the
who

Reputed Shortages

ally arises—where
goods going?

modity. It is not necessary that the
price of a finished product be used

market but to the system

into every corner and crevice
of the economic system and which
way

proximately one half of the total
output. Again the question natur¬

been, recognized. It
of

one

In the spring of 1920, sugar was
supposed to be about the scarcist
commodity in the world. It was
He said the" $33,000,000 of Fed¬
But this irregular and interrupt¬ wholesaling at 25c a pound and
eral post-war highway aid avail¬ ed flow of goods to the consumer orders were being taken for de¬
able
to Iowa
by 1948 can be is not the only consequence of the livery within 12 months. A special
matched for two years from pres¬ present system of price control. commission was set up by Presi¬
ent funds, and that the 1947 Legis¬ There has developed throughout dent
Wilson to
investigate the
lature will have to provide money the industrial and business com¬ sugar
situation. Open hearings

Twenty-three

enacted

their need has

Subterfuges

for industrial

It is not neces¬
that price regulations be de¬
layed from two to six months aftar

OPA Leading to Use of

98 of the 99 Iowa counties.

young men

Attract

of ten years ago.
sary

program

Two More States to

closing of the yield

lies all around

Besides the $106,000,000 in sight,
Blue pointed out that

Governor

hoping that

nomic collapse which inflation al¬

MAUERMANN,

$45,529,000 will be spent
road system, and
$60,546,000
will
be
spent
on
secondary roads.
the primary

munity

inflation

this

ATTEST;
■

re¬

that prices be determined by

sary

formulas derived from conditions

commodity be made to bear
the burden of cost of another com¬

new

happened in
1919 and 1920. In my opinion the
accrued interest to
date of payment,
Into the City Treasury, will be. con¬
pattern ot those two years is be¬
sidered.
ing exactly reproduced with the
i'• 9.
The
8.

announced

Blue

Governor

cently that Iowa plans to spend
over $100,000,000 on highway con¬
struction by the end' of 1948. He

has

sumption. The psychology of scar¬
city alone is able to produce these
results but they are being inten¬
sified still further by the pro¬
cedure of price making followed
by the Office of Price Adminis¬
tration.:'-:!//?/
,:k k •'j
Under OPA, prices of any given
commodity are increased by short
hitches at irregular intervals. The
price curve is not unlike an un¬
evenly constructed staircase. Un¬
der war conditions and postwar
conditions alike, costs creep up¬
ward steadily and gradually. Price
adjustment to these steadily in¬
creasing costs is resisted by OPA
until a certain breaking point is
reached and then granted.
But the inevitability of the price
adjustment is apparent to sellers
long before it is allowed. During
this period of anticipation sales
are reduced or minimized and, in
some
cases, disappear altogether.
The eventual price increase, when
it comes, will break the long-jam
temporarily and then comes an¬
other long season during which
the channels of distribution again
run completely dry.

year.

proposed to be bought, not to exceed
gy2 per cent, and the premium, if any.
6. The
Bidder
shall
pay
for
the
(Opinion of approval by Chapman &
Cutler,
Attorneys-at-Law, of Chicago,
Illinois, but the City will pay for the
printing of the bonds, and the City
will
furnish
the
opinion
as
to
the
legality of the
bonds
by
the
City
Attorney and the approval of the At¬
torney General of Texas.

price increases rather

is not necessary that the price

to match Federal aid for the third

Cities

4.
All proposals shall be made
on
Bid forms furnished by the City Audi-

goods respond to

control

price

against

been administered. It is not neces¬

than released for immediate con¬

government financing in the next
decade, municpal bond dealers are

legislation
enabling cities to engage in indus¬
trial promotion arid direct adver¬
are
tising of municipal advantages.
City New legislation in
Kentucky be¬

Treasurer

Big
Highway Program

the

Although dealers' shelves are
now
well stocked, since even a
short dull period will pile up sup¬
ply, it is hoped that the newly
kindled interest on the
buying
side will shortly deplete the old
inventory and permit the absorp¬
tion of the newly contemplated
emissions. Currently dealers are
advertising approximately $120,000,000,
a
figure
considerably
higher than a month back. It is an
accepted fact that the large life
insurance companies are not buy¬
ing municipals in any way near
the volume that formerly pre¬
vailed, their portfolios showing

and handlers of

Iowa Plans

Narrows

City Clerk of ithe City of San Antonio spread will be made between Gov¬
In the City Hall, San Antonio 5, Texas, ernments (with their Federal in¬
until

dollar.

schedule

Is¬

permitted, while Michigan
cities may spend up to 4 mills a

are

near

Rhode

tion is

large issues which

new

drastic decreases in municipals as

BE IT RESOLVED BY THE COMMIS¬

SIONERS

talk

land, no more than *4 to 1 mill a
dollar of taxable property valua¬

these government bonds.
exerted

though

states.

different

$70,000,000, al¬
is
considerable

over

expenditures by cities vary

been-

come under the longcapital gains provisions on

ported that little

aggregate

In betweeen these two atti¬

tudes the intermediary processors

for future

Statutory limitations ^
tional

obtain them irrespective
of price, or condition of

their speculative instincts with the
result that goods are accumulated

$100,000 annually

said that

ginning to
term

week

interest

tory loan flotations

this

elections

has

underlying

revived

for

light, calling for only about
$15,009,000 and the visible sup¬
ply for the next month will not

was

few basis

Corporate holders of Vic¬

puyers.

calendar

some

for promotion,

units have authorized at recent

market

issues

The

Utica, N. Y„ Iron

Mountain, Mich., and several
Tex as cities.
San; Antonio,
spends

•

3093

THE COMMERCIAL & FINANCIAL CHRONICLE!

Number 4496

Mirage?

3059)
OPA Frightens Public Into
Buying

page

its attempt to induce public

support, OPA preaches continually
the doctrine of scarcity. Only by
frightening the people into the
acceptance of this belief can it
keep before them the spectre of
possible inflation. Once the pub¬
lic
has
accepted generally the
psychology of sctrcity the first
condition

created

which guar¬

antees scarcity. People who have

goods to sell develop an exagger¬
ated opinion as to the value of

every consumer

above the age of

12 has had occasion to observe for

himself. To

one

who believes that

the
depend on
honest incentive, straightforward
dealing and free competition, the
spectacle is truly terrifying.
: ;
Yet, all of these developments
have been
conceived, nourished
and brought to full fruition under
a system
of government controls
Which are described as essential to
the protection of the American
people. In fact, the appeal to the
people for their continuance has
taken the character of a holy cru¬
the welfare of the country and

salvation of its people

demoralized markets and

chain

bankruptcies." Prosperity and
artificial scarcity overnight were
replaced by depression and un- j
manageable surpluses.
of

The lesson for
be

obvious.

The

today should

of
scarcity is not proof of scarcity.
Under conditions of rising prices
appearance

goods will appear to be
when

scarce
matter of fact the ac¬

tual, supply could be far in:exj*
cess

of current needs.

The most

the.economic
horizon today is the Philosophy of

dangerous cloud

scarcity and the procedures which
are
being followed by Govern¬
ment to nourish this philosophy
and

give it the appearance of
reality. The entire productive ca¬
pacity of America has been oper¬
people who wish to buy give ex¬
ferred to are not necessarily testi¬ ating at record h°ishts and under
aggerated expression to their de¬ mony against price control in peacetime conditions ior a. period.
rvf. nirm mAnfllC
.*
mand for goods and are always 'principled They
are
testimony of nine: months.
their goods, / On ' the other

hand,

sade.

■

Yet the evils which I have re¬

THE COMMERCIAL & FINANCIAL CHRONICLE

3034

Thursday, June 6,1946

iS.'iM

shall

The Loan to Britain—A Part oi Larger Program
■

(Continued "from page 3061)
economic cooperation as well as
on poltical cooperation. That primcipie this government has recogf nized by its participation in the
.measures thus/far
adopted for
■world economic cooperation, The
Congress, and iri particular this
Committee, has assumed leader
ship in a program of world eco¬
nomic cooperation by approving
"membership in the Bretton Woods
Institutions and by the provisions
rof1 funds
Bank.
shown

for

The
the

feat of the enemy,
now

Great Britain

finds itself with insufficient

war

knows that the

same

ples apply to nations
viduals.

American

princi¬
to indi¬ which cannot be produced at home

businessmen

doing business in Latin America

foreign exchange and foreign ex¬
change producing assets to buy before the war found a desire for
food and other necessities of life. American goods beyond the abil¬

participate wholeheart¬ ity of those countries to purchase.
edly in the common effort to build At the same time, they found
countries
flooded
with
a world economy based
on open those
competitive
trade,
it must be German harmonicas and similar
commodities
which
the
Latin
given financial assistance now.
If it is to

If the loan is made,

the United

Kingdom should be able to meet
its needs and at the same time

of this country

participate in cooperative eco¬
measures by approving the
inclusion, of economic as well as
political provisions in the charter
of the United
Nations, and by
generously providing for our par¬
nomic

in the United

Nations

Relief and Rehabilitation Admin¬

the other nations of the world in

developing an international trade
free from unnecessary;
controls and restrictions. Other¬

program

wise, the British will be forced to
try and meet their' needs within
the Empire and the rest of the
sterling area. They will be forced
to conserve foreign exchange by

istration.

international bloc, and this would be a matter
trade, eliminate unfair trade prac¬ of grave concern to the future
tices, promote mutually advan¬ peace of the world.
tageous commercial relations, and
Because
of
the
position
of
otherwise facilitate the expansion Great Britain in world
trade, the
and balanced growth of interna¬ continued existence of a
strong
tional trade and promote the sta¬
sterling bloc would inevitably re¬
bility of international economic sult in the establishment of other
relations,"
the
Congress
has competing economic blocs.
The
served
notice
that never again
possibility for division and strife
will this country stand by while would be
enormously increased.
the world develops the weapons The
possibility of building a last¬
of economic warfare.
ing peace would be correspond¬
ingly diminished.
U. S. ill leadership of World
Cooperation
Other Steps Are Necessary
upon

f. This

program

world coop¬

eration can succeed only to the
degree in which it obtains the
wholehearted participation of all
our

as
economically
as
they
abroad, or which cannot be

can

pro

Even
in
the period
immedi
ately before the war, export trade
and production for export made
significant contributions to the
national
ment.

to take in order to sell their sur¬

income

During

and

this

to employ¬
period, when

our

Without

Barriers

export trade declined in terms
of dollars to somewhat less than
of

the

1929

nevertheless

volume, exports

contributed

over

billion dollars to the national in¬

World

Trade

Will Expand

Allies, both great and small,

and somewhat less than

million jobs to
ment.

wealth

many

sources, we may

less

natural

re¬

need world trade

than others.

The experience

of the 30's demonstrates that this

country can enjoy moderate pros¬

perity

when world trade is
limited.
However, none of us
would
willingly return to the
even

moderate

prosperity of the latter

30's.

all

look

America of greater

forward to

prosperity, of
fuller employment. To attain that
America, we must not only con¬
tinue our efforts at home, but we
must also expand our world trade
—our imports as well as our ex¬
While this loan is an important ports.
As a nation of farmers,
and
businessmen,
we
step in making world recovery workers
and world cooperation
possible,; have a direct economic stake in
other steps are equally necessary. the expansion of world trade.
Loans to many other nations are

come

national employ¬

If through world economic co¬
operation, we can succeed in re¬
A Goal of $10 Billions in Exports
moving trade barriers and thus
If our measures for international
create a world trading commu¬
nity, world trade will expand. economic cooperation are even
This will supply us with markets moderately successful and if max¬
for our surplus agricultural and imum employment is maintained
industrial production limited only at home, an export trade of well
by our willingness to import, to over 10 billion dollars is in my
invest
abroad
and
to
travel opinion a possible annual post¬
war goal for
abroad.
this country. As a

our

for

all

19.7

million dollars.
37.5%
oi
tobacco production, of which

our

naval

stores

in 1937,,/of

40% went to the United Kingdom,
was exported from 1935 to 1939.

duced at home at all.

American countries did not desire
in quantity but which they had

continuing and expanding their
of
bilateral
payments
these actions, and by de¬ system
claring it "to be the policy of the agreements. While it may be that
United States to seek to bring the
British
cannot
indefinitely
about further agreement and co¬ continue the dollar pool, the coninuation and extension of the faroperation among nations and in¬
Participation in world trade is
ternational bodies, as soon as pos¬ reaching system of currency and necessary to the full economic
sible, on ways and means which i;rade agreements" would result in well b'eing of this country. Be¬
will best reduce obstacles to and the creation of a strong sterling cause of our size and because of

1: By

restrictions

port markets, with a totaL value

again look to foreign mar¬
exchange our sur¬
plus industrial and agricultural
for
production
those
products

ticipation

of its contribution to the de¬

Export-Import
has also cooperate with this country and plus products abroad.

the

Congress
desire

cause

turpentine was destined for .eV

kets in order to

matter

running at
10

billion

ports,
items

fact, exports
an

for

Exports Will Decline
As

practical matter, failure to|
the loan will reduce our
exports below the pre-war

dollars.
relief

include
and

level)

with
for

economy as a

where large numbers of people
gain their employment by product
ing for export. This would not
happen immediately, of course,

because/pf; pent-up demands
world
over,
and because
countries have substantial

being purchased in
the United States only because
other sources of supply are not
yet available.
An export trade of the order of

accu¬

mulated balances of gold and dol¬

However, once the immedi-'
period of world reconversion

ate

over

our export
trade, particu¬
larly to countries whose economic
position forces them to sell for

blocked sterling, would be sub¬
stantially affected.
How Loan Affects Domestic

Problems

Questions

many

reconstruc¬

the

many

lars.

ex¬

are

consequences1

far-reaching

our

whole, and
in particular for those fields of
production like cotton and tobacco

now

Current

approve

annual rate of about

however,

tion which

are

Without Anglo-U. S. Agreement.

time

loan

and

gram

raised from time

are

the

effect

of this

total

lending pro¬
problems immedi¬

our

the

ately facing us at home. As a pre¬
liminary matter, it must be em¬
phasized that the British can, if

the loan is approved, draw on the
would
mean
jobs directly re¬ credit over a period of 5 years.
lated to the export trade.
I am Considering the time that has al¬
sure
that all will agree that 4 ready passed, it would appear that
million jobs would represent a the British cannot spend during
significant contribution to achiev¬ the current year as much as Vz of
10

billion

dollars

about 4 million

the credit even if their orders are
ing full employment.
This type of an export program promptly
placed.
Furthermore,
our analyses would lead us to be¬
can only be realized if the meas¬
lieve that over % of the amount
ures designed to establish multi¬
lateral trade free of unnecessary which the British might expend m

restrictions

operative. If the
impossible to co¬
operate »in developing a world
trade community* based on
the
principles embodied in the BretBritish find

are

1946

will

for

commodities

supply, such as tobacco, cot¬
ton, petroleum, crude synthetic
rubber, machine tools, some types
of industrial machinery and some
easy

I am, of course, mindful that
equally necessary if the world is shortages at hom.eK,ip,ean thaMaiv
tori Woods institutions and in the chemicals. '
not to be divided against itself. I the immediate
future we must
The
balance, or
%
of the
recently published Proposals for
leadershifH^it cannot do the j bb am just as much opposed to an limit our
exports in many fields. the
alone. ■,
Expansion of World Trade and amount which we estimate may he
?
'
\
//■' i Anglo-American bloc
as
to
a I am aware that for the present
Unless* the greater, part of the British bloc which excludes us. world needs and the ability of Employment, the chances are that expended in 1946, will be for
in the long run our oarticipation items of which there is continu¬
World joins with us In the reduce I am just as much opposed to an
many foreign countries to finance
scarcity and on which we
in
world
trade
will
be
much ing
lion of tariff barriers, in thedim^ Eastern bloc as to a Western bloc. them from their own resources
smaller and employment result¬ maintain export controls, such as
ination of preferences, in the re- It must be our foreign economic will in
many instances exceed our
ing therefrom will be correspond¬ meat, fats and oils, grains, naval
imoval " of ' export; and
import policy to promote economic re¬ ability to supply those needs. The
stores, lumber, wood pulp, and
ingly reduced.
: quotas, in the reduction and ulticovery in the East of Europe as recent continuation by the Con¬
steel mill products.
These coniMany of our industries which
/mate removal of exchange, and well as in the United Kingdom.
gress of the Export Control Law
modities are so badly needed by
and
This agreement is in the interest will enable us to take care of Contributed much to employment
currency
restrictions,
the
the British that they would prob¬
in this country in the pre-war pe¬
world will, continue in a state of of this country., of Great Britain these
temporary difficulties by a
ably attempt to purchase them
drmed economic truce. An armed and^ of
the -entire
world; By wise limitation of exports and at riod are dependent in large part
here even in the absence of the
on a healthy export trade.
economic truce wiU not ^rsist any speeding British recovery, it will the same time to meet
Even
essential/
loan.
The granting of the loan
in the period 1935-39 six percent
more
than will an armed mili- make its contribution to world needs abroad
by directing those
will not increase the allocation^
of our production of passenger
t ray truce^ff the world permits the recovery. By securing from the
exports to the areas of greatest
granted to the British by the De-j
armaments of economic warfare the British their agreement to re¬ need. While we must take account cars was exported while in the
partment of Agriculture and the
to be forged, occasion will be move currency restrictions and to of this
period 1936-40, about twenty-one
present situation, we must
Civilian Production
Administra^j
found: for their trtilizatiom If the cooperate in removing other trade build our
percent of our trucks were sold on
program for the period
tion, and the continuation of thef
world permits economic blocs to barriers, it will promote world of abundance which will follow.
export markets. The production of
allocation and export license au- •
these vehicles totaled about 600,be created,
the economic blocs trade unity and economic peace.
thorities will adequately protect'
U. S. Has Surplus Production
will war with each other.
The extensive trade and finan¬
000. units representing 118,800,000
our domestic economy from undue
man hours of labor, or about
cial controls in existence during
World economic peace and coCapacity :j
110
demands for these commodities. *
rsierfctioi
are
Even now there are many fields million dollars in wages at 1938
dependent- t>n the war were necessary in order
The general inflationary aspects
world recovery. A hungry world to mobilize exports and imports in which because of the produc¬ wage levels. In addition, of course,
of our export program have beeni
will
for war purposes. Their continua¬ tive
not
be
a
large numbers of people were em¬
peaceful world.
capacity built up during the
carefully considered by the De**j
World economic stagnation cannot tion In peace time tends danger¬ war we can produce far in excess ployed in other industries, such as
partment of Commerce as well /as j
led to peace.
ously to divide the world and of foreseeable domestic demands.' the mining industries and the
by the other agencies represented i
steel industries to supply the raw
Our
program
for world eco- impedes the expansion of world We can now produce more rail¬
on the National
Advisory Council j
road equipment, machine tools and materials going into the produc¬
fcmic cooperation:must be a pro^ trade.
on
International Monetary and '
Import
and
export
quotas, certain types of general industrial tion of these cars. It must also be Financial
arnm to assist in world, economic
Problems, and by the
exchange machinery than we can use at remembered that the increased Office of Economic Stabilization.
tariffs,
rr—>very. It is for this reason that preferential
volume resulting from manufac¬
ti c International Bank for Reeon- controls, clearing agreements and home. This will soon be true with
I am in entire agreement with the !
Sir ctioi
and Development was barter arrangements diminish the respect to power and transmission ture for export enabled the indus¬
analysis of this problem contained |
^Oblished; It is"for this reason total amount ;of world trade and equipment. We have quantities of try to reduce unit costs with enor¬ in Mr/ Chester Bowles? letter <of
mous
benefit
to
consumers
at
th t additional funds Were pkk the participation of this country ■ cotton, tobacco and other agricul¬
March 8, addressed to Mr.
Clay-j
home.
ed fortheExport-Import^ahk in it. Multilateral trade, under tural products which are surplus
ton. My opinion is in accord with j
which each nation can buy where to domestic needs, at the same
While our
ard that another increase in those
exports of cotton
hi$.. statement that "there is tie
lunds will be requested by the it chooses and can sell where it time as most primary food prod¬ have dwindled, in the five years doubt that the
foreign lending*
finds a ready market, tends to ex¬ ucts continue to be in very short previous to the war they aver¬
Administration.
program will add somewhat to
pand trade. Bilateral trade, where supply. Some of the metals and aged over 5 million bales a year,,
these inflationary pressures, but
Financial Agreement an
each nation can only sell to other heavy chemicals, crude synthetic of which over 1 million bales went
the influence will be small rel¬
1
Important Step
countries in the measure in which rubber and other industrial raw to the United Kingdom. Our cot¬
ative to the inflationary pressures
The financial agreement before it buys from them, tends to re¬ materials can be currently pro¬ ton exports during that period
already- created —by
.domestic
this Committee is another and strict trade. The doctor who could duced in excess of domestic de¬ represented nearly 40 percent
of; forces."
*'
i-'
important step in promoting world only buy groceries to the extent to mands. While food shortages may our total production* Of the 9 to
In any event, any slight in¬
recovery. Great Britain still oc¬ which he could find sick grocers be- expected to persist vfor some 10 million, people, in this country: crease
of- inconveniences: .end
cupies a key position in world to treat would likely be an un¬ time, there is tan ever-widening dependent on a living from cotton,:
shortages at home, as well as of
trade. Its recovery from the ef¬ derfed doctor. Doctors as a whole area where industrial
production over 3V2 million were in families inflationary, pressures, represents
fects of war is an essential and find less
opportunity to practice is sufficient to meet all reasonable deriving the major portion of
part of the small price which this
integral part of world recovery. their profession or would find demands, both domestic and for¬ their income from the
export country must pay for world re¬
Unless its recovery can be ex¬ themselves in possession of too
eign, and the areas of restricted trade.
construction...
i
pedited, world recovery will lag. little food and clothing and too; supply are constantly contracting.;
.Many other industries
were
The world needs British co¬ much lumber and steel.
!
All Controls Will Not Be Removed
Once our productive capacity similarly dependent on exports.
operation in the economic field as
Every businessman who partici- catches up with deferred con- 42V2% of our
In emphasizing the importance
production of resin
well as British recovery.
Be- pated in foreign trade before the sumer and
producer demands, we and 39% of our production of to world

both

Eastern

country

can

and Western.

and

must

This

exercise

•

peace

and world trade

Volume 163

of the removal of controls which
is contemplated in this
agreement
and in our entire
foreign econbmic
program, I would not want to be
.

imderstood
that

all

trade

holding the belief
affecting world
immediately or even

controls

can

eventually eliminated.
gress has

continued

coming

The

Con¬

recently recognized the
necessity during the
for the control

year

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4496

over

exports

by
the Department of
Commerce. Some few import con¬
trols still persist in this country.
Countries like the United King¬
dom, who will still have to pre¬

serve-foreign exchange even if
this loan and the balance of our
lending program are approved,

the case of

be necessary in
materials which

may
raw

because

depletion of natural resources on
world

chronic short

will

basis

wide

supply.,

regulate segments
economy
by legislation.
While we shall continue to strive
it necessary to
our

for

international

economy

possible of controls, I am
certain that some regulation by
international
agreement
will

free

The danger to world peace and
world trade from such controls as;

For

problem
with
faced, as in -the

are

income on the

iums for life insurance in 1935-36

average earned
fund's
reserve

received incomes of

$3,000 or less.
The individual income tax is pro¬

3.08%.

gressive,

on the "ability to pay"
principle, and heavily taxes large

of these are below the assumed

incomes from whatever

tuarial

rived.

The

hidden

strikes at

money

alike.

Its
at

source

tax

rich

and

discrimination

those who

save

rate

cheap
poor
di¬
pro¬

was

corresponding fig¬
for 1940 was 3.01%.
Both

ure

de¬

liabilities

The

3Y2%

the

used

rates

ac¬

ulation

which could have very
unpleasant consequences in the
long run.
Finally, and perhaps most im¬
portant of all, there is the effect
of low interest rates upon prices

high grade investments have de¬
clined further since 1940.

vide for the future.

Full Effects Not Yet Felt

of goods and services and the cost

Pension Costs Up

living. If interest rates are held
by expanding the volume of
money and credit, the "gains" to
the taxpayer may be lost through
rising prices that increase the
Government's other expenditures.
Low interest rates may not en¬
able the home buyer to get more
down

value per

materials.

and other raw
inclined

be¬

lieve that similar arrangements

the

governments of
a peaceful and

and

peoples

the world to build

world.

prosperous

in pension costs actually
experienced by private pension
funds.

creases

conservatism in
the establishment of original con¬
tractual rates of interest, surplus
reserves previously
accumulated,
and a hold-over of higher yielding
investments have delayed the rate
(Continued from page 3063)
While to a certain extent tax¬ of cost increase; but, where it has
.and, consequently, a lower level
.'of taxation than would other¬ payers, savers, investors, debtors, not already done so, cheap money
and creditors are identical—many must ultimately reduce the amount
wise be possible. More impor
\ tant, low interest rates will be taxpayers, for example, are also of pension obtainable per dollar
i a stimulating force in the econ¬
bondnolders, and many mortgag¬ contributed.

generally,

.make

they

will

it possible for the homebuyer to get more house value
lor each dollar of monthly pay
>ment; for State and local taxmore

hospitals for their tax dol

flars; and for industrial

concerns

tand

public utility companies to
get more plant for every dollar
of their fixed charges."

