Full text of Commercial and Financial Chronicle : June 7, 1951, Vol. 173, No. 5018

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UNIVERSITY
OF MICHIGAN

JUN. 8 1951
ESTABLISHED 1S39
BUSINESS MINISTRATION

Reg. U. S. Pat. Office

Volume 173

Number 5018

New York, N. Y.|

EDITORIAL

Taking the Crunch Out of
Tax Bite via Municipal Bonds
By IRA U. COBLEIGH

Mr..

by a rather strange transformation of
human thinking; He will not fail to observe the
rapid growth of a certain collectivism which has
the

thought of virtually all peoples, Equally
growth of a definite
anti-colonialism (more often labeled anti-impe¬
rialism) particularly in those lands which for cen¬
obvious will be the rise and

turies

were

"direct
be

the haven of what

are

foreign investments."'. Nor will it likely

difficult

to

discern

the

inconsistencies

and

The conduct of American

the conflicts which,

although not always clearly
exposed to view, really inhere in much of this
modern way of thinking about things in the large.
Nqr should we be very greatly surprised if the
historian a quarter of a century-^-or should we
make it a half-century?—hence were moved to
say with the noted Frenchman that the more all
these things change the more they remain the
same
thing.
We

moved

are

to

this

of

sort

of

crisis is

sense

creating

the crisis.

The

British

Continued

on

page

a

Killing in Wall Street and Keep It"

of avoidance or reduc¬
income, and highlight¬
ing the sheltering qualities of certain municipal bonds.

Touching

of

that is no

to

conceal

a

clash for
:

t

'

cash-perhaps-it has escaped
elite

basement of their own.

It all

It is not

a

longer possible, to

matter o£ confession or
own

sake, nor

Ira

gbnes be bygones. It is a matter of
functional efficiency. The need for

face-saving, for maintaining an ap¬

tends to blunt our diplomatic weap0ns.
It operates to block the avenues

Eugene Lyons
;

of action which

tion of the recent

require bold repudia¬

past, and to that extent imposes arcui-

cial handicaps on American policymakers.

kind

same

ignorance

of

or

political egomania got our country and the
still in command, labor-

world into the postwar mess are

as

Continued

32

PICTURES taken at the Annual

VALLEY MOULD

on

pages

Cobleigh

U.

(1951) "The Bond Buyer's" 20 (Municipal) Bond Index
yield rose from 1.58% to 1.92%. This is an inverted
way of saying that some of the choicest municipal issues
in America dropped from $40 to $80 a bond in a single
week.

Why,

Kefauver

all

never

the

City

caused

a

Hall scandals revealed by
municipal jolt to compare

with this!

What

does

all

this

and

why all the hoopla
Well, first off, munici-*
pal bonds (next to U. S. Government issues) are our
safest investment (98% of 'em kept paying regularly*
even in the depression 1930s).
They are the promiseto-pay of states, cities, towns or other political subdiviprove

about municipal bonds anyway?

is that the same people, or at best the
people, who through wishful thinking,

The tragedy

on

page

Continued

36

Field Day of the BOND CLUB OF NEW JERSEY appear
17, 18, and 27 and 28 in this issue.

& IRON

R. H. Johnson & Co.

STATE

Established 1927

Request

*

INVESTMENT

duPont, Homsey & Co.
Members New

York

& Boston

Stock Exchs.

31 MILK STREET, BOSTON 9, MASS.
Tele. BS 424

Tel. H An cock 6-8200

120 BROADWAY, NEW YORK 5. N. Y.
Tel. WOrth 2-0115

page

19

Municipal

Bought—Sold—Quoted

on

on

State and

Common Stock

Circular

March—the

"

a

carping refilsal by critics to let by*:

pearance of bogus "continuity" even
when policies are reversed, leads to
deviousness
and
double-talk,
and

started back in

13th, to be exact—when the govern¬
ment bond market fell outta bed, got
thoroughly unpegged, and the offi¬
cial 2V2%
long-term interest rate
joined the dodo and the Stanley
steamer out. on the limbo of history.
And what all this did to the munici¬
pal bond market shouldn't "happen
to a dog"
(much less a' gilt-edged
coupon-carrier).
It took a little while, for the full
impact of this dramatic change in
national monetary policy to sink in,
but during the first week in April

past mistakes. This serious
element of national weakness, though
it has been noted by a good many
analysts, has not received the em¬
phasis itdeserves.

crow-eating for its

notice that

your

lordly baubles of the financial
as
municipal bonds have also
dropped down into a sort of bargain

such

•

-

and

—

your

country, have been carrying on a .king-size price war—

for their share in
they are inhibited

compulsion

ways

on

While Macy's and Gimbel's, not to mention hundreds
their less illustrious counterparts throughout
the

justify

.

of the

upon some

tion of annual tax debit

cramped by an acute

turn

every

a

where

philosophizing

Government

At

by

by recent developments in Iran and the unrest
seems
to exist throughout most of that
part of the world. Unrest or even uprisings in
the so-called undeveloped regions are certainly
nothing new. This is particularly true, of course,
of those sections where foreign interests have in
one form or another attained a dominant
position
in the economic or social sphere.
But in this
London-Teheran controversy, there are a number
of new wrinkles.
Here Iran is "nationalizing'*
or
socializing the oil industry, and the "foreign
exploiter" is not "bloated capitalists," but another
nation.

"How to Make

foreign policy in this time

in the. hands-of-men

of embarrassment, if not guilt,

which

socialized

same

.

termed

now

Lyons calls it tragic that the
t

in recent years to tinge

more

Author of

officials who got
us into our terrible postwar mess are still in command,
engaged in ^automatic salvaging of their own reputations.
Asserting Far East theories of our diplomatic leaders
exploded in their faces, and military high command
surrendered, territory, moral principles, and American
interests needlessly, Mr. Lyons insists present challenge
must be met by leaders with clean conscience, fresh
approach, and ' minimum ■ psychological identification
with past cruel mistakes.

marked

and

Copy

By EUGENE LYONS

As'We

more

a

Oni Foreign Policy—
Dedication to Chaos

The future historian will, we suspect, find all
the latter part of the first half of the 20th century

tended

Price 35 Cents

Thursday, June 7, 1951

Tele. NY 1-315

64 Wall

Troy

MUNICIPAL

600 Branches
across

BONDS

Canada

Monthly Commercial Letter
upon request

SECURITIES

Street, New York 5

BOSTON

and

THE NATIONAL CITY BANK

ian

PHILADELPHIA

Albany

Buffalo

Scranton

Wilkes-Barre

Williamsport

Washington, D. C.

Allentown

Department

NATIONAL BANK
Head Office: Toronto

Bond

Bond

THE CHASE

Bank

OF NEW YORK

Harrisburg

Providence

*

Dept. Teletype: N Y 1-708

New York
Seattle

THE CITY OF NEW YORK

OF

Agency: 20 Exchange PL

Portland, Ore. San Francisco Los Angeles

We maintain active markets in

CANADIAN

Dominion of Canada
Internal Bonds
Placer

Underwriters and
Distributors of Municipal
and

Prospectus from authorized dealers or
VANCE, SANDI5RS & CO.
Ill

Corporate Securities

Established 1899

New York
,

Los Angeles




- -

CANADIAN DEPARTMENT

&

Co.

-

New York

Cincinnati

.

Chicago
Denver
Columbus Toledo
.

Analysne

DoMunoif Securities
Grporatkwi
40 Exchange Place,

Dallas
Buffalo

Public Service Co.
PREFERRED

MEMBERS NEW YORK STOCK EXCH.

CLEVELAND

Chicago

BONDS & STOCKS

Oil
Company of California

ESTABLISHED 1891

(Incorporated)

BOSTON

Ltd.

Canadian Superior

Goodbody

OTIS & CO.

Devonshire Street

Development

Great Plains Development,

New England

1.15 BROADWAY

105 W.ADAMS ST.

NEW YORK

CHICAGO

New York 5, N. Y.
WHItehall 4-8161

request

IRA HAUPT &CO.
Members New York Stock Exchange
and other Principal Exchanges

111 Broadw«yf
WOrth 4-6000

Teletype NY 1-702-3

upon

'Boston

N. Y. 6

Teletype NY 1-2709

Telephone: Enterprise 1820

2

The Commercial and Financial Chronicle

(2342)

The

IN

MARKETS

TRADING

in the investment

5% / 52
on

memo

week, a different group of experts
and advisory field from all sections of the country

participate and give their

reasons

(The articles contained in this forum

request

they to he regarded,

are

C.

TED

New York Hanseatic

as an

offer

Established 1920

Broadway, New York 5

Younker
In

Teletype NY 1-583

BArclay 7-5660

Brothers,

selecting

Inc.

like best at this time,

favoring

I

Iowa

an

again

am

company,

position it

Rights & Scrip

our

Since 1917

the

department

As of Jan.

nation's

state.

Iowa

Members
New

York

Stock

New

York

Curb

Exchange
Exchange

BROADWAY, NEW YORK 5

120

Tel.

REctor

2-7815

of the

;

'

i

American Furniture

little

Bassett Furniture Industries
Camp Manufacturing

C. Henderson

Ted

;

Life Insurance Co. of Va.

STRABER,TAYLOR & CO., Inc.

Lynchburg, Va. "

TWX LY 77

39

Placer

Development,
Limited

Producing Oil Wells in

19

Ector

County, Texas

LEAD-ZINC-GOLD-TUNGSTEN
Trading market maintained

available on request

Analysis

John R. Lewis, Inc.
1006 SECOND

SEATTLE

.

ELiot 3040

Teletype SE ,105

passengers

has

become

house¬

a

of

State

the

and

Moines

of

City

the

store in

department

appropriate advertising
through the "Des Moines Register
& Tribune" which is published by
the
Cowles Brothers, also pub¬
by

lishers

"Look"

of

"Quick"

and

The
"Des
Moines
Register & Tribune" has a state¬
wide
coverage, and the
Sunday
circulation runs over 550,000. The
existence
of this
large outside
important

an

was

in

through the state.
has

location

on

part

a

and

buildings

stories

seven

six

of

respectively,

with connection

structure, and has
frontage on Walnut

full .block

Street

between

Eighth

Streets.

Seventh

The

is

in

and

Store

for

ap¬

seven-story

across

the

store

with

main

and

transferred in 1946,

separate

a

building
the

furnishings

were

is

from

street
which

it

is

by subway. The two
which are operated as a
single unit have 165 separate de¬

120

New

York

Stock

Exchange

Broadway, New York 5

Telephone

BArclay 7-7340

(mostly

seven

lent

Teletype
NY

1-2739




com¬

The

as

hours, and
000

guests

constitute

well

serve

a

during store

as

upwards of 100,-

monthly,
much

and

more

which

important

and

with

pared

the

on

per

share

its pres¬
price of 33, will yield

and based

on

the

income

a

had

last 11

low of 3% and
While this stock

a

of 34V2.

high

spectacular rise in the

a

further appreciation
possibilities are by no means ex¬
hausted.
The
company,
in my
years,

reached

has

opinion,
where

full

the

a

benefits

of

place
their

expansion program will begin to
be realized.

Earnings

on

aged

on

the

common

McKnight

w.

]j0n

as

ending
$4.56

year

Jan. 31,
1951
against $4.02

amounted to

I

previous

like

mon

$18.1 million.

Earnings per com¬
mon
share were equal to
$6.92
against $5.79.
Cash dividends
amounted
on
a

June

to

5

$3.00

tion

45

1

approved

stock

common

of

for

because

field
the

Brothers

Com¬

conservative
of

the

in Iowa,
heart

tural center of
in

my

top

in¬

posi¬

and its loca¬

of

our

opinion is

dependable

the

agricul¬

country, which

one

segments

of the most
in

our

en¬

department of the business than is

tire economy. The stock is traded

typically

in the over-the-counter market.

the

case

with

depart¬

Common

in

both

well

as

cents

these

of

in

as

split.

Georgia & Florida 6s-1946

share

a

Gersten & Frekkel
Members

150

each

Houdry Process
Atlantic City Electric Rights

Pennsylvania Railroad

the neighborhood of $50 million a

Central Electric & Gas
Central Public

Postwar expansion has in¬

year.

cluded

expansion

been

present

recent

years

stores.

At

Famous-Barr Co.

a second

branch is

in

branch

by

being constructed in the

Louis

Southtown

at

area

and

will be opened in the Fall of 1951.
At

about

the

same

there

time

Utility SVSjS

American Marietta

the

tional

has

New York 7
Tel. NY 1-1932

Alan Wood Steel Co.

which-grosses in

of

Security Dealers Assn.

Giant Portland Cement

St.

and

Y.

Tel. DIgby 9-1550

cities

two

Cleveland

N.

Broadway

<

Louis,

Rights

Cent. R. R. N. J. Int. Ctfs.

country from Pitts¬
burgh to Los Angeles with a big
store

&

Marion Power Shovel Pfd.

section of the

Henry B.Warner & Co., Inc.
Members

Phlla.-Balto.

.Stock

Exchange

123 South Broad St., Phila. 9, Pa.
Phila. Telephone

Bell System Teletype

KIngsley 5-2700
New

York

Direct

PH I'll

City Tel.: BOwllng Green 9-4818

wire

to

Ames

Emerich,

Chicago

is

expected to be completed at Lakewood Center,

Beach,

a

Angeles

Calif., north of Long
third branch of the Los

main

The

store.

BUY

Lake-

project will be the largest

wood

suburban department store in the

U.

S.

SAVINGS

country with parking facilities for
10,000

BONDS

cars.

Low

This
a

Cost

company

Operator

has always been

relatively low cost operator and

the

addition

course,

year.

they hold in the department

in

Teletype BS 259

:

share and

per

stockholders

two-for-one

Dividends

as

Younker

Stock

vestors

:

Telephone WOrth 4-5000

Virginia Elec. & Power

com¬

wi4h

pared

stock

Earnings for the fis¬

$4.82.

for the

Y.

a

$21.4 mil-

was

David

for the last five years have aver¬

cal

OA. 7-0425
N.

basis

LIFO

St.

stock from 1942 to

common

present has had
has

request

148 State St., Boston 9, Mass.
Tel.

million
year be¬

$393

Ohio, and Sioux City, Iowa. Addi¬
$2.00

approximately 6%.

store

evenings

when

can

dividend
is

stock

per annum,

Facilities include
open

and

experienced

current

common

The

on

<z/2aw/wM?&6o.

acquisition of Kaufmann's in Pittsburgh in 1946, and
of Younker's in the, smaller stores in Youngstown,

growth

operated directly
are

if

past 11 years.

tion

company.

are

capable.
This
has
been
demonstrated through the excel¬

of service type)

three restaurants which

The

aggressive,

by the

& hall
Members

partments, all but

stores

be ob¬
present management

very

connected

stores,

state,

locations

proper

tained.

Walnut

thoroughfare of Des Moines for
50 years. The main store-occupies
two

the

the

ent market

shopping

main

in

towns

.

occupied

branch

seven

operated at the present time, other
stores
will
be opened
in other

factor

population

important

the

pliances

nielsen, gordon

operating in the large indus¬

While

promoted

business is aggressively

Homes, to which the departments
merchandising
major
items
of

Firm.

as

quarterly will be inaugurated on
the new stock, affording a yield
the farm of 5.6%, a payout of slightly more
City, Fort Dodge, Marshalltown,
program the prices on agricultural than half of last year's earnings,
Ottumwa, and Iowa City.
products are pegged and conse¬ allowing for the split. (Present
As operator of the leading de¬
quently the income from these price of -new stock is 32.)
partment store in the capital and
products is more stable and as¬
May operates 13 main stores, in¬
largest city in the state, a large
sured.
This, in my opinion, adds
state-wide business has been built
cluding three large branches as
greatly to the stability of Youn¬ well as ten small branches. On
up by Younker's and a substantial
ker's
earnings, and being in a the Eastern seaboard the
company
portion of the sales of the Des farm state it can count on
steady is located
Moines
store
is
made
to
only in Baltimore, but
pur-,
growth for years to come.
it covers a good geographical cross
chasers
outside the
city.
Such

household
our

not

subject to the sharp decline
in earnings experienced by those

been

stores

$417 mil¬

lion

definitely that through

a

in

have

past

of

n g s

corpparable size. In addition
to its main store, the company has
stores in Sioux City, Ames, Mason
is of

principally

Partnership

the

in

i

trial centers. I do not mean to infer

Street,

to

e a. r n

just because Io^va is an agricul¬
tural state perpetual prosperity ex¬
ists. I do want to point out very

of its present

has been admitted

departments,
were

big

many

store in the state

No other

Younker's

MR. JACK FEINSINGER

the

Younker's

Iowa.

centers

announcing that

31, 1951.
Net sales, in¬
cluding leased

fore while net

acknowledged

Younker

in

word

hold

Analysis

ended

year

department stores located in

recessions,

stores

in

is

It

AEROVOX CORP.

fiscal

the

Jan.

controls.

name

sales

earnings

for

this forecast
farmer should
from alleged price

larger earnings than Younker's in
flush times. However, in times of

in the decision to establish branch

pleasure

and

the

fear

no

branch offices

our

best

like

record

If

output.

Birmingham, Ala.

Mobile, Ala.
Direct wires to

time-tested equity in¬
May has just reported

a

much

beginning,

small

that

From

market

We take

have

due

bought their supplies at Younker's.

magazines.

AVENUE

Stores,

vestment.

large industrial centers will show

Iowa.

LD

while

store

Des

I

creased

Brothers, Inc., operates under the
name of Younker's, is the
largest

Dan River Mills

income

NY 1-1557

New Orleans, La. -

-

I

the

recently

Exchange

Curb

New York 4, N. Y.

writing is May Department

higher prices than to in¬

to

materializes,

Keo¬

Younker's

Commonwealth Natural Gas
r ■

farm

net

more

lumber¬
ing wagon trains and careening
stage coaches stopped before the

Trading Interest In

,

at this

record 1951 rise of 30%

a

in

pioneers
opened hislittle
general

Just

Exchange

York

New

'

.stock

common

Department of Agriculture,

forecast

progressive

kuk, Iowa. In those days

;

The

Agricultural Economics,

Bureau of

Younker, one
oh Iowa's

in

Stores

Department

May

City

failure. I do not think
will disagree with me that

sometime.

for

Samuel

store

New York

the farmer has not been in clover

1856

in

when

York Stock

Partner, G. H. Walker & Co.,

crop

many

old

years

^CflONNELL&rp.

plete

10

was

31, 1951, the company

states. Iowa has never had a com¬

The State of

Members New

HAnover 2-0700

$1,000,000 of 7% non-callable

is one of the
leading
agricultural

Steiner, Rouse & Co!
Members

david w. Mcknight

of the farmbelt, and

in

field

store

B ought—S old—Quoted

25 Broad St.,

with the business as a whole.

preferred; $3,194,200 of 5% pre¬
ferred stock; and 400,000 of no par
common shares outstanding.
The State of Iowa is in the heart

outstanding
in

Louisiana Securities

C. Henderson &

T.

(Page 2)

is

had

because of the

holds

C.

Inc.—Ted

Co., Des Moines, Iowa. (Page 2)

primarily from specialty
shops which compete with indi¬
vidual
departments rather than

Younker Brothers Common Stock,

Specialists in

Brothers,

Henderson,

nor

sell the securities discussed.)

to

city

of the stocks I

one

be,

to

Younkers

By reason May Department Stores — David
of
the
dominant
position
of
W.
McKnight, Partner,- G. H.
Younker's in the Des Moines re¬
Walker & Co., New York City.
tail field, its competition in that

Co.,
Moines, Iowa

Des

intended

not

are

particular security.

a

Alabama &

and

Selections

ment store restaurants.

HENDERSON

T. C. Henderson &

Corporation
120

for favoring

Participants

Their

.

Thursday, June 7, 1951

..

Week's

This
Forum

A continuous forum in which, each

Cen'ral Public Utility

Revised

Security I Like Best

.

of

has

branch

stores,

of

advantage

the

of

spreading managerial, warehouse
and

advertising costs.

other basic factors

sideration,

such

ment's financial
been

to

keep

small and not
and

Still

There

worthy of

as

the

are

con¬

manage¬

policy which has
the

funded

debt

OVER-THE-COUNTER

.INDUSTRIAL STOCK INDEX
12-Year Performance of
35 Industrial Stocks
BOOKLET

ON

REQUEST

indulge in the sale

lease-back of store property.
other

N. Q. B.

considerations

are

an

National Quotation Bureau
incorporated

especially good control
Continued

over store

on

page

19

46 Front Street

New York 4,

N. Y.

yolume 173

Number 5018

.

.

.

The Commercial and Financial Chronicle

(2343)

The Steel

Industry, the Russian

INDEX

Menace and Good Government
By ERNEST T. WEIR*

beginning of

problems of further

sion under current defense
program.

companies

Foreign Policy—Dedication to
Chaos—Eugene Lyons__Cover

expan¬

Says earnings of steel

depreciation allowances. Condemns partisan politics, but
businessmen

Our

The Steel

exaggerated and calls for upward revision of

are

Page

.___

Business Outlook and Its Impact

will enter greatest

Department Store Outlook in 1951—Malcolm P.
McN'air

period of economic and social
a

—E.

mand

had

built

in

progress

than

and

half

a

modern

perhaps to

75%

of

try

and it

Of

tions

now

ply in

a

Uneven

ap¬

rious

spotlight,
criticized for shortages
a

in this respect
it is likely

that

overcome

consider¬

able

Ernest T. Weir

fluctua¬

tion from time
to

time.

tion,

In

view

of

this

attempt

any

to

give

condi¬
a

de¬

tailed estimate of future steel sup¬
would be sheer speculation
and of no help to you. The
plain

ply

fact

is

that

today

what the future

no

knows

one

will bring.

no

is by

might

reasonably
that this

say

means

a

new

One.

104

has

industry.

other

Steel

of -the

has

always

that

IS

the

early

118

of

crease

tons,

or

the

the

last

to

war

steel.

In

for all the steel

upon

In

all

any, real

of

steel

40%

The

to

develop
of

War,
age

of

of

the

The

of
during the last
that

ments

the.

total

an¬

for

of
in

can

of

1943.

was

military
were

of

•

around

finished

total.

In

23

steel—

is unlikely
situation the

present

proportions

of

particularly since
merchant

ships,

stallations

of

all-out

war—

and

weapons

all

kinds

that

)

*An

war

a

address

huge, abnormal

of

ficult
can

by

Mr.
of

Weir
the

Purchasing

York City, June 5,

before

National

Agents,

Unless

in¬

with

me

of

—

"Britain

Considers

Guaranteed

to

see

From Washington Ahead of the News—Carlisle
Bargeron__i_

13

Indications of Business Activity

37

Mutual Funds

20

opinion, if

how

any

Franco

there

on

will

be

page

News About Banks and Bankers

22

Wilfred

Our

Reporter

Prospective

23

Security

Members New

York

50 Congress

HAnover 2-4300

Offerings

Exchange PI., N. Y. 5
1-1826

41

29

Railroad Securities

21

Securities Salesman's Corner
Securities Now in

The

Registration

38

Schenectady

Curb

The State of Trade and Industry

5

Collins Radio
Tomorrow's Markets

34

(Walter Whyte Says)

Washington and You

Twice

_____

1

Weekly

COMMERCIAL

Dictograph

44

Di-Noc

Drapers'

B.

Park

DANA

Reentered

COMPANY, Publishers

Place, New York 7, N. Y.
2-9570

WILLIAM

DANA

D.

ary

25,

York,

SEIBERT,

Worcester

C.,

Hoving Corp.

Eng¬

N.

as

>

Stromberg-Carlson

second-class matter Febru¬

1942, at the post office at New
Y., under the Act of March 8,

Whitin Machine

Works

Subscription Rates

President

RIGGS, Business

Manager

Subscriptions

in

United

States,

Possessions,
Territories and
Paq-Amerlcan Union, $45.00

U.

S.

Members

of

per

Dominion

Other

7,

E.

1879.

9576

to

Thursday, June

Gardens, London,
Edwards & Smith.

Copyright 1951 by William B. Dana
Company

CHRONICLE

Reg. U. S. Patent Office
WILLIAM

c/o

and

year;

of
Canada,
$48.00
per
Countries, $52.00 per year.

In

Bought

year.

—

Sold

—

Quoted

1951

Exchange

2-8200

-

Baker-Raulang

2

REctor

1-5
-

Air Products

19

—

Security I Like Best.

25

Street, Boston 8

Hubbard

Teletype—NY




40

Teletype NY 1-1825 & NY

Public Utility Securities

The

Spencer Trask & Co.
Glens Falls

&

HA-2-0270

WILLIAM

-

Singer, Bean:
MACKIE, Inc.

43

HERBERT D. SEIBERT, Editor & Publishet

Chicago

5

7

Governments

on

Engineering
•

May

Reporter's Report

Our

preferred stocks

-

and

30

High Grade Public Utility and Industrial

Albany

Soundcraft
Thermal Research

FINANCIAL

25 Broad Street, New York 4

Wyoming Oil
Reeves

shortages

develop, the key factors
Continued

Stock Exchange

Corp.

Mfg. Co.

shortage of

New

1951.

York

Dev. Res.
Bates

interested in offerings of

Members New

Associated

Power
26

land,
are

Purchasing

——

Published

We

8

_:

full-

a

the additions al¬

genuine

any

should

we

misfortune

for

be

my

the
As¬

43

are

steel for any great
length of time.:
In

Annual -Convention
sociation

de-

:

re¬

quired large tonnages of steel

war,

of the

Teletype NY 1-3370

many naval and

ready made to steel capacity and
those yet to
come, it is very dif¬

discontinued

6

Philadelphia and Los Angeles

14

It

scale

or

i.

require¬

We remember that the production

result, by the end

;

Broadway, New York

BO 9-5133

production

of many civilian
goods

a

Reilly & Co.

44

Bonds"

Observations—A.

the

As

61

more

still in service.

entirely.

23

be

have

tically restricted

Einzig

tons,

war

steel

the

rate

purposes.

dras¬

Stocks..

expan¬

produced

was

Insurance

Dealer-Broker Investment Recommendations

in¬

war

strictly

and

Coming Events in the Investment Field__

that

steel

Went' for

J. F.

....Cover

military requirements will reach
the

During

(Editorial )__-r_

million

steel

peak

the

year

1938,
only

great percent¬

It

______r

will end the year

year

that

a

it

The effect

production

million

the

in- 1940.

course,

36

1940.

this

we

total

104

tons

capacity.

See

is

if

38%

situation really
began

war

At

steel—an

than

over

date

and
a

request

tons—all

1953.

tremendous

million

years

still

on

Direct Wires

operation by

of

more

considerably be¬

were

low capacity. As
recently as
for instance, operations were
about

my

never

shortage of

fact, in most

operations

n——ii

Incorporated

than two million tons of steel each

only one 4n with
industry has ever* than

produce.

seen

the

We

Bank

constantly, show¬
ing up in the production figures.
We are now turning out more

the

previous experience, I have
before

-

City

Regular Feature*
As

country will
capacity of about

tons

45%

to

And

-

add

in

of

ingot

an

million

maintained,

could

National

construction

million

be

part

ginning

time is
which the steel
at

Says

1953—this

week,

present

will

14

or

built well ahead of demand—not
just average demand but peak
demand. The period from the be¬

'been called

Remington Arms

,■

,

*Circular

7

-

tons.

progress

of which will

of

history

million

in

programs

sion

the

the shortages.

Canadian Securities

throughout

of

•

Danger,

25.

about

It is merely a
stepping up of the
•expansion that has been constant
steel

.

Principal

Business Man's Bookshelf

have

be

may

taks

the

91,890,000
From-1946 to Jan. 1,
1951, the industry added over 12
million tons, bringing the total to

demand

I

Still

ingot tons.

time—in

that

24

Bank of New York

1946 this had grown to

situation, the steel
industry has set itself to the task
of building additional capacity to
raise overall steel production to
the point where it will cover
any
expected.

Hytron Radio & TV

15.

.

Inflation Is

In
fact,
the
industry never
stopped building even during the
war.
In 194^0, the industry had a
capacity of 81,600,000 tons.
By

now

To meet the

,

*Punta.Alegre Sugar

Canada, and the More Promising

,

will

we

in

\

International Resistance

industry, but also because of
the truly remarkable job done
by
the
steel industry
in providing
increasing quantities of steel to

see

NEW YORK

WHitehall 4-6551

*Hoving Corp.

12

Truman's Credit Policy Committee Issues
Report

steel

and

WALL STREET,

11

Industries—Arthur S. Torrey

cause
of the shortages was
entirely beyond the control of the

steel-

09

8

Survey of Business Problems—Roy A. Foulke

Investment Outlook

the

va¬

and

6

—

~

man¬

products,

4

What Can We Do About Inflation?—H. E.
Hoagland

everything from bobby-pins to
automobiles.
In
my
view, this
criticism was entirely unwarrant¬
ed not only for the reason that

very

to the

ner

A

of

course, alloca¬

more

stock

up

placed under

was

nothing

obsolete

Obsolete Securities Dept.

,

products, the steel indus¬

was

the

total.

Banking

on

Sherman Adams

Making Secure Investments—Roger W. Babson

for goods of
distribution of almost one-half of all kinds. It was
only natural that
the total steel produced. It is
pre¬ there would be shortages. Because
dicted that this control will ex¬ steel is an
important material or
tend to more
the principal material in so many
,

have

that

Telephone:

businessman's program.

Today, Washington controls the

with

us.

3

,

politics "as dominant force in our lives."
Sees lack of responsible
political leadership in both parties,
but expresses belief, if war with Russia can be
avoided, we
Outlines

will

you

do

to

call

Industry, the Russian Menace, and Good Government

—Ernest T. Weir

"MAKE IT CLEAR"
That

urges

enter

history.

AND COMPANY

Taking the Crunch Out of Tax Bite via
Municipal Bonds
—Ira U. Cobleigh
Cover

Chairman, National Steel Corporation

After reviewing steel
industry's expansion since
World War II, Mr. Weir discusses

llCHTOTflll

-

Article* and New*

Other Publications

Every Thursday (general news and ad¬
vertising issue) and every Monday (com¬
plete statistical issue — market quotation
records, corporation news, bank clearings,
state

and

Other
Chicaarn

city news,

Offices:
3.

HL

135

Note—On

the rate of

etc.).
South

(Telephone:

Bank and Quotation Record —
Monthly,
$30.00 per year. (Foreign postage extra.)

La

Salle

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account

of

the

fluctuations

in

exchange, remittances for for¬

eign subssriptions and advertisements must
be made In

New York

funds.

THEODORE YOUNG & CO.
40

3

Exchange Place, New York 5, N.Y.

WHitehall 4-2250

Teletype NY 1-323*

The Commercial and Financial Chronicle

(2344)

4

new

Banking

on

By E. SHERMAN ADAMS*
Lecturer in Finance, New

business

reviews

Adams

Dr.

as

labor

the

rearmament

affected by the

All

force.

these

of

be accelerated

trends will

into

gets

program

the

as

high gear.

Says within six months full impact of
rearmament outlays will be felt and though total production
will increase, public spending will rise faster, thus aiding
inflationary pressures. Looks for continued expansion of bank
loans, to check which, Reserve Board may be given power to
raise reserve requirements, or may be granted authority to
regulate risk assets of banks. Favors latter alternative, and
holds, though interest rates may rise, Government bond
defense

remain

to

York University

prospects

program.

How

Far

With

Can

the

Production Go?

prospect of mounting

expenditures by government,
business

and

concerns

by

by
in¬

question naturally
production
can be increased. Today industry
is already operating almost at ca¬
dividuals,

arises

market will be protected.

the

to how much

as

pacity; the amount of unemploy¬
ment is small;
and- many raw
are
in
short
supply.

materials

The

of

1950

jolted us
dangers
confronting Western civilization.
Once
awakened, the American

has

people quick¬
ly reached a

in

events

realization

a

had

a

impact

considerable

strained productive re¬
This has been reflected

our

upon

sources.

expansion of credit and an
in the turnover of bank

an

increase

bankers

You

determined to
build

can
see
in your own

these results directly

operations—in

the

up

the form of more
expansion of your de¬

defenses of the

loans,

an

United

posits,

and an even
in the activity

States

of

and

crease

our

Allies

posit accounts. In recent months,
debits have been running

to

withstand

the

C
a

bank

about 25%

higher than a year ago,
reflecting a much higher rate of

of

menace

nist

o m m u

spending. And since it has not
been possible to increase produc¬
tion proportionately, this higher
rate
of spending has generated
strong inflationary pressures.

ession.
implica¬

g gr

The

of

tions

that

decision

for

business

and

for
are

E.

Sherman

Adams

banking

At the moment,

far-reaching.

We

have

a

defense

had

has been

economy.

some

a

these pressures

Government controls

eased.

have

in the process of trans¬

are

formation to

in¬

greater

of your de¬

and

effect

there

slackening in consumer

The first phase of this

transition, and inventory buying. In certain
time, lines, inventory accumulation
has been* a period of inflationary went too far and some liquidation
boom'.
Mpst
of
the
increased is •now taking place.
spending which has caused this
boom has been done by individ¬ Full Impact of Rearming to Come
from last June to the present

uals

and by business concerns in
anticipation of the effects of the

This

The

public,
fearing
higher
prices and shortages, has gone on
two great buying sprees, one last
summer and one early this year.
This buying was financed in part
by a sharp rise in personal in¬

of individuals and businessmen to
those

developments.

is

this

event,

only

But
a

in

temporary

in part

ing

shift¬

production and be¬
of shortages of material and

to

cause

war

technical personnel.
In

short, although total produc¬

tion will increase some, it will not
increase

fast

as

as

total spending.

Moreover, much of what is pro¬
duced will be military rather than
civilian goods.
It

as

there

a

result

be

will

therefore,

apparent,

seems

that

a

of these

strong

factors,

tendency

for prices to rise further. The ex¬
tent to which prices actually do

rise, will depend to a large extent
upon the effectiveness of the gov¬
ernment's stabilization program.

Without

trying to analyze this
detail, it must be
that its development to
in

program

agreed

date has not

wages

is already in full operation.

Moreover,
for

the

a

even

if

we

manage

policy
the net

pay-as-you-go

Federal

budget,

business

at

a

expansion

time when

programs

are

downward
of

banks,

how¬

duced
these

and

little

or

no

can

loss

to

existing inventories strong demand for bank credit.

as

consumer

durable goods are re¬
as the production
of

Moreover, the Federal Reserve
System cannot go very much fur¬
is curtailed. Despite ther than it has already gone

goods

opposition to Regulation W toward tightening general credit
by various pressure groups, the conditions by means of its open
Federal Reserve Board appears to market and interest rate policies.
be
determined to
maintain
its The most compelling reason why
curb on this inflationary type of it cannot follow such a course,

the

credit.

The

*

needs

credit

of

business,

aside from its effects
entirely
the debt management prob¬

upon

the Treasury, is that it
would interfere with the flow oi
will probably increase, though
not as sensationally as over the credit needed, to finance the re¬
armament
program
and
other
past
year.
Additional
working
essential production.
capital will be needed to meet

so,

Will Voluntary Gredit Restraint
costs, and to carry larger and
Be Effective?
higher-priced inventories. As dur¬
The next question is: How ef¬
ing World War II, the larger
fective will the Voluntary Credit
banks will probably benefit most
Restraint program be? In the past,
from demands for credit to fi¬

efforts to curb bank lending on
defense production. How¬
a voluntary basis have not been
there is no prospect at pres¬
ent that production in non-defense very successful. This time, how¬
industries
will
be
curtailed
to ever, the approach to voluntary
control has been thought through
anywhere near the extent that
more carefully than ever before.
occurred during the war.
My own opinion is that this vol¬
Demand for agricultural credit
untary program can play an im¬
cannot be
expected to increase
portant role in preventing specu¬
greatly because of the strong fi¬ lative
loans and in encouraging
nancial position of most farmers.
conservative
bank
lending pol¬
There may be many areas, never¬
icies.
theless, where farmers will need
But even if this voluntary pro¬
more bank credit both for capital
gram is successful,
bank loans
purposes and for operating ex¬
may nevertheless increase. And if
penses.
they do, even if they are all for
nance

ever,

The

Question

Continued

of Commercial

on

page

26

Expansion
If
if

this

is

analysis

total

bank

and

correct

loans

do

expand

further what action will be taken

by the monetary authorities to re¬
strain

such

expansion?

It

Central States Elec. (Va.)

goes

Eskimo Pie

without saying that loans required
to
finance
defense
production
should not be curtailed. The prob¬
lem is how to

which

essential to

defense will still be decidedly in¬

armament

Bought — Sold — Quoted

discourage spending

for

come

commercial

securi¬
liquidate with
meet urgent
lending will probably be reduced local demands for loans. Higher
due to growing shortages of build¬ rates on
government securities,
ing materials and the effects of therefore, may exert some re¬
straining effect upon bank lending
Regulation X.
Similarly, the trend of install¬ policies, but cannot exert suffi¬
ment
credit
will
probably
be cient restraint to curb a really

effect of government spending for

armament.:;,
This will

Most

for the re¬
During 1952, ties which they

mainder of this year.

however, the volume of mortgage

been too reassuring.

Agricultural prices have been per¬
mitted to skyrocket. Wage rates
have
been "rising
steadily
and
weekly earnings even faster. The
familiar spiral of. food prices and

flationary.

which had been lying dormant in
the banks.

types of

higher payrolls, taxes, and other

the dislocations involved in

taxes will have little effect toward

:•

to other

will ever, still hold substantial amounts

slower rate than usual because .of

by the full impact of the rapidly
accelerating expenditures for re¬
.

securities

investments.

of short-term government

high

fairly

credit

estate

real

Thursday, June 7, 1951

however, during the next year or lems of

months, the economy will be hit

consumer

for

ment

possible and we will also
probably see some lengthening of
the average work week. Output
per
man-hour
should
improve
somewhat
but
probably
at
a

any.
-to achieve

phase, a breathing spell. Over the
coming year, probably within six

by an expansion
credit, and in part
from past savings — redemptions
of Savings bonds and the use of
savings
and
demand
deposits
of

readjustment

of

much as
several months longer. Its dura¬
tion
depend upon international
developments and the reactions

rearmament program.

comes,

period

could conceivably last as

The indications are that the de¬
mand

Some further increase in the labor
force is

.

deposits.

We

decision.

procurement,

military

growing

of the

into

authorities to restrain
expansion?

monetary

further credit

expand—partly from rising wage
rates, partly from more overtime
work, and partly from additions

Business Outlook and Its

Impact

high annual rate of $242 bil¬

lion, more than 10% higher than
a year ago. Government and pri¬
vate payrolls are continuing to

...

Higher

corporation

reducing
business
expenditures
plant, equipment or inven¬
tories. There is little prospect that
additional taxes will be levied in

is

not

program

competes for
manpower,,
sure

scarce

re¬

which
materials and

thereby putting

prices

on

the

and

and

wages.

If

monetary policy is to be used tq
help to divert our resources, to

military

purposes,

then

JAMES J. LEFF & CO.

pres¬

the

Incorporated

50

Telephone BOwling Green 9-5920

V

Teletype NY 1-3018

fi¬

at
a
record
pace. a manner that will reduce private nancing of non-military activities
Spending by business has been proceeding
the major factor in the upward American
industry
will
spend spending to the extent that gov¬ cannot remain on a business-as•
surge of employment, production about $25 billion this year for new ernment spending increases.
usual basis.
and prices. Plans for rearmament plant and equipment. Expansion
Since we are not actually en¬
The first question, naturally, is
plans for 1952 may be equally gaged in an all-out war, govern¬
clearly foreshadowed a high level
what will the Federal Reserve
ambitious.
of business activity and the
ment
controls
meet
prob¬
strong re¬ System do with its
newly achieved
ability of higher prices and short¬
And as the nation converts more sistance, either from the public
flexibility with respect to open
ages, especially of capital equip¬ and more to war production, the at large,
or
from businessmen, market operations and interest

St., New York 4

Broad

MEMBERS
MIDWEST STOCK EXCHANGE

v

ment. As

a

programs

and

result, plant expansion
have been stepped up

business

risen to. the

inventories

trend of inventories will bankers;
farmers, * or organized rate policy? The chief
significance
probably be upward, even if not labor. The chances are, therefore, of the new pattern of government
at the spectacular pace of the past that anti-inflation measures will bond
yields is that it imposes cap¬
year.
Despite the huge increase be too little and too late to pre¬ ital losses on investors who sell
that has taken place, business in¬ vent some further rise in prices
long-term securities to transfer
ventories in the aggregate do not and living costs. No one can say their funds to other
investments.
just how serious this will prove This means that its restraining ef¬
appear excessive when measured
by past relationships to produc¬ to be. However, there is no reason fects will be felt primarily by
tion, sales and unfilled orders. It to assume that prices will get holders of long-term securities;
is pertinent to recall that in 1941, completely out of hand.
namely, the insurance companies
a
and the mutual savings banks. In
year of transition from peace¬
overall

have

highest levels in his¬

tory.

During this period, the defense
program has been
under

slowly getting

Production

way.

of

mili¬

tary equipment and supplies has
about

This

doubled

since

increased

business and

last

June.

spending

by
by individuals plus

time to

increased about 30%".
Consumer
demand
for
goods

address

by Dr. Adams at the
Bank Executives Forum, Florida
Bankers
Association, Daytona Beach, Fla., May
21, 1951.
'
y

will

Banking Outlook

military procurement, in¬

ventories
*An

undoubtedly

increase.

Per¬

sonal incomes recently reached a

What

does the

future

the case of these

hold

for

banking? How strong will the de¬
mand for bank credit be and what

policies will be

adopted by

Mill

&

SAMPLES

Elevator

Will
new

Standard Milling Common

Members

(Assoc.)

wire

71

connections




principal cities

to

inspect

our

New

York

1856

Members

LAMBORN & CO., Inc.

Sranch

99

WALL

STREET

NEW YORK 5, N. YV

York

Stock

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York

Curh

Exchange

Cotton

Exchange

York

New

Chicago
New

sugar
Raw

—

Refined

—

Board

Orleans
And

Trade

Cotton Exchange

other Exchanges

Exchange Bldg.

NEW YORK 4, N. Y.
CHICAGO

DIgby 4-2727

of

Liquid

Exports—Imports—Futures

126 Lexington Ave.

Inc.

Exchange,

Commodity

For this explan¬

New York 16, N. Y.

Exchange

New

development in successful

ANALYST INSTITUTE

BAltimore 3600

and

Established

govern¬

N. Y, Cotton

Detroit Stock Exchange

»

to

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City 6, Missouri

KC-67, 68, 69, and
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invest

atory TIMING FACTOR folder
plus free samples of complete
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New York Stock Exchange
York

St. Louis 1, Mo;

H. Hentz & Co.

Interstate Bakeries Common

,

STREET

institutions, the

the the shifting of funds from

Flour Mills of America Pfd.

New

50£ OLIVE

decline of government bond prices
below par may eventually prove
to be an important deterrent to

Specialists in Milling and Baking Stocks
Colorado

Stix & Co.

DETROIT

PITTSBURGH

GENEVA, SWITZERLAND^

Volume 173

Number 5018

.

.

The Commercial and Financial Chronicle

.

(2345)

fr

Texas IBA
Steel

The

Production

Electric

Group

Elects Richardson

Output

Observations.

Carloadings

State of Trade

Retail

Commodity Price Index
Food

and

DALLAS', Texas — The
Group of the Investment

Trade

Industry

Price

Auto

Production

Business

Index

Association of America

ers

annual

16th

convention

Failures

ardson,

J

Co.,

noticable

As

rise

for

above

the

aggregate

level

claims

for

the

similar period

one

over

has

the

yet

outlook

at

in

taken

direction.

As

of

the

moment,

some

foundry centers is for growing pig iron
stringency. To date, foundry operations, now averaging 45 hours
weekly, have been sustained by judicious distribution on the part
of iron suppliers,
greater use of scrap and resort to imported
metal.

Whether

formal

government

allocation

would

result

in

any better supply conditions in existing circumstances is
ques¬
tioned by many in the light of the
generally successful distribution

policy of pig iron producers since shortly after the beginning of
the

present emergency.
Whether

supplies

level foundry

will

operations

continue

in

the

adequate

months

to

ahead

high-

support

in

the

face

of

a

general

shortage of metallics is the big question of the moment.
Right now the outlook for pig iron adequacy is darkened by the
scheduled blowing out of a number of blast furnaces for needed
repairs over coming weeks. Also, imports, which have been pro¬
viding the foundries a decided supply lift over past months, are
tending to dry up. Already some casting shops are on short iron
All

rations.

of
them are
working on virtual hand-to-mouth
inventories, scrap also being in short supply. This latter
is highly significant in view of the fact that most foundries have
been conserving pig iron by increased use of
scrap.
Some shops

Cutbacks

-

in

civilian

durable

goods and accompanying let¬
castings demand at best will only temporarily alter the
pig iron supply situation.
down

in

Indications

-

the

that

third

quarter will be the tightest
civilian durable goods manufac¬
possible easing in; conditions being experienced

are

of steel supply for the

period

turers, with some
in fourth quarter.

announced

was

issued the first of
use

of

scarce

Saturday last, that the government had
series of regulations governing third quarter

a

on

metals in the production of consumer durable goods.

Ef fective July 1, the use

automobiles
In

the

J,

Motor

car

their steel cutback

manufacturers

with

compared

headed

are

25%

20%;

was

reduction

for

in

.

35%

a

steel

*

Gil¬

R.

ever

in

40% cutback from the pre-Korean levels during the third quar¬
ter and aluminum a 50% reduction. The second quarter cutbacks

K

i

n

k

c

e

30%

r-

T.

b

o

Richardson

k*e

c

k

c

Houston,
elected

C.

Vice

Porter,

Antonio,

Dittmar

&

named

was

for copper and 35%

for aluminum.

Members

r,

were

they can get the necessary materials.
The
Authority issued an order restricting the in¬
dustry's use of steel, copper and aluminum and gearing third
quarter output to a level about a third under the like period last
year.
But, the agency noted, if manufacturers want to, they can
make more lighter cars.
However, the industry indicated a shift
to

the

of

chosen

Reaction

manufacturers

of

to

New

York

City's

"fair

trade"

price war was speedy ar.d to the point. Two producers of na¬
tionally known brands stated they would discontinue selling their
products to
The

store.
weave

Macy's New
firms

were

York, the

world's largest department
Goodall-Sanford, Inc., maker of Spring-

and Palm Beach summer suits, and Eversharp, Inc., manu¬

facturer

of

and

pens

Macy's

razors.

started

the

price

slashing

Tuesday following a Supreme Court ruling that stores which
price-fixing agreements under the fair trade laws
did not have to honor the minimum prices.
On Monday of this

Wilfred

A.

differ
our

in

varying
thesis

own

the

degrees

as

well

communications

as

pub¬

last week.

May

Executive
Thomas

are

Dallas; Robert A. Underwood, R.
A.
Underwood
&
Co.,
Dallas;
Edward H. Austin, Austin, Hart
& Parvin, San Antonio; Lewis F.
Rodgers, Central Investment Co.
of
Texas, Dallas; an"d Chas. B.
White, Chas. B. White & Co.,
Houston. '

From the V. P. of Blue
DEAR MR. MAY:

'

Ridge

.r

As an officer of an investment fund I would like to
enlarge
the discussion of the problem raised in
your recent "Observa¬
on "The Stockholders'
Meeting, Mr. Avery, and the Funds."

on

tions"

You

effectively for the proposition that the Funds

argue

collective

stockholders

responsibilities,
insure

good

which

they

should

exercise

and

management
are

owners,

protection of their

own

of

both

companies
as

matter

a

interests and

in
of

meeting will be held

Smith, Moore & Go. to
Be NYSE Members
June

14

Crago
will acquire member¬

ship in the New Yofk Stock Ex¬
change, and Smith, Moore & Co.,
Olive
Street,
will
become

509

firm is

of

Stock

the

and

Exchange.

The

belief

as

a

that

the responsibility is
exercised, but that the
extent of action should be
extremely flexible
and determined by the circumstances of eachparticular instance.
is

should

be

obvious

that the Fund managements,
professionals, acting as trustees
stockholders, should be far more
thorough in their voting of proxies than it is
informed

as

for

their

possible for

an

fore it is not

much,

a

effort

untrained layman to be. There¬
question whether, but only how
should be spent and in what

M.

direction.

D.

Popovic

member of the Midwest

a

Exchange and

member

of

the

Partners

M.

the

pub¬
Considerable thought and experience

to

It

ST, LOUIS, Mo.—John H.
on

lic duty.
there

1952

Mr.

are:

Canavan,

Curb.

York

Crago, James

Edward

Some

associate

an

New

Haver-

E.

Francis A. Dunnagan,
partners, and Robert B.
Smith, limited partner.
Jr.,

general

Before

the

Reasons

for Inaction

discussing advisable policy,

negative side should

forceful practical

be

some

mentioned.

general thoughts

There

are

a

number

Name

Changed to
Dreyfus Fund, Inc.

Announcement

change of
Fund. Inc.

is

made

of

the

The Nesbett
to the Dreyfus Fund,

name

of

have

wide field of selection and they would be wasteful of their

a

for the stockholders to pull out by sale even at some loss than to
have festering investments which take time to watch without def¬

inite promise of getting a just reward for the expended effort and

Everyone with experience will know how wasteful it is
simple pressure by negotiations and proxies not
speak of the higher costs of fighting legal battles.

money.

to

even

to

exercise

Practical

Inc.

The fund is now managed by
Dreyfus Corporation, 50 Broad¬
way, New York City.

the

,

tit-

'

;

'

.

"

Troster, Singer Wire
To

Edgerton, Wyckoff

It

is

also

of

some

Disadvantages

importance

of

Unpopularity

from

v

the

viewpoint of good
will in the investment community not to build a reputatioh of
being a trouble maker.
It may lead to loss of opportunity to
capitalize

on

developments b,y full and advance information obtain-

sible to sell at
•

:

a

y

reasonable
.

price, and being locked in, the Fund
y

.

Continued

on page

Troster, Singer & Cof, 74 Trinity
Place, New York City, securities
dealers, announce the establish¬
ment of

a

direct private wire from

its

Co., 619 South Spring Street, Los
Angeles, Calif., members of the

page

35

Los

office

to

Edgerton, Wykoff &

Angeles Stock Exchange.

Announcing the formation of

SCHAFFER, NECKER & CO.
Packard

United States Radiator
6%

Cumulative Preferred Stock ($50 par)
We

believe

offers

(1)

Good

Generous income—approximately
from

(3>

a

well

in

a

tax-sheltered

covered

Hotel Weylin
meets the

(2)

value

issue.

of the

requirements

Members

New

York

Stock

&

NEW

YORK

6,

N." Y.




Delicious Food

Intimate Cocktail Lounge
Excellent Service

Carl Necker
y

June 1, 19 SI

Archibald, Manager

PLaza 3-9100

-

BARCLAY

Charles A. Schaufler
Linford B. Cassel, Jr.

Joseph J. Tunney (Limited)

For reservations

Theodore B.

Exchange and other

The firm of Schaffer & Co. has been dissolved

TELEPHONE
-

Bonds

Russell W. Schaffer

Atmosphere

CO.

1889

Leading Stock and Commodity Exchanges
115.BROADWAY

Homelike

•

Request

Spacious Rooms

•

•

ESTABLISHED

State, County, Municipal and Revenue

Central Location

•

•

J. R. WlLLISTON

•

Specializing in City oj Philadelphia Issues
•

Capital appreciation prospects of about
20% to the call price.
on

Dealers in

discriminating

7%—

dividend.

Quotations and Analysis

Building, Philadelphia 2, Pa.
LOcust 7-3646

Corporation

7-7500

of

why a Fund should not be acting as a
spearhead in attacking inefficient managements and policies. The
principal one that comes to mind is that the investment managers
stockholders' money if they spent their time in quixotic pur¬
suits of correction of wrongs in individual cases. It is much better

had not signed

on

on

reasons

own

last

Continued

as

certain
supervision to
accept

leads

The

in Galveston sometime in May.

lighter, autos wouldn't be fair to dealers or employees of the

different divisions.

stockholders

lished in this space

Co., San
Secretary-

Beckett, Jr., First Southwest Co.,

quarter—provided

National Production

fulfill

Treasurer.

Committee

will be allowed to make about

makers

They
from
from

William

Chairmen.

-

e

to

expert collec¬
(voiced in our

MR. AVERY AND THE FUNDS").

&

i

n

alert

as

of May 3, last, "THE
STOCKHOLDERS' MEETING,

r-

Clung
K

of the current week it was reported that auto
1,200,000 cars in the third

Monday

On

\

to

the

on

column

Mc-

bocker

Dana

tive

B.

a

amounted

be

responsibilities

Dallas, and

Waldo

stick,

use

June.

Copper use
durables, including automobiles, is slated to get

for all consumer

a

industry—.the executive of¬
ficers of Blue Ridge and "M. I. T."
—to our suggestion that the Funds

National Bank

durables other than

consumer

ordered reduced by 30% from pre-Korean levels.

was

second quarter,

cutback,

of steel in

Funds

ensuing

R.

members

It

from two eminent authorities in the Mutual

for

metallics

have cut their metallics mix to 20% pig iron.

following communications embody important

bert, Jr., First

for

that

The

reactions

year.

year

adequacy of future

been

Stockholder Relations of Investment Funds

on

Houston,

the

pig iron supplies for the
merchant trade is increasing, says
"Steel," the weekly magazine
of metal
working the current week. This is giving rise to renewed
talk of possible early
application of formal allocations though no
move

More

Un-

Chairman

unemployment insurance, the
latest recorded week shows
virtually no change from the previous
period, but a sizable decrease below the level of last year. '
Concern

By A. WILFRED MAY

=

its

d e r w o o d,
Neuhaus &

manufacturing last week reflected an increase
in output, but a fractional
falling off in steel production had the
effect of bringing over-all
output to a point nearly even with the
week preceding.
However, nation-wide industrial output displayed
a

at

elected

Dana T. Rich¬

Some lines of

ago.

Texas
Bank¬

Madison Ave., at

54th St., New York 22

as

of May 31, 1951.

16

5

6

The Commercial and Financial Chronicle

(2346)

increase amounted

Department Store Outlook in 1951
By MALCOLM P.

McNAIR*

4j

Lincoln Filene Professor of Retailing, Harvard University

^

Market expert, after discussing LIFO versus FIFO methods of
inventory valuation, reviews aggregated operating results of
leading department stores, and estimates Fall profits in 1950
were at least 2% times as great as Spring profits. Says productivity of personnel improved very slightly in 1950, and
little help was obtained by larger stores from greater efficiency.
Finds soft goods business in doldrums, while early strength
in general consumer demand in 1951 has not been maintained.
Foresees resumption of inflationary pressures and tighter raaterials supply. Predicts 1951 dep't store sales will be higher.

£
|

,

I
Is

I,

|
£
|
^

Service Life Insurance dividends.

figures of 53% to 58% for smaller
the difference of course
tories.
Then, at the end of 1950, reflecting a substantially higher
with the much higher physical degree of division of labor ih the
inventories because of the accu¬ larger enterprises.
Under these
in the aggre¬

gate to 4.7% of the FIFO inven¬

In July, as a result of the outbreak
of Korean hostilities, department

concerns,

mulation of goods during the year,
the LIFO valuation was only 0.4%

below the FIFO figure.

theless

6.9%.

There

were

this

least

at

expected that dollar sales per
salesperson should be much larger

about 3%. Since

ference

at the end of 1950 was still nega¬

tive.

end

season

larger

was

still

concerns,

in

favor of

the

against

$13,900

In other

they

of

the

Never¬
spring

ahead by only
inventory adjust¬

were

the most part been

ments had for

completed during 1949, the spring
witnessed

1950

of

downs and

fewer

mark-r

consequent improve¬

a

ment in gross

margin. At the same
rate was held iri
check and even pulled down frac¬
tionally. Therefore, at the end of

time, the

sales per total employee; and here,
although much narrower, the dif¬

two

in which
the cumulative LIFO adjustment
group

jumped 30%.
the

at

circumstances it is naturally to be

In other
words, there was some tendency in the stores having a lower ratio
physical increments to inven¬ of salespeople to total employees,
tory to offset price advance. As a and this was clearly the case in
result, LIFO profits before taxes 1950, the two contrasting figures
for this group of firms were 6.2%
being $34,000 and $24,500.
The
of sales as against FIFO profits of real test, of course, is the dollar
instances in

sales

store

for

*

Thursday, June 7,1951

...

the

expense

half

first

the

of

fiscal

year

1950, department store profits be¬
fore taxes/though relatively mod¬
est in amount, had bettered the
rather drab performance of the

words, the required $13,400. Similar differences ap¬
LIFO Results
in so many different ways that it writeup of inventory at the begin¬ peared in net dollar sales per man
ning of 1950 was not fully offset hour. Although transactions per spring season of 1949 by roughly
impossible to make any
There has been a great deal of was
by the lower LIFO value at the salesperson were notably higher 50%.
interest in LIFO.
There were 41 worthwhile comparisons.
encf of 1950.
In other words, for the larger concerns, there was
In August and September, de¬
companies which submitted re¬
Perhaps the best comparison is these two firms presumably had
nothing to choose between the two partment store sales pushed up
ports to us both on LIFO and on afforded by the figures of 17 de¬ a
slightly higher taxable income groups when it came to number of 18% and 11%, respectively, under
FIFO.
This partment ' and
specialty
stores on the LIFO basis than on the transactions
per total
employee, the impetus of consumer "war
number
does reporting
on
a
January, 1941, FIFO basis for the two years 1949 the figure
being 3,600 for both scare" buying. The rather vio¬
not
by any LIFO base for all three years, and 1950 taken together.
>
•
groups. A very slight advantage lently
inflationary tendencies of
means com¬
1948, 1949 and 1950.
For these
Ayas manifest for the larger firms this
period beginning in July,
Results by Federal Reserve
prise all
the concerns there was relatively lit¬
in transactions per total man hour,
1950, were attributable not to ac¬
stores
Districts
which tle difference in LIFO and FIFO
but the difference was too small tual
government spending but to
at the present profits in the year 1948.
In the
Earnings before taxes were td carry any weight.
Tfye conclu¬ anticipation by consumers, retail¬
time
are
on
year 1949, however, with falling
highest in the Philadelphia Fed¬ sion, therefore, is that the larger
ers,
wholesale distributors, and
the
LIFO prices, " the
LIFO
adjustment eral Reserve District, next high¬ retail
enterprises with their more manufacturers. Consumers antici¬
basis, because added approximately $4.7 million est in San Francisco, and lowest refined division of labor did not
pated merchandise scarcities (pre¬
at
the
time to their FIFO profits of $33 mil¬ in the Boston district.
A greater
really show any greater efficiency maturely, as it turned out) and
when we were lion; and then, in the year 1950, rate of
sales increase and a more in their use of
personnel than did higher prices. Retailers, distribu¬
rising
prices,
the
LIFO favorable gross margin percentage
obtaining re¬ with
the smaller concerns.
tors, and manufacturers of con¬
ports a con- adjustment subtracted $4.1 million accounted
for
the. better
per¬
In .spite of the fact that the av¬ sumer
goods anticipated greatly
from the FIFO profits of approxi¬
s i d e r able
formance in
San Francisco;
as
number of mately $51 million.
The equaliz¬ between Philadelphia and Boston, erage value of "the sales transac¬ increased demand, higher prices,
tion was greater in the big stores, and eventual shortages of mer¬
f irms sub - ing effect of LIFO may be seen in
the difference lay principally in
Prof. M. P. McNair
the measure of payroll expense chandise.
Both consumer credit
mitted
their the figures for net gain before the'
expense rate, Which seemed
did not reveal any advantage for and utilization of bank credit by
figures to us taxes. ; For 1948, there was little to be
arbitrarily, affected by the these concerns. On the contrary,
on the FIFO basis with the state¬
difference between the FIFO and
retailers, distributors, and manu¬
composition of the samples. Such' .their
percentage figures were" facturers grew at a rapid pace.
ment that
they were considering LIFO figures. In 1949, the FIFO factors as the size of city, size of
higher both for selling payroll The output of consumer goods was
LIFO, but had not yet completed profits - before taxes were qnly
store, .affiliation with ownership
and for total payroll, though; stepped upi and eventually stocks
their calculations.
*
;
I 4.63% of net sales as compared
groups, and operation of branches
strictly on payroll of salespeople began to grow rapidly.
In the
The LIFO reports which we re¬ with LIFO profits of 5.30%. Then, are much more
likely to exert as distinguished from total selling
meantime, many manufacturers,
ceived fell ijito three categories. in 1950, FIFO profits were -3.84% influence on
the
expense
rate
the large • companies particularly durable goods manu¬
First, there;-y/ere 29 reports of against LIFO of 6.30%. It will be thin is the accident of geographic payroll
showed to some advantage. Sinqe
facturers, in both the consumer
companies that were on LIFO noted that the LIFO profits for location.
" V
?
p /■'• /
■
% the number of transactions han¬
/
r
i
-J
•
r
f
goods and .capital goods categories,
the two years 1949 and 1950 were
with a January,
1941,-base.; Then
dled per toial employee was the anticipated that substantial plant
Comparison ofL Spring and Fall
there
were
12. companies
that only 1%. of sales apart, 5.30%
Same, and since the larger - con¬
versus 6.30%, whereas the
expansion would be required; and
FIFO
made
the shift, from FIFO
.,y'V; Seajsonsfr' /V
to
;r';' cerns wrote a higher average sales. thus a renewed business plant and
LIFO on a January, 1950, base. profits were more than 2% of
Normally, the fall season is the
check, one reasonable inference is? equipment boom got under way.
sales apart, 4.63% versus 6.8,4%.
(There were -substantially more
principal time for making profits
that the. average compensation per Consumer buying, however, fair
in this group, but not all of them After taxes the equalizing effect in the
department store business,
was
even
more
had completed their LIFO
evident,
since and the" marked change in the employee must have been greater tered perceptibly in October and
figures
for the larger companies. Another November as customers perceived
LIFO
in time to submit
apparently in many in¬ business situation which occurred
them.) Then, in
and broader inference to be drawn that there were no merchandise
addition, there were a number of stances either eliminated or re¬ after the middle of the year may
from the entire comparison is that scarcities and as the war news
the
application of
the have accentuated this
companies whose use of a Jan¬ duced
tendency in the
larger department stores with from the Korean front became
excess profits tax.
At the end of 1950.
uary,
In
1941, base had not been
any
event,
the
fall
■

,

,

,

the

fiscal

year
1950 the LIFO season produced
approved and who were, therefore,
greater sales in¬
shifting definitely to LIFO on a cumulative adjustment for this creases, higher gross margin,
group of 17 companies stood at an lower expense
January, 1950, base. For this last
rates, and anywhere
group the complicated problems average of, 25.8% of their FIFO from two and a half to six times
of absorbing the old'LIFO reserve inventories,
as * compared
with as
many dollars of earnings before

-and

making

necessary to
base
*

were so

An

the

go

on

adjustments
a

LIFO

new

difficult and handled

address

31st

the

by

Annua!

Professor McNair at
Convention of the Con¬

trollers'

Dry
June

Congress of the National Retail
Association, St. Louis, Mo..
5, 1951.
'

Goods

26.3%

in 1949 and 33.6%

For the 12

the

shift

of

1950,

base

LIFO

of

the

in

1948.

the

on

a

initial

course

For

did the

as

was

to

these

Productivity

January,
effect

of

increase

companies

Because

the

value

period
War

this ford

of

the

since

the

World

effective measure
of productivity. As might be ex¬
pected, the average gross sale and
the sales per employee, per sales¬
very

person,

per

selling

man

increases
fell off

back
no

a

man

up

hour,

and

per

hour, all displayed
through 1948, then

little in 1949, but came

strongly in 1950. Although
importance can be at¬

great

tached to these dollar

changes, it
is just conceivably significant that
the relationship of salespeople to
total employees, which has fallen
steadily since 1945, turned slightly
upward in 1950.

The

evidence

for

increased

of

a

an

cited

appraisal of the out¬

As the

1950

fiscal year opened,

still

by the Chinese Communist

invasion of Korea, and in January

1951.

this

sales

hoped for, but

just before Christmas itself the
buying tempo picked up under
the impetus of renewed fears ex¬

briefly

Review of 1950

,

Early Christmas
come with the

rush that bad been

review of the year 1950 and
to

not

did

business

most of their

I should now like to turn

favorable.

more

smaller competitors.

change in
of

division

yet achieved any

real advantages over

dollar over this

end

elaborate

not

look for the year

II, dollar figures do not af¬
any

have

then

Personnel

of the rapid

of

more

to

spring season.

companies that made
LIFO

ending inventory valuation for

1949.

taxes

their

labor

of

wave

scare

buying

slightly

During this second half of the

below the corresponding month of

fiscal year, markdowns continued
to be below the 1949 experience,

were

running

new

pushed department store sales 33%
ahead of January, 1950.

1949, and the performance of the
first quarter was not impressive,

confirming the pattern which had
characterized early spring busi¬
ness for several preceding years.
By May and June, however, sales
increases

over

the

same

months

of the

and the cumulative markon moved
up

fractionally.

In the meantime
had begun to

the dollar expenses

forge

particularly

ahead,

the

last

three

the

year.

or

Hence,

during

four months
even

preceding year again were
being registered, owing to the in¬

overall 6.5% rate of sales increase

fluence

for the year

come

pf

higher

consumer

in¬

the drop in the

Continued

augmented by the National

on

All of these shares having been sold, this advertisement appears as a matter of record Only.

NEW ISSUE

marily in the data for sales tran¬
sactions.

Following the

war

per

employee and
off

as

49,000 Shares

the

of sales transactions
per

salesperson fell

Teleprompter Corporation

stores shortened hours and

Common Stock

sought to restore their .standards

.

of service. Thus for the three years

1947, 1948, and 1949 the number
INVESTMENT

BANKERS

of sales transactions per
stood
at
only 3,400

Established 1925

Members New York Stock Exchange and Other National

Exchanges

UNDERWRITERS and DISTRIBUTORS
of. INVESTMENT SECURITIES
BROKERS of BONDS,

Private Wires

•

STOCKS, COMMODITIES

Home Office: Atlanta




•

Phone LD-159

against

3,800

in

1945.

employee
annually

Price $5.00 per

Share

Then* in

1950 the number moved up * to
3,600, and/of possibly more sig¬
nificance, the transactions per man
hour and per selling man hour
likewise manifested a slight up¬

turn.

Among the larger stores sales¬
people constituted only 41% to
43% of total employees as" against

total

page

productivity must be sought pri¬

number

of

with the

L. H. Rothchild & Co.

Coffin, Betz & Co.

52 Wall Street

123 South Broad Street

New York 5, N. Y.

Philadelphia 9, Pa.

June 6. 1951

14

yolume 173

Number 5018

.

.

.

The Commercial and Financial Chronicle

(2347)

In

this "Radioactive Materials Room" at
Clm'slcr

designs
rubber

ATOMS

The

men

in the

picture

active automobile

are

handling "hot"

parts. That's the

reason

or

radio¬

for their

long-handled tools, the radiation
by the

man at

exposure meter held
the right—and their caution. It's all

part of a new kind of research at Chrysler Corporation.
Our

engineers send engine distributor points to

the U. S. Atomic Plant at Oak

they

are

a

Ridge, Tcnn., where

made radioactive in the famous Atomic Pile.

Returned to Detroit,
in

standard

though in

a

"hot" point is mounted

distributor, and given

your car.

Practical

a

hours of

OAK

some

.

RIDGE

But in

radioactive atoms




wear

TO

enough

a

few minutes of this
test,

are

In

this
way, our engineers find out where wear
first starts, and how and
why, and thus learn how
to

develop improved points that will
without
replacement.

run

•

tests,

guides research

Chrysler Marine & Industrial Engines

•

much longer
-

using "hot" piston rings,

bearings and the like,

stronger metals

.

.

.

better

DETROIT

lasting parts for

cars

and other vehicles, and improved

transferred from the "hot"

arc

helping

us to

gears,

develop longer-

ways

of lubricating them.

