Full text of Commercial and Financial Chronicle : June 8, 1944, Vol. 159, No. 4288, Section 1

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ESTABLISHED

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YEARS

2 Sections-Section

1

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Volume 159

Number 4288

New York, N. Y.,

Houston President
the

annual

meeting

held

Memorial

in

New

of

Frank

President

of

New
was

Presi¬

dent

of

the

We

Found ation,

make

succeeding the

native

and

nessean

V

d

a n

a

or

he

time

He

is

a

is

to

tional

Board

of

Na¬

the

of

Trustees

is

a

Director

President

of

Other

of

many

elected

officers

were

a(

velt recently appear

that

still

dealer
Issue.

Wisconsin,

Illinois

see

page

on

page

Distributors

war

delivered

before

the

by

Annual

29th

Convention

Association

of

Mr^

of

the

Purchas¬

ing Agents at the Hotel WaldorfAstoria, New York City, on May
31, 1944.
(Continued on page 2369)

Underwriters
"**

National

of

my

c o

n v

tion

c

basic

b 1 em of
main taining

p r o

American

in-.

total

•

■'

—

—:

1

the

cerns

will threaten a
problem.
War
brought inflation to a climax, and
the passing of war will intensify
the fight against inflation.

30's,

One great fu¬
ture

problem

lies

in

the

matter
term

of

and

i

n

d

ing

u

this

war

sarins.
rest

Why

problem

called
war

not
*

planning,
of

war

a

is

to

ask

the

question,

the usual sequence of
attending great wars? Why
"war boom," followed by a

not

A

National

con¬

Lewis H. Haney

war

controls.
was

consider

speech made by Dr. Haney
before the twenty-ninth Annual
International Convention of the

t-

p o s

tinuing

under¬
that the

to

way

so-

and the ques¬

tion

time

events

of

concerns

say

may

production trends and outlook at

recon¬

vert

foregoing

one

effective

most

It

Association

i

Orval

W.

will

the

Adams

i ng
That

n n

war.

i

w

war

is

(Continued

on

May 31,1944.

on page

2380)

Bond

for

ican dollar from becoming a post¬
war

All

casualty.

*An

address

Adams

before

sound

econ-

made

the

by Mr.
Pennsylvania

Bankers Association at the Hotel
William

Perin,- Pittsburgh, Pa.,

on

*

May 24, 1944.
(Continued

,

on page

2374)

the

chase

bank

OF THE CITY OF NEW YORK

Brokerage

Exchanges

Established

London

-

Geneva

25 Broad St., New
HAnover

2-0600

INVESTMENT

Kep.

64 Wall

York 4, N. Y.
Cleveland

Pittsburgh

service with Chase

correspondent

FROM

DEALERS

Hardy& Co.

from

Members New York Stock

LOS ANGELES

Members New

Exchange

York Curb

30 Broad St.

634 SO. SPRING ST
'

facilities

Exchange

INCORPORATED

JERSEY CITY

Dallas

"

and Dealers

BE

IS EXCHANGE PUCE

Syracuse

Williamsport

tel. DIgby

4-7800

New York 4
Tele. NY 1-733

Member Federal

Deposit Insurance

Corporation

1

Trading

Markets,

always

Central Soya Co.
ELECTRONICS
■

BROKERS

Buffalo

MAY

HUGH W. LONG and COMPANY

PHILADELPHIA

I

BOND

or

Street, New York 5

Albany

Actual

OBTAINED
AUTHORIZED

1927

SECURITIES

BOSTON

Teletype NY 1-210

Troy
Chicago

PROSPECTUS

R. H. Johnson & Co.

Members New York Stock Exchange
other

Broaden your customer

VICTORY

Hirsch, Lilienthal & Co.
and

Service
for Banks, Brokers

•

New

COMMON

RAILS

A. E.

INDUSTRIALS

England

Public Service Co.

Staley Mfg.

ALL ISSUES

COMMON
Analysis upon Request

Bought—Sold—Quoted

BULL., HOLDEN & C°

Kobbe, Gearhart & Co.
INCORPORATED

MEMBERS NEW YORK STOCK EXCHANGE

Members

14 WALL ST., NEW YORK 5, N. Y.
TELEPHONE-RECTOR 2-6300




N.

Y.

Security Dealers Ass'n

45 Nassau Street
Tel. REctor 2-3600

New York-5
Teletype N. Y. 1-576

Philadelphia Telephone:

Enterprise 6015

HART SMITH & CO.

REYNOLDS & CO.
Members New

120

York

Stock

Exchange

Broadway, Hew York 5, N. Y.
Telephone:
Bell

REctor

2-7400

Teletype NY 1-635

Members
New York

Security Dealers Assn.

52 WILLIAM ST., N. Y. 5

Bell

New York

HAnover 2-0980

Teletype NY 1-395

Montreal

Toronto

a

foregone con¬
clusion; but only statesmanship of
the most heroic kind, backed by
resolute courage, intelligence, and
selflessness, can save the Amer¬

of Purchas¬

4

n

'

national

Buy War Bonds

us

ing Agents at the Waldorf-Astoria
Hotel, New York,

that temporarily solved

w

we

that

the

standing,

con¬

the

peace

of

With

of

inating

contracts,

war

and

renewal

more

all of

today
than
anything short

the unemployment problem of the

goods.

purchas¬
of

deeply

in¬

out¬

*

Dealers

deep
i

that the

dollar

the

2392.

you

because

the

The

International
General Index

the

needed for

address

Zelomek

meet¬

with

power

war

Europe.
*An

2370;

2372.

page

Zelomek

W.

this

in

featured

activities
For

A.

to

we

of

ing
and

put consists of

have

the end of the European war,

in

the subject,

on

you

Professor of Economics, New York University

dustrial

lick,
which
will
probably take nine
months to a year longer. There¬
fore we cannot liquidate all the
war
features of our economy at

WISCONSIN

to

ing

the.

—-

and
Hotel Roose¬ yet we do not need all the equip¬
ment to fight the war in the Pa¬
on page 2366.

and

talk

considering the production trend and outlook, we should begin
by recognizing that the war is the main factor. Perhaps over 60% of

dangerous

cific that

ILLINOIS

to

-In

generally

a

BOND TRADERS CLUB OF NEW

YORK dinner at the

al¬

—

we

CORPORATION

me

I was happy to accept, both because
*
of the pleas¬

Bag" People Will Not Tolerate Rationing—Holds Prices Will Rise And Profits Will Grow

be nearer

foe

to

was one

War Is "In The

the

to their

and after that

IN THIS ISSUE
Pictures

bring

realized

Henry Alan Johnston, Attorney of
New York
City, and the Hon.
(Continued on page 2385)

extended

Destiny,"

Says Trend Of War Production Is Likely To
Continue Downward And General Manpower Shortage
Will Certainly Be No Worse—Predicts That When The

h&ve

than

Foundation.

the

of

Economist

may

large

invitation

By LEWIS H. HANEY*
!

hand,

though

He has been Vice-

corporations.

The

"Dollars

Production Trends And Outlook

the

still

knees

the

Sigma Alpha Epsilon Fraternity,
and

A.B.A, Presi¬

dent Holds

;

the

On

Nazis

of

President

State National Bank,

ure

have passed

we

Frank K. Houston

Trustee.
also

.

Salt Lake City, Utah

€>-

the

t

other

at

present

where it is difficult to
period of several years. On the

a

economy

it.

which institu¬

tion

a

war

Spending

our war economy
cover

we

peak- of

University, of

the

that

a r e

b ilt

e r

Vice President, Utah

are

tions

graduate of

in
to

indica¬

many

Ten-

at the stage

single forecast
hand,

there

isa

.

are

a

one

late Stuart G.

Gibboney. Mr.
Houston

Destiny

Well-Being And Destiny Of All Free Peoples
After War Because Of Probable Large Unemployment- Centers In The Preservation Of Sound Money And That
Holds People Will Veer To The Belief That The War Loss Of Confidence In Its Money, Or Inflation, Is The
Boom Is Over And That Deflation Rather Than Inflation Greatest Tragedy That Can Happen To Any Civilized
Will Be The Short-Term Dominating Factor
State—Urges 7 Reforms To Curb Govt. Debt Expansion

Bank & Trust

Co.

Executive
.

conversion Period—Does Not Look For Heavy

of

elected

Copy

a

By ORVAL W, ADAMS*

Professional Forecaster Predicts Price Declines In Re¬ Western Banking Executive And Former

K.

Chemical

iXork,

Dollars Of

and Fairchild Publications

Houston,
the

60 Cents

Price

Thursday, June 8, 1944

Economist, Internatipnal Statistical Bureau, Inc.

the

Foundation,

York,

Office

By A. W. ZELOMEK*

Board of Directors of the Thomas
Jefferson

Pat.

Price Trends And Outlook

Of Foundation
At

S.

IRA HAUPT & CO.
Members of

Principal

111 Broadway,
REctor 2-3100

Exchanges

N. Y. 6

Teletype NY 1-1920

Thursday, June 8, 1944

FINANCIAL CHRONICLE

THE COMMERCIAL &

2362

:fTrading Markets'in:

S. FUNDS for

We
Maintain Active Markets in

Nu Enamel Corp.

CANADIAN INDUSTRIALS

Triumph Explosives

Mallory & Co. Inc.

Analysis

Power and Light

CANADIAN BANKS

Du Mont Laboratories

P. R.

Delaware

Bought

COMMON

request

on

Sold

—

—

Quoted

CANADIAN MINES

United Cigar

Whelan

KING

Goodbody &. Co.

KING

&

Established, 1920
Members

New

Dealers

Security

York

Ass'n
Telephone

Gov.

UtiL, Com.

Axton-Fisher Tob., "B"

120

"We Cannot Practice In Peace The Centralization Which

^

Talon, Common

Either Free Or

Successful/' He Declares—Urges Paying
More Attention "To What Goes On In The World," And
Not

lllj

II

Again "Sit On The Side Lines As Mere Observers?

—Asks Unity In Peace As In War

Baltimore Stock Exchange

York, in an address made on
May 29 at the Thirty-Sixth Annual Governors Conference at Hershey,

Y. 1-1227

Teletype N.

the

urged

a

the

"so

all

that

pos¬

sible functions
of

I

"

,

.

government
this

in

Exchange

Curb

will

try

31

He

people."

also

"our

New

Amer. Gas & Power
Stock

All

in

formerly

& Imp.

New York 5

Teletype

hear."

j

made

States

England Public Service

a

Common

&

clear

sense

Works

Wall St.,

N. Y. 5
Teletypes—NY

Bell

unity

of

a

the

the things
a

precious

confusion; chaos reigns else¬

and

*

Hanover 2-4850
1-1126 & 1127
„

most

the

of

world

experi¬

he knows
I

that

say

I

what

think

regardless

f

that

fact

the

o

audience
may not-like it.
my

things

many

which
may

J.

de

Anton

do

not

can

be rebuilt. At such

(Continued

on page

a

time

Tudor

Fianh C.Masterson & Co.
Members
64

some

business conference,

City Units

WALL

New

York

NEW

1

:

Pfd.

&

FASHION

Common

times

But

are

TRADING

the

selves

and

allow

our¬

luxury

in

of living

a

dreamland built of things we like.
We want to

see

things as they are

and believe me, many

of them are
Two big questions

pleasant.

in the minds

are
men

of all business*-,

today. The first one is:

Is there going to

*An

address

of

(Men's
,

will

be

offices
York

formed

on

June

at;, 115
Broadway, New
City.
Partners will be I.

Munro

Missouri Pacific

cated

Interstate
Pfd.

&

Bakeries
Common

Oswego & Syracuse
Guaranteed

.

.

.

Blanchard,
Charles
W.
Snow,. John Watts and Richard R.

Seaboard Air Line 5s,

Thomas,

the

Exchange

member.

Mr. Blanchard and Mr. Watts

formerly partners in

were

C. N; Edge

BUCKLEY BROTHERS
Members New York Stock Exchange

63 Wall

& Co.

Street, New York 5, N. Y.
WHitehall 3-7253

Direct

be

good mar-

a

made

by

Dr.

the

de

Associa¬

National

Sfillman, Maynard Go.

Wires to Philadelphia Si Los Angeles

May 30,1944.
(Continued on page 2372)
on

—

TRADING

Detailed

his desk

at

Stillman, Maynard &
Co., 61 Broadway, New York City,
members

of the

New

York

Stock

Exchange,; about the middle of the
month.

Mr.

Remick,

the firm since 1937,
as

partner in

*

Indiana Limestone 6s, 1952

*Bartgis Bros. Common
*

has been

serv¬

Department.

commissioned
He has

in

been

March

a

New York Stock

He
of

governor

was

1942.

the Association of Stock Exchange
was

United States Lumber
Memorandum

INC.
Ill

Broadway, New York 6, N. Y.

BArclay 7-0570

I

ST., N.

Y. 5

WHitehall 4-4970

in 1941.

Henry Holt Common

Teletype NY 1-609

Emerson Radio




Co.