That these

tions—up to

are

valid considera¬

point—most people
The question
pon which opinion differs is as to
a

far the argument can be caried. It is one thing, for example,

iow

that a 4% interest rate
generally beneficial to the
Cojiomy than a rate of, say 7%,
dd another thing to argue that
%—or even 1%—is better than

Or argue
s more

The fact that "low"

benefit

the

interest

taxpayer,

the

idme-owner, and other debtors by
uction of interest charges is not
e

whole

story;

this basis it

night be argued that doing away
Hth interest altogether would be
till more beneficial. Recent stateiaents by Chairman Eccles of the
oard of Governors of the

/ith intimations that the Treasury
'egards present rates as low
are

such

proportion¬
ately. Any sharp decline in inter¬

are

same

lems;

We need

who lose

think of those

well

of those who

gain from low interest rates, and
to. weigh carefully the social and
economic

effect

the

unprece¬

dented

tipping
of
the
scales
against the saver and investor.

recognition that there

unction to play in the economic

ystem,;*
The savings of interest charges
j the Government, to business, to

the

Mutual

able

scrape

along,

at the expense of schools

pd colleges, churches, hospitals,
nd charitable institutions

irough endowment
aye

ment

which,

otherwise,

become recipients of invest¬
income.>

less than the

coupon

balance between the two. As El¬
liott V. Bell, New York State Su¬

rates.

perintendent of Banks, recently
stated:
"There ; comes a. point
where cheap money ceases to be

Corporations,! States, and mu¬
nicipalities have followed in the
footsteps of the Federal govern¬

a,bargain"

ment and taken advantage of the

the

slowness

poverty

twenty
now

ago,

years

the

is fortunate who

than

fifteen or
investor
realize

can

Following Administration indi¬
it would not retreat
from its original. position, of re*
fusal to recognize any union, the
city-labor dispute flared anew on
June 4 and Anthony .A/ Capone*
President of the A. F.ofL. Trades
and

3%.

drastically—from

Life

Insurance

Com¬

The Other Side of the Coin
All

this is

the

reverse

of
of

side

of New York, in conjunction
With his testimony before the Sen¬
ate Banking and Currency Com¬
provide

dollar's

worth of life insurance protection
in 1944 than it did in 1930.
The

the

both

are

debtors

gross

rate

interest earned

whi-le

the net rate,

which allows

for taxes and expenses, fell from

5.03% in 1930 to 3.09 in 1945.
This
of

life

one-sixth

increase

insurance

amounts

cost

which

new

life insurance

enced

reduction

its

endow¬

from

$6,637,072 in
1932 to $3,989,590 in 1945—40%.
"Under such circumstances," stated
the report of the president for
1944,
"(the trustees)
are
con¬
vinced of their obligation to dis¬
continue many continuing or re¬

Rochester ended

on May 29 when
the joint AFL-CIO
strategy com¬
mittee accepted a city administ^a4
tion promise to negotiate
witltorf

gan&ed employees,'so longas the
union

current grants as well as limit the

number and extent of

new

ones."

A book just published on "Amer¬

ican Foundations for Social Wel¬

fare," by Shelby M. Harrison and
F. Emerson Andrews of the Rus¬

sell Sage Foundation, cites the ex¬

perience of the Carnegie Corpo¬
as a "probable typical" il¬

ration

lustration
ment

the

funds

severe

available

curtail¬
for

penditure byv the foundations.

ex¬

the

kind

it is noted

United

the

aforementioned

date

ex¬

plained that the city administra¬
tion will meet "with city em<,

ployees or a committee of em¬
ployees selected5 by organized or
unorganized
employees."
Such
committees may be accompanied
by :counselv,■''^On^this;r'hasist^'fha^'

city would continue to1 refuse to

made in

was

■

our

issue of May 30.

1946, page 2930.—Ed.]
-,:.■■■■■'■V.>■»■;-T?;■
.

■

ft'",

sa 4

Stanhope Goddard Dies
Stanhope S« Goddard, associated
with Hemphill, Noyes 65 Co., 15
Broad' Street, New York. City,■
died at his home at the age of
,

fifty^five.

Born v in Pittsburgh,
Mr. Goddard in 1921 opened; an

:-vi

>Cy':

office there for the firm of Red¬

yields of mond
The effect upon church pensions
& Co;, in which he was a
investments were being made in
conservative investments are forc¬
1944.
...
«
•
-was
indicated • by the following
In 1925
ing a fresh consideration (by the partner for four years*
The breadth, of distribution of comment • * by
William, • Fellowes Foundations) of the problem of he organized Goddard & Co. and
this hidden, tax of cheap money is Morgan in his annual report as safety vs. income, and apply a a
year later opened a branch ofindicated by the number of life president of the Church Pension new and severe test to the prin¬ fice in New York. When this firm
ciple of perpetual endowment."
insurance policyholders—some 60 Fund of the Protestant
Episcopal All investing institutions lace the was dissolved in 1936 he joined
to : 70 million ' persons' (against Church for 1940:
same problem,
'
*
Hemphill, Noyes & Co.
,

;

negotiate with union leaders who
were not city employees.
fV
[Mention of the one-day shut-;
down, which on May 28 made ap¬
proximately 30,000 unionists idle.,

people will

Welfare" quoted above,
that the "Current low

the

City Manager Louis B. Cartwright's "statement of policy,'*
which was accepted at 2:15 a.m.

invest¬

according to an earlier Associated
Press dispatch, which also stated
in part as follows:
U

and

seek and the
consequences
to the quality of
investment portfolios and to the
economy* in general, tf people
and institutions cannot get rea¬
sonable returns on high grade in¬
vestments they are tempted to try
to make up the loss by going into
investments of higher yield but
lessened
security
and
assured
earning
power.
In the study,
"American Foundations for Social

loyal

Nor is the question solely one of
equity, important though that is.
The problem of the effects of
cheap money is more far-reach¬
ing. One of the effects to be con¬

sidered

"is

States*1 and does not claim thq
right; to strike agairisf iha pubHfe'^

the country.

ments

settlement on,

Associated Press dis¬

patch from Rochester (N.Y.) says.
The citywide labor shutdown in

■

income

Labor, to request the return
Frederick H. Bullen, the medi¬

May 29,

the

ment

Labor Council, has
Hanover, Secretary-

ator who arranged a

coin of cheap money. As
Secretary of the Treasury has
indicated, cheap money—by low¬
ering debt charges—may serve
the people as taxpayers; likewise
corporations, borrowers on real
estate, and other debtors, may
of

zens"

Social Welfare

Central

asked Harold

Treasurer of the State Federation

accumulate, by
of interest accruals.

investments,

secure

cation that

with

their funds

Instead of 4 and 5% on sound and

Rochester Tie-Up Ended

pany

are

these are selling at premiums, the
return to the new purchaser is

t)e mortgagor, v and to debtors
great deal of money, for policy¬
generally do not, of course, come
holders pay $4 to $5 billion each
tot of1 thin: ah*. They are a tax
year for life insurance protection.
pon all Who save. They come out
f the pockets of people who have Moreover, data prepared by Mr.
d* pay more for life insurance or Douglas gave warning that the
one-sixth would become a one3" build ; up pension funds* and
third increase in life insurance
pom reduced incomes of persons
costs should interest rates drop
.ependent upon some backlog pf
another percentage point from the
wings, whether well-to-do or
rate
■hey

and

phasis is being placed upon the
advantages Of cheap money, it is
important not tp overlook or un?*.V
derestimate
the
disadvantages.
Cheap money is an instrument re¬
quiring eareful weighing of the

3^ and
A principal bastion of security 4% to IV2 or 2%. Those who, aged
realize the benefits to the extent
to millions of American families-is or disabled, must provide for selfthat they are debtors.
On the
insurance on the life of the bread¬ support from past savings, have
other hand, the equally if not
winner. The costs of insurance are found
their
incomes
cut
by a more numerous
group of creditors
heavily dependent upon the level quarter, a third, or more, even —life
insurance
policyholders,
of interest rates, for premium pay¬ without taking account of rising
pension contributors, savings
ments go into reserves, and the living costs and heavier taxes." It
bank depositors, beneficiaries of
compounding of interest on these is here that cheap money has endowment
funds—pay the price
struck some of its hardest blows.
reserves creates a large part of the
to the extent that they are cred¬
benefits paid. On the basis of rep¬ Here,
truly,
is
the
"forgotten itors. While the situation is com¬
resentative figures developed by man."
plicated by the degree to which
Lewis W. Douglas, president of
Foundations Devoted to
"consumers, workers, and citi¬

two sides to

ply Just

the

ihei interest ques- insurance companies over this pe¬
riod declined from 5.31 to 3.57%,
iori anf ihat interest rates Iiaye a
re

couraged
which

Interest paid by
savings banks has dropped even

Sixth

2%%,

States and,;

In short, low Interest rates can
be far from an unmixed blessing*
In these times when so much em¬

lowering of interest rates. Cor¬
porate refundings alone reached
nearly $5 billion in 1945. A study
by the Federal Reserve Bank of
New York indicates that interest
rates on the refunding issues ran
Individuals who seek to build
%, %, or a full 1% less than the
up a "nest-egg" to supplement re¬ rate on the obligations redeemed;
tirement income derived from an and
many of the latter were them¬
organized pension plan, to put a selves refundings of still higher
•child through school, or to meet rate
obligations qutstanding until
unforeseen contingencies, are dis¬ a few
years ago.

Life Insurance Costs Increased

of 2, 2%, and

struction.

The
Carnegie Corporation of creditors, the interests of people
affected adversely by low inter¬
New York, which devotes its in¬
est rates ought to be considered
Federal
vestment income to education, so¬
mittee last December, it cost about
cial welfare, and research, experi¬ in determining what is good for
further a sixth more to

Reserve System, opposing
jecline in interest rates, together

hough,

interests

the

seldom

of life in¬

are owners

surance—their

vill probably agree.

<ates

of homes

ors

est rates, therefore, involves hu-t
schodls ^nd^ .map.,as. well as economic prob¬

vpeyers to get more
,

cases,

Low Interest Policy

omy

some

pons

dollar,

municipalities more schools and
hospitals for their tax dollars, or
industry more plant per dollar of
expenditures, if they promote in¬
flation and higher costs of con* ^

mary agricultural

will be min¬
Even if interest rates stop de¬
they are developed by- ^p^^T^pney raises the cost of clining and. hold their present
must continuerather close
im¬ international agreement. The re¬ private pension plans—set up for levels, average rates earned on
port. contools. The Bretton Woods strictions which came into being the benefit ■■ of some millions of investments of life insurance com¬
agreements; recdgnize; that during before the war were-^tlangdFduS employeesr'bf business establish¬ panies, savings banks, pension
the transitional period and per-.; .because
they were unilaterally ments, teachers, policemen, cler¬ and endowment funds, will tend
haps thereafter some exchange imposed
by
individual nations gymen, and" others. Based upon to be depressed further by the
controls will be necessary.
This without concern for the welfare preponderance of numbers, to¬ maturity or calls for redemption
country is a signatory to com¬ of the world as a whole or because gether with limitations on maxi¬ of bonds purchased years
ago
modity agreements in the case of they were developed by private mum pension benefits, the man or when interest rates were higher.
woman on the lower
rungs of the At the time of the outbreak of
jcoffee, sugar and wheat, all of cartels to serve private rather
income ladder is chiefly affected. the Second World War in
vhich
give recognition to
the than public interests.
1939,
eed for directing exports and
Thirty annual payments of $500— 13 of the 25 issues of United States
The financial agreement before
$15,000 in all—create a pension Treasury bonds outstanding still
'mports in the- case of commodi- your Committee is a necessary
ies produced by many small pro¬ part of the larger program for reserve of $29,240 when interest is carried interest coupons of 3% or
earned at 4*4%. To create a pen¬ more. Of the
ducers
where surpluses
are world recovery and world recon¬
13, eight have since
chronic.
The Proposals for the struction.
This agreement taken sion reserve of this same size at a been paid off or refunded into se¬
Expansion of World Trade and alone will not bring about world 2%% rate it is necessary to con¬ curities
yielding
considerably
Employment provide for inter¬ peace or world prosperity. The tribute $640 a year rather than smaller return; two more have
governmental commodity ar¬ economic program of which it is $500—28% more. This percentage, been called in for payment this
derived for purposes of- illustra¬ month.
a part is our chance, perhaps; our
Most
of
the Treasury
rangements
when chronic
surlUses develop in the case of pri¬ last chance, to work together with tion, is within the range of in¬ bonds now outstanding carry cou¬
may prove necessary

imized

equipped

long-term

not

other markets—stocks and real
estate—adds tp the danger. The /
situation fosters a spirit of spec- a

calculations."

Interest

individuals

make

judicious selections, the
venturing off the beaten path of
sound investments is particular¬
ly beset with peril. The fact that
the low yields on bonds tend to be
Reflected ip ; inflated prices in

last few years, is the problem
of interest earnings. In 1939 the

study,
that
% of the families paying prem¬

rected

necessary.

prove

main

"The
which

Committee

sources

Domestically.^&iough we all fa¬
vor free enterprise, we have found
of

36 million individual income
taxpayers)—and ' by .the; fact,
brought out by a National Re¬

some

309?

V
^

THE COMMERCIAL & FINANCIAL CHRONICLE

3096

■•V'tfV •ftfUv'v;

U's-.lJyVi'

K ii

^:!1( [

Thursday, June 6, 1946|

v:fr

N&SD1

The Retailer and OP A
favoring a middle-of- the reaction" when that pressure
the-road policy through which the is removed. There is, however, a
"I am not a greedy lobbyist. I am present
"heated 'discussions" of way of withdrawing the pressure
a' citizen .first, and, a merchant OPA can be speedily settled.
It slowly and gradually so as to

(Continued from page 3063)
I'guess 1 am one. But", I insisted,

record

Second, and only then

has stated:—

lobbyist."

readily adrhit that in asking
Congress and OPA to modify sti¬
fling price regulations in order to
speed full production and thus
fight inflation, the NRDGA is argu¬
ing for a special interest. But it is
the special interest of all thei con¬
sumers of the United States. We
asking

not

are

fication

ing

tinued

only

that

know

through full production can infla¬
tion be definitely prevented. And
retailers

than

inflation

fear

Bowles'

Mr.

callings/,,/

"It

black

assume,

waged

retailers and consumers are on op¬

posite
matter

sides of the fence in the
of price and commodity
are on the same side
you

will

well

have

with it

"Let
but

remember in the years to come—

which

remain in business.

cooperation

and

pliance of retail stores in every
community, the Price Administra¬
tors would not have had a ghost
of a chance to achieve any sort of

sibility
it is

tee

our

citizens

zealous

and

see

that

misguided

also

when

such

controls

"In

considered

our

sake, do not force us into an un¬
controlled
price
inflation
that

call
to

best

interests

the

current acute shortages of needmore than any¬
want to see fair price tags on fed goods. Such a program would
provide the common ground up¬
our goods, and sound merchandise
on which all business could coon our shelves. We are the pub¬
operate
with Government in
lic's Purchasing Agent in peace,
just as we served as Quarter¬ Ifighting against, inflation:^;
'
master: to the civilian public dur¬
Eventually, of course, tHe Gov¬
ing the war. We expect to be in ernment price controls will disap¬
business long after OPA has be¬ pear because the Congress will
come
a
more-or-less
painful undoubtedly refuse to vote to con¬
memory. We dare not be short¬ tinue indefinitely such an emer¬
sighted
in
our
views.
Three gency measure as the Price Con¬
months of inflation, of quick and trol Act.
excessive profits, would
be the
The Adjustment from a Con¬
most disastrous thing that could
trolled to a Free Market
happen to us,
The best protection this coun¬
Whether the end of Government
try, or any country, has against price control will come in nine
inflation is full production. And months time or one year from
the worst barrier to full produc¬ now or be deferred for several

.We merchants,

■

there still will be
readjustment

years,

most, is the OPA's unrealistic
attitude. As our own Lew Hahn

recently warned, under, the guise

ket.

lowering our
standards, increasing the
cost of living, and reducing the
purchasing power of the dollar.
There may be some* Who fcari sit
back and say, "That" is OPA's
responsibility. It is running the
living

Washington

wants

gouge the consumer, it is no con¬

cern of ours." I am proud to be
able

tell

you

that

the 7,500

stores of the National Retail Dry

concern.

They recognize and

will not shirk their responsibility
to the

normal free ecomony

process

going on con¬

prices tp costs and to competition.
Under

free economy,

the slack

is taken up from day to day. How¬
ever,

Middie-of-tJie-Ro^d Policy

when

you

freeze the economy

Association- has

placed

itself

3. Prepare a

influence and power.

wholesalers
and
by
which
they
shall individually commit them¬
selves to hold the prices of their
products to as low a level as pos¬
sible while production levels are
being regained—prices will drop
of their own accord once produc¬
tion has been restored;

and

thereby

destroy

for

of the

ciations, of all

consumer

are

thrown out of

If and when price controls are

probably
ways.

abolished,
react

prices
a

will

variety

Some prices would certainly

might remain fairly

Editor's

some¬

strong spiral spring. The greater

on^ the pressure - the greater will be

totalitarianism, which
rather than the servant

special privileges^ to
the principle that all
equal before the law.
^

The

Note:

are

in the

headquarters of the "Society. of
Lafayette Building, Detroit 26, Mich.

State Chamber

Opposes Federal Move to
Attract Industry to New Locations

groups

The

This battle the nation's retailers

of Federal funds to attract industries from

use

established'

industrial areas to uneconomic locations developed during the war
are

waging

against

inflation

acted upon by the Chamber of j
today (June 6) at its monthly'
the exciting history of American meeting.
The report emphasizes that these funds are contributed
During the
business, i It is a crucial contest largely by the nation's older established industrial areas.
war; for military arid manpower^ ».?1 n:■;■.
^n.;'"1 < - ■■;; between those who believe in the
reason, many new industries were funds,
which
are
contributed
inherent soundness of our com¬ located in interior sections of the1 chiefly by residents of the namore

than

control

just another chapter in

opposed in a report which will be
Commerce of the State of New. York

merely for the sake of

ex¬

ized and

now

industrial-; tion's highly industrialized areas,

lie idle, the report

that the American

will

never

lic

the

tion

life,

re¬

forget that in

in private and in pub¬

business,

superlative

resting upon

grants-in-aid and in other
to enable the less Indus-

centralized"

confident that the Ameri¬

confident

states, and future employment of; ways

the labor attracted to these "de-. trialized states and local govern*

war plants presents!
problem. The report, which
Was prepared by the Committee
can people want to continue the
on Internal-Trade and Improvej
free enterprise system that made
ments, continues:
|
this nation great.
I am equally
"Peacetime
'decentralization'.

tailer

pressure on

uik

protect legitimate economic activities of private
competition by government.

Sentinels"

and of all manufacturing and re¬

ercising control.

gear,

present

citizens from

who want restrictive government

selling prices

the

people.

citizens should be
14. To

which, 1 under present
regulations, are eating away
the nation's economic body like a
in all these
endeavors, the cooperation and
support of all other retail asso¬

of the government.

oppose laws which give
favored groups in violation of

OPA

Seek at all times,

restrictions

power

13. To

markets

taxing

12. To oppose any trend toward
makes government the master

black

cancer;

constitutional

limited

reestab¬
of trade

tjie

11. Tp oppose all efforts on the part of government to
redistribute the wealth of the citizens and to work

manufacturers

Strive constantly to
lish the regular channels

misleading and deceitful economic argu¬
by those who seek thereby to gain political

ments

pledge to be signed

by elimiating unnecessary activities

10. To expose

consumers

retailers,

the

government.

petitive economic system and those country not previously

relationship between costs and

thing like putting

The National Retail Dry Goods

fully

the

Keeping prices down is

/Advocated

9. To reduce taxes

prices, and

this process no longer works and

stable.
-

Explain

principles of good government and the duties and
obligations of citizenship.
!,!|

tailing associations.
our

go up. Others

public and to the nations

free mar¬

tinuously which serves to adjust

feoods Association feel that it is suddenly
their

period
from a

Under
OPA is
camouflaged, concealed there is

inflation that is daily

show.

controlled market to
'

Of holding the price line

fostering

serious

the

present govern¬
controls and that promised

circumstances

class legislation.

8. To interest and inform ourselves and others

ences;

one,

tion at this moment when we need

over

promote domestic tranquility and to oppose those
hostility and strife.
J

To oppose

price rises
resulting from inflationary influ¬

the

relieve

economy

our

petition will reduce
improve quality;

and dt the same time encourag¬

production

of
the
various
of what we may
"bridge" of price restraint

carry

ment

of the American

ing

support voluntary

who foment class

gap between our

consuming public by continuing
price controls where necessary

Are the Public's
% Purchasing Agents

6. To

groups concerned

opinion

might wreck our whole economy.
Retailers

endorsements

the

Secure

" (y'w

that, under the Constituthe Federal Government
$

agreements between individuals as against coercive
laws, regulations and directives.
i

representatives

would serve the

has unlimited power.

retailers, whole¬
salers, manufacturers and, most
important, the consumers' them¬
selves along the following lines:
1.

from encroachment by

5. To defend economic freedom and

land where honest American com¬

program

o* *:

Program for Retailers, Whole¬

the support of all

this

To oppose the assumption
tion of the United States,

salers, and Manufacturers

longer are necessary.

tinuation of controls for control's

mid-Atlantic

the

Our tentative program calls for
an
intensive campaign to enlist

the
removal
of
controls
promptly

compel

3. To defend local government
centralized government.
4.

will

that

for

promote individualism and to oppose any trend

toward collectivism and socialism.

the

strengthen the desire of people for liberty.

States.

pirce

over-

1. To

is George

Vice-President

NRDGA

legisla¬

specific

standards

tive

govern¬

been

Son, Williamsport, Pa. Mr. Stearns

provision

production

Believing that the material prosperity and the spiritual
happiness of the people of the United States are promoted
and safeguarded by a maximum of individual freedom and a
minimum of governmental restriction, we pledge ourselves
to do everything in our power:

L. Stearns II of L. L. Stearns and

provide an op¬
for reasonable

4—Establish

ment officials insisting upon con¬

have

Price Restraint

unfortunately have

portunity
profit.

good citizens. And now
responsibility as good

controls

removed.

duction and

price control. We sought no glory
for that effort; it was our respon¬

under

agencies could cooperate to
Price
Restraint
after

Government

current costs of pro¬

cover

„

promul¬

plan

and Govern¬

men

promote

3—Allow price ceilings which
will
permit industry to

com¬

Objectives of the
SOCIETY OF SENTINELS

tentative

ment

restrictions

other

all

prevented

whole¬

Had it not been for the

hearted

profiteering."

which business

needed merchandise.

and

the

Price

Average

have profit in business—

gated

Maximum

place the interests of
their customers first, do not long
.

minimum of dislocation.

We of the NRDGA have

the

for

2—Eliminate

„

Needed

been

Act

in business do
so because they place the interests
of their customers first. Retailers
who do not

that this transitional

men

Cooperative Price Restraint

Emergency

Control

Price

retailers who stay

clearly

As that eminent statesman, Bern¬
ard M. Baruch, so clearly put it,

period of nine months from
June 30, 1946.

would

pertaining to regulations? George Matthew Adams
certainly stated a truism: "There is no doubt as to the fact
that a nation is best governed that has the least number of
laws. People do not want (or need) more laws, but better
ones, and away with the poor and foolish ones."
We are endeavoring to enlighten the people in this area
concerning the bureaucrats through our "Society of Sentk
nels." It's quite a job as there are 2270 such agencies. I'm
enclosing one of our. applications showing our objectives
(see below—Editor) for your information. We're growing
fast, too, all across the country! Any comments will be
appreciated.
'
;
Sincerely,
4
Detroit, Mich.
SEWARD N. LAWSON. if

The Chairman of our Commit¬
the

1—Extend

fence because—and this is

something

steps

period from a controlled economy
to a free economy would carry

lowing:

control. We
of the

business

speedily enacting a
accomplish the fol¬

measure

(ContinuedTrom page 3056

tions

eliminate

Therefore

which

discussions

which

trol,

Good Asso¬
ciation suggests that the Con¬
gress put an end to the heated

spokesmen for OPA do, that

some

markets.

great value

indicate the desire of responsible

National Retail Dry

Common Interest

ridiculous

and

if construc¬
tive steps could be taken in prep¬
aration for the period of decon¬

exactly as it has been,
of the American

inflation

would

the national economy

interests

curb

name-

Retailers and Consumers Have
a

control

public, the chief party con¬
cerned, seem to have been com¬
pletely overlooked. The nation
undoubtedly is threatened by
inflation, of which a rising price
level is merely one symptom.
Nobody wants inflation regard¬
less of his opinion of the effica¬
cy of
Government price con¬
trols, but only production can

production.
Our objective is full production
because

price

extend¬
battle
to

the other side insist it be con¬

the

which

controls

of that reaction.

one

abolish OPA and extremists on

removal of
ask only modi¬

those

side of this question of

hamstring

serve

minimize the violence and extent

"While the extremists

for

price controls; we

obliga¬

each of

that of good citizenship.,

ments to offer special economic

inducements to attract business
away from the older established

industrial areas."
In opposing the use of Federal
funds for such purposes, the re

being advanced as a pana- port points out that wartime decorrecting the economic velopments such as rocket project
maladjustments resulting from tiles;and atom bombs.make the

now
cea

for

wartime
lation

Congress
authorize

'decentralization'.
now

(S. 1385)
the

Legis-1 "decentralized" plants in interior

pending before the
use

which. would
of

Federal

sections of the country just as
vulnerable to attack as those oo
the seaboard,

:£*.
i.;i#»*'«.

Ivolume 163

Number 4496

THE COMMERCIAL & FINANCIAL CHRONICLE

8# &»

°$r

/,./; ■/y
■

•

«£ SSfi

30^7

British Storm Over
,:. (Continued from page3055)
at the time this Govern¬

origin

issued

ment

gold

greenbacks
in

reserves

the

without
early 1860s,

revived again at the time of the
German fiasco, when that nation
issued fiat money, without gold

deliberately to defeat the
terms of the Versailles Treaty and
to i liquidate
her
internal
debt

their

nized, is

Similar factors

not

are

question that I cannot

answer, nor do I believe
other man would hazard

that any
an

esti¬

mate of their effect.

New

reserves,

Structure.

what- they * will be,"
Fourth:TheOfficeof PriceAdfull force is recog¬ ministration passes out of exist¬

permanent;
when

What

are

doing at the

mo¬

are

such

ence

then

and

cause
cure

extreme rise.

should determine the

devote

ourselves

preventative.

May

I point out some of the
changes that have taken
place in our economy that may
constitute

the

force

that

creates

the pressure for constantly

rising

prices.

'*.f First: We adhered
standard

to the gold
the Hoover ad¬

during

ministration in the face of

gravated liquidation of
structure

and

ag¬

debt

decline

constant

our

which

constitutes

the

then

absolute

start

bottom

and
that

Whether

anew.

its

terms

feel that its extension is

for

justified,

1934

increased

the price of gold from $20.67 an
to $35.00 an ounce,

ounce

and

foreign

domestically

buying
mined

gold, but continuing to deny re¬
demptions in gold.
I Third:

The coming of the

war

brought

further

and

so. We
eral debt from

justly
to

lation

dustry.
the

home

our

building in¬
Taft has made

Senator

statement

that

the

bill,

co-sponsor, has

purpose the
construction
12,500,000 new housing units
the next 10-year period.

That, said Mr. Taft, will in¬
volve mortgage financing for a
of

total

approximately

$80

increased our Fed¬

$275

We increased

Fourth:

circulation

our

cur¬

of today.