Chrysler Corporation
in this

peaceful

use

was an auto

industry pioneer

of atomic energy. It's

one more

example of the practical imagination that leads
directly to the fine performance and long life of the
products

we

make. And another

experience and skills

are

reason
why our
always ready for a wide

variety of challenging jobs—from cars and trucks and
military vehicles to industrial engines, heating and
cooling systems—and even railroad freight car trucks.

at
PLYMOUTH,

Airtemp Cooling, Heating, Refrigeration

COME

point—enough to be measured accurately by sensitive
Ceiger Counters.

Similar

many

.

engine operation for points to

to be measured.

test run as

Ordinarily it takes hundreds of

IMAGINATION

FROM

Laboratories,

smoother-running, longer-lasting parts have their beginning. Note the protective lead-andgloves and aprons, and the thick lead box in the foreground where "hot"
parts are safely stored.
.

Dodge Job-Rated Trucks

DODGE,
*

•

DE

SOTO

and

CHRYSLER

OiHte Powdered Metal Products

'

•

CARS

and

DODGE

Mopar Parts & Accessories

•

TRUCKS

Cycleweld

\

8

The Commercial and Financial Chronicle

(2348)

place

mer

Build

safely

No

knows whether

one

another

$he next few
Will not start

World

Good

this

within

was

not. Russia

years or
one

Her

summer.

must be

crops

gathered

and

the rivers fro¬
zen

first.

waited

not

so

would

be

common

bombing.

War

War

the

III,

de¬

and

Security

Fundamental

pendent upon
bridges.
The
same
policy
applies to

and

War

threat

of

family of well-educated and spir¬
itually-minded children. See that
your

character. From

mines

engineering and business profes¬
sions, or the essential trades. In
other words, invest in education.

under¬

war

security

a

certain
character
Russia.
The traits, such as honesty, for in¬
Roger W. Babson
critical
time
stance, are fundamental for pros¬
will,
not
be perous industry, commerce and
this summer but late fall and investments. Hence, our churches,
winter. If Russia does not attack schools and homes try to instill
CHICAGO, 111. —Aim, Kane,
this winter, it is reasonable
to character assets into our youfh. Rbgers & Co., 39 South La Salle
believe we will have some more Security
in
peacetime depends Street, announces the association
years of cold war.
primarily upon character and the with them in their Trading De¬
Real security cannot be obtained development of the very factors partment of Edmund
G. Brady,
which
military
service who was formerly associated with
by military force or by moving of life
out of larger cities. There are many tends
to destroy.
Hornblower
&
Weeks
in their
We criticise today the criminal Sales Department for the past five
cases in history where
the mili¬
underworld which has been un¬ years.
tary force itself has turned against
the government and taken over covered by the Kefauver Crime
the country under a dictator of Committee. We deplore the ex¬
•
its own. Hence, in building air¬ posures which Fulbright's Com¬
planes, tanks, and other imple¬ mittee has shown up in connection
standpoint,

Aim, Kane Adds

„

...

Brady to Staff

,

Louis Kraus Joins

warfare

of

ments

we

may

equipping Revolutionists
own country.
The

Inflation

Another possible

in

with

be

Enemy
enemy

of

se¬

,The

World

certain

other

countries.

The

Spanish

Civil,

-

wretched

ditions today are due
-

Kraus

mind

but

World
but I

what

War III

am

economic

sure

For

would

"win"

are

if it should

come;

we

DETROIT,

Invest In

Schultz

has

obscot
Detroit

changes.
Moreland

as

a

sum¬

stocks traded

Than

a

Decade

of

Brochure

—

common

the New York Curb Exchange which have
for 10 years or more—New York Curb Ex¬

on

paid dividends

change, 86 Trinity Place, New York 6, N. Y. Also available
is a booklet showing the Curb
Exchange tickbr network.
Graphic Stocks—January issue contains large, clear reproduc¬
tions of 1,001 charts complete with dividend records for the
full year of 1950, showing monthly
highs, lows, earnings,

capitalizations, volume on virtually every active stock on the
New York Stock and Curb Exchanges—single copy $10.00;
yearly (6 revised issues) $50.00—special offer of three edi¬
tions of Graphic Stocks, 1924 through 1935; 1936 through 1947
and up-to-date current edition, all for $25.00—F. W. Stephens,
William

15

Street, New York 5, N. Y.

"Information Please!"—Brochure, explaining about put-and-call

options—Thomas, Haab & Botts, 50 Broadway, New Y'ork 4,
New York.
Latin-American

York

Business

National

Chase

Highlights

Quarterly

—

digest

—

Bank, Pine Street, corner of Nassau, New

15, N. Y.

Market

Outlook—Analysis—Stanley
Street, New York 5, N. Y.

Natural

Gas

News—Current "data

Heller

Co.,

&

Pine

30

Arkansas-Western

on

Gas,

Commonwealth Gas, Delhi Oil, Hugoton Production, Kansas-

Natural

Nebraska

Kerr-McGee

Gas,

sissippi River Fuel, Mountain Fuel
<fe

Industries,

Oil

Supply, Petroleum Heat

Union

Gas, Southwest Gas Producing,
Transmission, Texas Eastern Transmission.
New

&

Mis¬

Power, Republic Natural Gas, Southern Production, South¬

ern

York

City

Stocks—Special

Bank

Tennessee

Report—Laird,

Gas

Bissell

Meeds, 120 Broadway, New York 5,.N. Y.

Outlook—Bulletin—Uno
York 5,

Equities,

Inc.,

Street, New

Pine

30

N. Y.

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

parison between the 30 listed industrial stocks used in the
Dow-Jones Averages and the 35 over-the-counter industrial
stocks used in the National Quotation Bureau Averages, both
as

to

yield and market performance over an 11-year period—
Inc., 46 Front Street, New York

National Quotation Bureau,

4, New York.
Philadelphia Bank Stocks—Comparison of 10 largest Philadel¬

phia banks—Stroud & Company, Incorporated, 123 S. Broad
Street, Philadelphia 9, Pa.
Profit

Sharing

been

—

Co.,

Herbert

Plans for Corporations—Bulletin—The

Parker

added

to

the

and

was

&

analyses

Stock

formerly

Co.

Ex¬

with

of

Railroad

Income

Also available in

New York 5, N. Y.

is

list of interesting low-priced

a

Oil and

Sinclair

stocksi

Consolidated

Hollinger

available.

Gold Mines are also

&

Midwest

He

Brief

Industry—Analysis—Francis I. du Pont &

Wall Street,

1

"Market Pointers"

H.

Co., Pen¬
Building, members of the

place in some small agricultural
community 60 miles from a vul¬

city. Use this

Mich.

staff of Titus-Miller

liable to be bombed. Buy

Dividends for More

Railroad Equipment

Chronicle)

to The Financial

nerable

would then lose

security.

pleased

parties the following literature:

Corporation, 200 Berkeley Street, Boston 16, Mass.

Titus-Miller Adds

security, locate where you

not

Mr.

to the break¬

a

we

the firm

analyst.

formerly with Marx &

was

(Special

to

Pine

Co.

con¬

turned away

What

investment

an

as

with

associated

become

World War II.

of

30

that Louis J. Kraus has

announces

ing down of character, caused by

these countries have
from economic secu¬
rity for temporary military secu¬
rity. There is no doubt in my
people

Co.,

&

Lauer

Stern,

Street, New York City, members
of the New York Stock Exchange,

and

American

World War I. The

War II.

might be said of France

same

and

and

that

hear

tory, we will find that the same
conditions followed the Mexican,

of

War I

We

Stern, Lauer & Go.

gov¬

graft and inefficiency. We wonder
what the reason may be. If we
will turn back the pages of his¬

preventing—are
encouraging. England "won" both
World

other

Washington is honeycombed with

curity is inflation, which the mili¬

tary—instead

agencies.

ernment

our

and

R.F.C.

the

send interested

should be good
the
long
pull,

for

investments

Your

Bonds

Government

understood that the firms mentioned will be

to

although they will fluctuate with

might

we

way.

It is

safe from bombing

I,

same

Recommendations and Literature

stocks of companies

children are taught not only,
honesty and law-abid¬
other investments might be worth
ance,
but also a sound religious
only 30 cents on the dollar as our
faith which will stand by them
country would be burdened with
a
terrific
debt.
Therefore, use when trouble comes. Furthermore,
train them for some specific line
your influence for World Peace.
of
work, such as the medical,

their

troops

from

safe

local

industry,

until

that

in

up

money,

Korean

rivers froze

is

can

you

your

prosperous

World

end

Communists

the

World

very

into

Chinese

over

The

in

stock

England general business conditions.. In
with her the case of corporate bonds or
Colonial
possessions
and
her preferred stocks, you should buy
worldwide holdings of shipping, only "convertibles."
The most important
need for
insurance and other stocks. Today,
England is broke. Her people have security is to invest in good health
and character—together with a
no economic security. If we enter
Before

will

we

War

buy
if it

bank

bonds or preferred stock. Says if Russia does not attack this
winter, we can expect to have some more years of cold war.

have

whole is excellent and

a

problems in obtaining financial security
against effects of war and inflation, and suggests locating in
some small agricultural community and purchase of convertible
1

Dealer-Broker Investment

during the next panic.
banking situation as

The nation's

Mr. Babson discusses

;

up

vestment

By ROGER W. BABSON

Thursday, June 7, 1951

f

protection.

a

as

bank deposits in medi¬
um-sized, safe
cities
for rein¬

Making Secnie Investments

jH

and

.

.

Bonds—Analysis—Vilas

Street, New York 5, N. Y.
Stocks—List of suggestions

49 Wall

Hickey,

&

investment

varying

for

Selected

objectives—A. M. Kidder & Co., 1 Wall Street, New York
5, N. Y.
Storm
mour

Shelter Investments—Study—Laird

Timing Factor—Explanatory

folder plus free samples of com¬

plete service on stock timing—$1.00—Dept. B.,
tute. 126 Lexington Avenue, New York 16, N.

$5,300,000

*

*

Air

148 State Street,

9, Massachusetts.

Boston

and Pacific Railroad

Analyst Insti¬
Y.

*

Corp.—Analysis—Raymond & Co.,

Aerovox

Chicago, Milwaukee, St. Paul

Reduction—Bulletin—Abraham & Co., 120 Broadway, New

York 5,

Also available in the same bulletin are data on
Ginger Ale, Firestone Tire & Rubber, Minneap¬
St. Louis Railway, Northern Natural Gas, Remington
N. Y.

Canada Dry
olis

&

Rand, and Walworth Co.

Equipment Trust, Series NN
Equipment Trust Certificates

.

Corp.

Viscose

American

Rhoades &

2Vs%

and Company, Ne-

Building, Wilmington 99, Del.

—

Memorandum

—

Carl

..

7

Continued

r

on

(Philadelphia Plan)
To

mature

To be

$265,000 semi-annually December 1, 1951

1

•

Priced

to

yield 2.20%

to

•

•'

>

•

•

1

•

We
•

.•

7

•

3.00%, according to maturity

The

Offering Circular maybe obtained in

such

of the undersigned

and

other

any

dealers

are

pleased to

may

lawfully

EDGERTON, WYKOFF & CO.,

offer these

LOS

is circulated from only

securities

in such

Los

WM. E. POLLOCK &,

CO., INC.

accurate

INCORPORATED

service

Securities

I

Exchange

from

in

all

Coast

Over-the-Counter
to

Coast

INCORPORATED

THE ILLINOIS COMPANY

FIRST OF MICHIGAN

Troster, Singer & Co.
Members:

N.

Y.

Security

Dealers

CORPORATIQN
74

GREGORY & SON

Stock

A. G. BECKER A CO.

OTIS & CO.
(INCORPORATED)

Angeles

ANGELES, CALIFORNIA

state.
Fast

FREEMAN &.COMPANY

the installation

OF A DIRECT PRIVATE WIRE TO

HALSEY, STUART &. CO. Inc.
R. W. PRESSPRICH A CO.

announce

by the Interstate Commerce Commission.

state in which this announcement
as

McMASTER HUTCHINSON &. CO.

Association

Trinity Place, New York 6,

Telephone:

HA

2-2400.

Teletype

Private

wires

NY

N. Y.

1-376;

377;

378

to

Cleveland—Denver—Detroit—Philadelphia—Pittsburgh—St.
June 5. 1951




page

.

Members

Issuance and sale of ilie.se Certificates arc subject to authorization

avail-

June 1, 1961, inclusive

guaranteed unconditionally as to payment of principal and dividends by
Chicago, Milwaukee, St. Paul and Pacific Railroad Company

•

•

to

Loeb,

M.

Co., 42 Wall Street, New York 5, N. Y. Also

Louis

13

Volume 173

Number 5018

.

.

.

The Commercial and Financial Chronicle

(2349)

9

HIGHLIGHTS
for the Year Ended March 31

From the annual

1951

1950

$95,746,000

$68,410,000

8,460,000

2,713,000

>

Net Sales

REPORT

OF

Net Income after Taxes

Earnings

BEAUNIT MILLS,

per

Dividends

.

.

.

6.86*

Common Stock

on

Working Capital

and subsidiaries

.

Share of

Common Stock

INC

.

Net Fixed Assets

2.17

1,555,000

37,408,000

35,358,000

....

14,870,000

37,670,000

....

600,000

18,388,000

29,335,000

•

Net Worth

......

*Based

Excerpts from President I. Rogosin

During the
tive

leading producers of

facilities have been constructed at
double

After completion of the projects under

rayon yarns.

EXPANSION
our

American

Additional

Bemberg plant

production from 14,000,000 to 28,000,000 pounds

to

annu¬

ally. A substantial part of this increase will be in staple fiber,
commercial

production of which will begin this Summer. This

staple, which has
and evaluation,

of fibers.'

gone

through

an

yddeiil

an

tile and tire yarn.

important role in the field

d.-i'd,

have

plant, adjacent to
to

our rayon yarn

are

constructing

plant at Coosa Pines, Alabama,

produce annually 36,000,000 pounds of viscose

The power

sufficient
new

rayon

tire

yarn.

and water facilities in existence at Coosa Pines have

capacity to

serve

both the present and the

new

unit. The

plant should be in operation next Spring and in full production

in the Fall of 1952. We

and

new

a

are

confident that

we

shall have

a

ready

profitable market for its entire production.

Our Technical Staff has succeeded
continuous

American

spinning

process,

in

adapting

production

per annum.

designed for this

RESEARCH
place in

new

purpose

tire yarn

in

use.

New machinery which

is being manufactured, and will

plant.

ferent
as

well

Research commands

efforts, and

our

tantial. This

We

of the

We believe this to be the simplest, best, and most

be installed in the

and will be

TIRE YARN EXPANSION

way,

economical continuous process now
we

as one

new

extensive period of rigid testing

promises to play

and fibers

rayon yarns

account for

rayon yarns now

maintaining the position of the Company

are

approximately 130,000,000 pounds of

BEMBERG

AMERICAN

year.

Message:

s

and fiber operations. Sales of

rayon yarn

60% of annual volume. We

will be

number of shares outstanding during the

average

the Company has taken significant steps in further expanding the produc¬

year,

capacity of its

over

on

phase of

our

our

a

prominent and highly active

expenditures in this respect

adapted to changing conditions

as

possibilities of the synthetic fiber field
as

are

sub-

operations will be vigorously continued

they arise. The dif¬
are

being explored,

continuing activities directed toward the improvement of

quality and productive methods.
The introduction of

our

Bemberg staple fiber and the installation

of the viscose continuous process

tangible and significant results of

in the
our

new

tire

yarn

plant

are two

research activities. These two

developments have broad significance to the

rayon

industry

as a

whole, and promise to contribute importantly to the competitive
our

"Hofmann"

developed and in operation at

position of the Company,

r

our

Bemberg plant, to the continuous spinning of viscose tex-




BEAUNIT
\

RAYON

YARNS

TEXTILE

AND

FABRICS:

FIBERS:
450

261

MILLS, INC.
FIFTH

SEVENTH

AVENUE,

AVENUE,

NEW

YORK

NEW YORK

16, N. Y.

1, N. Y.

\

The Commercial

and Financial Chronicle

with

in per¬

changes

major

no

Pennsylvania Brevities

and West

Virginia

Maryland,

of

Thursday, June 7, 1951

Milwaukee Bond Club

Virginia.

sonnel.

Securities

Bankers

Similar

if

if

if

interests
include Bonwit
(of Philadelphia); J.
E. Caldwell & Co.; the Loft Candy

Plant

Corp.

Expansion in

Annual Field Day

Penna.

Teller & Co.

Pennsylvania
leads all other
At a special meeting of stock¬
states in the amount of industrial
holders to be held July 25, ap¬
Corp. and City Stores Co., which, plant expansion aided by the gov¬
of
proval of a charter amendment
ernment
through
tax
benefits,
Local
234,
Transport
Workers will be sought whereby 78,507 of in turn, owns Lit Brothers.
*
if
if
according to figures released by
Union (CIO), voted last week to
presently authorized but unissued
the
Defense Production Admin¬
accept
Philadelphia Transporta¬ shares of $5 preferred stock, no
American Stores Co.
istration.
The Keystone State's
tion
Co.'s six-point program in
par, will be redesignated as $100
American
Stores Co., grocery
settlement
of a dispute arising
participation amounted to 15.9%
par
value preferred stock, divi¬
chain, reported record sales and of tne national aggregate, wi.a
from the company's announcement
dend rate unspecified.
Rights of
earnings for the 52 weeks ended
of conversion to one-man opera¬
present
preferred
stockholders March 31. Sales rose 12.8% to approximately one-eighth of the
totai centered in
the metropoli¬
tion of trolleys on certain routes.
will be unaffected.
$469,771,090 and net income in¬ tan areas ox Philadelphia and
Prior to the balloting, the union
*
*
❖
; ';;'
creased to $7,114,748, or $5.46 per Pittsburgh.
5
had threatened a complete tie-up
if
if
if
share, compared with $6,743,520,
New Orders for Baldwin
:
of transportation facilities if the
Baldwin-Lima - Hamilton Corp. and $5.18 per share, respectively,
company proceeded with its plan
Shifts Investments
has
received
orders
from
the in the previous fiscal year.
even though the existing contract
Philadelphian-managed
Well¬
Pennsylvania Railroad for 14 dieprovided specifically for the ex¬
ington Fund, one of tne country's
and 20
tension of one-man operations and sel freight locomotives
Out of Moth Balls
largest
open-end balanced-type
also
contained
a
"no
strike" diesel switching locomotives at an
GLASSMERE—Negotiations are investing companies, reports tnat
aggregate cost of approximately
clause.
it has substantially decreased its
under way between the Navy and
The amicable settlement was the $9,000,000.
investments
in
volatile,
"war
Company has also received a Aluminum Corp. of America to
result of late conferences between
S. reactivate a million dollar alumi¬ stocks" since the end of March.
PTC and union representatives in $4,000,000 order from the U.
In so doing, realized
profits on
num powder manufacturing plant
the course of which the company Army Engineers for four 35,000
securities have amounted to $2,reassured the workers that, as a h.p. hydraulic turbines to be in¬ here which has been inoperative
stalled in the Old Hickory power since 1945.
Resumption of pro¬ 928,607 in 1951, with a further un¬
result of one-man trolley exten¬
realized profit on investments of
sion: (1) job security would not plant on the Cumberland River in duction, which may reach a ca¬
Tennessee.
The turbines, largest pacity of over 33,000,000 pounds of $12,707,904 existing on May 17.
be affected; (2) no trainmen hired
Portfolio additions
have been
in physical size ever produced in "atomized aluminum" per year, is
before Jan. 1 would be laid off;
this country, will be built at Ed- expected by fall.
The product is made in chemical, drug, natural
(3)six days work each week
used in torpedoes, bombs of the gas, oil and utilities shares.
dystone, Penna.
would be available to trainmen
if
' '■ it
'
if
v
"blockbuster" type and as a rocket
who wanted it; (4) those who pre¬
-

..

.

(2350)

10

PTC Union Votes

"No Strike"

PHILADELPHIA—Members

field

Milwaukee

held

an¬

day and picnic of the
Bond
Club
will be

15

June

Friday,

Ocono-

at

Lake Club and the Ocono-

mowoc

Country Club.

mowoc

Free lunch

11:30

will be served from

a.m.

to

guest fee $10.00. Further

1:30 p.m.;

obtained from Otto
Marshall
Company,

details may be

Koch,

The

General
F. O.

„■

.

Wis.—The

MILWAUKEE,
nual

outing.

of the

Chairman

Breitengross, The Marshall

Company, and Albert J. Harbaugh,
Dalton

F.

Gardner

&

Co.,

are

in

charge of golf. Lyle W. Hamann,
Central Republic Co., and Thomas
H.

Twitchell, Jr., B. C. Ziegler &

Co./ will direct baseball. F. A.
Newton, Loewi & Co., is in charge

William T. Riley, Jr.,
Riley of Riley &

of cards, and
and

are

J.

Robert

Co.

in

charge

event.

a,special

of

;

,

j

Officers of the club are: Matthew

.

;

it

ferred

might

work

five days;

Profits

Oil

Gulf

Up

regular trainmen would be
PITTSBURGH — S. A. Swensrequired to transfer from present
rud, President of Gulf Oil Corp.,
depots, and (6) disagreements or
told stockholders at annual .meet¬
(5)

adjusted by

grievances would be
'

'

,

•

*

;

,

,

*

■

*

ing that company sales in the
quarter were 21% ahead of

Earnings have im¬
proved, he said, because of higher
sales volume and higher produc¬
tion although price advances have
not kept pace With increased costs.
He expects the betterment to con¬
tinue throughout the balance of
period.

1950

& Power Co.

Penna. Water

generating capacity of
Pennsylvania Water & Power Co.'s
facilities at Holtwood, Penna., is
to be tripled through the installa¬
tion
of
a
new
66,000-kilowatt
Steam

first
the

which is one of

United Gas
Improvement Co. stock
(55,000
shares) is expected to tender its
holdings in exchange for common
stock of Philadelphia Electric Co.
in accordance with the terms of a
voluntary plan filed by U. G. I.
larger holders of

the

with the Securities and

approved
Thomas

Pittsburgh

Steel

Co.

Schleiger,

Republic Co., Secretary-Treasurer.
Members of the Board
nors

&

of Gover¬

August L. Engelke, A. C. ■*

are:

Co.;

Harold

A. Franke,
H. Schuyler

Milwaukee Company;

have

French, Marshall & Ilsley Bank;
Charles W. Gerlach, Chas. Ger-

the
acquisition
of
by
Pittsburgh through

lach & Company;

,

William T. Riley,

exchange of securities.

to approval by

pricfr

Thomas stockhold¬

and

preferred

Phila. Bowlers to

one-third

Pittsburgh Steel.
Thomas Steel 4*4%

share common of
Holders

Commission.

of

Hold

the

addition,

G.

Steel

preferred will be offered an op¬
company the year but at a lesser percent¬
tional
exchange into Pittsburgh
Unscrambling TV Color
will modernize
and enlarge its age ratio.
stocks.
Preferred shares not so
coal recovery operations on the
Philco Corp. is not" waiting for
Stockholders,, approved an in¬
Susquehanna
River.
The two crease in authorized capitalization ultimate simplification or refine¬ exchanged will be called at 105.
if
if
if
projects with other lesser im- from 20,000,00 to 50,000,000 shares ment of the CBS, color televising
Purolator Products, Inc.
proyements and additions will in¬ of common stock. The declara¬ system. Eleven new television re¬
volve the outlay of approximately
The opening late this fall of a
just
introduced by the
tion of a 10d % stock dividend is ceivers
$25,000,000, according to John A. expected.
company
incorporate an adapter 40,000 sq. ft. plant at Ringtown,
if
"<«
*
vT
'
'■
Walls, President.
designed
to
convert Columbia's Pa., by Purolator Froducts, Inc.,
v-"
color signals into black and white. will render the company's 375,359
Plant Addition at Philadelphia
h""—
The adapter will also provide re¬ shares
of
outstanding
common
The Barrett Division of Allied
on
the ultra high fre¬ stock free of 'the Pennsylvania
We solicit inquiries in
Chemical & Dye Corp. has applied ception
for
certificates
of
necessity to quency bands about to be opened Personal Property tax.
to
telecasting
by ruling of the
E. & G. Brooke Iron
cover
$3,000,000 additional facil¬
Federal Communications Commis¬
ities for production of synthetic
Leland Electric
To Be Warren & Co.
sion. ',v.
phpnol at its Philadelphia plant.
On June 1, the firm name of
American Pulley
The substitution of nylon and
asbestos
for
and silicon Gay & Co., 63 Wall Street, New
copper
;
A. B. Farquhar
I-T-E Circuit Breaker Co.
steel normally used in the manu¬ York City, members of the New
PHILADELPHIA—At a special facture of condensers has been < York Stock Exchange, was changed
Bearings Co. of America
meeting,
stockholders of I-T-E developed jointly by Philco Corp.. to Warren & Co.
Riverside Metal
Circuit Breaker Co. have a^oroved and
the
Chicago
Transformer
Hi
urnnrnTii
ni mnnn o aa
increases in company's authorized Corp. The new method,is expect¬
In

unit.

Vice-President;
Central

Company,
Erwin

and

Subject Jr., Riley & Co., and Brenton H.
Rupple, Robert W. Baird & Co. .
ers, the agreement provides that
each share of Thomas Steel will
receive one-third share of 5^2%

an

Exchange

of

Thomas

and

Co.

Securities Exchange
Pennroad Corp.,

boards

shall

Best

Steel Companies Merge
The

no

^arbitration.
,

V- V,'.

"

propellant.

C. Allyn & Co., Inc.,

H. Pahle, A.

President; Otto J. Koch, Jr., Mar¬

•

Outing June

PHILADELPHIA, Pa.—The annual

banquet

Philadelphia

*

and outing of the
Bankers & Brokers

Bowling League will be held on
Friday, June 8, 1951 at the Sandy
Run
Country
Club.
John
W.(

Murphy of Hornblower & Weeks
will be installed as President of

,

for the 1951-52 season.
Philadelphia-Baltimore

the League

-

The

first

Exchange

Stock

Trophy

will

awarded to the team members

&

Hoffman
champions.

Walston,
1951

be
of

Goodwin,

*

•

HERBERT H. BLIZZARD & CO.
1421 CHESTNUT

STREET

LOcust 7-6619

Pennsylvania Water
& Power Co.

—

from

indebtedness

$l,5uu,ouo

10

25% of the pres¬
content, reduce manu¬

ed to save up to

$3,500,000 and an increase in pre¬ ent metal
ferred stock, par $100, from 15,000
facturing costs and permit opera¬
to 30,000 shares., Though no new tion of resistance coils at
tempersecurities have been issued nor
95
(iprrrpps
centigrade

Now Proprietor

Boston Investment Club
Dinner
ner

sole

O'Connor

proprietor
&

Co.,

135

of

Doyle,

South

meeting of the Boston Invest¬
Club will be held June 12

ment

CHICAGO, 111.—Leo J. Doyle is
now

Meeting

BOSTON, Mass.—The next din¬

La

Salle Street. Mr. Doyle has been
plans for their sale announced, the above previous limits.
steps taken place the company in a
V''v
' *
*
* i:r;r
'/i'-i President of Doyle, O'Connor &
position to obtain funds for ad¬
Co., Inc., since 1937.
I. R. C. Reports Gains
ditional
working
capital
when
and as needed. Present backlog of
PHILADELPHIA
—
Through
government and defense orders is April 15, sales volume of Interna¬
very large and includes jet-pro¬
tional Resistance Co. increased to

at

the Boston Yacht

Club at 5:30

speaker will be John
Middleton, of White, Weld & Co.,
who
will speak
on
natural gas
p.m.

The

stocks.
This will be the last

meeting of

the Club until fall.

.

Common
Free of Penna.

Stock

Personal Property Tax

components

aircraft
equipment.
pelled

This

1950

Company's

annual report

and

'■

'

reading for
interested in

makes interesting
investors

Company Will Carry On
An "or else" suit

■■■

"SPECIAL
for

income

SITUATIONS"
and appreciation.

stockholders

of

brought by 16

Philadelphia 3, Pa.

poration's preferred stock, or, in
the alternative, to bring about the
of

the

company,

was

rejected last week by Judge Rich¬
ard S. Rodney

A. M.

of

Court

Talon Inc.

Snellenburg

Common

Phila.-Balt. Stock

Pennsylvania Bldg.,

Exchange

Philadelphia

N. Y. Phone
COrtlandt 7-6814




sistors

manufacturers

had

shown

business of N.

the

year.

quired

a

Securities

main

The consideration

was

not

disclosed.
Albert M.
of

the

Greenfield, Chairman
of

the

announced

investment

that

the

business would continue under the
same

of

—

American

a

Stolk,

Can

Co.,

will
can-making plant at Le-

announced the

build

management for the present

a

company

STROUD & COMPANY
Incorporated

Cumberland County, with
capacity of 400,000,000 food cans

a

in

The new facilities will
fruit and vegtable growers

year.

serve

PHILADELPHIA 9
ALLENTOWN

•

PITTSBURGH

NEW

YORK

SCRANTON

•

LANCASTER

central Pennsyl¬
and the Appalachian areas

eastern

vania

comparison of 10 largest Philadelphia Banks

Plant

W., C.

moyne,

Board

company,

President

Send for

if

if

Goat Fodder

HARRISBURG

has

BANK STOCKS

Philadelphia.

in
sis

Snellenburg &

by Bankers

PHILADELPHIA

The company has ac¬
small plant at Downing-

New

one

week

ten¬

a

but that heavy
military orders were expected in
the third and fourth quarters of
dency to slacken,

Co. Sold

of Philadelphia's largest
department stores, was purchased
Co.,

Corp.

Samuel K. Phillips & Co.

for- re¬
from television and radio

PHILADELPHIA—The 78-yearold

Maintained in all

Harry A. Ehles, Vice-President,

facilities

last

Teletype
PH 375

Appeals in Wilmington.

Trading Markets

...

recently said that demand

town, Pa., to supplement its

Units

Preferred

Pratt Read Co.

Members

of the U. S. District

Greenfield 5s 1954

Leeds & Lippincott

.

Active

Pennsylvania In¬

the court compel
the payment of arrears on the cor¬

dissolution

Cambridge Bldg. 3s 1953

cents.

Inc., of Pittsburgh, who

dustries,

sought to have

BOENNING & CO.

compared .with
$2,in the like 1950 period.
Net earnings were 26 cents per
common
share,
as
against
18

$4,157,000,
548,144

'

and

4

yolume 173

Number 5018

.

.

.

The Commercial and Financial Chronicle

(2351)

A

placing of
equipment

Survey oi Business Problems

there is
of

By ROY A. FOULKE*

orders
and

armament,
Then,

second lag on

a

industry

defense

for

supplies.

to

the part
itself to fill

gear

contracts.

Complex mod¬
equipment require months
in the blueprint
stage, and mahy

Vice-President, Dun & Bradstreet, Inc.

ern war

Mr. Foulke reviews effects of Korean outbreak
segments of

and describes

our economy,

ping steps by which the defense

on

sequence

significant
of overlap¬

more

■-

civilian economy.

Finds requirements of present defense econdifferent from those of World War II, and stresses effect
of present defense orders being
superimposed on high volume

even

years

be¬

der -and the date of
sequence

omy

,

months and

tween the date of
placing an or-

becomes meshed into

economy

tion

of

with

delivery. The
in the prodiic-

of steps
modern

war

.

considerable

equipment,

War II.

In the first

building

our armed

place

we

are

ness

Concludes, basic problem is to
support existing price and wage freeze by holding down volume
of purchasing media.

uniform

peak of World War II.
ond place

we

are

the

at

In the

place

all-out war.

In the

Increased

durable

♦

actual

and

capacity

I would

.

like

to

divide

dress into four parts.

this ad-

In the first

Federal

our

It

the

©f

of

Korea and

our

fen

l'ar

until

to

of
overlapping

Roy

A. Foulke

steps by which
a
defense
economy

becomes
civilian economy
In the third part, I would like, to
outline what are the more imporinto

a

...

which arise
in this process of meshing a defense
economy
into a civilian
economy.v In the fourth part, I
would like to picture the under-

tant business problems

lying threat of inflation.
PART I

Has Happened

What

war,

(4) the

to

^han production during the de-

reasonable

life.

The

period and which would be

neces-

state

that
can

available,^ in

an

emergency,

to

used

more

in

was

bomber.
and

a

The B-17 is
of

range

production.

continental

heavy
24,700 pounds
1,750 miles.
new

of

tanks

10,000
60%

are

50%
tanks.

faster
Our

dustry, in the aggregate builds Its

B-36,

miles.

more

than

Our

new

a

a

new

War

the

seeking

105-millimeter

nation

a

,

^1S.

re.P°JJ*? *^,Pre.sl"

den* c!ated

steps by which the defense

econ¬

V1951, Charles omy is meshed into our civilian
Would be the great industrial caWilson, Director of Defense economy. Many have shifted in
pacity of this country rather than Mobilization, outlined the over- whole or in
part to defense pro¬
arme(j might.
But this indus**me element involved in these duction. Many will be stimulated
^rjaj capacity is dependent upon
nces- He stated that,
With to great growth from the profits
a sound
economy, which must not
fullest degree of drive and of overtime production. Many
be thrown out of balance by ex- unity> we can do this job-by 1953.
concerns will go out of business.
cessive costs for military prepathat date our readiness to en
All will feel the pressure of
rising
rations." The emphasis should be ter UP01} totat mobilization should costs
and higher taxes.
placed on the second sentence in be sufficient, and production, in
PART ffl
that
quotation, "But this indus- addition tp meeting military heeds,
trial capacity is dependent upon a should support a, civilian
ecOn-J The More Important Business
sound
Problems
economy which must not
' „or
above pre-Korean
I have outlined
be thrown out of balance by ex- levels.
So, we have approkibriefly what has
cessive costs for military prepa- mately two years of intense eco- happened
in
certain- important
rations."
A sound economy
segments of our economy since the
can^ no™ic mobilization ahead of- us,
world

domination,

,

it

have

months

eleven

;

the North Korean
wlrc<
Army rode their Russian tanks
southward across the 38th parallel
in the gray dawn of June 25, 1950.
Just about six months have passed
since Charles E. Wilson took the
oath of office as Director of Desince

passed

.

i

•

1

4-n

./*

Four months

Mobilization.

fense

.

TV.,

passed since Eric Johnston
Economic
Stabilization
Administrator. Any business Rip
Van
Winkle
who
might have
have

became

24, 1950, and
had failed to awaken until

fallen asleep on June
who

c°omp%reUhdend \he
iUUiy

in

our

*

-

-

changes

tremendous
a---

-

by factors other than "excessive costs for military prepa-

emergency.

rations"

ent defense economy are very
different from those of World

of the

vening approximate 11 months. I
like
to
enumerate nine

but

this

condensed

>.

view

chief of staff of the Ut

The. requirements of the

maintenance

by

omy

the

of

a

healthy

defense

This announcement is neither

Meshing

highest m our

J3-'

•

IS

workers

industrial
?1? ri" Z;,'
the (Vavhes
highest

wa2es

Le fhe

in

in

o^ histoiy.
our histoi
v

equipment

Dollar
Dollar

(6)

run-

are

manufacmanuiac

of
ot

sales
sales

turers, wholesalers and re,aih.rs
the highest in our history.

are

30,

1950,

the

Federal

actu.dl

tailers
iduers

are
die

wholesalers,

the highest in our
u«?
s

his-

deposits of com1
Uooirc
fhr hidhpst
in
mercial banks are the highest in
•

oro

°U(9) Loans
lu
^Thaf is

feom° the

in

an

nnr

hiciorv

impressive ar-

expenditures
for

tool

of

quarter of 1951 exceeded.
has

related

national

at the present rate

Almost

on

the

F<?timafp<;

costs

infpr-

many^ mx r
'

bowpvpr

rec™ntlv aDDea?ed inS
™*Uy

ducing

Foulke

at

the

Bankers Conference at the School of Com-

University of Wisconsin, Madison,
Wis., May 18, 1951.

tnerce,




as

nor a

solicitation of

an

raw

materials.

A total- of

materials, including rubber, co¬
balt, columbium, manganese, and,
tin, are covered by our stockpiling
program.

Our

ments

estimated to amount to

are

stockpile require¬

$9.7 billion at last February prices.
Oh

March

1

approximately

billion of these
on

the

hand.

No

stockpile

drawn upon.

Weapons
are

of

scarce

materials

stored;in

being currently

are

'

and

production

made from metals.

great

military

In

lines

period

a

industrial

and

Continued

on

page

offer to buy any of these Shares.
.

.

c

r.

I

■

Rights, evidenced by subscription warrants, to subscribe for these

uPward to a figure between $70-

shares have been issued by the Company to the holders of its Capital
Stock and will expire at 3:00 P.M. Eastern Daylight Saving Time on

'

,

~remind £!

bjmon

Qf

estimated

ex_

June 20, 1951, as more fully set forth in the Prospectus.

,

penditures of $5] „ bmion {or fis_ ;
.

$40 4

billion

are

for

Subscription Price $38

the

.on 1

assistance,

®y/tarv
utary
and

and

in

Share

the

<

:

economic

ana

economic
remaining

The several underwriters may offer shares of Capital Stock at prices

?40, b»lion *°r atomic
Stockpiling, defense production,5
defense
housing>
^ relatej :
",™s- " is. this aggregate: of
$51-8 billion

a

:

servkes

which

we

are

not lower than the

Subscription Price set forth above less, in the

case

of sales to dealers, the concession allowed to dealers, and not greater
than either the last sale or current offering price on the New York

Stock Exchange, whichever is greater, plus an amount equal to the
't
Stock Exchange commission.

m-

terested a."d n°t Just the $40.4;
service,

as

it

°

Copies of the Prospectus
*
■

i These

which

not

may be obtained from the undersigned only in States in
undersigned is legally authorized to act as a dealer in securities •<.

and in which such

Prospectus

may

be legally distributed.'

the

budgeted figures
so widely quoted.
These figt'ie result of the reclassification
by fhe gtaff of the Joint Com_

are

ures are

of data
mittee

are

which the

"

MORGAN STANLEY & CO.

of

Congress on the Economic Requoted in the "Report of the
Joint Committee on the Economic
Report
in the January 1951 Economic
Report of
the President," p. 32 <82nd
Congress, 1st
Session, Senate Report No. 201, March
1951).
and

June 6,1951,

$3.2

items w6re

($25 Par Value)

havp

na

the

73

offer is made only by the Prospectus.

;

that

port

Annual Commerce Conference and Spring

level

production of machine tools is the
problem of stockpiling and pro¬

Capital Stock

would

maintenance plateau of
$50-$55 billion a year for years to

is naturaUymn initial lag 1
of the bctwccn appropriations and the'

manv

of production.

same

a

,

itc

Mr.

and one-half years to fill

one

;

manifestations, is the Olby

defense

be on

is

.11

address

it has been generally
very recently, that

tbe aggrtega'e expenditures which

condition in its

At the

industry

Manufacturing
Company

hostilities

In other words, our current ecoin

entire

backlog of orders which will

a

take

the

The Yale and Towne

of

the armaments

^^n^li+inn

time

present

102,197 Shares

of

for the military

democratic countries of the world.

nomic

industry enjoyed the biggest
history, was the rate
order figure of the first

new

na¬

dprnmine

?u[ ^1S'°"rtmi'a-

five

the first quarter

as

In

•

Government

ail

h\ohc

outbreak

in Korea and

mPen°t"and

of commercial banks

quite

I \L«,

*An

war,

and re-

Demand

(8)

'

global

thouSht.

Dollar inventories of man-

(7)

Mfacturers,

over

were

first

Civilian Economy

romp

nrndnrtion

(5) Dollar expenditures for new

and

offer to sell

for

the

a Defense Economy With

a

For the fiscal year ending June

our
nower

1

plants

an

The

PART II

^
ar° 1116 Uoen.i1SAftereT952!tarrin\0lil-ou"t

^F^Iirhistorr
iZ'riv

during

1951

boom in its

War, and

with a civilian
Three important busi¬

until

only three of four
months of 1942, when the machine

economy
•

as

1950.

broken

In

tool

New orders

the

nation,

Siar^£p"ces:are the highest
1

defense

economy.

not

1942.

great

of

additions.

ecOnof

arm

tional security were $17.6 billion,

«f

pres-

outbreak of the Korean

the sequence of overlapping
steps
which take place in
meshing a

ca¬

machine

Army indicates the recognition of
utmost
importance
of
the

which have taken place
economy over the inter¬

would

be thrown out of bal^ 1° become fully prepared for any

course,

ance

of

of

.

of

own

the

received

times

,,

~

II,
was

quarter

<

Almost

end

tools

was

today which would deter

War

bottleneck

II

UP our armed forces gradually as recoilless rifles are mounted on
adequate equipment comes off the jeeps.
Our
40-millimeter
anti¬
assembly lines. In that order, the aircraft guns are being replaced
Collins, Chief of Staff of the U. S. "eeds for Korea and any possible by new 75-millimeter
SkysweepArmy, before the House Armed all-out emergency mesh with the ers.
And
guided
missiles
are
Services Committee in October, ability of industry to produce the
reaching the production stage.
1949.
At that hearing
General armament, the equipment, and the
Every industrial business in the
Collins succinctly stated, "Certain- supplies along with the reasonable nation is or
will be affected to
ly, if there is. any single factor necds of our civilian economy,
some extent by the sequence of

of further

source

World

powerful and

World

tools to increase its

own

pacity. Once it gets started, capac¬
ity can grow at a rapidly increas¬
ing rate, as each addition becomes

inter¬

the

weighs 102,500 pounds and has
range

in mind that the machine tool in¬

of

Our

the

kept

example, the

bomber,

planes, tanks,

machine tools they
need,
defense production move
along
at full speed. It must also
be

obsolete and out

now

of

can

standard

our

It weighed

had

of

complicated

World War II.

In World War II, for
B-.17

and (5) simultaneously building

only be based

is much

that

support the needs of all-out war,

sustained

a

forces

producers

electronic equipment, and
similar military items obtain all

mind that mate¬
rial for all divisions of the armed
than

switching from
military production
large-scale retooling.
Not

guns,

be kept in

economy. This viewexemplified by a statement made by General J. Lawton

sequence

meshed

sup¬

to

means

sound

a

point

the

describe

Mobilization

continued

realization

on

econ¬

like

would

of civilian

garrison

In
the
part, I

omy.

second

of Defense

the

the

de-

a

s e

in full-scale

the

sity of that integration must bring

decision to
create

of

adequate

those needed for currently scheduled output, but which would be

national

responsibility

needs

sequent

con

the

with

in

war

for

production-of

aadition of basic industrial capaintegrate the production of arma- city - which
will support high
ment,
equipment,
and
supplies levels oj. both military and ci-

outbreak

the

is

Office

economy

result

a

Government

the

plies of raw materials, (3) the addition of production lines for military goods -which are beyond

increased

defense.

of

as

of

expenditures, actual and potential, of the

part, I would like to outline brief2y what has happened in certain
sign ificant
segments

result

rect

v

must

adequate

—

goods,

civilian

ments started from

duction

of

Production

First is
the problem of increased
producion.
For most manufacturers of

and

third

present defense require¬
a level of
pro¬

our

the mobilization

manpower.

producing pri¬

marily for all-out readiness
not for

and

sec¬

overlapping, is higher than those of 1941.
On the other hand,
however, it

(1) the production of adequate
machine tools, (2)
stockpiling and

process.

forces, barring These three problems are the
prob¬
all-out global war, to
3,500,000 lems of increased
production, the
men and women and
not 12,000,channelling of adequate credit,
000 who were in

.

•

production of civilian goods.

:

problems arise in this

11

i

33

and Financial Chronicle

The Commercial

.

.

Thursday, June 7, 1351

.

(2352)

12

What Can We Do About
Business Finance, Ohio

though

Dr. Hoagland points out,

always

are

increase in

tionary

Inflation?

channels.
Meantime,
increased employ¬
ment to meet the needs of the

wars

accelerated

and preparation for wars

of last decade have come from Governmental
and lending institutions,

Cites Federal housing aids

have already gone too far in depending upon
effects of Governmental agencies to stimulate
Advocates restriction of real estate loans, encour¬

and says we may

inflationary
business.

agement of saving,

and increased taxation. Foresees

,

of

us

about

concerned

are

from

the

possibility of further inflation,

We

are

concerned because we can-

not foresee its progress nor

meas-

its effects

ure

our

upon

ture

fu¬

plans. In

the time allot¬
ted to

me

two

the

In

first

I

briefly the
kind of creep¬

inflation

ing
that

we

have

experienced
the

for
two

business you have

rates.

comes.

comes

opposition

Then you increase

past
H.

decades.

E.

Hoagland

to

it.

While we pay

collective lip service to demands
price inflation, individually we seem to like it. An

for curbing

and the resulting increase

discuss

shall

Subsequent increases in inarrive at a time when prices
have made still further advances,
for mortgage money exceeds the
if we really understood what
supply of funds available for this this kind of inflation does to us,
purpose, you make loans at higher we should be unanimous in our
jn your own

participated in this experience
many
times. When the demand

your

to

IIIC

will be catch up with the procession,
Prices always tend to outrun in-

advertising for new money
in savings tends to restore the balance
and to keep interest rates from
getting out of hand.
There are occasions when an

I

make
speeches.

plan

kept under control.

interest

this

morning

Ull

demand again and prices

Through cur¬
tinkering, subsidies, govern¬

tionary
rency

programs.

out

direct interest in

a

tions should

its opera¬

be gratified

governmental

that one

whose

agency

op¬

erations involved billions of dol¬

program

people enjoy any continuous gain
it. When price inflation is
on the I1IUIV.U few of us ever really
march iv.. v. — —

higher

interest rates.
All

kept in power the party that has
been the sponsor of many infla¬

ment
insurance and
guarantees, lars will soon close its books with
deficit financing, price supports, a profit.
produces
Then for a considerable time
and other measures, we have ex¬
sharp increases in national income.
perienced nearly twenty years of many of us had grave doubts
Consequently we face the paradox
government-generated price infla¬ about the actuarial soundness of
of more money to spend and less
tion. The successive shots in the the FHA. We questioned whether
opportunities to spend it. Under
arm administered to our economic
its reserves were large enough to
such
circumstances,
is it any
system by Washington have been cushion the shock of a possible
wonder that prices rise?
assimilated without too serious depression. If
not, its governmentshocks to our economic health.
Prices Tend to Outrun Income
guaranteed debentures might add
to the burdens of the American
One
curious
result of rapid
Inflationary Governmental
taxpayer. Then came the home
Actions
price inflation is that very few

State University

inflationary because of a resulting substantial
demand for goods and services, much of the infla¬

pressures

actions.

normal

for

defined

IIOAGLAND*

By II. E.
Professor of

production of consumer goods cur¬
tails
the
flow
of such
goods

in wages, salaries,

increase

and

financing

listeners will ques¬
tion the effects of governmental
actions which have resulted in in¬
None of my

Bill of
fects

flationary advantages to your own

the

operations. We need only mention
Owners Loan Corpora¬

current

the Home

tion, the Federal

Housing Admin¬
Loan Bank

Home

the

istration,

system, the Federal
Insurance

Loan

Savings and

Corporation, and

the

home financing

the

G. I.

provisions of

recall

Bill of Rights to

FHA

to

minds some of the agen¬
helped to increase
the demand for and the prices of
real estate and to keep them at
to your

cies which have

the prices of real

upon

bolstered

tate

GI

the

of

provisions

Rights. Its inflationary ef¬

give

the

in

program

of

assurance

financial

But must

we

es¬

in

weaknesses

manner

a

latter's

the

stability.

always look to our

national
sive

government for succes¬
doses of inflationary medi¬

cine

whenever

we

to

begin

ex¬

perience the pains of deflationary
indigestion? The end result of
such

policy is not hard to fore¬

a

As

cast.

in

believer

firm

a

the

of private enterprise,

advantages

other income inflates our ego. It high levels during the past two I want to keep it as private as pos¬
makes us appear to be more im- decades. Certainly none would sible. The more it becomes de¬
abnormal increase in demand for portant. When we find that the deny the inflationary effects of pendent upon public aid, the less
likelihood of its continuous sur¬
goods cannot be met readily with- increase in the number of dollars the succession of governmental
vival.
out serious dislocation of normal in our pockets cannot be trans- programs intended to house Amer¬
price arrangements. We cannot or lated into a corresponding increase icans through the offer of various
Government Inflationary
will not increase production facili- in the volume of commodities we types of direct financial subsidies.
Pressures Should Be
ties fast enough to meet the ad- wish to buy, we may admit the
While most of us approve the
Curbed
ditional demands upon our eco- delusion of our inflated incomes.
agencies mentioned above, except
much of the public housing efforts,
Perhaps we have already gone
honesty compels us to admit their too far in some directions in de¬
fL. 'n"
w
fhl
m °?r
true character. Our business has
pending upon the inflationary ef¬
our
benefited tremendously from the fects of
governmental agencies or¬
.

the second

In

I shall talk about

the kind of gal¬

WaHL^J!!»E Our reactions are registered not
S only
d?mands for greater
suggestions that have
compensation for
services but
particular
significance for the
m °th,er WayS aS Yk °Vr.,u?-fa"
business
den and sizable increase in demand vorable response to the deflation
inflation is not
mvs- for goods and services required of prices which followed the colterious
When the demand for for our national Protection.
lap^e of the boom period of the
commodities is greater than the
Insistent demands of this char- roaring twenties caused us to turn
supply, prices tend to go up. In acter are necessarily given against the political party in powmarkets adjustments take priority over the needs of private er at our national capital. In 1932
place rather promptly. An lin- consumption. Plant facilities and the majority of voters registered
in supply will balance the manpower normally devoted to at the polls their dissatisfaction
production of consumer goods with
economic conditions for
that we fear at
present time. In each I shall

loping inflation
the

make some

savines and

loan

verv

Price

free

crease

'

the

♦Address by Professor Hoagland de- are gradually converted to defense
whose creation the administration
sX?. aanadnLoa,'n ''League',"I-os A^'eies P.urP°f?resulting contrac- in office was not primarily reCalif., May 17, 1951. "
/
tion of facilities available for the sponsible. Since 1932 we have

lifts it has

received from insurance

guarantee

and

of mortgages, in¬

of

accounts, and the

surance

our

of

provision

Home

the

a

liquidity pool in

Loan

Bank

ganized to stimulate business ac¬
tivity.
While
we
regret
the
prescence of the conditions which
resulted in the promulgation of

system.

authorized
at a time when the pendulum had
swung too far in the direction of
agencies

These

were

for example, per¬
represents a step in the

Regulation X,
it

haps

regardless of the
for which it was im¬
posed. Perhaps we should hesitate,
as a normal procedure, to finance
homes which cannot be financed

right direction,

Consequently we are
inclined to classify the purposes
of these agencies as REflationary
instead
of
INflationary.
They
heloed to correct a bad situation
deflation.

purposes

except

substantially

under

liberal

more

lowest

the

than

terms

intolerable and levels of
Regulation
X
con¬
required bold measures to over¬
template.
come. Nevertheless each of these,
The sobering effects of various
like other kinds of opiates, is habit
elements of the current defense
forming. Now that we have them
program
should
redirect
our
and have become dependent upon
which had become

This is not

an

offering of these shares for
The

of an offer to buy, any of such shares.

or an offer to buy, or a solicitation
offering is made only by the Prospectus.

sale,

them,

260,071 Shares

major problem is not
with them but
keep them in operation

to

how

to

dispense

results. Indeed
we
dare not think in terms of
their complete
elimination. But
our dependence upon them should

without disastrous

Kentucky Utilities Company
Common Stock

We

($10 Par Value)

any

have agreed, subject to

unsubscribed shares and, during and
shares of Common

Stock

forth in the Prospectus.

year

presumably control

those who

the energies

of our private enter¬

prise system. Business institutions
abdicated their leadership during
the dark

on

days of the thirties and

government took over control

our

many

fronts not thought to be

the

debt created last year a con¬

new

certain conditions, to purchase

after the subscription period, may

as set

to

lines that restore

authority and responsibility

more

greatest building political in nature up to that time.
The pendulum has swung far to¬
boom in our history except for
ward bureaucratic control of our
the shifting of much of the risk of
economic
processes
in the past
financing new housing units to
two decades. Has it swung too far
some governmental agency. Of the
for our permanent good?
At least
total
home mortgage debt out¬
it is high time to examine this
standing at the present time, about
40% has been guaranteed or in¬ question carefully.
In times of peace, governmental
sured by Federal agencies. Of the

last

Rights, evidenced by Subscription Warrants, to subscribe for these shares at
£14.50 per share have been issued by the Company to holders of its Common
Stock of record May 23, 1951, which rights expire June 18, 1951, as more fully
set forth in the Prospectus.

The several Underwriters

permitted to increase.
.
would not have experienced

be

not

along

thinking

our

how

siderably larger proportion would
be so classified. Because of our

offer

agencies of the kind we have been
discussing tend to produce what
is ordinarily called creeping infla¬

this generous tion. By skillful manipulation of
guarantee and in¬ governmental policies it can be
turned on and off at will. If a
surance, much of last year's con¬
struction would not have been measure of deflation is desired,1 we
undertaken had its financing not can remove or minimize govern¬
been provided with governmental mental assistance. To avoid the

dependence
use

under¬

Copies of the Prospectus may be obtained from any of the several
writers only in states in which such underwriters are qualified to act as
dealers in securities and in which the Prospectus may legally be distributed.

upon

of mortgage

hardships of too much deflation,

v

assistance.

governmental we can open the floodgates of
governmental aid and, if need be,
agencies have produced inflation¬
Indeed successive

J. J. B. Hilliard & Son

Blyth & Co., Inc.
Merrill Lynch, Pierce,
A. C. Allyn

Fenner & Beane

Republic Company
(Incorporated)

Incorporated
J/V/1 OIV.U

W. L. Lyons

Inc.

Security & Bond Company

was

variously estimated

add
up

of

new

jobs and of demand for goods

and services.

that its

Some

F. L. Dupree

& Co.

June 5,1951.




kind

of

creeping

Goodbody & Co.

justified. When
business declines to a point where

Inc.

part to the effect of the FHA upon
the creation of higher real estate

day it sometimes requires artifi¬
cial stimulation to create an in¬

Holton,Farra Company The Bankers Bond Co. ,Inc.

John W. Smart

this

of

it is now clear that the
will
liquidate
with a
substantial profit to the United
States Treasury. In spite of the

inflation

Wilson-Trinkle Company
*

be

can

unemployment is the order of the

demand

in

prices,

Wagner ,Reid and Ebinger,Inc.

mechanisms for speeding

employment and the creation

cost American tax¬
payers from two hundred to five
hundred million dollars. Due in

O'Neal, Alden & Company,

& Co.

that have justified

losses would

luvui

Berwyn T. Moore & Company,

pressures

previous
governmental actions.
For
example, when the HOLC
was
authorized by Congress, it

Stein Bros. & Boyce
Central

and Company

ary

crease

HOLC

for

goods

and

services.

FHA, this profit
should cause great rejoicing to all
who have had any interest in the
HOLC.
Even Americans with¬

help given by the

Pump-priming efforts, if
successful, may avoid worse con¬
ditions.
is

But

primed

easy

with

as

it

soon

is

as

the pump

advisable

further

Continued

to

go

stimulants.
on

page

32

Volume 173

Number 5018

.

.

The Commercial and Financial Chronicle

.

Continued from page 8

how wrong we all were in taking the

Dealer-Broker Investment

Recommendations and Literature
able is

a

memorandum

on

California Packing Corp. and Hal¬

liburton Oil Well Cementing Co.
Anchor Hocking Glass
mill & Co., 14 Wall

Corp.—Memorandum—Shearson, HamStreet, New York 5, N. Y. Also available

isa memorandum
_.

on

Great Northern Railway and Interstate

Department Stores.

directive'on Formosa seri-(
ously. Not only did Truman consider Forfriosa important but he'
also thought Korea important.
•
So you can see just how inept, how ignorant we plain people
are in the various nuances of global leadership.
It must make all.
of us feel silly ever to have offered any criticism. In, this business
of global leadership we have just got to close our eyes and recog¬
nize the infallibility of Truman and Acheson.
There is also the case of High Commissioner of Germany
McCloy who has been "on the carpet" because all this time we
have been fighting the "cold war" with Russia, West Germany has
been gleefully exporting war and other goods, to the ehemy. Just
normal trade as countries engage in.
I imagine that the High Commissioner was the most amazed
man in the world when he was called upon to explain this and as
,

Refining Co.—Memorandum—Shaskan & Co., 40 Ex¬
change Place, New York 5, N. Y. Also available is a memo¬

yet his explanation has not been forthcoming. Because one of the
first things told me by the international pundits shortly after we

randum

took

Atlantic

Lion Oil and

on

on

Montana Dakota Utilities.

Company—Analysis—Vietor, Common,
Co.,Ellicott Square Building, Buffalo 3, N. Y.

Central

Dann

&

Public Utility—Bulletin—New York Hanseatic Corpo¬

ration, 120 Broadway, New York 5, N. Y.
Central States Electric—Bulletin—Ira Haupt & Co., Ill Broad¬

New York 6, N. Y.

way,

Also available is information

on

Florida East Coast.

Central

Vermont" Public Service Co.—Analysis—Ira Haupt &
Co., Ill Broadway, New York 6, N. Y.

Federal Machine & Welder Company—Bulletin—Troster, Sin¬
ger

& Co., 74 Trinity Place, New York 6, N. Y.

Franklin

National Bank of Franklin Square—Memorandum—
Blair, Rollins & Co., 44 Wall Street, New York 5, N. Y.

Good Humor Company of California —Analysis—Holton, Hull
& Co.; 210 West Seventh Street, Los Angeles 14, Calif.

Gordon

Weston

Limited—Analysis—Milner, Ross & Co., 330

Bay Street. Toronto 1, Ont., Canada.
Hoving Corp.—Circular—J. F. Reilly & 'Co., Inc., 61 Broadway,
New York 6, N. Y. Also available is a circular on Punta
Alegre Sugar.
Kuhhuao

Company

—

Shoes, Inc.—Memorandum—C. E. Unterberg &

Co., 61

Broadway, New York 6, N. Y.
National City Bank
Onderdonk

don't know much about it either.
this

But

must

give him, and

of New York

normal

grain for India this
I do hope
stand

he

way.

can come

Truman

and

to under¬

Acheson

because

if he doesn't, and I have
feeling he won't, the future is
fraught with danger—for Truman
and Acheson,
and their leaders
a

who have been playing ball
the Administration, too.

and

necessary

business, I

told, and unless

was

is just

what High Commissioner McCloy has been working for and
undoubtedly he has felt a sense of gratification over his progress.
Then out of a clear sky come the unschooled and unlearned in
global leadership, pouncing upon his neck. It must make the High
Commissioner wonder just what sort of a public? it is that he is

doing public service for.
We are so unrealistic in the game of global leadership, indeed,
that we become incensed over Britain sending stuff to Red China
through Hong Kong at a time when these Red Chinese are killing
our boys.
Come, come, now, let's not get sentimental. The busi¬
ness of global leadership is something mysterious and unexplainable and making little sense, something very difficult for the rank
and file to understand but don't you realize that it is through such
enterprises, such farsightedness on the part of Truman and those
around him, that we have "prosperity"? You must have confidence
in the brilliant minds that are ruling and thinking for us. Don't

realize that whereas it used to be often risky for the workingman to join a union, he can now not only join the "union of his
choice" but has to?
Don't you realize that this workingman has
come to have such a voice in his government that his politically
minded leaders demand that grain be given to India-, although the

Analysis

—

—

In Frank BSasferson
C.

Frank

Wall

Masterson

Street,
New

members

change,

& Co., 64
York
City,

New
York

announce

Curb

that

Company

—

Report

—

Loewi & Co., 225 East

This is not

an

offering of these Shares for sale,
The

or an

offer to buy,

or a

Riverside Cement Company

—

Card memorandum

—

change, has been admitted to
eral

&

Witt Harris, Upham
PASADENA, Calif.—George H.
Mecke

has

become

associated

with

Harris, Upham & Co.
Mr.
Mecke was formerly with Jones,
Cosgrove & Co.
and
Geo.
R.
Miller & Co., Inc. Prior thereto

he

was

with William R. Staats Co.

solicitation of an offer to buy, any of such Shares.

offering is made only by the Prospectus.

250,000 Shares

The California Oregon Power Company
Common Stock

States Radiator Corporation—Analysis—J. R. Williston

Co., 115 BToadway, New York 6, N. Y.
Iron—Circular—duPont,
Street, Boston 9, Mass.

Mould &

Valley
Milk

(Par Value $20 Per Share)

Homsey & Co., 31

Price $24.25 per

From

Share

Washington

Ahead

of the News

Copies of the Prospectus

may

be obtained from

any

of the several under¬

writers only in states in which such underwriters are qualified to act as
dealers in securities and in which the Prospectus may legally be distributed.

By CARLISLE BARGERON

Notwithstanding that the Gallup Poll, that great and unerring
public opinion, has repeatedly stated that

barometer of American
the American

outmoded

people have definitely turned their backs on such

things

and have come cheerfully to
accept global leadership, it appears they are
tremendously naive in just what global leader¬
ship constitutes. So naive are they, indeed,
that they are a pain in the neck to their leaders
in the global leadership business.
Take now, for example, their skepticism,

as

isolationism

their amazement
son's

over

Secretary of State Ache-

circulated
to

mosa

our

that

effect

its

famous

directive

on

For¬

our

II. M.

Central

Byllesby and Company

Republic Company
(Incorporated)-

(Incorporated)

First California

Company

propagandists, to the

Schwabacher & Co.

government was not worried

really

our

government's

attitude

at

all,

the

government instead, was really concerned, For¬
mosa

Smith, Barney & Co.

Lynch, Pierce, Fenner & Beane

Walston, Hoffman & Goodwin

Elworthy & Co.

Wulff, Hansen & Co.

Davis, Skaggs & Co.

the

expected fall to the Communists of
Formosa, that it meant nothing to us, was not
worth a shrug of our official shoulders; that
when
this directive was issued, it was not
Bargeron

Merrill

Kidder, Peabody & Co.

Eastman, Dillon & Co.

consuls throughout the world and

to the Voice of America

over

Dean Witter & Co.

explanation that when the State Depart¬

ment

Carlisle

The First Boston Corporation

Blyth & Co., Inc.

was

truly important, but this was just

the way we were supposed to act.
Well sir, you know that fooled even Senator

Taft who was
saying that all we had to do to protect Formosa was to parade a
warships up and down the water between Formosa and the

E. M. Adams & Co.

Pacific Northwest Company

William R. Staats Co.
Incorporated

Bateman, Eichler & Co.

Stephenson, Leydecker. & Co.
Brush, Slocumb & Co.
Pacific Company

Mitchum, Tully & Co.

Hill Richards & Co.

of California

-

Campbell & Robbins

Conrad, Bruce & Co.

Incorporated

few

Chinese mainland and this would be plenty of insurance for For¬
and constituted only a normal activity on the part of the

Davies &

Mejia

Wm. P, Harper & Son & Co.

Foster & Marshall

mosa

warships, but Truman said sarcastically that he was surprised to
know that Senator Taft was a military expert. Then Truman, who
is a military expert and a
great international expert because he
has hired as his Secretary of
State, the best international lawyer
around town who knows the names of myriad little foreign coun¬
tries because he graduated from Harvard and is so
intellectually
sensitive as to be hurt by questions from Senators; then Mr. Tru¬
man so
equipped, declared war Upon Korea, 100 miles to the left
of Formosa on the
map, which none of our military leaders and.
so far as can be
learned, nobody else had suggested. So you see




Ilayden, Miller & Co.
Irving Lundborg & Co.
Raggio, Reed & Co.
June 6,1951

William D. James

Company

Mason Brothers
Sutro &Co.

ef¬

(Speclal to The Financial Chronicle)

Falls Machine Co.
United

gen¬

partnership in the firm
(June 7),

fective today

Lerner A

Co., 10 Post Office Square, Boston 9, Mass. Also available is
a memorandum On Gear Grinding Machine Co. and on Seneca

as¬

sociated with the firm for i5 years
and is a 'member of the Curb Ex¬

Ltd.-^Analysis—John R. Lewis, Inc., 1006
Wash.

Calls—Booklet—Filer, Schmidt & Co., 30 Pine Street,

Ex¬

William

Edward Griffin who has been

C. Herbert

New York 5, N. Y.

,

with

were

we

Second Avenue, Seattle 4,
Puts &

and

the global leadership business and
feel a sense of dignity about it,

prepared to underwrite Western Europe for the rest of our lives,
this trade had to be restored. Presumably, restoration of that trade

Street, Milwaukee 2, Wis.

Placer Development,

•

we

told it does, a sense of dignity,
for his leaders to be demanding
are

Co., 165 Broadway, New York 6, N. Y.

Pabst Brewing
Mason

the global leadership was that while it was all right for

knows where it is and his leaders

government to keep hurling threats and imprecations at Russia
and her satellites, it was necessary for Western Europe to trade
with them.
Trade between Western and Eastern Europe was a

you

Electric

Analysis — Aetna Securities
Corporation, 111 Broadway, New York 6, N. Y.

Miles

over

workingman himself doesn't give
a
damn
about
India,
scarcely

our

Carborundum
•

13

(2353)

Lester & Co.
Revel Miller & Co,

Wilson, Johnson & Higgins

14

The Commercial and Financial Chronicle

(2354)

Canadian
time

is

economic

the

dollar

Canadian dollar will be quoted at

Canadian Securities

premium rather than

a

discount

a

vis-a-vis the U. S. dollar.

ket

Despite the fact that the Cana¬
export season both visible

dian

and' invisible

is

well

now

was

the

recent

by the Dominion in this country.

tario

under

further

A

important

Toronto

new

There

recov¬

in

Dominion

the

and

the removal of import restrictions,

procedure laid down by the Ex¬
change Control Board purchases

•Canadian

of

purchases

this

from

unprecedented

country are on an

large scale, but on the other hand
the Canadian export trade is like¬

sterling in the Dominion can
only be effected by prior purchase
As

of U. S. dollars.

a consequence

of this technical situation the pres¬

wise

booming.
Pulp and paper ent demand for sterling constitutes
production is constantly mount¬ a direct depressant on the Cana¬
ing and is meeting with an in¬ dian dollar.
satiable U. S. demand with even
As far as the Canadian authori¬
higher prices in the offing. Also ties are concerned this can be re¬
following the agreement recently garded as a conveniently favorable
reached with the United Kingdom, development. Normally whenever
Canadian sales to Britain, after a a positive trend is established in
long period of serious curtailment sterling it is sympathetically re¬
will shortly be sharply increased. flected in the Canadian dollar. On
Furthermore development projects
looking
back;, to the .exchange
Newfoundland

from

British

to

took place

during
Columbia are now entering a stage the summer of last year it will be
of activity that promises to break recalled that the persistent rumors
all previous records.
^
of sterling revaluation encouraged
•;
There appears therefore to be the speculative purchases in this
little reason for any concern with country of Canadian dollars.
It
regard to the overall prospects of
Dominion's

the

balance

of

pay¬

ments, that is now being adversely
affected

factors.

by

abnormal

temporary

Among these is the one¬

that

movement

will

it

was

that

remembered

be

also

when

decided

the

free

to

exchange the official comments at
that time were extremely critical
of the U. S. "hot money" influx.

in mind the prob¬
repetition of this un¬

bearing

sided implementation of the U. S.¬

Thus

Canadian Defense Pooling Agree¬

ability of

a

bull
movement
it
is
So far Canada has placed desirable
important orders in this country natural that Canadian official ef¬
but the anticipated reciprocation forts will be directed towards its
from this side has been conspicu¬ discouragement.
In the event of
freeing
of
the
ous by its absence.
In due course revaluation or

ment.

however this situation is expected
to be

the

adjusted in accordance with

original F understanding

U. S. military

that

purchases in Canada

stocks in the base-metal and paper

in 1950.

few

a

groups

the

risk,

from the
of an

be

lightly regarded. Although it
is only recently that the subject
has again received widespread at¬

tention, there is little question that
Provincial
Municipal

Department Store Outlook in 1951
percentage,

expense

lier,
it

the

was

plus

stated

as

ear¬

the

increased

enhanced

percentage which

*

^

Corporation

changes "now that the New Look

primarily

In

the meantime

in¬

wealth

exports.
ports at

adverse

no

effect

on

On the other hand im¬
lower cost would have
place of the
critical shortages Britain
a

been stimulated and in

present

A. E. Ames & Co.
incorporated

v

New York 5, N.V.