Evans Waliower Zinc

Deb. S's 1969

Eiectrol, Inc.

request

Troster,Currie&Summers

St., New York 4, N. Y.
Tele. NY 1-210

N.

Y.

Security Dealers Ass'n

WM. J. MERICKA 6- Co.
Members
Union

Cleveland

Commerce

Stock

BIdg.,

Exchange

Cleveland

Telephone MAin 8500
74

Trinity Place, N. Y. 6
Teletype

Private

Wires

Detroit

-

NY
to

HA 2-2400

1-376-377

Buffalo

Pittsburgh

-

-

29

Louis

Broadway, New York 6
WHitehall 4-3640

Cleveland

St.

Tin

General

INCORPORATED

Members New York Stock Exchange

HAnover 2-0600

Theatres

Cuba

v

of¬

Simons, Unburn & Co.
25 Broad

NY 1-1026

President

Liberty Aircraft

Members

70 PINE

request

on

F.H. K0LLER & COMPANY

of the

Exchange and of

Firms, of which, he

*

Eastern Footwear

Stock

G. A.Saxton&Co., Inc.

—

Great American Industries

Major in the New York

a

Ordnance

-

a

Auto Car, Cora. & Pfd.

possibilities.

report on

MARKETS

J. Gould Remick will return to

reconversion problems

fers tremendous

1931

v

HENRY HOLT

compli¬

its post-war outlook

5V4S

with

19

clothing)

An industry without

-

Chicago Mil. & Gary 5s, 1948
Exchange
firm of Blanchard, Snow & Watts

ing

t

of Purchasing' Agents at the
Waldorf-Astoria Hotel, New York

City

5

The New York Stock

tion

Detroit & Canada Tunnel
Common

MARKETS

you'

serious

too

too confused for us to

2378)

PARK, Inc.

YORK

HAnover 2-9470

—-

Select

American States Utilities

Curb Exchange

ST.

Teletype NY 1-1140

even

like to hear,

vention

ties

Great Amer. Industries

not agree,
some

Haas

uprooted and men are bewildered
or
quarreling about the funda¬

which their socie¬

& 7s

■

Haas before the 29th Annual Con¬

upon

Supplies And Equipment Or

you

established institutions have been

mentals

Bridge

Common, 6%s

from

past

not

is

Detroit Int'S

j

It

where and threatens everywhere;

&TeeTie<mdCompcmi|
37

of

comes

The world is swept by war

fact.

7's,Pfd.

Dealers Assn.

the

This unity of ours

Preferred

Y. Security

of

there

that really count.

throughout

N.

diver¬

sense

no

comes

American people about

Vicana Sugar

Members

immense

Rather

confusion.

Alegre Sugar

U. S. Finishing Co.,

this

there

gence

Preferreds

United Piece Dye

of

.

Nu-Enamel Corp.
Punta

out

WHitehall 4-8120
Teletype NY 1-1919

1

be ..be¬

cause

are

Governor, has
problems and to some
extent, differing types of people.
But

Broadway

Bell System

-

different

Diana Stores

Members New York Curb Exchange

65

such

no

and
as

Members New York Stock Exchange

r m a n

statement.

St^s.

Each of us,

Edward A. Purcell & Co.

was

and Thomas & Allen.

You r<J>—:

i

a

tonight with

some

New

h

c

agricultural, some indus¬
Some are seaboard States,
mountainous, some prairie

trial.

hf the First Na¬

Memphis, and

^^

I shall tell you

1-1843

NY

the

chairman says, "Tell'the boys something they like to

program

stimulat¬

a

those

Some- of

West;

of

manager

University

preponderantly Republican, some
Democratic. Some are preponder¬
antly

Telephone: WHitehall 3-1223
Bell

the

people,

There
are gathered here Governors from
39 States, North, South, East and

H. G. BRUMS & CO.
20 Pine Street,

is

•

Thomas

Mr.

partner in Saunders & Thomas

Usually when I am asked'to; speak for

upon

conference

municipals.

bond department

a

Bayway Terminal

Mississippi, Tennessee and Ar¬

kansas

Off

ence

This

Pfds.

Du Mont Laboratories

The, World"—Sees Free Competition

Still A Long Way

ing and reassuring occasion.

1944

6s,

"Face Chaos In

may

Issues

U.S. Realty

7%

municipal buying department of
Bullington-Schas & Co.,-First Na¬
tional Bank Building, specialists

of International Relationships,

War Plan For Allotment Of

ing future wars."
The text of the address follows:

Struthers Wells

&

Emerson Radio

Stops" Re¬
sulting In A Post-War Boom To Be Followed By a Pe¬
riod Of Industrial Decline—Urges An International Post-

present one will not recur,"
and that they have "a positive
determination to join in prevent¬

Stock

6%

MEMPHIS, TENN.—E. C. (Coke)
Thomas is how in charge of the

"A Tremendous Potential Demand

Economist Predicts

the

Byrndun Corp.

England Pub. Serv.
Plain

'

For All Kinds Of Products When The War

the proposition
that our foreign affairs must be
conducted so that disasters like
united

are

Common

Zeigler Professor
Harvard

the

conviction that

Gov. Thos. E. Dewey

Common

ex¬

pressed

NY 1-1548

Teletype

System

sources

—the

COrtlandt 7-4070

Telephone
Bell

their

New York 5

Nassau Street

pro¬

ceed closely to

York Curb Exchange

New

coun¬

.

Vanderhoef & Robinson
Members

William

post-war

period,

1919

Y.

branch offices

our

mas

By DR. J. ANTON de HAAS

re¬

reconstruction

Russian Government
N.

Direct wires to

2-7815

This Scrambled World

sponsibility in

3-6s, 1956

on

4, N. Y.

NY 1-1557

return

State

to

Savoy Plaza

•Traded

HAnover 2-0700

New Orleans, La.-Birmingham, Ala.

dan-

gers
of regi¬
mentation and

61/28,

Members New York Stock Exchange

25 Broad St., New York

Exchange

pointed^

Pa.,
out

*

REctor

tional Bank of

-

Governor Thomas E. Dewey of New

N. Y. 5

WOrth 2-4230
Bell

;

BROADWAY, NEW YORK

E.

was

120 Broadway,

Stock

:,

York Curb Exchange

Tel.

Brought About Totalitarianism To Our Enemies And Be

Stock

Mayflower Hotel, Common

Members

Members

York

New

NY 1-672

Teletype

7-0100

1

..

New

Dewey Sees A Revival Of
State Responsibility |

.

Chesebrough BIdg., 6Ts, 1948
Elk Horn Coal, Com. & Pfd.
La France Indus. 4's, 1956
&

.

1-423

BELL TELETYPE NY

American States

BArclay

Steiner, Rouse & Co.

*

'

NEW YORK 6, N. Y. /

BROADWAY

115

N.Y. 5 HA 2-2772

40 Exchange Pl.f

McDonnell &fo.

-

Exchange and Other Principal Exchanges

Y. Stock

Members N.

Bought—Sold—Quoted

!

CANADIAN UTILITIES

COMMON

Direct

Private

Wire to Cleveland

14

Invest.

Bagdad Copper

Stand.

Comm.

Tob.

South Shore Oil
Petroleum

Ht.

&

Pwr.

MORRIS STEIN & CO.
Established
50 Broad Street,

1924

New York 4, N. Y.

Telephone HAnover 2-4341

Volume

v

Number 4288

159

THE COMMERCIAL & FINANCIAL

The COMMERCIAL

FINANCIAL

:on
/

Reg.

3*/2S, 1954

.

U.

William

.

Dana

Company

Publishers

Somerset
1st

25

Railway

Ref, 4a,

1955

Paper

William
William
•

'

Dana

D.

•

■

every

;»

Security

Dealers

Ass'n

Other

DIgby 4-8640

Harrison 2075

Teletype CO

Manager

'

>

and

news

Offices:

" v

:

;

129

wards'

j

week

S.

La

&

Smith.

v'

1944

Reentered

MORTGAGE

'

•;

Copyright

by
as

1

Telephone HAnover 2-4300

'

N.

Y.,

-

Dana

.

-t

Company

second-class matter Feb¬

under

the

Act

of

March

I, 1879.

PARTICIPATIONS

Subscriptions ■ In United States and
Possessions, $26.00 per year; in Dominion
)f Canada, $27.50 per year; South and'
Central
America,
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and
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$29.50 per year; Great Britain;
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issued by

Central Hanover Bank & Trust Co.
Chase National Bank

City Bank Farmers Trust Co.

Publications

II

I

Members

40 Wall

[j

New

York

St., N.Y. 5

Bell

Stock

$20
Monthly Earnings Record—Mth.. .'$20

Teletype

NY

||

1-2033

must

be made

in

New

York

funds.

sidies—Favors Baruch-Hancock Plan Of Tax Reduction
In

delivered

before

the

Conference at

;

•

address

an

Harrisburg, Pa.,
Ohio, Repub-3>

*

,

lican

Presi¬

yr.

dential

rant,

aspi¬

severely

condemn

e

d

•

tion

examined

the

"Order For

as

the

Dealers, Inc." A
full, is appended.

"the
of

Examining the order makes
7

The Commission recites

an

interesting study.;

State

and

govern¬

on

"aid

and

suppress

The text of

Our

representative

system

government has responded

Gov. John W. Bricker

a.y

i

.

ingly to the crisis of

greate#

economy

and

Teletype NY M203

MOXIE CO.
Comprehensive Circular
on

Request

The dictators have said that the
democracies

were decadent.
They
proclaimed to the world that

had

free people could not be welded

together into

tions-.-,'.-".. :
We

strong, united and

a

has belied
•

J.F.Reilly&Co.

..

.

Ill

■

have

built, almost over¬
night, the mightiest Army and
Navy in the world. American incontinued on page 2386)

Members

•

New

accusa¬

series of facts which its "offi¬

a

6, N. Y.

HAnover 2-8970

war.

their

H e .s t r e S S e d
particularly

New York

of

American in¬

form of
dem agog,y."

39 Broadway

.

amaz¬

genuity

every

CO.'

Members New York Security Dealers Assn.

prepared address follows;

determined nation.

ab¬
and

Information

Governor Bricker's

doors

"to

Statistical

L. J. GOLDWATER &

encourage rather than
American enterprise."

a

solutism

the need for

v

to

QUOTED

■

Thirty-Sixth Annual Gov¬
May 30, John W. Bricker of

ment," and as
opening
the

hearing date "In

-

Complete

SOLD

balanced
budget
in Federal
operations, and a complete over¬
hauling of tax policies so as to

paralysis

local

Proceedings And

of this order giving the text 'in
;,. vy.';.V

copy

leading

as

the Matter of the Rules of the National Association of Secur¬

ities

power

Government

Notice of Hearing" made by the Securities and
Exchange
Commission which fixes June 13th

of

-

a

in the Federal

Hearing On NASD "5%
Spread Philosophy"
have

BOUGHT

Certain Taxes To Local Governments In Lieu Of Sub¬

yr.:

.

CERTIFICATES

Policy Of Spend, Waste, Borrow
Economy," He Declares
—Urges (1) Strictest Economy'In Government; (2)
Collaboration Between Federal, State And Local Govern¬
ments To Segregate Tax Basis; And
(3) Reservation Of

the centraliza¬

We

give

!

•

"The Pre-War Federal

NOTE—On account of the fluctuations
n the rate of
exchange, remittances for
foreign subscriptions and advertisements

II

Exchange

Whitehall 4-6330

to

to the Red Cross?

TITLE COMPANY

And Tax Will Wreck American

;

3ank and Quotation Record—Mth.

Uewburger, Loeb & Co.

of blood

Exchange

Balanced Budget

ernors
Other

appropriate time

more

that pint

Gov. Bricker Calls For Fost-War

.

Guaranty Trust Co.
Irving Trust Co.

being

Salle

ruary 25, 1942, at the post -office at New

7ork,

is

/;

f

B.

blood

the battlefield.

on

What

us remem¬

Teletype NY l-§

Members New York Stock

issue)

*

•<.

William

American

that

the initial

over

Day, let

'

Monday

.

•

Buy

Trask & Co.

Speinccr

i

•'
•

advertising

135

exultation

ber

25 Broad Street, New York
a

the

of "D"

shed

St.,
Chicago 3, 111. (Telephone: State 0613),
Western Representative;
1 Drapers' Garlens,
London,
E.
C., England, c/o Ed¬

CHICAGO 4

Teletype NY 1-832. 834

Utility and Industrial

PREFERRED STOCKS

3

complete statistical issue—market quo¬
tation
records,
corporation,
banking,
dearirigs, state and city news, etc.)

Board of Trade Bldg.

NEW YORK 4

THOUGHT
Amid

v

Thursday

and every

STRAUSS BROS.

We

Public

President

Business

.•

Published twice

{general

Broadway

;

;

successes

Thursday, June 8, 1944

Seiberling Rubber

32

High Grade

3-3341

Seibert,

Riggs,

.

Mergenthaler Lino.

York

A SOBERING

V\

•

offerings of

Herbert D. Seibert,

.

New

interested in

are

.

Editor and Publisher

Oxford

Members

.