1 Fifth:

reduced

gold

our

circula¬

Sixth: We reduced the require¬
of gold
reserves
against
Federal Reserve Bank
deposits
ment

from
the

35%

and

vides for the insurance of

mort¬

we are

all in accord that adequate

housing for all

our

people is

necessary, an appeal for a reason¬
able balance between supply and

term

maturitiesjr

as provided by
prospective housing
legislation, will serve the best in¬

and

recent

terest of our economy.
Second:

Credit expansion on

vast scale under the RFC

partici¬

pation

program, which provides
that corporation's automatic

for

insurance of any industrial loan of
which a bank is prepared to carry

to the debt burden of

This

stimulates

sion and builds
Not

only

industry.

credit

of the

reason

part

the

activities

Government

fostering the creation of

private

debt structure by guarantees, in¬
surance
and direct lending, we

expanded debt
time of high prices.

does

this

constitute

for higher prices but, in
addition, experience reminds us
pressure

that

and

excessive

created

may

debt

time of

incomes is

25%, both to give that

private

deposits from $40
billions in 1934 to $160 billions
as of the last call date.
bank

Eighth:

increased

wage

Harbor, by
61%, with the suggestions of the

levels,

since

Pearl

that

structure

built

unsound

foundation.
In

debt

structure

high prices
structure

be vulnerable to insta¬

years

past, there

were

Second, surplus production of
farms

and

our

of these factors

factories.
are

our

Neither

current in

our

economy today. Caution and con¬
servatism in the creation of a debt
of

already,

time in the future,
upon our

economy

will, at

the early 1930's.
In my travels on behalf of the
American Bankers Association, I

located. So with the last
were

war.

The

to receive

was

member

marked

Parliament

re¬

spite

this

tive

hazard

the

execu¬

council, approved this loan

possible source of encouragement

unit.

increased

trade.

multilateral

world

it.

supporters

most

were

than

worse

the

loan

indignant about the
they feared that Mr.

agitation

Dalton's

denial

commitments

regarding the sterling .balances
might strengthen opposition to the

determined

were

pursue

this

—

the

paper, /

Human Relations and Efficient

Production—Score card for a Bgt-*
ter

Understanding in Industry—^

National Association of Manufac¬

turers, 14 West 49th Street, New
York, N. Y.—paper.
Paths
K.

Production —William

Jackson—reprint of an address

before

the

annual

meeting

—

Chamber
of
Commerce
of
the
United States, Washington, D. C.
■paper.

■

-•*

Program for Industrial Peace/A
Herman W. Steinkraus — re¬
print of an address before the

—

annual

meeting
Chamber of
Commerce to the United States,

Washington, D. C.—paper.
Regulations
ments

Regarding

Between

Pay¬

Switzerland

and

Various

Countries—Bank for In¬
ternational
Settlements,
Basle,

Switzerland—paper—(printed
either

French

German)—Sw.

fcs. 32.50.

l-M'i

-■

matter.

In his answer to the ten ques¬
tions addressed to him on May 28,

Mr. Dalton most emphatically de¬
clared that there will be

tional commitment
on

the matter of

between

United
rests

this

agreement

sterling balances

The

between

addi¬

country

States.

holders

and

matter

Britain

these

amount

and

the
now

Cotton and Rayon Textile Com¬
— An
analysis of Compara¬

panies
tive

Investment

portunities

—

Values

and

Axe &

Op¬
Co.,

Inc., 730 Fifth Avenue, New York
19, N. Y.—paper $1.00 (500 to
Public

Libraries

institutions).

and

non-profit

the

balances,

and
not begin until

dollars

is to hand

that

to other

over

countries.

tional

outlet

for our production
twelve months after the ratifica¬
give the people of other tion of the
loan. After Mr. Dal¬
nations of the world the benefit
ton's statement it will at
and

to'

dollar.

That, to demonstrate

dollar, and
addition, to be fair to the
people of America, who invested
in

Make

any

not be

nounce

philosophy in

our

wire

be surmounted with
a

grace

ease

that will justify an

and

the installation of

Batkin, Jacobs & Co.

announce

Mercier,

an¬

direct

McDowell,; &

way, New York City, to conduct

generalbrokerage;busiriess.
Principals of the firm drb Sidney
Jacobs, for many years with
Stryker & Brown; E» Jacobs; Ely
Batkin, previously with B; GCantor & Co.; and Jerome Batkin.

Officers Elected by
Investment Counselors't
Assoc. of So, Calif.
L.OS

!
,

ANGELES, CALIF. —The

Investment

Counselors' Associa¬
tion of* Southern California held
its annual meeting on

April 29,

1946.

Murray W. Hawkins, C. M.
McCuen, Donald Myrick, C. C.
Newby, and Henry H. Clifford
elected to the Board of Gov¬
Harlan B. Robinson was
elected Secretary-Treasurer. The

were

ernors.

Dolphyn, members of the Detroit Board of
Governors met on May
Stock Exchange, Buhl Building,
27, 1946, and elected H. H. Clif¬
ford as Chairman.
Detroit, Mich;, and the resumption

even

of their wire to Trubee Collins &

American

Co., members of the New York

monthly

of life. I have great faith in

Stock Exchange, M. & T. Building,

which

Buffalo, N. Y.

economic and financial interest

greater
way

path will

■'

Trinity Place, New York City,

our

Troster, Currie & Summers, 74

fundamentals

Government and all of the other

rate

Britain

accuse

Troster, Currie Installs
Wire to Mercier, McDowell;
Resumes to Trubee, Collins

these

problems that lie in

possible to

of obtaining the ratification of the
loan under false pretenses.
~W—

Opens in New York

he opening of offices at 32 Broad¬

They believe the Chancellor of
zeal for life that we devoted to
the Exchequer was right in mak¬
production of war material to
ing it quite plain that Britain has
destroy.
a free
hand in fixing her terms
SECOND: To rebuild our for¬
with her creditors provided that a
eign trade to provide an addi¬
settlement
is
reached
within

creed and the

unanimous vote of its

Many

Britain

Government.;

After

imagined

mum

FIRST: The restoration of
civilian production with the same

this agreement will be spent for
.

even

meeting

Commerce

States, Washington, D. C.

Bafkin, Jacobs Go.

their accumulated funds and their
savings in the securities of this

that this deal is

United

annual

prices in this country by creating
shortages of goods already scarce.
Most of the funds advanced under

terms, Britain

extensive^ negotiations will

mpre

can

have an effect by

these effects will be

in¬

the

Chamber

New York Laws A f f e c
ting
Business Corporations—Annotated
than any in history, that because*
after the ratification of the dollar and revised to April 26, 1946 —
of the number of nations
involved, loan.
containing the amendments of the
and the huge destruction of life
Legislative
Session
which / ad¬
This cleai?-cut
statement was
and property. The reconstruction
welcomed even by some of the journed March 26, 1946 — United
of our economy cannot be
ac¬
States Corporation
Company, 160
supporters of the loan. They feel
complished by an attack upon the
Broadway, New York 7, N. Y.—
that, had the British position not
individual phase of that
economy. been
.,A ''
made plain, Congress would paper—$2.00.
Careful planning, free of political
have ratified the agreement under
expediency and political consider¬
the false impression that there is.
ations, is essential.
or is
going to be, some form of
Out of the maze of
conflicting
ideas, there appear three funda¬ understanding fixing the mini¬

dislocations

to the world that we Will defend
the integrity of that

purchasing power of our monetary
Whether

that

appear

receiving $3,750,000,000 in
return for accepting the American

loan in the
and the redevelopment ratification of the
foreign markets will serve House of Representatives. Never¬
well to avoid a repetition of theless, the opponents of the loan

Many
justify it, but
it is to be remembered that it,
too, will exert a force for higher

some American Bankers Association has,

and upon the

stead of

our

Kingdom of Great Britain.

All of these actions on our part
have

made

statement,

structure

factors in the loan

States.

tern therefor.

before

all, Esau,
having paid dearly for his mess
two
of pottage, did not hand back to
de¬
Jacob three-quarters of his meal."

factors that brought about a
pression; First, an over-extended
private debt structure; and,

pat¬ goods and services in the United

Government constituting the

leading Oxford economist arid
Keynes's successor as Editor

the

One

debt

Seventh: We increased our com¬

balance, only $950,000,000 (after
ceding to holders of blocked ster¬
are
creating additional pressures
ling $2,000,000,000 and making
for higher prices, because of the
into
dollars
freely convertible
shortages that already exist. Those
another
£200,000,000,)
should
credits aggravate and increase the
arouse
very
strong resentment
demand.

mental necessities—

expan¬

gold in our ownership support bility and forced liquidation.;
a greater volume of currency
Third:
The
Congress of the

mercial

Page

ord
of

which

By
the

of our industrial
development.
expanded Federal Reserve United States is at the moment
THIRD: To maintain the present
Bank deposit liability.
considering a loan to the United purchasing power of our Ameri¬
for

recent

Folly", Mr/R. F., Harrod.

able that Mr. Vinson's

reasonable balance commensurate

structure at

ratio against currency in
tion from 40% to 25%.

entitled

his

private conversation:
"I have always thought the Wash¬
The Patman Bill provides for with our corporate or individual
ington Loan Agreement the worst
FHA
insurance
of a
mortgage, resources is desirable, at all times.
bargain ever concluded since Esau
bearing a ratio of 90% to the To do the best we can with what
sold his birthright for a mess
current cost of construction.
The we have, is to be preferred over
of pottage. But now it
appears
a greatly expanded debt structure
Wagner-Ellender-Taft
Bill
pro¬

$51/&

from

billions in 1934 to $27 billions as

British

This being so, it is understand¬

Inflationary

Factors

bil¬

lions.

$36 billions in 1934
25% of the risk. Again, this rep¬
billions as of a recent
resents
credits
created
through
Governmental activity that adds

dlate.

rency

changes,

pamphlet
1 ;he

the absence of

loan.

alent.

Resume of

depression ran its full course,
prior to March 4, 1933, will al¬ demand, and a maintenance of that have heard many men bewail our
balance, is justified.
ways remain a moot question.
present
monetary
status,
our
The inauguration of President
During the '20s we added $20 huge debt structure and other
Boosevelt brought a new philos¬ billions to our mortgage structure. phases of our present
day econ¬
ophy.* We abandoned the gold In the early '30s we witnessed an omy. Of course, we have prob¬
standard, declined gold payment extreme deflation in this type of lems, but in the wake of every
I doubt if this volume great war the economy of the
and embarked on a new course of financing.
of mortgage credit,
fiscal affairs.
with long- countries involved have been dis¬

& Second:

dollar

arge

"Economic
Journal",
many short¬
strongly criticises the British,
Arbitration of Labor Disputescomplain today
people and its leaders for not hav¬ Clarence M. Updegraff and Whit¬
were created, and
properly so, by ing received these
conditions with ley P. McCoy—Commerce Clear¬
Governmental
activities
during enthusiasm. But those who share
ing House, Inc., 214 North Michi¬
the war years.
The common in¬ lis
views constitute an insignifi¬ gan
Avenue,; Chicago
1, 111.—
terest of all of the people should
cant
minority. The view that Cloth—$3.75.
^
be considered, to the end, that
Britain ought to have put up with
hardships brought on by the much
hardship rather than accept
Decade of Decisions, : A -- Eric
emergencies of the War shall be such
terms is much more prev¬
avoided as far as possible.
Johnston—reprint of an address

long-range

commodity price level.
gage bearing a ratio of 95% to
England abandoned the gold stand¬ the
appraised
value,
with
an
ard in September of 1931. By that
amortization period of 32 years
action she, in part, arrested the
and bearing an interest rate of 4%
tapid decline in prices.
Had we
per annum.
temporarily abandoned gold at
This volume of credit, insured
that time, the course of our fi¬
nancial affairs might have been by a Government agency, is in¬
tended to stimulate housing con¬
greatly changed. This action on
struction that may produce ex¬
the part of the Hoover adminis¬
cesses
far greater than we are
tration indicated a conclusion on
its part that the depression should suffering in shortages today. While
go

(Continued from page 3065)
cepting even in

ages of which we

have created

our

be permitted to run its course—

June, 1946.
consideration

owing to the fact that

its

basic

of the forces that

which he is

Pressures for Rising Prices

extension

experiencing an extreme price housing program. These bills have
rise, or are we about to experi¬ as their primary purpose a stimu¬
are,

30th

giving

ment to aggravate or control some

present in our economy today. To that continue to exert a
pressure
give the people of this nation a for
higher prices?
better understanding of what we
First:
Congress has recently
are
experiencing, we should des¬ enacted the Patman
Bill, which
ignate the phenomenon by a cor¬
incorporates the Wyatt program
rect, descriptive term, namely, ex¬ for
emergency housing. Congress
treme pressures for higher prices.
is currently giving consideration
[i]' After a careful analysis, we to the Wagner-Ellender-Taft Bill,
should determine whether

the

a period of a
year. Without analr
yzing this bill, its advantages or
disadvantages, I am inclined to

Pressures

ence

Congress is

Loan Subsidies

pride

our

the future of America.

The

Association

are

dinner

holds

regular

meetings

discussed

„•

subjects

at
of

THE COMMERCIAL & FINANCIAL CHRONICLE

Securities

Registration

Now

•

Kan.

Air Capital Manufacturers Inc., Wichita,

May 20 (letter of notification) 40,000 shares of cumula¬

tive convertible 0% preferred stock ($5 par) and 40,000
| shares of 100 par common to be givei^ share for share
preferred. * Offering price, $5 a share.
I Underwriter—The issuer.
For added capital for ac¬
withl sales

quiring additional equipment and floor space and
bills payable,

•

Safety Device Co., Mount Holly, N.

be offered to present bondholders in
exchange folf
equal amount of 5% bonds.
To refund bonded indebted¬
wri

and

for

general

corporate

purposes.

under-

ing.

(6/17)

Brooklyn

(N. Y.)

Union Gas Co.

May 3 filed $34,000,000 general mortgage sinking anc.
improvement fund bonds due June 1, 1976, and 100,000
shares of cumulative preferred stock ($100 par). Under
writers—To be filed by amendment.
Probable bidder^

Underwriters

May 29 (letter of notification) 2,000 shares of capital
stock (par $25).
Offering price, $25 a share.
For pur¬
chasing, leasing and acquisition of airports and for
.Working capital. No underwriting.

Bridgeport,

will

ness

Corp., New York

Inc.,

31 (letter of notification) $200,000 of 4V2% firs,
mortgage bonds, due 1966. Offering—Price, 100; $175,50G

underwrit.en.

Aviation

County Ciub,

May

May 29 filed 320,667 shares of common stock (par $3).
— No
underwriting.
Offering— Company

Salisbury, Md.

Brooklawn
Conn.

May 29 (letter of notification) 6,000 shares of common
stock
(no par).
Price, $10 per share.
Proceeds for
working capital.
Offered to present stockholders in
ratio of 3 new shares for each 10 shares held.
Not

•

Airfield Operating Corp.,

•

Arrow

ISSUE

INDICATES ADDITIONS SINCE PREVIOUS

•

retire

v.,.

Thursday, June 6, 1941

previously reserved 375,000 Shares of common stock for
issuance to officers and execu.ives upon exercise of

this means, company issued 4,666 shares
include Halsey, Stuart & Co., Inc. (bonds
on 359,000 shares, leaving. 23,667
only); Harri
man Ripley & Co., and Mellon Securities
certain options having lapse^iThe
Corp. (jointly),
shares being registered are those on which op J6ns: may v.-,The First Boston
Corp.; F. S. Moseley & Co., ape
Otis &
Co.
be exercised on or before May 30.
Proceeds—Net pro¬
(stock only). Proceeds—Company plans
to refund its entire outstanding long-term
ceeds will be added to working capital.
Business—
debt, to reim¬
By

options.

allotted

and

options

shares to be allotted,

All

American

Aviation,

Inc.,

Wilmington

(6/24-28)

May 23 filed 100,000 shares of common stock.
Under¬
writers—Van Alstyne, Noel & Co.; Francis I. du Pont

twin-engine aircraft,

etc.

For details see

issue of

May 30. '

'Allied Stores Corp., New York

(6/17)

^May

29 filed 257,840 shares of common stock (no par).
Underwriter—Lehman Brothers. Offering—Stock is to
be offered for subscription to holders of common stock

4 at the rate of one share for each seven shares held of
record at close'of business on date registration state¬

It is expected that the offering
to shareholders will be made on or about June 18, and it
will extend for a period of 14 days. Proceeds—Net pro¬
ceeds will be added to the general funds and applied
ment becomes effective.

to such purposes as

tails
*

see

For de¬

directors may determine.

issue of May 30.

American Airlines, Inc., New

Deetjen

Proceds—General

Co.,

and

corporate

Forgan & Co.

Glore,

purposes.

For details see

tissue of May 30.

St. Louis

American Investment Co. of Illinois,

May 24 filed 90,000 shares 5% convertible preference
stock (par $25).
Underwriters—Alex. Brown & Sons.
Offering—Shares initially will be offered to holders of
its 5% cumulative convertible preferred stock on an
exchange basis of two shares of preference stock for
each share of preferred.
Preferred stockholders, also
will receive a cash adjustment.
Shares of preference
Stock, not issued in the exchange offer, will be offered
to the public through underwriters.
Proceeds—Net pro¬
ceeds will be used for redemption of unexchanged shares
of preferred at $50 a

share on June 28.

American Manufacturing Co., Inc., Montgomery,

Aviation

•

May 31 (letter of notification) 300,000 shares. Offering
price, $1 a share. For purchasing additional equipment
and machinery, for plant expansion, and for other general corporate purposes.
There will be no underwriter
but Ike securities will be sold entirely within the state
of Alabama by Harry Marks, a broker licensed by the
State, for an agreed compensation of $5,000.
'

American Water

Works Co., Inc., N. Y*

March 30 filed 2,343,105 shares of common (par $5) plus
on additional number
determinable only after the re¬
sults of competitive bidding are known. Underwriters—

Probable bidders include
Dillon, Read & Co. Inc., White Weld & Co., and Shields
& Co. (jointly), and W. C. Langley & Co. and The
First Boston Corp. (Jointly). Offering—Price to public
by amendment.
Purpose—The common stock, together
with $15,000,000 10-year 3% collateral trust bonds (to
be sold privately) are to be issued to .acquire certain
Assets Of American Water Works & Electric, liquidate
two subsidiaries, Community Water Service Co. and
Ohio Cities Water Cprp., and provide cash working capi¬
tal.
Common stock is to be offered initially for cash
to common stockholders of parent and to public holders
of preferred stocks of Community and Ohipin exchange
for their shares.
Stock not subscribed or issued under
To be filed by amendment.

exchange offers
For details

see

Corp.,

Van

Nuys,

Calif.

contemplated to be commenced in the immediate future!
by the sale of $34,000,000 general mortgage bonds and
100,000 shares of preferred stock. In addition, a $1,000,4

May 6 filed 493,750 shares of common stock (par $4).
Underwriters—Livingstone & Co.
Offering—Price to
public $4 per share.
Proceeds—For machinery, tools,
furniture, fixtures, etc. and for working capital.
Busi¬

000 bank loan will be obtained.

Fresh

Awful

$20,240,000 general mortgage sinking fund bonds]
3V2% series, due Sept. 15, 1969, and $11,850,000 25-year
4% sinking fund debentures, due Sept. 15, 1969,
In

Oakland, Calif.

MacFarlane,

addition, $4,000,000 will be used to

May 13 filed 12,000 scares of 6% cumulative preferred
stock (par $25) and 30,400 shares of common stock (no

the construction program now in

to be sold for cash to underwriters.
issue of April 4.
are

provide

funds for

and contem¬

progress

plated, each involving .the installation of additional pro»?
duction, pumping, storage and distribution facilities,

the common stock 24,000 are reserved for
of the preferred.
Underwriter—Stevenson,
Leydecker & Co. Offering—Preferred, and 64,000 shares
of common are being offered for the account of T. G.
Stanley, the preferred at $25 per share and the common
at $8.75 per share.
Of

par).

The company will re¬

deem

ness—Sales service and storage of planes.

conversion

6- Bubble

Up Bottling Co., Washington,

No underwriting. To finance
tions of the company.

March 30 filed 350,000 shares of common stock (par $1).
Underwriters—Bond & Goodwin, Inc. Offering—Price to

Budd Company,

Co., Chicago

(6/17)

May 29 filed, 59,862 shares of 3%% cumulative converti¬
ble preferred stock
($100 par).
Underwriter—Glore,
Forgan & Co., Chicago.
Offering—Preferred will be
offered for exchange to holders of $4.25 cumulative pre¬
ferred stock
each share

basis of

one

share of

Benguet Consolidated Mining Co., Manila, P. I.
filed

702,302 shares of capital stock value
(par 1 peso, equivalent in U. S. currency to 50 cents
share). Underwriters—Allen & Co. The shares are
part of a total of 852,302 shares purchased by Allen
& Co. from five stockholders.
Of the 852,302 shares,
150,000 were sold privately at the cost price to Allen
& Co.
Purchase price to Allen was $2.10 per share.
Offering—Price $3.50 per share. For details see issue of

per

March 21.

Booth

Fisheries

Corp., Chicago

(6/17) *

scription to

filed

15,000

cumulative

the sale of preferred will be
of 9,148.5 shares of preferred

applied^;thevredempticm;:,

—

Corporate and Public Financing

$105 plus divi¬

stock

SPECIALISTS IN

shares of

par

one

shares held.

ockholders of record

five

shares will

C.J.

FIRST BOSTON

^riidpal^pnds^4,

to the public by underwriters.
Proceeds—To increase
working capital and to finance purchases of additional
machinery and equipment, e.c.
For details see issue
of May 30.
f
,

•

BurrillvilJe

June

INC.

,
.

(letter of notification)

H CORPORATION '

1 '

41 WAU ST., NEW YORK 5, N. Y*

r,L

u'W

."'I.Z."*/"*T?*

Offering price, $22 a share.
No under-j
writing. To pay for a portion of the expenses of con-]
structing new horse racing plant at Lincoln, R. I.
California Electric Power Co.,

Riverside, Cal.

May 10 filed $16,000,000 first mortgage bonds due Junc|
1,' 1976, and 169,636 shares common stock ($1 par). Un¬

•

Boston

•*

Chicago

Chicago and other cities

•

Dillon, Read & Co., Inc. (bonds); The
First Boston Corp.; Halsey, Stuart & Co., Inc. (bonds)i
Kidder, Peabody & Co., and Stone & Webster Securities
Corp. (stock).
Offering—Securities will be offered for
sale at competitive bidding.
Price to public by amendJ
ment.' Proceeds—Redemption of first mortgage bonds
3V2% series; balance to general funds.
"*(*
include

Calif. Oregon Power Co., Medford, Ore#

May 24 filed 312,000 shares of
Stock will be sold

writers—Names

common

'1'

St. Louis

•
i

■

„

•
■ i

San fronclsco
m .1

miirniU

(6/1.2)'

stock (no par)

Underj

through competitive bidding.

amendment.

Probable bidders

in-j

elude Blyth & Co., Inc.; The First Boston Corp.; Kuhni
Loeb & Co.; Smith Barney & Co. (jointly); Harrimar,

Offering—Stock is being sold by Standard
parent, of; California.
/

Ripley & Co.
Gas

and

Electric Co.,
>

••»'

•

>(6/19)]
.(par $1)^

•

Candego Mines, Ltd., Montreal, Canacte

May 31 filed 500,000 shares bf common stock
Underwriters—Sabiston-Hughes, Ltd., Tdronto.: Offering—Shares will be offered to public at 75 cents a share
Proceeds—Net proceeds, estimated at $300,000, will fec
used .for mining opterations. \- Business—Exploring
fbf
■

..Underwriters and Distrihutm of

:-Securities

' V

■

km $

■ •

;
•'*

-ifetddei^&abodyM^
■

Founded 1865

HAnovtf 2-2727

Phlladefphlor ,f Pittsbofgh ' Cleyefdrtd

Cincinnati

j.
—" ■

Boston

Probabld

derwriters—Names to be filed by amendment.

bidders

NcwYork

13,500 shares of no pari

class A stock.

...

T*\r

Racing Association, Pawtucket, R. L

R. I.

DEVINE a5CO.W«

•

com¬

be offered

CorporateapdMunitip.al'

The

June 21

additional share for each
Uhsubscribed

United States Govern ment'Securities
State and

stock.

common

ore.

Balance will be added to general funds.

dends.

common

the rate of

—

convertible
preferred stock (par $100) and an unspecified number
of shares of common stock (par $5). Underwriters—By
amendment.
Offering—Preferred and common stocks
will be offered to the public. - Prices by amendment.
Common shares are being sold by six stockholders in¬
cluding Central Republic Investment Co./ A. C. Allyn
and Co., Inc., and Lee Higginson Corp. The latter two
companies and Central Republic Investment Co. (One of
the selling stockholders) propose to participate as un¬
derwriters in connection with the public distribution of
the stocks. Proceeds—Net proceeds to the company from
May

opera¬

Underwriters—Carl M. Loeb, Rhoades & Co., and Blyth
& Co. Inc.
Offering—Shares will be offered for sub-^

of $4.25

preferred.
Exchange offer is sub¬
ject to purchase by underwriters of all shares of new
preferred not taken in exchange.
Proceeds—Redemp^.
tion of old preferred not exchanged.
For de.ails see
issue of May 30.

March

property]

bottling and related

Philadelphia

May 24 filed 543,000

mon

Foods

•

working capi.al, for purchase of equipment, repayment
of loans, development, etc.
For details see issue of
April 4.

Beatrice

(letter of notification) 10,000 shares of common!
stock (no par).
Offering price, 4,800 shares at, $5 a!
share; 5,200 shares will be held for offering to one;
individual in return for services and personal

public at market but at not less than $10 per share.
Proceeds—Payments to and advances to subsidiaries for

June 3

Canton, G.. (6/17-21)

Barium Steel Corp., S. E.

|i| Ala.
;

Maintenance

construct

tion purposes, and to provide funds for the
completion
of a construction program now in progress and
opd

York (6/12)

May 22 filed $40,000,000 sinking fund debentures, due
1966, and 400,000 shares ($100 par) cumulative convert¬
ible preferred stock.
Prices by amendment.
Under¬
writers—Kidder, Peabody & Co.; Lehman Brothers;

Emanuel,

burse ihe treasury for expenditures made for

of aircraft.

Manufacture

& Co., and Courts & Co.
Offering—Stock will be offered
to public.
Price by amendment.
Proceeds—Purchase

Members ojtheNevt Yprk and Boston Stock
Nnw'forit

Boston

Phiiadriphia

B^chan^es'::r
"?

Chicago

Volume 163

THE COMMERCIAL & FINANCIAL CHRONICLE

.Number 4496

Carbonate

City Ice & Fuel Co., Chicago

Mining & Milling Co., Spokane,

Wash.

May 28 (letter of notification) 400,000 shares of
stock.

common

Offering price

10 cents a share.
For working
Underwriting—Officers and directors of com¬

capital.

pany.

Toronto, Can.

Common stockholders will be given the right to subscribe
for the 114,827 shares of common at the rate of one

new

for

common

each

June 3 filed 400,000 shares of common stock ($1 par)
(Canadian funds).
Underwriter — Frank
P.
Hunt,

plied by amendment.