-

1-1045

NY

4-2400

As matters

devaluation

as

ceived at

being

were

re¬

faster rate than antici¬

a

of

other
Boston 9, Mass.

and

As

pointed
ports in this

earlier

in

out

series,

re¬

factors

two

the

brutal

in

recent

years

(1) the underlying ten¬
dency for consumers as their in¬
increased to spend a higher

comes

proportion

those

on

goods items such

television,

as

deemed

are

of

part

a

automobiles,
washers, and so

dish

which

on,

so

higher

a

durable

essential

of

standard

living; and (2) the pattern of
bunched-up replacement demand
in soft goods which was

measure can serve

the present

in

level

the

absence

dollar

would

Canadian
■

Available

on

all

Securities
on

request

that

(

MEMBERS

Montreal

&

Morgan

Stock

Exchange

-j The Toronto Stock Exchange
[ Montreal Curb Market

268 Notre Dame St., W., Montreal
38

King Street W.
Toronto

61

Queen St.
Ottawa




present

be clearly

operation
factors has

It

season.

is

probable

also

certain volume of Canadian

a

exports has been deferred pending
the

imminent

ment

of

certain

Robertson

up¬

pound, the

its

to

an

of
abnormal
re¬
cently
tended
to
offset
the
strengthening process that nor¬
mally takes place during the sum¬
mer

Information

of

the

downward

U.

items.

S.

tariff

adjust¬
rate

Furthermore

on

this

will mark the beginning of a
era
of dynamic Canadian
expansion,
notably
in
oil,
and

year

further

iron-ore

development.
Canadian
production in these fields alone

impetus
of

of

of

the

started

18%

1951
re¬

buying the

scare

year

increase

an

it

and

in

off

with

February;

ment

that

had

' stores

by the heavy soft goods spending
at the time when durable goods
not available.

were

It is still true,

of

that

course,

of

the

the

larger
purchases, but

consumer

variations

nondurable

in

the

ratio

have

been notable—from 71.9% in 1941

to 81.6%

up

perceptibly to tighten their credit
policies some premonitory symp¬
of

toms

controls.

.Altogether

the

spring of

preceding

vision,

the

of

prove

should

the

two

cause

be¬

of their volume is

much

so

stores

Because

pattern

of the

presumed

replacement demand,
observers were looking for

many

better business in soft

in

wave

in

1950.

ever,

goods lines

This

expectation,
disappointed.

was

how¬

in

in

the

the

the

sale

of

The

total

the

second

nondurable

in

1950

ran

65.6%
63.2% in

quarter,

third

writing the
is that this situation
temporary.
Even if

guess

relative

department

the

present

of

wave

materialize,

not

economy" in which

son

find ourselves

which

will bring more
the market place to
goods and services than

into

spend

on

there

are

goods

.

On

income

personal

February,
$241 billion at
in comparison

is stated as
rate,

1951,

annual

the
with

billion:

$215

larger workforce

family

per

on

by

no

means

reached

point of

a

What might have hap¬

ing,

payrolls), the

at

riod

of

defense

the

pe¬

mobilization

is

impossible to say.
In the early
part of 1950 many observers v/ere
of

the

avidity
evince
end

opinion
for
the

renewal of

With

the

year,

before

followed

interest in
advent

consumer

goods ' would

decline

some

of

that

hard

of

the

by

a

soft goods.
semimo-

a

high

be

main¬

levels

and

increased is afforded

by the
government defense orders which
are

pouring out at the rate

now

These

on

will

than

more

$5 billion monthly.

of the last 10 months

ticipation.
indication
boost

v/ere

the

At present there is
that

taxes

on

no

Congress
v/ill
income

personal

1951

to

exercise

much

effect

on

bilization economy, of course, this
shift did not occur, because con¬

disposable income; indeed, dispos¬
able income for the first quarter

parts

relation

would

soon

become

re¬

stricted in supply.

come

between

of

in¬

disposable

consumers

goods

and

dicted

pre¬

that at the present rate of

directly during the remainder of
Present stocks in the hands

1951.

of retail outlets as well as

whole¬

manufacturers

and

channels

sale

likely to be adequate for any
that will be made on

demands

the

for

them

of

rest

with perhaps here

this

year,

and there a few

exceptions; also consumer inven¬
tories

by

are

means
low.
publicizing of
production of

no

the

Nevertheless

inthe

cutbacks

goods lines ' as the
will make for more
lively buying at retail (and even
before that time many of the re¬
tailers who are now staying out
of the market will be flocking
hard

many

months

pass

Furthermore it may be

back in).

expected that at some point either
in 1951 or early in 1952 consumer
and

interest

that1 consumers will

clear

is

It

spending will swing

to the soft goods side.

more

once

more dollars in
increased spending

spend
this

all

affect

types

of

1951, but

will not
retail outlets

equally. As we noted in the year
1950, for instance, the relative
concentration
on
hard
goods
caused
the advance
in depart¬
ment stores to be smaller than
the rise in retail sales generally.
On the other hand, stores in the
food

times

as

consumer

many

department stores
mail-order companies,
did
increase their 1950 sales by

dollars
and
not
as

which receive almost

group,

three

as

do

great a percentage as

did de¬

partment
stores.
With higher
food prices and the increased de¬
mand for better-quality food that
accompanies a rise in money in¬
comes, food stores may well ex¬
hibit a greater rate of sales in¬
crease
in 1951 than they did in
1950.
Another factor which com¬

plicates the

prediction of depart¬
sales increases forsales figures for

stores

ment

is the high

1951

July,

August,
which

1950

and September of
will have to

stores

beat this year.

Gerald R. McDermott

.

there

some

retailers

here and

laid

part

of

the blame at the door of apparel

.

Manager
of the municipal department of
Harriman, Ripley & Co., Inc., New
York City, passed away at the age
of 58 after an illness of several
Gerald

R. McDermott,

months.

KANSAS

CITY,

are

&

now

Mo.—Kenneth

George B. Row

W. Chambers and

affiliated

with Waddell

Reed, Inc., 1012 Baltimore

Ave.

Dempsey-Tegeler Adds
(Special to The Financial

ing
as

retail,

and

to

Chronicle)

can

be

break

of

LOUIS,

Exchanges.

services
circum¬

With State Bond & Mtg
(Special to The Financial

Chronicle)

Minn.—Francis E.
foreseen for the re¬ Schuelke has joined the staff of
1951, barring the out¬ State Bond & Mortgage Co., 26V2

advance

mainder of

under

ST.

their

the lines just indicated,

situa¬

concerned, however, these pres¬
are likely to be felt only in¬

sures

Mo. —William C.
sumer
attention became
riveted of 1951 is estimated at the annual
Messmann is now affiliated with
once more on those durable goods
rate of $216 billion versus $197
Dempsey - Tegeler
&
Co.,
407
for which it was feared thai met- billion last year. Past experience
North Eighth Street, members of
a/s
and
important
component testified that there is a close cor¬ the New York and Midwest Stock

dian

payments

output of the munitions of war*
as the retail supply of goods

up

sufficiently for the remainder of

tively poor showing in the soft
goods business in 1950 ran along

confidently

off materials and man¬
from the production of
civilian goods and services just
as effectively as does the stepped-

an¬

ultimately bring about a
striking change in the U. S.-Canaof

garrison economy,

a

setting the wheels
of industry in motion on defense
Two With Waddell & Reed
work are the reality of which the
(Special to The Financial Chkonicle)
inflationary
price
developments

of

be

goods

capital

present

orders

except

can

in¬

defense-sup¬

siphons

A guarantee that

at

It

pres¬

power

most of all the higher
likewise the higher agri¬

cultural income.

of

had not entered

some¬

purchases

balance

also

and

if

we

the

what longer hours in manufactur¬

these

satiation.

February,

reflects

(more members

tained

had

in

increase

The

1950.

demand,

for

even

durables

services

side of money

the

cerned, it is evident that the der
consumer

and

available to meet that demand.

mand

for

now

consumers

money

income

con¬

we

ily to create and widen an "infla¬
tionary gap," i.e., a situation in

consumer

is

year

basic

"garri¬

pushing stead¬

are

first

the

the

economic pressures of the

wages,

of

possibility
of
scare
buying

evef-present

quarter, and 66.2% in
the fourth quarter. So far as the
half

no¬

ticeably to sag.

the

to

sev¬

stances that cause the rate of sav¬

tion.

the

festations of

seasons.

those for which buy¬

were

another

tance

re¬

ing enthusiasm seemed most

will

impor¬

was

Also, the
hard goods that earlier had been
particularly in demand, e.g., tele¬

best

between

appeared

down that had characterized
eral

nondurable

substantial

it

1951

peating the pattern of spring let¬

Although the total

proportion

prices, both

supply and demand situation, and
not
as
a
consequence
of price

68.9% in 1949.

of

in

ap¬

and at retail, flat¬
out, largely because of the

business is much greater than the
volume of durable goods business,

is

rise

The

distress-

wholesale

at

tened

proportion

goods

inventory

peared.

in 1944 and back to 4 As

of

or¬

Although a majority of the hy¬
potheses
concerning
the
rela¬

will

for defense and

are

slackened,
depart¬
considerably

clear

became

pened in the second half of- 1950

•

,

The

many

CANADA

at

appear

undervalued.

INVEST IN

to correct

...

ward movement of the

Canadian

no

damaging trend of the

British terms of trade.
Even

that

fiscal

initiated That

to

fact

the

wave

of

dering*
Retail ? stocks
mounted
rapidly, and as the banks began

business

in the first quarter,

forced

Under

Remainder

goods

have been

66.6%

a

old

overshot the mark in advance

goods

stand, just

now

became

the

which have militated against soft

mate¬

raw

become

but thereafter demand

pated.;

stockpile

cheap

for

1951

deliveries

ratios

expedient, revaluation similarly is
likely to be reluctantly decided
upon as an inescapable step in the
face

Fifty Congress Street

relatively

a.

essential foods

rials.

Two Wall Street

WORTH

late
of

side

supply

will be generated by the

boom, which is one of the mani¬

is

Outlook

dise

accumu¬

would have been able to

that

So far

newed

materials there would

raw

been

since

long

look."

ventory buildup was proceeding
rapidly, largely because merchan¬

more

have

has

30% increase in dollar profits

a

after taxes.

sive demand for British Common¬

CANADIAN STOCKS

whom

sales

responsible for producing a figure
of

manufacturers

margin

Tiius

dollar

gross

were

textile

and

they asserted to have been dila¬
tory in bringing out new fashion

less than V2 of 1%.

was

in the soft goods category, and
appropriate level im¬ because some of the
important
mediately when it was apparent sectors of the consumer durable
nearly a year ago that the British,
goods business, as, for instance,
terms of trade had entered a pe-A
the automotive and building ma¬
riod of progressive deterioration.
terial lines, bypass the department
In view of the subsequent inten¬
store almost entirely.
a

clear

dollars into the
they did

more

the

is

1951 consumers

year

porting purposes; and in this con¬
nection it is important to realize

sterling should have been adjusted
to

On

that

the

that

bring

sures

6

page

adjustment to the higher level
of sterling.
./y.. ■>
At the present time it would

adjustment of the ex¬
change rate of the pound, is not to

Government

from

part

imminent

CANADIAN BONDS

Continued

would follow its traditional course

Canadian official viewpoint,

full

the

will

following recent increases

then

inference

The

use

goods constitute much

appear

than

creasing diversion of materials to

pound
however there
is little
question that the Canadian dollar
of

appreciably larger pro¬
they did in 1950.

comes any

portion

that con¬
out of their in¬

prospect

save

retail market place than

way,

conditions

will

by the golds and Western oils. The
in the decline were

ery

of offerings of internals in sympathy in newsprint and metal prices.

source

the Canadian dollar remains temporary weakness of the Cana¬
curiously immune to its custom¬ dian dollar is the current heavy
ary strengthening influence. As a
buying of sterling for Canadian
consequence of the current boom
account.
In accordance with the

much

not

sumers

On¬

and

were

sharp

a

was

is

least affected

again mostly confined to

issues.

however there

Subsequently

for

-

external section of the bond mar¬

would at least offsdt those effected

6%%.

to

to 6 3/16%. Following earlier
strength
stocks
again
resumed
their recent downward trend led

During the week interest in the
By WILLIAM J. McKAY

decline of the Canadian

with the

the

progress
distant when

far

not

Thursday, June 7, 1951

..

.

sharply.

So

far

global hostilities, there

NEW

"Wnrth

ULM,

Minnesota

Street.

.

.Volume

173

Number 5018

..

The Commercial and Financial Chronicle

X2355)

,

15
t

The period of the first
war,

Investment Outlook in Canada,

to

Co., Ltd., Montreal, Canada

Prominent Canadian investment banker reveals Canada's

indus-

.

absence in Canada of capital gains taxes

-

tries.

Points

out

paper

and recent legislation
giving limited tax exemption

paid by Canadian

.

Twenty-five
month

a

years

young

this

ago

two

man

years

of

college was working for
Electric Bond and Share Co..
then
located at u

of

of

the

that

utility

everywhere

and

by

op¬

for.,

Arthur

S.

Torrey

in

-

provinces,

for advice

to

he

Mr.

Owen D.
then
President
of
the
General Electric
Company, which

Young,

owned

standing shares

all
of

of

the

out¬

Bond

simple. Mr. Young said, "If I

were

a

young man I would not hesitate
all to spend from
two to five
years in learning
at

something about

the country that lies to
the north
us
or
of those countries
that
lie to the south." So I
took his
advice and have been in
Canada
of

Many

taken

changes have
place in those twenty-five

years

but

for

if

anyone

similar

to

were

advice

will

ask

one

few decades.

Canada in two world
it

is

said,

to

grown

with natural resources of all kinds
in unprecedented amounts.

Many

yours

in

Canada

been

have

been

the

spent,

while

surface, has

only

ceived

Using the slang expression
"What is it you
have

have that

not?",

the

we

in

answer

would

be, in natural resources,
nothing, but what we do lack is
and

manpower

capital. Both

can

be produced and with them
oppor¬

tunity

to

the

entrepreneur
profit to the capital.

and

What else does Canada offer to
make

welcome

the

bour and capital?

ion,

continue

advent

French

which at times

but

stable

federally
mixture of

a

la¬

opin¬

my

both

government,

provincially;
races,

of

have

to

and

causes

fundamentally

also acknowl¬

corporation

in¬

taxes

on

corporate

dividends

on

re¬

by individual shareholders

to

deduct

amount

their

from

total

.

.

equal

10%

to

tax

of

the

.

comes

Canadian;

evident.

more

securities generally

investors in the United

known to

States.

This

recent

origin, it is

broad

well

are

familiarity is not of
a

product of

extending over

experience

long period of years. As in any

a

part
the

in

fight

the

Association
York

defense

against

"An address
of

in

it

happened or could have

not

outside

time during the

no

capital

movements

the

much

United

of

States

Canada's

contrast

in
to

tions

the

ada's
It

be

imports

new

Control

scale

was

was

this

of this payment

use

feature gave the foreign purchaser

protection against adverse changes
fn rates of exchange

as

well

as

a

possibility of profit from the rate
of

exchange, v.

V By 1930 over half of the funded
debt

Canadian

of

governments

three-quarters of the funded

debt

of

Canadian

corporations

from

come

Canada,

the United

the other hand,
the country
in overseas loans, United States
dollars, and gold, about four and
a

invested

half

net

on

outside

billion

foreign
and

a

dollars,

investment
half

I

my

the

generally

in

war

copper

pre¬

leads

in

and

radium,
and
is
second in gold and third in silver.
All this is being done from the

country's developed mineral
is

It

far

said

by

of

potential

has

resources

explored,

been

much

these

more

Canada's

areas.

who know
things than
than one-quaiter

people

about

more

although

been done

in the

even

Most of you are
familiar with the recent huge high
grade

years.

iron

ore

Labrador

and

developed.

of

areas

which

These

Quebec
being

are

deposits

cover

remarks

Range) containing 400,000,000 tons
of ore with more being developed

some

the

time.

Present

plans

for

United
one

used

in
between

States, Canada

twelfth

seventeenth

one

has

about* sitates the building of a railroad
and- some 370 miles into the northern
wilderness and, until completed,

population

your

your

national

income.

piece of equipment has and
brought in by air. Ameri¬

every

must be

Canadian Securities
Now for

a

to

outbreak 'of

of

Canada

making, production- estimate five million
comparsions
United * tons in 1955, ten million in 195.6
and later to possibly twenty mil¬
States and Canada. It is
simply
that with an area greater than the. lion tons. This development neces¬

ties payable in two or three cur¬
With

platinum

should have repeated the yard-? all

stick

payable solely or optionally
in foreign currencies, with securi¬

v

metals

its
in
and

about

of

a

billion.

Perhaps earlier in

of
third

most

13,000 square miles (forty
times t*he size of famed Mesabi

leaving

were

rencies leading the way.

production

cious

I that not

point, for¬

and

Canada Js

zinc, fourth in lead. Among

past few

billion

interest at the option of the holder
'three
in any one of two or three cur¬
rencies. Wide

asbestos,

aluminum.
world

have

has

Canadian debtors of multiple pay

securities, which are, as, you know,
bonds payable as to principal and

.

its

six

by

use

this

on

have

produced

90% of all the world's nickel, 70%

eign investments in Canada total
about 8 billion
dollars, of which

period that

maximum

anyone care to
■

States.

during

me

Summary Regula¬

In conclusion

.

the

saw

Board

them.

a

addi¬

financed out of Can¬

savings.

Time doesn't permit

tions, should

but

periods

explain how, but I have with
copies of the Foreign Exchange

me

financed

1920's,

done.

to

one¬

during this period of rapid

growth

we

1920's

large

earlier

to
purchase
and
sell
Canadian securities.
Many of you
are
familiar as to how this can

cap¬

a

Capital

residents

the

September,

duced

a

capital,, except for the HolCanada, has

can

interests in
moment I would like; linger
•made this possible.

say a few words about Cana-<
dian securities in particular

The

,

,

Steep Rock iron ore prop¬

1939,

of

system

in

United

These controls
volume of

dollars.

States

permitted

a

large

dealings in outstanding

securities, but since 1939 up to just
recently, when some two hundred

effort

which

finished

therefore,
with

not

they

manufacture

products

and

are,

greatly concerned
prices. .

material

raw

The

history of Canadian mining

development,

This advertisement is neither

the

old

miles

500

some

Gulf

Lawrence

Kennecott

Here

mitted

to

spend

down
from

not

over

and

States

any

NEW ISSUE

of these securities.

June 5, 1951 ^

capital

thousand

two

offer to sell nor a solicitation of offers to buy
offering is made only by the Prospectus.

branches, the
are
engaged

which

Subscription Offer

,

companies

majority of;
manufac¬

New England

in

turing. The other 50% is in port¬
folio investments, including pub¬
lic issues
of bonds and
stocks;

Gas and Electric

Association

•

TvA

two-thirds in bonds and one-third
stocks.

;

NewEnglandGas and Electric Association isofferingto holdersof its Common
Per Share) the primary right to

'T

of United States

The migration

Shares of Beneficial Interest (ParWalue $8

capital to Canada has a continuous
history of over one hundred years
in the case of direct investment in
business
years

75
of the purchase

enterprises and

in the case

subscribe
one

over

of Canadian stocks and bonds

tional
rants

for

bonds of
and

purposes.

the Province

shortly

after

Winnipeg.

\

of
•

Today 40% of all United States

foreign investments are in Canada
and of the total foreign invest¬
ments in
the

will

expire

on

June 20, 1951.
Prospectus, Participating Dealers will be paid

'•

a

*

-

fee for
y

>-

Copies of the Prospectus and of the Participating Dealer Agreement may be
obtained from the undersigned which has been retained by the Company to act
as

Dealer

Manager.

:

;

•

Canada, 75% come from
States. These United

United

States investments in .Canada pay
a

eight shares held of record on May 31, 1951, and an addi¬
subscription privilege as outlined in the Prospectus. Subscription War¬

obtaining subscriptions.

of Quebec

of the City

$13 per share to 197,394 additional Common Shares at the rate of

As set forth in the

In 1870
United States investors purchased
investment

at

share for each

larger cash return

The First Boston Corporation

than all other

its
and

none

in

1867,

ments in

lion

to

foreign

Canada totalled

dollars,

British.

1900

Confederation

of

From

which

1900

to

invest¬

Britain.

100

Broadway

WOrth 4-4000

75 Federal Street

Liberty 2-7200

IV4 bil¬

80%
1913

was
this

PITTSBURGH

BOSTON

NEW YORK

From the time of

.PHILADELPHIA
1500 Chestnut Street

Rlttenhouse 6-9700

Frick

Building

-

FRanklin 2-6640

GRant 1-8800

CLEVELAND
Union Commerce

Building

CHerry 1-2320

CHICAGO

231 South La Salle Street

SAN

FRANCISCO

405 Montgomery

Street

YUkon 6-2676

the St.
Montreal.

is

comf

less

than

Copper

Continued

prospectors

an

The

U. S. Capital in Canada

United

in

from

their

payment of capital obligation due

avoided.

been

figure had grown to 2V2 billion,
by Mr. Torrey before the
Customers' Brokers, New of which three-quarters came from




new,

of

source

become

base metals. Last year it

bal-" American investments abroad put

playing

inflation

City, May 29, 1951.

has

here, so let
us look at Canada's
mining indus¬
try as it stands today. Canada is
the world's largest
exporter of

of

None of these restrictions
made
impossible for United States

There

for them

of this experience has
good and some we wish

together.

but

Company in 1949.

time

no

failures,

occasion.

some

been

and

To be sure, we have government
restrictions in some measure that

irksome,

this

another

and rapidly growing coun-t

young

ance.

are

to

for

earlier days,
their

.•

.

two

English,
pin pricks,

gives

confined

is

and

successes

Canada intro¬ groups. In the time, at my dis¬ erty on Lake Ontario is another in
posal I cannot attempt to do more which American capital has played
foreign ex¬
dividend
received
on
snares
of
than touch on some, of our leading an important part. Production here
change control. This was done
any company resident in Canada'
with reluctance, but was unavoid¬ industries, participation in which will reach three and a half million
and subject to Canadian income
is available to the investing pub¬ tons
able in order to. protect Canadian
by 1954 with an eventual
tax.
:
lic. The three groups selected are
target of ten million tons.
;
supply of United States dollars.
Before
dealing
with
specific To be
mining, oil, and forest products,
Other new developments are the
sure, these United States
groups of industry let me give a
the latter including both lumber
dollars would not be dissipated
huge copper ore deposit of fiftybrief resume of capital movements
and paper. Companies engaged in
in
non-essential
purposes,
but
seven
million tons in the Gaspe
over
a
period of "years so you
these industries, generally speak¬
conserved to finance the import
Peninsula
and Titanium
or
IImay see the trend that daily be¬
of essential goods, and the prompt ing, own the actual .raw materials menite in the Province of Quebec,

First and fore¬

most, it has and will, in

manner.

and

an

in

scratched.

Canada

be capitalized

can

of

invested
in Canada today approximates six
billion
dollars, of which about
wars has,
manhood 50% constitutes direct investments

among the nations of the world.
If this is so, it is
because, like
the United States, it was endowed

of

tax

by allowing Canadian shareholders

to Canada in the next

accrue

*lt>%-

a

double taxation

earnings

had

answer

that

volve

moment has
there been any
regret, but unfor¬
tunately I am twenty-five years
too old to reap the benefits that

to

for

never

paid

government

edges

States

from

and

try,

have

of

earnings to the extent of

Our

today I
by saying

would

1,-

tax-

same

in

and pioneers of the

.

Electric

The advice given was

since.

or

to January

distribute

similar

a

private

a

surplus. Also, subsequent

annual

unlimited, but

the young
question had in
May '26
a position
offered to him in Can¬
ada.
Knowing little except, that
Canada was the
northern neigh¬
bour of the
United States and
that instead of
forty-eight states
,there
were
nine

prior

to

dividends
.

in

and Share.

have what is

capitalize sur¬

payment

that

on

>

advancement

fever

created

free

pretty

company

is, of course,
capital gains

permits'

xboO

portunity

went

Like

is not entirely

We also

plus

future

seemed

it
no

•.yuuiic company xo

every-

bright and

man

else

reversal

a

significant part of the

Canada.

payable

were

decline

it

development

few words

a

in

with

This

years.

,

prevent

operation.

in

as
Section 95A, which,: to
is one of the best bits of tax
legislation introduced in recent

tongue.

The

im¬

me,

Bond

looked

Were

known

{■.its subsidiariesV
one's

but,

destroyed.

and Share and

were on

just add

States

static, then refunding issues, with two
excep¬
which tions.
First, a Dominion of Canada
continues up to this moment. Of
issue in 1948, and
second, finan¬
course, present currency controls cing of the
Canadian Oil Pipeline

chief

Taxation-

taxation

British

So since the first World War the

•

unduly deprive the

would

1913

remained

gradual

a

way

tax, our incentive

snares

Electric

that

investment

ital. At

of dividends

Canada's

high

the

had irom 1924
to March 1926.

me

United

United

major benefits of his labours.

about

uninterrupted
rise

.

from

years

issues by

new

debtors

,

aginative and tne industrious from

I

will recall the

■

twenty

of many.

concerns.

them

Broadway.
Many

:

Canadian

.

developments in Canadian mining, oil, timber and

out

England. For about

trend, much to the dissatisfaction

nomic

progress and important role played by United States
capital invested in its industries. Furnishes interesting data on

are

your

of capital from

there

eco¬

their

market, offerings of

definite
the flow

began

By ARTHUR S. TORREY*
C. Pitfield &

a

change, that is, the end of

And the More Promising Industries
President, W.

1918, brought about

million of provincial and munici¬
pal bonds have been sold in

1914

on

page

29

Chronicle

The Commercial and Financial
16

.

.

.

Thursday, June 7, 1951

(2356)

Continued

jrom

page

the

through

through association with

of concerted force

means

preferably

either as individuals, but

action under this head can be

5

other trusts.

York Stock

Members New

a

"good fellow" who does not raise

•
there

questions.
It

action

STREET

MAIN

592

should
cannot

be

pointed

be

out

that

Sometimes

avoided.

it

embarrassing

"
are

.

instances

where
at a

is profitable to go,

discount, into companies which are mismanaged and which
can
have great potentials if a management change is effected
by exercise of pressure. Also there are cases where it is impos¬
sible to sell at a reasonable price, and being locked in, the Fund
management has to act forcefully to protect its interests. As to
public relationship, while innocuous manners are preferred they
are not respected, and a certain amount of independence and con¬
structively destructive action is necessary to avoid being pushed
around by the more aggressive groups.
The Fund management,
in protection of their stockholders' interest, therefore have to
weigh the elements involved in each individual instance and act
for their best interest on the basis of their considered judgment.

proper

ORANGE, N. J.

EAST

5-6667

Phone ORange

New York Phone REctor

2-4480

NEW JERSEY

In

matters as pensions, for instance.
That is an excellent example of how silence and inaction worked
against the stockholders. The Funds should have considered the
matter thoroughly and established a fixed policy of action in their

short, there should exist a flexibility to act in whatever
the highest results promise to be forthcoming.

man¬

proxies a long time ago.

the movement started would have at least
inequities and arrested the chain of events
which are beginning to plague us all.
The wild pressure for
"security" on the part of everyone and the mounting pension
obligations of the industry will be a big problem sometime in the
future and
the stockholders will pay for their thoughtlessness
Any action when

brought to focus the

and inertia.

and unfair.

In

MUNICIPAL BONDS

under

interest,

and

longer

the

system to which we belong.

Adams & Hinckley
24

Commerce St.,

Newark 2, N. J.

MArket 2-6002

Telephone
;

consideration is a simple matter
by each of the Funds, on basis
of the best judgment of the managements. The size of investment
and nature of difficulty will bring logical reaction.
Your reference to Mr. Avery and Montgomery Ward can be
used as an example of such a case.
Clearly, when Mr. Avery's
personnel policies and his fixed ideas on economic trends started
to interfere with the profitableness of the company, a decision was
needed.
In that particular instance it was better for most Funds
to sell the stock than to attempt to force a correction. The market
was broad and he was too entrenched to hope that disagreements
The first

and

SECURITIES

INVESTMENT

N. Y. Phone

DIgby 4-6282

New Jersey

or

Securities

or

direct practical

be handled individually

discount

protests would be of any use, so sale at a few points
value was a cheap way out of the dilemma.
As to the

more

intangible aspects of longer range

Public Service Issues

Newark 2, New
Mitchell

Phone

new jersey

municipal bonds

★

Mitchell 2-2800

744

BROAD

STREET

New York

Telephone:

REctor 2-9289

NEWARK 2, N. J.

BROAD STREET

MAY:

matter you

raise of the

responsibilities to be discharged
is one that interests me

collective stockholders,

The

trouble

companies like

with

ours

making a point of

the time

speaking up at annual meetings is it is then too late. By
the annual meeting is held the proxies are all in and the result
will not be altered by any speeches that investment companies,
anyone

Investment companies can, therefore,

else, may make.

well in
protesting

.H

Underwriters, Brokers and

spite of this we do go

have been of some

criticism by the press.
MERRILL

Dealers

and UNLISTED

GRISWOLD,

Massachusetts Investors

Chairman,

,;

LISTED

few occa¬

to some meetings, and on a

help to the management.
The longer I am in this business the more I believe that the
most constructive way to prevent corporate abuses is through com¬
ments by the press, published before, not after, the annual meeting.
For instance, The London "Economist" used to publish articles re¬
garding new offerings as soon as the prospectus came out. I expect
that the sponsors of new issues were, therefore, most careful not to
have anything included in their prospectus that would justify ad¬
sions we think we

verse

2, NEW JERSEY
3-0213

I. T.'s Griswold

And From M.
DEAR MR.

Fund, Inc.

*

*

&

good by arguing matters out with managements
advance than by going to stockholders' meetings and

Harry P. Schaub, Inc.
MARKET

POPOVIC,

do more

BRIDE, MILLER & CO.

Newark Telephone:

744

City

New York

In

Mac

why not?

NEWARK

D.

MILAN

Vice-President, Blue Ridge Mutual

against the inevitable.

securities
★

that there is no doubt that both
benefits the Fund managers should exer¬
cise judgment in signing their proxies, but the action should be
flexible and subject to individual appraisal in each instance; and
on larger issues it should be a concerted action.
and indirect

for direct

or

funds

toll bridge-tunnel

★

,

it would seem

In conclusion,

considerably.

Jersey
2-7660

mutual investment

1

of the worse abuses.

some

by the Funds as

Street

Commerce

of

The

mueller & currier
24

simple rules.

saddled with pension

have been

profits and

accepted and
as trained
economists the Fund managers should be aware of the import
of their activity or inactivity.
They should at least express their
opinions even at some expense and temporary discomfort. The
duty to the public, a sense of responsibility must be
acted upon not for altruistic reasons but simply because

Bank & Insurance

-

can

approved in their proxies unless it quali¬
For instance, no company should
obligations for past services which
amounted to nothing else but juicy retroactive salary payments.
Also the amount of pensions should have been set at a reasonable
level well below the maximum salaries earned by active officers
in full productivity.
Many pension funds have been set up out
of tax-paid earnings because even the taxing authorities did not
recognize them as fair current load.
The stockholders were
completely inarticulate. A slight disapproval by an informed and
powerful group would have gone a long way towards elimination
plan should have been

fied under certain

from the fair
♦

Municipal

is divisible
immediate
range problems where in addition to
a factor of one's duty to the economic

general, the type of action that can be advisable
the two heads of practical considerations of

tangible benefits there is

period was the time when the Funds should have
the" matter and set a formula of fairness. No pension

That early

examined

Categories of Factors

certain

started in the '30s it came from

which simply found another way
of increasing their pay.
They set the example which was quickly
followed and improved upon by the others so that now the pen¬
sions are universal and are in many cases completely unsound

ner

INSURANCE STOCKS

the movement

When

entrenched management groups

BANK STOCKS
Two

applies to such broader

This

Exchange
fers to deal with

Pensions

The Matter of

Observations...

Nugent & Igoe

Trust.

Boston, Mass.

SECURITIES

PP^
I Municipal & Corporate
Securities

|
E

-■

v >•

v

v

new jersey

PARKER

EMANUEL, DEETJEN & CO.
Mpmhprc
&

LCommodity Exchange, Inc.

New York

general market

WEISSENBORN

(New York Stock Exchange
J New Yorlc Curb Exchange
I Midwest Stock Exchange

120 Broadway

AND

AND

municipals

5, N. Y.

SPECIALISTS

| Van Deventer Brothers
~

E

E

NEW

F. R. COLE & CO.

BANK STOCKS

JERSEY

Incorporated

24 COMMERCE ST.
NEWARK, N.J/

New

Newark Telephone:

61 BROADWAY

State and Municipal Bonds
★

NATIONAL

MArket

3-0190

Open End Phone to New York City
DIgby 9-0767




★

New

JERSEY

810

Broad Street,

or

trust

j

\company/

BANK

1812

Newark 1, New Jersey

WOrth 2-7776

municipal
'

.

Fidelity Union Trust

■

Company

Municipal Bond Department

11

NEWARK, NEW
Tel. MArket 2-5800
New

Telephones—Newark Ml 3-4000—New York City BA 7-5928 Tele. NK 348

Market 3-8445

York Telephone:

bonds

{(fidelity unioni i
\

★

STATE

FOUNDED

31 Clinton St., Newark 2, N. J.
Phone

NEW

state &
-

★

Koellncr & Gunlher

NEWARK,

K.

Jersey

Securities

NEWARK 2, N.J.

24 COMMERCE ST.,

NEW YORK CITY

»

Incorporated

York

JERSEY

Teletype NK 170

Wire COrtlandt

7-8075

Volume 173

Number 5018

,

.

.

The Commercial and Financial Chronicle

(2357)

Bond Club of New

of the Bond Club of New Jersey: Harry Miller, Nugent & Igoe, East Orange,
Vice-President; Bill Roos, MacBride, Miller <ft Co., Newark, Treasurer; C. Wallace
Smith, Smith, Barney & Co., New York City, President; Fred'Brown,
'
White, Weld & Co., New York City, Secretary

Officers

Hal

Murphy,
Bill Roos,

Commercial & Financial Chronicle, New York City;
MacBride, Miller & Co., Newark; Walter F. Coss,
Van Ingen & Co. Inc., New York City
✓

Harold

17

Jersey Annual Field Day

N. J.,

H. S. Krusen, Shearson, Hammill

Smith, Pershing & Co., New York City;
Currier, Mueller & Currier, Newark

Cyrus

& Co., New York City

Chas. S. Bishop, Central Hanover Bank &

Royce

N.

Flippin, Smith,

Barney &

Trust Co., New York; City;
Co., New York City

B. J.

A

Q
'-'I.'

Harry

D.

Miller,
New

Walter

Nugent & Igoe, East Orange, N. J.; Scott Russell, Gtore, Forgan
City; Ed Kezer, B. J. Van Ingen & Co. Inc., New York;
Court Parker, R. W. Pressprich & Co., New York City

&

Co.,

York

Schumann, Dolphin & Co., Philadelphia; Walter Fixter, J. W. Sparks & Co.,
Norton Rogers, Rogers, Gordon & Co., Inc., New. York City; Jim Musson,
B. J. Van Ingen & Co. Inc., New York City




Philadelphia;

Foy Porter, Estabrook & Co., New York; Gill Morris, National Newark & Essex Bank, Newark, Paul
Welzmiller, J. B. Roll & Co., Inc. New York City; Fred Brown, White, Weld & Co., New York City

Ken Cronyn,

MacBride, Miller & Co., Newark; Edward McLaughlin, Paine, Webber, Jackson & Curtis,
York City; Ken Ebbitt, Shelby Cullom Davis & Co., New York City;
Robert W. Lane, MacBride, Miller & Co., Newark

New

18

(2358)

The Commercial and Financial Chronicle

.

.

.

Thursday, June 7, 1951

June 1st at Montclair Golf Club
(Continued

Daniel

L.

Reiber,

National

Addison

K.

Harold

Albert

D.

J.;

Peoples National Bank & Trust Co., Belleville,
Eugene A. Riordan, President, Harrison-Kearney
Trust Co., Harrison, N. J.

Biddulph, Bloom field Savings Bank, Bloom field,
Inc., New York City; F. Norman Lillig,
Chet

F.

State Bank, Newark; John Ryan, Ryan, Hanauer A
Barry, National Newark A Essex Banking Co., Newark;
Kennedy, E. F. Hutton A Company, New York City

P. Luscombe,

N.

H.

J.

Bardsley,

Salomon

Bros.

A

N.

Co.,

Newark;
,

page

C. Wallace Smith, Smith, Barney A Co., New York; J. F. Dolan, Spencer Trash A Co., New York;
Chas. S. Morley, New York City; Kenneth D. McLaren, Corporation Trust Co., New York Citythe oldest playing foursome at the New Jersey Bond Club outing

J.; James J. Gustat, Halsey, Stuart A Co.,

First

National

Hutzler,

New

27)

Ed Hinckley, Adams A Hinckley, Newark; R. F. Vanderhoff,
Fidelity Union Trust Company, Newark; J. Albert Leek,
Coffin A Burr, Incorporated, New York City

Bank

York

of

John

P.

M.

V.

Poole,

R.

M.

Keator, Jr., Lord, Abbett A Co., New York City; O.
Griffin, Griffin, Kuipers A Co., New York City;
I. C. Ayers, Emerson Cook A Co., New York City

Goldman, Sachs A Co., New York City; Edward Winpenny, Wilmington
Wilmington, Del.; Jack Sachau, Blyth A Co., Inc., New York City;
Norman Brassier, Paterson
Savings Bank, Paterson, N. J.

Ryan,

Pater son;

City

S. Astarita, President, Montclair Trust Co., Montclair, N. J.; S. M. Weissenborn, Parker A
Weissenborn, Inc., Newark; R. A. Hitchings, Vice-President, Fidelity Union Trust Company,
Newark; J. W. Kress, Howard Savings Institute, Newark




on

Geo. B. Gibbons A

New York

D. 1

Group,

Company, Inc., New York City; E. H. Hills, Eldredge A Co., Inc.,
City; D. E. Fitzpatrick, Phelps, Fenn A Co., New York City; L. Walter Dempsey,
B. /. Van Ingen A Co. Inc., New York City

Volume 173

Number 5018

.

.

The Commercial and Financial

.

Chronicle

(2359)
Continued,

from first

tion, and

page

your own

longevity

19

may

this way make you sad and
broke
at

Taking the Crunch Ont of
Mo¬
Bite via Municipal Bonds
classes:

(1)

General obliga-

tioris^-aj Virtual first mortgage

all ,land^. buildings and personal tfon of
particular issues
property jm a community — with to your needs or wishes.
interest

met

Bonds;

(2)
Revenue
issued to build a

usually

tunnel of

bridge; or to build or
buy a municipal electric, gas or
water system.
The specific revenues from these projects are then
applied diretetly to interest; sinkingYund'and'bond redemption
a

other

key quality of all

a

This

issue )

She's-

the-bonds

Shakes

accorn-

Fi?rst

nurnoses

issues

it

of

Cf»
income

Obviously
this

SI L
are

nf •(hehover
of the buyer.

the

tax-free

increases

«

two

But

the altitude of your

income. Right
$16,000 taxable

away

tne

of

:

•:

quoted

(over

takes

great.

more

It

would

be

advisable

to

opinions

(if'

issue is to find

back

problem, the facts

your

facts" s'hoiild

have gathered will give you
clde
to
its solution. These
be hoiled down" into

tions

statistical organization,

you

;

-,

the

*

2

page

:

simplest, most understandable
form; so that during your second

Security I

call

operating expenses

he ban

inf.?p#isp

abi]itv th

do

the

things which will

redound to his benefit. Be careful
and avoid complicated charts and

well

as

on

your prospect you will be
able td show him graphically how

Like Best

S.

as

too detailed explanations. In fact

an

inventorv tnrn-

if

you

put

can

the

whole

storv

'your

up

own

statistical department is
limited). This could be done

by
using the material an'd classifica-'
prepared by a recoghized
On

a

second

shohld

keep

unless

sheet, which

in

your

need

you

it

compute

average rate of return
te whole. You

as

well

as

mnvpc

yield

safetv

as
vnn

the list
able

be

can

bv

the

on

be

may

show how

you

possession

to

improved

making

oncfrtoct

Iw.—

nated,-the final decision.in a pur- ^ likely to ask you to leave it during 1932 or 1937 of each one
chase PartlciPati°n 1** with the with him for study and nearly of the securities in the account.
individual store-buyer. •
Company flway? if you do that you will In case your prospect
says that

'the
you

-executives areipaid on the basis find that, it will be fatal. Your
hOw?f a fixed salary plus "onuses on sa e must be made on your second
be^
3 rad'° °f a"out 40-60. Promotions eall-if you don t get it then it
.wMiinri
peculiar!- are made fr"m within the organi- will, be quite- unlikely that you
.

tfo

ent

£res- will

wherever possible. At

the

average

'

for

age

t^pomnanv
-

,-ft

the

vparq

No

The

Inventory Problem

Vnnr

T°

W

.

elements

investment

you,
on
request..- Secondly, appatience, thrift, industry (or the. pended to teach delivery of a mu- merchandiser" with^about'sO^"of
}
concentrated in such lines
fact that te^isfant uncle laid off
nicipal
a couple of
bond,^ there is what
inventory
million.in your direc--ioji.r, Now this is not an mpin- ,^|. a;:^-me wjien

Pr°spect

good

worried

about

market

that his stocks

you-.can

show

are

Set

all

him

what
has happened to his Good
Stocks
in the past. Never
create argu-

him
sound

are:; Proper
up
a
box
industries in which

showing the

isn't

"

always let him get his

ideas off- his * chest."'Agree

program

_

he

values and

monts and

PrllnLT
of .every

diversification.

May is essentially a soft goods

■
'

Tn

J.
.

•

'

largest

-

/

ever close the case.

'

execupyphi-

13

s

•

counter) on a
yield to maturity basis; but dollar
prices will cheerfully be given to

50% of the next $2,000, 53%
next two grand,, and if by

main

investor's

.

'

;

The

.

now, starting, at
income,s ; the
government

•-

'

Continued'from

ties about municipals I ought to
touch
upon.
First, by custom,
they're nearly always sold and

of

with

the

the

fflnk

Would

i™

There

importance

.

deal

.

"

-'

•

-

"

ex-

^itytoday—hence

a

high yield bn the bonds

a

in.;»i

are

Program Sale

(Article 5—Conclusion)
Siiice

taxable,

ol territories

'IftorroW"nh d^aAdSi^ibl^ie^elsak
M provides
tex-free re--' hOrtfT ahd then
thrn regardless of the s^ze of the
elegant its bbnds
inua

U.

The

r
'

>

,

-

most

By JOHN DUTTON
i

td heln take the

future

are

few

a

surely be said for

the

tailored

empt from both federal and State

mumci-

cxemntion

two

item—whereas

can

urScfotls

call

Government

Securities Salesman's Corner

both

presseT^ewi?^?' se^ected^long-

date, since, when
you buy tax exemption, you want
to be able to hang onto it, An-

.

But

remote

a

as

increasing and inevitable,

In general the best yields are
found in the long-term bonds; and
it's
smart
to
buy
noncallable
bonds* where possible; or at least

and "

to view

come

kind words

t

payments and maturities
by that

;out 'of taxes levied

community;

have all

we

ment and guidance in the selec-

on

V

So, while there seems to be no
flight from taxes, which

all be glad to give you
wine list of offerings, plus judg-

a

life.

of

perfect

sions;;and fall generally into two and they'll
main

inconvenient time

an

and- then

your

present
Don't knock him-down

case.

—remember,
lead
do

your prospect should have repre-

and

this

Tri

with

tactfully

to

arte

you

there

guide—you

to"

only
Cooperation.

with His
with" Hi

can

^hhphi^oh'

sentation., GitetekOff those where havte found out remember—you
problem for ret^er^is'cbMifliM^*
Not Represented.;
which'may be'
iudgnmnVof some flnancial'pooh- a°"^ered a paramount one. it, Cprrect distribution of his fimda more infconfe, capital
appreciaton.;
bahthat the Widshfe excellent
might be noted that the company ^-Divide your sheet into Reserve protecting his heirs, retiring some
yah that the bonds are excellent, Qn March 31 had an inventory of Type Assets and list cash,
fair, or
you

b^twen'$80 000 and $90S000_
Uncle ?Sam' will kettle tor
uncle
faam
setUe for

lates

i

then
■

Wl11

84% of this section of your pelf,
And in "this last nlushv instance-a
this
plushy instance, a

municipal

bond

just plain lousy. It's the
handiwork of attorneys' and alattorneys, tend al
2.50%' lows that there is such a tow
.50%
is
town or,

yield ng
yielding

Lets

of

the

ladder,

taxable

the other

Even here

end

considered by the management to grade- corporate bonds

that

the

in

securities

be realistic in the

to

appear

their

taxable

,u

income.

Thus,

if
beyond,

you're in this bracket, or
you'll want to know more about
municipals. -And even if, pres¬

ently,
don't

you're below this notch,
give up—don't go away mad!

For "one of two

-maybe

both.

fortunes

may

into-the
ternal

50,

things
Either

your

own

upgrade

soon

where

zone

happen

can

you

Revenue begin to

you

In-

and

split 50-

the next tax bill will reach

or

down by a

few thousand to where

you-live!
Which brings

me

back where I

started—today's apparent bargains
in municipals.

These may suggest

purchase:

your

recent

(1) because the
heavy price dip in this field

makes'em look cheap; (2) because

'need the exemption now, or
because
your
own
income

you

(3)

curve,

taxes

secure

that
more

of

impel

may

tax-free

much

you

so

you can

have

to

deal

some

sort

items that appear at-

some

These

diverse:

and

values

^

picked

out

from the market of June

1, 1951
of what's around.

'

-

'

Just

to. indicate, the

they've

price jolt
consider "that early

had,

in March,

Seattle

offered around

a

2's above

2%

they've dipped $100
weeks!
is

So

it

basis.

a

could

that

silver.'

on

*•

m

You

.foreign country, and

a

can

prove

really live there,

you

(aren't just visiting)
full calendar year

salary

and work

large .cities*

a

there, then your
that country is

in

earned

Federal tax

if_you

exempt.

You

get

can

alimony and if it's confirmed by

order, get runtax exempt
thats over
can

f
too.-

You

by a
collect

tiuck and the damages you
exempt, though you may not
then enjoy same. * Ditto the "soare

much-a-week",

accident
when

income

policy

if

from

had

you

You

buy

can

an

its

of

The

list

Base

lor

outlook

Mav

s

(not

last

hiaher

^

th~
19cq

or

higher

-n

third

Orr the full
dojjar

two

or

DoinL
the

of sales

one

one

is-

and

4%

up

vear

a

While

the

a

annuity and
income

is

a

tax-^

certain

to

securities, there
companies whose op-

now

are

sale of securities
assets at a loss

importantly the
or.

sources

quite

so^

liquidation of

The dividends re,

suiting from these

a

and

Pennroad
benefits
oeneiits.

to

few

receive

tax

are

people

have been latching on to
Corp., Electric Bond and

United

Share

exemp-

There are snmp fine
inere are some tine

"break-downs"

on

these and

simi-

situations

now

available

at

a

;

Then, of course, you can sell
everything, put the money in your
checking account, and draw out
much

a

year

tax exempt.

Turnpike Authority
Authority
Seattle .(Wash.) Munic. Lt. & P.
Transit

State of New

York__

3J/2%
.

a

3%

' 2

llA

-Due-

Aug. 1, 1984'
July 1, 1978
Mar. 1, 1980
Jan.

if^T'of

incOihl
^ppr^ioynrome

fairlv good exemption base
rpKnPpt

Df

profits

<65 00

fhp

tn

PYi,

share

a

2.70

Jan.

A

.

,

nl

y°u

"V'

.

designates

y s 1 s

can

be made,

or

to

two

show

can

taxes

amounted

Cents per

thought

to

paid

$13

the

in

J.40%

Mar.

1, 1969

Conservative

as,

1;

common

that net

last

should
current

be

vear
or

45

share.

It is my
income for the

taxes and

maintained

level,

near

perhaps

or

slightly higher during the present
defense spending period, meaning
that'sales

I t

and

earnings

to

Jan.

1, 1975

y™r
1

ls

Semi-

an

out^

its

help

Do this

and you not

orily will make a subsale, but you will have
something far more valuable—you
will have

customer!

a

Teleprompter Stock
by Bankers
An

offering of 49,000 shares of

common stock
(par $l) 'of Teleprompter Corp. at $5 per share has

been

all

child

Co.,

&

sold,
Co.

is

was

and

announced

Coffin,

Betz

eeeds* from' these shares
may be
used for the completion
;of.a production program and acquisitions,
and

the balance

marxex

Y^°,

° ®

,

5

flmH

speculative

in

ms-siocKnuna in
class

and

there-

K
. k
•
comarativelv too
tote hls risR ls comarativeiy too

for

general

attractive holding -in
department store group for

conservative

of| 5.6%

funds

and

the

yield

quite

secure.
In
connection with dividend
policy it

seems

Teleprompter

originall

is

an

conceived

as a

invention

practical

*

cueing of actors and

other* performers in television and
motion picture production, visual
d

_ti

nnblin

^npakina
caseation,
puoiic
speaking, and
and
other related fields
*
otner reiatea neias.
.

each

year

since

1910

a

dividend has been paid.

common

I
I
»

Prompt Wire Service

I
,»

bURHAM,
Courts &

I

.

To Western Markets in

I

LOS

ANGELES

•

SPOKANE

•

DENVER

SALT

•

LAKE

CITY

!
<1

I
I

i

I. A. HOGLE & CO.

-

Membeis
and

affiliated with

Tel.

jj

WHitehall 3-6700

New

other

50 BROADWAY

N. C;—William N. J.

Co., Ill Corcoran Street.

^

FOR BROKERS AND DEALERS

1

York

cor-

purposes.

standingly
thte

&

underwriters..

Of

you can make up

,

(Special to The Financial Chronicle)

•

you

and'

stantial

ESTABLISHED

2.00 ~
3.90

order,

number porate

^al* at ^ top tne
of
w?uia sn°w

With Courts & Co.

3.00

p'utting-

will watch it for him >
him to keep it that
way.

vaiue °.f ea^b category. A man answer to the

before

be

have

beSlde it. Then

t
takes, should gain considerably,. I 'the
f f

consider the stock

Gordon has become

4Y2

she?t should

2.50

*

propor-

the
total
offering, 20,600
to quality. One of the methods shares were sold by stockholders,
^ by investment advisors is to The balance of 29,000 shares was
create categories and number them sold by the company and the pro-

*

1.80

proper

this and then do one more
thing *
convince your prospect that
after
he has his house' in

might also grade his stocks

such

rather than disburse extras and in

3.75

the

our"

industries, and there yesterday (June 6) by L. H. Roth-

Conservative 2; Speculative 3;
Very Speculative .4. Each stock
or k°nd listed on your master

million

company,' despite higher
costs

of

of
assets^and
them into the right kind of
property that will do this job.
Show

y°ur

improve it. If he has

three

or

matter

a

t"ioning

too little

nrnfits

Yield About

1, 1974

1.80




stocks,

common

Excess

net

regular payment when warranted

1, 1996

Territory of Hawaii—.

—

real

day, having more peace of
«
mind,
or just better
investment results.
over a period of
years. It is only

-

should be noted that the manage-,
creeping infla-, ment has tended to increase the

Puerto Rico Water Res. Author.

Fairbanks, Alaska, Municipal
Utility Revenue

other

twenty more good ones where
he can spread his risk—there it is.

term

to live on—totally

But

Rate

Oklahoma

a

are

1

intermediate

of

half of his investment account

in

Priced to

Chicago

and

an

done

You

itK

value

reserves>

be

con-

.

hag

net

a

and

Pr°spect in black and white just
where he stands and what must

5%

gain of 5%

servatjve expectation.
-

in

with

quarters.

considered

hteve

(except home), speculative

Such

ex-

to

medium

Also

where improvements
If there is too much

nercentaee

fourth

and

saies

even

there.

Fluctuating Assets

t,v®".fiumns(

profits
during

auarter

second

Dected to be

with

oattern

year

The

and

Indicate the percentages in each
t0P °f the r6SpeC"

Sales

April
ate' estimated at

pubUshe4d)

'above
,

the

preferred

is

Type
preferred stocks of
'
"

calibre

bonds

estate

c0nsidered to be satisfactory

tax

so

1951

grade

section

a

-

short

Semi-Reserve

and list

section for

'

;
EPT

lists

have

of

•

Reverting

tibn
tion

Aver

over thi
the

"

Good

ene

free.

are

aholft

Next

investment

ari

.™ cdrptoatioh

you were flattened.

percentage

an

number of-brokerage offices.

now

-

work

can

vv.inion

about SR million
$8

y^ar Previous-

Perhaps it ought to be stated
that municipals aren't the only
tax-shelter around

^04=

nrevious

"•

•

t

crease M
of

bond

a

Thus

good time for your municipal
shopping. There are fine municiour

ling"

to

lar

a

pal houses in all

linked

were

bond in six

be

,'h,

,

to be sort of like '"Ster-

come

exempt;

were

and are samples

.

approval

erations

shopping list, I've jotted down

a

tractive

has

privilege

may be worth a great
in years to come.

below

i

prospect

a

now

'Just
of

the

or

higher

.

expectancy trends.1 which
working capital Jan. 31, last, Assets

Net

specialize in these "opinions" and

of

hiatUrity;

light of current

sales and sales

be legal and valid obligations
There are a few law firms that

exempt yield of 2.50% is the equal
5%

Were

cash values, short-term mortgages,
$23 million against government ~ b o n d s,
municipal
figures are bonds of short maturities, hfgh

$15.8' million.^Thesfe

and

tax-

a

jng drders

^nds^qulstion
question,

however-$16 000

income.

life insurance

previous> whne its outstand-

year

issuance of toe bonds
the

Dan.

back to

go

$09 million against $52 million the building and loan

<wYl thai the aldfrmen met' ^

whv

are

savings,

handiwork'of

ahbf1ltern*ST° ysnldvnn01^pp
-tax exempts
exempt^ are tycoon bait'
tax

more^llcudti

.

1915

.

Stock

Exchange
Principal Exchanged

NEW YORK 4f

N. Y.

Teletype NY 1-1856
.

The Commercial and Financial Chronicle

20

"Despite
ther

conviction that fur¬

our

inflation

.

Thursday, June 7, 1951

.

By ROBERT R. RICH

share

upon

request from

investment dealer,

your

or

from

Funds

of

mutual

shares

"The

been

&

securities

J.

can

otherwise

can

trustee

his

disposal.
in

used

BULLOCK

the

be

They are being so
cases.
It is to

many

FUND

It is aimed at

explicitly make a virtue of
what is already a

of

Brock Stevenson's Book

the

clearing

mystery

have

billion dollars to

a

Explaining Socialist Fallacies more than two and one half bilt
v„„„„„„
Hon dollars. There are now more
To the Younger Group
than Qne minion
individual in_
dealer

writes us

occasionally from Vance, Sanders

has

Boston,

in

an
•

,

Established 1-894

'

i

Recently,

anything.

ret out almost
he sent

us

u

tion

letter written to the

a

for Economic

Foundation

said,

Shelly

' Mr.

York.

o

S e y,

New

in

his

,

"As

licly offered Mutual Funds.

*

covers

shares
needs
and

to

special

institutional

investors. AdManager, Mutual

private

dress

the

Funds Department.

KIDDER, PEABODY & CO.
Founded 1865

Members New York Stock and

Exchanges

Uptown Office 10 E. 45th St., N.Y. 17
*.

;

MLJrray Hill

2-y l go

mentioning
Funds

Without

of the Mutual

any

by

the

succeed.

to

the

name,

100%

In an effort to explain the

pupils.

tuic

follo„,r

thonrv

t

try this approach:

It goes

front the salesman.

"When

one

take

brighter or

pupils

of 95 on

I

the

of

makes

a

tell him what he can say and what
cannot

explains

It

say.

what

an investment fund is, the various
types of funds, the costs of pur-

chasing, the risks involved and

a

section

important

of

the laws and regulations applicfunds by reason of the

able to

SecudUes

^

Act

ig33(

the

20

away

of the

contains

manual

a

,

points

and

make

mutual

about

investment

funds and explains why.

cording to his ability and—since
both would have a passing mark—
each would receive according to
his need.
After I have juggled

vernacular

grades of all the other pupils
fashion,
the
result is

this

ownership'
grade of between 75 and 80—the
'common

a

needed

for survival.

£x_

Parti
list of

ment Company Act of 1940.

them to a student who has
made only 55 points on his test,
Thus each would contribute ac-

usually

the

manual recites in simple language

test, I suggest,statements that salesmen may not

a

give

in

to

on

change Act of 1934 and the Invest-

^

harder-working

for

passing, or

Then I speculate with

pupils as to the probable rethe social-

suits if I actually used

Custodian

with

concludes
and

words

terms

of

Part I

glossary of 92
which are the

a

the

mutual

fund

industry.
part II of the manual tells sales-

the highly productive
pupils —and they are always a
minority in school as well as in
life
would soon lose all incen¬
"First,

Fund;
Certificates of Participation in

INVESTMENT FUNDS
investing their capital
IN

BONDS
(Series B1-B2-B3-B4)

PREFERRED STOCKS
(Series K.1-K2)

producing. Why strive to
make a high grade if part of it is
taken from you by 'authority' and
given to someone else?
tive for

(Series S1-S2-S3-S4)

may

be obtained from

Tte Keystone Company
of Boston
50

Congress Street

Boston 9, ,Ma.ssacliusettJ




productive

to

level

of

the

point,

survive,

have

no

in

the

low

producers.

At

order for anyone to

'authority'

woulft

alternative but to begin

and
punishments against even the low
producers. They, of course, would
then complain bitterly, but witha

Prospectus

less

produce. This socialist-com¬
munist system would continue un¬
til the high producers had sunk—
or had been driven down—to the
or

that

COMMON STOCKS

the

"Second,

pupils — a majority in school as
elsewhere—would, for a time, be
relieved of the necessity to study

system of compulsory labor

out

understanding.

value

asset

per

Fund

Bond

$7.99 on April 30, or 25 cents

higher than
Fund's

Oct. 3.1, end! of the

on

previous

fiscal

and

year,

the April 30, 19o0,

62 cents above

figure. This contrasts sharply; with
the action of prices of most highdeclines

as

their

in

prices'"were

the rule.

j£.'

On

April 30 assets of Manhattan'
Bond Fund amounted to $30,835*750 and there were 15,560 share¬
holders.

-ib

\
'

of investors for any
in the investment

\

half

total

the

of

com¬

corporations,
companies, estates,
of

accounts

the

flects

tude

undoubtedly

said,

re¬

investment

lati¬

wider

by a large

granted trustees
in

recent years.

They noted that of the 30 states
the "Prudent Man" rule,
15 have adopted it since 1946 and
that eight of the. nine states that
have specifically approved trus¬

having

tees'

investment

of

use

company

Funds

discretionary powers to
trustees,
However,
specific au¬
thorization to use Keystone Fund
grant

many

instances.
Fund,

BOND

commented

on

Copies

"The

in

one—has

been

the

past

the semi-annual reports
S3

of the Keystone Funds B2 and

made public.
an

This total represents

increase of $13,546,100 over

the

combined assets of $207,778,400 on

date last year.

the corresponding

Net assets of the Medium-Grade

Bond

Fund B2 increased to !$21,-

,

assets

of

$9,485,805

on

30,

April

1951, equal to $17.40 per share on

545,051 outstanding shares.

;

NET ASSETS of Bullock

TOTAL

Fund, Ltd., amounted to $11,647,680,
or
$24.12
per
share,
on
April 30. Three months earlier, on
total net assets were $9,944,381, or $23.-32 a share.

Jan. 31,

conflicting

six

the level

of

busi¬

activity and corporate earn¬
ings,"
according to the report.
"The minor and opposing
force
has been the effort by the Federal
to

Keystone Funds on April 30,

1951, were $221,324,500, it is dis¬
closed by

ness

Government

without

be obtained

COMBINED NET ASSETS of the
ten

existed in the bond

the

may

obligation from Wellington Fund,
1518 Walnut Street, Philadelphia.

months.
major force—a constructive

market

worthless lOO,OOQ,0OO Ger¬
bill on its frontispiece.

mark

man

in¬

vesting only in bonds, in its 27th
interim
report
to
shareholders,
forces which

en¬

But

.

What Can It Do for You?" repro¬
duces a

shares has been written into trust

MANHATTAN

.

ing the 12 months.
The Keystone Speculative Com¬
mon
Stock Fund S3 reports net

45

a

in

.

states is

in

greater willingness
on
the
part of those
creating
trusts in the "Legal List" states

instruments

pamphlet

eight-page

"This is Money

creased to $25.12 from $23.83 dur¬

located

are

attributed to

to

The

institutional

and

trustees

folder on how'infla¬
purchasing power

in the Keystone

ginning of this year.
That

just

628,350 at the close of April, 1951,
from
$16,744,257 a year earlier.
Net 'asset
value
per
share in¬

shares have done so since the be¬

holders of shares

a

has

the dollar.

titled,

The increase here, Keystone

50 %t

published

FUND

tion reduces the
of

period

company's history.

prises

WELLINGTON

business

restrain

borrowings." The government, in
permitting a decline in the prices
of Government bonds beginning in

thinks

D. MOREAU BARRINGER

it

likely

mutual
a

that

fund

the power of the
industry to cushion

market decline, has.

tjy.^io means

spent.. The Delaware Fund
Chairman, in his weekly letter,
been

pointed out that investment com¬

panies
revealed a considerable
proportion of cash and cash equiv¬
the year-end and again

alents

at

at the

quarterly report period.

"Since

of

function

the

in¬

an

company," he observed,

vestment

[n the offering of mutual invest-

March; encouraged a rise in the
general level of interest rates, in¬
creasing interest costs to business

ment funds,

borrowers.

Part III contains a number of
on effective sales ideas
such as, the best source of leads,

the part of gov¬

itely plans to come into the mar¬
ket at some level.
Some of this

ernment authorities did

not exert

buying," he noted, "may already

how to get sales results and

men

gives

sales points of value

many

Chapters

This action

•

•

*

•

i

on

these holdings rep¬

"is to invest,
resent

buying

power

that defin¬

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how the build

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and direct mail, and how to handle

—

,

gain to more than $20,000,is the largest growth in

similar

•

•

•

theory for grading papers.

istic

a

It

000.

this category

•

the

showed

invested

amount

The

Training

of concrete
examples of the pitfalls that con-

be understood by

minimum

K,

must know

giving 'to

lallacy in this theoiy, I sometimes

that

what

just

guage,

his need' is now

generally accepted by most of our

the

t

communist

-

lansalesman

easy-to-understand

large number of other important

each according to

grade

Curb

socialist

the

.

.

public schools,

in

ing to his ability,' and
'

all types

the

simpIe|

taking 'from each accord-

idea of

Company

meet

both

or

,

,..

.

teacher

a

find

I

complete, impartial
information about any pub¬
Write for

Investment

the development of the industry
and then goes on to explain in

he

,

Our service

The manual also briefly traces

Guide gives a number

history

School,

High

Yonkers

Educa-

ci^ii,r

t

J.

Thomas

by

teacher of economics and
at

of

:

.

New York

-

-

curiosity that can ter-

omnivorous

if CALVIN BULLOCK
One Wall Street

vestors in these funds,

or

Company,

five

last

the

in

funds

number of states

&

■/

vestment

from

risen

Net

Manhattan

of

years.

officials

Edward E. Hale, who

in¬

holding shares in its in¬

insurance

Mutual

of

Funds

than half

less

tr.'

Prospectus from your

Funds

.

Mutual

investment

CUSTODIAN

in- the number of trustees and

stitutions

About

some

up

was

grade bonds over the same periodis,
KEYSTONE

reported through its underwriter
a 72% increase to more than 1,900

,

Funds"

Mutual

in

"Shares

About

Know

short-

Funds
profit sharing iunds, colleges and
and traces the growth of the in-'
schools, churches, hospitals and
dustry during the last decade.
libraries.
Trustees
for
private
During this period, investments in
trust funds account for the other

fact."
Alec

and

Should

the

for

term."

Investment Funds."

Mutual

canonizing
From

accurately

Salesman

in all the states

and

"Mutual Funds" can

concisely pre¬
sented to potential investors. The
manual
is
titled, "What Every

hoped that law and statute
will eventually

be

guide
thor¬

to
and

salesmen

ods in which

at

means

number of im¬

histories

case

caution

suggests

oughly explores numerous meth¬

by

afforded

be

with

the

portant

prospective

The

President.

Simonson, Jr.,

manual contains a

be shown that

they pro¬
vide diversification, investment
performance and economy of
administration superior to what
it

120 BROADWAY, NEW YORK 5. N. Y.

&

tion, it was announced by Henry

by trustees for trust investment
in every trust account where

corporation

research

by the Natibnal
Research Corpora¬

prepared

Securities

vestment funds should be used

National

that their prices
attractive) the balance of the
feel

we

has

Industry

Fund

Investment

in¬

for the Mutual

manual

training
Prospectus

our

cross-currents in the market today

Trusts and

holds.

Fund

are

COMPREHENSIVE SALES

A

lasting influence on the price of
medium-quality bonds, which the

intention of

(when

Speculative Series

long-term

investing our buying reserve in
stocks
benefiting from inflation

Mutual Funds

NATIONAL

the

over

is inevitable, and

*

.

(2360)

inquiries. It concludes with actual
sales presentations that have, resuited in substantial sales.
The

training

manual has

reviewed by the

been

•

•

•

•

•

•
•

•

120

York

•

•

•
•

•

•

•
•

•

•

t

•

•

•

•

•<
•

•

•

Government

quality
other

public
40%

common

jn

bonds

the

in

and

highest

utility

bonds, the
dividend-paying

•

•

•

•

report

•

•

»

•

• •

•

•
•

•

A MUTUAL FUND

•

•«•
•

•

•
•

•
•

•

•
•

•

•

•

"Finally I return the discussion

investment management,
ted

to

the Board of

submit-

•

i

THE DREYFUS CORPORATION

—

the

where each

market economy —
person has freedom of

»

•

•

choice, and is responsible for his
own

decisions and welfare."

Securities, Inc., at their
meeting on June 4, Mr. Harold X.
Schreder summarized the- reasons
for

the

conservative

position:

•
•

MM

•

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•

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Prospectus

on

•

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TELEPHONE.*

•

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50 BROADWAY, NEW YORK 4

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request

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Directors of

Group

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NOW MANAGED BY

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INC.

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stocks of good quality,
semi-annual

MM

Dreyfus Fund

•

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the most defensive

position in its history. Nearly 60%
was in cash,

0f the Fund's assets

MM

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Securities
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ten in a simPle understandable
m^,"eIY
For
information
on
available

•

• •
•

• •

• •

•

National Associa-

tion of Securities Dealers, Inc.,
under the Statement of Policy, a

•

•

-

•

•

•

lit

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Number 5018

173

Volume

...

keeping
weight of many
of the secondary offerings of pre¬
ferred and common stocks which

1950, the gross assets of the Trust
increased
from
$956,589 to $3,-

have appeared."

to

have been functioning in
off the market the

I

Mri;

•

Barringer

called

attention

to hpw

readily in recent markets
selling -pressure lightens with a
little decline in price, and how

•difficult: it
-

has

appreciable

been

to

amount

buy any
at

stocks

of

283,307,

day of sharp decline. "Perhaps,"
he said, "our own mutual fund in¬
a"

269,498,

that

the

Fund's

net

assets

retail

The

increase of $5,448,000, or 1089%

since

March

Fund's shares

the

when

1950,

1,

first offered.

were

registered with the Pennsyl¬

vania
is

now

Securities Commission and
approaching. Pennsylvania

dealers asking them to

participate
Sell¬

in the sale of Futures shares.

ing commission is 8%, of which
6% is reallowed to dealers.

Futures, Inc., claims it is a mu¬
tual fund but not an investment

since it trades in com¬
futures and commodities
than
securities,
selling

rather

short and

long.