Spr.uce Street, New York 8
BEekman

We

Office. ♦' r'3

Patent

2363

"

•

CHRONICLE

S.

B.

and

CHRONICLE

York

Security

Dealers

Assn.

Broadway, New York, N. Y.
REctor 2-5288
Bell

jLi

System

Teletype.

NY

1-2480

NET MARKETS

cial files disclose." These include:
(a) the registration of NASD under the Maloney Act;
rule dealing with "high standards of com¬
mercial honor and just and equitable principles of
trade"; '
(c) the communications sent by NASD interpreting the "5%

U. S.-BriHsh Post-Wat Relations

(b)... NASD's

fjJr;
'.f;
;
.

spread"; and.

-

(d) the resolution filed by the New York Security Dealers
and the petition filed
by the Securities Dealers

Association
Committee.

Then
the scope

comes

1

-

the clause in which the Commission defines

necessary

not

automatically

one

reason

advantage

haven't

and appropriate in the public interest and for the

far "

Memorandum

we

Commission, having considered the aforesaid, deems it

COMMON
Listed St. Louis S. E.

for

to our mutual

(Continued

on page

;

2390)

;

'

\

can

agree

,

pro-

:

more

tensive
some

t

NASD. Board Of Governors
And The 5% Hark-Up Rule
Officials Failed To Abrogate Widely Opposed Measure
At Recent Meeting In This City—Effort Again Made To

Justify Mark-Up Policy As "Interpretation"

is
ex¬

of

members of the National Association of Securities Dealers

hold to the belief that the so-called

"5% spread philosophy"
promulgated by the Association's Board of Governors is
definitely a rule, a position long held by the "Chronicle."
Accordingly, as this publication has continuously maintained
in its editorial discussion of the subject, the directive is def¬
initely illegal as the by-laws of the Association require that
the membership be permitted to vote on
any rule.
Despite
this injunction, the Board of Governors failed to
give th6
membership an opportunity to consider the proposal and has
attempted to justify its illegal act by advancing the specious
claim that, rather than a rule, the mark-up policy is
merely
an "interpretation" of the Association's rules of fair
prac¬
tice.
It is perfectly clear, however, that the efforts of the
Board of Governors in this direction have been singularly
No better evidence of this fact is available than

[that contained in

a

letter sent under date of May 18 last by

(Continued




on page

2391)

vs.

suggest

—

of basic

and

an

United

unilateral dis¬

cussion,
we

are

lating

of

170 Broadway
Bell

COrtlandt 7-6190

System Teletype NY 1-84

bilateralism
as

a

feature

economic policy. To take

that

we are

us, let us as¬
talking about the

SUGAR

States, that Great Britain

is Vermont, that American is New
York State, and that there are

when

Request

analogy familiar to

sume

cussion I

mean

issue

multilaterialism

by current dis¬

specu¬

trade barriers between the

among

SECURITIES

—tariffs,

ourselves

to

as

are

or

when-

the

British

are

trying

states,

quotas and other ar¬
rangements whereby each state
endeavors to protect its own eco¬
nomic position.
This is an over¬

what the Brit¬
ish

Despite repeated statements to the contrary by its spon¬
sors, it. has long been evident that a large number of the

ample—the

s-

mssions would

on

UmiaD&Co.m

time

sider just one, taking it as an ex¬

the
d i

identical,
another, but

or

today to cover that
particular waterfront. Let us con¬

than

current

abortive.

Clay Products Co.

"Just now I suggested that the British and American
peoples,
working through their Governments, can discover and work out an
agreement on their mutual economic problems," said Don C. Bliss,
Jr., Commercial Attache to the American Embassy in London in an
address made before the Commerce and Industry Association, New
York City, on May 23, 1944. "I think," continued Mr.
Bliss, "that the
scope in which
we

of the hearing. Here it is:

"The

Laclede-Christy

ap¬

up

to

to,

simplification, but let

us say

DUNNE & CO.

fur¬

ther that Vermont'has only maple

Don Bliss

sugar to sell, while New York is
attitudes. There the only source of imported coffee.
of situations in which Vermont of course wants quite a

Members New York Security Dealers Assn

25

praise American
is quite a list

American and British -interests

are

-.

(Continued

on page

Broad

St., New York 4, N. Y.

Tel. WHitehall

3-0272

2385)

American Cable & Radio
Warrants

tflc Qoait

Public National Bank

Seculitiel
HODSON&

WYETH

8:

& Trust Co.*

COMPANY,

*First quarter analysis
available on request

Inc.

Co.

C. E. Unterberg & Co,
NEW YORK 5
'

40 Wall- St.

LOS ANGELES 14
647 SO.

Spring St.

Members Los Angeles Stock Exchange

Members New York Security Dealers Assn

165

Broadway, New York

61
,

Broadway, New York 6, N. Y

Telephone BOwling Green 9-356P
Teletype NY

1-16R6

2364

Thursday, June 8, 1944

:

.wiY,.1

j »■-a*

BOSTON, MASS.

A Low-Priced Stock in
With

Stix

t. •••

*-

»• X• &Bell

System Teletype

members:

Stock

y/ ;

ST. LOUIS 1, M0.

;

,

(Pa.)

" A

509 OLIVE STREET

jfiweltmavt

Div.

Sfctft

Z-ZYs

Arrears Ctfs.

york

new

new
and

Members St.

exchanges *

leading

pleased

Consolidated Textile & Bonds

to

for Copies

LERNER & CO.

exchange

Louis Stock Exchange

that

announce

POST

10

;
are

;

exchange

cotton

york

other

stock

■■■:

i'

■

18%-19%

Circular Available—Send

N. E. Pub. Serv.

6% & 7% Pfd.
Wickwire Spencer Steel
Lawyers Mortgage Co.
Pollak Manufacturing <; V,

.

Giant Portland Cement

Co.

a.

Industry

an

Rright Future

a

OFFICE

1

SQUARE

; BOSTON 9, MASS.

;

Tel. HUB 1990

Teletype BS 69

Purolater Co.

HUGH D. CARTER,

Axton-Fisher "B"

Crowell Collier P. Com. & Pfd/

has

been

admitted

Polaroid

•

in

as

this

general

a

CITY

SALT LAKE

DALLAS

partner

Bought

Specializing in

firm

home

office:

other

*

Mohawk Rubber*

ann1ston

Panhandle Eastern Pipe Line

athens

Hearst Pfd.

ROME

UTAH-IDAHO SUGAR

v

offices:

Southern Union Gas Common
So'western Pub, Serv. Com. & Pfd.

4

birmingham

'

Analyses Upon Request

chattanooga

hartsville

gadsden

v

greenville

Dallas Ry. & Terminal 6%

Check

& COMPANY
,160

Amer. Gas & Power & Wrnts.

Derby Gas & Electric

BELL

Small Business fate Vital Issue

SYSTEM

utah

1,

Southwestern Securities

on

RAUSCHER, PIERCE & CO.

main street

salt lake city

us

'

ESTABLISHED 1899

Sugar Com. & Bonds

1951

All Texas Utility Preferred Stocks

EDWARD L. BURTON

lagrange

Southwest Pub. Serv.

Vicana

Quoted

—

Pepper

Republic Insurance

atlanta

Util. 5%$

Public

Cent.

Dr.

AMALGAMATED SUGAR

Title Guar. & Trust

Liberty Aircraft
Conn. Light & Power Com.

Sold

—

Nu-Enamel

TELETYPE

SU

DALLAS, TEXAS

464

Houston

San Antonio

'•!

In NASD 5;

Merchants Distilling* *

Loft

Abrogation Of Measure Essential To Preserve Markets

Long Bel! Lumber*

Botany Worsted "A" and Pfd.
Brockway Motor*
Triumph Explosives

ATLANTA, GA.—Courts & Co.,
Marietta St., N. W., members
of the New York Stock Exchange,
have
announced that
HughD.
Carter, Jr., •:

Corporate Entities, Dealers Assert

difference of opinion, even among

well-!
in
the post-war period, there is one premise on which there is;
complete unanimity. This concerns the extent of the con-;
informed

circles,

a

as

to the probable trend of conditions

tribution that small business must make in the tremendous

MOXIE

task

Rayon

Terminal. &

Transportation
Cigar Whelan

way possible in order to grow and expand. A cardinal neces¬
sity here, naturally, is the creation and maintenance of mar¬
kets for their securities, completely devoid of any artificial

Talon

Radiator

Butler

Pierce
Nu

Enamel

"A" &

Drill

United

"B"

Industries*

American

Great

impediments.

Petroleum Heat & Power
Bird

&

of

providing the fullest employment in peace years..
Even so-called big business freely concedes and recognizes
this principle. Such being the case, it is axiomatic that these
smaller enterprises which, by and large,, have necessarily
suffered because of war conditions, must be favored in every

Com. & Pfd.

United

Son

"

has

mitted

Airlines*

Export

& Southern Airlines

Airlines

Airlines*

Mid-Continent

National

Airlines

Northeast Airlines

Washington Gas & El. 6s,

1960

Illinois Power Div. Arr. and Com.

Pwr. Com. & Pfd.
American Utilities Service Pfd.
Lt. &

Peoples
Cons.

Elec.

Gas Pfd.

&

Util.

Iowa Southern
Central

Elec.

&

Com.

Tel.

,

Com.

Dearborn

Consolidated

Nassau & Suffolk Ltg. Pfd.
Queensboro Gas & Elec. Pfd.
Puget Sound Pr. & Lt.
Mass. Power & Lt. $2 Pfd.*
United Lt. & Rys. W. I.
Scranton
Springbrook Water

is

Pfd.

Stromberg Carlson
Emerson Radio

'

*

Du Mont Lab. "A"*

International Detrola

Majestic Radio & Tel.*
Magna vox Corp.*

-gradu^
ate of Georgia
a

P. R.

no

OR WIRE ORDERS

been

&

on

to drive the little

Request

.

are

many

PATERSON, N. J.

cases

when I do not

.

-*

-

.

'-v

.

j..

charge 5%, but'there arje

other situations where I put in much time and money for re¬
search and it is necessary to charge over 5% to cover the overhead
proved that the additional charge oyer 5% w^is
well worth while.
I do not sell packaged items, such as investment
trust shares, where the dealers just tacks on 5%, but does no research.
Just as in any line of business, you get just what you pay for.
If the
'dealer has the interest of his clients in mind, he will not overcharge.
If he does, he will eventually put himself out of business.
If he is
limited to 5% then he cannot afford to put in the time and money for
In these

Y. Security Dealers As*.

BROADWAY, NEW YORK 5

REctor 2-8700
Direct

wires

to

Hartford

6111

NY 1-128'

Boston '

ENTERPRISE
—

&' Bhilai'11 \

'PHONES

n

Buffalo,




~K]
,

cases

it has

(Continued

on page

2388)

*

r

—

PH 265

N. Y. WH 3-7253

gas

from

Common Stock

r

'

V

•

Urtiverstity in
1925. Mr. Car¬
ter is
ber

Memorandum

Hugh D. Carter

on

Request

mem¬

a

of

Pied¬

Club,

Capital -City

Driving Club, Kappa Alpha

mont

Fraternity, and Princeton Charter
Club.

BOENNING & CO.
1606 Walnut

.

Admission

Mr.

of

Carter

to

St., Philadelphia 3

Pennypacker 8200

partnership in Courts & Co. was
previously reported in the Finan¬
cial Chronicle of May 18th.

Private

PH 30

Phone

COrtlandt

SAN

E.

to

N.

Y. C. 'V,;
UUC

7-1202

FRANCISCO

CURRENT INFORMATION

Announcement is made that Ed¬
ward

with Goldman, Sachs &
Co.; 30 Pine- Street, New York
City,- members of the New York
Stock Exchange, in Its buying de¬
partment.
Since 1942 Mr. Mar¬

' always

"

.

sociated

*

duction Board, Office of Civilian
Requirements, in the capacity of
Acting Director, Appeals and Or¬
Staff

and

the

to

available

on

"

pacific coast

securities;

.

!;

Send for our current report on

shall has.been with the War Pro¬

Clearance

MARKETS

and

W, Marshall has become as¬

Hecrst Consolidated "A"
>

o

>

H. R. BAKER & CO.

Special

,.

Russ

Bldg.

650 So.

.

San Francisco

Vice-Chairman.

F.

Los

196

l.

Spring St.

Angeles
a.

42

joining the WPB he was

of

Director

All this

many

120

:

*

.

.

-

.

„

„

out of business.

man

r

federal water

Co.

big brokers wonft Vice-President !and
move is only
Boston Fund, Inc.;,

the

'

con¬

with

since his grad¬

Prior to

There won't be any market for them as
bother with dealers in that type of security,

There

,ilembers N.

Phila. RIT 448?

;

BOSTON, MASS.

:

.

Philadelphia 2, Pa.

St.,

Bell -Teletype

v

S.

AT OUR EXPENSE

*Circular

.

j

ology,

Assistant

Mallory*

PHONE

CITY

market for such securities.