Rochester, N.

tion

Y., is underwriter for sale of stock in
Offering—Stock will be sold to public

UuLed States.
at 55 cents

D00 together with

$$$$$;•

■

Carriers & General Corp., New York

(6/15)

May 27 filed $1,872,000 15-year 3% debentures, due 1961.
Underwriters—Paine, Webber, Jackson & Curtis.
Of¬
fering—Price
of

101%

of promissory notes;

by amendment.

entire

issue

•

City Stores Co., Philadelphia

May

filed 100,000 shares common stock (par $5).
Underwriters—Lehman
Brothers.
Offering—Stock is

being sold by Bankers Securities Corp., parent.
Price
by amendment.
Business—Holding company owning

Proceeds—For

redemp¬
debentures, due

15-year 3%%

•

(letter

notification)

19,000

and

other

corporate

•

(letter of notification) 1,000 shares of $100 par
5% cumulative preferred stock.
Offering price, $100 a
share.
No underwriting; to provide additional working

capital.
m

Central El. & Gas Co., Sioux

Not

purposes.

(6/24)

underwritten.

June 5 filed

$5,000,000- convertible debentures, due 1976,
and, 15,0QQ shares of common stock (no par). Company is
selling the debentures while the common stock is being

sold by Consolidated Inves .ment Trust, which owns 35,800
shares of company's outstanding cbmmom:?UnderwrLers

—Paine, Webber,. Jackson & Curtis.

Offering—Deben-

stock will be offered to

the

public.
proceeds
debentures, $2,610,825 will be used
for redemption of company's outstanding $4,25 cumula¬
tive preferred stock which is callable at $105 a share
plus dividends.. Approximately $1,500,000 will be used
for construction of additional manufacturing facilities
common

by amendment,

Proceeds—Of

the

net

from the sale of the

and, remainder will be added to working capital.

March 29 filed 60,000

Chicago, III.

stack (par $2).
being sold by certain stockholders; Underwrit¬
ers—Hallgarten & Co. Offering—Price based on market.
For details see issue of April 4.
Shares

shares of

common

are

by the corporation.
•

Cawthon-Coleman Drug Co., Selma, Ala.

Mass.

Diamond T Motor €Jar Coi,

cumulative conver.ible preferred stock (par $5).
Price,
$5 per share.
Proceeds will be used for working capi¬
Stock will be offered to the public

*■:

Dewey and Almy Chemical Co., Cambridge,

Clifford, Couturier, Inc., New York

May

tal

1960, at 103%% plus accrued interest.

underwriting.

•

Price

Pasadena, Calif.

tures and

(6/17)

majority of stocks of corporations engaged primarily in
the operation of six department stores.

Fluorite.

tion

4s.

share.

Proceeds—Of the net proceeds, $40,$22,000 of treasury funds, will be used
£or( development work.
If sufficient ore is found, com¬
pany will erect a mill at an estimated cost of $150,000.
The balance will go into working capital.
Business—
Company intends to explore for the mineral known as
a

Proceeds—$10,378,500 for retire¬
$1,170,550 redemp¬
at par by subsidiary of first mortgage sinking fund
For detail see issue of May 30.

ment

Desert Mesa Land Co.,

May 31 (letter of notification) 500 'shares of common
stocki. Offering price, $100 a share.. For working capital.

shares outstanding.

Unsubscribed shares, as well as the entire issue of deben¬
tures, will be offered to the public at prices to be sup¬

(6/24)

•

May 23 filed $12,000,000 of 2%% sinking fund deben¬
tures, due 1966, and 114,827 shares common stock (no
par).
Underwriter—A. G. Becker & Co.
Offering-

Cardiff Fluorite Mines Ltd.,

3093

Disston

Coastal States Life Insurance Co., Atlanta, Ga;

(Henry)

& Sons,

Inc., Philadelphia *;

(6/10)

May 28 (letter of notification) $300,000 of common stock
divided into 15,000 shares ($10 par) and the remaining
$10 a share to be capi al surplus.
Offering price,. $20 a
share.
No underwriting. ? For capital and
surplus.

notification) 300 shares of capital stock.
on behalf
of Jacob S. Diss.on, Jr.
Ripley & Co., Inc.
Price (at
market), $68 to $72 per share,

;V5^°nsol. Vultee Aircraft Corp., San Drego (6/17)

•

June 3 (letter of
Stock

sold

Underwriter—Harriman

Falls, 5. D. (6/17)

May 29 filed 35,000 shares of $2 cumulative preferred!<
stock, series A (no par), but with a stated value of $50 a
share, and 175,000 shares of common stock (par $1).
Underwriter—Paine, Webber, Jackson & Curtis, Chi¬
cago^ Offering—The stocks will be offered to the public
it-prices to be supplied by amendment.
Proceeds—To
off $3,000,000 loan from Firs; National Bank Chi¬
Harris Trust and Savings Bank, Chicago, bal¬
ance working capital.

May 29 filed 77,134 shares of

(par $1).
Offering—Shares

Underwriters—Names by amendment.
are to be issued upon the exercise of options allotted
by
the

Doman-Frasier

stock

common

to its officers and supervisor
For de.ails see issue of May 30.

executives.

company

Helicopters,

Inc., New

York

(6/10)
June 3 (letter of notification)

150,000 shares of common
Price to public, $1 per share. Proceeds
will be used for experimental purposes in connection §
with development of helicopters.
Not underwritten..

stock (par

$1).

pay

cago and

Central

Indiana

Gas Co., Munice,

Ind.

kpril 25 filed $3,250,000 first mortgage bonds.

Bonds
competitive bidding with the interest
rate/being named by the successful bidder.
Under¬
writers—By amendment.
Probable underwriters in¬
clude Halsey, Stuart & Co. Inc.; First Boston Corp.;
Stroud & Co.
Proceeds—Redemption of first mortgage
3%,% bonds; construction fund. - For details see issue
of May 2.
Bids Invited—Com mnv will receive bids for
the sale of bonds up to noon EDST June 10, coupon rate
0 be specified on the bids, at i s office 90 Broad St.,
Ne,w York.
will be sold

Central Ohio Light & Power Co., Findlay,

(6/17)

names

will

filed

are

sold to under¬

by amendment.

Probable

underwriters include Blyth & Co., Inc.; Otis & Co., Inc.;
Harriman Ripley & Co., Inc. Offering — The shares will
3e

for subscription

offered

the rate of

one

new

to common

slockhofiers

share for each 2.8 shares

now

Unsubscribed shares may be sold to underwriters
Dther

parties. Proceeds—For expansion of

vices and improvement of properties.

held.
or

consumer ser¬

Business—Public

Utility.

Montreal, Canada

(6/19)

stock

(par $1).
Underwriters—SabistohsHughes, Ltd., Toronto.
Offer¬
ing—Shares will be offered to the public at 75 cents a
share.

will be used for

•

common

Proceeds—Netsproceeds, estimated at $300,000,

ing for

mining, operations. Business

ore.

—

Explor¬

:—

Dayton Consolidated

Mines

Co., Virginia City,

May 28 (letter of notification) 176,330 shares of common
stock.
Offering .price, 156,330 shares at 30 cents a share.
20,000 shares are to be issued at 25 cents a share.
For
further developing of
The Broy

J§ming

properties.

filed

1,530,000 shares

aggregate of
•

common

stock

($7 par).
Corp.
share, or an

5:pft" bid of $33,639

per

Dazey Corp., Sti Louis, Mo.

(6/26)

St6bk%eing

share for the common.

butter

Business—Manufacture of

churns.

Chefford Master Manufacturing Co., Inc., Fair¬

field, III.

(6/10)

Delhi Oil Corp.,

May 8 filed 40,000 5% cumulative convertible preferred
shares (par 25) and 40,000 common shares (-par $2).
Underwriter—Cruttenden and Co.
Offering—Pifice' of
preferred is $25 per share; price of common by ?^nendhent.
Proceeds—$300,000 will be used to dBcharge
Dank loans, $60,963 to discharge machinery purchase
lOtes and approximately $909,694 for
additiohapwork-

hg capital.

Business—Automobile replacement- parts,

May

filed

Co., whieh

common

owns

31
tock

ar).
f

Motor Corp.,

Linden,

N. J.

preferred at $100 and

proceeds—Proceeds

one

share of

will be used

capital and expansion of facilities. Not
securities will be sold by officers of
without compensation.

common tat

furnish

$1.

forking

underwritten, as
the
corporation

•

Ducommun Metals &

Supply Co., Vernon, Calif.

(6/19)common stock (par $2).
principal underwriter is Hill Rich¬
Offering—105,000 shares will be offered to
price to be filed by amendment and 20,000

public at

shares will be offered for sale to officers and

employees
stockholders and to the employes' bonus
sharing trust. Proceeds—Of the net proceeds,
approximately $1,000,000 will be used to expand and
increase its inventory and the balance to increase work¬
ing capital. Business—Merchandiser of s,eel and indus¬
trial supplies.
not at present

stock

v;,{

Electronic Traps,

Inc., Rochester, N. Y.

May 20 (letter of notification) 40,000 shares of common
stock (par $5). Price to public, $5 per share. Proceeds—
To finance the manufac*ure of corporation products and

loan, the proceeds of which were used for
purposes.
Issue not underwritten, but
company is unable to sell stock it may later secure
repay

manufacturing

(par 500)

Offering—Shares will

broker's

assistance.

stockholders of Southern

all of the outstanding

com¬

stock of the corporation.
Proceeds—Proceeds will
be added to cash balances to be applied to the payment
of current or other liabilities.
Business—Production of
crude petroleum.

Co., Warren, O.

May 17 filed 50,000 shares of 5%

(letter of notification) 2,970 shares of preferred
common istqek (no
Offering—To be offered in units of one share

(par $100) and 2,970 shares of

Proceeds—Of the total eight stock¬

•

Electronics

House

Inc.,

Stamford,

Conn.

mon

Denman Tire & Rubber

China

share.

selling 73,208 shares.
Net proceeds to com¬
pany from sale of 18,910 shares will be used to- pay
balance due in purchase of certain real estate; plant
addition; additional machinery and equipment.
For
details see issue of May, 30.
-•*
>'
'j

(6/11)

common

Underwriters.

be offered for sale tb
Union Gas

Dallas, Texas

175,000. shares

Underwriters—No

are

sold by five stockholders.

Underwriters—Scherc0Richter Co., St. Louis. Offering
—Offering prices are $10 a share for the preferred and
a

$6,125

and profit

shqrbs of 5% cumulative convertible
preferred stock (par $10)" and 100,000 shares of Common

(6/17)
(par $2)VI,

May 31 filed 125,000 shares of

$51,467,670?^

(par 10c).

ards & Co.

June 4 filed 50,000
stock

stock

Underwriters—The

(6/7)

Underwriters—Blythv-&'£o., Inc., Mellon Securities
Issue awarded June

common

Underwriters—White, Noble & Co.; Grand Rapids, Mich.;
F. H. Koller & Co., Inc., New York, and Miller, KenoweH?
& Co., Detroit.
Offering—Stock will be sold to public

Underwriter—

Co., San Francisco.

Dayton Power & Light Co.
1

Douglas & Lomason Co., Detroit, Mich.
May 28 filed 92,118 shares of

holders

Nev.

May

nderwriters—If unsubscribed shares
writers

Cyprus Mines, Ltd.,

Ohio

29 filed 30,000 shares of common stock (par $10).

•

May 31 filed 500,000 shares of

stock (par 10) and

cum.

95,009 shares ($1 par)

conv.

(6/17)

preferred

common

stock.

Underwriters—Herrick, Waddell & Co., Inc. OfferingCompany is offering the 50,000 preferred shares to the
public.
The 95,000 shares of common stock are issued
and outstanding and aw being sold by the present own¬
ers.
Price to public;
preferred, $10 per share; com¬
mon, $8 per share.
Purpose—Proceeds will be added
to general funds.

June

(letter of notification) 150 shares of no par
stock.
Offering price, $100 a share. No underwriting.
For additional working capital.
Eureka Williams Corp.,

Detroit

17,000 shares common stock (par $5).
Shares being sold by officers and employees or their
relatives.
Offering—2,000- shares optioned to G. H. Ber¬
April

17 filed

nard to

purchase on or before Aug. 23, 1946, at $7,625 a
share, 15,000 shares to be sold at market from time to
time upon

the New York Stock Exchange or the Detroit
Exchange by the owners of such shares. For de¬
tails see issue of April 18.
Stock

(Continued

on page

3100)

Lee Higginson Corporation
INVESTMENT SECURITIES
Underwriters* Distributors
and Dealers

NEW YORK

BOSTON

CHICAGO

THE COMMERCIAL &

31G0

M^|-(

;

G/Films

General Cable Corp., New York

(Continued from page 3099)
-'v'X

-''W||,

*>4'

-r'

Inc.* New York

notification) 19,062 shares of common
present common stockholders.
price, $1.80 a share.
No underwriting. For
capital. '
?
Vj

May 27 (letter of

stock for subscription to

Offering

working

New York (6/25)
May 6 filed 300,000 shares common stock (par $1); Un¬
Flying Freight Inc.,

derwriters—J. F. Reilly & Co., Inc.

Offering—Price to

public $3.50 per share. Proceeds—Proceeds will be used
for the purchase of six land planes, ten flying boats, re¬
conditioning of flying boats and working capital. Busi¬
ness—Company was incorporated on March 9, 1946, to

operate as a charter air

carrier.

Food Fair Stores,

preferred).

of second

per share.

1950, shares of common stock at $19.50
The options were granted on Sept. 5, 1945.
In the event that all options are exercised,

Proceeds—

corporation
will realize $780,000,; which it intends to use for in¬
creasing inventory, acquiring and equipping additional
supermarkets, warehouses, etc.
Business—Food stores.

^! Franklin Simon & Co., New York
May 14 filed 50,000 shares

(6/11-12)

of cumulative convertible pre¬

(par $1). Of
the total covered, the 50,000.shares of preferred and 60,000
shares of common will be offered to the public, and
10,000 shares of common will be offered at $20 per share
to certain officers and employees.
Underwriter—W. E.
Hutton & Co.' Offering—Prices to public by amendment.
Proceeds—Redemption of 21,339 outstanding shares (ex¬
cluding treasury shares) off 7% cumulative preferred
stock at $115 per share and accrued dividends.
For
and 70,000 shares of common

ferred (par $50)

details see issue of May

16.

Oil $ Drilling Co., Denver, Colo.

May 20 (letter of notification) 1,493,303 shares of capital
stock (par 50) and 20,000 shares as a bonus offering
donated by Harry J. Newton, President. * Offering—
Price 50 a share.
100,000 shares allotted to present
shareholders to purchase at par and receive also a
20% share bonus with each purchase.
No underwriting

oil well in Albany
oil and gas interests
officers' salaries and general expenses.

present.
Proceeds—To drill
County, Wyo., to acquire further

and to pay

Fundamental'Investors Inc., New York

(6/10)

May 22 filed 500,000 shares of common stock (par $2).
Underwriters—Hugh W. Long & Co.
Offering—To be

Proceeds—For investment in securities.
Business—Open-end investment trust of the limited
management type.
sold at market.

Funsten

•

(R. E.)

Co., St. Louis, IWo.

15,684 shares of 4%% cumulative convertible
preferred stock (par $50) and 196,137 shares of common
stock (par $1).
Underwriters—G. H. Walker & Co. and
Alex. Brown & Sons.
The shares are owned by the
underwriters who acquired them by purchasing the
company's old $100 par common from stockholders. The
old common stock was recapitalized into the 4J/2%. pre¬
ferred and the $1 par.common.

Offering—Stocks will be
Business—

public.
Prices by amendment.
Purchasing and selling pecans.
offered

(6/11)

(par $1) reserved for conversion of

Baltimore

Corp., Nashville, Tenn.

sale of

from

common

purchased

Houston

Unsubscribed shares

stock will

Underwriter—W. E. Hutton & Co.

held.

Gatineau Power Co., Ottawa, Ont.

(6/15)

May 27 filed $45,000,000 series C and $10,000,000
D first mortgage bonds, due 1970 and $9,500,000 of

series
sink¬

Blyth & Co., Inc., and Mellon Securities Corp.
—Refunding. For details see issue of May 30.
•
'

General Builders Supply Corp., New

(6/19) v;,'*

</■

;-/

Proceeds
/.'• v/l

York

shares of 5% cumulative convertible
preferred stock (par $25) and 170,000 shares of common
stock (par $1).
Underwriters—Allen & Co. Offering—
11,238 shares of new preferred will be offered in ex¬
change to holders of $7 cumulative (no par) preferred
stock on basis of one share of old preferred for 4.6 shares
of new preferred.
Remaining 28,762 shares of preferred
and all the common shares will be sold to underwriters
May 31 filed 40,000

who will offer them to the

public $25 and $4 a share,

respectively.
Of the common being offered, the com¬
pany is selling 100,000 shares and 12 stockholders are
selling 70,000 shares.
Certain warrant holders of com¬

Proceeds—Net proceeds will be added
general funds to be used as working capital.

Ltd., Toronto, Ont.

4 filed 600,000

have agreed to sell to underwriters warrants for
purchase, during a period of four years, of 40,000 shares
of common.
Proceeds—Net proceeds to company of ap¬

pany

proximately$950,000 yvill be added to working capitals
used to reimburse treasury for previous ex¬

and will be

penditures, for

property improvements and additions to

present trucking
supplies.

...

facilities. Business— {Sale of builders

purchasing of
underwriters.

employees.

V'.

Chemical Corp.,

to issue 131,769 shares initially to present com¬
stockholders and holders of stock purchases war¬
rants for subscription at the rate of^-one common share
for each five shares held.
Price by amendment. Under¬
proposes

purchase unsubscribed shares plus an addi¬
Underwriters may or may not, as they

tional 65 shares.

determine,

(6/15)

make

public

offering

of unsubscribed

remaining 14,000 shares of common stock
to "certain officers and employees."
Proceeds—Construction and equipment. For details see
shares.

will

The

offered

issue of May 23.

International Paper Co., New York

April 26 filed 400,000 shares of $4 cumulative preferred
stock (no par) and 100,000 shares of common stock
(par $15). Offering—Company is offering to holders ot
its cumulative convertible 5%
preferred stock (par
$100) the right to exchange 400,000 of such shares for
new preferred and common on the basis of one share
of new preferred and W share of common for each
share of 5%

May 31 filed 500,000 shares of common stock (par $1).
Underwriters—Sabiston-Hughes, Ltd., Toronto.
Offer¬
ing—Shares will be offered to public at 75 cents a share.
Proceeds—Net proceeds, estimated at $300,000, will be

Business—Exploring for

ore.

Gulf Atlantic Transport'!! Co., Jacksonville, Fla.
Jan. 17 filed 270,000 shares of common stock (par $1).»
Underwriters—Allen & Co. have withdrawn as under-,
writers.
Offering—Price to the public by amenrtmpnt
Stock is being; offered initially to present shareholders

Minerals &

mon

Mafy 27 filed for an undesignated number of shares of
capital stock (par 250). Underwriters^-No underwriters
but company has entered into an agreement with Edgar
W. Garbisch, President for purchase of any unsubscribed
shares.
Offering—Stock will be offered for subscription
to stockholders of record June 20.
Subscription war¬
rants will expire on July 10, 1946.
Subscription price
may be paid either in cash or by surrender of first mort¬
gage 6% honds, due 1953, at principal amount, or partly
in cash and partly-by surrender of such bonds. Proceeds
—For redemption of $646,200 6% first mortgage bonds.
Balance of proceeds will be added to general funds.;

operations.

•'

Chicago

writers will

mining

materials,

Stock to be offered by issuer

May 21 filed 145,834 shares of common stock (par $5).
Underwriters—White, Weld & Co. Offering—Company

Corporation, Battle Creek, Mich.

(6/19)

supplies, equipment,

International

/Grocery Store Products Co., Union City, N. J.

for

etc.

business.

used

Intaglio Service Corp., New York

such

(letter of notification) 1,500 shares of no par
common stock.
Offering price, $10 a share.
No under¬
writing. For purchase of inventory and to promote the

Gubby Mines, Ltd., Montreal, Canada

Purpose—
For details see issue of;

May 29 (letter of notification) 6,000 shares of 7% cumu¬
lative preferred stock.
Price to public, $50 per share.
Proceeds will be used in ordinary course of business;

shares of common stock (par $1)
Canadian
currency.
Underwriters—No underwriters
named.
Offering—Company is offering common stock
to public at 50 cents U. S. currency per share.
If com¬
pany accepts offers from dealers to purchase the stock,
company will sell to such dealers, if any, at 32.5 cents
U. S. currency per share for resale at 50 cents U. S.
currency per share.

•

Offering—Common

Rights expire 3 p.m. (EDST) June 12.

augment working capital.
May 2.

by amendment.

ing fund debentures, due 1961.
Underwriters—To be
decided by competitive bidding.
Possible bidders in¬
clude The First Boston Corp.; Halsey Stuart & Co., Inc.;

(6/12)]

of record

May 27

Mich.

May 27 are given the right to
subscribe to the additional stock at $22 per share at ;
the rate of one share for each seven shares of common
stockholders

(non-voting). Underwriters—Glore, Forgan & Co.,
Lyons & Co.
Offering—125,000 shares will
be offered to the public and 25,000 will be offered to
certain officers and employees of the company.
Price

Gove

Motor Car Co., Detroit,

Hudson

and W. L.

•

For details see issue of May 16.

April 26 filed 226,973 shares of common stock (no par).

Louisville, Ky. (6/12)

Gold City Porcupine Mines,

& Pancoast;

working capital.

stock

Jan.

Inc.

added to general

May 24 filed 150,000 shares of class B (par $1) common

Field Material Co.,

Milton R. Underwood &

directors may determine.

Glenmore Distilleries Co.,

) Oil

(Texas

Fridley & Hess; Creston H. Funk;
Co.; Rauscher, Pierce & Co.;
Inc.; Pitman & Co., Inc.; Gordon Meeks & Co.; Dallas
Union Trust Co.; Moroney, Beissner & Co., and Rotan/
Mosle & Moreland. Offering—Price to public by amend¬
ment. Proceeds—Proceeds will be used to augment the
ertson

underwriters

funds to be used from time to time for such corporate
purposes as

(6/7)

May 13 filed 100,000 shares of common (par $1). Under¬
writers—Dallas Rupe & Co.; Dittmar & Co.; Dewar, Rob-1

rate of one share of
by

Angeles

120,000 shares common stock (par $1)/
Underwriters—Cohu & Torrey. Offering—Price to pub¬
lic $6 per share.
Proceeds—$97,125 to redeem preferred
stock and approximately $400,000 to retire short-term
bank .borrowings; balance for working capital.
For ;
details see issue of April 4.
March 30 filed

and
offered to public.
Prices by amendment/ ProceedsProceeds from preference stock, together with other
funds, will be used to redeem company's $4,800,000 15year 3% sinking fund debentures, due Dec. I,tl959, at
104% (exclusive of accrued interest).
Net proceeds
will

common

the selling stockholders.

Hoffman Radio Corp., Los

Proceeds—For corporate

for each 10 shares held.

agent for selling stockholders.

ceeds go to

May 21 filed 50,000 shares (no par) cumulative prefer¬
ence stock and 64,030
shares ($1 par) common stock.
Underwriters—Smith, Barney & Co., New York. Offer¬
ing—Preference stock will be offered to public but com¬
mon stock initially will be offered for subscription to

Co. of
Net pro¬

$75 a share. Underwriters—Safe Deposit & Trust

Corp., Atlanta, Ga.

present common stockholders at

...

Hennegen-Bates Co., Baltimore, Md.

purposes.

Shoe

/I-"

May 23 (letter of notification) 1,504 shares of stock to
be sold on behalf of eight stockholders. Offering price

For

May 16 (letter of notification) 19,984 shares of common
stock.
Offering price, $6 a share.
Underwriter—Gen¬

General

Chicago, III. (6/10-14)]

Hayes Manufacturing Corp., Gr. Rapids, Mich*
Feb. 27 filed 215,000 shares cf common stock ($2 par).,
Shares are being sold by certain stockholders. Stock
acquired by selling stockholders in exchange for 432,000.
shares common stock (par $3) of American Engineering
Co. Underwriters—To be named by amendment. Offering
—Price to public by amendment.
Stop order hearing ;
by SEC. For details see issue of March 7.

stock, Series B, $761,000; remainder approximately $3,-

(6/24)

June 3 filed

$9,625.

preferred. Underwriters — Paine, Webber, Jackson &
Curtis.
Offering—Price to public by amendment. Pro¬
ceeds—To retire outstanding 6% cumulative preferred

common

Front Range

Harrison Wholesale Co.,

4% subordinated deben¬
tures, Series B, and 60,000 shares 4% cumulative con¬
vertible preferred stock, Series C (par $50) and 180,000

Co., Atlanta, Ga.

its $27,300,000 ;

April 30 filed 85,600 shares of common stock (par $1).
Shares are being sold by two stockholders, Albert L.v
Arenberg, President, 73,000 shares, and Louis Sisskind,
Vice-President and Secretary, 12,600 shares.
Under¬
writers—Brailsford & Co.
Offering—Price to public

May 3 filed $1,250,000 15-year

eral Finance

used to redeem

and refunding bonds, series D 3%%;f

due 1969.

filed. 145,024 shares common stock (par $1),
is offering 25,000 shares and 21 stock¬
120,024 shares. Price to public by amendment.
Underwriters—Smith, Barney & Co. Proceeds—Net pro¬
ceeds to the company will be added to general funds.

General Securities

will

loan

of first mortgage

holders

working funds.

Probable bidders
Corp.; The First

Proceeds—Net proceeds, together with a $2,000,—

bank

000

of which company

294,000 will be added to general
details see issue of May 9.

bidding.

Securities

Webster

& Co.

May 23

shares of common

York (6/11)
May 23 filed 175,000 shares common stock (par 500)
of which company is selling 150,000 shares and two
officers 12,500 shares. Underwriters—First Colony Corp.
Offering—Stock will be sold to public at $5.85 a share.
Proceeds—Construction of plant, purchase of equipment,
working capital. For details see issue of May 30.
FR Corporation, New

Texas

include Stone
Boston Corp.;/
Halsey, Stuart & Co. Inc.; Blyi/h & Co.; Harriman Ripley,

Inc., Lockwood, O.

General Finance Corp., Chicago, III.