The fund feels that "It is
tablished

that

fact

commodity futures

an es¬

positions in
provide a

can

positive hedge against inflation or
deflation
superior in many re¬
—

spects to securities, real estate or

other

any

investment."

of

type

The fund's management

shares

Futures

!over-all

feels that

add

"can

the

to

safety of almost any in¬
also

management

however,

that

states,

by

Inc.,

"Futures,

itself, is speculative in character,"
'which

by

borne out

be

to

seems

the

reported fact that, roughly, a
10% move in the Dow-Jones com¬

modity futures index is likely to
result

in

a

50%

value

of

fluctuations

of

asset

up

,

in

move

the

the net

fund.

course

work both

Trust of Boston report

year-end

The effect

Code.

From

report

the fiscal year

for

ending May 31, 1951, and for all
future years, on all income of the
which

Trust

distributed

is

to

shareholders.
As

it will

value

the

of

Trust's

assets

previous

realized appreciation.
this

change,

As

investments

realized.

we

in

about

sented

We

oil

stocks

20%

of

repre¬

assets

our

(compared with 29.9%

on

Oct. 31,

1950), We intend to hold this
sition for the time being."

po¬

Eberstadt, Enstrom

tax

the

by

have

tently

time

a

also

Trustees

plan

optional

announce

have to

with marketwise

contend

held

hearings that must

whenever

there

for

is

will

which

shareholders

to

re

their

natural that when railroad

quarterly dividends in additional
shares of the Trust, or to acquire
shares

additional

the

through

each

monthly

making

month

Trust are:

Street

State

ident

of

Payson Rowe, Treasurer of

Savings

Bank;

John Hancock Mutual Life Insur¬

per,

Company; Francis W. Cap¬
Vice-President of Boston Safe
and Trust Company;

Deposit

Charles Codman Cabot, partner of

Ernest Hen¬

tees of the Trust are:

derson, Chandler Hovey, Robert
Moore, George B. Henderson

L.

and

Joseph Furst.

SIDELIGHT

on

the

art
a

of

in¬

report

of wages and

seeking

its

in

it

the

objectives,

assets
and

are

placed

in

cash,

bonds

preferred stocks when it be¬
a course is in the

lieves that such

of shareholders.

best interests

At

April 30, 1951, Affiliated was not

rising spiral

other costs have im¬
them. These state¬

upon

ments

Inc.

Warner-Hudnut,

of

directors

as

Bo'ost, President of the company.

Eberstadt

Mr.

Chairman
of

is

President

and

board

the

of
F.

to

as

As

securities.

WELLINGTONS

&

the

arranged

cently

Phonograph Corp., James Tal-

Machine Tool
Barge Line Co.,

a

share

from

ordinary

payable June 30, in cash
a

prospectus
from your

on

shareholders' option, to

request

or

the

on

slowing

down,' in

from;

civilian

to

freight
change¬

military

&
Machine
production. This is merely tem¬
Corporation.
porary. On the other side of the
During World War II he was picture there is little question

Co. and Valspar

of

Vice-Chairman

Pro¬
prepared

War

the

duction Board and later
the

report'recommend¬

Eberstadt

three mili¬

ing unification of the

tary departments. He also served
as
assistant 1 to
Bernard
M.

that

but

has

part of the drop
due

been

63 Wall Street, New

the

head of

of the Hoover

organization

Commission

of

on re¬

of
the
executive
government.

Irving

Chairman of the

Company,

Trust

in

net

extraordinary
maintenance outlays. In part this
has

the

stock at

position for which he was quali¬
fied through years of experience
in the financing of foreign trade.

Irving's

business,

foreign

a

been due to a desire to get
shape to handle future heavy
military shipments.
.•
Granting the mixed nature of

roads that continue to show results

well

of

=

STOCK FUND

FUND

The
prospectuses of these two investment funds may
obtained

from

your

investment

dealer

or

&

Company (not Inc.) have moved
into a larger and refurnished office
at the same address, 208 South La
Salle

be

Street,
new

Chicago

room

4,

& HOWARD

INCORPORATED

number

is

1075.

Telephone—CEntral 6-9744, and
teletype—CG 301, numbers are the
Alfred

A.

Harmet

and John

Colnitis have been with
BOSTON

24 Federal Street

BOSTON




•

Great

been regarded as
of the top investments in the

one

long

Montgomery Street

SAN FRANCISCO

that

the
will

1951

of

$9.11

top the 1950
share by an

a

appreciable margin. On this basis,
analysts have again been
recommending the shares as
having outstanding attraction in
many

the

better

grade

investment

sec¬

tion of the rail list.

Halsey, Stuart Group
Offer Equip. Tr. Ctfs.

J.

this com¬

traffic

cut

to

to

levels and at the

low

unusually

years.

business

for

over

30

Plan,

offered

the

certificates

were

subject to approval of the
priced

were

to 3.00%

Commission,
yield from

to

according to

ma¬

turity.
The

certificates will be secured

by

equipment

not

less

than

estimated

to

cost

$7,100,000.

Other members

&

of the offering
included R. W. Pressprich
Co.; Otis & Co.; A. G. Becker

&

Co.

group

Inc.; Freeman & Co.; The
Co.; Wm. E. Pollock &
Inc.; First of Michigan Corp.;

Illinois
Co.

The

Milwaukee Co.; Gregory &
Son, Inc.; and McMaster Hutchin¬

son

& Co.

Stanley Heller & Co.

of

fact,

operation. As a matter
the situation was such

the

directors

the

reduced

months

early

always

are

Stanley
lished
Stock

Heller

1927,
and

equipped

&

Co.,

members

Curb
the

of

$1.00
•

Y^rl

openingj of
branch

uptown

centrally lqcated

at

Avenue,, between

601

57th

;

full}
office

a

Madisor

58th

and

|'

Streets.
The

requests

firm's customers

to

many

for

a

:|hc

of

convenient¬

midtown

office

implement

located

helped

of

their

has
own

program.fln

long-range expansion

addition, Stanley Heller & Co. disc
maintain

completely

staffed

and

equipped seasonal offices in Palm

j-

Beach, Florida. '

year

poor

seasonally

the

estab¬

New

Exchanges, hay*

time boost

same

the costs of.

ones

for Great Northern. This is natural

inasmuch

it

depends heavily
iron ore, the latter
generally moving only when the
on

as

Specialists in

grain and

Great Lakes

are

open
are

to shipping-.
normal for

the first three months of the yeah
Even

this

year

the

road

had

was

year,

an

operating

with

iron

loss

ore

cumulative

loss

opening periods.

the

SECURITIES ?■
Selected Situations at all

Times

this

but

moving

of

RAILROAD

no

net
operating
income
for
the
period. Last year in. April there

since its formation 12 years
volume, the operating profit
ago. Including prior connections,
more
than enough to offset
they have been associated in the
security

phia

record) combined, ly

on

pany

333

in

earnings

only reasonable
full
year's

seems

ago.

year

Last'year this railroad,

which has

Illinois. Operating deficits

same.

EATON

it

expect

announced

a

been

temporarily from
quarterly to $0.75.
:

CHICAGO, Illv—A. A. Harmet

DAIANL'ED

of

has

dividend

A. A. Harmef Go.

In New Quarters
EATON &• HOWARD

these

Northern.

The

EATON &• HOWARD

those

above

One

that

jm

Philadelphia 2, Pa.

that

to

in

York,

WALTER L. MORGAN, President

York 5, N. Y.

profits tax liability in 1951. Even
at

to

United Nations
Commission and recent traffic and earnings re¬
the Security Committee ports, there are quite a few rail¬

on

income,

Distributors Group, Incorporated

foad

tacularly favorable. Also, the

2.20%

Great Lakes

stock of record

com¬

will presumably run into an ekcess

and

where he has spent
field, got off to a very poor 'start.
virtually all of his business life. Strikes and weather
(including
For many years he was connected
one of the latest openings of the
with and later was in charge of

June 13, 1951.

investment dealer or

Obviously

their face they would tend to bear

Boat

Jeffersonville

New

Quarterly Dividend
20c

stock outstanding.

parative results during the balance
of the year will not be so spec¬

out the contention of management
in the rate hearings that it has

over

Mr. Enstrom is

'

a net loss of
equivalent
to

the only class of

on

Interstate Commerce

movement incident to the

board

86th Consecutive

was

instance, recent railroad earnings
reports have been very mixed. On

cott, Inc., Monarch

branch of the

<$»FI)Nt>.

A Balanced Fund

against

share

a

ciates. Issued under the Philadel¬

final factor in the present

a

which re¬
first public been
impossible to keep pace with
offering
of
common
stock of the rising costs.
Particularly in
Warner-Hudnut, Inc. He is Presi¬
April
many
railroads
reported
dent and a director of Chemical
fairly sizable year-to-year declines
Fund
Inc.
and .a
director
of in
earnings., To some extent the
Braniff Airways, Emerson Radio
drop in net has been real, based
Inc.,

Co.,

&

Eberstadt

as

of

$2.97

the

railroad

for

announced by Elmer H.

was

Baruch

Group Securities, inc.

$272,740
$8,894,455)

Offering of $5,300,000 Chicago,
strangling effect Milwaukee, St. Paul & Pacific RR.
of inflationary forces on profits series NN 2%% equipment trust
certificates maturing semi-annu¬
of the industry are widely quoted
W. N. Enstrom
Ferdinand Eberstadt
in the newspapers and statistical
ally Dec. 1, 1951 to June 1, 1961,
The
election
of
Ferdinand services. Naturally they tend to inclusive, was made June 5 by Hal¬
Eberstadt and William N. Enstrom dampen speculative enthusiasm sey, Stuart & Co. Inc. and asso¬
posed

Atomic., Energy

FUND

in¬

net

case

in

Co.,i'American

invest

and

money
securities.
In

increase

an

of

execu¬

their

real burden That the

law firm of

Herrick, Smith, Don¬
ald, Farley & Ketchum. The Trus¬

presenting

are

freight rates
they will tend to stress the very

Trust

William B. Snow, Pres¬
Suffolk

for

by

H.

S.

tives

investments

Company of Boston.
On the Advisory Board of the

re¬

Such

hearings have been going on in
Washington in recent weeks. It is

permit

invest

-

a

increases.

rate

in

after all charges (net incoipe

come

results

things the railroads

is the extended

an

when

relating to
quite consis¬

press

been

through

months

improvement

to-year

adverse.

quest

A

has

One of the

be

at

come

four

082, in sharp contrast to thq net
operating
deficit
of
$6,566,405
sustained a year earlier. The year-

a

selling into the rail group.
Apparently there are quite a few
people who are willing to go along
on
the theory that a settlement
in
Korea
would
bring about a
slackening of the defense effort
despite the fact that all signs, and
all logic, point in the opposite di¬
rection.
These
periodic
peace

reserve.

The

that

rumors

ble

railroads

Appointed Directors

the

of

amount

Recurring

the

For

April, 1951, the company reported,
a
net operating profit of $2,765J-

peace was about to be negotiated
in Korea tend to bring considera¬

scares

value of the Trust's shares will be

increased

vestors.

publicity in the

result

a

portune to do so and a portion of

ADMINISTERED

ac¬

Railroad
stocks
in
the
past
couple of weeks have again been
the victims of widespread jitters
among both speculators and in¬

liquidating

the

31, management points out, borrowed
money is used when it seems op¬

THE FULLY

sales

good part of the net

tax

a

borrow

May

were

these

and
a

which

profits

equivalent to 25% of un¬

reserve

of

market

the

from

deduct

to

sary

longer be neces¬

no

substantial

the

highs,

counted for

April while
reaching

of

part

prices of oil stocks
new

regulated investment com¬

a

pany

of Affiliated Fund, one of the few
mutual funds "with the right to

dated

latter

place in

"took

management,

Taxes

Investment

increases in total assets and shares

,,outstanding.

In¬

Federal

the

under

Revenue

vestment is contained in

of

TRUSTEES

that

Great Northern

trade stocks.

Income

These

and down.

THE

the

announce

oil

in holdings of

increases

relieve

ance

vestment account."

The

re¬

qualification will be to^ continued the sale of such securi¬
the Trust from Federal ties in May and, as of May 15 our

company,

modity

the

such

of

FUTURES Distributors reports it
has

the

"Many of these changes," says

gain of 50%,

a

they have elected to qualify the
Trust as a regulated investment

$5,948,000,

were

stocks.

electric light and power, food and

Trustees

$0.60,

as

an

1951,

in

important changes were
in the holdings of

12.04%; and the dividends paid
per share increased from $0.40 to
of

Fund, pointed

May 31,

$123,463,-

invested

the past six months

During
most

stocks and

company

of

assets

but

money

but 6.4% -of its

gain of 600%; net asset value in¬
creased from $8.72 to $9.77, a gain

ternal

out

gain of 340%; share¬
917,

a

a

dustry has a lot to do with this."

The Value Line

shares

borrowed

any

all
net

ductions

ARNOLD BERNHARD, President
of

243%;

of

using
had

491

holders increased from 131 to

their lowest quotations on

or:near

gain

a

outstanding increased from 61,216

21

(2361)

Chronicle

The Commercial arid Financial

in

A

t

f

ft

j

was

the

three

25 Broad Street

jw
New York 4, N.

V.

Telephone BOwling Green 9-G400
Members Nafc'l Assn. Securities Dealers,

I$c.

22

The Commercial and Financial Chronicle

(2362)
Madison Avenue

46th

and

News About Banks
REVISED

quirements of the New York

Bankers

and

ETC.

NEW OFFICERS,

The existing

stantially

CAPITALIZATIONS

enlarged

entrances

Concerning his find¬
the New York statute,

of

New

May

Company,
announced on

Trust

Bank

Exchange

York, was

Dunham

by

31

of

Chairman

31,

1951; .to

appropriate

of- Pension

carrying

Fund,

balance

construction/ dust-proof partitions

of

as

ana

.

.

.

.

..That

defendant

were

be

could

defeat

......

York

is. unconstitutional."
Arthur

menting

;-

the

.

*

...

•

Mr.
to
time

him

devote

to

more

The-Board
Fulton

Harbor

of

Savings

Jr.,

Av¬

45- Fourth

at

Trustees

Bank,

of

public

affairs.

personal

continue

as

director

a

and

com¬

John

bank.

active interest in the

Executive Viceelected President,
E.,Herrick Low, one of the

and

Senior

was

of

the

Mr." Connelly is
development, con¬

land

real

and

near

estate

..,'/,

'

■

if

■

\

L if

'

opera¬

McWilliams

Mr.

'

'

'

'

"

•

Company,

a

the

National

has

Vice-President and
since

rector

since

became

Announcement
June 5

a

Trust

Vice-President.
;

It

if

made known

was

City

.

three

as

for

Supreme
Court Justice Thomas J. Tuff in

to

Reserve

of

Tederal

Deposit

of

Bank

New
York
National

of

into

The

of

pected
June

Texas,

*•

National

Bank

of:..Dallas.

long

career

that

will

ejided

'
.

be.; felt

ticipated

in.

He

elected

was

a

of the Republic Bank

it

shortly after
organized and his. services

was

Director,

a

it is

said contrib-,

much to the growth of the.
bank, Born in Dallas, Mr. Drey- /

fuss

President of Dreyfuss &

was

clothing store/.Tri 1910 he and /

Son

father, ihe. late Gera. d Drey-/
fussu opened
Dreyfuss. ?■" & % Son!
which has grown from a single/;
lloor structure to a, six-floor re--/
•

•.

establishment.^^'-i/'/"--' /■ V"
f
< -'
f;'•/. -i
/ r •/,/, //;; ,'■/■> • /-.
•-

i

*

Harbor

of

of the

York,

New

Bank

State

in

begin

to.

functioning

References

18..

ex¬

to. the

on

pro¬

Day

comprehepsive

;

sports programs ever arranged for.
the Bond Club Field Day has been
set up for this year's

outing of the

Bond

York

Club, of

New

at

v

the

,

/■-,.

Sleepy Hollow Country Club next
Friday, June 8, P. Scott Russell,

Glore, Forgan & Co., Field Day
Chairman,*announced. The day's
May 17,, events will provide fun for" par¬
page 2062. As noted in the Phil¬ ticipants and spectators alike, and
adelphia "Inquirer" of June 1, will include golf/tennis, baseball,
the
merger
plan provides that horseshoe pitching, horse racing,
stockholders
will
receive
one
a
hole-in-one contest, trick, shot

Kiss, which was
present location in
1925,
and
converted

Emil

,

Corp.

Bond Club Field

One of the most

posed consolidation have appeared
in these columns Feb. 8, page 647,

April

State bank under the name

a

Insurance

The consolidated institution is

the

by the City Bank Farmers February,

membership ,in tLe
System and .the

Federal

office

-The

with

the

office

an

Trust.

bank,

"Open

observed

be

days

by

moved

on

1928.

Mr.

Flanigan, of Manufacturers
Trust
Company
has
also
an¬
nounced that Wesley B.
Harris,

appointment of David C. Powers
as
Trust Officer.
At the regular

May 29

on

State

York

New

that

if

made

was

Company,
affiliate

trust

*

first

labor¬

been

York.

New

will

Street

has

bank

the

he

when

1929

have

banks

Greater

.

Di¬

a

Low

with

identified

"been

Mr.

1941.

in

House"

Manufacturers

employ in 1906.
ecutive

decision,"

This

ing. It brings about equality* in is the successor to a private bank^
banking practices and should be
ing business established * in 1898
of great benefit to the public."
at - Second
Avenue
and
Eighth

having entered its
He has been Ex¬

bank,

.

;

member of the Board of Directors

which will be operated as a State

of the Manufacturers Trust

office

the unfair com¬
petitive disadvantage under which

devoted his entire business career
to

Dallas,

his

;

if

the Board of Manufacturers Trust

banks

he said, "removes

was
Vice-President and

First

Director.

a

accounts.'

interest

Vice-Presidents,.,

elected

of

$2,000,000. /

to

greater perhaps by the bank than
other organizations that he par¬

.

McWilliam,-

R.

President,

Bank

Sports Program1 fo^ |f/If

member,, thus retaining 'his

mittee

„

will

He

of

sale

Texas, stated that his death

>

his

'to

'the

of

s

„

{- ' - /f
announcing the death on
May 27 of Sol Dreyfuss; thej Re- r,

.:/ At
special meetings on May-31
and .1 Harvey ft L..- the stockholders Of the Corn Ex->
tail'
President
of '-. the; change National Bank & Trust Co.
tion with savings, banks and sav¬ Schwamm,
American Trust Company. Trans-:', and the Girard Trust Co., both of
ings and loan associations, be¬
fer of the office will take place • Philadelphia -approved plans forcause depositors
are confused by
business on the merger of the two institutions
substitute .words for savings, such as of the close of
under / the /name
of the Girar^l
as
'special
interest
accounts,' June 8, and on Monday/June 11/
C or n
it will open as the 108th banking Trust
Exchange
Bank,
'thrift accounts,'
and .'compound

commercial

/

In

Brook¬

Trustee.

as

active in

9th Street, Manhattan/ struction
it was announced on June "*4' by.1 tions. '
f •
••
Horace C., Flanigan, Chairman of », /,
enue,

untenable competitive posi¬

an

/

if

9

-

lyn, N/Y., announced on May'29
uted
Office ?of Ihe/ the election of Paul W./Connelly/

State

York, "located

the decision said:

placed

years,

in

if

result

$1,500,000

as

American Trust Company, of Nevv

f

T.

on

.-

-Com¬

of New, York, has acquired

pany,

statute

"This archaic law has, for many

at his own request

was

enable

Low

of

retirement

The

rectors.

Peters

Herrick

E.

McWilliam

R.

-

Trust

Manufacturers

Roth, ..President of
the Franklin National Bank, com¬
John

■<,-£

^

obligated to .sus¬

New

The

.

if

.

entire

pend for lack of enough savings
deposits with which to operate its
business.

National

forward

and

the

stock.

new

$500,000 of new stock, the Dallas
increased its capital May 3 from..

£170,873." The bank's

they use the words 'sav¬
willpermit the transaction of investments stand in the books.at
'savings' in advertising
normal business with a minimum less than market value, as at Mar.
publicizing that they may re¬
of /inconvenience
to
customers 31, 1951, and all other usual and
ceive 'savings deposits,' are ex¬
and staff... The
Madison Avenue; necessary provisions have been
ercising an implied and, inciden-* office at 46th
Street
is. one*', of made. The register of shareholders
tal power conferred upon them
Chemical - Bank's 17 " branches in" will be closed from July 4 to 17,
by acts of Congress. The restric¬
the New York -City. area.
"The both dates inclusive."
tive nature of the.N. Y. Banking
18th branch will be opened soon
"Argo (/roll is the New York
Law
defeats
the
purposes
for
in
the. new .100, Park
Avenud agent of the. bank.
/
which Congress .created
defend¬
■if "
if
if
Building at 41st Street.'
ant.
ing'

Di-

of

As

March

Street,, and

course

- ••

>,

•

ings and six pence jn the pound,$100,000 ofmaking a total distribution of 20
shillings per share for year ended

new,

Madison

During the

A

-

-

end of 1951.

National

that

satisfied

am

Sherer, banks,

B.

Board

the

"I

*

mezzanine.<. .Construction, j£J5O,0Dii to writing .down bank
is scheduled for completion at the premises .and £4Q0,000. to officers'
a - new

ings on
Judge Tuff said:

Peters, Jr., President of the Corn

the payment of a
of; nine shillings per
together .with, a bonus of

next,

The capital of the South Side
four shillings per share both pay¬
National Bank in St. Louis, Mo.,
able in British currency and sub-,,
was increased
as of May
14 from.ject to income tax at nine shill¬
$400,000 to $500,000 bty the sale of

occupy

both

from

Avenue and East 46th

sociations.

Ralph

of

retirement

to

;

Thursday, June 7, 1951

.

Newport News business life, .is a
July leader in civic, community, and /
final business affairs.

on

dividend

area.

feet with

Meeting to be held

share

premises will be sub¬

about 20,000 square

The

25

bank's .sixth major branch office
improvement since World .' War II
to
meet
increased
banking re¬

CONSOLIDATIONS
NEW BRANCHES

eral

Chairman/an¬
project marks the

This

.

shareholders at the Annual Gen¬

Street,

N. Baxter Jackson,
nounces.

,

5,

1438

page

and

share of stock in the

new

bank for

>

•

;

*

exhibitions and water sports. Top¬

each share of stock held in either

ping the crowded schedule will be
weekly meeting of the National who is in
In addition, the merger the annual Bond Club golf tour¬
charge of the bank's! bank,.
City Bank" Board of4 Directors, j Life Insurance Loan
authorizes the issuance of 136,875
Division, has
nament
to
be played
Mineola, N. Y., on that day de¬
over
two
Frank T. Mitchell was appointed
been appointed an Assistant Sec¬ new shares of stock in the com¬ courses at
cided that Section 258, sub-divi¬
Sleepy Hollow. ' This
Assistant Vice-President.
*
bined bank.
■——
sion 1, of the New York State
retary of the company. Mr. Har¬
.'
■""if
if
»
:'■•■■■■
year's event will bring some of
ris
became
associated
with
the
Banking Law, is unconstitutional
From the "Inquirer" we also Wall
Street's 'best
golfers' into
The title of the Central Han¬ Manufacturers
and denied an injunction sought
Trust
in
1935, quote: / '
-•■/ ■ •
■
/'. -• •
- competition on opposing teams—
over Bank and Trust Company, of when
the
latter
the / "David E.
acquired
"by the Attorney General of New
Williams, President the "Bulls" captained by Bond
New York, will be shortened on Mortgage
York to restrain the Franklin Na¬
Corporation
of
New of Corn
Exchange, at that bank's Club President Clancey Bartow,
tional Bank of Franklin Square, June 30, when the corporate title York. It was. also announced that
special- meeting, announced that Drexel & Co., and the "Bear^" led
Long
Island,
from
using
the, of the institution will be changed James F. Cavanagh of the bank's the new shares-would be offered by Vice-President Jim Lee, Lee
words,
'"saving," ' "savings," ; or to The Hanover Bank. Plans to Securities Department has been to stockholders at $35 a share. Higginson Corporation. To provide
/their equivalent.. This statute, it this effect were noted in these appointed an Assistant Secretary.
Smith, Barney & Co. will " head for a larger number of pl.ayers
,

:

,

-

.

«

,

...

.

-

is

stated prohibits, any; financial
institution, except savings banks
or
savings and loan associations;
from
using these words-'in its

'

banking

financial business. The

or

action,,brought

in

May

of

1950,
1947

that the bank since

alleged

these terms in

had used

its.deal¬

ings with the public and, as such,
had

York

The
the

that

violated

New

in

bank,
of

section

of/the

State

Banking Law.
its reply, admitted

the

words, but con¬
tended that the State statute dir
rectly conflicted with the United,
-

use

Constitution

States

and

the

Fed¬

eral Banking Laws, and interfered
■with the
■

banks

ities;

and

against
.

operation of all National

.as

Federal. instrumental¬
also

National

of State savings

discriminated

banks

in

favor

banks and; State

and Federal savings and loan

Oklahoma

as-

Turnpike

Authority

i

columns

t

i

t

Bought—Sold—Quoted

President.
Mr.

his

In

Sherman will

personnel

-

tional matters.

*

*>

30 Broad Street, New York 4
Phone HA 2-2600— Tel. NY 1-1017




function

new.

have

charge of

internal

and
*

He has
the

with

and

been.;

Vice-President

,•

Under "a

ment

and

Chemical
pany,

program

of

extension

of

Bank

&

-

if

i:.

New

York

South

Agency,

Africa, Ltd.,

at; 67 "ory

announced

Trust

Com¬

board

of its office at 379

•'

...

by the bank.

the

bank

for

"The
of

resolved

directors

of the

South Africa,
to

the

cil

.

Standard

Ltd., hpve

recommend

to

the

Virr

They are John Wil¬

ber of

of

liam

Jones

.and

Henry
a

former

a

Peltz, the son of the late

tos Brakettes

Mr.

A/Peltz, who was long active in

will

of

Stratford, J Conn.,
Linden, N. J.

and the Arians of

Joe

tion

Joseph

game

by two championship
girls soft-ball teams—the Raybes-

mem¬

ginia Real Estate Association

The

diamond.

be- played

shot

past/President of Vir¬

rather than

the sidelines

on

the

-David

Newport News City-Coun¬

and

men
on

Baukc of

of The

PelfzvMr. -Jones-is

Bank

'

new^mepi-

giqia, qf. Richm»n4, is announced

on May 31 the receipt of the fol¬
lowing cablegram-from the Head
Office .in London,..regarding the

enlarge¬ "year ended March.
31, 1951:
facilities

♦

if

election of two

r

«

Wall Street, of the Standard Bank
of

it

j.

The

operations

*

of New York, is beginning

the expansion

Offjce.

bers/to the Newport News advjs-

The

as¬

in; 1949.
.

*

opera¬

commercial

if

Mr. Tintle remain connected with
the bank's Chambers Street
-

banking department since joiping
the company
in 1930; was .ap¬
pointed Second Vice-President ip
if

-

v

-

1942

qAllen & Company

last ~

'•

sociated

3V£%-3% Revenue Bonds

23

Nov.

year*; *-•
/•<. .,/•*;/
*
./••.'•-./, /' //.■'.
group underwriting the offering. and a faster game, the tournament
and on Jan. 25, this
James M. Pedowitz has
been Mr. Williams will be Chairman qf will be played on a two-ball jfouryear, page 452.
At their Jan. 17. elected an Assistant Vice-Presi¬
;the Board of the merged institu¬ some selected <^rive basis. At'stake
meeting
the
stockholders
took dent and Counsel in
charge ,of tion;
James
E. Gowen, Girard will be the traditional Bond; Club
action toward increasing the cap-,
the Jamaica office
of the Title Board/Chairman, will be Chair¬ trophies—the Ex-Presidents', Cup
ital from $21,000,000 to $24,000.,Guarantee and Trust Company/of man of the Executive Committee for low gross, the Candee Cup for
000.-In its current announcement
New York, it was announced, on and Geoffrey S. Smith, President low
net, and the Christie Cqp for
concerning the shortening of its June 4
The match play against par. Twice the
by William H. Deatly, of Girard, will be President.
title the bank says:
,//
President of the company.,
Mr. new bank will have a 25-member usual number Qf cash prizes will
"The Hanover Bank .was. first
Deatley stated that Mr. Pedovyitz board of directors."
be awarded.
! I
established. at
Hanover Square, has been continuously associated.».-»•
if
%■. * ■ if
J
While the golfers are swarming
New York, a century, ago. In 1929 with the
company since 1935, ex¬
The Peoples National Bank &
oyer
the fairways, Wall Street
it was merged with the Central- cept for a period
of five years Trust Co., of MonpsSen, Pa., has tennis
players will pair up jfor a
Union Trust
Company to; form while in the armed services of
enlarged its- capital from $125,000 round-robin doubles 'tournament.
the Central .Hanover Bank and the United States.
For the past to
$225,000;. part of the increase, The two
surviving teams will meet
Trust Company. Now for the pur¬ five years he has been counsel in
$62,500, was brought about by a in a finals match in the afternoon.
pose of simplification and to con¬ the company's Mineola office, sj
Stock dividend, While the further
•"
*
*
*
;
Horse racing, which was revived
form'' to
common
usage,
the
addition of $37,500 resulted from
last year and proved to be one of
shorter corporate
The election of Henry Reuter,
title has* been
the sale of new stoek.
The in¬
the most
popular events^ will
adopted."
John B. Milligan, .and DeWitt C.
creased capital- became effective
$
Sjl
#
again be a feature of the j Field
Tintle, Jr., as Assistant Treasurers, -May/LL-i». .«•
• /:/-.-■'■
v
/
Day Sports program. This year's
if
if
if
♦
Promotion of Harold M. Sher¬ of the Marine Midland Trust Com¬
racing will be of the harness va¬
The Farmers National Bank, of
man, Jr., to be Vice-President in pany of New York has been an¬
James G.
Blaine, Beaver - Falls/.Pa., reports under riety, with entries by leading un¬
charge of general organization for nounced .by
derwriters
and
prominent j bond
the Guaranty Trust Company, of President. Mr. Reuter continues
date of May 14, a capital of $300,men as drivers.
V
his association with the Foreign
New, York,
was
announced
on
000, increased from $100,000 by a
Baseball this year will find bond
June
5
by William
L.- Kleitz, Department and Mr. Milligan and stock dividend of $200,000/
:
on

2000,

page

one

Kirkwood,

golfer,
and

will

famoustrickgive an exhibi¬

there will be

a

hple-in-

cpntest for golfers who do not

enter- the tournament.

Deck: Qhair

the swimming pool
will be able to watch a variety of

•occupants
informal
water

at

swimming

ballet.

races'and

a

/

Volume 173

Number 5018'.

.

The
Commercial and Financial Chronicle

.

(2363)

'

Our

Reporter

Schaffer, Necker Go.

P

Governments

on

Opens in Philadelphia
PHILADELPHIA,

By JOHN T. CHIPPENDALE, JR.
■

Under the influence of

U.

ernment,

market

the attention

-

Pa.—An-"
By

nouncement is being made of the
formation of Schaffer, Necker &

major refunding operation, the govin a restricted sphere, with most of
being paid to the nearer-term end of the list. The

'

i

a

Co.

with

offices

in

the

is moving

H. E.

JOHNSON

This Week—Insurance Stocks

Packard
Fire

losses

in

the

United

States

have

been

increasing

'

"rights value"

<

\
•

security

-

,/

the

called

obligations

bodes

for

institutions.

many

The

switches

which

vmade ^out of the called issues have not been sizable
ceeds have gone mainly into

.

porations have been the main sellers.-

...

,

have

■

been

on

the

cautious

side

year
over

cor-

because funds

not

too

plen¬

restricted bonds have been in

Prices of building materials and labor have
gone up, particu¬
larly since the beginning of the war in Korea. This has meanl thai;
the cost of repairing or replacing
damaged facilities has also in¬
creased.
In other words, even though actual
physical damage

.

Russell W. Schaffer

The

shortest and longest maturities

may

the

"

-

;

.

v

>:

jJ-

to be

be the same, the losses in terms of replacement,

"

•;; ^ -

•

and .uncertainty,

General
firm

of the money markets has developed into a seemingly
strong desire to keep as short as possible. On occasions in the
past, when the obsession for shortness of maturities was at its

„course

height, the more distant
entering a buying range.

maturities
.

of

have

governments

"*

:

of the

*

;
•

come

and

>

be sure,

Federal has made

chases here and there.
been

some

attitude

.

the.higher

an

keel.

evener

to have

seem

income

.

of

.

last

the

32nd, there is

\

side adjustment

down

has

taken

a

will

:

■

as

be

well

as

by the statements that

place.

This

an

are

shares

additional

at

$13 per share
share for each

on

May 31, 1951..
to sub¬

rights

for

shares not subscribed
the primary warrants are

any

under

con¬

share-for-share basis

a

also

offered.

exercised

Warrants

by

3

restraints

more

mon

is

must

1,579,153

shares of beneficial

com¬

a

Mas¬

sachusetts Trust.

who

for the group of dealers

will

actively

further

seem

to he

if this method, cannot
way;;

As

a

more

catching

the

The net proceeds are to be used
repay bank loans and the-re¬
mainder set aside for the purpose
of
acquiring, under preemptive

sting for

ac¬

but

more

time is needed to

in

a more

substantial

(Special, to The Financial Chronicle)

Denise




"

-

FRANCISCO,
V.

pany,
.

Miss

Calif.-^.

Hughes has joined the

staff of Paul C.

structure, there does not seem to be much likelihood that legisla-

groufc)."

stocks

common

.With Paul Rudolph Co.

see

tion^will be adopted at this.time, based on the recommendations,

a

year ago.

itself

■

likely that losses
be that losses for

seems

It

-??•'

may

will be close to the record total of $711,114,000; re¬

much

as

approximately

as

fire insurance companies
'loss trends and totals are

50%

of

premium, volume of

is concentrated in the fire lines, the fire
especially important to these companies.

Of course, the fire

lines written by most insurance complies
of insurance coming under- the
classification of "extended coverage."
This includes damage to
include

number

a

of other types

property resulting from such things as

lightning, hail, windstorm;

explosion, riot and civil commotion, aircraft, land vehicles, and
smoke and smudge.
*
'

is

the

for

an

.

.

the

other part of the

,

.

,

'<

.

fire line, extended coverage, some

improvement may be shown. Results last year from this phase of
operations were adversely affected by the explosion at South
Amboy in the early part of the year and by the windstorm
throughout the North East section of the country in November.
Such disasters are most unusual and not likely to be repeated in
the immediate future. This should mean that underwriting gains
resulting from this part of the fire line should help to offset, the
higher losses expected in straight fire insurance.
,
Thus even though fire losses are rising and likely to show,
an

are

upward trend at least over the next several months, prospects
the underwriting operations from this phase of the insurance
will show a generally satisfactory result for the year.

business

With Daniel Reeves
(Special to The Financial

Chronicle)

Co., 398
members of

staff of Daniel Reeves &
New

(Special to The Financial Chronicle)

SAN
FRANCISCO,
Calif.-.
Calif.—
Golden has joined the Alonzo W. Anderson has become

Thomas H.

the

Joins William R? Staats

HILLS,

BEVERLY

York

and

Los

Stock Exchanges. He was

Angeles

associated with William R. Staats

Co.,

Sutter

Ill

Street.

He

was

formerly formerly with Mitchum, Tully &

with Bankamerica Company.

NATIONAL BANK
oi INDIA. LIMITED
Bankers to the Government in.

Kenya Colony and Uganda

of the

result of what has already taken place in the credit

of the f Wilson

additional

SAN
purpose

In

Head

v-

on

prices and costs it

..

Co. and Schwabacher & Co.

exercising of the warrants.

to fur-

difficult. Also voluntary credit

accomplish its

-

the

to

monetization

"

Normally

reverses

ported for 1948.

South Beverly Drive,

The association has named The
First
Boston
Corp.
as
dealermanager

'

resumes.

ahead of

run

months and

summer

be

interest

in the association which is

being

This made the availability and

season

In view of current

(EDT)
on
There are pres¬

.

A good part of the

Bank, credit and

risky and

the heating

downtrend.

seasonal

a

continues into the

this trend

p.m.

Friday, June 20.
ently outstanding

right,

cessibility oi" Reserve

..

4

share-,

of subsidiaries.

Federal debt

-

its

on

by the action of the monetary authorities in eliminating pegged

--

and

June

in

favorable.

scribe

prices of Treasury obligations.

•

Gas
on

$688,457,000 $667,536,000

_—

currently

are

strictly fire lines, the outlook for the current,
increase in losses. However, this: development
should not be particularly burdensome fpr most companies as
underwriting results for the past two years has been relatively

one

the basis of

Supplementary

.the time being at least has .been taken out of the credit picture

.

England

Association

eight shares held

sizable purchases

more

months

12

year

Dealer-Mgr.

an"

common

on

While

Report" with recommendations

"anti-climactic mood."

May 31.

offering, .to
holders of
197,394

To

opinion

New

Electric

ther limit credit through new controls has been received in what
is termed

was

Slock Offered; First

made

The Wilson Credit Report

,

of

Boston

made if quotations should recede more.

The so-called "Wilson

firm

49,678,000
48,914,000
53,116,000
67,279,000

66,820,000

Losses

as

51,787,000

55,790,000

December

In

pur-

more

obligations.

being further. backed by the larger commitments that

made,

-

new

England G. & E.

The

50,150,000

49,592,000

49,953,000

Within

growing feeling that the greater part

a

&

previously reported in the "Finan¬

New

they do not profess to have the ability to pick the bottom down
to the

Biddle

-

cial Chronicle"

Nevertheless, the outside buyers that have

toward

Co.; Carl

Moncure

Formation of the

«•

;

.

selective but not too sizable

appearing in the market of late

fident

of

dissolved.

-

accounts, it is reported, have been
showing an increasing interest in the ineligibles, especially the
V last two maturities. The buying by these funds, plus some scat¬
tered purchases by eleemosynary institutions, and a few of the
/ smaller insurance companies, have helped to keep demand and
on

firm

bond

trust

supply in better balance and the market

Vice-Presi¬

Co., Philadelphia, which has been

•

V

been

Schaffer &

into the

picture and throw calculations out of kilter.

49,878,000
.45,922,000

new

Jr., all formerly
general partners of the municipal

not likely to be very much under what they were
However, by the latter pqrt
it is believed, these institutions will have their houses

funds

had

the

October, when he formed the
of

$54,162,000

—

the full year

year are

Pension

of

through the liqui¬

pretty well in order unless unforeseen developments

'

55,290,000'.:

$58,765,000
57,116,000
52,980,000

November

Schaffer, who

Linford B. Cassel,

of

of the year,

-

$272,294,000 $251,233,000 $242,858,000 /

_

—

will continue to

during the first six months of-1951.

-

$57,926,000
62,424,000 >'
67,218,000 v

61,605,000

------

bond
department^ of
Rambo, Close & Kerner, Inc. until

the stage right now,

:

58,340,000
72,465,000

62,965,000

___rr_

September

Necker, Charles A. Schaufler and

Treasury obligations. How many of these bonds will
have to be disposed of is largely a matter of conjecture, but certain of these institutions report that, eliminations in the last half

1949

October

municipal

firm

there has been a moderate backing and filling
.on slightly enlarged volume in the longer end of the list.
Liqui¬
dation of the securities which have .to be eliminated
iq order to
provide funds for other commitments has been slowed, but nonetheless, dome of it is still being done. It is expected that the
sales of the restricted bonds will be stepped up in the not too
distant future, because there are indications non-bank holders

69,136,000

last

.*•

Although the refunding operation is occupying the center of

dation

partners

Russell W.

dent and director in charge of the

Liquidation of Restricteds to Increase

of these securities must continue to obtain funds

are

previously

been

:

•

Charles Schaufler

Building, Philadelphia, to deaj, in
state, county, municipal and reve¬
nue bonds,
specializing in City of
Philadelphia issues.

the

over

ApriT

basis, together with
jjiu

*

1950

August

Necker

Carl

,

preference

monthly

a

July

Treasury bills has been very sizable, with cor¬
really competitive mood as far as this security is

liquidity

on

71,507,000

June

for
a

,

*:

maturing obligations. This is more or less a normal procedure,
important operations are going on in the money markets.

The

.

May,

when

concerned.

year

$68,686,000- $58,823,000

Four months

the new 9J/2 months security to such an extent that
largely offsets the sales which have taken place in the

porations in

this

March

vertible into

Demand

far

so

:

maturities
other than what would be available in the-new. 1%%issue, there
has also been buying ol the called obligations that are con¬
very

as

1951

.

other: short-term obligations because-of the need for

it

which is
companies, is higher.
estimated by the National Board of Fire Un¬

insurance

January
February

-

modest

-fillip to the picture.':,Nevertheless, it is not expected the takings,
by the Central Banks of the maturing, issues will be important
b enough to; have a marked influence upon the credit restrictive
program. While there,has been switching into Treasury bills and

-

V

the

losses for.1950 ajid.1949^ are shown below.

.

a

losses,

derwriters,

~

.

salutary effect upon T
the market far Treasury obligations,
although only minor price '
changes have been registered.- The terms of the refunding were
to flie liking of the financial community and a successful conversion is in the offing.
Federal has given some protective en-

to

-

a

couragement to. the money markets - in order to give

'

,

the'favorites,v

Refunding Terms Attractive

-

The mid-year refunding operation had

;

.

seem

cost

Fire

,

These losses compared with $242,of 1949.

,

mildly- defensive position, despite

a

somewhat enlarged takings here and there by certain funds.

was
the similar period of 1950.

This upward trend of fire losses is a
reflection of rising
prices for goods and services generally. While the number of fires
has a tendency to increase during
periods of high industrial activ¬
ity,, the higher losses of the past year are primarily the result of
higher costs.
~
4

tiful. while at the same time they are more interested in the
«shorter obligations. The partials, however, appear to have
plenty
of buyers, whenever they
appear
in attractive amounts.
The
-

Board

858,000 for the first four months

T

are

as estimated
by the
of Fire Underwriters showed a
decline of 11.9%
March, the total for the four months of the current
$272,294,000 as against $251,236,000 or a gain of 8.3%

National

pro-

.

for

year.

from those of

been

and the

r

a

Despite the fact that the April fire losses

"Tl^e intermediate and longer governments have been on the
outer circle,- so to speak, although this does not mean there has
been some activity in these obligations.
Bidders for the eligibles
have

•

over

suc-

a

Non-financial

Treasury bills.

:

for

well

cessful- exchange of the 2%s and the July lV^s into the 9Vz-month
1%%. The less-thanr-one-year obligation seems to be gaining in
popularity and indications are it is going to be a very desirable

<:,>

■

for

23

127

Hughes

Rudolph & Com¬

Office:

Bishopsgate,
London, E. C.
26,

was

,

Street.

previously with

Capital Securities Company.

City

Bank Stocks
Record of grpwth not
acknowledged in market price.
Report sent on request

Branches in India, Burma, Ceylon, Kenya

Colony, Kericho, Kenya, and Aden
and

Subscribed

Paid-up
Reserve

Zanzibar

Capital-,

Capital--,
Fund—

£4,000,000

Laird, Bissell & Meeds
Members New York Stock Exchange
Members

£2,000,000
£2,500,000

New York Curb

120 BROADWAY, NEW

Exchange

YORK 5, N. Y.

Telephone: BArclay 7-3500
conducts every description of
banking and exchange business

The Bank

Montgomery

New York

Bell

Teletype—NY

1-1248-49

(L. A. Gibbs, Manager Trading

Trusteeships and Executorships

undertaken

Bept.)

Specialists in Bank Stacks<

24

The Commercial and Financial Chronicle

(2364)
other is less useful

President's Credit

Policy Committee Reports

under

ful

controls

Subsequently, during the

1967-72.

time allowed investors for the ex¬

selectively as possible.
credit
controls,

as

change, more than $13.5 billion of
the outstanding amount of $19.7
billion of 2V2% marketables were

use

credit, real

consumer

as

able bonds of June 15 and Dec. 15,

credit

to

selective

While
such

circumstances,

desirable

it

makes

harm¬

even

or

present

es¬

exchange for the new

in

tate

offered

ties markets,

non-marketables.

credit, and credit for securi¬
have a continued use¬
fulness in the mobilization period,

curtailment,

credit

general

or

a

general rise in interest rates, does
have

not
in

selective

so

impact

an

priorities.
credit control is, however,

relation

General

defense

to

essential to reinforce the effective¬
of

ness

the

and other
The objective

voluntary

efforts of restraint.
of

discriminating credit policy is

a

further aided

John W. Snyder

Charles E. Wilson

W. McC. Martin, Jr. Leon H. Keyserling

by government agen¬

cies through

loan guarantees, tax

owned
by the Federal Reserve banks and
government investment accounts,
and of these approximately 20%
was
acquired in the few weeks
prior to the Treasury's announce¬
ment
and during the period
in

the
new

maaklftory controls until problem becomes
Director! ?iof
tion

Charles

mitted

further needed actions.

has

World War II, because
of the large government deficits,
banks and other financial insti¬

of the

tutions and many other investors

Advisers;

bought large quantities of govern¬
ment securities.
In the postwar

report

H.

Chairman

Keyserling,

Economic

of

Council

committee

which

at

formed

was

suggestion of the President in
memorandum of Feb.
26, to

the
a

Current Problems of Credit

Federal

period,

Reserve

conditioned by the ob¬

taneously, to maintain stability in

for these securities

the

stantial

and

interest

rates.

government bond market.

The

official text of the Commit¬

tee's report follows:

1951, to the Secretary of

Treasury, the Chairman of the
Board of Governors of the Federal

the

System, the Director of
Mobilization,
and
the

Reserve

Defense

Chairman of the

"I

re-

am

of the
Treasury, the Chairman of the
Federal Reserve Board, the Direc¬
the

questihg

Secretary

tor

of. Defense

the

Chairman

Mobilization, and
of the 'Council of

Economic Advisers to study ways
and

to

means

This

letter objec¬

effective

the

limited

in

increase

general

use

of

operations for pur¬
poses of counteracting inflation.
The possible restrictive effect of
increases in

provide the neces¬

reserve

also limited by

was

requirements

the large hold¬

ings of government securities by
banks and other institutions.
General credit control again be¬

of Eco¬

Council

Advisers stated:

nomic

a market
without a sub¬

of maintaining

open-market

The President's memorandum of

Feb. 26,
•

was

jective

tive

of

use

restrain

traditional instruments to
credit

came a

when

matter of national concern

developed
the

inflationary

new

after

expanded

pressures

the initiation of
defense program.

Various measures were adopted by

Federal

the

riod

to

in this pe¬

agencies

government

other

and

Reserve

restrain credit

expansion.

restraint on private credit
expansion and at the same time to

Nevertheless, the needs of public
debt management, the large avail¬

make it

able

sary

possible to maintain sta¬
bility in the market for Govern¬

ployment and production, contin¬

securities."

ment

the

assets, and
increased accent upon full em¬

ued

The present

problem of restrain¬
ing the expansion of credit must
be attacked

fering
other

under conditions dif¬

vastly

of liquid

supply

from

inflationary

those of any
period in the

nation's history. To a

large degree,
the problem is fashioned'by the

to

Federal Reserve

the

limit

System's pursuit of a more effec¬
policy of credit limitation.
The period since the outbreak
in. Korea has been characterized

tive

by anticipation on the part of con¬
sumers
and business concerns of

the effects of the expanded na¬
of the tre-„ tional
security program. This an¬
mendous accumulation of public
ticipatory buying was financed in
debt, during World War II, and by a
variety of ways. Credit expan¬
the imminent task not only of re¬
sion was
one
of
the
available

continuing

influence

funding the large portion of that
debt

which

matures

the

in

near

future but also of undertaking new

financing;

Conditions iif the

mar¬

ket for government securities be¬

come, therefore, a compelling con¬

sideration. Within this framework,

nonetheless, restraints must be

acted

on

ex¬

overall credit'expansion,

particularly for

nondefense

pur¬

in order to keep combined

poses,

government and private demands
within the bounds of available sup¬

the

financed

means

which

hanced

demand,

policy was one of the factors which
facilitated credit expansion. Com¬
mercial banks and other financial
institutions

in

were

favorable

a

credit,

extend

to

-

since

they could always sell government
securities and the Federal Reserve

not ready to

buy at prevail¬

feasible Fed¬
plies of goods and services and yet
eral Reserve policy could not have
not interfere with the maximum
prevented individuals and business
possible

expansion

of

output

in

ing prices. While

concerns

vital linCs.

chases,
We submit to you in the present

report:
rent

(I)

a

brief review of

problems

of

in

connection

defense

the

the

credit

national

,26; (III)
trols

'

memorandum

of

ling

Feb.

pf credit con¬
under! permanent,

expiring, and proposed legislation;
(IV)
our
conclusions
and

and




Part

amount.

extended,
and

of
as

of

course,
a

result

the
was

the

better

stocked and better tooled for tack¬
a

large

program

defense

than it

was

production
at the time

fore,

'

The fact that

some

sion

serves

pose

in the defense

a

highly

cfedit exten¬

useful

pur¬

effort, while

effect

We

are

be

cannot

there¬

facing,

in which

period

a

have

we

deal with both the problem of

to

still

is

this

early to appraise

too

effectiveness of
It may be noted

the

conclusively

measure.

of

the rate
expansion in bank loans began

to

slacken.

that, beginning in April,

change may

But this

in the
demand for credit, the softening

also reflect seasonal factors

demand that became

of consumer

vol¬

apparent in that month, and

restraining the further expansion
of

credit should be con¬

private

tinued.
On

Director of
appointed
task forces from! among the
March

the

12,

Defense Mobilization
five

personnel of the Treasury, Board
of Governors of the Federal Re¬
System, the Couhcii of Eco¬
and -the Office of

serve

nomic Advisors,

Defense Mobilization to

implement

studies of these; agencies
undertaken
in
response., to
the

the joint

President's memorandum..

March

On

the

23,

(

Mobilization

Defense

s

Director of
wrpte the

Secretary of Commerce, referring
to the President's memorandum of
Feb.

1951, and suggested that

26,

Council of

the Business Advisory

Department of Commerce un¬
dertake a program to complement
the
Voluntary
Credit Restraint
the

The implication of the

Program.
letter

was

that efforts of lending

liniit credit

institutions to

would

sion

borrowers

be

more

exercised

expan¬

effective if
restraint in

financing. As a
Business
Advisory

their requests for

the

result,

Council has undertaken

contin¬

a-

uing nationwide program' to bring
to
the attention of lenders and
borrowers

that the

fact

the

suc¬

untary

gram.

pursuant

tem,

Defense

the

Office

of

and with the Federal Trade

controlling private credit expan¬

mission.

sion.

"

large

The

lic's

inventories

existing

appraisal

the

in

pub¬

seriousness

of the

of the international situation may
create

relaxation in

temporary

a

the demand for credit.

Such

re¬

a

laxation, however, may be of short
duration only, and the slightest

international

darkening

of

tions

may

set

wave

of buying.

in motion

rela¬

another

national
security should remain high for a
considerable time, we hope that
increase

in

total

few years,

after

a

tion

or

output

permit

a

then

would

We

may,

relaxa¬
of physical

modification

controls.

The

has set

program

National Committee as well
regional committees covering

up

enter

as

The National Committee has is¬
sued three

ing with

bulletins, the first deal¬

of restraining in¬

means

ventory financing, the second with
the

be followed in
capital expansion pro¬
grams, and the third with State
and local government financing.
These bulletins, together with the
Statement
of
Principles of the
principles to

Program, have been distributed to
all

financing

institutions partici¬

within

period of mobilization, during

flationary loan expansion in their

which

stage,

of

fully

expansion in the

some

duction

still

pro¬

goods

and

consumer

in

private investment might lead

to

a

for

renewed

in demand

growth

private credit.

In that event,

chief reliance must be

on

fis¬

cal, monetary, and credit policy.

Legislation

respective fields.

Other bulletins,
as may
be appropriate and help¬
ful, will be issued from time to
time. Meanwhile financing insti¬
tutions

requesting the regional
committees for opinions as to the
are

desirability

under present condi¬

>

following summary indi¬
cates the more important actions
The

for

be

can

legislation,
be employed if expiring
existing

under

can

that

restraint

credit

taken
that

all sections of the country.

pating in the Program to provide
a common guide for combating in¬

another
the

Legislation and Proposed

a

financing

Even if requirements of

an

throughout

institutions

nation.

Under
Expiring

Permanent Legislation,

This program is now

financial
the

.

Controls Available

Credit

Com¬

in
operation and includes major

full

fluctuations

the

and

"■

V •'

•

ill

of

consultation with the
the Attorney General

after

1950,

of

to Section 708
Production Act

Federal financing and the need for

the. Defense

(notably

legislation

extend¬

Production Act of 1950) is

ed, and that could be initiated
new

legislation

conformance
dation
Such

if
in

with the recommen¬

made

a

passed

were

Committee.

the

by

classification clarifies tha

problem and indicates the respon¬
sibilities of the several branches

in
designed

and agencies of the government

implementing

a program

restraint and sta¬

to achieve credit

market for govern¬

bility in the

ment securities.

(1)

Permanent Legislation—
(a)

The Federal Reserve

System ha's power to change
rediscount rates.

(b)

The

Reserve

Market

Open
of

Committee

Federal

the

System

the

has

authority to conduct

open-

tions of loans in debatable classes.

There

has

of

been

substantial

a

ernment securities and such

accomplishments

opinions

all

to

Accomplishments

record

market

These

II

form

there

time to build up

tical

On
the

Feb.

March

Federal

nounced

26, 1951.

4, the Treasury and
Reserve

that

they

System
had

an¬

reached

Committee

to analyze
of the

are

indications that the initiation

effect

pursued
ment's

financing of the

requirements

and,

govern¬

at

the

time, would minimize monetization of the public debt."

same

On

March

4, the Treasury an¬

offering of

a new

in¬

on

the trend

Endorsements
and

Program, there

has had
of

a

salutary

of credit.
the

co¬

operation have been received from
many representative i n d u s t r y

Under these circumstanc¬
those connected with the Pro¬

groups.
es,

gram are

most encouraged, and it

Committee's view that

is

non-marketable bonds in exchange

authorization

for the

operative effort

the

for

this
as

the

unique

one

in

gov¬

transactions

can

view to stabil-

izing

means

co¬

of

the

a

be

market

<

under¬

for

!

such

securities and tightening or
relaxing credit conditions.

(c)
would

of

Governors

tral

legislation !

Existing

permit the Board of |

Reserve
serve

Program

pledges of wholehearted

vestment series of 2%% long-term

outstanding 2xk% market¬

thoroughly

effects

management
successful

the

the

of the Program

policies to be
which would affect,the

been

enable

to

operations

taken with

yet

body of statis¬

a

information

"full accord with respect to debt-

and

uni¬

insure

not

has

mittee

on

to

policy nationwide.

While

since

being relayed

are

committees

the President appointed this Com¬

nounced the

of the Korean outbreak.

a summary

available

have reduced

American economy today is

effort;

your

total

necessary,

(II) a review of
the accomplishments in these fields
since

their pur¬

stronger policy of credit

difficult and would

credit

with

from financing

a

restraint could have made it more

cur¬

control,
as they have emerged in the
post¬
war period and as we face them

'

any

full

their

and

foreseen.

System stood ready to make pur¬
chases whenever other investors
were

capital issues.

It

Thursday,: June 7, 1951

.

,

credit restraints then un¬ cess of the Voluntary Credit Re¬
dertaken, as well as the decline straint Program rests equally on
of security prices. It appears that both of them.
private credit expanded while gov¬ new commitments by insurance
On May 7, the Director of De¬
ernment budgets showed a sur¬
companies and savings banks to
fense Mobilization wrote the Gov¬
plus. Expenditures for the defense purchase mortgages have been re¬ ernors of all
States, the Mayors
duced. Some plans for new secu¬
programs have now commenced to
of all major cities and financial
increase substantially, and as long , rities to be issued have been with¬
officers of principal counties and
as these
expenditures are not fi¬ drawn or postponed and others
other political subdivisions. He re¬
nanced on a pay-as-we-go basis
have had to be revised, although
quested that all State and munic¬
the total volume of new issues has
the Treasury will be faced with
ipal projects, which necessitated
the need for deficit financing in
continued very large.
The new
borrowing and which were posttone in the market may have an
addition to large refunding oper¬
ponable, be postponed. In particu¬
ations. There is at the same time
important effect upon many new
lar, he asked that every proposed
no
certainty that private demand offerings
that were,
or
might
borrowing by a State or munici¬
for investment and credit will sub¬
otherwise
have
been,
contem¬
pality of $1 million or over, before
side, At the peak of defense pro¬ plated.
being consummated,, receive the
duction -• direct controls of mate¬
On March 9, a Program for Vol¬
approval of one. of the regional
rials
may
curtail private credit untary Credit Restraint was in¬ committees
appointed under the
demands. But physical controls are
stituted by the Board of Gover¬
Voluntary Credit Restraint Pro¬
still in the developmental stage nors of the Federal Reserve Sys¬

our

position

We are now shift¬

the preparatory to the
production phase of the defense
effort.
In the preparatory stage,
ing from

-en¬

the support

and

re¬

quirements for refunding and new
financing.

various stages.

Control

During

study methods for control of pri¬
vate credit expansion and, simul¬

government's

the

policy will be modified
in character and intensity as the
mobilization effort passes through

committee composed
of
as
Chairman, along
with Secretary John W. Snyder,
representing the Treasury, William
McC. Martin, Jr.. Chairman of the
Federal Reserve System, and Leon
of a
himself,

with

Credit

the

Truman

President

to

sub¬

Wilson

E.

respect to

recommendations with

of course, be recon¬

must,

ciled

serious.

more

Mobiliza¬

Defense

They

stabilization.

An

par.

this

fective instrument in the program

and

securities

been

important result of
action has been the effect in
markets for mortgages and

general credit controls are an ef¬
mobilization

5,

permitted to decline, a
number of the issues falling be¬

have

Supplemented by such programs,

of

permitted.
prices of out¬

government

standing

zation

Reserve authorities to impose additional
bank reserve requirements and a broadening and intensifica¬
tion of Voluntary Credit Restraint Program. Would withhold

March

Since

Four-man committee,

empower

were

which exchange was

low

legislation to

billion

$5.6

change,

amortization, and direct financial
aid to defense-related activities.

under chairmanship of Defense Mobili¬
Director Wilson, recommends as emergency measure,

Of the total ex¬

.

the

Federal

System to raise

requirements of

re¬

cen¬

city banks very

reserve

•slightly above existing lev¬
els.

(d) Under existing legis¬
lation the

Board

nors can

amend

T and U

so

as

of

Gover¬

Regulations

to raise

mar¬

gin requirements for listed
securities

to

100%, and

re¬

strict withdrawals and sub-

yolume 173

Number 5018

.

.

.

The Commercial and Financial Chronicle

(2365)

stitdtions

of

securities

in

(e) Section 5 of the Trad¬

ing with the Enemy Act of
1917, as amended, and Sec¬
•»

l?:
i

tained

readied for the imposition of

these

be

should

powers

exercised

except

in

extraordinary emergen¬
the statutory authority
appears to be sufficient.
an

of

(a) Section 708 of the De¬

iProduction

Act of 1950

provides the legislative basis
for

the

present

Credit Restraint

Voluntary
Program.

Regulation

(b)
Board

X of

Governors

of

Federal
which

Reserve

the
the

of

System,

the

governs

exten¬

sion of real estate construc¬
tion

credit, stems from

thority .granted
dent

the

au¬

Presi¬

Section

under

1950; he in turn is per¬

mitted to utilize the services
of the Federal Reserve

Sys¬

tem in this connection. Pres¬
ent

authority would permit

the

Board

the

restrict

Governors

of

real

of

use

to
es¬

tate construction credit sub¬

stantially

than has al¬

more

ready been done.
Should
the proposed change in the
enacted

be

Act

3871

(H.R.

>#nd S. 1397, 82nd Congress,
1st Session, Section 106), it
would be
the
in

possible to restrain

of real estate credit

use

the

purchase of existing

structures.
•

The

tary

of

Federal

the

credit controls in

consumer

Executive

with

accordance

Order

Re¬

exercise

System-to

serve

8843

1941).
Regulation W of the Board
(Aug.

9,

restricts

Governors

of

the

credit; the

Consumer

use

of

use

of such credit could be

substantially

'tightened

yond the

would

1397

the

which provides

quired

permit

re-

;

connection

in

credit

estate

-

the use of real

on

purchase of exist -

/. with the

ing structures.

-

Section 611 of H. R.

(b)
V

3871 and S 1397 would per¬

when-

President,

the

mit

he determined that
speculative trading on

•j

ever

-

!

trade

of

boards

to

threatens

or

unwar¬

cause

in the price

ranted changes
"•

causes

commodity, to pre¬
governing the
margin to be required with
of

any

scribe

*

chases

sales

or

for

future

Section 21 of the Securities

1934
are made applicable in ad¬
ministering and enforcing
Act of

Exchange

provision.

form

of

cash

curities.
The

been raised

limits of

virtually to the

existing authority.

recommended

mergency measure,

ought

to

or

,

government

of

be summarized

may

se¬

these

plans

follows:

as

Loan
Expansion
Reserves—
Every insured bank receiving de¬
mand deposits, other than a mu¬
tual savings
bank, would be re¬

quired to maintain additional
serves

equal

to

a

re¬

percentage, to
the Board of

be

prescribed by
Governors of the Federal Reserve

System, of that part of its loans
and

investments

in

excess

certain prescribed base.
In computing loans and

of

a

invest¬

ments, all assets of the bank would
be

included

empower

uthorities for

a

that,

as

an

legislation be
th e Reserve

limited period to

except (1) cash,
balances due from
banks, (3)

(2)

the

board might pre¬
scribe from time to time.

Primary Reserves and Govern¬
ment

Securities—Either in substi¬

tution

for

insured

in- addition

or

requirement

to

the

discussed

above, an
receiving demand

bank

deposits, other than a mutual sav¬
ings bank, might be required to
maintain additional
to

reserves equal
limited percentage of its de¬

a

mand deposits, in addition to the
deposit balances now required.

Such

percentages could be dif¬

ferent
nt

with
1

r a

respect

reserve

to

banks

cities,

in

reserve

elsewhere.

or

bank

a

under

a

deposit balance,

certain

amount

an

equal to the

dollar amount of the
deposit bal¬
ance
which the securities
replace
at

or

lesser

some

figure.

For

ex¬

ample, the board might prescribe
that, for reserve purposes, $1.50
$2.00

or

might

$2.50

or

be

in

equivalent

securities

to

$1.00

of

cash.

Within

a

Governors
to

few

days the Board of

will

consider

ask

the

Congress
legislation

definitive

providing for supplementary

re¬

quirements.

Conclusions and Recommendations
Conclusions—
thus

far

adopted

minimum adverse effect

government

on

security market,

Production

which

provides

(2)

between the

tary

Credit Restraint Committee.

Voluntary

Committee
most

Credit

cannot

informed

ing.

lending

will

measures

deal

assurance

with

the

tionary situation that may be an¬
ticipated as the national security
expands.

Additional

measures are needed to

contribute

anti-inflationary

and at the

same

program

time maintain sta¬

bility in the market for

govern¬

ment securities.
In
ures

general, the additional
which

Restraint

exercise

guided
the

by

unless

up-to-date

it

shifting

requirements

should

extension

of

as

ernors

ference of Mayors be enlisted
the

Voluntary

Credit

to finance deferrable

(4)

That

the

C.

in

themselves,

tax

WM.

-

'

McC.

MARTIN, Jr.,

The Chairman of the Board of

Governors of the Federal

and

Reserve System

a pay-as-we-go

aggravates

-

SNYDER,
Secretary of the Treasury

The

Any failure in this

program.

respect

WILSON,

JOHN W.

such

first

-

.

.

E.

Mobilization, Chairman

Economic

requires,

importantly,

contributes k its

accomplish the pur¬
of mobilization and stabili¬

The Director of Defense

controls

assure

stabilization.

stabilization
most

credit

wage

we

zation.

the

LEON H.

immeasurably

KEYSERLING,

The Chairman of the

the problems of economic stabili¬

Council

of Economic Advisers

and

be

meas¬

taken

are:

reinforcement

cluded

in

in it.

(5)

That government loan

loan

guarantee
follow
policies

agencies

in

of

of its

flation

is

serious

still

"In the

bank, "some think it is

result will

set forth in the

most

a

circumstances,"

ing institutions

as

nation's

despite

let-up
in the
inflationary psychology.

restrict

with

the

danger,

to

the

mistake

a

regulations

designed

demand, and
be

says

that

the

unnecessary unem¬

Principles of the
National
Voluntary f,Credit Re¬
straint Programt If the
policies of

letting inflationary

the two groups of lenders

business

of

are

not

now,

coordinated

sufficient

gram

gers.

the
Voluntary Pro¬
might be undermined. This
subject is more fully treated in
the

forthcoming report of the Di¬
rector of the
Budget, the Director
of

Defense

Chairman

Mobilization

and

the

o| the Council of Eco¬

nomic Advisers

government

the policies of

on

lending agencies that

was

requested by the President to
complement the work of the pres¬
ent

committee.

the

(6) That Section 601 of the De¬
Production
Act
of
1950,
which provides
authority for Reg¬
ulation W of the Board of
Gover¬

nors

restricting the use of
sumer
credit, be extended.

con¬

current

easing

is

earlier

now

durables,

appearing, alter

false

alarms.

The

essential fact is that the
supply of

materials, and

probably of man¬
also, will not permit con¬
tinuing the output of consumers'
power

durables at recent rates.,
tunate

that

demand

It is for¬

is

subsiding
naturally, due to temporary mar¬
ket

saturation.

Otherwise

the

inflationary problem would be, to
that extent, less manageable."

Van Alsiyne, Noel to

also give in¬
to future dan¬

weight

The

wolf

the

and

be considered

Admit Arrowsmith

should

beneficial

and

gratifying, rather than a threat to
activity and employment, and we
believe most people so consider
if.
inflation
already has been

The

costly.
if

It would have been

anti-inflationary

worse

had

measures

not been taken. Inventories would

have

beem larger,

price

distortions

more

fense

pressures

of metals for consumers'

ployment and business loss.
This
view,
however,
underrates
the
strength of the factors sustaining

Statement

extreme,

situation

more

debts greater,
and
inequities
the business

and

vulnerable.

"The weight of economic

opin¬

ion is that inflationary forces

are

still dangerous, and that it would
be

foolhardy to take the risk that*'
J. E. Arrowsmith
they may get out of hand again.
Van Alstyne, Noel
in April, a relatively quiet
& ; Co., 52
fense
Production
Act
of
1950, month, new orders received
by Wall Street, New York City, mem¬
which
furnishes
the
legislative the manufacturing industries ex¬ bers of the New York Stock Ex¬
basis
for
Regulation X of the ceeded
shipments. Defense orders change, will admit John E. ArrowBoard of
(7) That Section 602 of the De¬

Governors regulating the

extension of real estate construc¬
tion credit, be extended and
that
the proposed
change in the Act
(Section 106 H.R. 3871 and S.
1397,
82nd
would make it
possible to restrain
the use of real estate
credit in the
enacted.

President, when¬

he determines that
specula¬
on
boards of trade

trading

causes

Even

are

being placed at the rate

billion

dollars

Wilson

says

or

threatens

of

a

Mr.

expenditures

activity that is in sight will
be pouring out
purchasing power,
but

not

will

be

all

the

available

goods
for

produced
those

who

to

"The attention given to accumu¬
lated retail inventories, and to the

weakening of the markets for soft
goods,

may

three

been

have

sold,

cause

quired with respect to speculative
purchases or sales for future de¬

livery.
(9) That the Congress be
urged
to act
promptly and favorably on
the proposals for
emergency addi¬
tional bank reserve

requirements,

these
of

are

advanced

Governors

of

by the

^ie Fed¬

Reserve System.
(10) That mandatory control of

imposed only if the prob¬

be

solved

is
a

most

serious,

demonstration
are

be exaggerated.

months

have

to

defense

and

smith to

Mr.

partnership

Arrowsmith

American
as

on

has

June 14.

been

with

Securities

Corporation
Manager of the institutional de¬

partment.