,

of

jchool
f echn

der

There will be

,

request

Philadelphia Stock Exchange

1529 Walnut

P r;i jiceton

NEW YORK

General Instrument*

Members

na*

a

uation

ing the dealer's comments was obtained from the postmark
appearing on the envelope in which the questionnaire was
returned.
In cases where publication of the name, of the,
community would tend to identify the firm (as in places where
only one firm exists), the point of origin is indicated by using
the phrase, "A Small Maine Town," as an example, or its
equivalent.

'

.

BUCKLEY BROTHERS

tional Association of Securities Dealers is calculated to -mar

Inland

'A

:Members New York Stock Exchange

tive of Atlanta

aas

:

•

their

Mr./ Carter;:

and

Pennsylvania

' '

part¬

im

who

'

\

»

a sa

Courts

terially interfere with the normal functioning of such mar¬
kets.
This fact has been emphasized time and again by
securities dealers in various parts of the country, whose
views on the subject have been published in these columns
regularly since our issue of April 13. While there have been
expressions to the contrary, the overwhelming majority con¬
tend that the 5% rule, if it stands, will seriously impair the
markets for existing securities of small corporate enterprises
and make it extremely difficult for these and similar units to
obtain new capital accommodation. In this connection, we
give here additional expressions in the matter and these,
incidentally, constitute the remaining unpublished balance
of the hundreds received on the subject. Weiwould call at¬
tention to the fact that the name of the city or town preced¬

i

firm.-■

]

X

Memo on
t

general
ner

Company
Tax free in
'■

ad¬

been

Unfortunately, however, there is substantial reason to
believe that the widely opposed 5% mark-up rule of the Na¬

Appliances
Tokheim Oil Tank & Pump

Chicago

H. H. Robertson

•

nected

' '

;

Bendix Home

American

M

Carter As Partner

While there is

Sugar
Remington Arms
Eastern Corporation
Magazine Repeating Razor
Alegre

fhenandoa

PHILADELPHIA

11

Car

Auto

Mark-Up Rule

For Securities Of Small

Candy

Punta

,

Courts & Go. Admits $T>:l

Vilas &

•'

Three To

Partnership

"Vilas & Hickey, 49

New

York

New

York

Laurence Hayes Forms
Own Firm in Rochester

Wall Street,

City, members of the
Stock

changes,

will

Jacobus,

John

and

admit
H.

Curb

Royden

Printon

ROCHESTER, N.,Y".—Laurence

A.

Ex¬

E.
and

Hayes

has

formed

A.J Hayes Co., with
Powers

Laurence

office in the

Building, to act as dealers

and brokers in unlisted securities.
Mr.

Hayes

was

formerly

the Genesee Valley Securities

George E. Richardson to partner¬

H. O.

ship in the firm on June 15.

aco,

with

Co.,

Wallace, Inc., and Delmon-

Hayes & Co.

Volume 159

Number 4288

-

THE COMMERCIAL & FINANCIAL CHRONICLE

POST-WAR POSSIBILITIES
Bendix "Home

■;>'

v

Appliances

Dumont Laboratories

;;

2365

"Observation Post"

Majestic Radio

Aldred Investment Trust
4

v

Emerson Radio

For Dealers

Stromberg Carlson
"

:

Bought

—

Sold

'

York

tust

Association

Dealers

Security

REctor

Bell

do many

2-5288

NY

System Teletype

the

as

Steep Rock Iron Mines, Ltd.

Army needs observation posts to obtain the

/ ' military intelligence

New York, N. Y.

111 Broadway

necessary

dealers require

for effective operations,

s

Winnipeg Electric

so

similar advance post which

can

provide them with accurate investment "intelligence".

;

HART SMITH & CO.

^

62

We Suggest-

We do

COLUMBIA BAKING

to close

6OV2
yield 6l/2%v

deal.

a

at

''r

to

market

(Callable at 100)

/

,

,

r

,

payable' july 1;' record June 15

$1

an

as

observation post

That information

WILLIAM St., N. Y. 6
Bell

by having

/

HAnover 2-0980

Teletype NY 1-395

New York

Montreal

Toronto

necessary

pertains to markets and
American Water Wks. & Elec.

conditions—resulting from constant research, long

5s,

experience and wide contacts in the field,

■

Quarterly dividend

dealers

serve

readily available the investment information often

Participating Preferred
'

1965, A & B

5s,

.

a

1-2480
.

.

Telephone

4y2s, 1961

J.F.Rcilly&G«.
Members, New

1959

British Columbia

.'y

'

Company

5s,

'

•'.*

y2s, 1967

Brown

1975

Community Water Service
6s,

Earnings statement on WRITTEN request

1946

East Coast Public Service
'

Phone

\ Established 1914
74

BOwling Green 9-7400 > . ;

a

transmitted

Trinity Place, New York 6, N. •Y^v-.-V*

Telephone:

teletype us

mation for

••

*

.

or

knowledge

the next time

closing action. Let
can

us

need specific infor¬

you

show

you

how rapidly

be of effective service

•J

•

sy2sf 1931

Tyler Building (N. Y.)
1953

6s,

SUGAR SECURITIES
($1.50 Cum. Conv. Class A Pfd.)'

Frederic H. Hatch & Co.

Favorable Current Earnings

*

Incorporated
63 Wall Street

Prospect of Large Post-War
:

Eitingon-Schild Co. Inc.

Type Investors, Inc. A
V"

..

We

201 Devonshire Street

FARR

S. R. Melven & Co.
York 6,

NEWARK 2

4/35

Iowa Central

Members New York Stock

5/38

Tampa Gulf Coast

Exchange

5/53 c/d

•

PUBLIC

UTILITY,

INVESTMENT

STOCKS

Sales

Gas & Electric

Standard
AND

Coal

Valley

Lehigh

BONDS

INDUSTRIAL

Minerals

Greendale

RAILROAD,

MUNICIPAL,

GOVERNMENT,

ST., NEW YORK 5

120 WALL

Telephone WHitehall 4-7544

Des Moines Ft. Dodge

Exchange

York Coffee & Sugar

New

Minneapolis St. Louis 4/49

CO.

&

Specialists in Sugar <fi Sugar Securities

N. Y.

Minneapolis St. Louis* 5/34

744 Broad Street

BOSTON 10

Members New York Stock Exchange

2 RECTOR STREET

New

STREET, NEW YORK 5

TEL. HANOVER 2-9612

Teletype N. Y. 1-2123

New York 5, N. Y.

Bell Teletype NY 1-897

Pressprich 8C Co.

68 WILLIAM

,

principals—Brokers may trade
for our account,
v
■

are

R. W.

Sugar Demand

Quotations Upon Request

British

Society of N. Y.

Certificates

vTfv

your customers.

1948

Provident Loan

to you and

Teletype: NY 1-375

.

4s,

Eastern Minnesota Power

.

•

722 Relief Decision Evokes Interest

1 Wall

Reed

Drug Com. Offered Washington Dodge Is
With Roberts & Go,
By Floyd D. Cerf Go.

By PETER GUY EVANS, C.P.A.

Taxation at Columbia

>:Y and Rutgers Universities

>,

Members New York Stock Exchange

Relief Section

Involves Recovery Procedure Under
Member of New York Bar; Lecturer on

Gude, Winmill & Co.

L;/

.

great deal of interest was expressed in the recent decision of
the Tax Court of the United States in the Uni-Term Stevedoring
A

decisions involving the inter¬
pretation of the procedure to be followed in connection with the
recovery of claims for refund of excess profits tax under Section

Co.

722, the so-called relief section.

not

Company, case, one of the Court's first

to

S

p

c

e

ruling

-

1943, Form 991, "Application
Relief Under Section, 722 of
Internal Revenue Code,"

15,
for

the

Tax

the

that

i

the
holds

f ically,

_

was

D. Cerf

of

25,000

offered June

Roberts

common

of the Reed Drug
6 by

Floyd
Co., Chicago, at $3.75 per

Co., 61 Broadway,
City, members of the

York

New

York

Stock

Exchange,

an-

American iaize

financing and
none of the proceeds
will accrue
to Reed Drug Co.
The company
is
engaged in maintaining and
operating a chain of retail drug
represent

fund of excess

termined to be due from the tax¬

ford

new

Products

corporate

try

payer

lief claim

in

na

Coro¬

the

by
i

s

claim

same.

Rev.-,

had

enue.

h a t

p

ically
cases

Peter

Guy

Evans

involving

tax

claim

for

refund,

Court will only rule on

the
the defi¬

ciency. Later, should the taxpayer
appeal from the Commissioner's
action

of

the

relief

Court will hear the

ingly.

.

722

t

acted

the
on

no

excess

Procedure Premature

*

in ,1943.

59

was

with

64

63 Wall

Incorporated
NeW York 5, N. y.
Teletype NY 1-897

Street"^

Bell

We have

prepared an Analysis on

EVERSHARP

cents -as

cents in

concluding the Court's de¬
cision,
Judge
Murdock
pointed

claim,

case

the

accord¬

that

out

had

been

nayment of the tax
the

Commissioner.

er's

request

jurisdiction
over

the

Section

in

nor
-

the

ouestion of

722

is

action by

The

the

that

neither

taxpay¬
Court take

proceeding
relief under

"consequently is not in position to

.

The Corporation

contended that

should it be compelled to pay the
additional excess profits tax, it

refund

on




Sept.

such

of
»

excess

The

contention

for overpayment.
"If the Commissioner

1942.

profits

Court'
and

suing

tax
disouted

assured

the

sue

later

Washington Dodge

INC.

disallows

refund, the sending of
a
notice under Section 732(a) is
mandatory," the opinion reads.
"The same section also expressly
provides that the petitioner (tax¬
payer) upon receipt of such a no¬
tice, mav invoke the jurisdiction
of this

Court.

•

.

"If the Commissioner should act

favorably

upon

this

for

refund,
entitled

claim

refund

or

held by

sue

petitioner's
the petitioner

to

receive »the

for it, or, if it were

this Court in

a

later

pro¬

ceeding that the petitioner is en¬
titled to relief
under 722, this
Court

ment.":

would; find

an

overpay¬

"
i

!

that Washington Dodge is
associated with them.
Mr.

nounce
now

claim for

would be

ask for any relief."

for

Claim Filed

and

premature,

would be barred from later

* :

Corporation filed

there

Corporation that it could

rob-''

Frederic H. Hatch &Co.

Springfield,
111. and
Gary, Ind., through which it sells
retail, drugs, pharmaceutical
products,
smoking
materials,
candy, specialties and sundries.
Sales for the calendar year 1943
aggregated $2,748,611, an increase
over
1942
when $2,695,960 was
reported.
Earnings per common
at

compared

a

")wi;
3

and

share

it

-..A .*!«.'

Milwaukee'

in

Allis, Racine, Kenosha ,and
Janesville, Wis.; Chicago, Rock-

a

In

overpaid.
The

that

not

profits tax
been paid by the tax¬

Since

ever

deficiencies

adjudicated as they come
for trial, but interjection or off¬
set of relief claims filed, but not
yet ruled upon by the Commis¬
sioner, will not be permitted. In
other words, if a corporation has
been assessed an additional tax,
and it has also filed an appropri¬
relief

fact

had

fund.

all

will be

ate

the

for 1940, the Commissioner
did not act upon the Application
because there was nothing to re¬

-

pointed

that

out

that

located

stores

payer

Court

The
m

e

offset against the

the

despite

Commissioner

sioner, of

internal

an

claiming

the power to hear the

Court had

with law,

ance

as

deficiency,

accord-

for trial

up

came

case

Corporation interjected its re¬

the

first

ruled upon,

its

On April 5, 1944,

for 1940.

when

profit tax un¬
til they have
been

a

Company

:w

.

West

claims for re¬

Teletype NY 1-955

&

New

The sale of this stock does

share,

refund of $83,669 for
the year 1940." ' This is the exact
amount that the Commissioner de¬
claiming

Court will not

.

is'sue

An

shares (par $1)

St., New York 5, N. Y.

©Igby 4-7060

Dodge formerly

partner of
Wiesenberger & Co., and
prior to that was financial editor
was

Common Stock

Arthur

of "Time"

NEW

YORK

CURB

EXCHANGE

-*

Booklet

available

upon

written request

magazine.

Substantial Improvement
Wood,

,

DEALT IN ON THE

a

Gundy

&

Co.,

Incorno-

Stanley Heller & Co.
Members

New

York

30 Pine Street
Tel.

rated, 14 Wall St., New York City,

Curb Exchange

New York

WHitehall 4-9200

have

prepared
an
eight-page
pamphlet outlining the substan¬
tial financial
improvement that
has marked the operations of the
Canadian

Pacific

RR.

over

the

Interesting Rail Situation
Adams

past five years; this is illustrated

an

by

& Albany

graphic

comparisons

of

1938

&

Peck,

63

Wall

St.,

York

City, have prepared
interesting circular on Boston

New

RR., which appears at¬

tractive at" the present time, the
firm, believes.
Copies of this cir¬
pamphlet may be had upon rd-j cular may- be had from Adams &
quest from Wood, Gundy & Co;' < Peck upon: Request.

with

1943.