States: UtilitiesCo., Beaumont,

competitive

(6/11)

ijlil

Gulf

May 24 filed $27,000,000 first mortgage bonds, due 1976/
Underwriters, by amendment.
Bonds will be sold at

General Dry Batteries,

April 29 filed 40,000 shares of common stock ($1 par),
issuable upon exercise of options to purchase common
stock.
The options to purchase common stock entitle
the holders to purchase between Sept. 5, 1946 and Sept.

issue of Jan. 24.

see

of first preferred and one share
,
„\

$150 per unit (one share

Thursday/June 6, 19461
at a price to be filed by amendment.
Holders of ap-r
proximately 200,000 shares have agreed to waive their;
preemptive rights. Postponed indefinitely. For details

(6/26)

May 17 filed 150,000 shares of 4% cumulative first pre¬
ferred stock (par $100) and 150,000 shares of 4% cumula¬
tive convertible second preferred stock (par $50).
Underwriters^-Blythv; & Co., Inc.
Offering—Holders of
150,000 outstanding shares of 7% cumulative preferred
stock are offered the privilege of exchanging their
6hares for 150,000 shares of,/the first preferred stock
and 150,900 shares of the second preferred on basis of
one share each (plus a cash adjustment) for each share
of 7% preferred;* Shares of first and second preferred
not taken in exchange will be sold to Blyth & Co., Inc.,
and associates for resale to the public. Price by amend¬
ment.
Price is presently expected to be not less than

Philadelphia

Inc.,

FINANCIAL CHRONICLE

July 1.

preferred. Exchange offer will terminate
For details see issue of May 2.
r

Iowa Public Service Co., Sioux City,

la.

May 21 filed $13,750,000 first mortgage bonds, due 1976;
42,500 shares ($100 par) cumulative preferred stock,
and 137,333 shares ($15 par) common stock. Underwriters
—Names
by amendment.
Probable bidders include
Halsey, Stuart & Co. Inc. (bonds); First Boston Corp.;
W. C. Langley & Co. (stock); A." C. Allyn & Co., and
Blyth & Co., Inc.. Offering—Bonds and preferred stock
will be sold at competitive bidding and the common
stock will be offered for subscription to present common

[Volume

163

-Number 4496

stockholders! at the

rate

THE COMMERCIAL & FINANCIAL CHRONICLE

one

new

3JLU1

each

for

three shares held.

Proceeds—Refunding improvements
to physical
properties, additional working capital. For
details see issue of May 23.
•

New Issue Calendar

Jack & Heintz Precision
Industries, Inc., Maple

(Showing probable date of offering)

Heights, Ohio (6/19)

June 6,

May 31 filed 50,228 shares

of cumulative preferred stock
(par $50), 4% series (convertible prior to April 1, 1956)
and 550,000 shares of common stock
(par $5).
Under¬
writers—Blyth & Co., Inc. Offering—Stocks will be of¬
fered to public.
Price by amendment.
The preferred
shares being registered includes
15,000 and 5,000 shares
toeing sold by William S. Jack, President and Ralph M.
Heintz, Vice President, respectively.
Proceeds—Net

Hoffman Radio

1946

Corp

Common

June

7, 1946

Dayton Power & Light Co

Common,
Common

Co., Inc

June

10,

Class A and.Common
Common

Central Ohio Light & Power

Helicopters, Inc
Fundamental Investors, Inc.__

Douglas & Lamson Co.—
Maryland Casualty Co...
National Gypsum Co.«—

Harrison

Common

Motorette Corp.
Nutrine Candy Co

Shares (par $1).

Underwriters—F. Eberstadt & Co., Inc.,
find Watling, Lerchen & Co.
Proceeds—To increase gen¬
eral corporate funds and
partly to
For details see issue of May 23.

reduce bank loans.

Inc., New York

(letter of notification) 1,000 shares of common
stock (par $1).
Price, $11.50 per share. Stock is being
sold in behalf of Harold
Stone, New York.

Corp., Rothschild, Wis.

(6/18)

common

ratio

3V3

one

shares will

ceeds—Net

cumulative

held

June

United-Rexall

Michaels

subsidiary and
collateral security for a loan.

each

five

company.

held

Metallic Exploration

Debentures & Com.

Drug, Inc

Brothers, Brooklyn

Co., Searchlight, Nev.
I

sell 477

shares of its

its

common

treasury to certain key employees
Proceeds—General corporate funds*

stock

Common

June

Capital Stock

•

held
a

May 22 filed 7,500,00& first mortgage bonds, due 1976,
and $4,000,000 ($100 par) cumulative preferred stock.
Bonds and stock to be sold through competitive bidding.
Underwriters by amendment.
Probable bidders include
Halsey, Stuart & Co. Inc. (bonds); The First Boston
Corp.; Blyth & Co., Inc.: Coffin & Burr, Inc.; Kidder,
Peabody & Co.; White, Weld & Co., and Shields & Co.
(jointly). Proceeds—Principally refunding. For details
see issue of May 23.
•

Monogram Pictures Corp., Hollywood, Calif.
(6/19)

May 31 filed 224,781% shares of common stock (par $1).

Underwriters—Emanuel, Deetjen & Co. Offering—Stock
will be offered to public.
Price by amendment.
Pro¬
ceeds—Of the net proceeds, - $35,000 will be used to dis¬

charge the balance of outstanding notes, $200,000 will be
used for plant expansion, and the balance will be added

share.

1946

26,

General Cable Corp

(6/7-10)

Meyercord Co., Chicago (6/14)
May 27 filed 100,000 shares of

will

1946

Flying Freight Inc

First and Second Pfd.

Motorette Corp., Buffalo

(6/10)

.to

working/capital. ^ Business-^-Production and distribu¬
tion of motion pictures.

■

«.

shares of

common

purchased.

Proceeds—Es imated net?

proceeds of $1,020,000 will be used to pay off $61,000 of
loans, to purchase plant and equipment at an estimated
cost of $751,620 and the balance as additional working
capital. Business—Manufacture of facial tissues, towel¬
ling, sanitary napkins, and facial tissue toilet paper.
National Gypsum Co.,

Missouri Power & Light Co., Jefferson City, Mo.

May 31 (letter of notification) 100,000 shares.
Offering
price, $1 a share. To provide funds to mine, produce
ore, and build a milling plant.
No underwriting.

also

June 25,

.Capital Stock

April 29 filed 23,444 shares of cumulative preferred (par
$100) and 56,267 shares of common stock (par $1). The
shares are to be sold by five stockholders following
recapitalization.
Underwriters—Weriheim & Co., and
Lehman Brothers.
Offering—Price to public will be
filed by amendment.

common stock (par $5).
Underwriters—Kebbon, McCormick & Co.
Offering—
Shares will be offered to public.
Price by amendment.
In addition, the company plans to sell 20,000 shares of
common to L. H. Knopf, President of the company, and
10,000 shares to H. C. Castle, Vice-President, at the same
price the common: shares are sold to underwriters.
It

Common |
—Common

Timeley Clothes Inc,—..—

Bonds and Debentures

[

$4 per
share., Unsubscribed shares to be offered to public by
underwriters at not less than $4.75 nor more than $10.
Proceeds—To repay unsecured bank loans; to pay first
instalment on purchase of plant from RFC; balance to
be added to working capital.
•

Common

April 30 filed 100,000 shares of common stock (par $1);
May 29 (letter of notification) 24,000 shares of common
also 60,000 additional shares of which 50,000 are re¬
stock (par $1).
May be underwritten.
Price, $10 per
served for issuance upon exercise of warrants, and 10,000
share.
Proceeds for increased inventories, equipment,
shares for issuance upon exercise of options granted
working capital, etc.
to George Markelson and Irving Isaacs.
^ #f
-if '■
UnderwritpriH-^
! | Namm's Inc., Brooklyn, N. Y. (6/15)
Burr & Co., and Reynolds & Co.
Offering—Pri£e tc>.
public by amendment.
Proceeds—To replace j wot king , May 3 filed 100,000 shares common stock (par $1). The
statement also covers 45,000 shares of common issuable
capital exended to redeem class A and B first preferred
stock; balance will be used to increase merchandise
upon the exercise of warrants. Underwriters—Van ALinventories, finance instalment sales, etc. For details see
styne, Noel & Co. Offering—Price to public by amend¬
ment.
Proceeds—Proceeds will be added to general
issue of May 2.
corporate funds and used, as conditions permit, for
Midland
Cooperative Wholesale, Minneapolis
purchase of additional inventory, etc.
For details see
issue of May 9.
May 8 filed 10,500 shares of series D non-cumulative
4% preferred stock (par $100)'.
Underwriters—No un¬
•
National Cellulose Corp., Syracuse, N. Y.
derwriters. Offering—Price to public will range from
(6/19)
$100 per unit in January, February and March, 1946,
to $103 per units in October, November and December,
May 31 filed 200,000 shares of common stock (par $1}
with warrants to purchase 20,000 shares of common.
Proceeds—To pay off first mortgage loans and
1946.
for operating capital.
Underwriters—Floyd D. Cerf Co., Inc.
Offering—Stock
For details see issue of May 9.
will be offered to public at $6 a share.
The warrants
Miles Shoes Inc., New York (6/11)
will be sold on the basis of one warrant for each 10

May 17 filed 370,000 shares of common stock.
Under¬
writers—Sutro & Co., and G. Brashears & Co.
Offer¬
ing—To be offered initially to shareholders in ratio of
for

Common

Mines Ltd

Stratford Pen Corp..

Debentures

Common

Sterling Elec'.ric Motors Inc

issue of May 23.

1946

24,

Dewey & Almy Chemical Co...Debs, and Common
Funsten (R. E.) Co
Preferred and Common;
Neville Island Glass Co
Class A and Common

1946

Grocery Stores Products Co

^ Menasco Manufacturing Co., Los Angeles

new

15,

Common

—

June

Common

Namm's Inc

the

70,000 shares ($100 par) cumulative preferred stock and
101,056 shares ($50 par) cumulative second preferred
stock, the interest and dividend rates by amendment.
Underwriters—Drexel and Co., and Harriman Ripley &
Co., Inc. Offering—Bonds will be sold to public. Pre¬
ferred stock will be offered to holders of $6 cumulative
pfd. stock, series A, and $5.50 cum. pfd. stock, series B,
on a share for share exchange basis, plus a cash pay¬
ment.
Second preferred shares initially will be offered
for subscription to common stockholders of record on
June 11, 1946.
Proceeds—Refunding, reimburse com¬
pany for expenditures in financing
a new
company,
enlargements and improvements to present plants.
For

two

1946
Preferred and Common

Dazey Corp
Reynolds Pen Co

Cardiff Fluorite

;

Common
June 20,

1946

Common
Common

Corp
Corp

Van Norman Co

Preferred

June

Mead Corp., Chillicothe, Ohio (6/11-12)

14,

Carriers & General Corp
Gatineau Power Co

one

May 21 filed $12,000,000 first mortgage bonds, due 1966;

see

Cellulose

Common

Twin Coach Co

stock of the company owned by the

details

National

1946

Meyercord Co

construction Finance Corp. This will release from pledge

Business—Casualty and surety stock

13,

Monogram Pictures

Capital Stock
Common
Common
Common
Common

All American Aviation Inc.—

and return to the company for cancellation the 270,000
shares of preferred stock and 1,474,450 shares of com¬
as

Common

King-Seeley Corp

public.
Pro¬
proceeds of approximately $24,000,000, to¬

pledged to the RFC

pre¬

and

Debs, and Pfd.

Airlines, Inc
Wayne Knitting Mills

gether with about $6,830,000 of other funds, will be used
to pay the entire indebtedness of Maryland Holding Co.,
Inc., a wholly owned subsidiary of the company, to Re¬

mon

Jack & Heintz Precision Ind. Inc.—Pfd. and Com. >

1946

United Cigar Whelan Stores Corp
United Printers & Publishers (Inc.)

(5/17)

common

offered

Common

12,

Purex Corp.

convertible preferred for each 1% shares of
held.
Subscription price by amendment. Un¬

subscribed

Common

Hudson Motor Car

preferred stock and 479,880 shares ($5 par) convertible
preferred stock.
Underwriters—Merrill Lynch, Pierce,
JFenner & Beane, New York. Offering—Stocks initially
will be offered for subscription to present common
in

19, 1946

Glenmore Distilleries Co

June

Airlines, Inc

June

Maryland Casualty Co., Baltimore

each

June

Candego Mines Ltd.-—
...Common
Chicago, Milwaukee, St. Paul & Pacific,
(Noon EDST)
Conditional Sale Agreement
Cyrus Mine Ltd.
'
.Common
Ducommun Metals & Supply Co
Common
General Builders Supply Co.—Preferred and Com.
Gubby Mines Ltd
....Common

American

issue of May 30.

for

Common
Deb., Pfd. and Com.

California Oregon Power Co

Proceeds for buildings, furniture,
Stock will be offered

Ma,y 29 filed 239,940 shares ($10 par) cumulative prior

ferred

ji.———Common

Chesapeake & Ohio Ry. (Noon EST).Equip. Trusts

struction of Canadian pulp mill; to construct a building
at Menasha, Wis.; balance for working capital.
For de¬

stockholders

13, 1946

Marathon Corp.

Pfd. and Com.

Batteries, Inc
Corp

—

June

.Common

Indianapolis Union Ry
Bonds
Corp
Bonds, 1st Pfd. and 2nd Pfd.
Miles Shoes, Inc
Pfd. and Com.

May 23 filed 420,000 shares of common stock (par $6.25).
Underwriters—Lee Higginson Corp.
Offering—Price by
amendment.
Proceeds—Refunding; to complete con¬

Common

Corp.

Mead

fixtures, etc. No underwritten.
by the corporation.

see

1946

General Finance

Liquid Conditioning Corp., New York
May 31 (letter of notification) $237,000 class A stock.

tails

11,

Oil Corp

General Dry

•

Marathon

Capital Stock

Franklin Simon & Co

June 3

Price to public, $10.

Common

June
Delhi

% Lamston (M. H.)

Common

Union Wire Rope Co

.Common

Preferred
Common

Riegel Textiles Corp.
——
Preferred
Rome Cable Corp.—
——--Preferred
Salt Dome Oil Corp.—.
—Ctfs. of Interest
Sardik Food Products Corp..————Capital Stock
Steep Rock Iron Mines, Ltd.—i
Capital Stock
Varney Corp.
....Common

•

Co.

.Common

Ohio Edison Co,

Common

Wholesale

..Common
Common

Consolidated Vultee Aircraft Corp

Doman-Frazier

King-Seeley Corp., Ann Arbor, Mich. (6/13-14)
■■■£ May 21 filed for an unspecified number of common

Common

Co.—

Denman Tire & Rubber Co...Preferred & Common

Pfd. and Com.

Central,Indiana Gas Co. Noon (EDST) .-.Common
Disston (Henry) & Sons* Inc.
.—Capital Stock

engines, internal combustion engines, bearings and
refrigeration equipment.

...—.Preferred

City Stores Co

1946

Chefford Master Mfg. Co

Jtric

.Common
Common

—

Booth Fisheries Corp.
..Preferred and Common
Central El. & Gas Co.—Preferred and Common

Tucson Gas & Electric Light & Power

proceeds to company from the sale of
30,228 shares of
preferred and entire offering of common will be added
tto working
capital.
Business—Aircraft products, elec-

1346

Beatrice Foods Co.——

Michaels Brothers
Seaboard Trust

June 17,
Allied Stores Corp......
Aviation Corp.....

Buffalo, N. Y.

(6/17-19)

May 21 filed 275,000 shares ($1 par) common stock. Un¬
derwriters-—W. E. Hutton and Co., and Blyth & Co., Inc.
Offering to be based on market.
Proceeds—Costs for
construction of two new plants, etc.For details gee
issue of May 23.
>

National Iron Works, San

Diego, Calif.

„

May 21 (letter of notification) 18,500 shares of common
stock.
Offering price, $4.12V2 a share. Underwriters-Nelson Douglass.
For general corporate purposes,
«
•

Neville Island Glass Co.,
(6/24)

Inc., Pittsburgh

June 3 filed 60,000 shares of class A stock

(par $1) and
60,000 shares of common stock (par 10c). Underwriters
—Amott, Baker & Co., Inc., New York. Offering—Stocks
will be offered to the public in units of one share, of
class

A,and one share of common at $10.10 a unit.. Each
share of class A stock is convertible into two shares' of
(Continued

on page

3102)

:•

THE COMMERCIAL & FINANCIAL

3102

and is

redeemable, at option of the .company,
Proceeds—Net proceeds, together with
$700,000 to be realized from the sale of Series A and B
bonds, will be used for construction of a plant on Neville
Island (near Pittsburgh) and for equipment.
The total
cost is estimated a; $1,137,460.
Any remaining proceeds
will go into working capital. Business—The company
was
incorporated in February, 1946, and has not yet
commenced operations.
It intends to engage in the
manufacturing and selling of a general line of glass

common
a-

$11

share.

containers.
Nutrine

(6/10)

Candy Co., Chicago

May 21 filed 200,000 shares of common stock (par $1).
Underwriters—Stifel, Nicolaius "and Co., Inc. The stock

sold "by

is beihg

Offering—Price by

stockholders.

seven

For details

amendment.

see

(6/17).

Safety Equipment Co., Inc., Reno, Nev.

May 31 (let er of notification) 10,000 shares of common
stock.
Offering price, $10 a share. For the manufacture
of gas and fire detection devices.
Underwriting, through
salesmen who will receive a maximum of $2.50 a share.

Pacific Telecoln Corp., San

Francisco, Calif.

May 31 (letter of notification) 58,000 shares of preferred
(par $5) and 58,000 shares of common stock (par

stock

market

upon

conditibns."

Underwriters—Kobbe, Gearhart & Co., Inc., New
Offering—Price $5.10 a unit consisting of one
preferred and one share of common. Proceeds
—For purchase of additional equipment, retirement of
indebtedness and for working capital.
$10).

York.

share of

-X%,PP..

■v

Spiegel, Inc., Chicago

May 9 filed 117,000 shares of common stock (par $2]
and options to purchase 111,800 shares of common.-j Un¬
derwriters—No
underwriting.
Offering—101,500
a r<
issuable

stockholders.
Underwriters—Names by
amendment.
Reported Alien & Co., probable under¬
writer.
Offering—Terms by amendment.
Proceeds—
Net proceeds to the company will be added to working
capital. Business—Manufacturing of ball-bearing tipped
300,000

Development Co., owner of the stock.
Offering is ~tc
be made any time within next three months, depending

have beep issued under

company

expects

shares of

common

•

grant

options. In additior
purchase 15,50(

options to

stock to certain of its employees.V

Stratford Pen Corp.

(6/24)

filed

100,000 shares of common stock (par $1)
Underwriters—First Colony Corp.
Proceeds—To selling
stockholders.
Offering—Price to public, $9V4 per share

June

fountain pens.

Steep Rock Iron Mines Ltd., Ont., Can.
-(6/17-21)
W- '
'
<

(6/17)

shares of capital stock (par

May 29 filed 50,000 shares preferred stock, series A (no

ProceedsNet proceeds will be used to finance construction of
property additions. For details see issue of May 30.

•

Reynolds Pen Co., Chicago (6/20)

•

March 27 filed 500,000

par). Underwriter—Dillon, Read & Cb. Inc. Offering—
By amendment. Proceeds—Net proceeds will be applied
to the repayment of $2,000,000 of 90-day notes held by
Central Hanover Bank and Trust Co., New York, re¬

Underwriters—Otis & Co.
the

300,000 shares of common stock ($1 par).
Underwriters—Not underwritten.
Company has granted
an exclusive option dated Feb. 20, 1946, to Morgan U.
Kemerer of Toronto to purchase 500,000 treasury shares

share and 500,000 treasury shares at 10 cents
per share, payable in Canadian exchange.
Mr. Kemerer
has assigned to Mark Daniels, 371 Bay Street, Toronto,
in consideration of $1, the former's right and option to
purchase 300,000 of the 500,000 shares optioned to Mr.
Kemerer at 30 cents per share.
Mr. Daniels plans to
market the shares optioned to him through the medium
of a registered broker or brokers in the United States.
Offering—Price to public is 40 cents per share, U. S.
funds.
Proceeds—Proceeds will be applied to develop¬
ment work, etc.
For details see issue of April 4.

at 30 cents per

general funds and will be available for genera'
For details see issue of April 4.

corporate purposes.

Sterling Electric Motors, Inc., Los Angeles *
(6/15)
-yi/

Rockridge Gold Mines Ltd., Toronto, Can.
March 27 filed

Offering—Price to public b:
Proceeds-^-Net proceeds will be added U

amendment.

maining proceeds will be added to general funds.

Co., and Stone & Webster Securities Corp.

Pacific

(6/12)

May 4 filed 400,000 shares of common stock (no par),
of which 100,000 shares are being sold by company and

Riegel Textile Corp., New York

May 29 filed 204,153, shares of common stock (par $8),
The stock will be sold at competitive bidding with names
of underwriters^ by ^amendment. .Probable bidders in¬
clude First Boston Corp.; Glore, Forgan & Co.; White,
Weld & Co.-Shields & Co. (jointly); Morgan Stanley &

•

($1^.031) capital, stock.
Inc.
Offering—100,000
stockholders and 65,000
shares are Being sold by company.
Price, by amend¬
ment.
Proceeds—To pay bank loan, additions and im¬
provements, etc. For details see issue of May 23.

May 21' filed 165,000 shares
Underwriters—Blyth
& Co.,
shares are being sold by 24

issue of May 23.

Ohio Edison Co., Akron, Ohio

Corp., Ltd., South Gate, Calif.

Purex

(Continued from page 3101)

Thursday, June 6, 1946

CHRONICLE

sinking fund deben
tures, due 1961, and 29,709 shares common s.ock (pa:
$1).
Underwriters—Maxwell, Marshall & Co. Offering
May 27 filed $500,000 15-year 5%

public at $1,000 each aftc
Each $1,000 of debentures wil
detachable stock purchase warrant fb

—Debentures will be sold to
at $3.50 a

common

attached

have

share.

purchase of 100 common shares. In addition, four stock
holders of the company will sell to the principal under
writer warrants for 19,591 common shares at 7 cents- i
warrant.
Proceeds—To finance construction of addi

building; purchase equipment and machini

tional factory

tools; retire current bank loans and working capital, et<

Super Vacuum Sales Corp., Denver, Colo.

•

(letter of notification) 15,000 shares of class ,7 j
stock (par $10).
Offering price, $10 a share)
For the manufacture of smoke ejectors. Underwriter-]

May 31

common

Rome

(N. Y.)

Cable Corp.

(6/17)

May
•

Pan-American

May 29 (le ter of notification) 110,000 shares of class A
common
stock
(par $1).
Underwriter—Koellner &
Gunther, Inc., Newark, N. J. Price to public, $2.65 per
share.
Proceeds for expansion of business, working
capital, etc.

Paulsboro

March

(N. J.)

Manufacturing Co.

29 filed 63,276 shares of cumulative convertible
preferred Stock (par $30). Underwriters—Carl M. Loeb,
Rhoades & Co. Offering—Shares will be offered for sub¬

The company.

scription to common stockholders at rate of one share
of: preferred for each three shares of common held.
Proceeds—Net proceeds will be used toward completion
of a construction program and to carry larger inven¬
tories. Business—Manufacture of hot rolled copper rods

May 21 filed 57,400 shares ($10 par) common stock
Underwriters—Harris, Hall & Co. (Inc.).
Offering-)

and wire and cable products.

Export Corp;, Newark, N. J.

ment.

filed

9,886 shares 6% cumulative preferred
(par $100); 31,000 common stock purchase warrants and
31,000 shares of common, issuable upon the exercise of
the warrants.
Underwriters—Butcher & Sherrerd, Phil¬
adelphia, Offering—1,880 shares of $% cumulative pre¬
ferred are offered in exchange (one new share for id
old shares) for shares of 4% preference stock ($10 par),
together with all dividends accrued thereon.. Exchange
offer is conditioned on
purchase of remaining 8,000
shares of 6% cumulative preferred and of the 31,000
common stock purchase warrants by underwriter. Pro¬

Salt Dome Oil Corp.,

Houston, Texas

(6/17)

March 28 filed certificates of interest for 800,000 certifi¬

Sutherland

offered for subscription to presen
on
basis of one new share fo
Subscription price by ameqd
Unsubscribed shares will be offei'ed to pubii

common

each

five

York, and Yarnall & Co.,
Philadelphia.
Offering—Company is offering the cer¬
tificates of interest to stockholders of record June 1 on
basis of one share interest represented thereby for each
share of common stock held at 58 cents per share. Rights
expire June 17 at 3 p.m. Proceeds—Exploring and de¬
veloping. For details see issue of April 4."

stockholders
shares

held.

through underwriters.
Proceeds—To repay outsiand
ing term-loan notes amounting to $1,500,000, improve
ments and additions.
For details see issue of May 23.]
v
.

•

J>.

royalty in oil, gas and surplus. Under¬

writers—Cohu & Torrey, New

Kalamazoo, Mic'h.

Stock initially will be

•

cates in overriding

Paper Co.,

•

.. ►

• -

Timely Clothes, Inc., New York

(6/24)

shares of common stock (par $19'

June 4 filed 90,000

being sold by stockholders.
Underwriters—1Th
First Boston
Corp.
Offering—Price • by amendment
Business—Manufacture and sale of men's suits, overcoat;,
Stock

topcoats, sport coats and slacks under the

label "Timel

Clothes."

ceeds—Purchase or construction of a plant and nec¬
essary "machinery and
Of April 4.

equipment.

Pennsylvania Electric Co., Johnstown, Pa.
21
filed $23,500,000 first mortgage bonds, due
1976, and 101.000 Shares of cumulative preferred stock,

series C. par $100.
Securities will be sold at competitive
bidding, and interest and dividend rates will be filed
by amendment. Underwriters—By amendment. iProbaiblr bidders include Halsey, Stuart & Co., Inc. (bonds
only); Smith, Barney & Co. (preferred only); Kuhn,
Loeb ■& Co., and, Lehman Brothers (jointly).
Offering
oublie by amendment.

••

For details

issue

see

Of March 28

derwriters receiving a commission of $2 a share. Of the
total being offered company is selling 155,000 shares and
the remaining 20,000 shares are being sold by two stock¬
holders.
Proceeds—Working capital, purchase equip¬
ment and plant, etc.
For details see issue of May 30.
Seaboard Fruit Co., Inc.,

May 17 filed $30,000,000 first mortgage bonds, series
due 1975, guaranteed unconditionally as to payment of

principal and interest by Susquehanna Power Co. Bonds
.WiU be sold through competitive bidding,
probable
:bi ders include, Halsey, Stuart & Co. Inc.; Kidder, PeaCo., Shields & Co. and White, Weld & Co.
(jointly); Morgan Stanley & Co. Purpose—Refinancing
program. ,For details see issue of May 23.
&

mon

$5.10

and augment

May 9 filed

Hoboken, N. J.

$7,000,000 15-year 4%

debentures due

April 1, 1961, and $1,242,300 20-year 5^%
debentures

Blair & Co., Inc.

pnept.

due

Ian.