"

trial

un¬

credit be

week,

will reach that figure by the end
of the year.
The immense indus¬

changes in the price of
any commodity, to prescribe rules
governing the margin to be re¬

warranted

when

a

get the purchasing power.

(8) That Section 611 of H.R.
3871 and S. 1397 be
enacted, which

moderate measures

increase

broad¬

be only temporary, and it would

take risk

In its review of business condi¬

those of comparable
private lend¬

more

some

to

tions, contained in the June issue

maintain

Board

mit continuation and

foolhardy

again get out of hand.

and

should

consistent

eral

endorses;
legislation to per¬

of soft goods markets
may

be

to

mittee

emergency

gov¬

the Voluntary Credit
Program, be included

Restraint

Voluntary Credit Restraint
Program, whose work this Com¬

wholeheartedly

Says Inflation Is Still the Danger
National City Bank of New
York, in its June "Monthly Bank
Letter," warns accumulated retail inventories and weakening

"Monthly Bank Letter," the
ernment agency consider whether National City Bank of New York
financing institutions, not now in¬ warns the danger of runaway in¬
appropriate

that




can,

general

economic

by

expenditures.

authority of the Board of Gover¬

c;rcum-

nor

Committee to help postpone issues
of State and
municipal securities

after

Under these

and

program

and

Only in a
in which each

measure

can

poses

necessities

Restraint

only

billion.

the

equal emphasis that neither selec¬
tive

the Council of State Gov¬

lem

;50

pro¬

financial
require¬
We wish to point out with

ments.

and the United States Con¬

and

alone

a

price

essential.

program

control

share

and

are

rounded

government's

(3) That the cooperation of such

the

year

neighborhood of

with

defense

the

bodies

an

calendar

accord

the

defense program.

ening of selective credit controls;

this

allocations

controls,

is

ialf

of

in

of

the enactment of

imount to in the

ing the expansion of the secmity
During
that
period,
therefore, direct controls, such as
program.

the

criteria

refunding and new issue oper¬
ations of the Treasury in the last

'he

^important role in

an

policies there still re¬
inflationary pressures dur¬

main

we

Even with adequate fiscal

credit

judgment regard¬

policy

tive

the

Office of De¬

The

ever

to

of
1950,
legislative

fense Mobilization and the Volun¬

infla¬

program

Act

the

That close liaison be main¬

prove

to

play

of

Voluntary Credit Re¬
Program, be extended.

tained

and

not

basis for the
straint

zation.

prepared/"
"; ;
/
••''(11) We have pointed out in this
report that credit controls must

is

(1) That Section 708 of the De¬
fense

too
are

controls, should gram of economic stabilization that

Recommendations—

that

no

of the

will

such

necessary.

would permit the

however,

these

extraordinary

an

purchase of existing
structures, be

measures

make

fher
tave a

become

up the beginning of an ef¬
fective program of credit restraint.
There is,

the

that

loans) if, in

esssen- ;

Congress, 1st Session), which

IV

The

ex¬

conditions

could count government securities

either at

additional reserve require¬
ments, either increasing the auth¬
orized
percentages
or
in some
way

tial

be

by banks and other finan¬

(excepting

or

propose the imposition of
mandatory controls at this
time, detailed plans for their im¬
position, in the unfortunate event
they become necessary, should be

man¬

di¬

obligations of
the
United
States, and (4) such special types

mpose

appropriate

tended

should

impact,

operation, or
inadequate. While

such

ob¬

total credits

on

cial institutions

rect

as

time,' plans

datory limits

be

not

may

do

their

in

.

provisions

sufficient

(c) Reserve requirements
of commercial banks have

is

bank,

by regulation, the option of hold¬
ing the additional reserves in the

The provisions of

delivery.

this

re¬

rules

respect to speculative pur¬

and

greatest

under conditions to be prescribed

"

strictions

con¬

reserve

and gives a

reserves

in

emergency,

supplemen¬

on

for additional

In lieu of such

*

S.

cor¬

requirements has

offer

cities,'

(a) As noted above, Section 106 of H. R. 3871 and

*

Force

reserve

,,

Proposed Legislation—

(3)

re¬

promise,
namely: (1) The loan expansion
reserve
plan, and (2) the primary
(securties feature) reserve plan,

c e

permitted.

Task

plans

be¬

currently

degree

additional

the

require¬
ments and has reported that two

fense Production Act of 1950

authorizes the Board of Gov¬
ernors

hold

respondents should be explored.

of assets

•

(c) Section 601 of the De¬

i

feasibility

in balances with their

serves

of

602

the Defense Production Act

of

to

ing existing bank

r

\

The

sidered various plans for reenforc-

Expiring Legislation—
fense

banks.

permitting non-member insured

banks

cy,

<V

requirements should apply to

powers

in

otherwise

possibility that all other anti-in¬
flationary measures fail, or that
needed

slow

too

uncertain

view to the

a

all insured

hot

'[

he

With

such

the

President, by Exec¬
Order, to regulate and

While

'r. !'>■■}•■

It

banks.

the market for government securi¬
ties.
In view
of the emergency

of

4

limit the. issuance of credit.

!;

disruptive effect on

a

sured

utive

•

•;

do not have

nors
to require, in case of
need,
supplementary reserves for all in¬

ize the

n:

I'

any

requirements for bank
reserves imposed
by the Federal
Reserve should be such that they

Emergency
Banking Act of 1933 author¬

tion

;li

stances, it is imperative that
additional

margin accounts.

25

department

For
stores

buying less than they
according

Federal

to

Reserve Board statistics.

Consid¬

ering the typically short cycles of
goods fluctuations—especially

soft
in

a

time when overall production

and employment are sustained by
the heavy expenditures on defense
and business plant and equipment
—this
is
getting the correction
well

under

judges

wayl
consider the

Competent
outlook

accumu¬

lated durable goods more than soft

As of
&

July 1, Berk, Greenberger
Co., members of the New York

Stock

Exchange, will be formed
Broadway, New
City. Partners will be Frank

with offices at 42
York
J.

Bennett,

Bernard

Exchange

Berk,

Robert

member,
H. Berk,

Eugene Greenberger, Joseph Klein,
Henry Mintz, general partners, and
Harry Moskowitz, limited partner.
Bernard Berk and Eugene Green¬

berger
ship

are

in

June 30.
from

retiring from partner¬
Faroll & Co. on

Joseph

Joseph Klein is retiring

Faroll

&

Co.

on

the

same

date.

With

Wilson, Johnson

(Special to The Financial Chronicle)

OAKLAND, Calif.—Howard D.
Hickman^ Jr. has been added to
the staff of Wilson,
Johnson &
As respects the supply Higgins, Central Bank Building.

goods, according to the inventory
analyses which the Reserve Board

publishes.

New NYSEFirm Forming

for

fall apparel business good.

"Moreover, stores have

Berk, Greenberger Co.

26

"(2366)

The Commercial and Financial Chronicle

tion of the total of public

Britain Considers Guaranteed

debt, and a relatively moderate amount
switching would raise the prices of guaranteed bonds to a level

of
at

which

holders

of

bonds

without

guarantee

consider it worth their while to switch

Purchasing Power Bonds

would

must

over.

purchasing

medium

By PAUL EINZIG

Federal

would be that it would

power

provide

a

Einzig comments

proposal that loans be offered with

on

a guar¬

anteed

purchasing power. Discusses pros and cons regarding
type of securities, and suggests that they constitute a
limited hedge against inflation.

this

to

new

Continued

from

page

It

•

•

once

Impact

more

productive

likely that

interest

rates

make

ference in this respect.
to

because of

save

that

in

The public is reluctant
conviction

like

we

tional percent or two percent per annum is not

methods

of

likely to make any difference to this attitude,
seeing that prices rise a good deal more than

be

useful

who

afford

can

purchases rather than

ings, and they

even

it

make

Dr. Paul

earn¬

Einzig

ities

dig into their old savings

prospect

or

control

credit

would

least

objec¬

and

likely possibil¬

enlargement of
of the Federal Reserve

(1)

are:

the power
Board

To remedy this state of affairs, it has been suggested in vari¬

v

most

Two of the most

in order to spend their money before prices rise further.
'

the

tionable.

advance

part of their

save

are

raise

to

bank

reserve

re¬

on

quirements in relation to deposits,
and (2) giving the Reserve Board
some kind of authority to regulate

various occasions in the past, during periods of advanced inflation
experienced in Germany and other countries after the first World

banks, perhaps in the form of the

in

quarters

ous

Britain

guaranteed purchasing

and

power

other

countries

that

should be issued.

loans

This

was

with
done

a

risk

the

assets

of

commercial

effects

of

tial

in their total non-defense loans.

erate inflation.

let

arguments against such issues may be summed

up

(1) In view of the repudiation of the "gold clause" in the
United States and elsewhere during the
'thirties, the public would
be inclined to distrust any "purchasing power clause" that would
be inserted in the loan contracts.
The insertion of such clauses by governments would be
as
an
indication that these governments themselves

regarded

anticipated
(3) In
such

further depreciation of the currencies.

a

case

bonds

of

and

a

their

maturity the issuing

governments

would

(4) Guaranteed purchasing power clauses would deprive the
governments of the advantage of benefiting by a depreciation of
the currencies. They would obviate a reduction of the real burden
Beyond

doubt

therefore

the

repudiation

of

the

be accepted without a

"gold

power

clauses" is

still

some

doubt.

It

in which to

way

allay fears by giving a solemn undertaking not to introduce in
any circumstances legislation to repudiate the "purchasing power
clauses."

v.,> :
regarding the insertion of such clauses
dication that the government is pessimistic about its
.

.

So far from

rency, many people would

probably regard it

as

an

as

an

own

in¬

cur¬

rate, it would indicate that the government considers it a fair risk
to undertake to pay more in terms of the national
currency if
prices should rise further.
The losses

prices would

revenue

prices,

that would be

be

in the

would
on

more

nominal

further rise in
than

real.

For

sooner or later

account of its loans with guaranteed

without

power

long tun

a

adjust itself to the new level
that the government would be able to pay larger

so

nominal amounts

ing

incurred through

payments to total

thereby

increasing

the

proportion

purchas¬
of

of

the

real

burden

of

the

public

debt

the

nominal

considerably since 1914

and is

amount

of

likely to rise

depreciation of the monetary units since
1914 the burden of the public debt of most
countries would have
become unbearable by now. There is no
need, however, for con¬

verting all outstanding loans into loans with guaranteed
purchas¬
ing power. It would be sufficient to confine the formula to new
issues needed for
ment drive.

financing and re-financing during the

rearma¬

It would be well worth while
for the governments
to shoulder the additional burden due
to the issue of such bonds
in return for relieving
pressure due to inadequate
saving or dis¬
saving during the period of intensified rearmament.
(

The bonds with guaranteed purchasing
power would of

command

a

substantial

without such guarantee.
want to switch into the

purchasing

premium

against

corresponding

Presumably holders
former, so that bonds

course

bonds

of the latter would

without guaranteed

hiight tend to depreciate to some extent. Their
be moderate,
however, because the total of bonds

power

decline would

with guaranteed

be in

purchasing




power would

represent

a

small frac¬

the

risk

be.

;

individual

authorities

would

really

a

other
than
defense
production.
They could actually accomplish in

comparatively

direct and cer¬
tain manner what they have here¬
tofore merely attempted to accom¬
plish by much indirection and
great uncertainty.

impact of the regulation of

The

assets

upon

of

the

interest

level and
might

rates

be revolutionary. For many years,
most interest rate have been de¬

termined

largely

by

the

market

yields of government securities. If
the Reserve System were to reg¬
ulate banks' risk assets, rates for
various types of risk credit could
easily become divorced from gov¬
ernment security yields.
if

Even

market

the

government
to

banks

bond

remain

and

borrowers.

Higher primary reserve require¬
ments would penalize every bank
regardless of its lending and in¬
vestment policies and they would
badly squeeze certain banks and
localities.

to

deposits.1, The
and

loans

ratio

deposits

affected
"

in

long

the

before
Dakota,

South

whatever.
And individual banks throughout
the

any pressure

country

have

which

been

without

and

restraint.

'

:

and

nent

the

that

period of

trend

over

a

might be toward

years

higher reserve requirements.
In contrast, the regulation of -risk
assets
would
obviously
be
an
emergency
control which could
ever

eliminated

be

once

much

easily

more

the emergency had passed.

terfering

with

the
government
market, and other in¬

securities
terest

to

rates would be

free to

rise

much

In

short,

if

we

forced

are

to

choose between these two alterna¬
may

be that the regulation

objectionable

than an enlarge¬
ment of the authority of the Fed¬
eral Reserve System to regulate
bank reserve requirements in re¬
lation to deposits.
Outlook

for

Interest

tions

add

up

to

in terms

ernment

securities.

ernment

securities

from

the

limita¬

still

it by the
magnitude of the national debt,
by the Treasury's financing prob¬

will

now

lems

and

imposed

severe

upon

by the credit needs of

the defense program.

earnings would probably
benefit.
The
underlying reason
why bank lending rates have been
low

in

recent

decades

for

though

is

United

managed

a

continue

the

it is

States

Gov¬

The

be¬

not

sold

with

little

loss.

As

reluctant

to

ments:

other

to

shift

from

types
result
in

govern^

of

assets.*

Prospect
What
bank

for

Bank

about

the

Earnings
outlook

earnings? In 1950 bank

for

earn¬

ings were at a record high, 13%
higher than in 1949. Today bank

market, "and
be,
even
free and less

to

more

managed than it was in
the past.
With its huge portfolio
States

curities, which

*

Government

exceeds the

se¬

total

volume of member bank reserves,
the Federal Reserve Banks can¬
not

in

primary

reserve

re¬

quirements, therefore, the outlook
for

bank

pears to

earnings at' present

ap¬

be exceptionally good. 7

What"

about

the
longer term
banking business? It
obviously impossible to say
just what will happen to banking

outlook

for

is

after the conversion to
economy.

In

there is

no

reason

decline

in

defense

a

bank

general,

however,

to fear

drastic

a

deposits. The fi¬
nancing requirements of Federal,
state and local governments will
continue

to

be

substantial

and

holdings of government and

municipal securities will doubtless
remain very large. When
over

credit

consumer

controls

and

real

estate

lending are eventually re¬
laxed, increases in these types of
loans

may

decline

that

tend

to

may

offset

occur

any

in

bank

loans to business.
,

to

In short, there
believe
that

is

every

reason

the
American
banking system will be able to
adapt itself to the changing con¬
(

ditions which lie ahead in the
defense economy, that the services
which banks render will continue
to be needed
by the

community,

and

that

survive
to

banks

and

will

continue

in the

prosper

to

years

Come.

".

is

possibly avoid influencing the
cause the volume of bank credit
level and pattern of government
has been so freely expansible. The security yields. Moreover, the Fed¬
regulation of risk assets would eral Open Market Committee in
provide an effective brake upon formulating open market policy
so

is

gov¬

market

closely

of United

.Bank

of

In the first place, it should be
recognized that we do not have,
and will not have,
a
truly free

Monetary management would
tions

Rates

outlook for interest rates?

market

released

useful

measure

higher levels than has
seemed possible for many years.
be

be

can

bank

What do all of these considera¬

without in¬

control

a

increase

Finally, if the Federal Reserve
System were to ;'be given addi¬
tional power to raise the primary
reserve requirements of banks in
relation to their deposits, there
would be a real danger that this
authority might "become perma¬

Effects of Regulation of Bank

would operate

even if
adopted,
lending
rates... may T go
higher as a result of strong de¬
mands for credit and capital. Many
financial institutions are currently
meeting demands for credit: by
liquidating their remaining hold¬
ings of short-term securities which

such

-

as an emer¬

short, the regulation of risk

other

government

doing a conscientious job of serv¬ loans are far above the average
the credit needs of their for 1950, and even more impor¬
communities,
would
be tightly tant, bank lending rates are higher
restricted, while their less enter¬ and are still moving upward. Bar¬
prising neighbors would be free ring .the
enactment
legislation
to
expand loans without effort which might lead to a substantial

gency

In

divorce

from

ing

and less

assets

could

rates

security yields. However,

ex¬

Similarly, yields for cor¬
porate and municipal securities
might rise appreciably even

Assets

assets,

private

banks

for

strong demand from private bor¬

Risk

As

posits is high, would be severely

more

unchanged.

not.;

a
further
regions, by commun-, This may
ities
and
by
individual
banks. hardening in private lending rates,
Thus banks in Vermont, where, including the yields of corporate
the
ratio
of
loans
to
de¬ and municipal bonds]

of risk assets woul be

remained

risk

interest

by

greatly

rise substantially in response to a

though Treasury borrowing rates

other interest rates may
than they have.

previously, the adop¬
tion of the loan-reserve plan; or
some other type of regulation
of

be¬

varies

tives, it

rowers.

mean

Their

stable,
therefore, bank lending rates could
were

necessarily

impact these holdings of short-term issues
upon a particular bank would de¬ become depleted, however, these
pend largely upon its ratio of institutions will be more and more
certain

ample, felt

v

position, for a change, to
regulate the flow of bank credit
to private borrowers for purposes

revenue.1

which has risen very
further. But for the

objec¬

what

regulation of

the

might

Reserve

such

Beyond doubt it would be a mistake to convert the whole of
the public debt into loans with
guaranteed purchasing power. In
doing so the government would abandon the chance of a reduction

less

this question,

consider

First and foremost, the Federal

indication of

the government's confidence in the future of the
currency. At any

of

of

structure

guarantees would

certain amount of

is for the governments concerned to devise

public

effects

the

answer

first

us

risk

increasing public debts through currency depreciations.

widely remembered, and the purchasing
not

tionable? To

a

substantial rise in prices between the issue of

incur heavy losses.

of the

would be

assets

"as follows:

methods of

Which of these two

control

essen¬

Secondly,
they
cause serious inequities and
hardships in the tCase of many

not

mentioned

bank

production.

loans

entirely unable to borrow unless they guaranteed the pur¬
chasing power of the loans. There seems to be no reasons, how¬
ever, why such loans should not be issued during a period of mod¬

risk

on

of credit needed to finance

tween

been

of

would

so-called loan-reserve plan which

special reserves against increases

regulation

.<)

This does

deposits would have several dis¬
advantages. In the first place, they
might interfere with the extension

would

require banks to maintain

the

requirements based

serve

World War. On each occasion the proposed remedy was
only re¬
sorted to when, owing to the speed with which the national cur¬
rencies were depreciating, the governments concerned would have

(2)

that

of any further substantial increase;
in Treasury borrowing rates.; "

assets, substantial increases in re¬

War, and again in Hungary and other countries after the second

The main

fore,

fn'ay take

opinion is, there¬
there is little chance

own

that

not, we may be confronted with
the problem of trying to decide
which
of
several
possible new

doing ^iso it would stand to lose as a
rising trend of prices. An addi¬

Those

place. My

rise" further

If that

Whether

the widespread

result of the

that.

tinue to regulate the range, within
which price fluctuations

the

purposes,

happens, it is en¬
tirely possible that new controls
may be imposed upon bank credit.

further increase of the
any material dif¬

a

would

support is needed, and it will Con¬

Banking

on

supporting the government bond
when it feels that 'kich

stream.

This means that, in addition
inflationary pressure caused by rearma¬
ment, there is also inflationary pressure due
to the spending of liquidated savings. Nor does

to the

seem

more

bange in

wider

market

result the supply of bank credit available
would
be
the
creation
of new to private borrowers for the first
deposits and the injection of ad¬ time since the early 1920's.
ditional money into the spending
In contrast with these possible

exceeded savings.

it

over a

govbrmhent

System will not abandon its policy

Business Outlook and Its

beginning of this year by raising the
Certificates and Defense Bonds. For a

withdrawals

weeks

recent

essentialj produc¬
disrupted.!]}

is apparent that

Nevertheless, the Federal Reserve

4

short time after the change the weekly statis¬
tics of savings showed small net increases, but

during

that

might be

the future than in the pastidecade;

at the

Savings

on

can¬

bor^d prices

freely and

Eng.—The decline of saving and the increase of
dis-saving is causing much concern in Britain. The Treasury sought
rate

authorities

security prices will fluctuate

extent

tion

LONDON,

interest

Reserve

tighten credit conditions; to such

an

of

to reverse the trend

financing
Treasury. Finally, the

future inflation.

Noting decline in saving and investment in Great Britain, Dr.

»

the

hedging against inflation. The provision of such an
might materially reduce hedging by means of acquiring
goods of every description, and to that extent it would tend to
moderate the rising trend of prices due to the anticipation of
alternative

.

to

not permit a decline in

for

important

necessity give

needs of the

One of the great advantages of the issue of bonds with
guar¬
anteed

of

consideration

longer

no

Thursday, June 7, 1951

..

.

J. R. Werges With
Join G. Kinnard Co.
MINNEAPOLIS,
G.

Kinnard

and

Minn.

—

John

Company,

71

Baker

Arcade, has appointed J. ft.
Werges of St. Paul, Minnesota, as
General Sales Manager in
charge
of Mutual Investments.
Mr.

Werges

years, associated
J.
Rice

was,

with

Company

Minnesota.

of

for
the

many

Irving
St. Paul,

Volume 173

Number 5018

.

.

.

The

Commercial and Financial Chronicle

1

More Bond Club of New
(Continued from

Ed

Fishwick,

Mutual

Insurance Co.,

Ray

Benefit Life Insurance Co., Newark;
W. M. Whitesell, Mutual Benefit
Newark; Robert A. Bivins. Chase National Bank of the City of New York;
Alex Seidler, National State Bank, Newark

Vanderhoff, Fidelity Union Trust Company, Newark; H.
Ballou, Shearson, Hammill & Co., New York City;
Richard
H. Monaghan,
Newark
,

J.

C.

Jim

Morton,

New

The Blue List,

New

York

York City; Ludlow Van Deventer,
Chas. J. Waldmann,
Jr., Kean,




City; E. A. M. Cob den, Kean, Taylor &
Van Deventer Brothers, Inc., Newark;
Taylor & Co., New York City

Richard F. Saffin,
New

Boland, Saffin & Co., New York City; Frederick J. Sautter, Boland, Saffin
York
City; Howard B. Dunning? C. P. Dunning & Co., Newark;
Floyd H. Johnson, Boland, Saffin & Co., New York City

Savings Bank, New York City;
Weeks, New York City

&

H.

P.

Schaub,

Mutual

Co.,

&

Jim

&

Jr., Harry P. Schaub, Inc., Newark; Gordon
Life Insurance Company, Newark, Donald
Merrill Lynch, Pierce, Fenner & Beane, Newark

Benefit

Lane,

Hopper, Equitable Securities Corporation, New York City; Horace C. Sylvester, III, Hall
Company, New York City; Halsey C. Brewster, Allen & Company, New York City;
John C. Clark, Chase National Bank of the City of New
York

A.

Jersey Pictures
18)

page

1

Ranson, Harris Trust &
Jim Gilbert, Hornblower

Kirk

Roald

Life

27

(2367)

Co.,

Boyd,
E.

Johnston, Bramhall, Barbour & Co., Inc., New York City; Walton R. Dunn, Machey, Dunn
& Co., Inc., New York City; Walter L. Brown, B. J. Van Ingen & Co., Inc.,
New York City; C. M. Haight, Jr., Tripp & Co., Inc., New York City

L. McDonald, Public Service Electric & Gas Co., Newark; Larry Carey, The Trust Company of New
Jersey, Jersey City, N. J.; Van Middlesworth, Public Service Electric <fi Gas Co., Newark;
F. J. Kugelmann, National State Bank, Newark

28

The Commercial and Financial

(2368)

Taken at Annual Field

Philip Van Deventer, Van Deventer Brothers,
& Co., New York City; J. Kirk Milnor, New

William Boland, Boland,
members

of

the

Inc., New York City; Wilmer Slaight, Granbery, Marache
Ycfrk City; F. R. Cole, F. R. Cole & Co., Newark, N. J.

Saffin & Co., New York City; Frank B. Quinby and C. G. Colyer, honorary
Bond
Club
of New Jersey
(both are retired); Arthur Robinson,
Fidelity Union Trust Company, Newark

W.

Chronicle

.

.

.

Thursday, June 7, 1951

Day

Weissenborn, Inc., Newark; Chick Spring, Outwater & Wells, Jersey City,
(retired); Harry Zimmer, Commercial Trust Company, Jersey City, N. J.

K. Van Hise, Parker &
N. J.;

John

Jim

Agnew,

Currie

Eastman, Dillon & Co., New York City; A. S. Currie, First National Bank
N. J.; R. W. Crum, Vice-President, National State Bank, Newark;
T. A. von Glahn, Salomon Bros. & Hutzler, New York City

of

Paterson,

"t

Bill

Roos,
Henry

Glenn

MacBride,
Miller
&
Hegel, Federal Trust

D.Thompson,

Co.,
Co.,

Newark; Ken Cronyn, MacBride, Miller & Co., Newark;
Newark; Chas. E. Reed, Kean, Taylor & Co., Newark

National State Bank,




'

New

York City;

Newark;

Carl A. Prelm, R. W. Pressprich & Co.,

C. B. Campbell, guest

Carl

Egner, Clark, Dodge & Co., Newark; Chas. Thomas, Kean, Taylor & Co., New York City; J. P.
F. A. Von Hoffman, L. F. Rothschild & Co., New York City

Rutter, American Insurance Co., Newark;

Joe Rush, Reynolds <ft Co., New York City; Craig
Pruden, MacBride, Miller & Co., Newark; Thomas

Mitchell, Blyth & Co., Inc., New York City; Deane
G. Kenyon, Carteret Bank & Trust Co., Carteret, N.J.

yolume 173

Number 5018

.

.

Continued

Utility Securities

Central Maine Power Company
Central Maine Power

where

of

most

industries

Maine,
the

of

not

are

Company

in

the

state's

serves

central

southwestern

and

industries

talk

clusive

sections

While

located.

are

at

Maine

especially large in the aggregate, nevertheless,

textiles, and boots and shoes.

about

twenty-five

about two-thirds of the

the state leads all others in the production of
newsprint and some
other pulp products.
Other important industries are cotton and
woolen

New

$60 million

in research

expansion since the war, in order to maintain their competi¬
The decision of C.-.co-Lowell Shops, a large textile

tive positions.

machinery

manufacturer

north and the

which

south, to build

a

has

locations

plant

in

both

the

example.
con¬

siderable industrial strength in its many diversified smaller indus¬

tries, such as woodworking, metal processes, and the growing
food-processing business. Maine's agriculture and its recreational
business
fited by

also

are

important fields.

Moreover,

Maine has

bene¬

the recent tendency of large industry to decentralize both

existing and
the

of product

therefore

do

industrial

areas.

of

plant facilities.

new

type

same

business

nounced

face

not

for

Maine industries produce much

both

great

as

war

and

problem

civilian

needs

and

of

retooling as other
Works, for example, is regularly in the
building fighting ships and is well geared to meet
a

Bath Iron

increased defense order needs.

continuing at

high level, and

a

Industrial production in Maine

is

reach the billion dollar mark

may

for the first time in 1951.
Central

Maine Power

Company is primarily a hydro-electric
company. It has 34 hydro-electric plants, with total rated capacity
of 191,000 kilowatts, located on the Androscoggin, Kennebec and
Saco rivers. The first two are well provided with
storage at their
headwaters, and rank favorably among the best regulated rivers
from a hydro standpoint. The company is the only power user on

the Saco River and

can

nickel

and

closely regulate its flow for system needs.

The Kennebec River is of most

importance, 53% of the company's
capacity being located on that river. In 1950, the com¬
pany completed a storage reservoir on Dead River, a tributary of
the Kennebec, which added about 12 billion cubic feet to the stor¬
age available for river operation and increased total storage about
total hydro

Sherritt

plans

in
this

Gordon

spend

to

an¬

some

dollars to develop
its Lynn
Lake nickel deposits.
Here also American interests, the
Newmont
mining
group,
have
thirty million

agreed to provide one-third of- the
necessary

moneys.

I should speak of
metal developments
Columbia all on a big

addition,
base

British

mention in
passing the huge aluminum plant
already in existence in Arvida,
which is one of the great engi¬
will

but

scale,

only

neering developments of the age.
This

same

nounced

recently

company

hundred

five

a

an¬

million

development and construction pro¬
gram

on

interest

of

be

West coast.

our

that

It may
electric

the

developed by the Aluminum
ail used
by them, exceeds the total amount
produced at Grand Coulee.

power

Company at Arvida, and

The

bringing all these

of

task

properties into actual production
will be a great one and undoubt¬

of keen and even cut-throat com¬

petition and the depression of the

stages

still

are

of

far

to

position
the

I

established

factory earnings basis and opera¬

in

this

it

there

that

is

are

ting to capacity. By illustration of

a

is

this

sedi¬

of

area

is

miles—larger
California,

of

States

the

basin

this

891 thousand square

than

River

Mackenzie

the

to

The

support these min¬

the

in
provinces of Quebec and Brit¬

ish

Columbia.

eral developments, particularly

improved its position by $36 per

oil that

3,000

a

fantastic lies in the

seems

Athabaska

so-called

mile

square

These

contain

sands—

tar

lying

area

of Edmon¬

about 200 miles north
ton.

of

source

it is estimated,
200 billion barrels

sands,

over

far more than
all other known reserves in the
world. The only problem is how
of

petroleum

to

it

Several

out.

but

set up

commercial method

no

and here another industry
in importance

ural gas

will in time rival oil

the United States.

it has here in

as

Already a chemical industry has
taken
advantage
of this cheap

know

sells for $36. I suppose you
3

out of 5 of every
printed throughout the

pages

world each day are on

newsprint

produced in Canada.
The industry established

new

production and sales in
and is operating at an even

records of
1950

the present time
ever-increasing de¬

higher level at
the

meet

to

consid¬

its products. A

for

mand

is being

erable amount of money

...

processes
have been tried and pilot plants
get

it

share, in the same period, and

newspaper

of extraction has yet been found.
edly profitable, but one which at
The oil is there, however, waiting
the moment is beyond Canada's
for someone.
financial
resources.
Fortunately
With oil, of course, comes nat¬
we
have
sufficient undeveloped
water power to

big newspaper companies has

the

that

potential

has built

reserves

which are the chief oil
producing States in this country.
Texas,

further

leading man¬

the past

Kansas, Oklahoma, Louisiana and

A

a

and resources in
10 years to the equivalent
of $97 per share. It sells on the
Stock Exchange at $94. One of
its

up

marine
disposition occupying a basis ex¬
tending from the United States
delta.

improvement,

ufacturer of fine papers

now

of

structures

mentary

the improvement has
of spectacular

short

and

that

not

am

but

not,

little

been

great

a

whether

say

or

case

largest

the

today, without exception, the
leading Canadian companies are
in a sound financial position, well
established on a stable and satis¬

and

surpassing

discovered.

of

anything

development

area

far

so

many

recent years,

in the early

somewhere in the west lies

oil

forced

'30s

companies into reorganization. Of

of the
important growth of the past few
we

twenty years ago, the

or

business of making paper was one

feel that, in spite

men

border
In

in

industries, Maine is also gaining

expenditures

Oil

years,

copper

sundry

In addition to these basic

ex¬

Quebec.

week

past

modern plant in Maine is an

new

dollars,

smelting

Sorel,
Again

There has been considerable

Industries in that state have spent some

of

million

in¬

manufacturing

largest

dustry.

northern Manitoba, where just

England's industries migrating to the south and
other regions, but this does not
appear to be typical of Maine.
and

da's

15

page

Investment Outlook in Canada,
And the Move Promising Industries

By OWEN ELY

population

from

Fifteen

Public

29

(2369).

The Commercial and Financial Chronicle

.

increase

to

invested

the over-all

producing capacity of the country
but the shortage of steel and the

investment needed
mill prevent
any large-scale expansion. Exist¬
ing newsprint companies, for ex¬
ample, have a capital investment
averaging probably
$30,000 for
each ton of daily production. It
capital

large

start up

to

a

paper

is estimated that,

based on today's

$90,000
capacity to start

costs, it would cost some

ton of daily

per

mill from scratch

and that

a

new

a

mill built on such terms

would

pany's present hydro plants will produce about 928,000,000 kilo¬
watt-hours annually. This is about 71% of present annual output.

Celanese Corporation not be profitable at present news¬
of America is now building a $30
Canada's
oil
industry
dates
print prices. The same situation
million plant at
Edmonton. Al¬
back only a few years. There have
applies to other pulp and paper
berta's gas reserves are now esti¬
manufacturers, so that, if other
been small amounts produced in
mated at 7 trillion cubic feet, of
New JbrunswicK and'Ontario but
plants are to be built, even higher
which some 4V2
trillion can be
the principal interest is in West¬
pulp and paper prices will be
exported commercially and I am necessary to justify the larger
ern Canada—chiefly in the Prov¬
sure that the Alberta Government
ince of Alberta.
capital required.
will soon permit such export to
At present, then, the industry
Although oil was first discovered the west coasts
of the United

From

in

one-third.

It is estimated that this

development increased the firm
capacity by about 17,000 kilowatts (or more for short periods).
The increase in annual production resulting from this development

will, of course, vary with water conditions. The company is also
acquiring rights in other hydro sites which may be developed later,
and is also considering further increases of storage capacity.
Under normal water conditions it is estimated

that the

com¬

mid-1947

through 1950 less than normal water conditions
during certain parts of the yearly periods, necessitating

existed
heavier

steam

operation and

of less

use

efficient

standby units.

Since November, 1950, the situation has been reversed and betterthan-normal water conditions have existed, un to the present time.

Alberta

Industry

Oil

Canada's

in

the

1936,

gas—your

present States and Canada. Pipe-line char¬

did not begin until
February,
1947
when
Imperial
Oil Limited (almost 70% owned
development

64,000,000 kilowatt-hours ahead of estimates for normal produc¬

by Standard of New Jersey), after
spending $23 million and drilling
a
total of
170 miles of "hole,"

tion, with corresponding benefits to earnings.

finally

the

For

first

four

months

of

1951

hydro

generation

was

about

in

well
The adverse effect of unfavorable water conditions

on

future

a

fuel clause

was

In the rate
included in most industrial

The Dead River storage development will improve
minimum flows on the Kennebec. And the steam units now being
added will improve the balance between hydro and steam on the

power

rates.

system and reduce operation
kilowatt steam
other early in

unit will

of less efficient plants.

be ready

One 30,000

in the spring of 1952 and

an¬

1953.

of

Edmonton.

Following

this

the
and

discovery,
by leaps

industry developed

bounds. In Leduc alone there

In

view of rising costs the company is

preparing an upward
be filed in the near
future in order to obtain a rate of return in the neighborhood of
6% on the rate base. In the 12 months ended April 30, with the
aid of plentiful water* the company earned $1.60 on the common
stock, compared with $1.49 in the previous period; however, earn¬
ings for the month of April were below last year's figure.
of

and

rates,

new

schedules

may

William F. Wyman in his recent talk before the
Society of Security Analysts stated that "the operating
income estimate for 1951 cannot have final significance until the
question of rate adjustments has been determined, and the Federal
income tax rate applicable has been established. From our studies
and estimates, we have reached the conclusion that the proposed
President

The

wells.

shares

additional

which

will

be

issued, and assuming conditions

reasonably foreseeable, the company's earnings should con¬
tinue at a minimum rate of $1.50 per share with more favorable

now

results

possible during certain periods."

The stock has

been quoted

De Coppet Doremus
De

Admit

Coppet & Doremus, 63 Wall

Street, New York City, members
of the New York Stock Exchange,
July

on

1

will

admit

William

Campbell Gay, member of the Ex¬
change, and J. George Zipp to
partnership.

ly

a

recently over-counter around 17,
'
■
.

$1.20 to yield about 7%.

and pays

Mr. Gay

was

former¬

partner in Gay & Co.




New York Stock

Exchange

Weekly Firm Changes
The New York Stock Exchange

has announced the following firm

changes:
from

&

George B. Hyslop retired

partnership in A. M. Kidder
May 31. Philip L. Carrett
retire from partnership in

Co.

will

Gammack & Co. June

15.

in

million

than $100

more

could

I

need for more.

in¬

on

go

definitely with the possibilities in
but time is running out and a

this

have

than

with

in

brought
a

at

till last month

local

the

rate

in

being

ones

new

more

wells

of about

demand

vinces.

of

oil

up

limited to the

of the Prairie pro¬

in

Late

Alberta

was

April,

the

forests

such

as

into

lumber,

pulp, paper and a wide range of
materials, is not new to any
one

of you.

that

today

of

other

that

are

Pulp Industry

and

conversion

The

It

plastics,
part

large

of

metals

would

substitutes

not long ago,

was

were

many

opinion

and

replace

multiple

the

wood and wood

the

other
in

uses

a

of

products. In some

instances, this has been true but
in the meantime more and new
uses

and

have
more

been

need of any further money,

shares of

opinion,
thriving

risk capital. The
existing pulp and paper
do,

would

I

demanding more

the cutting of standing

timber.

however,

in

my

offer participation in
Canadian industry.
like

to tell

you

;

a

some¬

thing of the many supporting in¬
dustries
such as steel, chemical
and others as well as

dealing spe¬

cifically with some of^ the
vidual companies but 'time
not

Lumber

The

producing

week.

Production

important.

into being since

producing

2,200

Alberta

ten

There

time.

that

come

products is most

forest

finished products,

success.

other

12

and

size,

areas

on

area

discovered
late in 1948, already exceeds Leduc
in

word

no

especially

per annum,

realize the ever-increasing

you can

is in

companies

So, with the annual investment
the industry now running at

in other fields

followed

success

producing

of

success

interest

awakened
and

600

than

more

now

New York

rates will bring existing operations into proper balance, and satis¬
factorily support additional capital needs of the company. Inter¬
preted in terms of future earnings on common stock, including

Montreal.

bring gas as far east as

are

The Red Water field,

revision

being sought to

already

are

oil

earnings has been reduced by several recent factors.
adjustments of 1948

Leduc,

south

miles

in a successful
Alberta, a few

brought

ters

permit,

although

pleased

I

indi¬
does

will be
questions

to answer any
later—if I have the knowledge
do

to

so.

History and geography, together
economic realities, haye
bound the United States and Can¬
with

for a long time and,
will bind us even
more
closely to each other. We
share a common origin, a common
ada together
in

the

future,

language, and similar traditions,
were partners in two world wars,
and we must go forward together

—strengthening
our
friendship
and developing
our mutual
interests.

first

Lumbering, really an industry
With Protected Investors
tanker load of Canadian crude
in itself, is, of course nation-wide
left the eastern end of the newly
(Special to The Financial Chronicle)
•
but the greatest stands of timber
built
Intreprovincial
Pipeline, and largest mills are located on
SAN
FRANCISCO,
Calif.—
which runs from Edmonton, Al¬
the West Coast in British Colum¬ Langdon W. Post has been added
berta, to Superior, Wisconsin— bia where \lk billion board feet to the staff of Protected Investors
a
distance
of 1,127 miles.
The of timber—worth $390 million- of America, Russ Building.
allowable production was prompt¬ were scaled last
year
over half
ly raised to 140 thousand barrels the total cut for the whole of
Thomas Mackey Opens
per day and, for the week ended Canada.
(Special to The Financial Chronicle) •
May
7th, the allowable figure
The shares of three of the lead¬
MIAMI,
Fla. — Thomas
S.
jumped to. 152 thousand barrels
ing British Columbia lumber com¬
Mackey is engaging in a securities
per day. This is
still far below
panies are actively traded on Ca¬ business from offices at 3170 S. W.
the maximum efficient producing
nadian Stock Exchanges, and by
rate of the wells, so even wider
Eighth Street.
companies large
...

■

markets

are

needed. The first step

by in¬
pipeline's
capacity from 95 thousand barrels
per day to 130 thousand barrels.
The next step will, I am sure, be
the building of a pipeline over
is

already under way

creasing

the

the

virtue

of

these

timber holdings

are

...

existing

Rockies to the West Coast.

as

looked upon

Joins Merrill

excellent inflationary hedges.

(Special to The Financial

Important as the lumber indus¬
try

is,

the

greater

into manufacture

of
&

:

Chronicle) '

PETERSBURG, Fla.—Ger¬
has joined the staff
Merrill Lynch, Pierce, Fencer
Beane, 568 Central Avenue.

ST.

ald R. Jobin

and paper to make Cana¬

timber land goes
of pulp

part of our

Lynch

Financial Chronicle

The Commercial and
30

..

.

7, 1951

Thursday, June

(2370)
mighty scarce article/ Actually,
steel
industry
is receiving

a

3

Continued from page

more

the Russian
Menace and Good Government

The Steel Industry,

construction. But you can

materials

critical

other

of

lack

replace exist¬
ing facilities, and it will not be
forthcoming. There is only one
source of money for replacement.

that it is stated

fact

the

From

time that

glibly from time to

so

No

Industry Expansion
Simple Matter

country should
have such
and such a steel capacity—the prethis

depending

figure

cise

the

on

of the moget the idea
that the expansion of steel capacity is a simple and easy matter,
Emphatically, this is not the case,
Expansion puts very heavy burdens on steel
industry — both
physical and financial burdens.

opinion of the speaker

would

ment—you

not generally appre¬

This fact is

understood even

ciated and is not

steel fabricators who
apparently think that the expan¬
by

remember—when
which man and
party should move into the City
It must come from proper depre- most serious. There is scrap in the Hall, the County Courthouse, the
ciation charges.
The earnings country. Extraordinary efforts Governor's mansion or the White
shown today are misleading to the must be made to get it flowing to House. The issues of the past were
very substantial extent that they the mills. Additional blast fur¬ important, of course, but even at
include money that should be naces, with the necessary coke the height of partisan emotion, we
charged to depreciation, because it plants, are being built to increase knew that the outcome of elec¬
must be spent for replacement and the production of pig iron. But tions would not have a noticeable
at
our.
desks
or
work
therefore is not available for any this takes time, and today, we effect
other purpose. If this factor were have an emergency. Unless steps benches, or in our homes. Those
properly recognized, earnings are taken to increase the supply were the days when about the
of scrap—and soon—steel produc¬ only contact of the average per¬
would drop to a point which
would show that steel prices today tion is going to suffer. You gentle¬ son with the Federal government
are
not commensurate with the men can help in a very important was the Post Office.
real costs of investment and op¬ way to prevent that from happen¬
Starting with World War I,
eration.
ing.
The
industrial
plants
of however, the force of politics has

able

capacity is compar¬
enlargement of
in
their

the

to

A moment ago,

pro¬

panies

most cases, if a fabri¬
cator has available manpower, all
In

lines.

that

requires to expand

he

is

duction

floor

more

You might say

ment.

pro¬

and

space

equip¬

and

machines

additional

that plenty

problems are involved in fill¬
these
requirements—and I
will agree with you because we
have them every day in our fin¬
ishing operations which are essen¬
tially
the
same
as
fabricating
operations. But our really tough
problem is to provide the facili¬
that

make

the

finishing

other

this,

limestone

coal,

Then

materials

be

rate of four

finished steel

open
hearth
furnaces,
soaking pits and blooming mills,

must

ahead—and even 50
years is not too far ahead—be¬
cause
if you have the finest and
biggest plant in the world, you
still can not produce steel in it
unless you have the raw materials.

those

of

which

is

It

expan¬

has

whiph is the big job and in¬
big cost. For the steel
industry as a whole, the invest¬
in

through

expansion
from
1940
will amount to $6

1952

billion, 147 million. For National
Steel Corporation alone, invest¬
during the same period will
$375 million. And I want to
that

out

practically

all

this huge investment in the

of

steel

industry represents private capital—with help neither asked from
nor
given by the government.
Industry's Financial Situation Not
Completely Satisfactory
While

this matter of invest-

on

ment, I would like to

say

that the

financial situation of the steel in-

dustry

not be considered at all

can

satisfactory. This

ing to

you

steel

of
you

be surprisin view of the reports

on

earnings that
the financial pages.

to

say

company

read

dislike

what

may

it, but part of
is fiction. The

read

you

earnings of steel companies—our

source

holds the

uneco¬

an

ore

—

of

for

over

high grade

ore.

You have all

heard, I

of the discovery and

?

m

reserves

new

sure,

am

development

Venezuela, Africa and

;La"radQr.
The Labrador project—in which
National Steel is largely interested
-is being carried forward

active¬
ly with a program that involves
the present spending of $200 mil¬
lion and eventually will run into
many
millions
more.
This
de¬
the usual mining installations, but

living quarters
for
employees, a 365-mile railroad, dock¬
*ng and loading facilities, and the

also

for

ships

a

boy of 15. It is

with

iron

ore.

expected

the

the

the

a

have

been

a

great industry

lem
on

is

how

which

basis

arrive

to

at

a

live

in

reason¬

can

we

able peace

times. That prob¬

our

and security with our¬

selves and with the other nations
of
an

the

important and perhaps a deci¬

sive
of

Industry" will have

world.

in the solution
problem—but still only a

part to play

that

are

part. If the man who lead indus¬
mean

conscious

so

obligations?

is

first ore in
good illustration of

its entire

response

active participation, the

is

businessman
because

a

him; because he begrudges the which the public naturally greeted
the return of this great
soldier

to

time and effort he would have to

give to it, and because he has the
idea that the public is "anti-busi¬
ness" and thinks the safest thing
do is stay in his

to

my

opinion,

none

of these reasons

with

influence

influence

is

There is not a single

people.

who

businessman

not

does

are

is

the greatest

and most constructive
country today. They

forces in the

force exerted all the way

ter

small

business life.

icy to allow
depreciation

through

return

from

it.

original cost only. Yet the cost of

money

each

plant and equipment has advanced
at least 2 Vz times over prewar. All

necessary

tax
on

deductions for
the
basis
of

property must be replaced on this

higher

cost

money

to

fectly

proper

money

total

basis.

come

will

Where

from?

is

the

It is per-

to expect that new

cover a

portion of the

financing required for




new

long-range

be
It

year

reserves

any

costs

to

possible
a

lot

carry

of

raw

of

these
ma¬

terials.

There is another extremely im¬

portant

raw

material I would like

to mention—iron and steel

scrap,

It is merely junk to most people,
but to steelmakers, scrap is a

vital

resource,

have

states—they could be one of

own

problem of our time
essentially a political problem.

and it has become

in

force

our

lives.

and

village

the

We

that

see

from the
township

levels of

the

factual

approach that has become a mat¬
of

habit

with

them

in

their

They would not be

large likely to become submerged in
and factionalism. Their main interest

cities and counties, the states
the

nation.

In

the

great

debate

in

politics

would

be

to

develop

practical facts necessary to secure
clean and reasonably efficient and
seen that military policy, although
government.
They
it may have been sound from a economical
would endeavor to get into office
purely military standpoint, has
over

international policy, we have

had to

give way before the greater

weight of world political consider¬
ations—and properly so because
civilian control must always be

kind

the

of

men

who

had

the

inclination and the ability to pro¬
duce
am

word I gave a

Second:

moment ago.

government of that kind.

I

convinced that the widespread,

.

have
other Amer¬
personal opinions,

These Republicans

the same right as all
icans to express

is valid.

Political

great American, it was snide
politics in all the meanings of. the

and

shell. And, in

responsibility which is theirs est in
politics—starting right in
particular moment in his¬ their own communities and their

This great

so

tempt to ride along with the tide
of emotion and
sympathy with

management—content themselves influence
with
many
peoplewith doing a good industrial job
many more than he thinks. If the
and nothing more, they will fall
great body of American business¬
short—far short—of accepting the
men would
take an active inter¬

tory.

they have continued to

Now,

strange field

a

can

taking depreciation

and

political neuter

politics is

there

to

used for political

policy, a certain group of promi¬
nent Republicans leaped in imme¬
diately to endorse his position,

of the great majority is
not my game; that's for

before

tell

due

inferior;

da so.
far as I am concerned,
"That's
there were at least three things
the politicians." The truth is, in wrong with this course of action.
First: Insofar as it was an at¬
my
opinion,
that
the
average

any more

and develop costly property years

is

goes on to define
follows: "spurious; de¬

Then as soon as General
MacArthur made his statement of

of

Many

re-

method of

not

This

to

thing

purposes.

responsibility in their own jobs,
think that they can shrug off their

suiting from the government pol-

story.

their

of

Politics have become the dominant .would bring to politics the

whole

same

This gives you a

base."

at this

of

field

as

ceptively

he

them do not even vote. And as for

dustry—are only part of the great

problem of

who

preparations that
essential to steel production
and of the necessity to acquire

included—do

own

"snide"

ability. He
the mental capacity for factual

political

of the
steel industry which I have been
discussing — and the problems
which each of you have in your
own
company and your own in¬

to ship its

1955. This is

I

these problems

course

full

Labrador

the

Webster

then

opinion, it is a crying
The average businessman

has more than average

The Great Problem

Of

transportation

The

mean

I learned that it was a slang
word, which was news to me, and

my

gotten where he is because

has

great record.

a

large ocean-going

the

shame.

cases

stand before the

you.

concerned.

are

many

a

would

and

activity

and

And in

[

*

politicians will
public on
important matters not because of
deep conviction growing out - of
study and understanding of those
matters, but simply because they
think the position is the one best
calculated to bring political ad¬
vantage to themselves or their
party. And such actions are con¬
sidered as part of the game/ they
are brushed off as "just politics."
In my book they are not "just
politics," they are snide politics.
You know, after I used that word
in preparing my notes for this
talk, I decided to look it up in
the dictionary. It meant something
to me, and I wanted to be sure it
In

take

MacArthur and

which

with

dustry

velopment will require not only try—and by that I

construction of

wide difference.

country—are living
buggy days so
their own political aware¬

as

ness

intimately associated since I was

heretofore but which

a very large
within the United
States. Second
and presently
more
important—we are looking

the world

of

T

potential of

supply of

ment

point

is

progress

considered

been

nomic

volves the

ment

is taking two

ore

First,

far

of politics and the purposes
politicians. There is a very

pose

tricky; mean;
wide as¬
sortment of meanings to
select
advance
of demand. Even now, has
from.
As for me, I accept all of
despite the interference of war analysis that leads to sound con¬
them as applying to the kind of
and the great dislocation of our clusions
and right actions.
Ob¬
politics I have been talking about.
domestic economy, it is living up viously, his batting average has
to that record. I can assure you
to be pretty good to keep him
Republican Party Shortcomings
that it will continue to do so. As
moving up—or at least keep him
As a lifelong and active Repub¬
a result, whatever the difficulties,
where he is. These talents are ex¬
this country will have plenty of actly the ones that must be ap¬ lican, I regret to say that, in my
steel for all essential uses. I know plied to political activity if the opinion, politics of an entirely im¬
proper order have been played by
you will excuse my saying that I
tremendous power now contained
members of my own party in the
am proud of the record of our own
in it is not to become an actual
MacArthur incident.
In the first
company, which in proportion to
danger
to
the welfare of the
place, the entire matter had a
size, has one of the largest expan¬ people of this country.
political origin, because it started
sion programs among all major
Why should businessmen with¬ with the letter which Congress¬
steel companies. And beyond that,
hold their talents from politics? man Martin secured from General
I am proud of the entire steel in¬
What is it that makes these men,

grade, hard rock ore which

low

a

this

sion

I

routes.

being made in the developing of
methods for working taconite —

with

compare

the fabricator.

preliminary part of steel

be

years

The search for

is

preliminary to
making the finished steel in the
operations

has reserves for

that it

see

many

main

this

of

or

fortably close. No steel company
can take chances with iron ore. It

ties.
All

year

not
next

ning of the last war to the present
time is bringing the day uncom-

auxiliary facili¬

many

this

depleted

years.

will

ores

importance of your coopera¬

reputation arises from con¬
the legitimate pur¬

evil

fusion uetween

new

doing to the
in the horse

which a peo¬

ple can establish an orderly and
satisfactory basis of life. Politics'

individual. The compari¬
the old politics and
politics is the comparison
between ^the
horse and buggy
and the
jet plane. Yet far'too
many of the businessmen I know
—who apply jet plane thinking
to their own businesses and who
"beef" about what government is

the steel industry
has a great historical record of
always taking care of the demand
for steel—of always building in

But the enormous and con¬
tinuing to drain from the begin¬

semers,

as

60

these

mechanics through

between

the

Gentlemen,

year.

ship. After that, we must build
coke ovens, blast furnaces, bes-

well

than

more

Understand,

we

as

for

duction

cannot

a

son

tion in this matter.

perior ores which have been the
backbone of American steel pro¬

materials—the

at the

is

wrong

of every

of shiny
new
receiving platforms.
emphasize too strongly

tent, we must provide against the
exhaustion of the rich Lake Su¬

and

tons for every ton of

appeal to you

your

a

Actually, there is

simple

broad in scope and so

so

"bad"
nothing
with politics per se. Its
purpose is to provide the
become

has

It

manner.

word.

in penetration that now it
controlling factor in the life

deep

flow

continuing

the

ties to transport and handle these
raw

picture is

to

capacity to such a tremendous ex¬

particularly,
I will show later
must provide facili¬

we

adequate

back

go

can

us

become

also

offices and
have
your
plants
combed
for
every available piece of scrap. Get
it
moving
to
the
steel
mills
through the normal channels at
the earliest possible moment. The
rusty junk that you send out of
your plants will help to insure the
to

I

the iron ore, as
on.

and

—

steel to your

must first find

raw

scrap

non-ferrous scrap. I

materials—and

raw

steel

of

most

the main issue was

become

has

great source of

the

are

and

iron

oper¬

are

day-to-day

a

situation

time that we are

operations—in

we

develop

The

different. At the very
expending steel

entirely

material

raw

of

great problem. Now the

words, the primary steel.
do

To

and

the

basis.

particularly iron ore. Always un¬
til the present time,
there has
been an ample supply of iron ore
in this country. It presented no

ing

for

on

I referred to the
by steel com¬

maintaining

in

reserves

of

ties

faced

difficulties

own

facilities

duction

almost

ating

Difficulties

Raw Materials

mills

individual

America

many

sion of steel

shall be con¬ politicians and government—from
shall consume it; the community right on up to the
what we shall eat and wear, and national level. And, certainly, such
finally—on the great issue of war an improvement is a sadly needed
or
peace—whetner we shall live thing today.
or die. The policies of today
is a
Very often we hear the word
far cry from the yesterday that
"politics" used in a disparaging

steel industry is down
Some

caliber

what

it;

produce

in the entire
to 21 days.

of scrap

inventory

would be

marked improve¬
of politics,

a

the

in

ment

sumed and who

normal. Now the average

sidered

shall

participa¬
the affairs

political parties

determine what followed
by

produced and who

be

shall

the high and increasing
production from new capacity. A
scrap inventory that will support
operations for 60 days is con¬

not ex¬

active, and continuing
tion of businessmen in
of both

today

Politics

but not enough to

support

pect new money to

and lack of manpower.

Steel

United States.

in terms of tons than

scrap

in former years

the

in

authority

ultimate

the

the

but I do not know of a

in

which

was

any

single case

of these statements

designated

as

an

expression

of personal

opinion. The members
of this group were all prominent
Republicans. As such, their ardent
statements undoubtedly made the
MacArthur policy the Republican
policy in the minds of a large
segment of the public. The fact is,
of course, that no member of this
group, nor this group as a whole,
has the right to commit the Re¬
publican Party to any policy/ As
a Republican, I resent the party's
being committed by inference as
it was in this case, and I am sure
that many other Republicans feel
the same way.

Third:
ment
was

The

of

not

immediate

endorse¬

MacArthur

the

taking

a

policy

considered posi¬

sides.
I can
gentlemen, or
any other American businessmen
doing a comparable thing with re¬
gard to any major business mat-

tion;
not

it

was

imagine

taking
you,

Volume 173

ter.

Number 5018

.

.

The Commercial and Financial Chronicle

.

You would want to have all

the facts before

making your de'cision.
Certainly it would have
been far better if these Republi¬
leaders

can
•

would

waited

have

until all the evidence

in and

was

then, after most thorough study,
to have established their carefully
reasoned position.
Of course, the Administration
followers have been just as bad.
With few
this

on

been
a

exceptions, the line-up
serious

most

strictly political.
of attack

case

defense

on

an

has

It has been
side

one

the other of

on

.position—with
\

matter

and

political
to future

a

eye

elections.

Gentlemen, this thing
big for ordinary political

too

•is

thinking and action—much too
big. What is involved is the whole
future
of
the
American
people
and, in fact, because of our coun¬
try's dominant position in world

light to the viewpoint of Russia's
rulers. It is based on analysis of
the

man¬

kind.
Political

ership

Leadership Lacking

both sides is not

on

meas¬

the public.

There

there

is

is

question

no

widespread

disgust
among the American people with
present politics and political lead¬
ership, and with good reason. They
see the hopeless waste and inef¬

.government which is rapidly com-

ing

to

the

point

where

it

will

jbe ;simply impossible for the

peo¬

ple to pay for that
; their earnings

cost

of

out

the hidden

...

2 cost of government in the form of

if

we

we

avoid

can

establish

can

peace—

relative military

compare our

preparedness.

If

un-

are

The

more.

remote

no

areas

any¬

of colonialism

day

is

clearly
that

than

She

do.

we

military

knows

today is pri¬
marily a manufactured product—
a product of industry, if
you will.

Stalin,

power

himself,

the

last
total

admitted

Russia

war.

control

knows

in

that

and

resources

her

that

industry
vastly in¬

are

and of the demand for better

ditions

of

life.

India
this

in

forerunner

has

indicator

curate

the

of

an ac¬

atti¬

new

tude

throughout the Orient. Pain
with the birth
of this new spirit for awhile, but
and unrest may go

great repository of industrial
strength is in the United States

fraction of that of the

knows how

West.

She

quickly the West can
into mil¬
through a technology

the

status

contribution to

an

the

betterment

convert industrial power

world conditions.

itary

United

States

both

of

give and to gain.

power

and trained manpower with which
she cannot hope to compete.
In

We

know

of

them

would

have

much

because

ture

view

of

the

of

this, two-sided

world's

future

pic¬

—

one

general outline, but we dark and one light; one war and
desolation, and one peace and hu¬
they are there.
the United
Against this background, assume man betterment
that
Russia
started
a
war
and States, as the world's leading na¬
succeeded
quickly in occupying tion, bears a grave responsibility.

only

in

know

—

lishing

understandable

an

constructive

try.

It

policy for
to

seems

our

and
coun¬

that

me

of

the

growing lack of confidence in

our

to cope

homeland

thin

but

it

establishes
most

is

negative,

conditions

favorable

for

it

and

that

are

control

by
.small-bore, professional politicans.

j What is most needed

is

greatly

a

expanded interest and active par¬

ticipation
.

in politics—not
treat from politics.
AH

the

over

re-

a

with

over a

an

vast

vast oceans

the

to

world

there

is

a

wanted

by people everywhere is
genuine and lasting peace.
The
thing they dread and hate is the
thought of war. We know that
more

Certainly it must

true in the

case

of

countries—including Russia

—all

of

which

perienced

have

such

and

This

ever

—

United

States

power,

Russia

remains
can

a

never

military
draw a

safe

breath.
In Russian eyes, do
think this looks like an easy
task, or one that assures success?
you

And how do you suppose
rulers

Russia's
appraise the consequence of

There

two other factors of

are

sive

be even

States.

because if this
starts, it will be the final
showdown
and so long as the

war

tions and policies of their
political
leaderships. The one thing most

other

this

would be necessary,

different nature.

here.

on

overcome

United

disparity
between
the
aspirations of peoples and the ac¬

case

And

failure?

glaring

is the

spread

army

area.

shaky foundation, she would have
to
undertake
history's
greatest
military operation—the crossing of
two

able,

She would have

with resistance movements

occupy

many Americans
fail to vote, even in national elec¬
tions. This reaction is understand¬

Europe.

in every country from the Atlan¬
tic
back
to
and
including her

reason why

so

Continent of

ularly in the air.

present political leadership is the

j

the

She could expect in¬
retaliation from us—partic¬

.

leadership on both
incapable of estab¬

our

seems

directly

terrors

of

ex¬

war

as

Russia

has

never

The

war.

a

The first is that
won

second

an

offen¬

is the

cen¬

tral belief of Communist doctrine
that

communism eventually will
prevail through the world, because

capitalism will fall of its own
weight. Under this belief, mili¬
tary force is not a necessary in¬
for

strument
sia's
can

aims,

attainment

of

Rus¬

Russia, therefore,

and

afford to wait.

these

For

Europeans
actually on
believe her
pepples of the world, the political
position is dictated by weakness,
leaders of the world's
principal not strength, and by fear, not con¬
countries seem entirely
incapable fidence. Admittedly, this creates
of. laying down a
peaceful foun¬ a
perilous situation. A leadership
dation for a
working arrangement which is characteristically dis¬
among nations.
In view of
this, trustful and is motivated by fear
the only alternative of other coun¬
and
weakness
is
unpredictable
tries and our
own, apparently, is and likely to lash out first if it
again to make preparations
against thinks it is in danger.
Even so,
the outbreak of general war—
Europeans believe that Russia is
preparations
dictated
by fear— much more disposed than we sus¬
have not. Yet, despite this uni¬
versal desire for peace
among the

we

fear

of

tions.

found

the

a

felt that if
more

other

fellow's

trip last fall
war

likely to

comes

result

action of the United
than

Russia.

neither
its

inten¬

Peculiarly in Europe—as I
on

the

it

—

is

it is much

from

some

States rather

They

know

American

that

people

nor

leadership

fear
some

want war, but they
that we will blunder into
incident that will pull the

trigger.

This explains much
the European attitude toward
present

situation in

Korea.

of
our

They

believe that Russia
definitely does
not want

war.

thgy attribute

This is not because
any sweetness




and

find

can

reasons,
believe that Russia is

the

defensive.

They

pect to: arrive at some basis for
world peace. It may not be all the
West would want, but it at least
be

would
the

burden
that

a

tension
of

starting point out of
release

and

from

the

preparation

military

weighs down the world.
a
peace even of this
kind be preferable to a war which
would
destroy western civiliza¬
now

Would

not

tion and
era

tinue

terrible

to

defenses

possible

build
so

we

and

long

the

Dark

must

con¬

than

Obviously,

Ages?

we

plunge the world into an

more

maintain

It

should

be

the

who

out

is

take

as

issues

.

.

.

such to all the

mind

own
.

..

them

on

really

my

that

can

He

his

can

own

awhile

when

Offer'g

Towne

Manufac¬

share for each five

one

of record

on

June 5,

shares

it was

announced
man,

by Gilbert W. Chap¬
President.
Transferable

subscription warrants will expire

he

at 3 p.m.

their actions.

(EDT)

on

June 20.

Morgan Stanley & Co. heads an

refrain from seeking for

investment

business aid from govern-

is

which increases both the cost

men

&

Co.

held

what they are doing
important—let them
in

Yale

of

deter¬

as

once

approves

country?

is offering its share¬
holders the right to subscribe for
102,197 additional shares of capital
stock at $38 per share, at the rate

..

know

my

turing

follow the actions of his

of
and—just

can

government

community, and

The

representatives and senators
.
.
let them know when he disap¬
proves

good

Towne Stk.

be out¬

usually

much at stake. We

Underwrite Yale &

and help form the pub¬

opinion

days

history—•

Morgan Stanley

make up

...

so

have

serious
our

course,

mines what is done about them.

world's

banking group which
underwriting the offering.

Of. the net proceeds,
Yale &
and the power of government.
peoples of the world. And in say¬
Towne
will apply
$1,000,000 to
He can influence his community
ing this, we again come back to
the payment of its presently out¬
support the
the proposition that this can not organizations which
standing bank loans,
and the
happen unless we have political idea of governmental economy in remainder will be
placed in the
leadership
that
is
capable
of general to support it in particular
funds to fi¬
when it comes to federal spending company's- general
thinking and acting in terms of
nance
its substantially
enlarged
in that community.
'
this magnitude.
7
volume
of
business, to acquire
Any businessman who will do
As it is, we hear too little from
machinery and equipment, and for
these things will be at least 10
our leadership that is positive and
other general corporate purposes.
times as active as the present av¬
constructive. We are told that we
Yale & Towne has eight manu¬
erage.
If
the
general
run
of
must
prepare
to endure 5-10-20
businessmen did them, they would facturing divisions, five of which
years of tension
of expanding
become a potent and a construc¬ are located in the United States,
government and government costs
tive influence. I want to say that at Stamford, Conn.; Philadelphia,
of widening government con¬
I am not asking you to do any¬ Pa.; Salem, Va.; Berrien Springs,
trols
of high taxes
..
of
thing that I do not do myself. I Mich., and Chicago, 111.; and one
military service for our youth
have taken a long and very active each in Canada, England and Ger¬
of a ..garrison state economy.
interest in political matters and many.
Think
what
this
will
mean.
make no bones about it.
I intend
A
substantial supplier to the
It will mean that by the end of
to keep on doing so. I have never
armed forces in World
War II,
20 years—if it does end then—we
thought that my position in the Yale & Towne has recently ob¬
will have two whole generations
business world canceled either my tained
government contracts for
of Americans who have never had
rights or my obligations as an the manufacture of a large volume
the opportunity to know the real
American citizen.
of trucks, hoists and certain ordAmerica.
They will have no ex¬
So long as his motives are right, nance
products. '
perience with the real individual
the public not only accepts but
independence that made this coun¬
For the first quarter of 1951,
welcomes the business leader in
try great, but on the contrary,
Yale & Towne has reported net
they will accept as an accustomed the political field. The closer he sales of $22,764,333, as compared
thing the detailed control over is to the people and the better with sales during the same period
their private lives by a powerful they know him, the more true this in 1950 of
$13,916,293.
Net in¬
is. For example: Weirton, West
central government.
come
after taxes for the three
■

.

...

...

...

.

.

...

Gentlemen, it is our solemn ob¬
to see that the America
that was given to us is preserved
ligation

for those who will

come

after

Virginia, the home of' Weirton
Steel Company, became a city just
four years ago

of

a

us.

The

only way it can be lost is
bad political action. By
the same token, the only way it
can

be

preserved is through good

months

ended

March

amounted to $950,030, as

31,

1951,

compared

through the merger with $467,946 for the correspond¬
communi¬
ing quarter in 1950.
combined population is

number of adjacent

ties.

The

over

through

many

30,000. At the urging of
citizens, Mr. Millsop, the

President of

Weirton

Steel Com¬

Glore, Forgan Co.

candidate
for Mayor. Some of his friends
I repeat what I have said before, told him he was
putting himself
The
admission of Alfonso
because
it
can
not
be
over¬
out on a limb. They thought it un¬ Manero as a
general partner in
emphasized:
The only way that wise and perhaps dangerous for
Glore, Forgan & Qo., 40 Wall
this
country can cope with the the head of the largest company in
Street, New York City, members
world situation as it is today is the district to run for
political of¬ of the New York Stock Exchange
with political leadership that is
fice. Well, the people of Weirton and other
leading securities ex¬
equal to that situation. The only did not think so. They elected him
changes, was announced June 1.
way we will get political leader¬
by a 5 to 1 majority. The city has Mr. Manero will be in charge of
ship of that standard is through since been
operated on what is the
firm's
foreign
department
alert
and
determined
political
probably the most businesslike which he joined in 1933. Prior to
action by the people of this coun¬
basis of any municipality in the his
present association, he was
try. Businessmen have a particu¬
country. Just a few weeks ago, the with the foreign departments of
lar
responsibility to help bring
primary was held in the second The National City Bank of New
this
about.
The
capacity
for
municipal election. Mr. Millsop York and The National City Com¬
leadership
they
have
demon¬
was again a candidate and he re¬
pany.
strated in building and producing
ceived more than 87 % of the total
imposes on them the obligation to
votes cast. The people of Weirton
take the lead in preserving the
With Bache & Co.
know that he has only one inter¬
fundamental conditions that have
(Special to The Financial Chronicle)
est in the job, and that is to give
made
it
possible to build and
political action.

produce in the way they have. In
Russia and some other countries,

there is any industrial management can do a
but also pretty fair technical job. But that
world initiative is all it can do, and it must func¬
as

danger of war,

should

our

national

spoken
lic

most

political
activity
takes
time, takes thought, takes effort.
But as you leave here, ask your¬
self seriously: Do I not owe this
obligation to myself, my family,

persuade his family and

his community officials
and his congressman—the better
elements or the gamblers, racke¬
teers, and professional politicians.

his

this occasion—be¬

good politics. And only
through good government can we
hope for peace in the world. Of

electing

He
In

has serious internal

difficulties.

to

And in this, the

these

through

vote.

enormous

stant

sides

only

friends to vote.

tant

make

would

on

case

in

there is

of

peoples

the

cause

will

movement

The

be made known

downright immorality in gov¬
The people are confused

be

If he finds that it is the latter, he
be forward.
can
join an organization formed
those countries
to change the
condition, and if
will become better producers and
none exists, he can take the lead
—beyond reach of Russian land- better
consumers, and with their
in forming one.
power.
Her production of steel,
teeming populations, even a slight
He can keep abreast of impor¬
coal and oil, for instance, is
only a improvement in their economic

the

great
champion for peace—and it should

of

conclusion,
gentlemen,
I
you
have
heard
other
speakers on other occasions who
have urged businessmen to take
a
greater interest in political ac¬
tivity. Probably you have paid
very little
attention to them. I
sincerely hope that that will not

—above all others in

can

handicap at

know

power?