Copies

of

the




iCT4

•

a%. m\

Thursday, June 8,*1944

■'<*"

Photographs

by

Jack Germain

;Volume 159

THE COMMERCIAL & FINANCIAL

Number 4288

.

CHRONICLE

2367

Brazil Transfers $42,000,80© To fleet Initial

;
Payment On Dollar Loan Issues In U. S.

i

1st & Ref. '5s.

transferred to this country

It is announced that Brazil has just

-

more than $42,000,000 to meet the initial payment of its foreign obli¬
gations represented by dollar loan issues in this country amounting

to

The

$286,065,645.

Income

Ry. Co.

& Western Railroad

"C"

1973

New York, Lackawanna

Mortgage 5s, 1993

When,

arrangement is the result of Brazilian
dated Nov. 23, 1943, and April 10, 1944,

new

Decree Laws 6019 and 6410,

Delaware, Lackawanna

New York, Lackawanna & Western

as

and if

issued

& Western Division

Bought & Sold

respectively, which determine the two plans A and B worked out in
with

•Bondholders

Protective

Inc.

(New

the

Council,

plans

These

York).

[ On Board of Sterling Bank

the

statement

registration

becomes

The

effective.
also

nouncement

an¬

PFLUGFELDER, BAMPTON & RUST

®

Herbert

Luce

P.

has.

been

1

Members

.

elected
of

a

of

member

of

Directors

Refunding 5s, 1973

Income

1

will be offered to the bondholders
when

1st &

Foreign^-

■cooperation

New

York Stock

5s, 1993

(When

Issued)

Exchange

Board

the

61

Sterling National

Broadway

New York 6

'

Telephone—DIgby 4-4933

Bell

Teletype—NY 1-310

Riverside Cement

says:

"Signing of the necessary docu¬
was
held .today (June 7)

ments

in the presence

of representatives

ing interests.

-

'

•

'

.

"

(b)

bond;

general

(a)

agreement with 10 fiscal agents
covering 3.1 different issues; (c)

(d)

registration statement;

pros¬

pectus; (e) offer to holders of dol¬
lar

agreements with
fees and general

(f)

bonds;

fiscal agents on

However, it

York,

will

which

/

act

Erie

de¬

as

"The documents will carry the
signature of Romero Estellita as
the legal
representative of the
Minister of Finance, and who will
Sign in behalf of the United States
Brazil.

;

F.

"Valentim
Council

and

Boucas

Finance

Brazil,

of

and
General

and

Comptroller
of
Brazil,
respec¬
tively, also signed the documents,
not only as witnesses, but as the

Herbert' P. Luce

•*"
..

Bank

&

is

it

Trust

Co.

announced.

■'*

New

of

is

Luce

Mr.

of

;

York,

United

Cigar-

Whelan Stores Corp.

' "

v

•

NSTA Members To Aid

for

has

that

the

out

carried

been

this

in

months

six

last

country."
'

"This

said:

Boucas

Mr.

in

is

fact the most important financial

operation of its kind in this coun¬
try and shows the real and com¬

prehensive way of a 'good neigh¬
bor'
policy
working
in
both
directions.
T

yV,'.S;'';:

"We all understand the enor¬

but

of

anxiety

mous

holders to

I

that

am

will realize

they

sure

the

of

because

bond¬

the

all

this put into effect,

see

pom-?,

many

plications and number of narties
involved

it

the
1

Complete
sooner."

not. possible

was

According

J

program
-

the

to

any

v

,

to

,

announce¬

put into operation im¬
mediately the present plan the
to

ment,

issued

Government

Brazilian

amounting

In 5th War Bond Drive

holders

$33,000,000.

mately

The

2,200 members of the Na¬
Security Traders* Associa¬

tional

tion, Inc., are again being enlisted
for participation in the forthcom¬
ing War Loan Drive along the

kmount, $25,000,000 will
Interest due up

the

pay

to July 1, plus a

.substantial amount

account of

on

principal, and $8,000,000 will be
sinking

advance

This

latter

normally
The

fund

due for

not
time.

some

of

part

money,

would

payment

be

greater

agents'

v

paying

the

this

is

a

efforts

their

of

the

in

last

result

of

the

Vargas

and

Getulio

concentrate

efforts

their

in

the

on

company's equip¬

ment, subject, as to certain units,

outstanding equipment obliga¬
tions.
In the first place, the pro¬
too

long
the

to

extension is for
period to be attractive

maturity

posed

a

holders.

institutional

the

professional investment field and
will make

thorough

a

possible through the great

Artur

been
very

de

in

Souza

this

Costa,

country

several

successful financial and

nomic missions."

;

'

has

who

on

■

v.

; ■

eco¬
'

120

list.

of

program

Ohio

&

more

recent

fixed charges

has

ing

&

the second place

relatively,^ improved
cttide. everi

the

would

unsecured

in-

Coft-

Mortgage

charges

offset

the

would

increase

quirements

E.

Sullivan,

just

How will
fare

fixed

in

contemplated
on

H.

F.

Koller

&

Co.,

in*
I.-

the Re¬

Broadway, New York City, have
prepared a comprehensive anal¬
ysis on Great American Industries
which

the

attractive

firm

believes

appears

at

current

levels.

Copies of this interesting analysis
as
well as circulars on Bartgis
Bros,

and

had

be

may

United

States

upon

Lumber

request

from

of

the

Public

National

Bank and Trust Company of New
offers interesting possibili¬
ties
a

for investment, according
issued by C.

memorandum

it

is

that

notable

the- minimum

inevitably also have to in¬
clude
satisfactory sinking fund

operating income of $6,500,000 the

arrangements—it is likely that at
least another $100,000,000 of debt

interest would absorb only
10% of 1938-1940 gross, a modest
gent

burden for

be considered on a truly
firm credit standing.
This is ex¬

so

road may

clusive
held

of

$28,700,000 of publicly

Notes, 1944, which it is

4%

to
E.

non-

total of fixed and secured contin¬

will have to be retired before the

efficient

a

property inherently

as

the B. & O.

'
aspects

of

maturity

the

the

►

outlined

treatment

for

the

-

.

(Special

SAN

to The Financial

CALIF.—

Robert K. Bourne has become

•

interest

We

Discussion of )

-

and

,

the: ;6s

sociated with

&

Talbot.

wish to cell to your attention

-

..

,

:

j,

Teletype BS 25!)

Telephone HAnover 2-7914

Lehman Brothers Offers
National Airlines Com.:

i

i

'

l,'*

Lehman Brothers made

a pub¬
June 7 of 113,333Va;
(par $1) of Na¬
tional-Airlines, Inc., at $13.75 a

lic

offering

common

shares

share. The

issue will

with
for expansion.
Civil

The

provide the
capital
!

working

company

•

Aeronautics

Board

has granted to the company

auth¬

ority to establish a new route be4
tween Jacksonville, Fla., and NeW
York
City,
and
this
will - bd
started as soon as additional fly¬

and

ground

equipment

are

.

pending

expand

to

its present routes.
stock

will

issue

outstanding

common

bring the
; issue

to

as¬

George H. Grant &
junior mortgage bonds was in line
Co., Russ* Building.
Mr. Bourne
with ' earlier
expectations.
The was
formerly manager of the
fixed portion of interest on the
trading department of the San
bonds would be doubled over the
Francisco office of Merrill Lynch,
amount received under the Chand¬
Pierce, Fenner & Beane, and prior
ler Act readjustment now in ef¬
thereto was in charge of the bond
fect.;' The 5s would receive 2%
fixed • interest and
3%
secured trading department of Hannaford

Unterberg & Company, 61 Broad¬
way, New York City.
Copies of
this memorandum outlining the
situation may be had upon request
from C. E. Unterberg & Co. •:
: Contingent

N. Y.

obliga¬

St., Boston 9, Mass.

Tel. CAP. 0425

The

Chronicle)

FRANCISCO,

.'V-

'

request.

on

applications

...

1

available. The company has other

With Geo. H. Grant Go.

the

proposed plan were sur¬
prising as well as disappointing,

'

148 State

ing

Robert K. Bourne Is

expected will be paid off in cash
this year.

F. H. Koller & Co.

Stock

fact

allowing

will

interesting discus-

an

-

tion

of gross through to
net operating income before in¬

for

estimates

presented

sion sent without

,

In

capital set¬

new

Postwar

re¬

age of 416.7%

ments.

holders

current

and figures are

the

in

end of this month.

Ill

Inc.,

be reached before the
Any such plan

may

by

up?

about

Jr.', of

Situations of Interest

St., Chicago 4, 111.

Frisco Issues

If the publicly held 4s, 1944 are
paid off this year the reduction in
fixed

LaSalle

Profit Possibilities in

bonds.

y
^ V come ta3fes and even in its poor¬
accorded the est year, 1938, carried through
initial proposal is not taken too 11.1%.
In addition, even in the
F. L. Putnam & Co., Inc., Boston,
seriously, .however, and there is poorest years non-operating in¬
heads
the
group's Special War
little question in the minds
of come has run around $6,500,000.
Bond Committee and will direct
most rail men who have followed Obviously, then, even under the
the drive.
The Association has
thesituation
but
that
a
more most
stringent
conditions
that
2,200 members located principally
equitable
compromise
will
be could be expected post-war the
in 23 of the largest financial cen¬
worked. out within a reasonable company would have little diffi¬
ters of the country.
time.
It is possible that an agree¬ culty in covering these require¬
John

Bonds.

So.

years
Balti¬
reduced
its

to around $18,000,-

General

Broadway, New York 5, N* Y.

231

retirement

debt

capvass of
ytertible 4I/2S, 196(Jv
purchaser of War
The cool reception

every;;possible

been, York

ability of its Minister of Finance,

as

.

its

'

York Stock Exchange and other
leading Security and Commodity Exchs.

speculative

media in the rail bond

'

MEMBERS
New

are

quarters

many

attractive

most

interest readjustment
funding
&
General

In

the

financial

has

and

basis

contingent
tion, would look kindly on such a
one-sided proposal.
These First charges to around $27,500,000. Of
this total, $4,000,000 is represented
Mortgage bonds not only have a
lien on some of the heaviest den¬ by unsecured contingent interest
sity .and most important mileage which is junior to the contingent
of the system, but, also, they are portion of interest on the Refund¬

Although

President

by

in

considered

•.

"All Public National Attractive

stated:^

adopted

policy

made

also

the

of such treatment these bonds

.

Boucas

Mr.

fixed

On

000 and total fixed and

also paid.

expenses were

1st mortgage

2.40%

Bought—Sold—Quoted

Mortgage
the contemplated
;
v.
plan would extend the life of the bonds.
drive, according to an announce¬ bonds
Fixed
charges
of
$18,000,000
beyond the due date of close
ment
by Wm. Perry Brown of
to>; $179,000,000 of system bonds would absorb less than 11.4% of
Newman, Brown & Co., New Or¬ now
average 1938-1940 gross revenues.
having a later maturity than
leans,
President.
According to the 1st
the
depression
decade
Mortgage bonds. The ma¬ During
present plans, the traders will turities thus
having their position Baltimore & Ohio carried an aver¬

lines

thid

Of

the

of

expected

their preeminent posi¬

in

bonds,

be

receive

contingent.

Through

to

approxi¬

to

aggregate
than $74,000,000,

hardly to

that

ment

■checks

Lake
1951,

the

in

was

secured

principals responsible for all the
work

: West

/••It

Economy

on

3.60%

5s,

should remain undisturbed.

Claudionor de S. Lemos, member

of'the

would

Division

Pittsburgh,
Virginia 4s,

amount of more

Vice-President

•

the

;

outstanding

...

of

and

1950

"■'

■

contemplated that

was

the, 'Southwestern

and (g) agreement with
the National City Bank of New

expenses,

positary.

Class A & B

Apparently the first trial balloon released by the Baltimore &
Ohio management in an attempt to settle the still burdensome ma¬
turity problems of the next ten years received a cool reception. Re¬
ports indicate that the larger institutional holders were approached
with a proposal to extend the maturity of the 1st 4s and 5s, 1948 for
a term of 40 years.
At the same' time the RFC loan was to be ex¬
tended
for,, the', statutory
limits

"The following documents were

signed:

Railroad Securities

f

of Brazil and of the various bank¬

500,000 shares.

.

Boston &
jr

•

'

,

•'

'

a-

;

\

* '

» ■

Albany R. R.
BOUGHT—SOLD—QUOTED

the

interesting possibilities in

"THE POST WAR PERIOD
and THE

RAILROADS"

Copy

on

request "

Circular

J;

Members New York Stock Exchange

TEL.

wall street
HANOVER 2-1355




new
TELETYPE

TUNNEL RAILROAD
1. h. rothchild &

co.

Adams & Peck

'

.

york
NY

request

and

'

Mclaughlin, baird & reuss
one

on

ST. LOUIS BRIDGE, 1st & 2nd Pfd.

5

1-1310

specialists in rails
52 Wall Street
HAnover

2-9072

n.

63 Wall
y. c.

5

Tele. NY 1-1293

Street, New York 5

BOwling Green 9-8120
Boston

Tele. NY 1-724

Philadelphia

Hartford

I

2368

THE COMMERCIAL & FINANCIAL CHRONICLE

Thursday, June 8, 1944

SPECIALISTS
J

in

TRADING MARKETS IN

Since

SECURITIES

*&

SHASKAN

CO.