1964.

cumulative

Underwriters—

Segal Lock & Hardware Co.,

gating $8,OCO,COQ.

For .'derails

Preferred Utilities

aggre¬

See issue of May 16.

Manufacturing Corp.* N. Y.

f>%% cumulative convertible first preferred stock and

$11.50
one

10c

unit, consisting of

common
a

common

are

common.

one

stock.

Offering price,

share of preferred and

addition,

10,000

Underwrtiers-Childs, Jef¬

fries &Thorndike, Inc., and First
Colony Corp. Purpose
—For purchase of machinery and
equipment and to in¬
crease

each two shares of any such stock held. Price by amend¬
ment. Proceeds—Purchase of additional: machinery and

equipment for modernization of present facilities, etc.
For details see issue of April 4.
SHYer Capitol Mining Co.

working capital.

May 22 (letter of notification) 600,000 shares of common
stock.
Offering—Price 20 cents a share.
Underwriters
Spokane, Wash. Proceeds—
For exploration
•

development, work in mining property.

Six Mix Corp.,

Reno, Nev..

(letter of notification) 200 shares ($100 par)
stock.
Offering price, $100 a share.
To de¬
velop and manufacture a flavoring extract known as

May 31

common

Six Mix.

No underwriting.

purchased by the underwriters at

share for investment.

are given right to subscribe ;to new
shares at rate of one share of common toi

preferred stock

—Standard Securities Corp.,

/May 29 (letter of notification) 24,000 shares of $10 par
34,000 shares of 10c par

Inc., N. Y.

738,950 shares of common (par $1). Un¬
derwriters—Floyd P. Cerf & Co. Offering—Holders of
coinmon stock, 7 % preferred stock and $2.50 cumulative

Offering—Price to public by amend-

Proceeds—Payment of promissory notes

unit.
Proceeds—To repay bank loans
working capital.

per

March 30 filed

common

Pittston Co.,

Income

New York (6/7)

May 27 (letter of notification) 58,000 units, consisting
of 58,000 shares of convertible class A stock (par $4)

shares of common stock (par 10c).
Under¬
writer—Hill, Thompson & Co.
Offering—To be offered
in units of one share class A stock and lk share of com¬

Electric^ PbWeir iCo.

Traders Post, Inc.,

Greenville, Miss.

(letter of notification) 2,000 shares of 5% pre
ferred stock and 9,000 shares of common (no par).
Qf

May 31

fering price, $50 a
common.

share of preferred and $1 a share

Underwriter—Stock- will be offered b,y Henr

Crosby & Co.,

Greenville, Miss.' For paying off r«c

estate indebtedness.

Tucson

(Ariz.)

Gas, El. Lt. & Power Co.

(6/7

147,000 shares common stock (no par
Stock constitutes all of the outstanding common stock tc
Tucson and is owned by Federal Light and Traction G
Underwriters—Blyth & Co., Inc., and The First Bosto
March 29 filed

and 29,000

IPtUadclphia iPai)

ttc iy

Corp., New York (6/17)

May 29 filed 175,000 shares of capital stock (no par).
Underwriter—George F. Breen, New York. Offering—
Stock will be offered to public at $16 a share with un¬

March

—1

Sardik Food Products

For details see issue

•

South American Gold & Platinum Co., New York

June .4

stock.

(letter of notification) 13,000 shares of common
Stock will be offered on the New York Stock

Exchange through Lewisohn & Co., at market (approxi¬
mately $7), but in no event shall the total price to the

public exceed $100,000.

Proceeds will go to General

Corp.
or

Issue awarded June 5 on
aggregate of $5,558,000.

Twin Coach Co.,

bid of $37.81 per shar]

Kent, Ohio (6/14)

($35 par) $1.50 cumulate
convertible preferred stock.
Underwriters—Reynolds,«
Co. and Laurence M. Marks & Co.
Offering—Stock wyi
be offered to public.
Price by amendment* ProceedsPurchase from the War Assets Administration of, :
hangar and other properties, purchase of machiner;
equipment, etc. For details see issue of May 30.

May 24 filed 85,715 shares

Union Carbide & Carbon

Co., New York

f|i

May 17 filed 463,889 shares of capital stock (no par
Underwriters—None. Offering—Shares are being offere

by the corporation to certain officers and employees •<
corporation and subsidiaries pursuant to the terms an
provision of a stock purchase plan. Offering—Price I,
amendment.
Proceeds—Acquisi Lion, construction an
equipment of manufacturing
details see issue of May 23.
Union Wire Rope

and other facilities.

Corp., Kansas City

(6/10)

shares capital stock (no par). Undef
writers—P. W. Brooks & Co., Inc., New York.
Offerir
—Stockholders of record May 24 will have the rigl
to subscribe to the stock at $15.50 per share. Righ

Feb. 4 filed 42,000

expire June 10.
United

Cigar-Whelan Stores Corp.,

N. Y.

(6/12-13)

of common stock (par 30c
Offering-—Initial public 0,
fering price will be determined by a formula. Proceed
—To reimburse company for amount spent in "ucqui^

May 10 filed 400,000 shares
Underwriters—Allen & Co.

Volume 163

Number 4496

iTHE COMMERCIAL' & FINANCIAL CHRONICLE

ion of the Dade Pharmacies and Dade Cut-Rate Liquor
Store, for redemption of shares of prior preferred stock,
working capital. For details see issue of May 19.

| United

•

Bonds and preferred stock will

sold

share.

the

Co.

The

United

see

Denton, Texas

reduce

bank

loan.

(6/17)

to be issued to the several underwriters upon

are

company's 5% cumulative convertible
by the selling stockholders.
issue of May 30.

ferred

stock

units of $10 and up, in multiples of $10.
Offering—
fid market.? Proceeds—For investment.
Business—A

details

see

pre¬

owned

For

•

May 22 filed 165,656 shares ($1 par) xieunmon stock. • ?
Underwriters—A. C." Allyn & Co., Inc.
Offering—Stock v
yill be offered to public. Price by amen^hw^t.; ProiedStjt»r $3,500,000 will be used' taredqem,.it£10O,GQ0® fibres of outstanding cumulative preference stock at $35
i
share,
Balance will be added to general corporate

New York.

United States funds.

For details

issue of Aug. 2, 1945.

see

W,r Av and A. Motors, Inc., Baltimore; Md.
May
-of hotificatioh) 1,500 shares of common
•

stock.
Offering price, $10 a share. Nn underwriting. To
purchase machinery equipment.

unds.

United-Rexall Drug, Inc., Los Angeles

May 27 filed
tock

Wayne Knitting Mills, Fort Wayne, Ind. (6/12)

(6/15)

maximum of 1,000,000 shares of capital

(par $2.50).

Underwriters—Dillon, Read & Co.,
ric.
Offering—Stock will be offered to the public.
'Hce by amendment.
Proceeds—Acquisition of retail
rug stores or companies manufacturing merchandise
ormally sold in drug stores, working capital, etc. For
etails see issue of May 30.
U.

May

filed

150,000

($5

Underwriters—No underwriters.
be

offered

holders
share

for

$20

held.

Inc.,

St.

Petersburg,

Fla.

sold at this time.

funding, general funds.

For details

pril 22

filed 900,000 shares common stock (par $1)
300,000 stock purchase warrants, of which 150,000
ave been issued to Harry R. Playford, President, and
50,000 will be issued to underwriters.
UnderwritersMi Johnson & Co.
Offering—Price to public $3.25
qr share.
Proceeds—To pay principal and interest on
ank loan, to finance purchase of additional aircraft,
quipment, etc., and for working capital.
Concrete

Corp.,

see

will

Proceeds—Re¬

Pierce, Fenner & Beane; White, Weld & Co.; Glore,
Forgan & Co., and Harriman Ripley & Co. (jointly);
The Wisconsin Co., and Dillon, Read & Co.
Proceeds-rPart of the shares are to be sold by Middle West Corp.,
top holding company of the System, and part by pref¬
erence stockholders of North West Utilities Co., parent

issue of May 30.

Philadelphia

Tay 28 (letter of notification) 25,000 shares of common
;ock (par $1).
Underwriter—Eastman, Dillon & Co.
ill act as agents.
Price to public, $11 per share,
roceeds—To purchase additional equipment; to acquire
ssets of Vacuum Concrete, Inc., by retiring remaining
utstanding stock and liquidation of its liabilities; to
Kpand and develop patents, and for working capital.
.

17 filed 155,145 shares of cumulative preferred
stock, series A (no par), convertible on or-before Dec.
31, 1953), and 310,290 shares of common stock ($1 par).
Dividend rate on preferred by amendment.
Under¬
writers—Kuhn, Loeb & Co., and E. H. Rollins & Sons,
Inc.
Offering—Company is offering to stockholders
rights to subscribe for the series A preferred at rate of
share

one

for

each

by amendment.

common

held.

preferred, which together with shares not subscribed for
by other stockholders will be sold to underwriters for
possible resale to public.
Company is also offering
rights to its stockholders to subscribe for 310,290 shares
common

stock* at

rate

one

new

for

each

eight shares held.
Similar rights with respect to the
preferred and common stock are being offered to holders
of ouistanding options.
Proceeds—Net proceeds will be
added to the general funds.

Prospective Security

North

West

Utilities

Yank Yellowknife Gold

Co.

'!/''■

4- ;■

Mines, Ltd., Tor., Ont.

Feb, 13 filed 600,000 shares of commdn stock (par
Underwriters—J; J, Carrick, Ltd., Toronto; Canada.

fering—Price to public 25 cents per share, United
funds.

For details

York

(Pa.)

$1)V
Of¬

States

issue of Feb. 21.

see

County Gas Co.

May 8 filed $1,700,000 first mortgage bonds, due 1976.
Will be sold at

competitive bidding.

Probable bidders

Halsey, Stuart & Co., Inc.

include

Interest rate/ by

amendment.

Offering—Price by amendment.

—Refunding.

Price

Certain stockholders will not exercise

their rights with respect to 46,773 shares of the series A

Wisconsin, who elect to sell such shares of Wisconsin
which will be distributed to them upon the

common

dissolution

Toledo, Ohio

Inc.,

May

Vacuum

stock.
Offering—Shares will
common

Unsubscribed

Willys-Overland Motors,
S. Airlines,
(6/12-17)

par)

present common stock¬
share, in the ratio of one additional

each

Proceeds—Refunding,

May 21 filed 559,000 shares ($10 par) common stock to
be
sold
at
competitive bidding.
Underwriters—By
amendment.
Probable bidders include Merrill Lynch,

subscription to

not to be reoffeerd

■

fer and to the sale to underwriters of all shares of new
serial preferred stock not subscribed for or required to

f* v

preferred stock, 4%%. series.
>
The subscription offer to common stockholders will ba
at the rate of l/10th of a share of new serial preferred
for each share of common held. The right of subscrip¬
tion is subject to the consummation of the exchange of¬

Wisconsin Power & Light Co., Madison, Wis.

vpar $x—
(par $1Underwriters-Willis E. Burnside & Co.,
Offering—Offering price to public 28 cents

*^'Canadian).

subscribe for shares

serial preferred not subscribed for or exchanged,
share-for-share basis, for shares of its old serial

new

effect exchange.

June '**' filed 220,000 snares or capita*. siock.
24 ineu *4u,uuu shares of capital stock

--'v

mand Pub-*''

stockholders the right to

common

Virginia Red Lake Mines, Ltd.

-*■*

Co.; Blyth & Co.; Inc.; Hal?

sey, Stuart & Co., Inc. (bonds); Wisconsin Co. (stock);
Mellon Securities Corp.
Offering—Company will offer

conversion of

a.5

used

May 29 filed 150,000 shares of common stock (par $2.50).
Underwriters—Names by amendment.
Offering—Price
by amendment.
Of shares being offered an unspecified
amount is owned by selling stockholders and remaining

May 14 filed $1,000,000 investment trust fund certificates,

.^,1

exchange offer will be

Management investment company.

will

Vemey Corp., Boston, Mass.

issue of May 19.

Investors Corp.,

balance

Business—Manufacturing certain machines and tools.

underwriters and offered to public at $100 per
For details

be sold through com¬
Probable bidders include The First

petitive bidding.

Boston Corp.; Dillon, Read &

Proceeds—Net proceeds will be applied to
reimbursement of its funds incurred in the recent

acquisition of stock of Morse Twist Drill and Machine

Offering—Prior preferred stock¬

under

Price by

the

new convertible preferred stock at rate of
shares of prior preferred for one share of con¬
vertible preferred with a cash adjustment.
Convertible

issued

common

amendment.

shares of

not

Wisconsin Electric Power Co., Milwaukee, Wis.

May 22 filed $50,000,000 first mortgage bonds, due 1976,
and 260,000 shares ($100 par) cumulative preferred stock.

our

^referred

(6/19)

Offering—Stock will be offered to the public.

Cigar-Whelan Stores Corp., N. Y.

holders will be given privilege of exchanging such shares
or

Co., Springfield, A/lass.

stock (par $2.50).
Underwriters—Paine, Webber, Jackson & Curtis, Boston.

May 14 filed 50,000 shares of convertible preferred stock.
Cumulative dividend, $3.50 per annum (par $100). Under¬
writers—Allen & Co.

Van Norman

May 31 filed 120,000 shares

3103

For details

issue of May 9.

see

Proceeds
>

Young Radiator Co., Racine, Wis.
Jan; 29 filed 100,000 shares of common stock (par; $1)1
also registered

40,000 shares of common for issuance upon

exercise of warrants.
& Co.

Underwriters—Van Alstyne,

Offering—Pried to

40,000 warrants to purchase
share prior to Feb. 1,
holders

Noel

public $8.25

per share.
Of
stock at $8.25 per

common

1951, 20,000

issue to stock¬

were

recapitalization and 20,000 are being sold to

underwriters at

cents per warrant

postponed indefinitely.

For details

share.

see

Offering

issue of Feb. 7.

Offerings

(NOT YET IN REGISTRATION)
•

Air Services,

pril 1

Inc., New York

American Bosch Corp.

company was reported planning
of common stock through B. G.

sale of 150,000
Cantor & Co.,
ew York, as underwriter.
Price about $2 per share,
ampany's headquarters will be located within eight
iles of New York City.
Principal business will be
udent training and charter service.
tares

'fir/l:-

INDICATES ADDITIONS SINCE PREVIOUS ISSUE

expansion

program.

Probable

bidders include Dillon, Read & Co. Inc.; The First Bos¬
ton Corp., and Blyth & Co., Inc.

y-f ^

•

Armour

Co., Chicago

Broadcasting Co., New York

filed with FCC application for permisissue of 1,000,000 shares of stock to
£ public. Estimated net proceeds ($14,000,000) would
4 devoted to financing present and proposed facilities
company. The public offering of stock, if approved,
ill be made through Dillon, Read & Co. Inc., with
horn arrangements have been made by the ABC proding for the purchase from it of the entire proposed
sue of 1,000,000 shares at $14 a share.
Sale of the stock
the public by Dillon, Read & Co., will be at $15 a

American Gas & Power Co.

June 3 reported that there are
zation by company before the

prospects of a recapitali¬
end of 1946, maybe eveii

before

American

Traditional

ay 23 company

April 10

Gas Co.), under modified plan approved by SEC, reserves

new

(name to be changed to Minneapolis

company

new

common

stock.

excess of 874,078
Probable bidders include

•

are.

White, Weld & Co., W. C. Langley & Co., Otis & Co.
American Yarn & Processing Co., Mt. Holly, N.C.
It is expected that an issue of $1,500,000 preferred stock,
of an authorized issue of $4,000,000 approved by stock¬

R. S.

American

14, last, will be filed with the SEC at
Probable underwriters will include
Dickson & Co. and Kidder, Peabody & Co.

early

date.

Bemberg Corp., New York

25 stockholders will vote

proposal that present

& preferred stock be exchanged for

4Vz% issue,
plan would be the refunding of the issue
rough sale of other securities.
new

ternative

Arkansas Power & Light Co.;
March

reported

Little Rock, Ark.

planned to issue 290,000
shares common stock (par $12.50)
and $5,000,000 in
promissory notes, for purpose of paying current promis-

Atlantic

company

Government,

First California Company
INCORPORATED

Corp., Philadelphia

Refining Co., Philadelphia

company's indebtedness from time to time by additional
amounts not in excess of $50,000,000 in aggregate. The
purpose
in

of the plan, it was said, is to place the company

position to fund bank loans, add to working capital
and to provide funds for capital expenditures. Probabld
a

underwriters include Smith, Barney &

Co.

„

Imperial Diesel Engine Co., Oakdale, CaIif«

stockholders voted to split common stock
of 300,000 (par'
$10) of which 150,000 shares would be issued and sold
to finance purchase of constituent company, improve¬
ments, etc. Blyth & Co., Inc., probable underwriters.
2 for

and

underwriters

May 7 stockholders approved proposal to increase the

April

State, Municipal

Summer.

16 stockholders will vote on increasing common
stock by 300,000 shares, the hew stock to be offered
stockholders at $10 per share.
Proceeds for expansion
and working capital.
Management does not anticipate
entering into any underwriting arrangement.

Atlas

United States

July

holders March
an

end

Artloom

right to make public offering of not in
shares of

the

Kuhn, Loeb & Co., The First Boston Corp. and Harri¬
man Ripley & Co.

are

6n to offer

notes and finance

sory

April 16 reported that Alien Property Custodian may
shortly ask for bids on 535,000 shares (77.24%) of the
stock of the
corporation.
Probable bidders include
Glore, Forgan & Co. and Lehman Brothers (jointly),
and Blyth & Co., Inc., and Merrill Lynch, Pierce, Fenner
& Beane (jointly).

and create new preferred isue

Corporate Securities
Underwriters and Distributors

blair 6- co.
;
V

■

.BOSTON

INC.

NEW YORK

V
..

Our Sixteen
Serve

Offices

California and Nevada

v(: •-

BUFFALO

CHICAGO

PITTSBURGH

ST. LOUIS

April 16 stockholders authorized
pany

new

mortgage.

Com¬

contemplates refinancing one-third of outstanding

funded debt (Dec. 31, 1945, $12,665,000) through sale of
equal amount of bonds under

competitive bidding.

CLEVELAND

Head Office: San Francisco
PHILADELPHIA

Bangor & Aroostook RR., Bangor; Me.
.

man,

Ripley

new

mortgage; through"

Probable bidders include HarrU

& Co., Inc.; Lee Higginson Corp., and

Halsey, Stuart & Co. Inc.
(Continued on page 3104)

Thursday, June 6, 1946}

FINANCIAL CHRONICLE

THE COMMERCIAL &

3104
"?*

(Continued from

Tt-

page

company, and a formal application for this should be
ready for filing with the Commission within the next
10 days."
Traditional underwriters, Morgan Stanley &

3103)

Bessemer Limestone & Cement Co.

May 27 stockholders voted 25,000 shares of new 4% cum¬
ulative preferred stock (par $50). Directors plan to call
the present outstanding 23,141 shares of 6% preferred,
giving holders thereof the right to exchange their shares
for

share.

4% preferred share for

new

Co., Macon, Ga.
June 1 stockholders will vote on changing capital stock
from 200,000 shares (par $100) to 800,000 shares (par
$25) four new shares to be exchanged for each old share;
an additional 200,000 shares
(par $25) will be created
Bibb Manufacturing

to be held for future needs of the company.
:

V•

Co.

Consumers Power Co.,
March 14

sell

cation

competitive bidding 876,568 common

shares, after capital adjustment. Proceeds for extensions.
Probable bidders include Morgan Stanley & Co.; Leh¬
Brothers; Harriman, Ripley & Co., and Mellon Se-

man

curites Corp.

(jointly).

Continental Foundry & Machine Co., Chicago
June

Brass Co.

share-for-share basis for 7% preferred
will be
redeemed on July 1 at $105. Each share of new stock
will be convertible into two and a half shares of com¬

April 23 stockholders voted to issue an additional 450,000
of common stock vvhen and if pew capital is

underwriters, Hincks Bro. & Co.;
Hornblower & Weeks.

Probable

needed.

All the 7% stock which is not exchanged

stock.

mon.

Stone & Webster Securities Corp.;

Detroit Edison Co., Detroit, Mich.

Louisville, Ky.

Brown-Forman Distillers Corp.,

July 23 stockholders will vote on a plan which calls for
increase in common stock from 300,000 shares to 600,000
(par $1), after which a 100% stock .dividend, will be declaied.
Directors also seek approval of an additional
issue of 14,750 shares of 4% preferred stock for which
the present $5 preferred can be exchanged, on a sharefdr-share basis.

Central

sufficient number

of Central & Southwest

Corp., the new company, would be sold at competitive
bidding to provide funds, not otherwise supplied, to
retire
outstanding preferred stocks of Central and
American.
Possible
bidders:
Glore, Forgan & Co.;
Lehman Brothers-Lazard Freres & Co. (jointly); Smith,

(jointly); Blyth
Co., Inc.; Stone & Webster Securities Corp. and First

Barney & Co.-Harriman, Ripley & Co.
&

Boston

•

Corp. (jointly).

Century Manufacturing & Instrument Co.

May 29 reported fistes, Snyder & Co.,

may underwrite
offering of common stock following merger of Century
and Continental Geophysical Service Co.
•

Cleveland.
Probable bidders include Halsey,
Co., Inc.; Salomon Bros. & Hutzler; Harris,
Hall & Co. (Inc.), and probably some trust companies.

Tower,

Chicago

•

Milwaukee St.

' '

Paul &

Pacific

RR.,

Chicago
Company is inviting bids for the lowest interest rate at
provide either or both of the follow¬

which bidders will

(probably under conditional sale agreement): (1)
$1,713,750, from time to time on or before
May 1, 1947, for financing the acquisition of 18 new 1500
horsepower >Diesel-electric road and switching locomo¬
tives; (2) Not to exceed $2,006,250, from time to time on
or before Jan. 1, 1947, for financing the acquisition of 5
new 6,000 horsepower Diesel-electric passenger locomo¬
tives. Bids must be received before noon (CDST) June
19 at office of H. A. Scandrett, President, Room 874 Un¬
ion Station Building, Chicago 6, 111. *"■
ing

Corp.,

First Boston

Corp.,

Coffin & Burr, Halsey, Stuart
Trask & Co.
f

Inc.; Shields & Co. and
Paso

Lehman Brothers.

nancing of a proposed natural gas

pipe line from the

County, N. M., field to close to Blythe, Calif. The
meeting is contingent on the company attaining the
necessary approval of the FPC, which is expected to
an early date:
If securities sold, probable underwriters
will be White, Weld & Co., and Stone & Webster Se¬
curities Corp.
Fair

its

by the road of $58,900,000 lower-coupon first

mortgage bonds, proceeds from the sale of which would
be
used
to
redeem first mortgage 4%
bonds. 1994,
is expected to be postponed until late this year. Earlier
plans were for the retirement of the bonds July 1.
Three investment

banking groups were set up to enter
competition for any new offering, viz.: Kuhn, Loeb &
Co.; Mellon Securities Corp., and Halsey, Stuart & Co.,
Inc.

••

company was

long-term basis.

Airplane Corp.

& Co.

Florida Power Corp.

June 4 it was reported that company

to meet financing

expenditures in 1947 may find it necessary to issue addi¬
tional common stock if market conditions warrant it.
iFresh Dry Foods Inc.,

May 29 registration expected within 10 days of 58,000
shares

share.

common

stock.

Public

offering price $5 per
Underwriter—Westheimer & Co., Cincinnati.

May 29 reported a registration statement covering 650,000 shares of common, stock (par $1).
Expected to be
an

York, as
Public offering price about $5

early date with Newkirk & Co., New

principal underwriters.
per share.

General Telephone Corp.,

New York

Columbia

tion

was

Gas &

•

Goldring Merchandising Co.

Majr 28 reported prospective
with Merrill

corporation is expected to sell approxi¬
$100,000,000 debentures to pay off balance of

program,

mately
senior

securities

and

Probable

pansion.

provide

bidders

funds

for

property

ex¬

include:

Glore, Forgan &
Co.; W. E. Hutton & Co., and Halsey; Stuart & Co., Inc.
'■

•*

*•

■

•

V'v-•

V:.

•

••

"...

....

vVV'fVf.

Consolidated Edison Co. of New York,

Inc.

June 5. Following criticism by the New York P. S. Com¬
mission on company's delay in taking advantage of
favorable market for refunding outstanding securities,
H.

Tapscott, President,

"We have had under
preparation for some time a program for refunding the
callable long-term debt and
preferred stock of the SysteI9:Vompanies, a refunding operation aggregating up¬
wards of $600,000,000. Work on the program has been
going forward as rapidly as is practicable. We have ap¬
plied to the Commission to refund $9,000,000 of the $9 515,000 outstanding bonds of the Yonkers company and
hearings on that application have been closed. The trus¬

said:

tees have already given general approval to the refi¬
nancing of $304,000,000 of callable debt of the parent

Graef &

financing being discussed
under¬

Lynch, Pierce, Fenner & Beane, as
;

Electric Corp., New York

stated that in'final step in recapitaliza¬

the company.

Schmidt,

■

Inc.,.New York

; i

/:•

Custodian invites bids for the pur¬
chase, as a whole, of 100 shares of comntion stock (no
par) constituting all the issued and outstanding com¬
mon stoc^, • Company preisentfer is engaged in the manu¬
facture and sale of a line of scissors and shears. All bids
must be presented at the Office of Alien Property Cus¬
todian, 120 Broadway, New York 5, N. Y., on or before
12 noon (EDST), June 7, 1946.
,
.
The Alien Property

Grand Union Co.

May 23 reported directors giving careful consideration
to a splitup of common shares and issuance of additional
new stock, but it is likely that no action will be taken
before September. The management, it is said, is now
making an exhaustive budget study to determine what
additional capital will be needed to finance an expansion
program.

^ Green's Ready

May 15 it

was

shares of

common

Built Home, Inc., Rockford, III.

reported that early registration of 350,000
stock

Corp will be

Proceeds—For expansion, etc.
underwriter. Public offering

share.

Huyler's, New York City
^
May 27 stockholders approved an increase in authorized
common from 600,000 to 700,000 shares and appproved
the sale of the 100,000 shares plus 41,530 now unissued
(total 141,530) at not less
would be used to redeem

than $10 per share. Proceeds
loan, preferred stock and for,

working capital.

May 3 it was announced

that in connection with pro¬

posed bond refunding plan company proposes to sell
$35,000,000 first and refunding mortgage bonds Series B.
Proceeds would be used to retire outstanding refunding
Probable bidders:

called for payment Nov. 1 at 107%.
Halsey, Stuart

Kuhn, Loeb & Co. and

& Co. Inc.