He

no

In

have to operate under such limits

can

development

and, according to reports, is

proved

the polls.

not

—not

He
a

has

man

The

con¬

been

What then?

ernment.

does

imagine
past. From Asia, for instance, we
What Businessmen Can Do
Curtain, hear
repeatedly of; the stirring
Now, there are a number of
however, and look from East to
among the peoples of all countries
things
that
West, we get a different picture—
every
businessman
there, of rising nationalism, of the
can do.
and one that Russia sees more
discontent with their present lot,
He

most

.

businessman

can

we

lar and

.

by political leadership.

American

ourselves behind the Iron

inflation which is eroding the dol¬

threatening actual finan¬
cial
disintegration
and
finally, the complacent acceptance

tion strictly within the limits laid
down

convinced if

am

there

ficiency in government
the
^continual increase in the cost of addition, she
...

I

war,

ave¬

yet. On the contrary, he can
we will enter the
greatest period
soning: When \ye of the West look of economic and
help establish the limits of politi¬
social progress in
cal leadership. If he fails to exer¬
at Russia, we think in terms of
all history. The world over, there
cise this American
her strength. .That is because we
birthright, is
are signs that peoples have awak¬
he not placing on himself volun¬
always hear of the number of ened to the
potentials for human
divisions she has, her tanks, artil¬
tarily the limitations which his
betterment that started with the
lery and airpower, her great land Industrial Revolution. With mod¬ European counterpart must accept
under compulsion? Isn't he invit¬
mass, and her position in Central ern
transit
and
communication,
ing the extension, of government
Europe and Asia. Against this we

ferior to that of the West and that

view, the political lead¬

uring up to its responsibilities.
They have been running behind
that

is the basis for their rea¬

Here

possible

every
toward peace.

Russia's situation.

under

Ih my

exploring

nue

underlying practical factors of

the

affairs, the whole future of

in

31

(2371)

pany,

decided to

be

a

Admits Manero

the cleanest, most eco¬
RALEIGH, N. C.—Jack Cusson
government possible. And has become connected with Bache
that is the kind of leadership the
&
Co.,
126
South
Salisbury
people want. The fact that he is
the community's biggest business¬ Street.
Weirton

nomical

32

The Commercial and Financial Chronicle

(2372)

almost

Continued jrom first page

well

everywhere else

with

famed

We See It

As
time

It

now

managing

ambitious

:

.

So far

the Iranians

as

simple

as

man

runneth not to the contrary,

merely permit the Iranians to learn from bitter
experience that the foreign capitalist in this case has not
been merely a parasite, she would run the risk of being
opposed or replaced by another foreign "exploiter" whose
ability to thwart her either on the field of battle or in

ductive plans.
n

sphere is incomparably greater than Iran's.
vs.

Collectivism

Let
to

turn

us

tionary
the

curred

we

amine

our

complacency
soon

realistic

-

for

to

way

enemy

of

gram
another

ac-

Our

Old
more

a

chances

our

de-

to

sworn

of life. The results

our way

launched

we

of

mortal combat with

avoiding

stroy

policies

"Good

about

gave

oc-

reex-

defense

appraisal of

potential

a

to

course

new

national

for

Joe"

forced

international
a

As

incident

Korean
were

and to chart
tion

efforts

defense

the

as

pleasant,

little too late

extensive

an

against

preparedness

Pearl

Harbor;

pro-

if we

or,

•

nothing better .than to have Britain ousted from Iran—
except to have her own minions there in the place of the
British. It happens also that the Kremlin,
long recogniz¬
ing the development of anti-colonial feeling throughout
Asia and a good deal of Africa, has been
perfecting a tech¬
nique of taking over through puppet regimes which shout
patriotic oratory from the housetops day and night. It is
an old
technique but it has been perfected and adapted
world

current

conditions.

What

we

have

at

bottom

here in Iran is, then, the same old

struggle, less between
imperialist and the "exploited," than between two im¬
perialists whose interests and ambitions clash at many
points. ; •'• '■" ;
'• '
.y""" •'/•'
.

Here is

a

basic

state

of affairs

which

through
virtually all of Asia and in one degree or another through
much of the other
"undeveloped areas" of the world.
Japan was able to make a good deal of profit from it un¬
der

her

banner

playing the

of

same

"Asia

theme

for

now

Asiatics."

the

to

a

runs

Russia

fare thee well.

of course, added a few wrinkles of its

own.

is

It has,

All her pup¬

pets

are
"liberators," and all her organizations are
"people's" armies or parties. Thus in one degree or an¬
other, apparently, she is succeeding in causing her victims
to forget her role as
imperialist and exploiter in the

decades

that

have

Domination by the greatest
tyrant of all history is now a liberation of the people.
Incredible

as

headway in

it

passed.

may seem,

many

such

an

absurdity is making

Asiatic lands.

the

over

war

strange aspect of all this is the fact that
world the impression
appears to be gaining

thinks

will hesitate to start if he

newly prepared strength will
prevent him from winning.

our

The

setting aside of a sizable
proportion of our productive capacity and of critical materials for
preparedness purposes has had

electrifying
The

effect

hoarding

necessary

an

prices,

upon

by

our

national government

companied

hoarding
While

individual

has

a

a

defense
place,

the tempo of

up

consumer

larger

are

from

taking

been

production of
ventories

to

economy

have stepped

we

citizens,

conversion

the

economy

has been acless
necessary

by

by

peace-time

goods. In-

than

usual
by

As

more

of

our

productive

pacity is devoted to defense
poses, we

ca-

pur-

need not fear too greatly

of at least some
inventories,
They can easily be absorbed in the
period ahead when a smaller proportion of our economic efforts
our

present

large

will be devoted to the creation

problems. We
flourishing in such old and long established
economies as Britain and
France, to say nothing of a num¬
ber of others of a
comparable sort; we find that in unde¬
veloped, or backward, countries (we now hear them called
same

popular.\ It is rampant in Asia,
Iranian

affair, the trend of




prescription
of course,

events in

seems
as

to be

attest the

China, and the drift

in

used

manner

a

that

be

can

avoided.

schooled

Americans
the

to

not

are

degree

self-

of

restraint needed for voluntary ra¬

tioning,

controls

more

will

un¬

doubtedly be required. These are
of various kinds. The government
discourage future purchases

may

controls.

•

of credit
already in

tightening

further

by

The

controls

meeting increasing

are

op¬

position in spite of the fact that
they

not fully accomplishing
they are intended to
Both credit and materials

are

purpose

serve.

controls affecting the construction

industry

likely to be increased

are

rather than to be eased as soon as
the

a

of

fulfillment

defense

all

re-

quirements. As a long-range pro-

this proposal has an appeal.
It also suffers from certain limita-

gram

tions. At best

reach

it will take time to

goal. Furthermore the

this

requirements of an expanded productive capacity would demand
the

use

of

materials that are al-

ready in short supply. Also if expanded production results from

and higher
wages and profits it will tend to
defeat its purpose by stepping up
purchasing power to match the increase
in the amount of goods
produced. If the increase in production could be brought about
overtime

increased

defense

really

program

gets

rolling,
pr[ce
tainlv

and

do the

t

made

to

blame

denended

be

job alone
in

date

cbiefiy

are

controls

wage

rannot

ceruoon

The gestures

these

earners'

directions

No

gestures

wage

one

can

for demand-

ing greater compensation to offset
higher prices.

£or

Nor

of

producers

as^ing

creased

services

and

higher

But

hif?her

f

the

blame

can we

goods

vGien

prices

theh. major CQst eiements

are

in_

merry-go-round
higher

meet

to

wa2es

prjces ancj 0f higher prices to enable

employers

to

higher

pay

does not solve

wa

our

Incidentally,. if any of

my

problem.

listeners

of feather- have any serious hope o£ abandonbedding of all kinds, it would be menj. 0f ren^ controls at an early
most effective.
date
forget it
Look for more
The aftermath of an excessive cont^ols in this area rather than
the

by

increase

elimination

in

productive capacity—

jegs

beyond the needs of probable future
demand
for
consumption

'

Taxation
.

might be very serious. " Another method of sopping
Over-capacitation in important
P0^er, lona+l
.s
lines might result in future defla- double barrelled advantage is

up
a
to
tion that even a solicitous govern- increase taxes at least enougn to
ment could not prevent or sub- P61™11 a Tay~??~^ou~°° ?°+l!CyY
stantially
ameliorate.
It
might meeting[ the added cost ot tne deeven result in the winning of the fnns<3 ottort. r;
device
war by our potential enemy withof a^aianced budget we can avow
goods

—

.

out

the

necessity

of

fighting

a

greatest
opportunity for dominating our
economy would
probably follow
an economic collapse in this country. Our people are not likely to
succumb to the promises of a
Indeed his

single battle.

deficit spending. While this recemendation may appear naive to
those ^who look ^upon a .national
deficit as a virtue instead of a
viPe'

.

sp

+v,°?^ ii° +
which thinks that all costs

of

foreign economic system as long
as they enjoy the realities of
a

to the siren songs of alluring
promises as have other discontented peoples all over the Comprey

munist-dominated

world.

judgment

hinges

cern

to

goods. Our greater con¬

question,

prices

as

upon

the

answer

to

"What will happen
the supply of goods

decreases and the amount of pur-

have

power

increases?"

We

experienced

have

sur-

and

vived nearly 20 years

the

of creeping

remedies that
prevent the
catastrophe of a fully-regimented
defense economy
of rigid price

are

may

be

possible

applied

to

Decreased

inclined

In

Consumption

fense

Needed

Along

with

our

efforts

to

inde-

on

this

question

ad-

meeting the costs of the defense
effort. However, most of us are
terms

consumer

inflation, augmented by the
sharper
increases
in
post-war
prices. Can we survive comfortably an uncertain period of galloping inflation which threatens
our
economy as a result of the
current defense
program? What

a

solution of the world economic and
socjal
find the notion

be

inflation

sion, Americans too may become a

responded

nism,

Point Four countries) the

not

'invite

to

of

Prices; have

sharp increases.

chasing

merely "managed economy," somehow offers

sup¬

the consequences

levels.

advance buying at all

ground—or, at all events, to have gained much ground—
that collectivism, whether we call it
socialism, commu¬
or

.

,

both

—

military—that do. not

the defense program—short of
those needed to pay lor an allsystem which produces the highest ou* wai^ should one come
should
standards of living the world has be met from current incomes. Curever known. But if the substance
lo.usly enough, m®st Pe°Pfc ap¬
of fat pay envelopes is supplanted Parently agree with me. Nearly
by the shadow of a severe depres- everybody who has expressed a

in spite of

the

Now another
all

fortunate, against an all-out
which our potential enemy

are

bureaucrats

sumption needs concurrently with

now

infla-

the

of

growing out of

pressures

present

soon

T

attention

our

consideration

a

To avoid having too

In this particular instance it is not France but another
collectivist government, Soviet Russia, which would like

to

.

be

possible. The

as

capacity sufficient to meet all con-

.

.

of this appraisal were not

Collectivism

should

and wage controls and rationing?
One widely acclaimed proposal
calls for increases in productive

Pressures of the Defense Efforts

or

the economic

\

are

the collection of
taxes is being used to help con¬
trol
inflation, their expenditure

"

12

page

Normal economic processes should
be permitted to guide our pro-

"exploiters" does not and cannot give any
foreign "imperialists" will
stand aloof. The Iranians may or may not realize it, but
so rich a prize as their oil deposits will not be overlooked
or
ignored by the remainder of the world—and when the
shouting has died down it may well be discovered that
the next foreign "exploiter" is exacting a price greater
than that which Britain could have been persuaded to ac¬
cept. And Britain, of course, knows full well that, should
they decide either to use force to protect their interests
in Iran

;i

•

sacrifices

While

pressed.

the

whatever that other

assurance

•

pres¬

represent real needs must be

What Can We Do About Inflation?

that the departure of

British

the

of

civilian and

effect

the trouble has been in such situations since the memory

of

■■ ■

,

.

jrom

that.

concerned, the trouble is, as

are

~

Continued
so

promptly

as

whims

take heed.

affair.

Unfortunately, the situation is not

met

affairs, and particularly those now hatching
"Point Four" programs, would do well to

our

not

are

needs of the government must

Those who are

but there it is.

We

inflationary

individual

if

Because

It doesn't make sense,

prefer nothing to whatever they can get
the choice, in other circumstances,

inflation.

curb

essen¬

by excessive spending by
governmental agencies. The real

it goes.

out

of

to

is

it

wastes that feed

offset

private enterprise. It still has a long, long
The "achievements" of British socialism have
mostly the fruit of our Quixotic generosity. And so

British,

own

likely

Ex¬

our gov¬

expendi¬

postponed. Even

eliminate

the fires

private capitalism or indi¬

But where is the evidence?

to go.

been

be

can

defense efforts

tial to

a

of

distance
way

help from abroad. Of course, if this matter could be re¬
garded as simply a dispute between Socialist Britain and
socializing Iran, the matter might be left to the parties
involved to work out for themselves as best they might.

their

of

puppets, or even Socialists or governmental man¬
take over? • The real economic achievements of
history—whether measured by the creation of wealth or
by its distribution—are to be found in private economies.
Russia has been trying, and under the leadership of able
men, for more than three decades to get within hailing <

all probability bring this sort of thing to a fairly
quick end by leaving the Iranians to learn for themselves
how much their vast oil riches are really worth without

as

"failure" of

a

result

a

agers,

in

might be regarded

or

is

this

all

that

must avoid

in the

munist

technicians, operate their oil industry. Of course, in other
circumstances, the "foreign capitalist" in this case could

the

tures that

sures

at his disposal,

of

ernment too

ploitation there certainly has been—but why should any¬
one
suppose that exploitation will be absent when Com¬

"foreign capitalist" has an army and a
which, in other circumstances, he
might well use to protect his interests. Of course, the
socializers in Teheran could not, without the aid of foreign

out

said

sometimes

"breakdown"

Of course, this

If the Iranians

is

policies.

Along with individuals

definite advantage in many instances.

a

vidualism in economics.

Foreign Capitalist

navy

that of alternative

line, and gives that historically

A "Breakdown?"

facing some of the problems and vexa¬
which have plagued private capitalists from time to
since economic colonialism began.

capitalist is
tions

imperialist

the cost would be much less than

It all fits in

that continent.

on

Kremlin

the

Thursday, June 7, 1051

..

.

to

of

word

addition
costs

thereby

this

policy

in

"YOU-pay-as-WE-go."
to

meeting the de¬

from

current
taxes,
avoiding the further in¬

flationary effects of deficit financ-

production we must
consumption in the period ln&> we can use taxation to reduce
immediately ahead. In making purchasing power in the face of a
this statement I appreciate that I declining ( supply
of consumer
am not voicing a popular appeal, goods. To accomplish these results
Nevertheless, we can and must we cannot i ely solely upon taxing
"wear it out, make it do, and get y16 rlch. If we took away all their
along without" some things we incomes we would not be able to
would like to have. Our govern- Pay the costs of the defense proment's needs are more urgent than gram from this source alone. And
our own. If all Americans as inwe would affect the prices of most
dividuals had the will to lick this consumer goods hardly at all be"old debbil" inflation we could do cause the rich buy so little of the
it successfully and without too available supply. To really use
great hardship. In the long-run taxation to help control inflation
crease

crease

.

Number 5018

[Volume 173

also

must

•we

..

The Commercial and Financial Chronicle

.

those who

asssess

would otherwise bid up prices by

Granted that it would

loans.

spending their incomes for com¬
modities that they can do with¬
out as long as such goods are in
short supply. Equal sacrifice may
be a good slogan for obtaining tax
revenue: it is not a sound basis for
controlling inflation through taxa¬

to support the market for

agency

Now

tion.

Again realism compels the con¬
that no Congress would
the courage—or the foolhardiness—to raise personal in¬
come taxes on all classes of people

not

logical for one governmental

be

loans
while
another
mortgage
agency is removing its support of
the
can

bond market, it
still be done. Only time will

government

tell whether
is

or

not it will be done.

good time to let
"Fanny
May"
recede
into the
background of home mortgage fi¬
a

clusion

nancing.

have

Some

time

some

of

been

have

fearful of its ultimate

us

effects for

past. The more home

(2373)

starts made in 1950. Measured by

to pay higher rates of return for
standards, however, the pro¬ long-term money than for that
of housing units
during which stays with your institution
the current year will be a credit¬ only a brief
period of time. You

most

duction
able

Both material and labor

one.

costs

word of caution should be said

subject. Immediately after the
close of World War II the prices
of

older

flated

houses

than

mortgages it buys the more ques¬
tions will be raised in Congress

properties.

available purchasing power above

about the alternative that

mer

required to pay for
bare necessities. Dictatorships un¬
amount

hesitatingly follow policies that
accomplish this result. Free people

.will not stand for such programs,
even though they might be tem¬
porarily defensible.
Another

inflation

means

is

to

controlling

of

reduce

available

purchasing power by deferring its
expenditure
until goods whose
purchase can be postponed are in
greater supply. In other words,,
what is saved from current earn¬

double: it reduces
the inflationary pressure of cur¬
ings

serves

a

rent demand while available sup¬

ply is short; and it puts the saver
in a more advantageous position
to make purchases at a later date
when

the

supply

of

is

goods

The

today

business

has

represented here

always

impressed

me

having as a major objective the
building o£ good citizenship
as

.

through the
encouragement
of
thrifty habits. The thrifty family
is made up of more stable citizens
than those who spend currently
all that they earn. Now is a par¬

ticularly good time to encourage
thrift. The emphasis you place

have

erate

use

clearing
lenders

of

May" as a
used by

"Fanny
to

agency

whose

be

demand

for home

financing assistance exceeds their
ability to meet from available
lending funds can be defended.
General

this

of

use

agency

as

a

dumping ground for low interest
rate mortgages can easily result
in direct lending by a
govern¬
mental agency.

own

he

earns

titude

has

a

more

friendly at¬

toward his problems than

if he were compelled to do some¬

thing that he has not determined
to do of his own volition.

Policy

on

Real Estate Loans

which the in¬
here today
help to control inflation is to

Another way by

erned

more

were

the

in¬

of

new*

prices

The latter

were

gov¬

largely by costs. The for¬

contained

considerable ele¬

a

Proposals have been made for
upward
on

adjustment

of

interest

GI and FHA loans. A small

increase in interest rates

on

these

types of loans would be inflation¬
ary.
Such increases would not
discourage prospective borrowers
from requesting insured and guar¬
anteed
able
not

loans.

If

financial

made

such

increases
avail¬

resources

when otherwise they would

be

offered in the real

financing
would be

markets,

the

estate

results'

will

undoubtedly

con¬

tinue. Without any announcement
of a major change in policy you
can

follow

a

flexible

program,

making adjustments, as changing
conditions require them. The lend¬
ing needs in your community, the
amount

of

Buyers

the

best

are now

buys

in

shopping for

their

markets.

As

a
consequence, they will pay
less occupancy premium than was

true

a

year

or

more

ago.

Conse¬

quently, in your lending opera¬
tions,
primary
consideration

new

supply of housing units en¬
market, the less desirable

older properties will lose some of
their appeal and will be harder

to

from the market. Neigh¬

move

borhoods

play

determining

a

major

desirability

part

of

in

par¬

ticular properties.
No
what

doubt
all

you

this

are

adds

wondering

up

to

with

respect to your dividend policies
in the period ahead. Most of
you

quite

are

well

thoughts

my

some

on

acquainted
this

with

rates

The

on

above

your

analysis

books,
is based

the assumption of an indefi¬
nite continuation of the cold
war,

upon

of

being

military strategist I make
being able to forecast
likely to happen to inter-,

no

a

Korean

area.

claim to

What is

years past. Here are my cur¬

your

be able to avoid

Continued

from

A

all-out

an

page

than their competi¬
Use
of short term

money. In most of your institu¬
tions the ihvestor who leaves his
money for a
or

two

is

few months

paid

much

or a

year

more

than

he would be

paid by any of

your

competitors,

including

your

na¬

tional government. At any specific
short-term corporate bonds

time

always pay much lower effective
rates of interest than do long-term
bonds issued

tion.

Even

by the

takes

only

conflict

a

serious

that

would

domination of

we

must

economic

mis¬

in

result

the

by an
ideology that is completely at var¬

iance with

our

our

economy

own.

the field of battle. Time may
not be on our side in the economic

on

As

arena.

this

pointed out earlier in

greatest danger
American way of
life lies in the potential discontent
of

paper,

losing

our

the

of

masses

of

a1

future

period

unemployed during

pression. Then
way
The

we

of severe de¬
could lose our

of life without a test of arms.
period ahead will be difficult;

interesting; and,
the

to

which

economic

have

made

be¬

we

lieve, will bring continuous

suc¬

patterns
country

our

great.

11

Survey of Business Problems

expansion, the availability of met¬
als set the scope and the pace.
Most metals are now in short sup¬

ply. To overcome these shortages
great efforts are being made to
increase production, expand im¬

$139 billion, the highest on record
and 7.6% greater than the pre¬
vious high of 1948. Sales of all
wholesalers in 1950 reached $100
billion, the exact figure of the

previous high

1948. Sales
jumped to
The three most important metals, $235 billion, the highest on record
of course, are steel, copper, and and 10% greater than the previous
aluminum.
high of 1948.
■
1
"
.The larger inventories and sales
During the first three months
of manufacturers, wholesalers, and
of this year military requirements
of

exploration.

expand

and

ports,

Washington last week indicate the

the

such

make

cess

paying

more

not

this country. If we are permitted
to become strong militarily we

took

for

spared

should be

thoughts. As a group, savings
and loan associations are
already
tors

potential
one thingsstrength. If we become strong
enough soon enough the dreaded
third world war may be avoided.
If we are fortunate
enough to be

kinds of control and of regimenta¬
tion that we have never known in-

may

Our

war.

Given sufficient time to prepare
Not we shall not fear to face the
enemy

outside

the

world

enemy respects

year of
manufacturers

all

.

subject for

same corpora¬

the effective

rates

on

long-term corporate bonds decline
as the bonds approach their ma¬
turity dates. In all financial mar¬

available funds kets
the owners of funds com¬
for lending purposes, and the na¬
mitted
for
a
short
time
only
may
ture and intensity of your com¬
be more selective in the granting
expect and receive less return
petition will bear careful and than if
they are committed for
of real estate loans. By taking ad¬
constant study by you. Now is
longer periods.
vantage of the various govern¬ not a
good time to announce longmental aids available to you dur¬
term policies
Interest Rates
which cannot be
ing the past two decades, you have
changed easily and quickly as
The Federal government is noted
jjreatly liberalized your lending conditions warrant.
for its attempts at precise adjust¬
policies. Liberal mortgage loans
With respect to the volume of
ment of the price it
pays
for
constitute a major factor in rais¬
new
construction in the current
money to the time for which it
ing real estate prices. Less liberal
year, some of us have been mis¬ contracts to use it. Its short-term
loans help to keep prices from
led by . the high level of building
coupon bonds and notes are issued
advancing. Now is a good time to starts since
January 1.
It takes at much lower rates of interest
make less liberal loans than some
time to convert a peacetime econ¬ than its
long-term bonds. Its E,
of you have made in recent years.
omy to one with greater emphasis F, and G bonds are all calculated
Let me hasten to add that I
upon
defense production. While to penalize their holders who
am not being inconsistent in sug¬
this conversion is taking place, cash them before
maturity. The
gesting that you encourage sav¬ production of consumer goods—
longer they are held the higher
ings at the same time that you both soft goods and durable — the interest rates paid to their
discourage too liberal mortgage continues at a high level. Gradu¬ holders. The recent compromise
lending.
Your
competition
for ally critical materials and man¬ with institutional owners of bonds
mortgage loans is currently less power are shifted to defense pur¬ maturing in 1972 for an increase
aggressive than it has been. Since poses as the latter program gets of interest rate from V-k to 2%%
the recent abrupt change in gov¬ under way. The squeeze on many carried with it a
postponement in
stitutions represented

want to have

should be given to neighborhood
influences and prospects. As the

rent

inflationary.

Those of you who follow a prac¬
tice of charging variable interest

process

met.

ters the

v

savings helps the people who
your accounts. It is also -a
rates on the mortgages granted by
major factor in helping to control
you
have probably already ad¬
inflation since your use of such
justed your sights upward some¬
funds will not affect the prices of
what. You are making a smaller
consumer goods as much as if they
number of conventional loans at
were spent directly. Furthermore,
your lowest rates and a larger
the person who can be induced
number at somewhat higher rates
to save voluntarily a part of what
than was your habit earlier. This
upon

raise air dividend

national relations in our dealings
ment
of
occupancy
premium.
consistently 'opposed.
Congress-(
with those who dislike our way of
men
are
bound to question the People were desperate for places
life. To the layman an indefinite
desirability of
a
governmental to live and paid almost any price
be fi¬ period of preparedness appears'
agency acquiring a sizable pro¬ asked, provided it could
certain.
Should it be succeeded at
portion of home mortgages at 4% nanced; and provided the housing
any time by an outbreak of hos-r
or
higher when it could make accommodations were immediate¬
tilities on a global scale then we'
direct loans to veterans and others ly available. The most insistent
must anticipate the imposition of
at a lower rate of interest. Mod¬ demands for houses have
been

rates

greater.

we

on

this

high enough to take from them all
the

need not

high and tend to edge in the period ahead but you will
higher. The higher costs of new probably be required to offer
units will help to justify similar somewhat greater inducements to
high prices for older properties. A those whose accounts you most
are

third

33

of

12%

our

total steel pro¬

Reports emanating from

duction.

proportion might rise to 50% by
the end of 1951. The shortage of
developed in spite of the

steel has

highest production rate in our his¬
tory. In 1940 the steel ingot ca¬

pacity of the nation was 81 mil¬
lion tons. In 1945 the capacity had
been lifted to 95 million tons, and
today it is 105 million tons with
more capacity on the way.
:
Defense

requirements are now

consuming 12%

of

of refined copper.

production
This proportion
our

20%

by the

will increase to

over

end of the year.

When the defense

program was initiated, our domes¬
tic copper mines and processing

operating at near ca¬
t ic production,

plants
pacity.

were

which

accounts

D

o m e s

led

retailers

increased

to

bank

borrowings to carry larger receiv¬
ables and larger inventories. Loans
of commercial banks were $44.8
billion

at

the end of June, 1950
$52.8 at the end of De¬
cember, 1950, an increase of $8.0

and were

billion

in the

last Six months of

the year. During the first quarter
of this year, loans of commercial
banks increased another $1.2

lion -and reached

a

new

bil¬

all-time

high of $54.0 billion.
Adequate bank credit is avail¬
able to satisfy^ all

legitimate needs

of business for the production

of

and civilian

goods. In addition to

loans

made

defense

and

distribution

material

these

for

purposes,

however, billions of dollars have
been granted by commercial banks
to businessmen to carry inventor¬
ies in

of reasonable needs,
possible profit on rising
prices, to businesses to acquire
any previous year except the peak
real estate and plants, and to in¬
years of World War II. Neverthe¬ dividuals
to
purchase
homes,
less demand exceeded production
automobiles,
televisions,
radios
by 15% and was met only by. and durable
goods on the instal¬
drawing on inventories.
ment basis.
!
our

for two-thirds of

excess

to make

a

total supply, exceeded in 1950

During World War II military
production accounted for approxi¬
mately 90% of our aluminum con¬

Military requirements
expected to utilize
total supply. In June,
1950, the industry's pig capacity
was 750,000 tons.
By March, 1951,
capacity had increased to 800,000
tons, and by 1953 should reach
1,300,000 tons.
sumption.

this year

25% of

After

are

our

production

comes

alloca¬

During World War II
which went

over

contractor were unable to obtain

adequate bank credit, even on a
secured basis, because of thei* ob¬
viously extended financial condi¬
tion. To break this bottleneck the

Federal Government evolved
cessive

methods

adequate credit

tion.

many con¬

largely or
completely to the production of
war equipment and supplies either
as a
prime contractor or a sub¬
cerns

such

of
was

suc¬

seeing that
available in

situations.

Initially, direct
Adequate Credit—The immedi¬
interest types of building materials is just the maturity date of non-negotia¬
ate result of our decision to sup¬ loans were made by the Army,
rates on government bonds, some beginning to take effect. It will ble bonds to 1980.
the Navy, and the Maritime Com¬
of your competitors for mortgages become
port the Republic of Korea in its
progressively greater in
In the face of very
general
mission in the form of progress
fight against aggression—and it
are slanting their investment pro¬
the months ahead until we have
recognition of the need to pay was immediate—was a wave of or partial payments and advance
grams toward the bond market— passed the peak of demand for
ernmental policy toward

higher rates for long-term money
consumer
scare
buying in July.
government and corporate—with a defense purposes.
Just
when in nearly all financial markets,
That scare buying was largely in
commensurate decrease in prob¬ that
will
be
be
accu¬
cannot
savings and loan associations
ability of purchasing mortgages. rately foretold at this time. tend to pay a premium for short- items which had become scarce
during World War II,' A second
Because your mortgage competi¬ After this peak has been reached,
term funds and to penalize those
tion will be less aggressive in the a sizable but somewhat smaller who leave their accounts intact wave of consumer scare buying
period immediately ahead, you proportion of o u r productive for longer periods of time. Unless occurred in January, 1951.
can afford to be more selective in
The jump in retail sales in July,
capacity will be required to meet we take steps to correct this situa¬
the continuing needs of the tion we shall suffer the loss of 1950, led immediately to the plac¬
approving loan applications.
program.
Thereafter a some of the funds which benefit ing of increased orders by re¬
Of course, it is within the power defense
with
wholesalers
and
of your national government to larger amount of our economic ef¬ our institutions most. Whether you tailers
reverse

current trends. Liberaliz¬

forts will be available for the pro¬

operate under a state or a Federal

manufacturers

for

two

reasons,

payments.

and

Then

1944-V

came

V, VT, T

loans. and

commit¬

ments.

A similar program has been de¬
veloped in the present emergency
so that prime contractors and sub¬
contractors in extended financial

condition and unable, because of
that fact, to obtain bank credit
would be able to obtain adequate

financing from
Federal

the

programs

government.
include

now

should be permitted first to keep retail inventories in direct
ing the purchasing policies of
loans,
loan
guarantees,
to offer competition for the kind line with higher sales, and second
"Fannie May" (F.N.M.A) would cluding houses.
long-term procurement contracts,
We shall not, in 1951, approach of funds you most desire to attract to anticipate higher prices. Sales
tend to stimulate rather than to
Continued on page 34
retard the making of G I and FHA the very high record of housing and hold. This means permission of all retailers in 1950 reached




duction of consumption goods,

in¬ charter

you

The Commercial and Financial Chronicle

If

courses.

first

Tomorrow's

Whyte

follow the
won't lose a
will you make

you

you

Neither

would

This

one.

fishing or whatever is your
equivalent of fishing.
go

If

Thursday, June 7, 1951

..

you

,

The first

one

is that

the one

the current reaction,

the

then

column)

method to follow is to do your

buying at present levels and
add to holdings on the way
day,
will wear itself out
down. However, to cut poten¬
around the lows of last month.
tial losses, don't carry posi¬
The
that

got underway on Mon¬

second is that these lows

beyond the lows of last
will be just another stopping
month. If you'll check your
point before they start spill¬ stocks and
compare their
ing down all over again.
prices with those made on the
*
*
*
initial break, you'll get the
I'm quite aware that giving
figures.
you these possibilities places
If you want some encour¬
you between two millstones.
It's a case of you're damned
agement that the market will
tions

•

if you do and damned if you
go up
don't. But if you're trying for at the

then take a long look
Dow theory. Just as

and who isn't—you
prepared for losses. plicate the highs of the indus¬
*
*
*
trials on the last up-swing
This doesn't mean that the was indicative, according to
first possibility or the second followers of the theory, that
one will come about.
JTo con¬ no bull market was beginning,
profits

rails to du¬

the refusal of the

—

have to be

fuse

still more there is

you

third

a

even

add to

to

one

hairs. The market
simply turn dull and lay

your grey
may

around for weeks
*

*

r

fused to

Sj! "

Si!

Sj!

pointing to this as
barometer of any future

I'm not

the

three

idea which of
gestive tract.
possibilities will
si!
I

about

come

suggest

I have all I can

tell

you

well

as

to

figure them from week
week without going batty

trying to worry about them
for longer periods.

Pacific Coast Exchanges

[The
article

Schwabacher & Co.
Members

time

necessarily at any
with those of the

not

coincide

Chronicle.

in this

expressed

views
do

They

are

those of the author

presented as

only.}

Exchange

New

York

Stock

York

Curb

Exchange

San

Francisco

Stock

(Associate)
Exchange

C. F. Cassell Adds

Chicago Board of Trade
New York 5, N. Y.

14 Wall Street

COrtlandt 7-4150
Private Wires to

San

Teletype NY 1-928

Principal Offices

Francisco—-Santa

Barbara

Monterey—Oakland—Sacramento
Fresno—Santa Rosa

SPECIAL

•

CALL
..

lnt'1 Packers.

Chi. Gr. West.
CIT Financial.
Amer. Distill..

Int'l Paper

..

Macy
Amer. Seating

West. Maryl'd

Louisv.-Nash.
Southern Rail
Armco Steel..
U. S. Steel...

Con.RR.Cb

pf.

OPTIONS

C.

F.

@39% July
@24
July
@52% July
@52
July
@41% July
@41
July
@29% July

13 137.50
23
87.50
16 137.50
30 350.00
23 137.50
6 137.50

26 200.00

Subject to prior sale or price change
on

asso¬

&

Cassell

Co.,

Inc., 114 Third Street, N. E., mem¬
bers of the Midwest Stock Ex¬

SPECIAL

CALL

Per 100 Shares

@52% July 16 112.50
@33% Aug. 3 162.50

OPTIONS

(Plus Tax)

THOMAS, HAAB & BOTTS

8

$550.00

Cyana.,95%Aug.
Lines.26% Sep.
.17% Sep.
Gen'l Motors. .49% Sep.
U. S. Steel....40%Aug.
Southern Pac..64%Aug.
Stnd. Gas $4 pf.68% Dec.
Chrysler
69% Aug.

9

550.00

Amer.

U't'd Air

350.00

N. Y. Central.

187.50
275.00
275.00
24

350.00

14

700.00

27

375.00

July 30

275.00

17

337.50

Studebaker ...29

Dec. 17

337.50

Amer. Woolen.36

July

20

212.50

18% Aug.

27

187.50

Zenith

Frisco

66

24% Dec.

com

Penn. RR
Booklet

1951

economy

our

and

men

in

women

force.

work

—

we

Of

At

rate, the purchasing media :of

the country, that is, currency and
demand
deposits also increased

of $8.0

expanded

billion

months of

On

during

the

six

last

1950.

;

Jan.

26, 1951, the General
Ceiling Price Regulation was is-,
sued, freezing all prices, except
prices of agricultural products, at
j
the

10.8% above the index of Febru¬

civilian

our

60,200,000

these,

It

1950.

inventories

of

the

at

retail

and

wholesale levels.

employed, the largest num¬
ber ever at work in the month of

large variety of consumer

a

Since the Revo¬ freeze has been replaced by a se¬
War we have had four ries of detailed regulations. These
periods of substantial price infla¬ regulations limit and regulate the
to 2,100,000 which is only slightly
tion in our history, and we are amount which can be added to the
above
frictional
unemployment.
now in
our fifth.
Each of these cost by manufacturers, wholesal¬
The rise in employement in de¬
five periods of inflation has been ers, and retailers to cover their
fense production so far has been
the result of, and took place dur¬ selling expenses and profit.
For
moderate, largely because of the
regulation
ing and following a war, the Revo¬ example, one such
March.

Unemployment

time it

takes to

down

was

translate

defense

plans and appropriations into ac¬
tual

production and jobs. The ini¬
tial
employment
increases
oc¬
curred

in

in

munitions

aircraft and

as

lutionary, the War of 1812, the known as Ceiling Price Regula¬
War, World War I, and tion No. 7 (CRP7, for short) ap¬
World War II.2 The cost of these plies to apparel, household furni¬
struggles was paid largely by defi¬ ture, musical instruments, radio
cit financing,
that is, by funds and television sets, notions, houseCivil

in

and

During this initial phase of the
defense

however,

program,

em¬

borrowed by the gov¬

were

in

ernment

ordnance.

—

lutionary

industries al¬
production of
which
and related items, such

chiefly

engaged

ready

Observations

For

goods, the original general price

were

that

way

process,

in

increase

stantial

media

one

wares,
glassware, jewelry,
another, watches, clocks, and a number'Of

or
a

very sub¬
purchasing

forced into circulation.

was

defense orders has
The
process
was
elementary
superimposed
during the Revolutionary War; the
on the continuing high volume of
Continental Congress and the vari¬
goods being produced for
the ous
States just issued paper money
civilian economy. The major part
until no more could be floated.
of the employment impact of the
The value of the Continental cur¬
defense program upon civilian in¬
rency eventually dropped to one
dustries still lies ahead. Between
cent on the dollar, and the cur¬
ployment
been

on

will

be

needed.

workers

will

be

obtained

civilian

transfers, from

reduction

employed,

other

in

the

the

These
from

activities,

number

addition

of

of

new
some

increase in hours. In this process

pools

develop

as

of

in Georgia and

from

unemployed

large plants shut

PART IV

in

two

ways,

to

purchase

Prices

a

primarily

During the ab¬
conditions of a war and

period of deficit financing, and
securities

pt

the

Federal

Government

Wholesale

—

securities,

of

Federal securities.

when

Wholesale

were created basically
(1) by crediting
deposits, and (2) by the

ing media

normal

Underlying Threat of Inflation

Virginia.

War II, demand deposits which
comprise the bulk of our purchas¬

loans

the

tailer

Five

separate regu¬

apply to the sale of beef
packer through the

and

re¬

'

on.

so

The freezing of prices and wages

is

man-made decision. It attacks

a

symptom and not the basic

a

cause

\

of

high prices. The freezing -6f
prices and wages is a mighty force,
for

a

but

while, to hold back increases
will

further

not

prevent

itself,

by

increases.

The

longer,

a

price and wage freeze remains .in
force—if basic

During World War I, and World

un¬

workers, and simultaneously
temporary

of the various States from
40 to 1 in Maryland, to 1,000 to 1
rency

items.

lations

largely

very

causes

not

at¬
simultaneously—the easier
creep
up
in the
forms of black markets, inferior
materials, reduction in sizes, elim-,
are

tacked

will

increases

ination

of

unprofitable items,

troduction of

items, and

new

bining the sale of
with

less

of

profitable

more

profitable items.

While the

in¬

com¬

^

,

increase in the level

wholesale

prices

was

fairly

substantial during the days of the
last price control
(i.e., between

canqqt be sold in
quantities to insurance April, 1942,

sufficient

prices during World War II were
under control of OPA from April,
1942, to June, 1946.
Over that
period of 50 months the index of

banks, build¬
ing and loan associations, other
investing institution and individ¬
uals, then they are^old to com¬

wholesale

and June, 1943), the i
simultaneous great increase in the j

mercial banks. In

prices compiled by the

saving|:

companies,

volume
the
a

of

country

still

purchasing
laying

was

a

media of
basis for ■%.

greater and faster rise: as';

purchasing these soon as controls were lifted. This
of Labor increased from
securities, a bank simultaneously great increase in purchasing media
83.2 to 112.9, or 35.7%;
Between increases its aggregate deposits. was brought about primarily by
June, 1946, and March, 1937, the In this way, deficit spending finds monetizing Federal deficits dur¬
index went from 112.9 to 150.0, its
way into the volume of pur¬ ing the war years.
or
32.9%.
In the nine months chasing media and
The basic problem immediately
|a| consequent
immediately following the elimi¬ depreciation- in currency and in¬ ahead of us is to support the ex¬
nation of controls, the percentage crease in the level;of wholesale
isting price and wage freeze 'by
increase in the index expanded
prices.
holding down the volume of pur¬
almost as much as during the 50
In one of his more popular books, chasing media. That can be done
months
that
controls
were
in
"The Money Illusion,*' published by (1)
maintaining the highest
existence.
After a slight dip, the
in 1928, Irving Fisher pointed out possible banking reserve require¬
upward trend continued until in
that higher costs of living are ac¬ ments, (2) by the voluntary care¬
August, 1948, the level of whole¬
tually due to increased quantities ful scrutiny of all applications for
sale prices was at its highest level
loans and refusings to
of money. In other words, higher banking
in 169 years; that is, since 1779.
prices in many commodities at the make those which are being sought
The sellers' market which had same time are not due to short¬ to carry excessive
inventories, or
existed for nine years now turned
other types of speculation, (3), by
ages in those commodities but to
into a buyers' market.
For 16 a drop in the value of money due continuing credit controls on con¬
months,
that is, from August, to an increased supply of money. sumer sales, primarily the amount
1948, to December, 1949, the index There might well be world short¬ of the' down payment and the du¬
of wholesale prices dropped.
By ages in certain basic items such as ration of credit to be extended on
December the drop had amounted
wool,
rubber,
tungsten,
cobalt, instalment accounts, and (4) by
Bureau

,

on

Puts

and

Calls

on

Request

to

11.1%.

>

columian at this
In January, 1950, a recovery in time, but if there is any truth in
wholesale prices started to take Fisher's extensive studies, the lift¬

place.

After the war exploded in

•

ward at

a

of

Filer, Schmidt & Co.
Members

Put

Dealers

30 Pine

&

Call

Assn.,

St., N. Y. 5

Brokers

&

Inc.

WHitehall 3-9177

continued

trend

the

Korea,
week

beryllium

up¬

In the third

faster rate.

last, September

wholesale index reached

the

the pre¬

vious peak of

August, 1948. After
downward reaction in
October, the index continued up¬
a

slight

each week without

ward
and

for

1951,
time

the

week

a

break

March

of

Consumer

prices

10, 1949.
Prices

followed

a

—

Consumer

pattern

some¬

what similar to wholesale prices.
A new

high

was

reached in Au¬

gust and September,

and

ing of wholesale prices and con¬
sumers'

prices

to

all-time
recent months,
new

highs during more
it is due to an increased supply of
money.

.

June, 1950, and De¬
1950, combined invento¬
ries of manufacturers, wholesalers,
and retailers expanded $7.4 bil¬
Between

cember,

1948, when

covering the cost of
expenditures

on

a

our

defense

pay-as-yourgo

basis to prevent deficit
that is, the imposition

financing,
of higher

taxes all along

the line. While the
implementation of each of these

four

policies is essential, the last
important. The

is by far the most

greatest economic brake on infla¬
tion is to raise in

one

way or an-,

other, sufficient funds to

pay,

all

the Federal Govern¬

speaking, inflation is a
of war and of post¬
war
readjustments. During the last cen¬
tury and a half at least, in connection
with every great war in Europe, with the
possible exception of France in the Na¬
poleonic Wars, the principal belligerents
have all experienced serious inflation."—
Edwin W. Kemmerer, The A B C of In¬
2

"Historically

usual accompaniment

flation,
New

p.

3

(McGraw-Hill Book Co., Inc.,

York, 1942).

expenses

of

ment,

24,

stood at 183.9, a new allhigh and 21.8% above the

week of Dec.

Association, Inc.

Broadway, N. Y. 4, Tel. B0 9-8470

Manpower

drop

has

index

steadily since February, 1950, and
in October, 1950, broke through
the previous high. For last March,
consumers' prices were at a new
all-time high of 184.5 and were
ary,

March,

moderate

a

The

4.5%.

February, 1950,

heavier inventories.

carry

any

,

80% Aug.

Merck

request

Members Put & Calls Brokers & Dealers




has become

Dew

with

•

@31
July 6 $75.00
@13% Oct. 24 137.50
@23% July 23
87.50
@52% Oct. 16 225.00
@50
July 9 112.50

Explanatory pamphlet

D.

ciated

change, as salesman.

Per 100 Shares Plus Tax

Studebaker

CHARLOTTESVILLE, Va.—Jo¬
seph

registered

then

highest point they had reached
during the previous five-week pe¬
is obvious that riod. Since then, we have had a J
By the end of these
high prices represent potent steady stream of price and wage
had 62,300,000 reasons for the current indigestion
interpretations and regulations;

in

need

real

today.

I

what

asked

do to

on

is willing—if not anxious
—to receive applications for loans
and to carry on a socialized lend¬
ing program for which there is
suppose

ment, equipment, and supplies.

I.

as

Securities

50

-

long pull. All I
is what I read
read the oracles

can

I

and

stand

old

the

down to re-tool to produce arma¬
*

si«

and you can

Pacific Coast

went down and in

at

business

will

been

I've

New

di¬

your

two
think of the

Orders Executed

in

butterflies

have

slightest

equipment and plant

extensions.

prices

Consumer

months.

to

174.5 for both

index stood at

the

3 and 4 million additional defense

rise. I'm just calling it to your
Having given you three attention as something to bol¬
choices, I'll now go into my ster
your morale in case you
own little dance.
Not having

the

govern¬

workers

a

#

;

low.

the latter made a new

tiring every¬

body out.

industrials re¬
follow the rails when
the

have

so

of

installation

ment owned

no

lion.
Between
June, 1950, and
December, 1950, outstanding loans
of
commercial
banks
expanded
$8.0 billion, and the greater por¬
tion might well have been used

33

page

Survey oi Business Problems
the

and

from

Finally, the RFC is still doing

know that buying
EE By WALTER WHYTE=
them always includes a risk
(unless you're buying for in¬
There are two possibilities
come, in that case you don't
facing traders in the current need this
market.

A

*

❖

*

Says—

Continued

that

mean

get out of them here and

you

Walter

one

dime.

Markets

,

.

(2374)

34

matter how great those

no

expenses may
years
«

Probably

during the
underlying
was

be in the immediate

ahead.
*

*

the

*

greatest

student

19th

Century of the
surges of all history,
the English scholar, Lord Ac¬

ton. In the words of Herbert

Paul,

Number 5018

Volume 173

.

.

The Commercial and Financial Chronicle

.

(2375)

Lord

Acton

learning."

"a

was

of

prodigy

ess

Throughout his life he

write

of

carrying

on that war, we, taxation must give way to direct
would continue down taxation/
One hundred and
all-powerful Wel¬
seventy-five

ourselves,

the road of the

of
Liberty" and for that purpose he fare State.
collected
a
Our short-term
personal library
of
60,000 volumes. That "History of win both the hot
to

planned

"History

a

which

Liberty" was never written!

"By liberty" Lord Acton wrote,
"I

the

mean

shall

man

be

cold

upon us.

tions"

to

That

wars

in

Our long-term

protected in doing
is his duty

which

men

means

radical

realignment of the eco¬
policies of the State. To

nomic

re-achieve

our

freedoms

lished

free-market

in

better to be the citizen of a hum¬

commonwealth

ble

and then

the
ag¬

and

the

of

only

too

true of
"than

in

days

were

In

tradition-bound

in

more

industry,

maintain
*

traditionally

took
place with the Emancipation Proc¬
probably

lamation.
:With the progress

of the indus¬
there
increasing maldis¬

revolution,
about

came

tribution

an

however,

in

and in periods
extreme difficul¬
part of substantial

unemployment
of

the

on

themselves

for

sistence

families.

their

evident

So

than

were

and
was

liberty and turned back; here
born the counter-revolution

and

freedom

against

liberty,

in

favor

counter-revolution

shelter and security to be

a

of

provided

by1 the all-powerful State. That
is expressed in the Marian slogan
"From
each according
to his

abilities, to each according to his
needs."

the

.

months.

summer

but

average,

more

and

more

workers

are

on

Iron

Steel Institute

and

announced

that the operating rate of steel companies having

this week

93% of the steel-

making capacity for the entire industry will be 103.2% of capacity
for the week beginning June 4, 1951, based on the industry's in¬
of Jan. 1, compared to

creased capacity

steel

a rate of 102.7% a week
point.
operating rate is equivalent to 2,063,000 tons of

increase of 0.5 of

week's

This

castings

ingots-and

2,053,000
duction

a

week

a

the

for

A month

ago.

yielded 2,073,000 tons.

entire

ago

A

industry,

the rate

year

ago

compared

steadily gaining strength through¬
out the world.
In this counter¬
revolution are the basic roots of

Socialism, Fascism,
Deal and the
Most politicians of
World, without know¬

Communism,

the

Statism,

Electric Output Declines in
The

amount

of

electrical

103.7 % and pro¬
it stood at 101.3% of
■

Institute.

was

207,958,000 kwh. under that of the pre¬
above the total output for

the week

what they have been doing,
this

cultivated

have

security

and

shelter

desire

to

be

pro¬

believe

we

which

with Thomas Jef¬

government, is
least. There

the

that

ferson

is

the

by

the output

governs

growing evidence that we be¬
government is best which

Loadings of

freight for the week ended May 26, 1951,
according .to the Association of American
Railroads, representing an increase of 2,324 cars, or 0.3% above
the preceding week.
totaled

The

4%

State,

real

freedom.

governs
•

There, as wards of

every

individual

has

shelter and security, and no

some

There

government

most.
feeling is universal that
our great enemy.
There

The

Russia is
is

no

question that Russia is our

obvious

cept.

enemy,

is

fenemy

an

That

but our

greatest

idea, a mental con¬
idea is communism

with its retreat from

freedom and

the individual. If the
Great" War should materialize, and
liberty

of

Russia and her satellites were van¬

quished, communism, would still
here; the long-run problem of
the counter-revolution would still

be

be with

us.

the

total represented an increase of 30,873 cars, or
corresponding week in 1950 and an increase of

26,975 cars, or 3.4% above the comparable period of 1949.
Auto

Russia, of course, the

ultimate goal.

v/eek's

above

narrow

irregularly.

Other

the

on

ments

market

of wheat

further

Moreover, in the proc-




of

Responsible for the decline

Disputes

off to

a

were

alone, total output

113,844 units
against last week's revised total of 150,697 units, and in the 1 ike
138,402.

was

Canadian output in the week totaled

9,712 units compared with 7,521 units a week ago.
Total output for the current week was made
cars

and

'
up

27,767 trucks built in the United States and

Business Failures Fall in
and

commodity price in¬
at

previous, and

320.38

compar¬

year.

of

rumors

on

following

peace

of

passage

for

the

developments in wheat

by

in

the

included an improve¬
sharp falling off in country ship¬
Corn moved steadily upward,
receipts at terminal markets and a

decline

a

a

Southwest.

in

Corn

good

start.

Oats followed

seeding

reported

was

crop is expected to get
pattern set in wheat and

the

with strength in late trading following early weakness.
Although trading, in flour was quiet at the week-end, sub¬
stantial bookings of hard wheat
bakery flours were npted in the
first part of the period for July and
August delivery.
other flours remained cautious and

Buying of
mostly for nearby needs.

Raw sugar turned easier at the close after

The decline

induced

by

was

the

maintained
of

mid-week rise to

a

high levels for the current movement.

new

firm

a

attributed to profit-taking and hedge selling
international situation.
Cocoa futures

unsettled

offerings from

undertone, influenced by

continued scarcity
actual
further weakness in
a

primary markets and tightness in the

market.

Lard declined in sympathy with
vegetable oils induced by the favorable war news from Korea.
After dropping to the lowest levels since
January, hog yalues
firmed up at the close, aided by small week-end
receipts.

Spot cotton prices remained at

•

week

while

industrial

a

86,077

total of

near

clined rather

new

ceiling levels the past
crop
deliveries, de¬

sharply.

The weakness stemmed from active selling
continued favorable weather and crop advices,
of peace for Korea, and easiness in securities and other

stimulated
rumors

by

outside markets.

Mill and export

helped to cushion declines to

price-fixing

on

the scale down

Sales

extent.

some

in the

10

spot

markets declined

sharply last week to 37,100 bales, from 52,700 a
week earlier, and 111,100 in the corresponding week last
year.
Mill consumption of cotton during April, as reported
by the
Bureau of the Census/averaged 39,800 bales per day.
This was
larger than the trade had anticipated, and compared with a daily
rate of 45,600 bales for March, and 36,100 for April last
year.
Total consumption of the staple for the first nine months of the
current

season

amounted to 8,232,000

bales,

a

gain of 23.2%

over

the 6,683,000 in the corresponding period a year ago.

Trade Volume in Latest Week

Enjoys Slightly

shopping day lest throughout most of the nation in

one

observance

of

Memorial

Day, consumer spending dipped slightly
on Wednesday of last week.
The total
dollar volume spent, however, was moderately above the level
for the similar holiday-shortened week a year ago, states Dun &
Bradstreet, Inc., in its current summary of trade. Outside of New
York, where buying was somewhat stimulated by the lowering of
during the period

ended

fair-trade

minimums by some stores, there was no perceptible
to the recent Supreme Court ruling pertaining to the
legality lof the fair-trade agreements.

response

Total

retail

dollar

Wednesday of last week
above

a

declined

to

in

estimated

was

the

to

period
be

from

ended
3% to

on

7%

Regional estimates varied from the levels of
by the following percentages:

year ago.

ago

year

volume

New

a

England

+4 to -f8; East and Pacific Coast +2 to +6;
+7; Midwest +1 to +5; Northwest and Southwest

South

+3 to
+ 5 to +9.

was

a

items.

above the

very

slight rise in wholesale buying in the week
many promotional and

increased retailer demand for

an

The

total

dollar volume

level for the similar

ordered

period in 1950.

wholesale centers declined moderately

holiday-shortened week,
attending last week.
Department store sales on

in

comparison

was

somewhat

Buyers attending
in number during

with

country-wide basis,

the

number

taken from
May 26,
1951, increased 3% from the like period of last year. This com¬
pared with an increase of 4% in the previous week, and an in¬
crease
of 5% for the four weeks ended May 26, 1951.
For the
the

Federal

Reserve

Board's

a

index

for the week

as

ended

to date department store sales registered an advance of 11%.

year

Retail

trade

in

New

York

the

past

week

advanced

close to

10% above the like period a year ago as a consequence of the
price war resulting from the Supreme Court's fair trade decision.

132

According to the Federal Reserve Board's index, department
sales in New York City for the weekly period of May 26,
1951 advanced 4% from the like period of last year. In the pre¬

store

ceding week an increase of 3% was registered above the similar
For the four weeks ended May 26, 1951, an increase

Holiday Week

failures

or

futures, particularly the

-

of

7,012 cars and 2,700 trucks built in Canada.

Commercial

the

corn,

seasonal

suspensions by all northern
plants in observance of Decoration Day and shutdowns by Studebaker and some Lincoln-Mercury plants for the remainder of the
week, "Ward's" said.
Labor disputes at various Chrysler divi¬
sions/principally Dodge, cost the corporation an estimated 5,000
units, the agency added.

last year

wheat

strengthened

this

of

show

completion in the main belt and the

near

ports," totaled 123,556 units, compared with the previous week's
total of 158,212 (revised) units.

week

week

a

tightening in cash markets.

various

States

to

index finished

corresponding date last

selling

some

the

bullish

following

Combined motor vehicle production in the United States and
the past week, according to "Ward's Automotive Re¬

United

pound of

per

is

individual commodities

as

The

slightly from 319.13

up

was

There

Output Adversely Affected by Holiday and

the

price

function

range last week

fluctuate

ment in demand for flour and

Canada

For

chief

wlieat-for-India bill by both houses of Congress.

revenue

cars,

Labor

cbunter-revolution has reached its
the

811.799

most.

In Soviet

1,426,721,000 kwh. in excess of
reported for the corresponding period two years ago.

Carloadings Make Further Mild Gains in Latest Week

lieve the
governs

ended June 4, 1950, and

for

all-powerful State
at the expense of freedom and lib¬
erty of the individual. No longer
vided

best

a

but

With

vious week, 812,807,000 kwh., or 14.4%

the Western

do

Korea

Holiday Week

energy

Welfare State.

ing

and

Improved Pace

.

The current total

total of the

its

weeks,

.•

distributed by the electric
light and power industry for the week ended June 2, 1951, was
estimated at 6,447,741,000 kwh., according to the Edison Electric

New

four

ago, or a rise of 20.5%.

year

Bradstreet daily wholesale

the

past 100 years, or so,
counter-revolution has been

the

to

was

the old capacity and amounted to 1,931,000.

For

a

sum

Grain futures developed
strength as the week progressed but
some of the
gains at the close.

ex¬

pay.

The American

total of

,

.

the job as they see their fellow employees
Steel companies also expect to pay a lot of
overtime this summer to keep output up.

ago, or an

&

to

May 29,

slump

industry

pected to stay
drawing extra

these fundamental economic mal¬

adjustments that many men abandoned
the struggle for freedom

through the

on

vacationing over 95% chose to work—and accept "bonus" vaca¬
tion pay, this trade paper discloses.. This is a good deal higher

to provide sub¬
and for

numbers of people

to

,

depression,

ties V

right

pace

However, the steel companies could not do this without the
cooperation of the steelvvorkers and their union. Although the
labor contract assures vacations for steelworkers, the union has
agreed that they may stay on the job if they wish, this trade
journal points out.1
'
'
;
In one company where workers had a choice of working or

wealth, the. substitu¬
indirect for direct taxation,

tion of

fast

during the hot summer months—even
when demand remained high.
But this year steel companies are
making every effort to
maintain
near-capacity operations.
Even
mills
that
formerly
closed down during a plant-wide vacation
period expect to keep
'
going full blast.

the, materially higher pinnacle of

trial

their

In past years there were very
good reasons such as vacations,
need for maintenance and hot weather that caused

steelmaking

In the United States,

freedom

dex, held in

influenced

Mildly This Week

becoming commonplace in the steel
"The Iron Age," national metalworking
are

according to
weekly, marking as it does the 14th week during which the
industry has operated at or above its rated capacity. Further, a
survey by "The Iron Age" shows that steel companies plan to

and prob¬

Dun

There

Industry

respec¬

prewar

Week Arrested
The

5

Steel Output Scheduled to Rise

the French

sometime after

personal

page

occurred

Wholesale Commodity Price Decline of Previous

ing with 265.74

from

Production miracles

Europe.

ably reached its pinnacle during
the first quarter of the 19th CenRevolution.

31

continued

liberty.

about 20%

were

165

and

general trend of food prices at the wholesale level.

its study to you in this day

price cuts spread to Newark, Baltimore, Memphis, Omaha
Francisco, but consumer buying power lacked the en¬
thusiasm experienced in New York.

idea of personal
struggled out of feudal¬

ism of the middle ages

tury,

and

Casualties

168

past

The index represents the
foods in general use and

San

and

the

Europe

freedom

Indirect

when

sharply, 47%, from the

compared with $5.94 at this time

great classics in logic, eth¬
ics, and economics. Let me com¬

mend

1949

Irregular Movements

lost

propitious for the development of
individual
freedom
and
liberty
than

of the

week

circumstances

America

colonial

our

one

and

down

Food price movements
continued to be irregular the past week
and the wholesale food
price index, compiled by Dun & Bradstreet, Inc., dropped another cent to stand at $7.16 on
May 29.
This represented the lowest
level in the

world's

The State of Trade and

Europe."
in

is

.

subject of the superb autocracy

Here

the material sciences.

Continued

Czars

that overshadows half of Asia and
of

and

mate goal. That study

1950

were

Food Price Index Continues to Reflect

on

Soviet Union of today,

the
a

discovered

liberty would reach their ulti¬

Alps,"

the

veiled refer¬

a

Russia

remains

which

in

he made
the

to

ence

be

eco¬

powerful, followed in economics just as they of great problems as it holds on
enslaved.
It is have been discovered and followed high the twin torches of freedom

and

prosperous,

relationships

must

That

in

They

249 recorded in the similar week
of 1939.

than

rather

free,

laws

pub¬

science out of

in

closely knit manifestations. Natu¬
ral

was

States.

the United
a

a

of

interference

prefers that his country should be
and weak, and of no account,

ago

nomics and pointed the way to the
laws of nature by which freedom

ricultural products, raw materials,
and
finished goods in all their

...

in

volume made

look forward to the elimination of

governmental

years

"Progress and Poverty"

must

we

tively.

played a great part
struggle for freedom and

book with the provocative title of

of free

race

erty is not a means to a higher
political end. It is the higher po¬
litical end.
A generous spirit

but

was

lower than

volume

the

liberty. Seventy-two

a

against the influence of authority
and majorities, custom and opin¬
ions."
Then he elaborated, "Lib¬

poor,

Wealth of Na¬
published in England.

the

believes

he

what

is

problem
and

"The

ago,

problem is to be the vanguard of

that every

assurance

are

years

week, Dun & Bradstreet, Inc. reports.

35

week of 1950.

in

the

holiday-shortened week ended May 31 from 191 in the preceding

that of a year ago, and for the year to
advanced 11% fuom the like period of last year.

of 5% v/as recorded above

date, volume

The Commercial and

36

Financial Chronicle

.

Thursday, June 7, 1951

.

.

(2376)
Our

everything that went before and
the
Roosevelt delusions

Continued, from first page

required more than two years of
Kremlin double-crossing and in¬
sults to exhaust that impetus.

Our Foreign PolicyDedication to Chaos

expediency

interests

can

needlessly.

political
prevailed, the Presi¬

the Balkans also Central Europe—
the

effectively

strategy tnat would

Stock Underwritten

There¬

fore, it ruled out Anglo-American
invasion Of the Balkans, and from

logic rather than

Had

Kentucky Utilities

It tory, moral principles, and Ameri¬

ally his own.

about our Soviet

Surrender

Therefore, it surrendered terri¬

make

Kentucky Utilities Co. is offer¬
ing

holders of its

to

common

stock, subscription rights to pur¬
chase 260,071 additional shares of

have dammed the Muscovite tide
common stock at $14.50 per share
dent would have broken cleanly
making with the unsavory past, dismissing across that,continent. Therefore, on the basis of one new share for
ing to undo their own mischief.
it handed over to
the Kremlin each seven shares held of record
Even if we give them full marks inescapable changes without dis¬ those most directly responsible for
commanding positions in Manchu¬
May 23, 1951.
for sincerity in the effort to ex¬ owning those men and those years. gutting
Blyth & Co., Inc.,
the victory and turning

remain squared, by

must

our sacrifices into a Homeric joke.
mess, they
Anxiety Over MacArthur
He would have recalled the men
political and
To concede that the Rusk pro¬
who had been pushed out and
psychological pressures to cover
nouncement cancelled out the old
pushed around for being right—
up mistakes, to discount disastrous
assumptions on which we pro¬ for distrusting Stalin and his as¬
appeasements, to deny palpable
ceeded in China to the point of
treason in their midst with cries
sociates, including American as¬
full catastrophe, obviously, would
sociates.
He
would have sur¬
of "red herring."

tricate

the

from

us

would still be under

look like vindication of
The Latest

Demonstration

witnessed another

We have just

critics like

Wedemeyer, Pat Hurley,

General

William C. Bullitt,

Joseph E. Grew

of this and mere citizens contemptuously
18, As¬ dismissed, as a "China lobby."
sistant Secretary of State Dean Worse, it might be viewed by the
Husk made a speech refreshing in public as an admission that Gen¬
its realism.
He offered a sane, eral MacArthur's judgment, par¬
with reference to the
sound and clear appraisal of our ticularly
position in China, labeling the value of Nationalist potentials, is
correct and has been accepted by
Communist regime a puppet of
the Kremlin and pledging Ameri¬ our government.
The anxiety to
withhold credit from MacArthur
can support to the legitimate Na¬
while taking over some of his pro¬
tionalist Government and the peo¬
ple of China in ridding themselves posals is face-saving in another
of
the Red incubus.
His pro¬ dimension.
nouncements,
self-evidently too
Thus, our foreign policymakers
fundamental to have been made are in effect the prisoners of their
or;, his own, was given additional
past.
Nations can make 180-deweight by two other speakers on gree turns in policy and have done
the same occasion, Senator Doug¬ so all through history—but it does
las of Illinois
and John Foster not come so easily to individuals.
Dulles, whose sentiments were en¬ Every vital revision of official
tirely consistent with Mr. Rusk's.
views must therefore be carefully
Virtually the entire nation, par¬ dressed up to hide the fact that it
striking
demonstration
basic weakness. On May

The one
of the Administra¬ is really revisionary.
accepted the words at thing tnat might restore confi¬
face value—as a sharp break with dence in officialdom—a forthright
previous American policy in Chi¬ acknowledgement of basic mis¬
na.
From every direction came calculations and blunders—is pre¬
expressions of
relief that the. cisely what the "top tier" in Wash¬
Jraurky
atmosphere had finally ington cannot bring itself to un¬
been cleared; that there was an dertake. v:,.'
er.d to equivocation.
Many com¬
It would seem obvious to the
mentators applauded Mr. Rusk's naked eye that the shabby bar¬
moral courage in recognizing pub¬ gains with Stalin which turned
licly, at least by implication, that Eastern Europe and then China
we had
blundered in our earlier over to the Communists can not
estimates both of the Communists be effectively undone until they
and of their enemies in China.
are recognized as unwise and re¬
tisans and foes

tion alike,

short¬
lived. The State Department has¬
tened to inform the world that no
reversal, no new beginning, was
intended. Mr. Acheson explained
the

But

that his

jubilation

Thus,

they

should

their

own

continuing poli¬

but,

more

Harry Hopkins.

pretty up

Truman

Mr.

pursuing the policies of
when we regarded the

the past,

this.

not do

Played

Politics

The politician

in his

logic. He
elevated
of those who had a personal

many

keeping
the picture
blurred. It is no accident, surely,
that the two officials among the
in

stake

making in
Later

it

any
was

case.

J. J.

and

Hilliard

B.

&

Son

are

underwriting
group which will purchase from
the company any shares remaining
joint managers of

June 18,

on

an

after 3 p.m.

unsubscribed

General Marshall

resisting the attempt.

perspective of time, now
Tse-tung's total subser¬
vience to Stalin is being spelled
out
in blood on Korean battle¬

In

(CDT)

1951.

The company will use the pro¬

dedicated, in the nature of

virate

the case,

to

defending the Great
dealing ear¬

Blunders even while

Mao

fields, the Marshall mission seems
the very symbol of sterility and
defeatism in our Asia policies. But
"continuity" of the dis¬

to assure

may have been motivated.
It calls for action to restore some

they

faith

American

in

intentions

the peoples, from Czecho¬
nestly with the result: the "deadly
slovakia to China, who feel that
danger," in Mr. Truman's recent
they have been let down or even
phrase.
betrayed by our statesmen. Mos¬
Mr. Acheson's Great Alibi
cow
having violated every basic
When Mr. Acheson was made undertaking in the Yalta, Teheran,
Potsdam agreements,
Secretary
of State in January, Cairo and
1949,
Administration spokesmen we have ample legal ground, let
hailed his appointment as a guar¬ alone moral justification, for de¬
We
antee of "continuity" in American nouncing those agreements.
among

foreign

policy — this at a
bold reversal rather

time

its

the

that

approach, the General was
living who best personify the war¬
made
Secretary of State, then
time
confusions on Communist
Russia, General Marshall and Dean Secretary of National Defense.
The current predicament of the
Acheson,
are
respectively the
free world calls for an honest,
heads of our military and foreign
policy establishments.
With the humble, unequivocal repudiation
of past mistakes, regardless how
President they comprise a trium¬

are

launched

on

a

notorious

the

White

than

Paper

—

a

properties.
Vvitn

antici¬

number of electric
customers, which figure rose 41%
in the past five years, the com¬

the

!

estimates that its expansion

pany

for

program

1951-1952

approximately
which

about

will

cost

$29,000,000

of

wili

$11,000,000

be

expended in 1951.