Members New

Exchange
York Curb Exchange

Members

41 Broad

Street, New York 4

By JOHN WEST

FRED F. FRENCH Stocks

TUDOR CITY UNITS

,

.Market

.

Improved Realty

SECURITIES CORP..

.

WOrth 2-0510

equity interest in this well -♦>
New York City property were

60%

bids

or

Bonds

2d Mtffe. 3%-6% Income

without Stock

AMOTT, BAKER & CO.
150 Broadway,

New York 7, N. Y.

REAL ESTATE
SECURITIES

Yaliquet & Go.
135 So. La Salle St.

\

.

CHICAGO
Central 4402

CG-81

Beatrice

in the |

of

shares

offered to

for

each

four

one

stock¬

owned

penses

share

Decrease

new

have

been

gas

sold.

35,276.83

■

in

loss on

refrigerators

removal of

—-.v.-;..

company
will
use
the
received from this offer¬
ing to redeem on Aug. 1 at 105.50
a
share, 29,788 shares of $4.25

Less

increase

7,014.11

„

Total

The

$132,330.74
in

real

estate

taxes

2,520.00

money

preferred stock or approximately

Net

improvement in operating
results (before depreciation) $129,810.74

"It is noteworthy that a reduc¬
tion

in

within 120 days after the close of

operating costs and ex¬
penses was accomplished concur¬
rent with a considerable gain in
income and occupancy and not¬
withstanding the higher prevail¬
ing operating costs affecting real
estate
in
general.
Specifically,
London Terrace, Inc., experienced
the effect of increased wage rates
resulting from the general wage
award, effective April 21, 1943

the

and the uncontrollable increase of

one-third

of

standing.

The

funds

the

needed

amount

balance
for

this

will be taken from

out¬

of

the

purpose

working

cap¬

ital.

Under
ferred

the

stock

terms

issue,

the

of

the

pre¬

company

is required to purchase or redeem

fiscal

year

ended

Feb.

20,

nearly $12,000 in heating costs be¬
1944, and each fiscal year there¬
cause of the necessity, due to war
after
an
amount
of
preferred conditions, of discontinuing the
stock equal to 30% of the excess use
of our oWn steam heating
of consolidated net income over plant and
of purchasing steam
,

$750,000,
$200,000

with
a

year.

a

limitation
This

year

directors plan to retire about

third of the preferred.

~




of

the
one-

,

"The property continues to

en-

sue

of

short-term

a -new

is¬

debentures

of

or

the

,

operating income. The results
best illustrated by the fol¬

are

common

i

the

lowing comparative figures for
Glore, Forgan & Co. announced the
past fiscal year and the fiscal
June 5 that the* *7,998 shares of
year ended March 31, 1943.
Beatrice Creamery iCo. common
Increase in total income from
stock ($25 par), representing the
$90,039.80
rentals, etc.
unsubscribed balance of 100,433 Net decrease in operating ex¬
holders in ratio of

However, the Commission sus-4>major point in the plan' the SEC and the courts have
—that although the holding com¬ never
passed
on
the question
pany is solvent; it need not retire whether the bondholders still have
its bonds entirely with cash, but any legal claim on the assets of
can make a partial distribution of Standard Power & Light. Presum¬
stock holdings in subsidiaries pro¬ ably, however; this question will
vided the total value of the "pack¬ be disposed of when this issue is
age" is ample to assure the bond¬ retired along with other Standard
holders receiving par (the Com¬ Gas debentures, under a modified
mission has always disapproved of plan.
This would remove the
paying redemption premiums in "cloud" on the claim of Standard
Power & Light preferred stock¬
holding company dissolutions).
The
Commission
disapproved holders to the company's assets,
inclusion of new "A" common in which consist largely of Standard
the package, and suggested in¬ Gas preferred. The preferred sells
stead "that the portion of debt not currently some 13 points higher
paid off in cash and portfolio se¬ than Standard Gas $7 preferred,
curities could be compensated by reflecting ownership of a larger
tained the

number of shares than its

will

It

own.

be difficult to

appraise
the exact position of, Standard Gas
prior preferred stocks until the
new plan is forthcoming.
Share
earnings have fluctuated widely
in the past and may continued to
do so.
If the system is broken
up at a nearly date, the Federal
tax burden might increase sub¬

property for the fiscal year end¬
ing March 31, 1945, will show fur¬
ther improvement."

Standard

Invasion T emporary Market

indicated its industry operations in its territory
findings that the present and may lose substantial revenues
common stock has no value,- and
after the war.
Any forecast of
based on this the New York Stock future values would depend on

Gas

is

now

in

a

better

position to dispose of certain as¬
sets than 15 months ago when the
paid cumulative income interest
plan was first broached. At that
for preceding fiscal years.
As a
As earnings for the fiscal year
stantially, since subsidiaries would
time Standard's holdings in Cali¬
result, the deficiency in 'cumula¬ ended March
no
longer* enjoy the benefits of
31, 1944 were abo&t fornia
tive income interest as of March
Oregon Power, Mountain a consolidated system return. On
5% % before capital improvements
31, 1944, is reduced to $161,175 as on funded debt and as the cor¬ States and Pacific Gas & Electric the other hand, relief from the
were apparently the only holdings
compared with the deficiency as
excess profits taxes after the war
poration
indicates further
im¬
readily available for sale or dis¬ might more than offset this fac¬
of March 31, 1943 of $214,000.
provement for; the current fiscal tribution to
bondholders, How^ tor.
In the calendar year 1943,
"In our last annual report, you
year, it appears that the outstand¬
ever, since that time the set-up
were informed that the operation
$12.12 was earned per share on the
ing First Fee and General Mort¬
of Oklahoma Gas & Electric and
of the End Units by an outside gage bonds
prior preferred stocks, compared
carrying about 60% of the financial
position of. Wisconsin with $12.05 in the previous year,
management agency was termin¬ the equity stock riffer Considerable
Public Service has materially im¬
arid
relief" from excess
ated as of Jan. 31, 1943. Since that
profits
appreciation
possibilities"1 from proved "so that we could sanction
taxes would have increased this
date, the End Units have been their present level of around 55.
their
distribution
on
) suitable
by half or more. The company has
operated under the direct manage¬
terms." :.■■■;
v.;.
benefited substantially from war
ment of the officers of your cor¬

net

Shares Placed

SEC in March,

holding company providing
corporation for • j0y occupancy of practically 100%.
The amount paid jn the absence of a substantial for a rapid retirement by the ap¬
as
income interest is applied as change in conditions
during the plication of earnings and proceeds
follows:
1% to the payment of current income period, it is antici¬ from any future sales of assets,"
The Commission pointed out that
cumulative income interest with pated that the earnings of the
earnings

poration. We also stated that this
type of management would result
!n economies and improvement in

Creamery

.

.

increase

respect to the fiscal year just end¬
ed and 1% on account of the un¬

Active Markets in

,

rooms,

such fiscal year.

System Teletype NY 1-588

Bell

1,510

^

Telephone BArclay 7-2360

The recapitalization

conform to

to the Commission's views.

700 apartments

considerable

the

Incorporated

has

which
into

Savoy Plaza, Inc.

'

plan of Standard Gas & Electric Company,
Section 11 of the Utility Act, was submitted to the
J1943, and was conditionally approved by the staff in
November, but has now been rejected by the Commission. The com¬
pany will have 90 days in-which to amend the proposal to conform
■

to

adjusted to the rentals in
divided effect on March 1,1943, with such
modifications
as
have
subseof which 620
are one and two room units.
We quently been made with the apquote from the report. "
| proval of the OPA. The substan¬
ce are pleased to report that, tial improvement in rental income
in addition to the payment of six did not arise, therefore, from in¬
months' fixed interest of l1/2%, creases in the. rental schedule; but
there is now also being paid in¬ is directly attributable to the in¬
come interest of 2%
on the out¬ creased occupancy and to the constanding bonds.
This additional tinuation of the policy Of furnishmodified debentures
payment is possible because of'ing apartments.
•
i .
known

offerings

Utility Securities

Standard Gas & Electric Plan to be Amended

,

"Times" Sunday, June 4, the other headline,/the subject of this
article, gives a concrete example of the advantages of efficient man¬
agement under improved conditions.
v
v
yy
London Terrace, Inc., reported optimistically on May 20, 1944,
to First Fee and General Mortgage bondholders who also have about

BROADWAY

or

Of

Conditions

The first two headlines of this article appeared in the New York

Dealers Ass'n

NEW YORK 6, N. Y.

With

Public

,^

London Terrace, Inc., Shows Increased Income As Result

C. H. TIPTON

We solicit your

.

.

Realty Gains Due To Be Maintained For Coming Year
Survey Indicates A Further Stiffening of Residential

AND

Members N. Y. Security

.

HAnover 2-2100

Real Estate Securities

ALL

in

York Security Dealers Association

New

ESTABLISHED 1879

1-953

We Are Interested In Buying

"■

Paine; Webber, Jackson & tens

Incorporated

Dlgby 4-4950

Bell Teletype NY

I

1929

Seligman, Lu betkin & Co.

Members Now York Stock

40 EXCHANGE PL.,N.Y.

UTILITY PREFERREDS

Real Estate Securities

REAL ESTATE

from

the New York

Steam

Cor¬

poration.
"The

property became subject
tq rent control on Nov. 1, 1943. On
that date,
the rental schedules

The

Commission

definite

Factor, Firm Believes
The invasion will prove to be a
temporary and minor market fac¬
tor
(unless there is a military
catastrophe, which seems in logic
rather improbable), Newburger &
Hano believes, in an interesting
memorandum
discussing
the
change
in
public
psychology
which is being reflected in the
response
of the. market.
The
firm declares the belief that our

Exchange
has
now
suspended
trading in the issue. The position

these

of the

factors.

$4 (second) preferred stock
remains somewhat uncertain, the
question as to whether it can par¬
ticipate being left open.

the

relative

weights assigned to

favorable

and

unfavorable

■.

.

.•

'-rwmmm——

Attractive Situations

,

;

Panama Coca-Cola

Bottling and
Coca-Cola Bottling Co. of New
York offer interesting situations
Standard Power & Light Corp.
This. is the "parent" of Standard according to circulars being dis¬
post-war fears will yield to a ris¬
tributed by Hoit, Rose & Troster,
Gas (other holding companies such
ing optimism, and it seems that
74 Trinity Place, New York City;
as U. S. Electric Power and H. M.
the future may see a profound
Copies of these circulars may bo
Byllesby & Co., together with cer¬
change in stock and bond prices,
had from the firm on written re¬

which have risen and fallen with

Another point left unsettled is
the status
of
the
securities of

tain

affiliated

interests

such

as

United Founders and a banking
capitalists'
group, have now been pretty well
confidence,
Copies of this inter¬
eliminated as top holding compa¬
esting memorandum may be had
nies).
The Standard Power; &
upon request from Newburger &
Hano,
1419 Walnut St., Phila¬ Light bonds were assumed by
Standard Gas some years ago, but
delphia, Pa., members of the New

the

and

rise

York and

fall

of

quest.

at
current >
Co., Inc.
A
circular discussing this situation
mav also be had from Hoit, Rose
& Troster on written request.
Also

levels

interesting
Butterick

is

Philadelphia Stock Ex-

changes.

N. Y.
At

Analysts

to

Hear

;

American Gas & Power

common

the

meeting of the New
York Society of Security Anal¬
ysts, Inc.,. on June 9, Duncan R,
Linsley of the First Boston Corp,
will speak
on
"Highlights and
Sidelights in the Underwriting of

Federal Water & Gas

common

Midland Utilities 6s 1938

Public Utility Securities."

.George H.
dent

of

speaker
June
AH

Sibley, Vice-Presi¬
Sons, will be

Squibb &
at

the

meeting

on

12.

meetings are held
Biuad St., at i2;30 p. m.

Gilbert J. Postley & Co.
29

at

58

BROADWAY, NEW YORK 6, N. Y.
Direct

Wire4 to

Chicago

I

Volume

Number 4288

159

THE COMMERCIAL & FINANCIAL CHRONICLE

mentioned

Price Trends And Outlook
There

is

also

the

question

of

how far Government controls will
be relaxed or eliminated with the
end

of

the

while the Pacific

We

waged.
how

soon

ment will

in'the

war

must

determine

also

govern¬

allow free enough
countries

civilian

normal

there.

the decline in agricultural
prices will be retarded by loan
and parity levels.
ever,

3.

war

military

our

liberated

sume

and
is still being

European

rein

to

re^

activity

Prices will then

recover.

This

will be
considerably
less
inflationary gain in 1919-

gain

than the

and

1920

will

not

result In

run¬

It will be followed

away

prices.

by

stable price trend for

a

5 years.