Illinois Power Co.,

Decatur, III.

with SEC to simplify capi¬
the conversion of 5%
cumulative preferred stock (par $50) into common stock
on basis of two common shares for one preferred.
Com¬
pany states underwriting is available for this conver¬
sion program and will cover a 30-day commitment to
purchase enough additional common to redeem any pre¬
ferred not tendered for conversion.
Company proposes
issuance of 200,000 shares of new preferred (par $50)
and such additional common shares to provide cash to
pay dividend arrears .certificates ($11,596,680).
Prob¬
able bidders include Merrill Lynch, Pierce, Fenner $
Beane; Otis & Co., and the First Boston Corp.
April 11 company filed plan

Plan contemplates

tal structure.

(Ind.)

Power & Light Co.

April 24 it was reported that company probably
replace its $32,000,000 first 3%s due May 1, 1970,

will
with

securities.
Probable underwriters in¬
clude Lehman Brothers; Blyth & Co., Inc., and Halsey,
new

lower-cost

Stuart & Co. Inc.

Indianapolis Union Ry.
receive bids up to June 11 for the pur¬
$6,500,000 refunding and improvement mortgage
bonds, series G, due June 1, 1986. • Interest rate to be
specified in the bids. Bonds will be guaranteed jointly

Company will

April 17 stockholders approved amendment to certifi¬
cate of incorporation modifying restrictions against in¬
curring debt for capital purposes without specific stock¬
holders' approval.
Stockholders also approved amend¬
ment to authorize 175,000 additional preferred shares.
Probable bidders include Paine, Webber, Jackson &

writers.

April 12; it

Hungerford Plastics Corp., Summit, N. J.
May 29 stated filing by letter of notification expected
next week of 74,000 shares of common stock to be sold

Indianapolis

Columbia, S. C.

Colling ( H. T.) Co.

name.

own

mortgage bonds to be

with the corporation's call of its
preferred stock for redemption June 24 Smith, Barney &
Co., and associates are offering to purchase at $56 per
share (flat) all shares of $2.50 preferred stock tendered
to them. All such shares of preferred will be converted
into common stock. Arrangements have been made with
Smith, Barney & Co., and associates whereby the com¬
pany will sell to them any common stock into which
unconverted preferred was convertible. Associated with
Smith, Barney & Co., are Eastman, Dillon & Co., Newhard, Cook & Co., Spencer Trask & Co., and McDonald
May 23 in connection

Curtis.
;

The corporation will acquire
well known department and
specialty store companies in various parts of the United
States.
These companies will be operated under their,

Illinois Central RR.

planning to
$1,239,330 4% mortgage notes, due 1959,

Fairchild Engine &

•

' j"XY;

Hoving in his plans.

Mr.

(The), Chicago

18 it was stated that

May

corporation is at 10 Rockefeller Plaza. The shares, it is
understood, will be offered to the public at a date to be
announced later. Blyth & Co., Inc. are associated with

price expected at $4 per

Lea

filed at
Issuance

Hoving Corp., New York

May 28 Walter Hoving, former President of Lord & Tay¬
lor, announced incorporation under laws of Delaware of
Hoving. Corp. with an authorized capitalization of 2,000,000 shares ($1 par) common. New York office of the

authorizing the fi¬

Not to exceed

Chicago Milwaukee St. Paul & Pacific RR.

company

in behalf of

Natural Gas Co.

(Texas)

stockholders will vote on

June

iiiiH

reported to be planning some new
financing with Blyth & Co., Inc., as underwriters.
May 28

First Colony

1976. Proceeds would be used for

improvements to the company's properties
in Missouri, Arkansas, Kansas and Oklahoma. Probable
bidders include The First Boston Corp.; Halsey, Stuart
additions and

& Co.

;

Hilton Hotels

ownership of and operate

May 3 company filed application with the Arkansas P. S.
Commission for authority to issue $2,000,000 2%% first

Cpmpany will receive bids up to 12 noon (EST) June 18
the purchase of $1,500,000 equipment trust certifi¬
cates. The bidder must specify the dividend rate which
must be some multiple of V& of 1%.
Bids will be re¬
ceived at office of H. ,F. Lohmeyer, 3400 Terminal

4s.

Empire District Electric Co., ioplin, Mo.

for

•

Securities

Dillon, Read & Co. Inc.,
& Co., Inc., and Spencer

refinance

Chesapeake' & Ohio Ry., Cleveland

Stuart

Mellon

include:

to consider
Probable bidders

formed

of directors

committee

refinancing of $65,000,000 3Y2S and

mortgage bonds due in

Southwest Corp.

Pursuant to plan of Central & South West Utilities Co.
and American Public Service Co. approved by the SEC
a

March

through issuance of rights.

convertible preferred stock which will be offered

in exchange on a

Bridgeport (Conn.)

;f
of dissolution of Engin¬
eers Public Service Co. part one of the plan calls for
reclassification of common stocks of two subsidiaries,
Gulf States Utilities Co. and El Paso Electric Co., and for
their distribution to Engineers common stockholders.
The Gulf States Utilities stock would be distributee!
Gulf States Utilities Co.

May 24 in connection with plan

stockholders will vote to create a new issue

of 5%

;

Jackson; Mich.
filed with Michigan P. U. Commission appli¬

150,000 warrants to un¬
Price of stock to public
is expected to be $3.50 per share.
Underwriters, it is
understood, will be R. H. Johnson & Co., New York*
'Sj.rb.
and Shillinglaw, Bolger & Co., Chicago.

pany, it is stated, will also sell
derwriters at H per warrant.

(par $1) was expected.

Com¬

chase of

Pennsylvania RR. and New York Central RR.
with treasury funds will be applied
to the redemption on Sept. 1, 1946, of $7,679,000 re^
funding and improvement mortgage ZVz% series B
bonds.
Probable bidders include Halsey, Stuart & Co.,1
Inc., and The First Boston Corp.
.
' * ,< r.-'Oi
by the

Proceeds together

Inc.
Stock Exchange received notice

Insuranshares Certificates

.•

from
company that the proposed, offering of: 101,700 shares ot
capital- stock t6 holders of common stock of record,
May 27 has been postponed. Offering is contingent on
registration statement (yet to be filed) becoming ef¬
May 23 New York

fective.

Interstate Power Co.

(Del.)

May 21 pursuant to amended plan filed with SEC com-)
pany proposes to sell through competitive bidding $20,-1
000,000 new first mortgage bonds and such number ofj
3,000,000 common shares as may be necessary to enable'
the company to carry out the provisions of the amended)
plan. Probable bidders include the First Boston Corp.;;
Halsey, Stuart & Co. Inc, (bonds only); Dillon, Read &
Co. Inc. (stock only).
•

Kansas Power &

Light Co., Topeka,

Kan.

May 31 reported; company probably will replace out¬
standing bonds and preferred stock with new lower cost|;
securities.
Probable bidders if securities are sold m-j
elude Halsey, Stuart & Co., Inc. (bonds only); The Firs
Boston Corp.; Blyth & Co.,
Harris Hall & Co. (Inc.), •

Inc.; Kidder
1

— - •

Peabody & Co.^
1 '' '3

;

f- ?4k .v'

/''' M i:v;

iVolume 163

Kurman Electronic Corp.

Montgomery Ward & Co., Chicago

Company, manufacturer of various electrical relays and
clocks, is reported planning the sale of 90,000 shares of
common

stock

through B. G. Cantor & Co.
An addi¬
tional 7,500 shares would be sold for account of N. S.
Kurman, President. Price $3 per share.
•

■'

:-'-W>B
3105

prior preferred 4y2 %

Sewell L. Avery, Chairman, following* the annual stock¬
holders' meeting, indicated that rights may shortly be
offered to shareholders to raise funds to finance

panded volume of business.

•

ex¬

Probable underwriters

stock is offered include Glore, Forgan & Co., and Shields
& Co.
-

stock (par $20).
If approved,
preferred (on which there Were
of $30 per share May 1) will

holders of present 6%

dividend

arrearages

be asked to exchange one share for 6shares new
prior
preferred. Each prior preferred share would carry with
it a warrant to subscribe for Vs of a share of class 'B
stock at varying prices over a number of
years.

lawyers Title Corp. of New York

An order to show cause dated June
3, 1946, was duly
made by the New York Supreme Court directing all per¬

interested to show

sons

cause

before that Court

June

25, why an order should not be made authorizing the
Superintendent of Insurance as liquidator of New York
Title

and

Mortgage Co., to sell the stock of Lawyers

Title Corp. of New York. The order provides that on the
return day of the order to show
cause, any person may
bid for the purchase of all of the stock of Lawyers Title

Corp. of New York provided, that prior to the making
of any bid, such persons shall deliver to Thomas D. Aus¬

tin, Special Counsel to the Superintendent of Insurance
of the State of New
York, as liquidator of New York
Title and Mortgage Co., a certified check in the sum of
$100,000 payable to the order of the Superintendent of
Insurance.

Lowenstein

(M.)

& Sons,

Inc., New York

May

14 it was reported that due to expansion and
acquisition of grey mills company, has need of additional

capital.

If additional stock is required, Eastman, Dillon
are expected to head the
underwriting syndicate.

& Co.

Macfadden

May 20 it

was

Publications,
reported that

Inc.,

company

New

York

had under con¬

sideration plans to refund the outstanding 6% deben¬
tures and the $1.50 participating preference stock.

Montreal, City of

•

that he

offering at public sale minority
this company, engaged in
the export of hardware and farm implements with the
aid of foreign and domestic affiliates.
Securities being
offered include 2,164 shares (21.99%) of the first pre¬
ferred stock, 1,588 shares (34.90%) of the second pre¬
ferred stock, 1,046 shares (29.90%) of the class A com¬
mon stock, 2,000 shares (38.10%) of the class B common
stock, $39,900 (14.60%) of 6% serial bonds and $93,100
<14.90%) of 6% income bonds. Bids will be received
on the six lots individually and on the six lots as an
stock and bond

Mountain States Power Co., Albany,

June 4 Standard Gas & Electric Co. asked SEC

permis¬
competitive bidding its entire holdings
of 140,614 shares of common stock.
Probable bidders
include Blyth & Co., Inc.; The First Boston Corp.; Har¬
riman Ripley & Co.
Standard would receive bids for
sion

interests in

Sale will be by public auction to be held
(EDT), June 21, 1946, at the Office of Alien
Property Custodian, 120 Broadway, New York ^5, New
York.
McGrath St. Paul Co.

May 28 early filing by letter of notification of 37,000
shares of cumulative convertible preferred stock and
37,000 shares of common stock (par 500) expected.
Principal underwriters Irving J. Rice & Co., St. Paul,
Minn., and Amos Treat & Co., New York. Preferred
stock expected to be offered at $6 per share and com¬
mon at $2 per share.

ony Corp., is to be underwriter.
offered at $7.50 per share.

First Col¬

Mich.

April 1 filed with SEC application to sell (a) $3,500,000
due April 1, 1976, (b) 14,000 pre¬
ferred shares (par $100) and (c) $400,000 common stock

'first mortgage bonds

<par $10). All issues would be sold through competitive
bidding.
Probable bidders include Blyth & Co., Inc.;

Kidder, Peabody & Co.; The First Boston Corp.; Harris,
Hall & Co. (Inc.); Merrill Lynch, Pierce, Fenner &
Beane, and Ira Haupt & Co.

National Container

Michigan-Wisconsin Pipe Line Co.

contemplates issuance of $6,000,000 in 2% 5-year serial

$34,000,000 in 3Y4% 20-year first mortgage

May 23 it was reported that company may refund its
outstanding $4,300,000, 5% debentures due 1959 later this
year with new lower-cost securities.
Probable under¬
writers Van Alstyne, Noel & Co.
New

England Gas & Electric Association, Cam¬
bridge, Mass.

Co.; White, Weld & Co.; Halsey, Stuart & Co. Inc.,
Corp.

and Mellon Securities

Milwaukee Gas Light Co.

May 6 it was reported company is considering refund¬

ing its $13,000,000 4%% bonds due 1967 and the refund¬

retiring of the $2,000,000 outstanding 7% preferred
stock. Refunding step would strengthen company's capi¬
or

ments,

mortgage 4s, due 1951. New issue will probably run 25
years. Probable underwriters, Hayden, Stone & Co., and
Halsey, Stuart & Co., Inc.
r * ?
; r
•

•

Northern Indiana Public Service Co.

April 17 reported that company has under consideration
the refunding of its $45,000,000 series C 3y8s with issue
of about same size carrying lower coupon rate. Probable
bidders, Halsey, Stuart & Co. Inc., and Harriman, Ripley
& Co..

Northern Pacific Ry., St.
It

Paul, Minn.

reported April 10 that company has under con¬
sideration the refunding of $55,000,000 collateral trust
was

4*&% bonds due 1975 and the issuance of

new

series,

- Prospective
bidders, Morgan
Stanley & Co., Halsey, Stuart & Co. Inc., and Kidder,
Peabody & Co.

•

Ohio

Public Service Co.

May 28 it was reported that early sale by Cities Service
Light Co. of its common stock holdings of Ohio
Public Service Co. was probable following the virtual
completion of the refunding program of this subsidiary.
This is one of the few remaining steps prior to com¬
plete divorcement of the Cities Service Co. from the
utility field in compliance with the Public Utility Hold¬
Power &

ing Company Act.

Marquette Ry.
April 24, W. H. Wenneman stated

Oklahoma Gas & Electric Co., Oklahoma City

Company contemplates at same time Standard Gas &
Co. sells its holding of common stock (in ac¬
cordance with SEC regulations) to sell approximately
140,000 shares of new common stock, proceeds of which
will be used to reimburse treasury and retire bank loan
used in redeeming the 7% preferred stock.
Probable
bidders will include Merrill Lynch, Pierce, Fenner &
Beane; The First Boston Corp., and White, Weld & Co.
Electric

•

Pacific

Affiliates, Inc., San Francisco

May 31 stockholders of Pacific Coast Mortgage Co .voted

Pacifier Affiliates' ownership of all stock in Pepsi-Cola
Bottling Co., of Los Angeles.

Holding Company Act require¬

Probable, bidders include Otis & Co., Glore,

(jointly); Halsey,
Inc., and Dillon, Read & Co. Inc.

that

refinancing, of

company's $59,749,000 first mortgage 3j&s will be un¬
dertaken following consummation of
"merger of road
with Chesapeake & Ohio
Ry.
Probable underwriters
include Halsey, Stuart & Co., Inc., and
Blyth & Co., Inc.
Philco Corp., Philadelphia
May 17 stockholders voted to increase capital stock from
2,000,000 shares of common to a total of 3,370,057 shares,
consisting of 250,000 preferred shares (par $100), 2,500,,

shares (par $3) and 620,057 class B stock
$3). Purpose is to secure permanent capital as
may be required for future expansion..
Smith, Barney
& Co. probable underwriter if sale of securities takes
place.
; common

•

Portland

(Ore.)

Gas & Coke Co.

McKee, President, in his annual report

stated that the logical answer to
company's present
problems is to refund outstanding bonds ($8,747,000 Dec.
31, 1945) and eliminate preferred dividend arrearages
($3,641,634), through the issuance of new bonds and
recapitalization of capital structure. Financial program
expected later this year. Probable underwriters when
plan is proposed include Blyth & Co., Inc.; Smith, Bar¬
ney & Co.; Halsey, Stuart & Co.,
Inc.; The First Boston

Corp., and Kidder, Peabody & Co.

Radio-Keith-Orpheum Corp., New York
May 4 L. Boyd Hatch, Executive Vice-President of Atlas
Corp., stated that company may shortly dispose of all or
part of its holding of R-K-0 common stock; which
<

amounted to
a

1,329,020 shares (43%) Dec. 31, 1945, with
as of that date of
$21,762,702. Sale

total market value

be made by June 30

may

time in the fall.

Prob¬

is sold, Dillon, Read

& Co.

or some

Rochester

(N. Y.) Telephone Corp.
May 29 expected early registration and competitive sale
in June of $6,238,000
35-year bonds now held by Halsey,
Stuart & Co. Inc.

Bonds now carry a 2y>%
coupon but
probable that company will request
"that/rate be
specified in the bids. Probable' bidders include Halsey,

Stuart &

Co., Inc.
'.v

♦

St. Louis

April

Service

the

(Mo.)

company

Commission

Public Service Co.;
to

including reduction in
Company proposes to
640,683) and to issue
limited originally to
clude White, Weld &
Boston Corp. ;,
Seaboard Corp.,

petitioned

the

Missouri

Public

simplify its financial structure,

interest and sinking fund changes.
retire current funded debt ($11;*
up to $10,000,000 new bonds, but
$6,000,000.
Probable bidders in¬
Co.; Blyth & Co., Inc., and First

•

Harrisburg, Pa.

April 30 John Stapf, President, announced that proposals
and plans for the refinancing of corporation and affiliated
interests will be received until June 1,
1946, by the com¬
pany. Operations consist mainly of owning and managing
22 water utilities located in several states.
Interested
firms

are

invited to communicate with the
general

N. Sixth St.,

Seven-Up Texas Corp., Houston, Texas
May 21 sale

office,

Harrisburg, Pa.

was

announced

controlling interest in

the

to distribution of its stock

Peabody Coal Co., Chicago

Forgan & Co. and Lehman Brothers

June 24 stockholders will vote

Stuart & Co.

zation plan involving the

Pere

Inc.

Co., N. Y.

American Light & Traction Co., parent, to enable

latter to meet Utility

Co. (a subsidiary) consisting of 55,000 shares
(par $10) to Scott, Horner & Mason, Inc., of Lynchburg,
Va., for $600,000, plus closing adjustments/
K//

able underwriters if stock
New York Dock

sale of Pacific Affiliates, Inc., wholly owned subsidiary;
to Blair & Co., Inc.
Involved in the acquisition was

tal structure as a forerunner

by the

March 27 filed amended recapitalization plan with SEC
providing for sale at competitive bidding of (a) $22,500,000 20-year sinking fund collateral trust bonds, plus
(b) sufficient shares of new common stock out of the
original issue of 2,300,000 shares to supply $11,500,000.
Proceeds will be used to retire at par and interest out¬
standing debentures. Bidders may include Halsey, Stuart
& Co., Inc. (for bonds only), Bear, Stearns & Co. (for
stock only), First Boston Corp., White, Weld & Co.Kidder, Peabody & Co. (Joint).

the "initial financing." The plan has

yet to be presented to the SEC. Probable bidders of the
bonds include Dillon, Read & Co. Inc.; Glore, Forgan

ing

well Gas

June 5 Paul B.

Corp.

of collateral trust bonds.

May 3 it was reported that Michigan Consolidated Gas
;Co., through the purchase of $17,000,000 in common
stock, would acquire full control of the Michigan-Wis¬
consin Pipe Line Co. - Sale of the stock to Michigan
Consolidated would be a part of the- initial financing.
of the new company, which proposes to build a $71,<000,000 pipe line to bring natural gas from Texas to
Midwest
States.
Michigan-Wisconsin's proposal also

Pennsylvania Gas & Electric Corp., York, Pa..,
May 7 corporation applied to the SEC for permission to
sell all of the common stock of the
Petersburg & Hope¬

(par

May 15 it was intimated that company may have financ¬
ing plans in connection with steps being taken in ac¬
quiring additional lines. Probable underwriters include
Reynolds & Co.

Stock expected to be

Michigan Gas & Electric Co., Three Rivers,

bonds to complete

Lines, Inc., Chicago

May 28 reported negotiations will be resumed probably
in June with view for refunding of $10,000,000 first

Metal Forming Corp.

May 29 filing of letter of notification expected in two
weeks of 60,000 shares of common stock (par $1) to be
sold for the account of certain stockholders.

and (b) 101,000 shares of series C cumulative
preferred
stock, with a dividend rate not to exceed 4%>
Both
issues are to be sold through
competitive bidding. Prob¬
able bidders include Mellon Securities
Corp., Smith,
Barney & Co., Kidder, Peabody & Co., and Merrill Lynch,
Pierce, Fenner & Beane.

National City

entirety.

anotes and of

sell

the purchase of the stock up to 10:30 a.m. (CST), July 16.

at 12 noon

■

Ore.

March 28 company applied to the SEC for permission to
issue (a) $23,500,000 first mortgage bonds series of 1976,

000

May 23, Alien Property Custodian James E. Markham
announced

Pennsylvania Edison Co., Altoona, Pa.

May 16, J. O. Asselin, Chairman of Montreal's Executive
Committee, conferred with investment bankers with
respect to proposed sale in the United States of a new
bond issue designed to provide funds for retirement of
city's outstanding two-payment obligations. The tenta¬
tive schedule, which is subject to approval of the munic¬
ipal calls for bids on $20,610,000 bonds in June; $22,460,000. in August; $20,095,000 in December, and $22,474,000 in February of 1947. As an alternative the City
may sell half the issue in June and the other half soon
thereafter.
Refunding in Canada of $121,816,000 Cana¬
dian and other payment bonds is to accompany the
financing.
The City will determine the coupon rate
on the bonds, which are to mature 1947 to 1975.
Invest¬
ment banking groups planning to enter the competition
include one led by Halsey, Stuart & Co. Inc.; one by
Glore, Forgan & Co.; one jointly by Harriman Ripley
& Co., Inc., and Dominion Securities Corp.; and one
jointly by Shields & Co., and Blyth & Co., Inc.

Markt & Hammacher Co., New York

•

$ Mi'/*;\vv/Z:/Z OMZ M &.■:

THE COMMERCIAL & FINANCIAL CHRONICLE

Number. 4496

approving recapitali¬

authorization of

series of

company to si group composed of Stifel Nicolaus
Co., St. Louis; Dittmar & Co., San Antonio, and
Rauscher, Pierce & Co., Houston.
New owners, it is
said, plan considerable expansion of the company, in¬
cluding installation of new machinery, etc., necessitating
new capital.
* m*

Southern Co., New York
The Southern
&

Southern

Co.

(to be;

;

successor

to Commonwealth

Corp.)

proposes to sell for cash (when
recapitalization plan becomes effec¬
tive) sufficient common stock to realize $10,000,009, to
Commonwealth's

invested

jin

Southern

Co.'s

subsidiaries

and

new

construction.

Southern Electric System,

Inc.

May

10. pursuant to substitute plan for retirement of
preferred stocks of Electric Power & Light Corp., filed
with SEC common stockholders of Electric Power, l&

Light Corp/would be given rights to~ subscribe' to United
(Continued on page 3106)
s

•

(Continued from page 3105)
stock and stock of the new holding
company Southern Electric System, Inc. -the latter com-,
pany would be formed to hold the stocks of Arkansas
Power & Light Go., Louisiana Power & Light Co., Mis¬
sissippi Power & Light Co., and New Orleans Public
Service Inc.> ^--4-^
i

Gas Corp. common

Southwest

•

v.-

Merchandise Market, Wichita,

Kan.

of 99,000
at $3 per
.share, with Clayton Securities Co.; Sills, Minton & Co.,
pnd Estes, Snyder & Co., as underwriters.
.

& Co., New York

(J. P.)

Stevens

May 29 it is rumored that company expects to do some
new financing in the immediate future following the
merger of several Southern mills in which the company
holds a controlling interest. Name of underwriters unde¬

& Co. Inc.
•

Sunray Drug Co.

immeto be
$l,OQO,OpO bank loan and for working capital.

May 23 reported company plans registration in
diate future of $2,000,000 debentures.
Proceeds
used to pay
Probable underwriters, Eastman,

•

Sunray and Transwestern
Oil Co. announced, subject to stockholders' approval.
Public distribution of securities of Sunray is proposed
With Eastman, Dillon

& Co. principal underwriters.

\ ; Textron, Inc.
plan was, under way to
finance a new company to acquire the assets of Nashua
Manufacturing Co., 95% of the common stock of which
is owned by Textron. Probable underwriter, Blair & Co.

April 30 it was stated that a

Toledo

stockholders

June

that a refunding program is
contemplated at an early .date £or this company to be
followed later by sale at cpmpetitive bidding of the com¬

Cities -Service power & Light Co.

stock now held by

lower

(N. J.)
approve

the

issuance

will vote

creating

cumulative preferred stock junior to the present
7% preferred stock.
It is proposed to offer the new
preferred in exchange for the 7% preferred stock share
for share. Unexchanged 7% preferred will be called for
It is not the present intention to issue any
preferred except in exchange for the 7% preferred.

redemption.
new

Missouri
It is rumored that company contemplates refunding Its
outstanding $90,000,000 3%s of 1971 with lower cost
obligations. Possible bidders would include Dillon, Read
& Co. Inc., and Halsey, Stuart & Co., Inc.
Union Electric Co. of

United States -Trust Co., Boston

considering the ques-

determine now whether
off in cash or will be refunded. If

maturity date is top far away to
I issue will be paid

dividend per share.

vertible into common, share

sharbs of converti¬

has

and redeemed

unconverted

The stock is con¬

An issue of addi¬

stock to take the place of preferred stock

common

been underwritten

$10,000,000 first mortgage bonds, series B, due Jan.

1981, proceeds to be used to refund a like amount
first mortgage 4% bonds due Jan. 1, 1974, and held b5
RFC.
Interest rate to be specified in bids.
The direr
tors

rejected the conditions attached by the IC

have

Co., Inc.;

Shields &

standing securities which would require

the

debenture

new

maturity

are

the issuance of

Details of

$100,000,000 of debentures.

approximately

and

including interest rate

issue,

•

presently out¬

standing $40,000,000 3% debentures due

1959 and $60,-

Dillon,

debentures which mature in 1965.

Co. Inc., is expected to

head the underwriting

syndicate.

Realty-Sheraton, Inc.

with

the

reorganization

Realty & Improvement Co. and merger

of the U. S.
with Sheraton

Corp., 42,390 shares of the reorganized company's com¬
will be sold to an investment group headed by
Lehman Brothers.
1

(Continued from page 3055)

company

similar rule to cover its

Public Service Co., Milwaukee, Wi;

to alter.

Co.

expected to sell at competitive bidding some

in June its

Probable bidders include The Wisconsin
Boston

Corp.;

Yonkers

(N. Y.)

New York, Inc.

applied to New York P. S. Commissi

authority to issue $9,000,000 30-year debs., int. ra

not to exceed

to be sold

In any

froitt
the

event, in April, when the SEC sent out a request ities

its Philadelphia ptfice fpr opinions of the industry

proposed rule, it claimed that it was in possession of

documentary evidence of jn^ferenttal

Halsey, Stuart & Co., Inc.; Morgan Stanley

membership.

Securities
Co. and

Corp.

(Joint); Blyth & Co., Inc.; Shields

White, Weld & Co. (Joint); W. C. Langley

Co.; Merrill, Lynch, Pierce, Fenner & Beane and Kidd
Peabody & Co.

(jointly).