By the end of
Utilities Co.,

Kentucky

1952,

which supplies electric service in

central, southeastern and western
Kentucky, will have increased its
rated kilowatt capacity from 214,290

to

304,290 kw., with

tional

6*0.000

kw.

an

addi¬

generating unit

scheduled

to begin operation the
following year.
Operating revenues for the 12
months
ended
March
31, 1951,

to

amounted

$23,832,616

after

income

preferred

$3,290,007,

was

$1.81

or

and

net

dividends
com¬

per

share.

mon

NY

Municipal Forum
Nominates Officers

expanding

an

increase

lurther

in

pated

what is called psycho¬
continuity was indicated by com¬ logical warfare, the primary pur¬
mon
sense
and in practice, as a pose of which is to make friends
matter of fact, was unavoidable. and allies of the populations in
the Soviet sphere. But those peo¬
Small wonder that Mr. Acheson
proceeded forthwith to produce ples, the Russians especially, re¬
when

program of

member

all

too

vividly how we

Dr. Frederick L. Bird of Dun &

Bradstreet has
selected
The

to

been

serve

Municipal

York

for

unanimously
President

as

Forum

1951-1952,

announced

of

of

has

it

New

been

by the Forum's Nom¬

Committee.

The

election

compendium remarkable for its
omissions, selectivity and alibis—
whitewashing the China policies
of which he had himself been the

used

inating

Soviet

of Dr. Bird and other officers will

chief architect.

General

entrusted

He

the

task,

ers" fiction. Then the same

In Charge

with

present leadership is con¬
to
function within the

been

astrous

long

Our

which Stalin could
prevented from

and

have

ernment for

did

make-up ruled out cold
not
only
retained but

Bankrupt Leadership Still

demned

no longer

Japan that we

on

needed
not

back, in pay¬

Soviet declaration of

new

Unhappily for the world he

a

situation

war

China's

a

unencumbered by any

under¬

atmos¬ important, should seek loyally to
standably from his vantage point,
safeguard the historical prestige
to Philip Jessup, another leading
The mo¬ of colleagues like Franklin D.
champicn of the "agrarian reform¬
Roosevelt and

was scotched.
Whether the United States is still

present

reputations

merely

for

ment

people, who undertook the ill-fated at¬ ceeds from the financing in con¬
impulses to tempt to foist the Communists nection with its present program
upon
the Chinese Government, of additions, extensions and im¬
recent history.
and who helped disarm that gov¬
provements made or to be made to
with

rounded himself

ambiguity

suspicion that we had
clear policy grounded
definitive judgments of the

mentary
reached

not

shield

familiar

the

phere of confusion and
was
quickly restored.

on

pudiated. But it is too much to
expect that the men of Teheran
and
Yalta, Cairo and Potsdam,
would do so, human nature being
what it is. tit is only natural that

Assistant had merely re¬

stated the old and
cies.

was

behind

ria

Owen Lattimore and
rest of the Sovieteering cabal
the Institute of Pacific rela¬

Alger Hiss,
the

in

Jessup,

and
intimately
associated
Frederick Vanderbilt Field,

bayonets to drive unwilling
citizens back to Stalin's
torture chambers and concentra¬
tion

camps;

how we

Vlasov

and

surrendered
other anti-

take
of

place at the annual meeting

the

Forum

Committee

28.

The

announced

June

the

on

also

Kremlin's following unanimous nominations:
executioners; how we fell down Vice-President, John N. Mitchell
on
solemn
assurances
to obtain of Caldwell, Marshall, Trimble &
free democratic elections in Po¬ Mitchell; Secretary, Fred D. Stone,
land
and
other countries.
The Jr., of Marine Trust Company of
Western
New
York; Treasurer,
memory of these American blun¬
Soviet

leaders

and

ders

to

failures

the

stands

higher

and

Charles A.

Peine of

Tucker, An¬

Iron Curtain between us
those whom we would reach

thony & Co., and for the Board of

of psycho¬

Smith, Barney & Co. and Joseph

than any

through the methods
logical warfare.

Governors, Winthrop S. Curvin of

L. Kaszubski of the New York
Chinese limits of the legends of Mr. Roose¬
Communists
as
independent of velt's political and General Mar¬ tions, was assigned the special job
City Housing Authority.
In diplomacy, as in war, new
of formulating
new China poli¬
Moscow and "wrote off" the Na¬ shall's military
sagacity.
Years
The annual meeting will follow
cies.
We
thus got "continuity" strategy demands new command¬
tionalists, or consider the new re-, after the theory that Mao Tseers.
The
challenge
confronting by two weeks the first national
with
a
vengeance, on the neat
gime a servile satellite of the Po¬ tung and his cohorts were simply
America can best be met by lead¬ conference of the Forum on Pub¬
lish or Bulgarian model, is again agrarian
reformers exploded in theory that pyromaniacs make the ers with a clean conscience, a lic Housing Financing at which

their

anyone's guess.

Why
chaos?

this

new

There

are

dedication
a

to

number of

plausible secondary answers, such
a.s the hope of a deal with Peiping
to end the Korean stalemate, and
the need to reassure Britain and
proponents of appeasement.
quick warning
that nothing has changed amounts
to a disingenuous insistence that

other

But at bottom the

nothing needed changing, for, belive it or not, American policy has
been

right all along—and particu¬

larly at the points where it seems,
to the common sense of the un¬
initiated, to have been

stupid. The

Department, as Arthur
Krock of the New York "Times"

State

put it in discussing the Rusk epi¬
sode,
"resorts
automatically to
face-saving" when the wisdom of
its past

behavior is in question.

"Throughout the top tier of the
Department," Mr. Krock
wrote, "are men who for years
have advocated toward China a
course directly contrary to the one
outlined in Mr. Rusk's speech."

State

Denial of the plain purport of that

faces,

the

group

that

nur¬

best fire chiefs.

fresh approach,
a
minimum of
to the sworn testi¬
psychological identification with
of former Assistant Secre¬ cruel mistakes. It is being met,
operations. The panicky eagerness tary of State Adolf A. Berle, the unfortunately, by men staggering
of some of these men to hold on "pro-Soviet group" in the depart¬
under a load of personal involvment in
1944 was caotained bv
to their power, indeed, may be
ment in' the crisis and tripped up
explained in part by that compul¬ Acheson, "with Mr. Hiss as his continually
by their need to de¬
sion to hush up the past.
principal aid in the matter." It
fend their own methods and mo¬
was
this group that jockeyed the
In
any
business organization
tives.
So far as the President is
"anti-Soviet group"—Grew, Berle
whose affairs had been so thor¬
concerned, there is, of course, no
himself,
Hornbeck, Hurley and
real cure for this situation.
But
oughly fouled up, those respon¬
others—out
of
the
department.
sible would be removed from their
the leverage of an alerted public
They have remained "out," while
jobs as the first step in dealing
opinion can and must be brought
Acheson has risen to the head of
with the bitter consequences.
A
to bear with respect to the rest of
the department. There, I believe,
parliamentary government of the
the Teheran-Yalta-Potsdam group
we
have the telltale element in
European type, under similar cir¬
still in places of power. The task
the equation that has helped bring
cumstances, would have had small
of this crucial period is, in all con¬
Communist control of all China,
chance of surviving. But in our
science, tough enough without
aggression in Korea, Red Chinese
country the very magnitude of
making it' tougher through inhib¬
intervention against us at one end,
their errors apparently forces the
ited and guilt-ridden leadership.
Administration to retain and even and the prevention of Nationalist
Chinese intervention at the other
promote the most culpable offi¬
With Joseph F. Jordan
end.
cials as a species of insurance
-rf
(Special to The Financial Chronicle)
General Marshall's role in the
against reckless revelations.
BOSTON, Mass. — Donald T.
Mr. Truman was a bewildered wartime blundering was less ob¬
and uninformed man when des¬ vious than Acheson's, but no less Steele has become associated with
Our military high Joseph F. Jordan & Co., 79 Milk
tiny deposited him in Potsdam. significant.
He was carried along willy-nilly command under his leadership was Street. He was formerly with Coburn & Middlebrook, Inc., R. H.
by the impetus and in the direc¬ so conscious of America's need of
tion of his predecessor's policies Russia that it overlooked Russia's Johnson & Co. and prior thereto

is
salvaging

tured this propaganda nonsense
still

in

charge

of

the

According

mony

was

speech came almost as a condi¬ and commitments. Necessarily he far more desperate need of Amer¬
Co.
tioned reflex. Somehow the circle had to shoulder responsibility for ica.




wtih

Schirmer,

Atherton &

will be outlined by officials of the
Public
and

Housing

the

Administration

National

Association

of

Housing Officials details of the fi¬

nancing of

the

new

Federal-aid

program.

Bond Club to Feature
Harness

Racing

Something new in harness rac¬
ing is promised for the Bond Club
Field Day at the Sleepy Hollow
Country Club on June 8, accord¬
ing to Jansen Noyes, Jr., Chair¬
of the Field Day Horse Rac¬
ing Committee.

man

The

Bond

Club

version

"Hambletonian" will be
a

special

located

on

of

run

the
over

raceway
conveniently
the Sleepy Hollow Club

grounds. There will be six entries
in the

names

of

major underwrit¬

ing firms and prominent bond
will be selected
races

with

have
two

required.

been

heats

as

men

drivers. Three

scheduled, each
and

a

run-off

if
f

[Volume 173

Number 5018

.

.

The Commercial and Financial Chronicle

.

The

Indications of Current

Indicated

steel

AND

STEEL

,

operations

ingots

and

-

or

month available.

month ended

on

-

"Week

Month

that date,

*

Ago

Crude- oil

and

June 10

103.2

102.7

103.7

101.3

2,063,000

2,053,006

2,073,000

1,931,000

AMERICAN

gallons

output

domestic

Gasoline

to

(bbls.)

average

(bbls.)

Kerosene output (bbls.)
oil, and distillate fuel
Residual

oil output (bbls.)
output (bbls.)
refineries, at bulk terminals, in transit and

fuel

at

Finished

Kerosene

unfinished

(bbls.)

gasoline

fuel

ASSOCIATION

oil

OF

21,102,000

20,847,000

19,876,000

5,591,000
18,704,000

26

2,534,000

2,650,000

2,698,000

8,353,000

8,061,000

7,201,000

-May 26

9,045,000

9,148,000

8,747,000

-.May 26

130,819,000

132,742,000

(bbls.)

AMERICAN

122,757,00.

19,832,000

18,725,000

15,635,000

May 26

I

at

at

137,474,000

May 26

51,344,000

48,826,000

43,859,000

16,075,000
40,607,000

May 26

oil

37,365,000

37,223,000

36,080,000

freight received from connections

(number

of

—May 26
(number

of

ENGINEERING

—

811,799

809,475

824,662

S.

U.

681,913

£82,489

702,581

675,862

ENGINEERING NEWS-

BANK

Private

—

,

Public

construction

State

and

of

Bituminous

(U.

S.

BUREAU

OF

Pennsylvania

(tons)

SALES

Electric

output

FAILURES

000

Central

Central

STREET

DUN

AGE

INC.

100,340,000

Mountain

20,299,028

14,580,381

Pacific

61,818,270

62,875,122

88,718,000

26,486,000

33,850,000

94,824,000
10,634,000

$372,503,130
27,351,774

$431,630,560
49,584,940
382,045,620

$445,978,656

345,151,356

7,653

7,649

8,375

$36,400

*$35,500

$29,100

11,400

11,200

9,100

18,400

17,800

14,300.

$66,200

*$64,500

$52,500

$1,049,600

$219,300

$818,400

May 5
May 5——_—
(000's omitted) April

23,127,000

23,134,000

23,113,000

19,903,000

20,953,000

20,069,000

11,699,000

10,436,000

8,764.000

spindle in place Apr.

504.6

554.2

31

9.757,000

"9,655,000

10,460,000

857,000

782,000

725,000

10,228,000
1,042,000

134,400

*139,300

139,700

Total

115,300

290

2

6,444,741

United

York

steel

285

293

282

6,652,699

132

PRICES

Electrolytic

(E.

&

M.

UNITED

STATES—DUN

INC.—Month

BUSINESS

5,631,934

191

163

Lea a

(St,

(New

York)

Louis)

(East

•'

•

4.131c

3.837c

$52.69

$52.69

$52.69

MERCE

NEW

St.

$43.00

$43.00

$43.00

$37.25

May 30

24.200c

24.200c

20.200c

27.250c

27.250c

24.425c

v

PRICES

139.000c

139.000c

142.000c

78.125c

M.

.•

A

—

%'4

x

J

>«•

■

CORPORATIONS

S.

OF

COTTON SPINNING

spindle hours
Active spindle hours

DEPARTMENT

STORE

RESERVE

5

97.35

97.44

97.62

5

111.07

111.25

111.62

115.6:

5

115.04

115.24

115.63

120.63

5

114.27

114.46

114.46

119.20

102.52

110.15

110.15

110.70

115.24

105.34

105.52

10G.04

108.34

5

107.80

107.80

108.16

110.70

111.07

111.07

111.44

116.80

114.66

-

*230

114.85

115.24

FACTORY EARNINGS AND
LABOR—Month

120.02

All

goods

5

2.67

2.67

5

3.11

3.10

3.08

2.87

2.90

2.89

2.87

2.62

Nondurable

5

2.94

2.93

2.93

2.69

3.16

2.66

2.31

All

AND

5

3.16

3.13

2.89

5

3.43

3.42

3.39

3.26

Durable

5

3.29

3.29

3.27

3.13

3.11

3.11

3.09

5

2.92

2.91

2.89

.

2.65

All

5

-

489.3

491.6

Month

514.1

396.9

209,194

206,161

202,342

244,937

257,930

248,326

102

106

105

638,760

680,105

646,878

AND

ODD-LOT

SPECIALISTS

Odd-lot sales by dealers
Number of orders

ON

EXCHANGE

1

152.5

153.2

153.9

120.6

Odd-lot

short

Customers'