Despite these uncertainties it is
possible to indicate probable price
between

now

and the

ened.

of the

European

war,

and between

in the

'

■

3

end

rise

I

influence

term

the

reconversion

and

re¬

adjustment period. It is also pos¬
at this early stage to indi¬

study of the factors

sponsible

the end of the European war and
of the Japanese war, during what

will

the

for

show

most of them

is

wartime

clearly

very

to

re¬

price
that

will have lost their

as soon as

turn downward as munitions out¬

fore

hits

put

peak

its

then

From

on,

quirements

of

and

Government re¬
metals and other

materials

war

declines.

will

shrink.

,

reached, it is natural that
price-raising influences are weak¬
A

the Stephenson Act in rubber, the

basic

•

war econ¬

omy

trends

:.

-

With the peak

.

will
in varying
de¬
their effectiveness as
price-raising influences. Some of
them, indeed, will go into reverse.
An example of this is the con¬
sumption of materials by the mu¬
nitions industries. By August or
September at the latest, I believe
that total war expenditures will

lose

grees

(Continued from First Page).
:

the European

In

income

National

decline

expenditures.
buying is bound
to be adversely affected.
While
there may be exceptions, I doubt
along

Hence

that

with

will

war

consumer

business

demand

occasioned

by deferred depreciation, replace¬
ment
and • capital
requirements,
and

foreign demand for rehabili¬
will offset declining mili¬
tary needs immediately after Ger¬
many is beaten. Certainly at that

of sticking out my neck first and
then explaining, I will; indicate

fact, a number of
already lost their po¬
tency. (The war period price rise
was
caused largely by the fol¬
lowing major factors.
(a) Tremendous consumption of
materials by the munitions indus¬
tries, backed up by the outpour¬
ing of billions of dollars in war
expenditures by the Federal
Treasury.
\
(b) Increased purchases of most
goods by consumers as their in¬

encourage produc¬
imports, and to the build¬
ing up of stockpiles.
In some lines productive capac¬
ity is still growing as a result of
completion of wartime emergency
expansion. Furthermore, in many
industries productive capacity

here what I expect.

comes

will continue to rise after the

sible
cate

some

the

of

post-war

pros¬

pects for prices, after the end of
both phases of the war.
Within
the time permitted me I shall de¬
vote most of my discussion to the

period between
of

both

In

,

German and Jap¬

wars,

V.

anese.

and the end

now

:

-

line with my general policy

1. The peak of wartime whole¬
prices
has
probably been
seen.
Any further gain in the

sale

composite
nominal.

cultural

index
It

is

will

certain

be
that

very

agri¬

prices,

for; example,
which
have
probably advanced
the most, have already seen their
peak, and in view of Government
price control, semi-processed and
processed

will

hardly ad¬

much further.

vance

2.

items

Prices

will

decline

during
period between
European war and
of the Japanese war. The decline
the

war

them

have

rose.

(c)

Rising costs of production.
(d) Setting of higher prices to
encourage production or imports.
(e) The building of stockpiles

safety reserves.
(f) The lagging increase in out¬
put, relative to consumption, of
as

many

commodities because of the

time necessary to

expand capacity.
(g) The curtailment of .imports
by loss of foreign sources
to the enemy or by lack of ship¬
ping.
either

reconversion

the end of the

over.

I do not include the
crease

in

the

startling in¬

volume

of

money

and

2369

tation

time also there will be an end to

price rises to
tion

or

.

as

fast

as

coveries

new

are

processes

applied

war

and dis¬

to the

duction of civilian goods.

pro¬

Hence,

production capacity is reaching
unprecedently high
levels
just
when peak war requirements are
the

verge of turning
down,
reversing the lag in output
relative to consumption of many
on

thus

commodities.

Japanese silk control in that

modity,
all

are

too

oration.

Federal

own

to

recent

Farm

of

control

cotton,
elab¬

need

each instance the in¬

In

creasing supply of the commodity
ultimately broke down the at¬
tempted controls.
supply

and

the

position

demand

montns.

in

:

find

we

that

demand

longer, the outlook is
definitely for a sharp decline after
the

end

of

the

European

war.

However, of still greater impor¬
tance in this price equation is the

supply outlook.
going into

We

definitely

are

of excessive sup¬

an era

ply.

The shortages of today will
become the surpluses of tomor¬
Commodities

row.

that

of

tion of

raw

the

increasing

produc¬

materials that has de¬

veloped in this country, or of the
output we have encouraged
abroad and which is

available

to

These

supplies will continue
to press on the market.
Having
just finished a study of war sur¬
us.

pluses I am really surprised at the
prevailing belief that shortages
will develop in the readjustment
period.
There is

unanimity of opin¬

no

ion

regarding the extent and dur¬
ation of the decline in prices be¬
tween now and the final liquida¬
tion of the Japanese war.
Those
who say that prices may not de¬
point

pent-up
and

to

the

demand

abroad.

tremendous

in

this

country

While

prices did
gain during the war, they point
as
the war approaches its end.
out, they were well controlled, and
After that, of course, we can have
as
controls are
removed
prices
foreign supplies in any quantity will reflect the
advances which
come

currency,
considered sepa¬
rately, as a major factor. People that our international trade and would have occurred
during the
armistice is signed. In wholesale have
generally bought what they political policies will permit.
war
period.
It is further con¬
prices the decilne may easily av¬ wanted
because
It is true that some costs of pro¬
they
had
the
tended that supplies are not bur¬
erage 5% to 10%, with the reac¬ money to do so, but they have not duction will not
immediately de¬ densome and that
production can¬
tion more marked in some groups. tossed their
money away without cline, but will rise further or re¬ not be
increased rapidly enough
I might point out that very few
regard to values merely because adjust only after a considerable to take
care
of needs.
There is
groups will escape lower levels they were worried about infla¬
lag. This will be the case of wage also the usual stress on the tre¬
during this decline, but that the tion. It remains a potential rather cfosts and overhead, both of which
mendous
savings, huge deposits
main generating force will be a than an actual threat.
will retard the pftce decline.
and easy credit, as helping to sus¬
decrease
in
A review of the reasons for the
agricultural
com¬
During this century nations and tain demand.
modities.
The decline will vary wartime
price rise clearly indi¬ groups have attempted to circum¬
Against this there is the fact
with the economic position of the cates that most of the influences
vent the law of supply and de¬
that out of our total production at
individual commodity, rather than are
weakening.
Within a few mand. This has proved to be ulti¬
least 55%
is for war, and that
according to price control. How¬ months most of the factors I have mately impossible. The history of
over half of this will be liquidated
as. soon
as
the European war is

start

may

in

earnest

before

the

Foreign

dispatches tell us
Government in
India has suspended the Prohibi¬
news

that the Madras
tion Act. It

enacted in 1939,

was

and it

prohibited the sale and con¬
sumption of intoxicating liquors in
four important provinces.
No,

didn

we

because

distillery, but
out

job

a

Prohibition

created

fenses.

Penalties

did

translated
is

into

when

demand

discovered

that

funds

war

stead

badly

of into its

coffers.

1944,

uncertainty

about em¬
especially after the
weekly income of those still em¬
ployed is deflated at least onequarter
by the
elimination
of
overtime and Sunday work. Job
more impor¬
from the standpoint of nor¬
buying than accumulated sav¬
ings.

-

Moreover,

Dated June 1, 1944

Due June 1, 1959

Government

pluses which

v

can

sur¬

be used for ci¬

vilian purposes may approximate
15
billion dollars.
While
these

not be pressed

may

Price 100 and accrued interest
'•

and

'■

■

\

V;

clusive of Government

important
In.

85,000 Shares Common Stock

producers
and will

output

strive to increase their

be

Price $8 per share

While European

own

mar¬

needs will

great, they cannot be expressed

in normal demand until the Euro¬

countries become politically

pean

stabilized.

may

mar¬

holdings of

foreign

expanded

kets.

Copies of the Prospectus

the

materials abroad.

war

addition,

have

(Par Value $1.00)

i

on

kets, they will continue to over¬
hang them. This amount is ex¬

'

be obtained from the undersigned:

Foreign

tionable
use

whether

of these

all

funds

in
but not in
it is ques¬

balances

this country are large,
relation to needs, and

bars

will

to

be

the

lifted

immediately and credit liberally
extended.

Van

Alstyne, Noel & Co.

re-opened

R. S. Dickson & Company
Incorporated

It

is

really views the subject
being q. question of wet and
dry, but rather as a question of
legal and illegal liquor. And, surely,
if one is not entirely satisfied with
woman

not

as

our own

try,

experience—in this coun¬
gather a lot of corrob¬

one can

orative evidence

from




other

countries, namely, Russia, Sweden,
N orway and Finland. And then add
the Canadian Provinces of
Alberta,
British Columbia,

Manitoba, New
Brunswick, Nova Scotia, Ontario,
Quebec and Saskatchewan. All
these have experimented with Pro¬
hibition and all of them have found

the experiment

Color,

"ignoble."

creed, and geography

race,

don't

seem to make much differ¬
We ought to learn
something
from that and profit from our learn¬
ence.

ing. Some

said, "There

sage once

three kinds of men, the wise,

are

the part-wise and the unwise. The
unwise man never learns
anything;
the part-wise man learns from his
own

experiences; the wise

man;

learns from the experiences of
others."
'
.

MARK MERIT
Of SCHENLEY DISTILLERS CORP.

FREE —A booklet containing reprints

that

true

structure

is

the

monetary

inflated, in that the

huge, demand
and

the

smart

debt

and

series

will be

request. Send a post-card to
of Schenley Distillers Corp..
Fifth Avenue, New York 1, N. Y.

care

350

fiscal

management in
period, however, this
could become an important factor
in the longer-term outlook.
bad

With

the post-war

indicate gener¬

have tried to

I

of the pros and cons of
the price structure during the re¬
conversion period.
I wish to go
on record as stating that I agree
ally

some

with those who contend that
cline cannot be averted.

I

a

de¬

am con¬

vinced of the basic importance

of

psychological factors in economic
As Government

movements.

tracts

and

cancelled

are

gains

ployment

sion is taking

while

con¬

unem¬

reconver¬

place, psychological

factors will become adverse.

Peo¬

ple will veer to the belief that the
boom

war

is

tion will tend to

until

cline

will

in the future.

is

a

may

proper

ap¬

be expected

It seems,

deflation

be¬
cau¬

aggravate the de¬

there

praisal of what
that

and

over

over-cautious. Extreme

come

therefore,

than

rather

infla¬

tion will be the short-term domi¬

deposits
structure

large
is heavy.

are

Nevertheless, the public has been
June 7, 1944.

1939,

smce

We believe that the
average man
and

nating factor.
I

amount of money in circulation is

Field, Richards & Co.

on

liquor
in the

Prohibition did not prohibit.

mal

$1,500,000 5% Fifteen Year Sinking Fund Debentures

in¬

So,

legal

d'st.ricts where,

four

needed

elsewhere

went

January. 1,
shops were

me

tant
4

curb

sent you on

security is probably

*

not

violations. The Government also

ployment,

^

Madras

steady increase in il¬
legal
distillation,
accompanied
by many of the well-known of¬

of earlier articles in this

there

The Drackett Company

in

a

be

|

a

why the Madras Government

answer.

public de¬
going to manifest it¬
self
immediately.
Even though
there is great pent-up desire for
many things, much of it will not

NEW ISSUES

with

dug-in to find

we

suspended the Act, and—got the

mand is not

Prospectus.

with glee

gloai

v

have

we

Furthermore,

over.

This advertisement appears of record only and is not, and is under no circumstances
to be construed to be an offering of these securities for sale or a solicitation of an
offer to buy any of these securities. The offering is made only by the

series.

a

News Out of India

now

are

inadequate will become plentiful.
I
doubt whether anyone has a
true conception, for example,
either

thirty-five of

.

while

a

hope

SCHENLEY DISTILLERS CORP., NEW YORK

o.

prospects will continue favorable
for

we

mericans.

This is number

coming

•

While

NOTE—From time to time, in this
space,
there will appear an article which
will be of interest to our fellow A

We must there¬

determine

cline

Finally, the import situation is
already improving and will be¬
very much more favorable

our

Administration

ADVERTISEMENT

com¬

has

not

fallen

for

to

hope

you

speak

at

.

of

one

me

your

again
future

conventions where I shall*have
chance

to

the

constant talk of inflation wherein
the dollar will buy less and less.

*!

will invite

faced

discuss

with

outlook.

for

what

the

you

a

are

longer-term

THE COMMERCIAL &

2370

Thursday, June 8, 1944

FINANCIAL CHRONICLE

■

-

Recent

Analyses

PARKER

Request

on

Jefferson

Merchants Distilling Corp.

Oil

APPLIANCE
Stock

Common

Standard Silica Corp.

Copy

Ryan-Nichols
Stock Exchange
and other Principal Exchanges

Member

York

New

St.

So. La Salle

208

SECURITIES

leading companies.

on

•

FAR0LL& COMPANY

.a

present

and

Stock

Common

brief analysis
industry
which
international
gives current statistics

the

situation

FOREIGN

Research Department

prepared
petroleum

just
the

of

discusses

Common

Companies

Investment

Our

has

COMPANY

Electric Company

Stock

Common

on

Bought

request

Members of

Fuller&Co.
Chicago 4

209 S. La Salle Street •

CHICAGO 4
1430
Tele. CG 156

York

New

CG 1399

CHICAGO

4 77;-'.