The SEC is said

preferential lists.
course,

lists

of dealers ■

cus¬

Every dealer would have to admit, of

issues. In

barred from participating in

hps #ye|oped
piqrket and does not stem from any desire of

writers and

balers te profit hi the expense

interest.-;:; $7

vThe

was

>.'•

under¬

Lieutenant-Colonel

was

stationed in the Philippine;

Army

Carroll

Mr.

Air

will

Corps
in

■*'

that he had his regular customers for stock issues, but limiting the action
to the extent so-called ^<insidOrs,' may share in new
in harmony with ordinary trade practice.

stock

which it is feared by many niay prove
drop its .rule prpvided, however^ theJNASD itsel| adopts unduly restrictive in a slower marltet.

char

trading
department
Prescott, Wright, Snider Co.

George Garden Dies
George Alexander Carden, la>
yer. and formerly a newspape
member

and

man

York Stock
home of

the

Exchange, died at 1

heart ailment.. He

80 years of age.

Mr.

studied

Garden

law

Northwestern University and w
admitted
to the Texas - bar

1$89

seryteg #s
for

1898.

1912

;

Acting Distr:

Dallas

Attorney

County
to

came

Xqrk aqd
first World

Investors

led

Austriah"'Steamships.
the

The

shipsj arid although

been

g^oup

who (purchased tev

Jnade for

Government 4at

willing to settle the issue .by

the

of the public pro|it,' ^e^s^

volqntarUy
of its members, that .is, by setting limits

NASP apparently is

the

;qr»n[lent diihmated that it

pirobleni~-i| it^^ty ean% saiji tq be 3 problem at
xather than of ldpd> ^ is thought . The

was

fact, it appears likely

It is understood now that the SEC is willing, tentatively, offerings, a move

Laurence Carroll 8ac

Co., 916 Baltimore Avenue, aft
completing his military servic

The NASP replied then that it (knew of no such all-~is.qiie of ^degree

tomers.

this

Possible bidde

willing to yield this point to the NASD on

families at least should not be

SEC

/V-- V";-

Iss

2%%, to be guaranteed by parent.

through competitive bidding.

•!;:

Electric Light & Power Co.

and parent Consolidated Edison Co.

the NASD will take
the head of an SEC
the position that 4'insiders" and the public alike should be
division has the notion that a rule should be promulgated it
allowed to invest in new issues and will attempt to com¬
does not follow that the Commission itself is of the same
promise the issue with the SEC.
„,
mind. After all many, if not all, of the Commissioners and
Preliminary to next week's meeting of the Board of
their staff members recognize the fact that reckless action
Governors, the NASD requested each of its districts ta-set up
On their part will work to their personal detriment so far
as their future careers are concerned and are likely to be a committee to -study the subject 4# $ts $wu
of the findings that have bqen made- wjpl "be giVennfo the
conscious of $bi$ faqt when it comes to takipg definite official
action. The fact of the matter is that the attitude & jnany Board of Qoyerupxsby the <^ateiu.en of the yartews disjtjricts
quarters is
Wallace fulton, Executive Director of the who will sit as a sort of adyisory\council, but witho#>power
Association, in an attempt to ingratiate himself with the SEC of vote, at the sessions next week.
The Reeling is cux^cnt throughout theljnancjal district
officials, is too prone to urge the NASD jGovernors to &Q.W
iforth witha compromise proposal on every issue that crops that the prpblepi Which
up.

Co.; The Fir

Harriman Ripley & Co.

Jan. 21 company

for

tin(

holdings of 1,099,970 shares of common stoc:

the basis oi
At Prescoif, Wright
the NASP's contention that it alone should have jurisdiction
KANSAS CITY, MO.—Lauren.
over such questions.
The NASD feels that the whole field of B. Carroll has returned to h
fair-trade practices in the securities field is one for. self- duties at Prescott, Wright, Snid
to be

new

Many feel, too, that simply because

Electr'

May 20 it was reported that Standard Gas &

mistake if regulation by the industry.

which Congress alone

and not the Commission -has the power

Proceeds would 1

purchase of machinery, working capital, etc.-

Although the discussions on the proposed rule have
they choose nevertheless to enter into negotiations with the
SEC over the matter, rather than to give the Commission passed the preliminary stages and some kinks have been
the battle which a large part of the financial district here ironed out of the situation, dealers are firmer in their con¬
believe it should get. The contention is {the practice comviction than ever that relatives and members of their

plained of constitutes trade custom

plans to sell 1,000 shares

Co.; Lehman Bros., Harrimatt Ripley & Co. and Uni

mon

Proposed insider* Allotments Rule

4 reported

it? capital stock at par ($50) a share.

include

connection

Beam

Wiggins (E. W.) Airways, Inc.

June

will be

applied to retirement of the company's

Read &

Merrill Lynch, Pierce, Fenner &

.expected to be decided upon at an early

Proceeds from the sale of the new issue

000,000 3%

Probable bidders inclu

Co., and Glore, Forgan & Co.

Wisconsin

that the directors are giving
plan of refinancing presently out¬

16 it was reported
to

record

27 filed a petition for

Blyth & Co., Inc.; Bear, Stearns & Co.; Halsey, Stua

Texas Co.

May

April 11 ICC conditionally authorized company to iss

used for

Hornblower & Weeks.

of the Association will be making a grave

Probable bidders inclqd
Kuhn, Loeb & Co., and Halsey, Stuart & Co. Inc. > 0
$44,901,000 first mortgage 4s.

for share, at the option of

prior to 3 p.m. June 27.

the holder,

NASD Governors to Consider SEC's
~

has called its 45,000

United States

May 9 it was reported officials are

Maryland Ry.

sideration and oral argument.

preferred stock for redemption on July 1 at $22 plus

40 cents accrued

Union Pacific RR.

Jiop of meeting the $100,000,000 first mortgage railroad
and land grant 4's due July 1, 1947. However itis felt

Western

May 22 reported company working on plans to refinan

but the company on May

ble

Halse:

issue.
Possible bidders include
and Kuhn, Loeb & Co.

coupon

Western Pacific RR.

issue of

a new

Railway

Stuart & Co., Inc.,

United States Linos £0., Hoboken, N. J.
June 4 stockholders

date.

•.

voted to

Wabash

May 1 it was reported that company may possibly r
fund its $47,000,000 first mortgage VAs of 1971 with

$10.50 a share and accrued dividends.

ernors

30,000

authorizing

asked exemption from the SEC's con^
petitive bidding rule in connection with the propose5
sale of $6,500,000 of notes to a group of banks and insur¬
ance companies.

213,287 shares of new 4J/2% preferred stock in share-forshare exchange for outstanding 7% preferred stock. Any
unexchanged 7% stock will be called for redemption at

consideration

Edison Co.

(Ohio)

May 28 it was "reported

mon

Machinery Corp.

vote

United States Lines Co.

tional

will

underwriters, Kidder, Peabody & Co.

able

June 4 company

Sunray Drug Co.

■e

Hoffman

preferred stock (par $100). It is contemplated
to sell not less than 27,500 shares to underwriters. Prob¬

Dillon & Co.

May 1 proposed merger of

States

stockholders

Virginia Electric & Power Co.

shares of

O
i

United

June

•

June 4 company

41/2%

termined.

decides to refund through new issue probable
Kuhn, Loeb & Co., and Halsey. Stuart

will be

bidders

June 3 reported; company is planning Issuance
shares of common stock (par $1) to be offered

company

Goj

want

offers h

resale

heaj

to
cost.

In 1922 the brokerage,

firm

Garden, Green & Cp; was forjri
and -

admitted

jneriibership

the Stock Exchange.
was.

himself also

Curb^

Cotton

member of."

and Produce

changes.- The brokerage firm

termiriated In 1925^

Mr. Card

I
:

DIVIDEND1 NOTICES

DIVIDEND NOTICES

Irving Trust
Company
One Wall. Street, New York
A dividend for the second quarter
cents

per

$25

of 1946 of seventy-five
stock will be paid

May 29, 1946

par common

July 1, 1946, to stockholders of record at close
June 7, 1946. Transfer books will not close.

The Board of Directors has this

of business

day declared

quarterly dividend

of I S

cents per share on the capi¬
tal stock of this Company, par

H. F. LOHMEYER, Secretary and Treasurer

July 1, 1946,

$10., payable
stockholders

21; former G.I. wishes
in

with medium-sized

AVAILABLE

Assistant Treasurer

trading
Box

MINERALS & CHEMICAL

PLASTICS

or¬

accounting-ad¬

"4 CHEMICALS

ministration, married, free to

30,

No.

Chronicle, 25 Park Place,

nancial

New York 8, N. Y.

20 North Wacker

Place, New York 8, N. Y.

C 24,

Chronicle,

CORPORATION OF AMERICA

Dividends

were

Board

Directors

HELP WANTED

Avenue, New York 16, N. Y.

THE Boardthe Directors has this day
of following dividends:
declared

Canadian

Eminently cp.iaHfiedi fafinancial, reports.
Has made
omprehensiye analysis of earning piwer
nd
capital structures, of the
lead ng
idustrial,
public
utility
and
ra Ir ad
orporations. Willing to take on-the-job
raining.
Salary secondary.
Box C 68,
ommercial
&
Financial
Chronicle, is5
ark Place, New York 8.

the

'Securities Trader"'®;

iterpret

The

regular quarterly dividend for
quarter of
per
payable July * 1, 1946 to

Preferred

the

•

Gas

Company

regular

Sl.oeyv

Stock

declared

has

quarterly

per

dividend

the

Cumulative Preferred
i

Value

Common

Stock

Company, payable June 15,

the

1946

uo.

stockholders of record June 1, 1946.
Checks

will

mailed.

Stock

are

Thfl Board Df

payable June

Union

28, 1946 to stockholders of record
{at the close of business June 14,

SECOND PREFERRED STOCK

the

Directors. of Southern

Gas. Company

regular

12 V2C

1946, Checks will be mailed.

current

Par

Both dividends

June 17, 1946.

regular quarterly dividend for
quarter of $1.75 per share,
payable July 1, 1946 to holders of
record at the close of business June
17,-1946.
kthe

Fifty Cents (50c),.per share.

The

ing full particulars. 8 G, Box
226, Church St. Station.

Cumulative

$5.00

holders of record at the-close of busi¬

Union

follows:

current

ness

The Board-of-Directors of Southern

Quarterly Dividend of One Dollar
($1.00) per share.

share,

Opening . with very active
trading
department - Stock
Exchange House. Write giv¬

by the
May 23,

84.75 SERIES

declared

17th Consecutive

FIRST PREFERRED STOCK

SECURITY ANALYST
trained in corporate finance,
rvestments, analysis jof corporate fivtan-

Preferred

and Common Shocks

Park
180 Madison

Iniversity

Dividends

Commercial & Fi¬

1946

statements.

Drive, Chicago

UNION

COMPANY

CAS

General Offices

travel, available July 1. Box

Commercial & Financial

ial

SOUTHERN

CORPORATION

over-

Experienced

the-counter

ganization.

STEPHEN G. KENT, Secretary

capacity

any

to
the

close of business June 10, 1946.

SITUATION WANTED

YOUNG MAN

s.tart

of record

has declared

quarterly

per

dividend
the

Common

Stock of the

Robert P. Resch

Vice President and Treasurer

Company, payable June

15,

■

stockholders

1946

the

to
close

1946.

Checks

business

will

record

June

mailed.

COMMON STOCK

Mining and Manufacturing

cents
per share, payable June 30,
1946 to holders of record at the close

of business

Partner Wanted

June 17, 1946.

Phosphate

Potash

Fertilizer

♦

•

Chemicals

May

W. V. McCONKEY,

Secretary and Treasurer

29,

1946

R. O. GILBERT

Secretary

By Investment Banking House Gontem
plating

June 4. 1946.

International Business
UNION

NEW

INVESTMENT

BANKING

HOUSE,

now

being

organized, is desirous of adding to its present experienced
personnel, by taking in one or more actiye or inactive
partners, who can contribute $250,000 working capital

ORGANIZER HAS HAD OVER 25 YEARS of
experience in
practically every branch of the Securities Industry. He is

up-to-date executive and administrator. Is well
in the "Street" and elsewhere in Banking
Securities circles where his standing is
very high.

nected

KEEN-MINDED, ALERT, has

and

THE ATLANTIC REFINING CO

easy to

con¬

and

pleasant personality,

get along with.

business, and

secure

position to obtain
high class, responsible

G03

AMERICAN
At

meeting of the Board of Directors
held June 3, 1946, a dividend of
ninety cents (90c) per share was declared
on the Cu m ulative
Preferred Stock

3.60% Series B of the
Company, pay?,
able August 1,1946, to stockholders of
record at the close of business
1946. Checks will be mailed.

RICHARD
June 3,1946

July 5,

A cash dividend of

Seventy-five cents
the outstanding
capital stock of this Corporation has
(750)

HE IS IN A STRONG AND POSITIVE

remunerative

CARBIDE

CARBON

CORPORATION
Preferred Stock

3.60% Series B

or more.

AND

COMPANY

CAN
PREFERRED

May

28,

1946,

one

and

the

Preferred Stock of

three-quarters

been

STOCK

dividend

quarterly

declared on
Company, payable

per cent was

this

R. A.

declared, payable July 1, 1946,

stockholders of record
of business June 7, 1946;

the close

MORSE G. DIAL,
Secretary and Treasurer

July 1, 1946, to Stockholders of record at the
close of bqslness June. 13, 1946. Transfer Books
will remain open. Checks will be mailed.

ROLLINS;

BURGER, Secretary.
DIVIDEND

Secretary

customers.

per

WESTERN

NOTICE

TABLET

STATIONERY

CORPORATION

Acldress

Box

29, Commercial &
25, Park Place, New York 8, N. Y.

Financial' Chronicle,

THE ATLANTIC REFINING CO
Dividend

Convertible 4%

Number 41

Series A

^Wilmington,

Delaware: May 20, 1946

The Board of Directors has declared this day a
dividend of $1.12}$ a share oh the outstanding
Preferred Stock, payable July 25, 1946, to stock¬

Preferred Stock

HELP WANTED

/^ nfiKFFN E. I. du Pont deNemours
AtLU rUlil/»
& company

holders

record

the

July 10, 1946; also $1.75

meeting of the Board of Directors
held Juno 3, .1946, & dividend of

Trader Wanted

one
on

dollar ($1) per share was declared
the Cumulative Preferred Stock

Convertible 4% Series A of the Conn

Young

man

experienced in

over

the

counter

ness

securities wanted

by growing

concern.

payable August 1,1946,

to stock¬
holders of record at the close of busk
pany,

July

June 3,1946

Addrbs8:Bo>t R 65, Commercial & Financial
Chronicle,, 25- Park Place, New York 8, N. Y.

5, 1946., Checks

w«il«d.

will

RICHARD ROLLINS
-

LIQUIDATION

•

Secretary

NOTICE

The

Meriden 'National
Bank,! located
Meriden, Connecticut is closing its affairs.
creditors of the association are therefore
notified
to
present
claims
for

at;
All

hereby

payment.

Dated Itky 13, 1946.'
'

FRANK O'BRION, Cashier.

close
a

share,

business
as

the second

stockholders of record at the close of business

May^2 7,4946.
W. F. RASKOB,

hereby

given

that

a
dividend afe
the
rate
of
$0.50 per
share on
the
issued
and outstanding shares without par value of the
Common Stock of Western Tablet &
Stationery

Corporation has been declared payable on June
1946, to the holders of record of such shares
the close of. business on June 14, 1946.

28,
at

BACH,

Treasurer.

''interim" dividend for 1946, on the outstand¬
ing Common Stock, payable June 14, 1946, to
on

Notice

Secretary

GUARANTY TRUST COMPANY OF NEW YORK
'

iX New
The Board of

York,

Directors

has

June

5', 1946:

declared

quar¬

terly dividend cf Three Dollars ($3.) per share
on
the Capital Stock of this
Company for the
quarter ending June 30, 1946, payable on July
1;
1943, to stockholders of record at the close
of business June 1?.,' 1946
.vVl;1MATTHEW

MURRAY,

Secretary.

3108

the commercial & financial chronicle

good reception heretofore held by large holding of common stock of Tucson Gas, around $670,000
Electric Light & Power Co;, being preceding month, but more
institutional investors, and organizations.
trust funds seeking, after, quality
These1 stocks-,were up for sale sold by Federal Light & Traction double the 'aggregation for
as well as yield.
at competitive bidding yesterday Co., This stock was awarded at same month in 1945.
V\:,

debentures met a
f

\''"V

.'.'"-/v

,v"AV,

front

Our

yield ruling on the
distributed Standard
Oil Co. (N. J.) 23/sS.

recently

Report

Brought out a few wCeks ago
the latter issue is currently sell^

jvicUKet observers reported that

ing at prices to return an indi¬
cated yield of. about 2.39%.

huge refinancing

were

the

with

the

debentures

the

keyed to the. prevailing market
was
clear from a comparison

Reporter's

Vaccum Oil Co., Inc.,

of Soconybrought out

pricing ideas, of compet¬ $37,81 a share to Blyth &.Co., Inc.^
and The First Boston Corp. and
groups were
comparatively

ing

of the

largest deals yet

Act, brought 1,530,000 shares of
common stock of Dayton Power
& Light Corp. up for bids, the
sale being for the account of
Columbia Gas & Electric Corp*

Hardboiled Attitude

2.476%.

Many people would like to
seen a price tag of 100,

Shave

Contending: that such a figure
would have accelerated the sale

;

But the company and
bankers, presumably having

ho end.
the

substantial feel of the market,
were
satisfied that it would
move readily at the price fixed.

York

New

The

Public

State

Service Commission, through Milo
Maltbie, Chairman, appears visi¬
bly perturbed by the alleged lax¬
ity'of Consolidated Edison Co. of
New York in getting along with
the job of refinancing its $304,000,000 of debt and its preferred
stocks.

Accusing the company of neg¬

judgment was sound

ligence in not proceeding with

indicated by the fact that the

refunding and replacement
he warned. that rate
schedules of utilities in. the

That their
was

its

program,

INDEX

State henceforth will be based
on
low interest and preferred

Page
and Insurance

Bank

Broker-Dealer

Calendar of New Security

tainable.

are

ob¬

The company,

Flotaitlons.3098

in reply, pointed

out that:it had

...3076

i«;'|

launched the un¬

month's

and Notes

Municipal News
Mutual

3072

000,000 issue of its Yonkers sub¬
sidiary.

Reporter*! Report............ . v3108

Public Utility Securities........

..,,3060

Depending

Real' Estate Securities........... ...3070
Salesman's

Securities

Securities Now in

Corner.......3080

Walter

.3084

Wliyite Says.

Pennsylvania Securities Section
on

page

very largely by debt issues
either by way of refunding or for

American Molasses

the purpose of raising new capital.
Some 50 issues were marketed

District Theatre

total value of over

Scophony, Ltd.

with

HAnover 2-0050

000,000.
slightly

U. S.

....

M.S.Wien&Co.
ESTABLISHED 1919
Members N.

Kropp Forge

Bendix Home Appliances
Buckeye Incubator
Clyde Porcelain Steel

two

Tabtm N.

Majestic Radio & Television
Sheraton
Telecoin

Da Mont Laboratories

Corporation
Corporation

Trans-Caribbean Air Cargo

Design* and manufactures
precision products using the

Globe Aircraft

Ventnor Boat Works

lighter and slower oxidizing

Greater N. Y. Industries

Virginia Dare Stores

metals*

INCORPORATED

New

NASSAU

York

Security

NEW

Net

YORK

telephone

philadelphia telephonb

Entebpbise 6015

#16.03

...

wew

Sates .**.,.....22.00

bell teletype
tork

Earned

1-576

(after

(bid)
(*)

(1) 1946.

1.49

1.61
0.50

(1)17J4

•

......

0.35

14 Ya

* • f if

High price (bid)
Low price

Jardine Mining

Admiralty Alaska Gold
Aircraft & Diesel Equip.

3.70

1.69

taxes)

Low Priced Unlisted Securities

191.50

.(Before

Dividend

A Market Place for

(1)12 Yz
(o) estimated

per

♦

Kinney Coastal Oil
Recent

Kut-Kwick Tool

Signal

price

Ley (Fred T.) Co.

Helicopter

Write

Martex Realization

descriptive

call for

Palmetex Corp.

Petroleum Conversion

Red Bank Oil

analysis P-K-M

148 State St.,

Rademaker Chemical

Asphalt

Tel.

Standard Silver & Lead

Globe Oil & Gas

Gaspe Oil Ventures

CAP.

0425

Boitea
:

Mass.

Teletype BS 259

Y. Telephone HAnover 2-7914

Southwest Gas Producing

Haile Mines

i.07

»»...«,

Earned

Federal

50 Broad Siree!

Cap-

Wldng

iul.*

1945

Duquesne Natural Gas

SPECIALISTS

and jet

1939

Differential Wheel

nam, mams & ro- Inc.

propulsion field

Association

Copper Canyon Mining

Neu) & Old Securities

electronic

Dealers

STEEET,

the

Entered

Kobbe, Gearhart & Company
Members

f
•

Wilcox-Gay Corporation

Columbia Air Products

POWER & PAPER GO.

HA. 2-8780

1-1397

General Panel

Automatic

Markets

SECURITIES

O'Sullivan Rubber

D. B. Fuller

common

operating utilities

Dealers Atn'n

Exchange PI., N. Y. 5

Kut-Kwick Tool

Consolidated Industries

Bendix
Firm Trading

Y. Security

Lear Inc.

investors

buy

Finishing

Cinema "B"

Teletype—N. Y, 1-971

FOREIGN

$636,The total, however, was
under
the
figure
of

opportunity, possi¬

tomorrow,

V ABITIBI

taxes)

upon- clearance

Commission,

will have the

bly

stocks

3064.

Roberts & Manders

for

Artkraft Mfg. Com. & Pfd.
Baltimore Porcelain Steel

REctor 2-3600

Stocks

Rhodesian Selection

The outpouring was accounted

the details by the Securities and

Registration......3098 Exchange

Tomorrow's Markets—

Utility

Two

Railroad Securities.......,......... .3066

England Public Service

Gaumont-British "A"

Ironrfte Ironer Com. & Pfd.

had undertaken to replace a $9,-

Governments.....3089

Our Reporter on

Our

ap¬

proximating the $800,000,000 mark.

American Time

ceed, and noted that it already

3065

Funds............

NSTA Notes

New

Int'J Resist. 6% Pfd. & Com.

dertaking recently with approval
by stockholders of a new mort¬
3093 gage under which it plans to pro¬

Investment

discloses,

offerings

Trading Markets

;

compared with $116,000,000

in May last year.

flotations

during
May were the heaviest for that
month in almost 20 years or since
1927,
a
recapitulation
of
the

Recom¬
mendations and Literature
.3062

Dealer-Broker

issue

Amalgamated Sugar

3097

Securities

Canadian

which

rates

dividend

3062

Items

Bookshelf.....

Man's

Business

3068

Stock..

Personnel

involved bidding for 147,000 shares

Largest in 19 Years

New

equivalent

;

ed to raise

This

One

under the operation of the Pub¬
lic
Utility Holding
Company

number of stock issues were float¬
more than
$150,000,000/

will be offered at $40 per share.

close.

Incidentally, it Was pointed out
yesterday, was ac¬
The
stock
was
awarded
at
that as far back as the turn of
corded a good; reception by in¬
the year comparable obligations $33,639 per share to Blyth & Co.,
vestors.
Ma
^ ^
of these two companies were sell¬ Inc., and Mellon Securities Corp:
: This $100 million undertaking,
ing at a spread of about 10 yield and will be offered at $35.75 per
carrying at 2^2% coupon and run¬
share.
basis points.
ning for 30 years, was priced at
A second sale, much smaller,
100^5 to return the buyer an in¬
dicated yield of

Approximately

and the

bankers

the

That

South Shore Oil

New York 4, N. Y.

FOR DEALERS:
\

AFFILIATE: CARL MARKS & CO. Inc. CHICAGO

Morris Stein & Co.

TRADING

MARKET

Established 1924

We
American

Felt

Haille

■

Co.

RALSTON STEEL CAR CO.

HANOVER 2-4341

COMMON STOCK $10 PAR

Insurance and Bank Stocks

Mines

ufacturer

Investment Trust Issues

Securities with

Thompson's Spa
•

New

New Eng. Market

Specialists in
England Unlisted Securities

Street, Boston 9, Mass.
New York

Teletype

Hanover 2-7913

BS 328

;

Circular

'",' ??

Inactive

Tele. BOston 22

10 Post Office

Puklic

Securities

(A low priced,

Radiator, Pfd.

i"5.''

Bonds, Preferred and Coiitikon Stocks

years

Telephone COrtlandt 7-0744

Available

under

$6.25

per

Teletype NY 1-886

Amos Treat & Co.
Wall St.

BO 9-4613

New

i I

'U4

;'J.

i;*-

f- v;

Corp.
*-ru.."/

Empire Steel Corp.
^Prospectus

REMER, MITCHELL. &
208 SOUTH IA SALLE

•

^Susquehanna Mills

Current position 4.4 to 1

W. T. BONN & CO.
New York 5

BOUGHT—SOLD —QUOTED

Broadway

Vf -1

2.
'

per

stock)*

Average earnings for 5
$1.04

Farrell-Birmingham
>

dividend paying

common

:>y s;-*

Teletype Bs 69.

General Products

Engineering Works

)

Pressurelube, Inc.
U. S.

;

Northern

Sunshine Consolidated

Square, Boston 9, Mass.

Telephone Hubbard 1990.

Utility—Industrial—Real Estate
Lumber 8c Timber

Bell

Available

LERNER & CO.

Bank—Insurance

Established In 1922

TeL HANcock 8715

Grinnell

120

has
earn¬

Selling Under 13

Specializing in Xlnlisted Securities

24 FEDERAL STREET; BOSTON 10

Boiten

man¬

CARS

outlook for

Hubbard 6442

iyj\'

well-established

FREIGHT

ings and dividends,

Frederick C. Adams & Co.

RALPH F. CARR & CO.

this

favorable long-term

Public Utility Stocks and Bonds
TEXTILE SECURITIES

Keyes Fibre Common
Merrimac Hat Common

Stock

industrial Issues

Litho Mat Corp.

31 Milk

BROAD ST., N.Y.

TELETYPE-—N. Y. 1-2866

Jones & Lamson

specialize in all

Common

York

5, N. Y.

Tele. NY 1-1448

"WUX"

•

request

REITZEL, INC.

ST., CHICAGO 4 • PHONE

WESTERN UNION TELEPRINTER

RANDOLPH 3736

Hill, Thompson & Co., Inc.

BEU SYSTEM TELETYPE CG-989

Markets and Situations for Dealers
120

■

Broadway, New York 5

TeL REctor 2-2020

Tele. NY 1-2660

Full text of Commercial and Financial Chronicle : June 6, 1946, Vol. 163, No. 4496, Section 1

FRASER