Dollar

short

Number

other

~~~"I— May
.1-1—II— IIlMay

36.502

35.027

29,067

19

1,076,763

1,054,901

856.153

19

$43,960,115

$48,829,178

$38,528,573

29,697
'

918,137

$39,906,201

May lg

23,568

30,853

27,239

(DEPARTMENT

315

208

202

May 19

28,253

30,645

27,037

April:
639,313

755,022

559,311

:

503,079

617,399

455,193

—

135,415

136,794

103,850

coaches——

819

829

268

242.5

cars

May 19

814,654

869,592

983,165

11,750

7,758

749,387
7,066

May 19

802,904

861.834

742,321

$37,121,079

$31,433,463

$37,448,207

employer

industries

—

—

industries

——2

Government
Less

.

—

contributions

employee

for

insurance

*241.3

21.9.3

158.7

133.6

164.0

*162.1

136.4

72.6

72.0

57.7

44.1

*43.7
*19.8

18.1

27.3

*26.6

21.0

3.6

_

160.4

20.0

—

salary receipts,

and

Service

975,986

$35,102,075

COMMERCE)—Month

OF

income

Distributive

7,179

May 19

„

STATES

total—
disbursements
Commodity producing industries—

Wage

35,010

.

sales

-

May I9

■237.940

262,910

223,650

339,310

May I9

237,940

262,910

223~650

339~310

May 19

—

-

Other

*3.4

39.6

social
—

2.8

3.5

3.5

3.3

—

47.1

47.7

40.2

dividends—

19.5

*19.3

18.0

12.0

*12.1

24.2

income———,—

223.8

♦222.4

203.7

products

311

313

237

276

283

215

grain

245

254

224

221

222

174

437

440

389

359

351

236

labor

Proprietors'

451,050

410.080

328.800

277,160

,

.

Total

income—

transfer

———

rented

and

interest

Personal

Total

Mayl9,

sales

of shares

'

NEW

SERIES

—

U.

S.

DEPT.

income

income

and

payments—

nonagricultural

OF

RECEIVED

S.

1909-July,

182.4

182.4

183.4

156.8

March

All

farm

May 29

other

than

farm

and

and

Building

metal

Food

267.6

267.0

269.9

225.4

Feed

188.1

*187.3

188.6

161.4

Tobacco

275.4

274.7

279.1

238.7

Cotton

and

grain

—

INDEX

AGRICUL¬

1914 ==100—AS

allied

products

available.

.
:

170.9

171.1

171.6

147.9

183.6

136.2

Truck crop's

138.5

138.3

132.5

Oil-bearing

189.4

189.5

189.6

170.4

Livestock

199.8

Meat

—

Fruit

*183.3

138.5

227.3

227.4

227.5

May 29

358.9

358.9

358.9

i

May 29

141.6

*142.1

143.9

116.0

1,Includes 547,000 barrels of
foreign crude




hay
———

182.9

-May 29

May 29
1

£Not

OF

Crops

May 29

products

materials
and

171.9

May 29

materials

Lumber

Chemicals

foods—.

166.8

188.1

May 29

products

lighting

201.1

183.0

May 29

Keats

*198.1

May 29

Foods

199.8
184.0

May 29

Livestock

and

DEPT.

15:

——May 29

commodities

FARMERS

BY

NUMBER —U.

of

-May 29

Farm products

Textile

PRICES

TURE—August,

LABOR—

Unadjusted—

commodities

'Revised.

MANU¬

of

billions):

(in

personal

189

—May 19
J

March

of

Total

35,199

May 19

Grains

(

(AUTOMOBILE

S.

vehicles—_——,—

INCOME IN THE UNITED

Total

1926=100:

Metals

17,800

—

WHOLESALE PRICES

Fuel

$29,100

22,700

purchases by dealers—

Number

All

18,800

$35,500

FROM

SALES

ASSOC.)—Month
of

number

PERSONAL

.

:

V

$13,500
15,000

COMMISSIQN:

*

-

sales

sales

Other

Round-lot

f

U.

FACTURERS

motor

by dealers—

shares—Total

of

Short

\

IN

FACTORY

of

STOCK

.

sales

value

Round-lot sales

All

VEHICLE

Number

shares—Total sales

of

Customers'

$16,700

19,400

THE

sales-

Number

$17,000

SALES

SERIES—

trucks

„

sales

1.355

dollars):

———

motor

purchases by dealers (customers' sales)—
of orders—Customers' total sales
other

1.499

*1.460

23,400

Number

Customers'

*1.651

1.465

$36,400

r

of

value

Customers'

of

————

Number

May 19
—_

$1,434

•

1.652

&

NEW

(millions

ACCOUNT OF ODD-

(custcnusrs' purchases)—

Number of shares

.

INVENTORIES

COMMERCE)

March

passenger

'

Dollar

*$1,569

$1,574

.

——

—————

of

Y

40 70

38.50

Inventories:

PLANTS
June

N.

39.70

41.80

*40.00

333,486

INDEX—192G-36
—

EXCHANGE—SECURITIES

!

—

goods

93

May 26

PRICE

*41.00

41.70

209,350

May 26

rJ,

-

DEALERS

40.80

187,300

26

I_May

at

THE

——:—

39.60

Number

LOT

,

OF
of

Nondurable

FOR

61.01
5217

——*—

goods

Durable

May 26

TRANSACTIONS

$56.93

*69.01

*58.40

•

manufacturing

MANUFACTURERS'

Total

ETOCK

*$64.33

68.89

58.01

—

2.81

4

ASSOCIATION:

REPORTER

*238
*231

——22'-.——

goods

Nondurable

5

.June

-

——

DRUG

306

299

Hourly earnings—

MOTOR

PAINT

306
297

OF

.

—

manufacturing
goods —

.June

(tons)

AVERAGE=100

DEPT.

S.

———;

goods

Durable

5

(DEPT.

OIL,

*237

April:

manufacturing

Durable

.June

(tons)

*228

Earnings—

.June

orders

of

*223
'

HOURS—WEEKLY

ESTIMATE—U.

AVERAGE

244

$64.22

—

—

5

5

230

252

—

5

5

228
232

.June

Unfilled

April:

(average monthly), unadjusted
<
(average daily); unadjusted-.
(average daily), seasonally adjustedStocks, unadjusted
Stocks, seasonally adjusted

.June

!

of

Hours-

~

Percentage of activity.—

.FEDERAL

Y. —1935-193!)

N.

Sales

.

Nondurable

Group

(tons)

OF

473-0

FED¬

Sales

■

.June

PAPERBOARD

DISTRICT,

BANK

June

received,

COMMERCE):

SALES—SECOND

AVERAGE —100—Month

.June

Orders

per

RESERVE

AVERAGES:

INDEX

of

on

ERAL

June

COMMODITY

DE¬

S.

011

13.000c

June

Group

Production

place

active

11.800c

.Tune

NATIONAL

in

OF

12.000c

June

Aaa

MOODY'S

(DEPT.

17.500c

June

Railroad

U.

-

16.800c

June

-

DAILY

—

COMMERCE— Month

17.000c

June

—

YIELD

REPORTED

(OOO's omitted)

17.500c

f

Group

BOND

U.

March

17.000c

June

—

—

PUBLICLY

—

16.800c

*

—-

Industrials

DIVIDENDS

17.500c

AVERAGES:

;

Baa

MOODY'S

-——

16.800c

June

Railroad

——

Sales

'

•

,•

DAILY

-

-

—

17.000c

June
Aaa

Aa

-

Retail

May 30

.

March

——

.

May 30

at

of

SERIES—Month

May 30

at

Louis)

COM¬

20.425c

Way 30

—1—

at—-

24.200c

May 30

at—j.

OF

dollars):

Spinning spindles
Spinning spindles

.

k

MOODY'S BOND

of

DEPT.

$46.38

♦

—

York)

IN THE

BRADSTREET,

April—:

Active

1
•

4.131c

May 29

QUOTATIONS):

refinery at
refinery at—

(New

Lead

Zinc

4.131c

copper—

tin

(NEW)

&

57,723,455

388,255,201

168

lay 29
;

Domestic

Export
Straits

of

INVENTORIES,

PARTMENT

J.

City—

BUSINESS INCORPORATIONS

BY

May 29

(per gross ton)
Scrap steel (per gross ton)—

—

York

New

Wholesale

6,559,700

PRICES:

(per lb.)__

iron

METAL

States

City-

of

Total

.May 31

COMPOSITE

Finished

Pig

24,386,887

215,152
39 652,228
13 188,647
67 ,539,252

105,458,000

BRAD-

&

69

70,210,000

.June

INDUSTRIAL)

407,895

74,073,694

166,513,000

CASH

IRON

.

Central

Ma nuf acturing

AND

605,035

96

29,430,523

-

.

104,060,000

May 26

kwh.)_.

(COMMERCIAL

742,832

41

114,095,197

CITIES—Month

69,840,000

$205,798,000

INSTITUTE:

(in

98

30,672,841

&

SYS¬

AVERAGE=10()

ELECTRIC

$19 627,015

88,247,516

68,367,098

INC.—215

DUN

—

Atlantic
Atlantic

(millions
EDISON

$22,698,922

79,621,489

VALUATION

96,326,000

May 26

RESERVE

$22,374,199
32,519,020

PERMIT

SYSTEM—

thousands)

80,789,000

May 26

INDEX—FEDERAL

$104,035,000

OF

83,508,000

May 26

STORE

$101,414,000

58,073,503

RESERVE

(in

March

England

West

-

TEM— 1D35-3D

23,747,000

$129,172,000

GOVERNORS

of

Outside

lignite (tons)
anthracite (tons)

DEPARTMENT

216,492,000

11,174,000

201,519,000
172,226,000

31

$270,573,000

MINES):

Beehive coke

219,085,000

1,523,000

May 31

and

coal

12,332,000

$177,115,000

I.May

OUTPUT

13,143,000

export

(bbls.)

OF

17,000
14,614,000

11,725,000

233,623,000
stocks

9.000

13,096,000

April:

New

New
COAL

14,569,000

6,000

May 31

"

municipal

Federal

165,799,000

$373,745,000

I May

-

151.213,600

15,622,000

14,971,000

3

FEDERAL

THE

Month

East

-May 31

construction

181,672,000
166,041,000

17,774,000

:

(bbls.)

DEBITS—BOARD

South

construction

187,624,000

(bbls.)

780,92C

May 26

cars)

RECORD:
Total

gal¬

(bbls.)

(bbls.)

imports

Decrease—all

South

CONSTRUCTION

output

products imports
(bbls.)_
Indicated consumption domestic and

Middle

CIVIL

output

oil

BUILDING

cars)

42

Refined

BRADSTREET,

freight loaded

Revenue

of

(bbls.)

39,308,000

RAILROADS:

Revenue

(bbls.

output

7,421,000

In pipe Tines-

at

Crude

2,327,000

8,580,000

I

(bbls.)

5,118,000

6,236,000

May 26
,

at

oil, and distillate fuel

Residual

(bbls.)

6,154,000

6,405,000

"May

"

oil

and

6,163,250
116,430,000

6,177,100

May 26
May 26

daily

—

oil

gasoline

Benzol

May 26

stills

output

Gas,

Gas,

42

each)

Crude- runs

Btocks

of

Ago

205,404,000

crude

Natural

(bbls.

average

Year

Month

INSTITUTE—Month

production

each)

Domestic

daily

—

PETROLEUM

Previous

March:

Total

INSTITUTE:

condeancte

of that date:

are as

Month
of

PETROLEUM

of quotations,

cases

'

«%

either for the i

are

Latest

lons

AMERICAN

in

or,

Ago

June 10

tons)

shown in first column

Year

(net

castings

Dates

7

Prevloua

Week

or

(percent of capacity).

Equivalent to—
Steel

week

*

INSTITUTE:

production and other figures for tti£

cover

*

Latest
IRON

following statistical tabulations

latest week

Business Activity
AMERICAN

37

(2377)

runs.

and

eggs

193

333

168

379

230

343

products

340

258

425

308

280

285

243

217

205

165

428

products

Poultry and
'Revised,

204

265

386

-—

animals

Dairy

202

—

crops

~7

38

The Commercial and Financial Chronicle

(2378)

Securities

in

Now

•
Alaska Ferry & Terminal Co., Inc.
May 24 (letter of notification) 1,500 shares of 6% cumu¬
lative preferred stock (par $100) and 1,500 shares of
common stock (par $100).
Price—At par. Underwriter—

None.

Proceeds

other

corporate

—

For

initial

purposes.

payment

Address

P.

—

vessels

on

O.

Box

★

Alhambra

wov.
oar

1

ITEMS REVISED

Mines

Hollywood, Calif.

the symbol (•) preceding the name
tive borrower indicates that it is an

80,000 shares of common stock. Price—At
($1 per share). Underwriter—None. Proceeds—For

development of mine and for working capital.
Statement effective May
29 through lapse of time.

Amendment necessary.

American Bosch Corp., Springfield, Mass.
May 17 filed 98,000 shares of common stock (par $2).
Price—At the market (approximately $15 per share).
Underwriter—None. Proceeds—To Allen & Co. (owner
of 198,000 shares, or 15.1% of
outstanding shares).
American Natural Gas Co.

financing their property

sion programs.

1981.

Underwriter—To be

due

determined by com¬

petitive

bidding. Probable bidders: Halsey, Stuart &
Inc.; Kuhn, Loeb & Co. and Union Securities Corp.
(jointly); The First Boston Corp.; Harriman Ripley &
Co., Inc.
Proceeds—To repay bank loans and for new
construction.
Bids—Expected to be received up to 11
a.m. (EDT)
on June 26.
»
Co.

it

Arizona Edison Co.

;-■*>

April 24 filed 40,000 shares of
Price—To

common

stock

by

at 75 Public Square, Cleve¬
on June 26.

company

1, Ohio, up to noon (EDT)

it

Colonial Acceptance Corp., Chicago, III.
(letter of notification) 9,500 shares of class A
common stock (par$l).
Price—$4.37Y2 per share. Under¬
writer—Straus & Blosser,
Chicago, 111.
Proceeds—To
selling stockholder. Withdrawal—Offering temporarily
May 23

entirety - new

withdrawn due to market conditions.

...

Byron Jackson Co., Vernon, Calif.
-it
Commercial Credit Co. (6/13)
May 18 filed TOO,000 shares of. capital stock (par $10).
May 29 filed $40,000,000 notes due 1961. Price—To be
Price—To be supplied by amendment.
Underwriters—
supplied by amendment.
Underwriters—Kidder, Pea¬
Blyth & Co., Inc. and Elworthy & Co. (of Los angeles
body & Co. and The First Boston Corp., New York.
and San Francisco).
Proceeds—To construct and equip
Proceeds—To increase and maintain working capital and

it

a

plant in the Province of Ontario, Canada. Withdrawal

a

—Request filed May 28 to withdraw registration state¬

unsettled market conditions.

of

a

ultimately will

(par $5).

be

Consolidated Cigar Corp.,

(par $5)
b£ offered to common stockholders on basis of one

New York

March 9 filed 50,000 shares of cumulative preferred stock,

to

series of 1951 (no par).

Price—To be supplied by amend¬
Underwriter—Eastman, Dillon & Co., New York.
To prepay short-term bank loans and for
working capital.
Ottering date postponed.

Price—

share for each two shares held on June 12.

new

ment.

share.
Underwriter—Blyth & Co., Inc., and
Hooker & Fay, both of San Francisco, Calif. Proceeds—

$10

per

Proceeds

To<pay part of cost of plant expansion program.

—

Consolidated

Textile

Co., Inc., New York
shares of capital stock (par 10 cents),

supplied by amendment. Underwriters—
Staats Co., Los Angeles, Calif.; A. C. Allyn
Co., Inc., Chicago, 111.; and Refsnes, Ely, Beck & Co.,
Phoenix, Ariz. Proceeds—To repay bank loans and-for
new construction.
Offering—Expected today.

it
tarffornia Oregon Power Co. (6/12)
May 21-filed $6,000,000 of first mortgage bonds due June

offered in exchange for 200,000 shares of common stock
of

Probable bidders:

bidding,

Dec. 27 filed 220,000

Halsey, Stuart & Co. Inc.;

dated

&J3eaqe and Kidder, Peabody & Co. (jointly); White,
Weld &!* Co.; Blyth & Co., Inc., The First Boston Corp.
and

Salomon Bios. '& Hutzler
bank loans and for

repay

(jointly).

2^|'filed

Graham, Parsons & Co.,
New York, as to 875,000 shares and Gardiner, Watson &
Co., Toronto, Canada, as to 125,000 shares. Proceeds—
For qxpftoration and development of properties in Canada.

Vancouver,, B.C.,-

Copper Co., Ltd.,
//.'
April 20 fried 200,Q00'shares, of

terfrf®pfrTdT/common

New

Bates stock. Exchange offer to
Statement effective March 2.

of company
Stock

York

subsidiaries
on

the

and

through

wholly-owned

capital stock. ^Price—At

<^Per sha«* .^"writer-Harry M. Forst. ,Pro-

Car-Nar-Var Corp.,

—

..

issuable to holders of 26,403 shares of 6%
preferred stock
on the basis of IV2 shares for each
preferred share held.
The dividend rate will be not less than 4V2% nor more
Price—To be supplied by amendment. Under¬

than 5%.

writers—Harriman Ripley & Co., Inc.; Kidder, Peabody &
Co., and F. S. Moseley & Co. Proceeds—For general cor¬
porate purposes. Stockholders will vote June 19 on,ap¬

off*a

Central Louisiana Electric Co., Inc.
w
Jan. 25 filed 250,297 shares of common stocky (par $10)
and 2i;480 Shares of 4.5% preferred stock (par $100), of
which the preferred stock and 214,800 shares are being
offered in exchange for shares of common stock of Gulf
Public Service Co., Inc., on basis of 4/lOths of a share
of common aftd l/25th of a share of preferred for each
Gulf

Of

Ridge Mutual Fund, Inc., New York
—

•

Proceeds—For investment.

the

were

May 31
stock.

(letter of notification)

500

share

less

shares

of

common

Price—At

par
($100 per share). Underwriter—
.None, but will be offered through Mrs. Pearl Bridwell,
agent for the company. Proceeds—For organizational ex¬
penses and to prospect oil in Texas. Office—1560 V2 West
Magnolia St., Ft. Worth, Tex.

stock

5 filed 300,000 shares of convertible
preference
(par $100), Price—To be supplied by amendment.

Underwriter—Kidder, Peabody & Co., New York.
Proceeds—For additions and improvements to
plant and
equipment. Offering date postponed.

held

as

of

each

shares

17

Underwriter

than

429,600

—

common

per

writers—Sills,

share

shares

basis of

on

12.

on

Purpose—To acquire not

(80%)

March

one

■

of Gulf common stock.
'"■/•:/:"/ *
-

•

Fairman

&

Harris,

stock

(par

10

cents).

Underwriter—Greenfield
leased

exploration,

and/or

owned

additional

leases

by

Price—25

cents

per

com¬

share.

&

the

and/or

natural

gas

and

for

company;

leaseholds;

oil

interests

acquisition

and

for

of

working

Chevron

Petroleums, Ltd., Toronto, Canada

March 14 filed 900,000 shares of common stock (par
$1)
be offered "as a speculation."
Price — 50 cents per
share. Underwriter—Willis E. Burnside &
Co., Inc., New
to

Proceeds—To take up option and develop prop¬
Offering—Not expected before the middle of

June.
•

C.l.T. Financial Corp.,

June
to

4

be

filed

New York
150,000 shares of common

reserved

for

issuance

under the "restricted stock
of

the

upon,

stock

exercise

(no par)
of options

option plan for key employees

corporation and its subsidiaries."

be less than 95%

Price—Not to

of the fair market value of the

Underwriter—None.

Proceeds

—

stock*.'

For general corporate

purposes.

New York.

Boston

Philadelphia
'

Pittsburgh

San Francisco

Private Wires




to

all

offices

Chicago

Cleveland

• Cleveland Electric Illuminating Co. (6/26)
May 23 filed $25,000,000 of first mortgage bonds due
June

Cross-Tex

and

-

Petroleum

Corp.,

Dallas,

Tex.: /

panies represents l/24th of a unit of voting trust cer¬
of the Trust, which unit contains one share
of common stock in each of the 24 Cuban companies.

tificates

Price

—

$2

per

unit.

Underwriter

1, 1986. Underwriter—To be determined by com¬
petitive bidding. Probable bidders Halsey, Stuart & Co.
Inc.; Dillon, Read & Co. Inc.; Blyth & Co., Inc.; White,

—

None, but Jay H.

Schafrann, 20 Pine St., New York 5, N. Y., will act as
agent.
Proceeds—For drilling and explora¬
and working capital.
June 1, the 24 Cuban companies filed 1,500,000 shares
each of their respective common stocks to be issued to
the Cuban-Venezuelan Oil Voting Trust.
,t

servicing

tion

expenses

Cudahy Packing Co.
filed $10,000,000 sinking fund debentures due

March 23

April 1, 1966.
Price —To be supplied by amendment.
Underwriter—Halsey, Stuart & Co. Inc. Proceeds—To
reduce bank loans by $9,000,000, and the balance added
to working capital.
Offering—Indefinitely deferred.

Culver Corp., Chicago, III.
e
23 filed 127,364 shares of common stock (par $5).
be equivalent to approximately 95% of the
asset value of all shares of stock outstanding imme¬

Price—To
net

public offering plus a commission
share to security dealers. Underwriters—
Dealers may be underwriters. Proceeds — For invest¬
ments in railroad and kindred securities. .Offering—Ex¬
diately prior to the

of 50 cents per

act date not

yet determined.

•

capital.

erties.

Chicago,

^t /. Cuban-Venezuelan Oil Voting Trust
March 29 filed 1,500,000 units of voting trust certificates
representing one share of one and two cent par com¬
mon stock in 24 companies.
Each share of the 24 com¬

Oct.

Co., Inc.,. New York. Pro¬
drilling and development on

leasehold

presently

York.

Inc.,

May 23 (letter of notification)250,000 shares of common
stock. Price—$1 per share.
Underwriter — None. /Pro¬
ceeds—For acquisition and development of oil proper¬
ties. Office—1121 Texas Bank Bldg., Dallas 2, Tex.

it

Century Natural Gas & Oil Corp.,
Waynesbury, Pa.
May 31 (letter of notification) 1,175,000 shares of
mon

•

Brazil, Ind.

Gearhart, Kinnard & Otis, Inc., New York. Proceeds—
For working capital
and general corporate purposes.

stockholders

held, with rights expiring

None.

shares

Statement effective

This

13.

shares, 20,348

common

May 1, 1951 at $26.50

for

March

record

June 15 and will not be extended.

on

remaining 35,497

ceeds—For

Burlington Mills Corp.
March

expire

offered to Central Louisiana

of record

June 4.

Bridson Oil Co., Ft. Worth, Tex.

share

common

offer will

•

7*

.

it

proving issue.
June 5 filed 5,000,000 shares of common stock
(par $1).
Price—At market. Underwriter
Research Distributing

building and for other general corporate
J
:

new

price

last

5 (letter of notification) 150,000 shares of com(voting) stock (par $1). Price—$2 per share. Under¬

•

purpose!/

the

:

Temporarily deferred.

ment

of

95%

March
^mon

'■

Co., New York. Proceeds—xjp-®®e"s
L?r exP'oration all" development work.
Carrier Corp. (6/12)
Machlin, Vice-President of the company.
May^24ffiled 216,575 shares of common stock (par $10)
Ashland Oil & Refining Co., Ashland, Ky.
to be offered common stockholders of record June 12,
May 21 (letter of notification) 1,000 shares of common
1951, at irate Of one new share for each three shares held;
stock (par $1).
Price—At the market (approximately
rights to expire on June 26. Price—To be supplied by
$35 per share). Underwriter — None. Proceeds
For
amendment. Underwriter—Harriman Ripley & Co., Inc.,
working capital. Office—1409 Winchester Ave., Ashland,
and Hemphill, Noyes, Graham, Parsons & Co.,'New York.
Ky•
/■>/.'•
Proceeds—To help finance the construction and equip¬

it
Bigelow-Sanford Carpet Co., Inc. (6/21)
May 16 filed 100,000 shares of cumulative preferred stock,
series of 1951 (par $100), of which 39,6041/2 shares are

shares to

and wholly-owned

,

Underwriter—Gruntal &

.

subsidiaries

180,000

and

company

options at

Frederick

•

%

-

Exchange;

Exchange.

Continental

.

/"'Canada

shares of

10

executive employees of the

Noyes,

Canam

owns

now

through elections to purchase at 90% of the last pricq on
the

Canadian). Price—To be supplied by amendment. Un-

Armstrong Rubber Co., West Haven, Conn.
May 21 (letter of notification) 1,000 shares of 4%% cu¬
mulative convertible preferred stock (par $50) and
1,000

for

employees

(6/13)
1,000,000 shares of capital stock (par $1—

defwritler—Hemphill,

(Consolidated

May 24 filed 230,000 shares of common stock (par $20)
to be purchased in open market and offered pursuant to
employees stock purchase plans, viz:. 50,000 shares to

Calyan Consolidated Oil & Gas Co., Ltd.

Ma#

Co..

Continental Can Co., Inc.

it

Proceeds—To

received up to 8 a.m. (PDST) on June 12 at The Ameri¬
ca^ Trust Co., 464 California St., San Francisco 20, Calif.

it

Manufacturing

expire June 29.

construction. Bids—To be

new

Bates

51,400 shares, or approximately 13% of the 391,500 out¬
standing Bates shares) on basis of 11 shares of Consoli¬

Smith, Barney & Co. and Carl M. Loeb, Rhoades & Co.
(jointly); Shields & Co.; Merrill Lynch, Pierce, Fenner

&

Corp., New York.

used for

May 23 filed 118,066 shares of common stock

William R.

Blue

be

$35,000,000 1%% note which matures

Aug. 1, 1951.

(6/12)

Calaveras Cement Co.

of the proceeds

portion

the payment

1, 1981.- Underwriter—To be determined by competitive

expan¬

Appalachian Electric Power Co. (6/26)
May 23 filed $17,000,000 of first mortgage bonds,

Co.; The First Boston Corp.; Glore, Forgan &
W. C. Langley & Co. (jointly); Equitable Secufities Corp. Proceeds—For new construction.
Bids—
land

;

ment because of

(6/15)

May 24 filed 368,428 shares of common stock (no par),
of which company plans to offer 334,935 shares to com¬
mon stockholders of record June
12, 1951, at rate of one
new share for each, ten
shares held, with an oversub¬
scription privilege; warrants to be mailed on June 15;
and rights to expire on June 29. Price—To be
supplied
by amendment. Underwriter—None. Proceeds—To assist

June 1,

~

&

To be. received

-

listing.

further

ISSUE

"

As heretofore,
of the prospec¬

beginning of the respective listings.

Corp.,

„

chhnQes have been made during the past week, this
is indicated by the symbol (it) appearing at the

filed

system subsidiaries in

fyeek 'in accordance with later information made
br other reliable sources. Where

compilation-is brought up-to-date

available by the SEC

•

Gold

Weld

ADDITIONS

PREVIOUS

Co/and

data isri this

each

1178,

INDICATES
SINCE

EAC1J WEEK

The

and

Juneau, Alaska.

•

Registration

Thursday, June 7, 1951

...

it

Ekco Products Co.,

'

,

East Eagle

Mining Co., Seattle, Wash.
May 29 (letter of notification) 30,000 shares of common
stock. Price—33 V3 cents per share. Underwriter—None.
Proceeds—For working capital. Office—5515 15th Ave.,
N. E., Seattle 5, Wash.

Chicago, III.

May 9 filed 35,000 shares of common stock (par $2.50)
to be issued only upon exercise up to and including Oct.

22, 1955, of options to purchase such shares granted on
Oct. 23, 1950, to certain employees
(including certain
officers and directors) of the company.
share.

Underwriter—None.

porate

purposes.

Price—$13.7$

Proceeds—For general

per
cor¬

Statement effective May 29*,

Elgin Sweeper Co., Elgin, III.
April 18 (letter of notification) 38,864 shares of common
stock (no par, being offered to common stockholders of
record April 28 on basis of one share Jor each two
shares held, with an oversubscription privilege; rights
to expire about June Jl.
Price—$5 per share. Under¬
writer—None.
Proceeds—For working capital.
Office
5 Oak

Street, Elgin, 111.

.

Volume 173

Number 5018

..

.

The Commercial and Financial Chronicle

i

„

(2379)

Resistor Corp., Erie, Pa. (6/13)
May 21 filed 84,000 shares of common stock (par $5), of
which 19.593 shares are for the account of the
company

record

selling stockholders. Price—To be supplied
by amendment. Underwriter—Fulton, Reid & Co., Cleve¬
land, O. Proceeds—For working capital.
•

June

Falls

May 9

Mutual Telephone Co.,

(letter'of notification)

Madison, Minn.

2,600 shares of

stock and 1,200 shares of preferred stock.
share for common and $50 for preferred.

None.

Proceeds

To

—

Office—Cerro Gordo,

rebuild

rural

Omaha Ry. noon

per

Gas Service Co., Kansas City, Mo. (6/19)
May 24 filed $5,400,000 of first mortgage bonds due 1971.
Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; Blyth & Co.,
Inc., and Kidder, Peabody & Co. (jointly); Lehman
Brothers; The First Boston Corp.; Merrill Lynch, Pierce,
Fenner & Beane and White, Weld & Co.
(jointly); Union
Securities
Corp. and Harriman Ripley & Co:-,
Inc.
(jointly). Proceeds—To repay bank loans and for new
construction. Bids—To be received up to 11 a.m.
(EDT)
on June 19 at Room
1600, 70 Pine St., New York.

England Telephone & Telegraph Co._Common

Public Service Co.

of

privately

Corp

11

•

General

Corp
Maryland Ry.
a.m.
(CDT)

Oswego Falls

28

June
General Public

18,

Utilities

Minn.
—

Common

1951

Sutherland

Distilleries Co.

Preferred

(CDT)—Bonds
...Preference

11

(EDT)-.—Debentures

a.m.

Paper Co

Preferred

Texas Electric Service Co.

159,142 shares of class B common stock
Price—To be filed by amendment.
Under¬

June

11:30

writer—

Glore, Forgan & Co., New York. Proceeds —
working capital and general corporate purposes.
Offering—Expected to be withdrawn and new filing

Gas Service Co. 11

made, covering

Peoples Gas Light & Coke 11

30,000

shares-of

preferred

stock

(par

June

Goebel (Adolf), Inc.
May 14 (letter of notification) 10,000 shares of common
stock (par $1).
Price—At the market (about $5.25 per
share).
Underwriter — The First Guardian Securities
Corp., New York.
Proceeds—To Anthony De Angel is.

President, the selling stockholder. Purchased
underwriters, with no reoffering expected.

by

Ltd.,

the

June 24,
Public Finance

Montreal, Canada

June

11

a.m.

Cleveland
noon

Pfizer

of

1951

entitled

of three

shares for

the

pursuant

each

preferred
to

writers—To be named later.

four

shares

stockholders

amended

plan

will

United Gas Corp.

Business

—

and

for

Organized to

electric furnace steel plant and
•

H>

other

corporate pur¬
construct and operate

rolling mill.

v.

,

G. L.

Building Fund, Inc., N. Y. City ■'*
May 31 (letter of notification) 5,000 shares of common
stock.

Price—At

($10 per share), Underwriter—
None. Proceeds—To purchase and
acquire real property.
par

Office—2305 Seventh Ave., New York
City.
Hilton

Hotels

Corp.,

Chicago,

dorf-Astoria
June

Power

stock
27.

Corp.

on

a

in

exchange

for

their

share-for-share basis;

Dealer-Manager—Carl

M.

holdings

of

offer expires

on

Loeb,

Rhoades

&

Co., New York.

.Preferred

(par $1),

of

—

(EDT)

1951

which 20,000

Mines, Inc., Seattle, Wash.
(letter of notification) 21,000 shares of capital

stock to be offered in units of three

—$11 per unit.
complete tunnel.
1, Wash.

Underwriter

—

shares each.

None.

Proceeds

Price
—

To

Office—4109 Arcade Building, Seattle

B. Hilliard

& Son,
erty additions and

(6/18-19)

stock

•

construction.

Intra State Telephone Co.,

Office—Spo¬

Galesburg, III.

May 24 (letter of notification) 2,800 shares of
stock

to

be

offered for

shares
per

held;
share.

Louisville, Ky„ Proceeds—For
new

prop¬

construction.

which

9,276 shares will be offered for the account
Raymond B. Kropp (Executive Vice-President and
Treasurer). Price—To be supplied by amendment. Un¬
of

Gearhart, Kinnard & Otis, Inc., and L. D.
York; and Morgan & Co.,
Angeles, Calif; Proceeds—To be added to working
capital.
—

& Co., both of New

Los

•

Lead
1

King Mines, Inc., Las Vegas, Nev.
(letter of notification) 1,000,000 shares of capital
par (10 cents per share). Underwriter

Price—At

None. Proceeds

—

To develop reserves. Office

—

216

St., Las Vegas, Nev.

offered

to

"a

selected

group

Manning, Mexwell & Moore,

and

Proceeds—To redeem

York.

stock

(par
of officers and

$5)
em¬

Inc.

for

$281,000 of preferred

working capital.

Mayfair Markets, Los Angeles, Calif.
May 24 (letter of notification) 5,000 shares of preferred
stock

par)
and

(par $50) and 5,000 shares of common stock (no
to be offered in units of one share of preferred
share of common stock.
Price—$60 per unit.

one

Underwriter

—

Mays

None.

Proceeds —For

working

capital.

Bandini Boulevard, Los Angeles 23, Calif.

Office—4383

(J. W.), Inc., Brooklyn, N. Y.

(6/12)

April 27 filed 50,000 shares of common stock (par $1).
Price—To be supplied by amendment.
UnderwriterCarl

M.

New

York.

the

May 29 filed 6,000 shares of $5.50 cumulative preferred
stock (no par). Price—$100 per share.
Underwriters—
Paine, Webber, Jackson & Curtis, Boston, Mass.; Stone
&
Webster Securities Corp., New York;
and Pacific
Northwest Co., Seattle, Wash.
Proceeds—For repay¬
new

seven

if
Kropp Forge Co., Cicero, 111. (6/20)
May 25 filed 123,000 shares of common stock (par 33V30),

if

Idaho Power Co.

May 14 filed 35,000 shares of 4% preferred stock (par
$100).
Price—At par.
Underwriter—Wegener & Daly
Corp., Boise, Idaho. Proceeds—For new construction.
Interstate Telephone Co.

Price—$14.50

•

kane, Wash.

shares are to be offered by
Price—To be supplied by amend-




Higginson Corp., New York.

Idaho Consolidated

May 23

each

18.

May 16 filed 150,000 shares of common stock
(par
$12.50) being offered to stockholders of record who have
not waived their preemptive rights at rate of 15/44ths
of a share held, as of record about June 5, 1951; rights
to expire on June 15. Price—$15.50 per share.
Under¬
writers—Hornblower & Weeks and Clark, Dodge & Co.,

Bonds

Proceeds—For General corporate purposes.
•

for

June

on

•

Bonds

Lee

share

one

Underwriters—Blyth & Co., Inc., New York, and J. J.

if

1951

Co

ment of bank loans and

•
Hudson Pulp & Paper Corp. (6/12-13)
May 23 filed 220,000 shares of class A common
selling stockholders.

Underwriter

of

expire

New
ment.

•

III.

March 30 filed 153,252 shares of common stock
(par $5)
now offered to holders
of common stock of Hotel Wal¬
such

Bonds

1951

Corp., Owensboro, Ky.

—Equitable Securities Corp., Nashville, Tenn. Proceeds
—To be applied to cost of
acquisition, construction and
poses.

1951

a.m.

rate

Loyalta Oils, Ltd., Edmonton, Canada
April 16 filed 750,000 shares of capital stock (par $1),
Price—50 cents per share. Underwriter—James T. Chiles
of Denver, Colo., who will conduct offering to public
by
means of a mail campaign directed from
Edmonton, Can¬
ada.
Proceeds—To carry on drilling program.
With¬
drawal—Registration statement withdrawn May 24.

Common

——

September 11,

Proceeds—For construction

of common stock (par 25 cents) to be
offered in units of $1,000 of debentures and 80 shares of
stock. Price—To be supplied by amendment. Underwriter

facilities

at

Proceeds—For working capital.

$4,000,000 of 3Vz% debentures due 1961 and

of

1951

ployees of the company and its subsidiaries. Price—$33
per share
(subject to change).
Underwriter — None.

shares

installation

Kentucky Utilities Co.
May 14 filed 260,071 shares of common stock (par $10)
being offered to common stockholders of record May 23,

if

Co

11:30

Proceeds—To repay

construction.

City, Utah.

to be

29, 1951

July 24,

(par $8.75).

Underwriter—

•
Link-Belt Co., Chicago, III.
May 31 filed 20,826 shares of common stock

Bonds

Preferred

Mississippi Power Co

of

new

stock

amendment.

Underwriter—W. D. Nebecker & Co., Salt Lake
Utah. Proceeds — To explore and develop mine
properties. Office—310 Pacific Nat'l Life Bldg., Salt Lake

North 5th

Common

July 17,

(6/12)

common

Corp., New York.

for

and

by

aban¬

City,

—

-Bonds

1951

Corp.——

Public Service

Alabama

Green River Steel

320,000

Gas

supplied

temporarily

•
Kelly (Jack), Inc.; Ft. Worth, Tex.
May 23 (letter of notification) 100,000 shares of capital
stock. Price—At par ($1 per share). Underwriter—None.
Proceeds—To acquire leases in Eastland County and to
drill oil and gas test well. Office—360-A
Majestic Build¬
ing, Fort Worth, Texas.

stock.

Utilities, Inc.—

July 16,
Iowa

expenditures.
June 5 filed

1951

J——
Electric Illuminating Co.

June
United

recapi¬
talization
(with an oversubscription privilege).
Ex¬
pected to be offered June 19, with rights to expire on
July 3. Price—To be supplied by amendment. Under¬

•

Debentures

Power

which

to

common

become

Preferred

(EDT)-

June 27,

preferred stockholders of record June

basis

on

Inc

(EDT)
(Chas. & Co.), Inc.—

United

Corp. (6/19)
May 29 filed 104,094 shares of common stock*-(par-$10)
15,

loan

Sherman

1951

26,

be

derwriters

1951

Appalachian Electric Power Co.

working capital. Offering—Date not set.

to

bank

of

Service, Inc..

—

offered

Price—To

The First Boston

June

•

be

Bonds

Common

Co.—

Gas

Bigolow-Sanford Carpet Co.,

Goldbfatt Bros., Inc., Chicago, III.
May 25 (letter of notification) $175,000 estimated amount
of contributions to
Savings and Profit Sharing Pension
Plan from June 1, 1951 to Jan.
31, 1952; eligible em¬
ployees to contribute 5% of compensation but not over
$250 per year. Proceeds
For investment under trust
agreement. Office—333 So. State St.,
Chicago, 111.

to

(CDT)

Common

Proceeds—For drilling expenses, repayment

Green Mountain

a.m.

26, 1951

June 21,

750,000 shares of common stock.
Price—
($1 per share).
Underwriter—George F. Breen,

of advances and

Debentures

MidSouth

April 9 filed
New York.

Bonds
Common

Kropp Forge Co

>

Mines

(EDT)

—

$100), with warrants attached.

Golconda

a.m.

reported,

May 22 filed 256,842 shares of

rights to

Green Mountain Power Corp
Mission Corp.

•

Bonds

a.m

19, 1951

For

At par

Common

;
,

National Tea Co._
North Penn Gas Co.

but

share.

Corp

Missouri Power & Light Co. 11 a.m.

At

placed,

Kentucky-Utah Mining Co.
May 17 (letter of notification) 596,061 shares of assess¬
able capital stock (par 10 cents), of which
96,091 shares
are reserved for issuance
upon exercise of options grant¬
ed May 8, 1951, to two individuals. Price—IIV2 cents
per

15, 1951

Interstate Telephone Co..,

Price

Preferred

filed

$1).

par

1

(EDT)_ETquip. Trust Ctfs.

American Natural Gas Co.—

Proceeds—For investment.

Glenmore
Dec.

Equip. Trust Ctfs.

14, 1951

Corp._

June

Underwriter—Craig-Hallum, Inc., Minneapolis,

Minn.

Preferred

Texas & Pacific Ry. noon

purposes.

Securities, Inc., Minneapolis,

Co.—..-—Preference

Stares

June

June

June 4 filed 50,000 shares of capital stock.
market.

Common

Service

emption

Kansas Power & Light Co.

13, 1951

r_

Southeastern Public

/

returned

was

doned.

Erie Resistor

14; with rights to expire on
July 9. Price—To be supplied by amendment.
Under¬
writer—None.
Proceeds—To repay bank loans and for
general corporate

Hampshire

Calvan Consolidated Oil & Gas
Co., Ltd._.Common
Commercial Credit Co
Notes

•>'

-

(jointly), was received March
unopened. Statement effective
Amendment—On May 8 SEC granted an ex¬
from competitive bidding.
Preferred may be

Common

common

(6/18)

Salomon Bros. & Hutzler

27, which

March 14.
Bonds

June

effective

Corp., the parent, will be used for new construction.
Bids—Only one bid, from Union Securities Corp. and

Victoreen Instrument Co

"

Corp.

Statement

Jersey Central Power & Light Co.
Feb. 21 filed 40,000 shares of
cumulative preferred stock
(par $100). Proceeds—From sale of preferred, together
with proceeds to be received from
the sale of 350,000
additional common shares to General Public Utilities

Common

May 16 filed 504,657 shares of common stock (par .$5) to
be offered to stockholders at rate of one share for each
as

of New

Common

indefinitely.

14.

noon
(EDT)
Squibb (E. R.) & Sons

Under¬
Co., New York. Proceeds—To four

Utilities

Common

Western

*

shares held

(CDT)____Equip. & Trust Ctfs.

Common

United

selling stockholders.
Public

Common

Public Service Co. of Colorado

•

General

(PDST) .Bonds

a.m.

Common

New

if

writer—E. L. Aaron &

ing—Postponed
March

Common

Mays (J. W.), Inc

system.

Madison, Minn.

General Appliance Corp.
(6/11)
May 25 (letter of notification) 33,000 shares of
stock (par 10 cents). Price—63 cents per share.

received by company on March
27, from Halsey,
Stuart & Co.
Inc., which was returned unopened. Offer¬

Hudson Pulp & Paper Corp..,
Kansas Poker & Light Co

Underwriter—

telephone

was

Chicago, St. Paul, Minneapolis &

common

Price—$35

Bonds
Common

Cement Co

California Oregon Power Co. 8
Carrier Corp.

Cherry Bldg., Seattle 4, Wash.

Farmers

...Common

June 12, 1951

,

Calaveras

'

Jersey Central Power & Light Co.
Feb. 21 filed $1,500,000 first
mortgage bonds due In 1981.
Proceeds—For expansion program. Bids—Only one bid

11, 1951

General Appliance Corp
Montreal (City of),
Quebec, Canada
Sangamo Electric Co

Creek Mining Co.,
Seattle, Wash.
May 24 (letter of notification) 400,000 shares of common
stock.
Price—25 cents per share.
Underwriter—Noble,
Tulk & Co., Los Angeles, Calif. Proceeds — To
Philip
Seymour Heath, the selling stockholder. Office—418 Sec¬
ond &

May 21. Price—At par ($100 per share).. Under-*
writer—None. Proceeds—For operating expenses. Of¬
fice—100 No. Cherry
Street, Galesburg, 111.

KW ISSUE CALENDAR

and 64,407 for

15

39

Erie

,

Loeb,

Rhoades

&

Proceeds—To

Co.
Joe

and Lehman Brothers,
Weinstein, President of

company,

the selling stockholder.

McGraw

(F.

Hartford, Conn.
4,650 shares of commonstock
(par $2).
Price—$9 per share.
Underwriter—
Granbery, Marache & Co., New York. Proceeds—For
working capital.
May 17

H.)

& Co.,

(letter of notification)

Mercantile Acceptance Corp. of California
May 18 (letter of notification) 4,881 shares of first pre¬
ferred stock.
Price—At par ($20 per share).
Under-

common

subscription by stockholders of

Continued

on

page

40

"40

The Commercial and Financial Chronicle

(2380)

Continued

from

page

data

The

in

this

compilation is brought up-to-date
each week in accordance with later information made
available by the SEC or other reliable sources. Where

Proceeds—For gen¬

eral corporate purposes.

MidSouth

Gas

Co., Little Rock, Ark. (6/20)
May 29 filed 100,000 shares of common stock (par $1).
Price—To be supplied by amendment.
Underwriters—
Equitable Securities Corp., Nashville, Tenn., and T. J

changes have been made during the past week, this
is indicated by the symbol (+) appearing at the

Raney & Sons and Womeldorff & Lindsey, Little Rock,

tive

Ark.

Proceeds—To repay

beginning of the respective listuigs. As heretofore,
preceding the name of the prospec¬
borrower indicates that it is an entirely new

the symbol (• )

bank loans and for property

Appliance Corp., Hawthorne, Calif.
$1,250,000 of convertible sinking fund
debentures, 6% series, due July 1, 1963. Price—At par.
Underwriters—Paul H. Davis & Co., Chicago, 111., and
filed

5

Lester

&

Co.,

Los

bank loans and for

Angeles,

Calif. Proceeds—To
working capital.

retire

..

Underwriter—None.

Proceeds—To

of

operations.

development

ferson

and

out

carry

program

Jef¬

W.

Office—1217

Street, Phoenix, Ariz.

(6/14)

Oswego Falls Corp., .Fulton, N. Y.

May 25 filed 96,000 shares of 5% convertible second pre¬
ferred stock (par $30) to be offered to common stock¬

11, 1951, at rate of one preferred
share for each five common shares held; rights to expire
holders of record June

Mission Corp.

(6/19)
May 24 filed $12,000,000 of 15-year sinking fund deben¬
tures due June 1, 1968. Price—To be supplied by amend¬
ment.
Underwriter—Eastman, Dillon & Co., New York.
Proceeds—To repay bank loans incurred through pur¬
chase, in open market, of Tide Water Associated Oil
Co. stock.
'

Missouri Power & Light Co. (6/18)
May 17 filed $4,000,000 of first mortgage bonds due 1981.
Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Kidder,
Peabody & Co. Inc.;- Equitable Securities Corp. and Har¬
ris, Hall & Co. (Inc.) (jointly); Otis & Co., Inc.; Salomon
Bros. & Hutzler; The First Boston Corp.; Carl M. Loeb,
Rhoades & Co. and American Securities Corp. (jointly);
White, Weld & Co. and Shields & Co. (jointly). Proceeds

*

June 26.

up

to 11

(CDT)

a.m.

on

Montana-Dakota
1

filed

of

stockholder.

mortgage serial bonds
June 1, 1952 to 1971, inclusive.
Underwriters—To
be determined by competitive bidding.
Probable bid¬
ders: Halsey, Stuart & Co., Inc.; Blyth &
Co., Inc., Mer¬
rill Lynch, Pierce, Finner & Beane and
White, Weld &

(jointly);

Salomon Bros. & Hutzler and Dick &
(jointly). Proceeds—To finance acquisition

Merle-Smith
of

property at Billings, Mont.

•

National

Tea

Co., Chicago, III.
(6/18-23)
120,000 shares of cumulative preference
stock, convertible series (par $100). Price—To be sup¬
plied by amendment.
Underwriter—Hemphill, Noyes,

May

29

filed

Graham, Parsons & Co., New York and Chicago. Pro¬
retire bank loans and outstanding
$50 par

ceeds—To

value preferred stock.

i*
New England Gas & Electric Association
May 16 filed 197,394 common shares of (par $8)

bene¬
being offered to common stockholders of
record May 31
on
basis of one share for each eight
shares then held; rights will expire on June 20. Price—
$13 per share. Underwriter
The First Boston Corp.
ficial

interest

—

to act

dealer-manager.

as

notes and

Proceeds—To pay short-term

acquire stock of subsidiaries.

24 filed

England Telephone & Telegraph Co. (6/12)
May 23 filed 777,850 shares of capital stock to be offered
to stockholders of record June 8 in ratio of one share
for each two shares held;
rights to expire July 10 will
be issued on June 12.
Price—At par ($100

Underwriter—None.

Proceeds

To

—

per share).
outstanding

reduce

temporary borrowings.

North American Acceptance Corp.

k.|-,

the

selling

($1

Las Vegas, Nev.

Milling Co.,

per

In Mexico and for

general corporate purposes.

26

filed

March 20 (letter of
notification) 15,000 shares of 60-cent
cumulative convertible preferred stock
(par $5). Price

•—$10 per share. Underwriter—Michael Investment Co.,
Inc., Providence, R. I. Proceeds—For
working capital.
Offering—Postponed temporarily.
tAt
North Penn Gas Co. (6/18)
due

1971.

Under¬

writer—To be determined by
competitive bidding. ProbHalsey, Stuart & Co. Inc.; A. C. Allyn &

afale bidders:

Co., Inc.; Drexel & Co.; The First Boston Corp.; Lehman
Brothers; Kidder, Peabod.y & Co.; Equitable Securities
Corp.; Union Securities Corp. Proceeds—To repay bank
loans.

Bids

(EDT)

on

Expected
June 18.
—

to

be

received

up

to

11

a.m.

Northern

Illinois Corp.,
DeKalb, III.
May 7 (letter of notification) 3,080 shares of $1.50 cumu¬
lative preferred stock
(no par) being offered to certain
stockholders of record April 20,
1951, subject to allot¬
ment.
The subscription
privilege will expire on June

1951.

Price—$23.50
Proceeds—For working

per

share.

capital

Underwriter—None.
to be used to make

loans.
Ohio

March

30

Edison

(par $25).

Offering—Indefinitely

Peoples Gas Light & Coke Co. (6/19)
May 22 filed $25,000,000 of first and refunding mortgage
bonds, series H, due June 1, 1981. Underwriter—To be
determined by competitive bidding.* Probable bidders:
Halsey, Stuart & Co. Inc.; Glore, Forgan & Co. and
White, Weld & Co. (jointly); The First Boston Corp.
Proceeds—To repay bank loans, for new construction and
for additional investment (estimated
at $7,700,000) in
equity securities of Texas Illinois Natural Gas Pipeline
Co., a subsidiary. Bids—To be received up to 11 a.m.
(CDT) on June 19 at Room 1625, 122 So. Michigan
Avenue, Chicago, 111.

Pepsi-Cola Bottling Co. of Wash., D. C., Inc.
May 11 (letter of notification) 5,000 shares "of common
stock (par 10 cents). Price—50 cents per share. Under¬
writer—None, but Ferris & Co., Washington, D. C., will
broker for over-the-counter sales.

as

Bernard B.
•

June

6

second

(Chas.)

filed

one

& Co.,

150,000

shares

(6/26-27)
convertible

inc.
of

cumulative

preferred stock (par $100) and 444,015 shares of

common

fered

Proceeds—To

Schwartzman, the selling stockholder.

Pfizer

to

stock

present
share

new

(par $1), the latter issue to be of¬
stockholders in the ratio of

common

for

each

10

shares

held.

Price—To

be

supplied

by amendment. Underwriter—F. Eberstadt &
Co., Inc., New York. Proceeds—About $7,000,000 to com¬
plete expansion program already underway and the bal¬
of about $20,000,000 will be available for additional
working capital and for expansion of production facili¬
ties. Offering—Expected during the latter part of June.

ance

•

Potlatch Yards, Inc.,
Spokane, Wash.
May 22 (letter of notification) 20,000 shares of common
stock (par $5).
Price — $15 per share.1 Underwriter —
None.
Proceeds—For general corporate purposes.
Of¬
fice—909

W. Sprague

Avenue, Spokane, Wash.

(Jointly); The First Boston Corp.
program.

Proceeds

—

Fbr

Bids—Indefinitely postponed.

con¬

Were

to have been submitted up to 11:30

a.m. (EDT) on
May 2.
Olympic Radio & Television, Inc.
April 16 (letter of notification) 8,800 shares of com¬
mon stock (par $1).
Price—At the market. Underwriter
—None, but Van Alstyne, Noel & Co., New York, will
act as broker. Proceeds—To two
selling stockholders.

;•
Oi-o Flame Mining Co., Phoenix, Ariz.
May 24 (letter of notification) 328,500 shares

of

Stock

and

to

be

issued

to

present

shares to be publicly offered.




stockholders

Price—75 cents

.

common

per

stock

B

each

for

class

exchange for the

A

cumulative

_

debenture holders.

$100

each).

Price—At par

(in denominations of

Underwriter—None.

tional

operating capital.
Philadelphia 44, Pa.

Proceeds—For/addi¬

Office—18

West Chelten

Ave.,

•
Public Service Co. of Colorado (6/12)
May 24 filed 274,027 shares of common stock (par $10),
of

which

249,116

stockholders

of

shares

record

are

June

be

to
12

offered

on

to

common

one-for-ten

a

basis,

with rights to expire June
28; and 24,911 shares to
employees of company. Price—To be supplied by amend¬
ment. Underwriters—The First Boston
Corp., New York;
and Boettcher & Co. and

both

of

Denver, Colo.

Bosworth, Sullivan & Co., Inc.,

Proceeds—To

class

A

share

11

be

applied toward

Hampshire

(6/12)

filed

$3,000,000 first mortgage bonds, series F,
1, 1981. Underwriter
To be determined by
competitive bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; Otis & Co.; The First Boston
Corp. and Coffin
& Burr, Inc.
(jointly); Kidder, Peabody & Co. and Blyth
due June

&

M.

filed

finance

Proceeds—To

in

part

a

program

—

Bids

program.

Elm

.June 12.

—

To

be

received

St., Manchester, N'. H.,

at

up

company's office,
(EDT) on

to noon

Statement effective May 31.

•

Salt Lake Furniture

Union, Salt Lake City, Utah
May 24 (letter of notification) 43 shares of capital stock
Furniture

Co

preferred

stock.

See

latter

Quinby & Co., Inc., Rochester, N. Y.
May 29 filed $2,500,000 of Quinby Plans for Accumula¬
of

500,000
stock

common

of

stock

of

Eastman

Kodak

Co.

Quinby Plans for Accumulation of

of E. I. duPont de Nemours

&

25,000

Quinby & Co, Inc., Rochester, N/Y.

share.

vestment.

Co.

and

$2,-

common

Underwriter—

Proceeds—For in¬

company,

below.

(6/11-16)

Sangamo Electric Co.

May 21 filed 111,000 shares of
Price

To

common

stock (par $10).

be

supplied by amendment. Underwriter—
Paul H. Davis & Co., Chicago, 111. Proceeds—To reduce
bank loans and for working capital.
—

South

April

9

State

filed
Price

stock.

Uranium

At

Ltd.

Mines

384,000

amendment

by

(Canada)

shares of

capital

share).
UnderwriterOptionee—Robert Irwin Martin of Toronto. Proceeds—
—

($1

par

per

commissions, exploration and development expenses,

working capital.

Southeastern Public Service Co. (6/13)
May 22 filed 20,000 shares of 6% cumulative convertible
preference stock, series A (par $25). Price—To be sup¬
plied by amendment. Underwriter—Bioren & Co., Phila¬
delphia, Pa. Proceeds — For additional investment in
stock of subsidiaries.
-t

^

,

.

Inc., Chicago, III.
85,850 shares of common

Spiegel,

ic

May

tiled

2

stock

(par

$2)

issued to holders of cumulative preferred stock
upon exercise of stock warrants on basis of one share of
common stock for each share of preferred stock at $13.50

being

share

per

on

thereafter and

May

before

or
on

or

share thereafter and

$15 per share
and $16.50 per
May 31, 1956. Proceeds

31,

1953;

before Nov. 30, 1954;
or

on

before

—For general corporate purposes.

ic
Squibb (E. R.) & Sons, New York (6/12-13)
May 22 filed 300,000 shares of common stock (par $1), to
be split up on a two-for-one basis following approval of
stockholders on June 22 of a proposal to change each $1
par share into two 50-cent par shares. Price—To be sup¬
plied by amendment. Underwriter—Harriman Ripley &
Co., Inc., New York. Proceeds—For plant additions and
improvements.
'
"
,

.

Sterling Engine Co., Buffalo, N. Y.
April 27 (letter of notification) an aggregate of not to
exceed 16,000 shares of common stock (par 10 cents).
Price—At market (about $2.25 per share). Underwriter
—None, but Bache & Co.. will act as broker. Proceeds—
To Addison F.

Sun

Oil

Vare, the selling stockholder.

*

/\

Philadelphia, Pa.
May 3 filed 11,000 "memberships in the 1951 plan," effec¬
tive July 1, 1951, to be offered to employees upon their
becoming eligible for membership; a maximum of 111,000
shares of common stock (no par) which it is anticipated
may be purchased by the trustees of the plan during the
period July 1, 1951, to June 30, 1952; and 193,262 shares*
of common stock which "it is anticipated may be offered
for possible public sale by certain selling stockholders
during the same period," at market about $73 per share.
•

Co.,

Statement effective

May 21.

Sunrise Silver-Lead Corp., Spokane,

May 28
None.

Wash.

1,000,000 shares of com¬
per
share. Underwriter—

(letter of notification)

stock.

mon

Price—25

Proceeds—To

cents

purchase

full

mining

claims

and

properties. Office—Bus Terminal Bldg., Spokane, Wash.
Sutherland Paper Co. (6/18)
May 29 filed 34,399 shares of cumulative convertible pre¬
ferred stock

(par $100) to be offered to common stock¬

holders of record
of

stock

on

or

about June 18, 1951, on the

share of preferred for each 25 shares

one

amendment.
and

sale

Price—To be supplied by
York,

Underwriters—Lehman Brothers, New

Harris, Hall & Co.

From

basis

of common

(par $5) which will be outstanding following pro¬

posed 2-for-l stock split-up,

of stock,

(Inc.), Chicago, 111.

Proceeds—

together with funds to be received

private placement of a long-term note issue cur¬

rently being negotiated through Lehman Brothers, will
be used to retire outstanding 4*/4% cumulative converti¬
ble

preferred stock and for working capital.

•

Thermo-King Railway Corp., Minneapolis, Minn.

May 31 .(letter of notification) 200,000 shares of common
stock

(par

$1).

Price—$1.50

per

share.

Underwriter-

York. Proceeds—For working
capital. Office—44 So. 12th St., Minneapolis, Minn.
George

F.

Breen,

New

Texas Electric Service Co.

(6/18)

May 17 filed $11,500,000 of first mortgage bonds due June

Underwriter—To be determined by competitive
Probable bidders: Halsey, Stuart & Co. Inc.;
Union Securities Corp.; Carl M. Loeb, Rhoades & Co.;
Kidder, Peabody & Co. and Merrill Lynch, Pierce, Fenner
& Beane (jointly); Salomon Bros. & Hutzler; The First
Boston Corp.; Kuhn, Loeb & Co., Lehman Brothers and
Blyth & Co., Inc. (jointly); Harriman Ripley & Co., Inc.,
and Stone & Webster Securities Corp. (jointly); Hemp1, 1981.

•

tion

im¬

of capital

Offering—Expected today.

poses

—

Co., Inc. (jointly); Eqiutable Securities Corp.; Carl
Loeb, Rhoades & Co. Proceeds
For construction

1087

exchanged.

provements and additions and for general corporate pur¬

from

Public Service Co. of New

May

and

Manufacturing Co.
100,000 shares of 4V2% cumulative con¬
vertible
preferred stock (par $100), convertible into
common
stock until June 1, 1961.
Of the total, 70,000
share are to be publicly offered and 30,000 shares placed
privately with Bethlehem Steel Corp. Price—To be sup¬
plied by amendment. Underwriter — Blyth & Co., Inc.
23

Underwriter—None.

Service, Inc., Phila., Pa. (6/24)
April 30 (letter of notification) $250,000 of 6% cumula¬
tive debentures; 1950
series to be offered to present

construction program.

Co.

be offered in

to

outstanding

Public Finance

filed

150,000 shares of pfd. stock (par $100).
Underwriters—To be determined by
competitive bidding
Probable bidders: Morgan
Stanley & Co.; Lehman Bro¬
thers and Bear, Stearns & Co.
(jointly); Wi C. Langley
& Co.; Glore, Forgan & Co. and
Whiter Weld & Co.
struction

class

prior preferred

,

Ma/ 1 filed $2,700,000 of debentures

14,

of

and

shares of 5V2%

160,000

postponed.

act

of

shares

Dealer-Manager—Aetna Securities Corp., New York.

For

Peabody Coal Co.
March

(par 10 cents)

participating stock (par $6.25 on the basis of $7 prin¬
cipal amount of debentures and one-fourth of a share

200,000 shares of common stock. Price—At

share). Underwriter—None. Proceeds—To
purchase machinery and equipment, to construct a mill
Par

new

New

-

American

Pan

Jan.

company, who is the
Statement effective May 31, 1951.

President of

Getty,

ceeds—For construction program.

first

due

Co:

stock

265,608

to be issued in connection with offer of Western-Central

.

Price—To be supplied by amendment.;
Underwriter—A. C. Allyn & Co., Inc. Chicago, 111. Pro¬

Utilities Co.

$3,000,000

Proceeds—

New,York.

Weeks,

jc
Pacific Western Oii Corp.
May 10 filed 200,000 shares of capital stock (par $4).
Price—At the market (based on quotations on New York
Stock Ezchange at time of sale, approximately $21.25
per share). Underwriter — None.
Proceeds—To J. Paul

stock

June 18.
•

by amendment. Under¬

be supplied

working capital.

purposes.

Bids—Expected to be received

Price—To

writer—Hornblower. &
For

—To reimburse treasury for expenditures made for'construction program and for general corporate

June

Reading Tube Corp., Long Island City
1
5 filed $1,859,256 of 20-year sinking fund deben¬
due July
1, 1971, and 66,402 shares of class B

tures

May

Mission

June

Thursday, June 7, 195^

.

Rheem

listing.

additions.
•

.

June

writer—Guardian Securities Corp.
•

•

ITEMS REVISED EACH WEEK

39

.

bidding.

Volume 173

Number 5018

.

.

The Commercial and Financial Chronicle

.

(2381)
hill

Noyes, Graham, Parsons & Co. and Drexel & Co.
(jointly). Proceeds—For new construction.
Bids—Ex¬
pected to be received up to 11:30 a.m. on June 18.
•

Texas

Farmers

Telephone Co., Belton, Tex.
May 28 (letter of notification) 9,000 shares of preferred
stock and 4,000 shares of common stock. Price—At par
($5 per share). Underwriter—None. Proceeds—For re¬
construction

of

Texas

telephone

present

North Maine St.,

Belton, Tex.

Southeastern

Gas

May 16 (letter of notification)
stock

be

to

Office—102 V2

lines.

offered

to

Co.,

Bellville, Tex.

19,434 shares of

common

stockholders

through
transferable warrants.
Price
At par ($5 per share).
Underwriter—None. Proceeds—For working capital.
common
—

Thorkon Co., Atlanta, Ga.
May 21 (letter of notification) 15,000 shares of 5% cumu¬
lative preferred stock (par $10) and 30,000 shares of
common stock
(par 25 cents) to be offered in units of
one share of preferred and two shares of common stock.
Price—$12 per unit. Underwriter—F. E. McMichael &
,

Co., Hartford City, Ind.

1951,

on

with

basis of

one

securities of United Gas

iary, which, in turn, will

use

■

•

it
United Gas Corp. (7/24)
May 25 filed $50,000,000 of first mortgage and collateral
trust

bonds

due

1971.

Underwriters—To be

by competitive bidding.

determined

Probable bidders:

Halsey, Stu^are & Co.
Inc.; Dillon, Read & Co. Inc.; Equitable Secu¬
rities Corp.; Harriman Ripley & Co., Inc., and
Goldman,
Sachs & Co. (jointly); The First Boston
Corp. Proceeds—
To purchase securities of United Gas Pipe Line
Co., its
subsidiary, which, in turn, will use the funds to pay
$7,000,000 of 3% promissory notes owned by United Gas
Corp., and the remainder for its construction program.
Bids—To

be

received

24 at Two Rector

to

up

11:30

(EDT)

a.m.

July

on

St., New York, N. Y.

United States Steel Corp., Hoboken, N. J.
May 21 filed 1,300,000 shares of common stock (no par)
"to

be

offered from

ployees" under

time

time

to

incentive plan.

an

certain

to

key

em¬

Proceeds—For general

United Stores Corp. (6/13)
<
<
May 25 filed 103,170 shares of $4.20 non-cumulative sec¬
ond preferred stock (par $5) to be offered for
subscrip¬
tion
by holders of second preferred stock of record
basis

on

of

Sept. 1, 1962.

exploratory

May 24

Columbus & Southern Ohio Electric
Co.
16 J. B. Posion,
President, announced that com¬
pany plans an early offering of
$10,000,000 first mort¬
gage bonds.
Underwriters—Last issue of

Farmers

May

stock, 2,000 shares of class B common stock,
2,500 shares of class A preferred stock and 2,000 shares
of class
B
preferred stock.
Price—At par ($10 per

Underwriter

share).

—

None.

ments and operating capital.

Proceeds

—

For

pansion

share

one

for

one

share

be

provided out of cash resources at the end of 1950.
means that additional
capital of about $250,000,000
will be required
through 1954. Neither the timing nor
the nature of this new
financing have yet been deter¬
mined.
Probable bidders for bonds or
debentures: Hal¬

for each

10

Stuart & Co. Inc.; The First Boston Corp.;
Forgan & Co.; Morgan Stanley & Co.
sey,

Motors Co.

6, it was stated that company contemplates issuance

bonds, series H, due May 1,
(in addition to $40,000,000 series G bonds filed With
on March 30).
Underwriters—To be determined
by competitive bidding. Probable bidders: Halsey, Stu¬

and

sale

arts Co.

New York.

1981

Alabama Power Co.

shares held;

the SEC

(9/11)

writers—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Morgan Stanley

Inc.; Morgan Stanley & Co.; The First Boston
Corp.; Merrill Lynch, Pierce, Fenner & Beane and White,
Weld
&
Co. (jointly).
Proceeds
To
redeem
a
like

&

amount of Westchester

of

$10,000,000

first

mortgage

bonds.

Under¬

—

Co.; Blyth & Co., Inc.; Harriman Ripley & Co., Inc.;
Shields & Co. and Salomon Bros. & Hutzler (jointly);
Drexel & Co.; Union Securities Corp. and Equitable Se¬
curities Corp. (jointly); Kidder, Peabody & Co.; The
First Boston Corp.; Lehman Brothers. Proceeds—For ex¬
pansion program.
Bids—Tentatively expected
to
be
opened on Sept. 11. Registration—About Aug. 10.
:

it
Delaware River Development Corp. (N.
J.)v
May 23, Chief Examiner Frank A. Hampton of the FPC
filed

amount, and the remainder
general corporate purposes.
•

be

used

for

Utilities, Inc., Abilene, Kansas (6/27)
199,451 shares of common stock (par $10)
offered initially to common stockholders in the

5 filed

be

ratio of

share for each three shares held.

one

be supplied by amendment.

Price—To

Underwriter—Kidder, Pea-

body & Co., New York. Proceeds—For plant expansion
and to repay bank loans.
*
;
Van Lake Uranium Mining Co., Van Dyke, Mich.
May 15 (letter of notification) 100,000 shares of common
Price—At par ($1 per share). Underwriter—Titus
Miller & Co., Detroit, Mich.
Proceeds—For exploration
n and
drilling of mining claims. Office — 23660 Van Dyke
Ave., Van Dyke, Mich.
stock.

Victoreen Instrument Co.,

Cleveland, O.

(6/12)
-May 22 filed 374,000 shares of common stock (par $1),
of which 221,000 are to be issued by the company and
153,000 for account of John A. Victoreen, Chairman of
the Board.. Price—To

the

Courts

decide

whether the stock

to the Government

April

25

or

shares of

it

announced

was

company

may

file

soon

6%

convertible bonds. Price—At par (in units of $100
each). Underwriter—Tellier & Co., New York. Proceeds

the

total

Airlines, Inc., which represents about 4%
outstanding.

Aircraft

Corp.
May 28 stockholders approved a proposal to borrow
$2,500,000 on bonds to mature serially. The proceeds will
be

used

ter

plant

•

finance

to

28

it

of

a

$3,000,000 helicop¬

Fort Worth, Texas.

near

Canadian

May

construction

National

was

stated

.

v

Ry.
company

of

4i/2%

on

Sept. 1, 1951, in U. S. funds.

guaranteed mortgage

has

about

$48,000,000
coming due
Refunding likely to be

gold

bonds

under the auspices of the Canadian Government.

Carolina Natural Gas Corp., Charlotte, N. C.
Feb. 20 a fourth amended application was filed with the
SEC for

authority to build

to

certain

serve

areas

a

natural gas pipeline system

in North and South Carolina. Esti¬

mated cost of the proposed facilities is $3,595,295, to be
financed by the sale of first mortgage bonds and the

issuance of junior securities. Underwriters
may include
R. S. Dickson & Co., Charlotte, N. C.

Virginia Electric & Power Co.
May 2 filed 449,674 shares of common stock (par $10)
being offered to common stockholders of record May

to near Mt. Prospect, 111., at a cost
approximately $1,650,000.
The amount and character
financing are not now known. Bond financing in
March, 1950, was placed privately.

on

basis of

one

share for each ten shares held; rights

June 11.

on

Price—$19

Webster

&

ceeds—For

new

Securities

per

share.

Corp.,

New

York.

sub¬

scription warrants to expire June 20; and any remaining
stock to public. Price—$13
pej share to stockholders and

public.

Underwriter—Glidden, Morris & Co.,
New York. Proceeds—To pay bank loans and for work¬
ing capital. Office—101 So. 10th St., Tacoma, Wash.
Weisfield's, Inc., Seattle, Wash.
May 21 (letter of notification) 5,244 shares of capital
stock. Price—$53 per share.
Underwriter—None. Pro¬
ceeds—For

working capital.

•

Western-Central

Office—Ranke Bldg.,

1511

1, Wash.
Furniture

Co.

May 24 (letter of notification) 215 shares of preferred
(par $100), to be offered in units of five shares,
one

valued

at

share

$29

Underwriter

Office—623
Utah.

1

—

of

per

Salt

share.

None.

Lake

Furniture

Price.— $520

Proceeds

—

For

Union

for

each

stock,
unit.

working capital.

Continental Bank Building, Salt Lake City,
,




pipeline

from Volo,
estimated at

Chicago, St.

Paul, Minneapolis & Omaha Ry.

(6/12)

Stanley & Co.; Kuhn, Loeb &
& Co.
(jointly).
funds, to redeem

.

Dow

dated

$1,005,000 equipment trust certificates to be

July

1, 1951 and to mature in 15 equal annual
on July 1, 1952 to 1966, inclusive.
Probable
Halsey, Stuart & Co. Inc.; Harris, Hall & Co.,
Equitable Securities Corp. (jointly); Salomon

instalments
bidders:
Inc.

and

Bros. & Hutzler.

it

:

Chicago & Western Indiana RR.

June 2 it was reported company expects to be in the
market late this year or early in 1952 with a new issue
of approximately $70,000,000 of first

mortgage bonds,
due 1981, of which about
$65,000,000 will be sold ini¬
tially. Price—Not less than par. Underwriter—To be

by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.; Lee
Higginson Corp.; Harris, Hall & Co. (Inc.); Drexel &
Co.; Kuhn, Loeb & Co. and Salomon Bros. & Hutzler
(jointly); Harriman Ripley & Co., Inc.; First Boston

Corp.; Lehman Brothers; - Paine, Webber, Jackson &
Curtis; Kidder, Peabody & Co.
Proceeds—To refund
$49,988,000 of 4% non-callable consolidated first mort¬

Bear,

Stearns

Chemical

Co.

Denver City Ry.
17 stockholders of Colorado & Southern

Ry. ap¬
a program providing for simplification of that
company's corporate structure and for the refunding of
proved
the

indebtedness

This

program

of

the

calls for

company

and

issue

its

subsidiaries.

of

$20,000,000 first
mortgage bonds due 1981 of Fort Worth & Denver City
a

new

Ry. and the transfer to the latter of stock and other obli¬
gations of seven Texas companies.
Probable bidders:
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.; Salo¬
Bros. & Hutzler; The First Boston Corp.

mon

General Foods Corp.
May 24, it was reported that the company is consider¬
ing a plan to issue and sell approximately $30,000,000 of

debentures.

Traditional

& Co. and Lehman

underwriters:

Goldman,

Sachs

Brothers, New York.

Glenmore Distilleries Co.

April 23 it
a

to

of

and

—
Together with treasury
June 1, 1951, $35,062,200 oustanding

Fort Worth &

May

1400, Daily News Bldg., 400 West Madison St., Chicago
6, 111., up to noon (CDT) on June 12 for the purchase
it

Co.

Proceeds
on

April 5, Leland I. Doan, President, stated that the com¬
pany, plans to spend $65,000,000 on- plant expansion in
the current fiscal year ending May
31, 1951, and expects
to spend somewhat more in the
following fiscal year.
He added, however, that no decision has been reached
on any possible
financing in this connection. Traditional
underwriter: Smith, Barney & Co., New York.

$100

from

RR.

first mortgage 3%-4% bonds, series
A, and $8,666,900 of
Denver & Salt Lake income
mortgage 3%-4% bonds,
both due Jan. 1, 1993.

file

determined

stock

plus

30-inch

a

Western

purchase of $40,000,000 first mortgage bonds to be
May 1, 1951, and to mature on May 1, 1981. Un¬
derwriters—To be determined
by competitive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; Morgan

Bids will be received at the office of the company, Room

stock to be offered to stockholders by transferable

Fifth Avenue, Seattle

construct

111.,

Pro¬

construction.

to

of the

Underwriter

•
Washington Gas & Electric Co., Tacoma, Wash.
May 30 (letter of notification) 12,000 shares of common

$13.50 to

•

Grande

dated

of

Probable underwriters—Lehman
Deetjen & Co., New York.

Rio

the

equipment and for expansion.

new

&

April 12, Wilson McCarthy, President, stated that due
to! prevailing market
conditions, the company has post¬
poned to an undetermined date the taking of bids for

a

letter of notification with the SEC covering $300,000 of

—For

par value common stock.

no

Denver

Telephone Co.

necessary

expire

the

corpo¬

project would be financed through the issu¬
$28,200,000 of bonds, $14,100,000 of preferred
stock, $4,700,000 of convertible common stock and 100,000

rightfully belongs

equipment and working capital.

25

order

of

ance

to the Dollar interests.

Chicago District Pipeline Co.
•
May 22 it was announced that this company (a sub¬
sidiary of Peoples Gas Light & Coke Co.) may find it

-—Stone

would

proposed

be supplied by amendment. Un¬
derwriters—Barrett Herrick & Co., Inc., New York, and
A. H. Vogel & Co., Detroit, Mich. Proceeds—For new

to

which

preliminary permit to the

Jersey, Pennsylvania and New York, estimated to cost
$47,000,000.
Early last year, it was announced that the

this company now held by the Department of Com¬
The proceeds would be placed in escrow until

Bell

United

June
to

will

decision

one-year

investigation of the proposed development of
hydroelectric project on the Delaware River in New

of

Brothers and Emanuel

that

a

ration for

merce.

in

by

recommended

a

issuance of

a

American

Price—To be supplied

Underwriters—Union Securities Corp. and

Lighting Co. 3V2% general mort¬
Offering—Postponed.
'

gage bonds due 1967.

•
American President Lines, Ltd.
May 27, Charles Sawyer, Secretary of Commerce, pro¬
posed the public sale to the highest bidder of the stock

Co., both of New York. Proceeds—To ad¬
$495,000 to Cassels United Stores, Inc., a whollyowned subsidiary, to be used to discharge a bank loan

June 27.

Glore,

Consolidated Edison Co. of New
York, Inc.
March 23 company applied to New York
P. S. Commis¬
sion for authority to issue and sell
$25,000,000 of first
and refunding mortgage

18 it was reported Avco Manufacturing Corp. is
negotiating for the sale of its common stock interest
(48.6%) in ACF-Brill to a group headed by Allen & Co.,

May

D. H. Ellis &

on

ex¬

This

Prospective Offerings

vance

amendment.

Proceeds—For

1951-54 period calls for the

American Airlines, Inc.
May 21 it was reported that Avco Manufacturing Corp.
may dispose of its 257,600 shares of common stock of

.rights to expire

Co.

expenditure of about $450,000,000, of which it is estimated that
$200,000,000 will

5; with rights to expire
June 20.
Price—S38 per share.
Underwriter—Morgan
Stanley & Co., New York. Proceeds — To repay bank
loans and for new equipment.

ACF-Brill

Halsey, Stuart &

program.

May 22 Charles Y. Freeman,
Chairman, announced that
the company's scheduled
construction program for the

$25)

June

on

were

Commonwealth Edison Co.

being offered to stockholders at rate of
held

include

may

improve¬

(par

five shares

bonds

placed privately on July 1, 1948
through Dillon, Read &
Co. Inc., New York.
If
competitive, probable bidders

Office—Farmington, Wash.

it
Yale & Towne Mfg. Co., New York
May 16 filed 102,197 shares of capital stock
each

The remainder will go towards
property

improvements, etc.

Cooperative
(letter of notification) 2,500 shares of class A

Alaska

it

13

of

common

corporate purposes.

June

drilling

1, 1952, and to redeem $13,747,000
refunding mortgage 4!4% bonds, series
D, due

Feb.

Pipe Line Co., a subsid¬
the proceeds to pay costs

construction.

new

Proceeds—For

bonds due July

gage

first and

County, Nev.

Whitman

stock (par $10)

common

stockholders of record June 27,
new share for each ten shares held,

oversubscription privilege; rights to expire on
July 19 will be mailed on* June 29. Price—To be supplied
by amendment. Underwriter—None. Proceeds—To pur¬

of

•

common

an

chase

writer—None.
well in Elko

(6/29)

May 25 filed 1.065,330 shares of
to be offered to

•

Western Osage Oil Co., Inc., Las
Vegas, Nev.
May 28 filed 1,000,000 shares of common stock (par 20
cents). Price—To be supplied by amendment. Under¬

Proceeds—For working capital.

United Gas Corp.

41

announced company expects shortly to

was

registration

par

statement covering 30,000 shares of
preferred stock (with warrants attached), and

withdraw

statement

covering 159,142 shares of class
(par $1). Underwriter—Glore, Forgan
& Co., New York. Proceeds—For
working capital and
general corporate purposes.
B

common

stock

Hussmann

May 28, it

Refrigerator Co.

was announced

stockholders will vote June 18

on

approving issuance and sale of 23,000 shares of 4%
preferred stock, series B (par $100), to Penn Mutual Life
Insurance Co.
The proceeds would be* used to redeem
16,000 outstanding shares of series A preferred stock
(held by the same insurance company) and the remain¬
ing $700,000 added to working capital.
Idaho

Power Co.

May 14, it was announced company is presently consid¬
ering the issuance of approximately $15,000,000 of addi¬
tional first mortgage bonds in July.
This is in addition
to registration of 35,000 shares of 4%
preferred stock
(par $100). Bonds will probably be placed privately. If
competitive, probable bidders may include Halsey, Stuart
& Co. Inc.; Blyth &
Co., Inc., Lazard Freres and The

Continued

on

page

42

42

(2382)

The Commercial and Financial Chronicle

Continued

from

41

page

First Boston Corp.

(jointly); Equitable Securities Corp.;

Kidder, Peabody & Co.; Salomon Bros. & Hutzler and
Union Securities Corp. (jointly). Proceeds will be used
for additions and improvements to the

company's

prop¬

erties.

Iowa Public Service Co. (7/16)
May 22 it was announced company plans to issue and
sell $5,000,000 of first mortgage bonds to be dated July
1, 1951 and to mature July 1, 1981. Underwriters—

ir

To be determined by competitive bidding.

Probable bid¬

ders:

Halsey, Stuart & Co. Inc.; The First Boston Corp.;
Otis & Co.; Kidder, Peabody & Co.; Glore, Forgan &
Co., A. G. Becker & Co. Inc. and Wm. Blair & Co. (joint¬
ly); Harriman Ripley & Co., Inc.; Equitable Securities
Corp.; Salomon Bros. & Hutzler. Proceeds—To finance
its 1951 construction program.

Bids—Expected July 16.

I-T-E Circuit Breaker Co.

Gas

&

May 24 Murray
nounced

that

Electric

Co.

F. Gill, Chairman of

the board,

an¬

the

company's present construction pro¬
gram calls for expenditures of more than $8,000,000 in
1951. To finance part of the expansion program, com¬
pany may sell $5,000,000 of first mortgage bonds. Under¬
writers—To
be
determined
by competitive
bidding.
Probable

bidders:

Halsey,

Stuart

&

Co.

Inc.;

Union

Securities Corp.; Merrill Lynch,

Pierce, Fenner & Beane
Kidder, Peabody & Co. (jointly). There is a pos¬
sibility that company may also decide to refund its
outstanding $16,000,000 first mortgage 3%% bonds due
1970
(held by a group of insurance companies) and
$5,000,000 first mortgage 3Va% bonds due 1978.
and

McKesson &

May 24 it

announced stockholders will vote Oct. 23

was

proposal to increase authorized common

a

one
year,
or
until July 1, 1952, of maturity of $20,000,000 bank loans
and the issuance and sale of 30,000 shares of common

to the American Natural Gas Co., parent, for
$3,000,000, to provide an equity base for contemplated
future permanent financing which may include issuance
and sale of $12,000,000 of first mortgage bonds.
Pre¬
vious debt financing was placed privately.
If competi¬
tive, bidders may include: Halsey, Stuart & Co. Inc.;
The First Boston Corp.; Harriman Ripley & Co., Inc.;
Glore, Forgan & Co.
:
stock

.

Minnesota

Power &

Light Co.
May 27 it was announced registration is expected Qn
June 7 of $10,000,000 new first mortgage bonds. Under¬
writers—To
be
determined
by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Shields &
Co. and Equitable Securities Corp. (jointly); The First
Boston Corp. and Glore, Forgan & Co. (jointly); Otis &
Co.; White, Weld & Co.; Lehman Brothers and Drexel &
Co. (jointly); Union Securities Corp. and Salomon Bros.
& Hutzler (jointly); Kidder, Peabody & Co.; Coffin &
Burr, Inc. Proceeds—For expansion program.
Mississippi

Power Co.

(7/17)

Feb. 6, it was reported that this company contemplatei
the issuance and sale of $4,000,000 of preferred stock

facilities of three companies operating in Montana
Wyoming, to construct interconnections between
the properties to be acquired, and to build additional
compressor facilities.
The estimated total cost of the
facilities to be acquired is $4,770,389 as of Sept. 30, 1950,

plus

or

minus book

be built

are

adjustments,

and

the facilities

to

estimated to cost

$708,774. To finance the
transactions, the company plans to issue and sell $2,000,000 of preferred

stock and $3,000,000 of first mortgage
(latter registered with SEC—see a preceding
column). Underwriters—(1) for preferred stock: prob¬
ably Blyth & Co., Inc. and Merrill Lynch, Pierce, Fenner

bonds: Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.;
First Boston Corp.; Glore, Forgan & Co., White,
Weld & Co. and Union Securities Corp. (jointly). Pro¬

•

Montreal

(City of), Quebec, Canada

Bids will be received

on

June

11

on

(6/11)

four blocks of

public works bonds, amounting to $15,000,000, and
able in Canadian dollars.

The bonds

are

new

pay¬

to bear fixed

company's $66,500,000 construction program for the three
through 1953 involves new financing of $41,500,000
in addition to the $10,500,000 provided thus far this
year
through the sale of 2.80% first mortgage bonds, in ac-




(EDT)

on

June 14 for

Texas Power &

Light Co.

*

•

stated company may offer either $7,000,000
or
$14,000,000 of first mortgage bonds late in 1951 or
early 1952. Underwriters—To be determined
was

by

com¬

petitive

Rollins & Sons (jointly); Union Securities
Corp.; Drexel
& Co. and
Hemphill, Noyes,

of

stock

common

bonds

and

sufficient

to

dam which will cost $26,450,000.
The remainder
of the funds will be raised through bank loans
totaling
power

$13,500,000. Probable bidders for bonds: Halsey,
& Co. Inc.; Blair, Rollins & Co. Inc. and Carl M.
Rhoades & Co. (jointly); Lehman Brothers; W. C.
ley & Co. and The First Boston Corp. (jointly);

Stuart

Loeb,
Lang-

Union
Kidder, Peabody & Co.; Blyth and Co.,
Inc., White, Weld & Co. and Harris, Hall & Co., Inc.
(jointly).
Securities Corp.;

Panhandle

May 17 it
souri

was

Eastern Pipe Line Co.
,
stated company has applied to the Mis¬

P.

S. Commission for authority to issue and sell
public $20,000,000 of sinking fund debentures due
1971, and to issue 60,000 additional shares of common
stock to key employees under a stock
option plan. Unr
derwriters—For debentures, to be determined by com¬
petitive bidding.
Probable bids may include Kidder,
Peabody & Co.; Merrill Lynch, Pierce, Fenner & Beane
and Halsey, Stuart & Co. Inc.
(jointly). Proceeds—For

Pennsylvania-Reading Seashore Lines
'5, R. W. Brown, President, announced that due to

June

unsettled

market

Inc.;

Graham, Parsons &,Co.
(jointly); White, Weld & Co.; Equitable Securities Corp.;

Harriman

Ripley &

Bros.

mon

Co., Inc.;

Lehman Brothers; Salo¬
Proceeds—To be used to finance

& Hutzler.

construction

costs.
.

Textron, Incorporated

*

>

^

May 10, it was announced stockholders on June 8 will
on authorizing the creation of a new issue of
250,000
of 4% preferred stock (par $100).
On May 23,
they will vote on increasing authorized common stock
from 2,000,000 to 3,000,000 shares.
Traditional under¬
vote

shares

writer:

Blair, Rollins & Co. Inc., New York.

to be used for

are

Utah
March

8

expansion

Power &
it

program.

|

Light Co.

announced

was

Proceeds

,

company

during 1951

to issue and sell 200,000 shares of

poses

common

pro¬

stock

and estimated

$10,000,000 of first mortgage bonds. Un¬
be determined by competitive
bidding.
Probable bidders (1) For bonds: Halsey, Stuart & Co.
Inc.; Kidder, Peabody & Co.; Lehman Brothers, and
Bear, Stearns & Co. (jointly); White, Weld & Co.; Sal¬
derwriters—To

Bros. & Hutzler; First Boston
Corp., and Blyth
Co., Inc. (jointly); Union Securities Corp., and Smith,
Barney & Co. (jointly); and (2) for stock: Blyth & Co.,
Inc.; W7 C. Langley & Co., and Glore, Forgan & Co.
(jointly); Union Securities Corp., and Smith, Barney &
omon

conditions, the company has decided
to withdraw its proposed
offering of the $4,000,000 first
mortgage bonds, series A, which were to have been
dated July 2, 1951 and mature
July 1, „1976, for which

&

bids had been requested to be received

Co.

on

June 6.

'■>

Pennsylvania Water & Power Co..
May 28 John A. Walls, President, announced stock¬
holders will vote July 25 on
approving changes in the
company's

charter provisions

which would permit the
remaining 78,507 preferred shares as
cumulative series preferred stock with a par value of
$100. These shares are now without par value. Com¬

issuance

of

the

pany now has a $25,000,000 expansion program, the fi¬
nancing of which will be accomplished through a later

sale of securities to the public.

21,493

shares

of

$5

The present outstanding
preferred stock were

cumulative

subscribed for by common stockholders in 1933.
South

Georgia Natural Gas Co., Atlanta, Ga.

May 24 the FPC dismissed the application of

company
to construct 527 miles of natural gas
pipe line to supply
markets in Georgia and Florida, the estimated cost of
which was between $10,500,000 and

$12,080,000.

South

Jersey Gas Co.
Earl Smith, President,

bond issue of

more

than

announced

company

$8,000,000 by fall of

Underwriters—May be determined by com-/
Probable bidders: Halsey, Stuart &
Co. Inc.; Lehman Brothers; Blyth & Co., Inc. Proceeds—
To refund the presently outstanding $4,000,000 of
4Ys%
first mortgage bonds and repay outstanding short-term
year.

petitive bidding.

bank notes which

are

due before the end of the year.

Southern California Gas Co.

April 4, the company indicated that it would soon be in
the market with $18,000,000 of senior securities. Prob¬
able bidders:
Halsey, Stuart & Co. Inc.; Blyth & Co.,
Inc.; White, Weld & Co.; Lehman Brothers; Merrill
Lynch, Pierce, Fenner & Beane and Harris, Hall & Co.
(Inc.) (jointly).
Offering—Expected in the Fall.

(jointly); Lehman Bros. & Bear, Stearns &. Co.
(jointly); Kidder, Peabody & Co., and Merrill Lynch, >
Pierce Fenner & Beane (jointly).
However, common
stock offering may be made directly
by company, with¬
out underwriting.
Offering—Expected this fall. Pro¬
ceeds—To

bank loans and to provide addi¬
'funds.
May 18 company sought
approval to borrow from banks not in excess of

tional
SEC

repay

construction

$12,000,000.

-

■

>

v

Valley Gas Pipe Line Co., Inc., Houston, Tex.
May 9 FPC dismissed application of company proposing
the construction of a $144,500,000
pipeline project to
carry natural gas from Texas and Louisiana to markets
in
Indiana,, Ohio and Michigan., The' company had
planned to build 1,500 miles of line.
Victor Chemical
March 30 it

was

Works

announced company

plans to issue and

sell 100,000 shares of new convertible second
preferred
stock (par $50). Underwriter—F. Eberstadt &

Co., Inc.,
Proceeds—Together with funds from private
$4,000,000 of 20-year sinking fund notes, to be

New York.
sale

of

used
on

toward

proposal

expansion program.
June 8.

Stockholders to vote

on

,,

j:;.

Virginia Electric & Power Co.
May 1 the company announced that it is contemplated
that there will be additional
financing to an amount ap¬
proximating $20,000,000, after sale of the additional
stock

common

dent to the

financing

registered with

SEC

(see

above), inci¬

1951

will

construction program, and that further
be required in 1952.
Probable bidders

for bonds:

Halsey, Stuart & Co. Inc.; Salomon Bros. &
Hutzler; Stone & Webster Securities Corp.; Union Secu¬
rities Corp.; White, Weld & Co.
,
/
^

Southern

Union

Gas

Co.
•

May 23 C. H. Zachry, President, announced that com¬
pany plans the issuance of $5,000,000 new first mortgage

Washington Water Power Co.
:
»
May 28 it was announced that company - contemplates

bonds within the next 60 to 90 days.

issuance and sale late in 1951

Traditional Under¬

Rollins

&

Co., Inc.

Proceeds—For

new

construction.

Speer Carbon Co.
May 18 it was reported that company plans to raise about
$10,000,000 through the issuance and sale to private in¬
stitutions of an issue of bonds and a public
offering of
additional

common

stock.

Underwriter—Lee Higginson

Corp., New York.

Corp.

company outlined before the FPC plans for a
601-mile pipe line project to cost
approximately $45,300,000.
The program would increase the
company's daily

The balance of the funds needed will be obtained from

cash

underwriter:

early in 1952 of mort¬

or

gage

bonds "to the maximum extent possible and "the
loans at that time will

be largely or all retired."
time, it will formulate a program for the com¬
plete refunding of all <ff the bank loans and to provide

At that

for

the

On May

to

retirement

of

28, authority

$26,000,000

the
was

from

outstanding preferred stock.
sought of the SEC to borrow

banks.

Probable

bidders: "(1)
Smith, Barney &
White, Weld & Co, (jointly); W. C. Langley &
Co. and The First Boston Corp. (jointly); (2) For bonds
only: Halsey, Stuart & Co. Inc.
up

For stock

or

bonds: Blyth & Co., Inc.;

Co. and

Texas Gas Transmission

treasury

or

bank

writer—Blair,

delivery capacity by 240,000,000 cubic feet to over 900,000,000 cubic feet a day. Tentative plans include the sale
of around $30,000,000 of bonds
(which may be placed
privately with insurance firms) and about $10,000,000 of
preferred stock (depending upon market conditions).

years

noon

the purchase from the
company of

trust

raise

sale

underwriters.
New York

(6/14)

until

approximately $13,000,000 needed to complete the fi¬
nancing
of
the
100,000-kilowatt
Yale
hydroelectric

ir
Pacific Power & Light Co.
May 25 it was announced company plans issuance and

May 28

State Electric & Gas
Corp.
May 4, Joseph M. Bell, Jr., President, announced that the

Texas & Pacific Ry.

Co.

interest of

2Vz%, 3%, 3^4% and 3y2%, will be dated
June 1, 1951, and will mature
serially from Nov. 1,
1951 to 1961.
Bidding will be confined to Canadian

and
,

bidding. Probable bidders:
Halsey, Stuart &
The First Boston Corp.; Blyth & Co., Inc.;
Kidder, Peabody & Co. and Smith, Barney & Co. (joint¬
ly); W. C. Langley & Co. and Glore, Forgan & Co,
(jointly); Carl M. Loeb, Rhoades & Co. and E, H.

ceeds will be used for construction program.

bonds

& Beane.

stockholders

May 21 it

this

gas

common

haps more, which it expects to raise some months hence
through the sale of new securities. Probable bidders for

was stated that this company, a subsidiary of
American Gas & Electric Co., will need $36,000,000, per¬

Glore, Forgan & Co. and Sterne, Agee & Leach (jointly);

and

by

privately.

Bids will be received

Ohio Power Co.

24

ir Montana-Dakota Utilities Co.
May 24 the FPC authorized company to acquire natural

sold

May 15 it

a

15.

subscription

were

$5,500,000 equipment
certificates, series K, to be dated July 1, 1951. Prob¬
able bidders: Halsey, Stuart & Co.
Inc.; Salomon Bros.
& Hutzler; The First Boston
Corp.; Harris, Hall & Co.
(Inc.).

plans

June

•

cordance with contracts entered last August. Traditional
underwriter: The First Boston Corp., New York.

April

for

for

bonds

listing.

(par $100). Underwriters—To be determined by competi¬
bidding. Probable bidders: W. C. Langley & Co.,

tration—Scheduled

fered

the symbol (9) preceding the name of the prospec¬
tive borrower indicates that it is an entirely new

tive

Blyth & Co., Inc.; The First Boston Corp.; Kidder, Pea¬
body & Co. and White, Weld & Co. (jointly); Lehman
Brothers; Union Securities Corp. and Equitable Securi¬
ties Corp. (jointly); Merrill Lynch, Pierce, Fenner &
Beane.
Proceeds—For
construction
program.
Bids—
Tentatively expected to be received on July 17. Regis¬

was announced that company probably sbmeduring 1952 will issue and sell $34,500,000 in bonds
and $11,500,000 in equity securities to finance
expansion
of its pipeline facilities.
Late last year, stock was of¬

*

changes have been made during the past week, this
is indicated by the symbol
(+) appearing at the
beginning of the respective listings. As heretofore,

construction program.

^Michigan-Wisconsin Pipe Line Co.
May 29, SEC authorized extension for

Texas Illinois Natural Gas Pipeline Co.

time

each week in accordance with later information made
available by the SEC or other reliable sources. Where

to the

Bobbins, Inc.

stock by
500,000 shares to 2,500,000 shares in order to provide for
a probable offering of additional stock to common stock¬
holders. Probable underwriter: Goldman, Sachs & Co.,
New York. Proceeds will be added to working capital.
on

*

Thursday, June 7, 1951

May 22 it

this compilation is brought up-to-date

The

May 28 it was announced stockholders have approved
proposals to increase the authorized indebtedness of the
company to $3,500,000 from $1,500,000, and the author¬
ized but unissued preferred stock from 15,000 shares to
30,000 shares, par $100.
Kansas

•

ITEMS REVISED EACH WEEK
The data in

...

temporary

bank

loans.

Traditional

Dillon, Read & Co. Inc., New York.

•

Western Maryland Ry. (6/13)
will be received by the company up

Bids

^

to 11

a.m.

(CDT) on June 13 for the purchase from it of $3,540^.000
equipment trust certificates, series P, to be dated July 1,
1951, and to mature in 15 equal annual instalments be¬
ginning July I, 1952.
Probable bidders: Halsey, Stuart
Inc.; Lee Higginson Corp., L. F. Rothschild & Co.
and Auchincloss, Parker & Redpath (jointly); Harriman
Ripley & Co., Inc.; Salomon Bros. & Hutzler.
& Co.

f

Volume 173

Number 5018

.

.

The Commercial and Financial Chronicle

.

(2383)

Co.'s

Credit

projected $40,000,000
which probably

of ten-year notes

will

come

next

market

the

on

week.

State of

California.

Its

principal
Oregon.
company is engaged in the
production,
transmission, distri¬
offices

in

are

bution

sale

and

of

the

will*

have

appeal.

more

The

accruing

of

bulk

limited

less

or

southern

liquidate

The
defi¬

nitely in a

cautious mood again.
to have adopted a
strictly wait and see attitude and

They

working

miss

opportunity than

an

chance

the

at

take

a

moment.

This became quite evident with

the bringing to market of Georgia
Co.'s

Power

$20,000,000

3first

30-year,
bonds.

Offered

of

new

mortgage

for

will

capital.

added

be

price

The

Rush

of

Next

Small

Bond

rush of

a

stock

common

offerings, largest
of which will be 274,027 shares
of Public Service Co., of Colorado
common; 256,842 shares of E. R.
Squibb & Sons common and 216,575

shares of

of

common

competitive

California

Oregon Power Co. is

much

along the

The

same

successful

group paid the
price of 101.117 for the

company a

bonds

fixed

and

price of

101.871

rather

was

slow, judg¬

the

carried

yield

that

the

bonds

A rating and that the
viewed as attractive.

an

was

isn't

It

fact

so

months

many

ago

Blyfh-First Boston

that

does not
^seem

difference to

any

to make
investors

some

at the moment.

People evidently

are

still afraid

of the

market, having watched the
Treasury list wobble around and
municipals too. The market has
been
quite rough the last * few

months

and

crued

losses
not

are

easily

That, it is said,
for

reason

that

r

ac¬

forgotten.
to

seems

current

have

be

the

caution.

A

nationwide

syndicate jointly
headed by Blyth & Co., Inc., and

Perplexed

moving

it

is

little

wonder

the investment bankers and
ers

are

of

deal¬

upset by the current state

point

is

yield

from

out

000

shares of

$20)

3.10

to

triple

A

at levels

to

3.15%,

to

California

Proceeds
common

from

proceeds
of

from

the

$6,000,000

sale

proposed

tive

bidding

later

this

obtained

finance

to

current

Dividends

paid

con¬

3.40

a

basis

Feinsinger Partner
In Nielsen, Gordon
Nielson,

of

40

being

stock at the

common

cents

Co.

share

per

bers of

the

change,

announce

ultimately.
With
private
deals going through steadily,
you
just can't hurry buyers on a pub¬
lic offering, say observers.

SANTA

FE

Oregon

tered

close

business

per

Preferred

Power

June

checks

With

down

Bethlehem

30,000

of

70,000
subscription.
It

quarterly

and three-quarters per cent was

the

Preferred

ing

price

which

for

120

a
a

be

4.5%

around

dividend

about

the

102,
rate,

10%

indications

stock

would

at

June

is

CUMULATIVE

foot

"'mpany
to

Commercial

have

with

high

front.

to

COMMON

The

per

dividends

June 30,

1951

record

at

foot

H

$100.00
67

c/o

all
to

widths,
of

$150.00

Chronicle.



v

en¬

May 31, 1951.

BONNYMAN, Treasurer.

L.

of

WAGNER BAKING
The Electric Storage Battery

CORPORATION

cents

a

June

of

business

dividend of fifty cents ($.50) per share
on

30, 1951, to stockholders
the close of business

on

of record

H.

'

HO WARD

The

Trustees

share,

a

1951,

cents

payable

at

C. ALLAN,

Philadelphia, June

The Weatherhead

1951

i,

the

of

close

of

pany,

A

rec¬

business

1951.

15,

Federal

Street,

holders

•

Potash

Fertilizer

»

•

business

600 OFFICES

at

July 2,

to
the

1951.

H. WRIGHT
&

Treasurer

Cleveland, Ohio

Dividends

were

declared by the

Board of Directors

May 24, 1951,

New York, June 6, 1951

as

on

follows:

4% Cumulative Preferred Stock
37th Consecutive Regular
Quarterly Dividend of One Dollar
($1.00) per share.

The Board of Directors has this

Regular Quarterly Dividend of
Forty Cents (400) per share.

dend of Three Dollars
on

the

($3.)

per

Capital Stock of this

16,

1951,
at

to

the

stockholders

of

Both dividends

1951,

to

are

at

T

W
——.—.—

payable June 29,

stockholders of record

THE TT

Electric

$5.00 Par Value Common Stock

quarterly divi¬

a

the

estPe
Company

(Incorporated)

■

QUARTERLY DIVIDEND
DECLARED

close of business June 15, 1951.
•

close of business

Common

Stock

501

Checks will be mailed.

share

Robert P. Resch

June 15, 1951.

Vice President and Treasurer

Payable

per
on

,

June 30, 1951 to

stockholders of record on
BARNES, Secretary

IN U.S.
AND CANADA

1951

May 29, 1951

Treasurer

fINAlicTcO.

on

Com¬

the

16,

stock

MORRIS

'r-.gr^a^i

of

such

Vice President

Chemicals

a

July

business

Mining and Manufacturing
Phosphate

Stock

of

Com¬

Divi¬
share
was
$5.00 Cumula¬
1951,

per

the

upon

payable
of

29,

$1.25

Preferred

pany,

the

of Di¬

Weatherhead

The

of

declared

wy

Boston

-—rAv
3

of

held May

dend

tive

Company

meeting of the Board

a

rectors

25,

'

record

T&toorial

Secretary.

STEVENS,

June 15, 1951

a

June 30, 1951, payable on July

OVER

V.

J.

($.15)

June

shareholders

to
at

declared

have

fifteen

of

dividend

stockholders

June 1, 1951

1951, to
1951.

2,

stockholders of record June 15,

At

Company for the quarter ending

of

July

payable

Checks will be mailed.

Boston

payable

are

this

of

payable June

the Common Stock,

share on the Common
Corporation.
Both

per

Stock

a

divi¬

quarterly

shaie on the 1%
also a dividend of

per

Stock,

dividends

1951.

Street,

$1.75

has- de¬

Directors

of

regular

the

of

Preferred
15

cents

payable
of

Board

clared
dend

STOCK FHNII

share

share.

close

business

bs

The Directors have declared from the

declared

close

Federal

day declared

STOCK

to

of

close

the

at

Joseph F. Martin,
Secretary and Treasurer

The

shareholders

the

at

15,

share

per

(for quarterly period ending
June 30, 1951)

beach front

elevation,

Price
Box

300

not

203rd Consecutive

$3.25 Dividend Series of 1946

$.8114

record

of

June 29, 1951.

Accumulated Surplus of the Company

twenty-five

share,

a

STUART K.

Nassau, 200 to

will

share

per

company

STOCK

June 15, 1951.

grove

books

the

at

holders

follows:

as

PREFERRED

$.50
im¬

SALE

landscaped palm

trancing beauty.
a

P.

Dividends have been declared by
the Board of Directors

of

NASSAU, BAHAMAS ESTATES

several

1951

NOTICE

DIVIDEND

Philip Kapinas

near

,

Transfer

1951.

of

EATON &

LOAN CORPORATION

well

operation

ahead
FOR

plots

1951.

30,

""""

of

Natural

Juno

(30$)

paid on July 16, 1951 on the Common
Stock of the Corporation, to stock¬

holders
Rocky Mountain & Pacific Co.
New Mexico, May 31,
1951.
COMMON STOCK DIVIDEND No. 106
The
above
Company
has declared a dividend
of
50
cents per share on the Common Stock
of the "Company to
stockholders of record at
the
close of
business
June
15, 1951, payable

Louis,

who have filed suitable

1951,

record

BENEFICIAL

Commercial Credit

mediately

Capital

this day

mailed

Trustees

($ 25)

Secretary.

Quarterly Dividend of

big

dividend of Thirty cents

will be

DIVIDEND NOTICES

close

received.

only

Dividend No. 21

annual

picnic and Golf tournament at the

office.

this

25,

payable

were

be

Corporation

Club

Bond

the

yield of around 4.40%.
privilege was ex-;

be fixed

Preliminary

The

City

Wichita River Oil

Secretary and Treasurer

dividend of
declared on

this Company,

EDMUND HOFFMAN,

the current market.

that

Twin

St.

BALANCED FUND

1951 to Stockholders of record at the
1951. Transfer books
Checks will be mailed.

The conversion

pected to

DIVIDEND NOTICES

dinner

Quarterly Dividend

close of business June 14,

public
.

would

for

would set

Club

(St. Paul Minn.)

14, 1951

WILSON, Assistant Treasurer,
Broadway, New York 5, N. Y.

will remain open.

Steel

shares,

was

Angeles annual spring party

at Lake Arrowhead Lodge.

C.

June

indicated that the offer¬

was

be

stock

one

July 2,

Los

(Boston, Mass.)

Investment

were

dividends.

taking

June

to*

COMPANY

has

29,

will

Capital Stock

thereior

Mfg. Preferred

reported prepared
to open subscription books
today
on'
100,000 shares of convertible
preferred stock, cumulative as to

balance

Ex¬

AND

Y., May 24,

b'v>-

on

of

24

a

ai

declared
a
dividend
of
Two
Dollars
and
Fifty Cents
($2.50) per share, being Dividend No.
105 on
the Preferred Capital Stock of this
Company,
payable August 1, 1951, out of undivided net

CAN COMPANY

1951

(Los Ang., Calif.)

closed.

N.

Directors

of

24

Bankers

Stock

TOPEKA

RAILWAY

New York,
The Board

ord

Rheem

4,

mem¬

admitted

ATCHISON.

'

dividend

Stock of

Convention

that Jack Fein-

been

The

29,

Dealers Associa¬

meeting at the Boston Yacht Club.

120

EATON & HOWARD

May

Outin|

Manufacturer!

Investment Banking

June 22-24, 1951

(Jasper Park,

Canada

of

Boston

DIVIDEND NOTICES
THE

DIVIDEND NOTICES

On

American

Raton,

AMERICAN

in the hope of getting the
on
a
few
points
better

Hall,

&

York

New

has

against

basis

Summer

Dinner at the

Security Traders Association of

June 12, 1951

partnership in their firm.

D.

preferred

Philadelphia

Investment Bankers Association

(San Francisco,

Canada)

incorporated under the laws of the

ago.

(Philadelphia, Pa.)

Francisco

operating public utility

an

15, 1951

Golf and

A

orders

California

is

Gordon

Broadway, New York City,

Dividend

rate

New

Sleepy

Srofits for said year ending June Stock regis¬
the Preferred Capital 30, 1951, to
olders of

currently

are

the

on

of

at

Investment Traders Association

of

Investment

sale

construction program.

Club

meeting

Jasper Park Lodge.

months,

its

(Philadelphia, Pa.)

June 11-14, 1951

tion

first

of

annual

June

of

the

of

mortgage
bonds, 1981 series, which the com¬
pany expects to offer at competi¬

buyers, though
showing interest before a deal is
closed, are now inclined to shy
bonds

the

stock, together with the

(New York City)

Bond

Calif.

of broadening sales

program

singer

#

potential

away

Oregon
price of $24.25 per

a

share.

A

months

some

Yet

(par

2.75% earlier

Single

year.

around

2.90%

the

of

bonds, as
indicated by the Georgia
Powers,
are

offered

stock

common

Power Co. at

The

that

selling

now

trasted with 2.70
the

Corp.,

quarter.

paper

in

Boston

publicly yesterday (June 6) 250,-

that

affairs.

They

First

will be used to refund $11,000,000
of bank loans which the company

Considering the celerity with
which equity offerings have been

a

outlets.

that
similar
graded paper was
moving at yield of around 2.90%
The
or 50 basis points lower in
yield.'
But

to

Group Offer California
Oregon Power Stock

Municipal

Security Traders Seminar at Wharton School of Fi¬
Lous C. Lerner of Lerner & Co., Association annual
spring party at nance and Commerce, University
Boston, has been elected Vice- the Diablo Country Club, Diablo, of Pennsylvania.
San

Ltd., and will devote his activities

response

and

27th

Calif.)

Lerner

President of Victoria Gypsum Co.,

ing from gossip in dealer circles,
despite

equipment trust certificates.

C.

indicated

an

York

Day at the Sleepy
Country Club, Scarbo¬

June 8-9-10,1951
Louis

re-offering

a

for

yield of 3.40%. The early
of investors

$6,000,000 of its 30-year first
mortgage, bonds, and a week from
today Texas & Pacific Railway
will receive bids for
$5,500,000 of

New

Lake

Country Club, Oreland
Philadelphia Bankers & Brokers Pa.
Bowling League annual banquet
and
outing
at
the
Sandy Run June 18-23, 1951 (Philadelphia,
Country Club.
Pa.)

scheduled to open bids on June 12

pretty
pricing lines.

June 15, 1951

and

for

to show all bidders thinking

of

summer

Hollow Country Club.

rough, N. Y.

Carrier

and

groups sought the issue
tenders were close enough

Club

June 8, 1951

Corp.

bids, eight

(New York, N. Y.)

Field

Hollow

Wis.)

Club

Oconomowoc

at

York

June 8, 1951

be

Country Club.

and

Deals

Stock

promises

June 15,1951 (Milwaukee,

Field

Security Traders Association of
New York Bowling League dinner
at Antlers Restaurant.

to

to

—

13.

party

annual

week

Investment

June 7, 1951 (New York City)

terms will be announced presently.

appear

from current reports would rather

balance

In

Club

Milwaukee Bond

Lerner Elected

$35,000,000

a

part of Oregon and

note falling due on August 1 next.

are

June

EVENTS

funds

the

the company will be

to

to

used

negotiated

a

Yacht

by the usual pre-picnic
get together Wednesday evening,

the northern part of California.

is

Bear

preceded

COMING

electricity in

under¬
taking and in view of its nature
This

Institutional investors

White

Medford,

The

43

June

II, 1951.

INTERNATIONAL MINERALS

Guaranty Trust Company
of New York

h. d.

& CHEMICAL CORPORATION
Genera! Office*:!

3

North Wacker

Drive,Chicago 6

Mcdowell,
Secretary

June I, 1951.

The Commercial and Financial Chronicle
44

*.

.

Thursday, June 7, 1951

.

(2384)

ditional

BUSINESS BUZZ

would

reserve

dicated in the

BcTiind-tbe-Scene Interpretations

report, but the en¬

from the Nation's

of

the "Fed"

reserves

is

not

difficult

to

such

/w TpM fw

jljL § w%AU

Capital

mMf

JL

„

hit

higher

In

any

higher

is

it

and

the form of

upon

reserves.

whatever reserves

case,

proposed,

for

great,

finally proposed,

are

in¬

literally

thusiasm

Washington...

This

powers.

be

to

seem

will

be

if they are
a
standby

of

character, unlikely to be invoked
before Fall if then.

C.—This is

WASHINGTON, D.

haven't
here it is:

newsboys

the

something

got wise to yet but

developed

has

There

be' ditched, chucked,
tossed out, and be forgotten.

organizations one of the most
revolts in the country's
history, and it is pitched at both

farm

of the Truman Adminis¬

and

tration

economic

organized

the

ending

restoring

at

half

a

basic, orthodox ideas in the

dozen

operation of the nation's economy.
The thing is sweeping with all
the

of

fury

brush

a

fire

an

on

early spring day, and with about
the

speed

same

flu

the

as

have been held in 39 states
get going on this thing. In

mittee,

been
state,
been

have

there

held

state's

the

of

52

all

in

counties.

the

has

unanimity

remarkable

a

fruits

its

of

been

among

of organizations which

scores

both Banking
Committees what should be done
have

telling

been

to the Defense Production Act so

long-time
the kind
the Truman

possible a
build-up
of

make

to

as

military

yammered
chorus

by

for
the

for

supposed

purpose

of stopping

Russia.
exceptions which

With

the

have

not

are

movement

This

be

must
enable

will

Federal

the

its costs cur¬

to pay

government

bill

tax

a

rently, and the tax bill will have
to

down" into

dig

brackets,
protected

time

time

double

the

the

including

lower

Truman -

one-half and

and

Trying

boys.

had

has

Bureau,

rich

the

of

out

to

just

going to do the job.

dozen

or

get

illustration

by

his

in

Truman

down

budget,

$125 million. The Truman

to

crowd
a log¬

in the House
public housing boys

engineered

'Sorry I'm late, Mr. Squeegee—here's your speech!'

tial

commitments

The

three

tension

is in

fact

moment

possible
fire

been

has

The

at

for

now

its

caught

program

might later die down,
sj:

-I:

;

of this thing is that

be that in one state,

4

to

'

■*

■,

•

"

'

' •'

"

anything

mendations,

the

but

the

people and arrange a meeting. In

not

county, it might be some one from

credit

taxpayers' league, or a cham¬
ber of commerce, or the Grange,

the

have

to

solvent

country

find

can

sacred items of

questions

country,

by probing into
to

as

devoting

now

so

expenditure in the

defense category,
such

many

why the
less than

several

up

the

or

In

case,

any

in Wash¬

one

no

belabored

text

of

that

report,

there. For

one

dealt " with

which

control, there is
instance,

fies,

almost

an

one

as

productivity

inflation

to

answer

increased

and

is

pro-

the country.

f

daction.

points is not hard
has sat
defined
these
six

Even the six

(4)

and

Credit

must

be

controlled

and if credit inflation is sparking
an

inflation

whole, then

of

the

the

economy

Federal

as

a

Reserve

fast.

around

and

points.

Every

them in its
somewhat

must forget all the niceties about

instance,

being

while

on

the

Truman

team

and

committee

No

organization states
way, usually with
different emphasis. For
own

certain

retail

amounting

to

much,

is

essen¬

fact, but

the impor¬

about

refinancing, the Federal
about

may

open

market flex¬

banking,
dustries

between

the Treasury and Federal Reserve

ended, and it has in fact been

intended to bury the report, large¬
a

staff job,

very

quietly. Then

Robert

—

Edited

E.

Y.—$1.75.

Timing Factor—Folder plus free

samples of complete timing serv¬
ice—$1.00—Dept. B, Analyst Insti¬
tute,

126 Lexington. Avenue, New

be briefly boiled down,
For

banking

insurance
the

under

Federal

the

Large

in¬

of

subterfuge

CLASS B

the

Banking Act of 1933 will not be

and

rationing of credit

investment

unless

emergency,

develop

a

there

but,

grave

if

is

a

there

emergency,

then this Act will be used instead

of

requesting

powers

(3)
serve

additional

or

leading

(common) STOCK
producer

fast-growing

in

of cement
Southern

California.

•

trotted out to provide direct Fed¬
eral control and

Potential

RIVERSIDE CEMENT CD.

supervision of

Reserve.

The

Appreciation

WE SUGGEST

A

(2)

does

ly

Data

York 16, N. Y.

operated by the investment

gram

grave

was

for Farmers

Subsidies

the voluntary credit restraint pro¬

motivated before the

war

Construction

—paper—15c.

follows:

tially anachronistic in having been

groups,

going along generally with

at¬

est of the entire Administration is

would be

further and drastic tightening of

as

'

an

very

(1) At present, the main inter¬

might

consumer
credit rules, that per¬
ington is guiding the thing, mak¬
haps the Federal Reserve redis¬
preparation, need find it¬
ing lists of states, being sure that
count rate might be boosted way
self saddled with a civilian Fed^
committees are appointed for each
eral payroll about as big as when,
up, that mandatory Federal credit
state, proposing a
program,
or
rationing was nearer than many
during the height of War II, 40%
outlining a course of action. Thus
of
the nation's
thought, and so on.
production was far the
thing has had no organiza¬
going to war.
tion at all, and has swept most of
Actually the report isn't rated

The

Gas

Appliance

Actually, what the report signi¬

-

war

(3)

a

ibility, etc.
Throughout the

a

10% of its physical output to war

and

not

talks

of

Reserve

is agreed.

get the idea that there

organization.

other

any

but

Treasury

key

state, or a

another state, part of a

plate artist

made

called, "rationing credit." The

tance

inconsistent hint here and another

ing

call

will

reau

Gas

—

N.

upon

will¬
remain

istration

except

Act of 1933 for what is in
not

which any majority of the Admin¬

is recognized that a Congress

Bu¬

of the Farm

office

state

Natural

due

was

Summers—The H„
Thus, the CEA still talks for W. Wilson Company, 950-972 Uni¬
Avenue, New York 52,
its pet idea of using the Banking versity

.,

the

talk

Modern

by

recom¬

thing

only

Report unmasking the Rulers

good at¬
tempt, to fit the thing together.

That way is to pay little atten¬
tion

stuff

White House

the

tempt,

nearly
read it one

week ago unless you
3

was

the papers

as

boiler

Some

Reserve.

in

Wilson committee report of
a

inconsistent

if

It's easy to get confused by the

i

,

The—A

Spain,

Manufacturers
for the recommendations, consists Association, 60 East 42nd Street,
New York 17, N. Y.—Paper—$1.
of a group of separate and not
very
correlated memoranda
Role-Playing in Action—Chris
written variously by the Council
Argyris—New York State School
of Economic Advisers, the Wilson
of Industrial & Labor Relations,
staff, the Treasury, and Federal
Cornell University, Ithaca, N. Y.

90 day ex¬

a

New

Street,

V

in

Masquerade

got hold

report

to the fact that the report,

DPA, in the hope that

against

the

"suppressed,"

on

the Tru¬

that

that

be

way.

;

*

spontaneous move¬

a

of

heat

the

S., but taxpayers' leagues and
all sorts of organizations a fellow
wouldn't
dream
would
be
in¬

ment. It may

much

fully settle

U.

it

vote

a

Administration would cheer¬

man

These
include
not
large associations of
businessmen, such as the National
Association of Manufacturers and
the Chamber of Commerce of the

.

earliest

So

the

*

demanding

are

15, N. Y.

of
Spain—Charles Foltz, Jr.
—Houghton
Mifflin
Company,
put it, the taunt caused the report
Boston, Mass.—Cloth—$4.00.
to be made public.

informal

months, but these

of the papers

word

the

to

for two to

upon

by this movement

thing.

.

acted

some

of

killing price and wage controls.

organizations of numer¬
kinds are in there pitching on

The paradox

is

the

Other

h

be

groups

million.

terested.

when

Capitol.

general feeling is that DPA

cannot

didn't work out as to
public housing) to succeed in re¬
ducing the cut down to only $225

the

at

Broad

Company, 55
York

(which

merely

world—Foreign

the

Department, Manufacturers Trust

not merely to
cut "non-defense" expenditures. It
Note,

listing 144 quotations

of currencies of various countries

throughout

of
the
of this
thing is to get "agricultural con¬
servation payments" cut from the
$286
million. proposed
by Mr.
Just

London, E. C. 2,

Foreign Exchange Quotations—•
New edition

and a

seriousness, one little facet

.

(2) "Non-essential" government

Bank

England—Paper.

lesser organizations.

so

Exchange

&

(fifth edition)
Corporation,
99

Gresham Street,

the
Cooperative

the

Producers Federation,

Milk

isn't

expenditures must be cut sharply.

the

—Swiss

including the National Grange,

Council,"

Exports

Restrictions Abroad

part in this thing,

tions playing a

_

taxes

British

to

more

else with spread¬

anyone

ing the virus. However, there are
some
19 national farm organiza¬

this

There

a

perhaps
the President of the

Allan Kline,

ous

(1)

lacks

even

guiding genius, although

said, substantially along this

line:

which

against the common

interests

man."

roll with the

significant, ali the business and
farm organizations which have ap¬
peared before the Committees for
the.last 10 days to two weeks

,.

telephone,

dues. This, of course,

no

Cotton

Another

head¬

no

a

even

stop the first

Farm

states

officers,

not

will
left-winger who
gets a whiff of what is going on
from calling it a "conspiracy of
and

not

do than

several

organization, no com¬

no

quarters,

to

regional meetings. In one
Wisconsin, meetings have

if that is what

movement,

The

it is, has no

groups

<3

pretation from the nation's Capital
and may or may not coincide with
the "Chronicle's" own views.)

development has taken

All this

con¬

tagion of 1915. Already state-wide
meetings of farm and business

(This column is intended to re-

fleet the "behind the scene" inter¬

#

place without any of the trappings
of a nation-wide movement.

unique

nonsense

«

#

among

literally hundreds of business and

must

ply

Analysis
«

a

review

try

of this Company
of the Cement

available

on

and

Indus¬

request.

Selling about

$14.00

LERNER & CO.

new
Investment

,

Securities

*

from Congress.

"Maybe"

the

Federal

Re¬

is committed to ask for ad-

10 Post Office Square,

Boston 9, Mass.

Tel. HUbbard 2-1990

*

step
of

in and contract

money"

down

the

to

where there will be

no

"supply

the

point

credit

ex¬

these meetings, have

been

little

a

talking

others

than

more

timid

about

abolishing controls for fear

pansion.

of bad customer reaction.

(5) This is said less frequently,
but there is a groping toward two
untried (in the U. S.) devices. One

toward

country

of

thereafter, but right now, in June

these

would

"sterilize"

a

part

This

of the public debt by some means

1951,

to
1

ggjj

the

remove,

building

up

its

availability

bank

for
'reserves.

Another device is the adoption of
some

means

boost in

to

make

a

genuine

public savings.

(6) Finally, the spokesmen have
almost uniformly said that if the

foregoing five points

are adopted,
then price and wage controls sim¬




a

build-up

in

if

meetings

1956

an

directed

not

to

save

From

there

all

follows

FOREIGN

SECURITIES

members
legislation,
and the Defense Produc¬
with

tion Act.

abolish
and price controls right now, ,

The
wage

boys

are

hot

to

and have obtained some substan¬

on

request

FOREIGN SECURITIES SPECIALISTS

50 BROAD STREET..*NEW YORK 4, N. Y.

TEL. HANOVER 2-0050...TELETYPE: NY 1-971

1

Products

HARL MARKS & CO. INC.

of Congress about tax
economy,

§ffi

Prospectus

over

these

earnest and most ur¬

consultation

Allied Electric
FIRM TRADING MARKETS

the

sometime

or

possible.

country

gent

is

movement

Hill, Thompson & Co., Inc.
Trading

70 WALL

Department

STREET, N. Y. 5

Tel. WHitehall 4-4540