RANDOLPH 4696

Toronto

Indianapolis

Street

La Salle

So.

208

CHICAGO 4

1520

Andover

Exchange

exchanges

231 South LaSalle Street

3

CinCAGO

Tele. CG 146

Tel. Dearborn 9200

Quoted

—

ZIPPIN & COMPANY

Stock

principal

all

and

Salle St.

South La

105

York

New

&Co.

Chicago Stock Exchange

Sold

—

THOMSON & McKINNON
Members

William A.

t

Earnings of the

Andover

Phone

active interest

We have an

1950

of

6s

of 1938

Robbins & Myers

Pfd.

Match Common

Ohio

Doyle, O'Connor & Co.
Incorporated

Salle Street

135 S. La

at the

BAYWAY TERMINAL

Chicago banking has attracted the
interest of Chicago security deal¬

Stock

of

CO.

ADAMS
231

South La Salle Street

Chicago U, Illinois

the

i

an

advanced.

principal possibility
solution lies in municipal own¬

excess

the end of 1944.

Phone State Old

Teletype CG 361

of

dents in La

Salle Street financial

forward history has had traders of muni¬
already be¬ cipal houses interested recently.
gun
a significant shift in their It concerned the $11,000,000 error
portfoli'os of ^government Obliga¬ made by a group of Chicago banks
tions, from taxables to those par¬ in submitting a ibid for a Chicago
tially or wholly tax exempt.
(Continued bn page 2371)- * J
When more banks — through
necessity—find themselves in the
same predicament, it is expected
that there will be a heavy drain
As

result, some of the

a

looking bankers have

Recent

The

Circulars On Request

Following BOND Issues

International Ry. Co*

(Buffalo)

Crescent Public Svce. Co.
Robt. Gair & Co.

Buffalo
West

Susquehanna RR.

&

Va.

Des

Pittsburgh RR.

&

Moines Ry.

Co.

constantly shrinking sup¬

the

ply of tax exempt bonds outstand¬
ing/as banks absorb tremendous

quantities of the

California Consumers Co.

—

Co.

Telephone Bond & Share
Investors

of

Telephone Co.

III.

Tele. CG 650-651

Tel. ANDover 5700

CHICAGO' ILL.
Payne, partner of

»

old peren¬

the subject of much

conversation in the

financial

houses here.

latest

The

development in the

long-continued tangle that is

-

Pape Elected Board
Chairman Of Cgo. Exch.
—

Harry M.

Webster; Marsh

Co., was reelected to a second
term as Chairman of the Board
of Governors of the Chicago Stock

&

nial—is again
Salle St., Chicago 3,

»

Traction news—that

Straus Securities Company
135 South La

obligations.

Chi¬

Exchange, at the Annual Election
of the Exchange held today.

Wayne Hum¬
Co.; Joseph P. Brown and

George E. Barnes,
mer

&

cago's transportation system was John R. Burdick, Jr. were re¬
the refusal, last week, by four elected members of the Board to

Central Illinois Elec. Gas Com.
Public Service of Indiana
Delaware

Com.

Power & Light Com.

No. States Power
6

&

(Del.)

7% Pref.

000.000.

Bought—Sold—Quoted

Bear, Stearns 6» Co.
Members New

135

South

York Stock Exchange

LaSalle

Chicago
State
N. Y.

3,

representing first mort¬
gage bond holders of the surface
lines
to consider the federal
court's suggestion that they cut
the size of the first mortgage bond
issue in a reorganized consolidated
company from $72,000,000 to $45,-

groups

Street

Ills.

Office/DIgby 4-8500; NY 1-633

three years.

C.
Daniels, Apgar, Daniels & Co.;
Chancellor
Dougall;
Alfred W.
Mansfield, Thomson &-McKinnon;
and Frederick R. Tuerk, Cruttenden & Co., were elected members
J.

Walter

Harry

Buhler;

of the Board to serve

solution to the troubles

tory

lines,

of

apparently the bond
too worried.

holders were not
At

present there are two ma¬

jor proposals under

considera¬

capital

Flour Mills

MARKETS

of

Ralph Cleary, Cleary & Co.;
Carl J. Easterberg, Riter & Co.;

M.

George E. Hachtmann were
elected members of the Commit¬

for the

Certificates

MIDWEST

Commercial Corp.

of Indebtedness

York

Security

Dealers

Ass'n

Board of Trade Bldg., Chicago 4
Telephone: Harrison 2075

New

South

Teletype CG 129
Wire to New

York Office




York

La

Stock Exchange

Exchanges

Rollins &

II.

E.

South

Salle

La

State

2400

have

Street,

an

Products

Metal

208

in¬

Continental

on

Corp.

Commercial

Co.,

have

&

Street,

data

teresting

interesting memorandum on Long
Bell Lumber Co., copies of which
are available on request.

Rieke

and

copies

Corp.,

CG

252

208 S. La

Salle St.

Tel. CG 1268

of

?•'/.

which may be had on request,

Invasion Harked In Congress

And Churches By

Prayer—Two Minutes Of Silence On Stock Exch.
The invasion of Europe

the coast of France

on

6

June

on

following

with the landing of troops by the Allies

markedly observed throughout the nation

was

the request

Roosevelt

President

by

that the

people of the country join with him in prayer.
In both the Senate
and House cognizance was taken of the occasion, members having
been stirred deeply by word that the Allied invasion of continental
Europe from the north was on,^
a Washington dispatch to the' period
of silence on
the Ex¬
York "Times," turning to change:
"The. Chairman of, the Board
prayers for speed and complete
victory with a minimum of hu¬ read from the rostrum of the Ex¬
said

New

In part, the

losses.

man

following slatement
by General
Dwight D. Eisenhower:

voiced

members

"The

"

con¬

"You

plans of

'Grant

that

on

this

"The

of

D-day

chaplain of the Senate,
of freedom forged in
of
faith
may
pierce the

treachery

steel

pagan

invaders''

cruel

and

walls,

tyranny

and

and

"You

there

York,

op¬

elsewhere,
devotions in

the churches of all denominations
various

of business
closed earlier than usual. '
' r

and

places

The New York Stock Exchange

minutes of silence

observed" two
at

11 o'clock

Tribute

to

a.

change
The

in

the

was

suspended.

following

notice

after

the

~

• •

arms,

will

"We

and

fine weapons.
victorious.

be
may

the

Good

you."

Kindred

to The Financial Chronicle)

(Special

CHICAGO,
has

La

associated

Salle

St.

231

Mr. Vallely

was

printed the
two-minute

formerly with A. C. Allyn

Co.

CARTER H. CORBREY & CO.

WHOLESALE
MIDDLE WEST

-

DISTRIBUTORS
-

PACIFIC COAST

AND

SECONDARY MARKET
135 S. LA SALLE ST.,

Randolph 3002

V.

ILL. —Edward
become

Barcus, Kindred & Co.,

South

of

blessings

Now With Barcus,

with

/

You have

1944.

of

God go with

Vallely

s

hard

He will fight savagely

year

air superiority,

luck,

fight

will

enemy

on

the

ticker

this

in

June *3 "in
armed forces en¬
m.

liberation of the
European
continent,"
during
which period trading on the Ex¬
gaged

"The

and well.

as

special

were

superior

with

go

testable. right on your side.

in

pression, may crumble and fall at
the boast of Allied might.'"
New

are

security from the air, and incon¬

the

reared

world

prayers

'weapons

shields., of

the

of

eyes

and ' the hopes and
of
all
liberty-loving
peoples go with you.

was

Harris,
fires

about to embark on a

are

you

upon

the supplication
of the Rev. DrJ Frederick Brown

liberation/

morning

great crusade.

military and naval leaders.

In

this

issued

fidence in the skills and
our

the

change

"Times"

added:

Request.

CHICAGO

4
'

135

Sons, Inc.,

Salle

La

HOUSES OF ORIGIN
on

Webber-Simpson & Company

Salle Street

CHICAGO

will be glad to

and

Simpson

Webber
South

Corp.

Other Principal

231

Direct

;

Sincere and Company
and

Liq. notes, and Em¬

Corp.

FOR

Complete Information

Members

continuing

furnish information on request.

request.

upon

j

Rieke Metal Products

Nu Enamel
Common

New

bassy

M.

&

a

1960

STRAUSS BROS.
Members

B.

South L&

135

Devon Corp. common;

interest in
A.

Co.,

have

&

Street,

tee.

Continental

America

the

common

-

NEW YORK

Salle

be had from Fairman & Co.

may

three years.

and

in

increase

an

Valiquet

stockholders

•

Although Judge Michael L. Igoe
John J. Bryant, Jr., Jas. H. OIL
had warned the various transit in¬
phant & Co., was elected Chair¬
terests that, if they didn't accept man of the 1945 Nominating Com¬
the cut, he would take steps to mittee,
and Messrs. Sidney ■■ L.
end the long search for a satisfac¬
Castle, Carter H. Harrison & Co.;
the

CG 1279

0933

serve

report that

stock.
An in¬
teresting
memorandum
on
the
situation, which the firm believes
has an excellent post-war outlook,

other

The

authorize

to
,

That is the

ers.

brochure

page

shortly request

ership. Negotiations toward this
approaching end end seem to be temporarily halted,
profits tax carry¬ however, although the city council
over of the banks.
It is expected is said to be working on a1 ordi¬
'chat a number of the more profit¬ nance that would permit purchase
able local institutions will be in of the transit properties.
a
much heavier tax category by
One of the most peculiar acci¬

Available to Dealers
Four

in

trend

property which they leased and
this
interesting development
is
discussed in the memorandum.

208

Co.,

are

will

Illinois

the bond issue was

important

Another
Common

~

i?

*

CORPORATION

now

in

&

informed directors of the
Chicago Flexible Shaft Company

they

effort to amend
the 1941 plan to the satisfaction
of the state commission. It was
in connection with these amend¬
ments that the proposal to slash
rection,

out that the

Fairman

W.

South La Salle Street,

didn't like many details
of the proposal. Committees are
now
at work, under court di¬

recovering
from the losses taken in the
severe decline of early 1942.

stocks are only

Fred

Nu-Enamel

request.

upon

just brought in a well on some

has

will be sent on request.

group

time—

same

the

by

send

which

of

copies

Tractions,

cago-

,

ComCommission, because that

1941

merce

year

traders point

and

MARKETS

1

La

have interesting buU
letins on Nu-Enamel and Flour
Mills of America, which they will

developments affecting Chi¬

rent

VV"' 77;7
recently indicated,

■■■'.v

in

and a half period,
earnings assets per share have
also
had
a
sizeable upward
the

in

movement

ACTIVE TRADING

quotations on
have advanced

the

Although

CG 1200

Dearborn 9600

'

South

231

Co.,

&

Salle Street,

Street, have an interesting
memorandum reporting on cur¬
Salle

banks, a survey
8 have increased their capitaliza-^
tion.
One
would
consolidate
tion through stock dividends in
the surface and elevated lines in
the last 18 months.
This has en¬
one
reorganized company un¬
couraged investors to believe that
der
private
ownership.
This
a number of the others will soon
plan, which has been kicking
follow the same procedure.
7
around for years, was rejected
the bank stocks

CHICAGO 3

.

Sincere

Co., 208 South La

Brailsford &

have reported an

ing record in recent years.
Of the 18 leading Chicago

Pfd.

Hearst Publications

'

increasing interest
recently in the over the counter trading in Chicago bank stocks.
Although banks throughout the country have been making good
profits, the Chicago institutions seem to have had an enviable earn¬
investment houses

Local

Portland Electric Pov/er
Midland Utilities 6s

Chicago Recommendations

Chicago'.' Brevities

in

DISTRIBUTION
CHICAGO 3

Bell System

Teletype—CG 362

&

I

Volume

Number 4288

159

THE COMMERCIAL & FINANCIAL CHRONICLE
—

2371

—

J
All

these

shares

having been sold, this
of record only

appears

as

Z.
HOTEL SHERMAN 5s

w.s.

f/:y

'

Central Electric & Tel.

AMBASSADOR EAST HOTEL 5s/52

.

Y';//;, //-/;. V.

NOT A NEW 1SSVE

57

I

;

TRADING MARKETS IN—

—

v

matter

a

w.s.

Common

EDGEWATER BEACH 6s/50

25,000 Shares

Reliance Steel
United

Stockyards Pfd.

REED RUVG COMPANY

value

par

C. L. Schmidt & Co.

IvNEELAND & Co.
BOARD

$1

,

,

141

■

OP

TRADE

W. JACKSON

Tel. WAB. 8686 and Western Union

BUILDING

.

Established 1922

V

-

120 South La Salle Street

BLVD., .CHICAGO 4

Telephone

CHICAGO

Tele. CG 640, 641 & 642

f

per

Tel.

Randolph

(

±*

Offering price: $5.75

LIBERTY BAKING CORP.
$4 Cum. Preferred
1943

Earnings $10.34

FLOYD D. CEKF COMPANY

Opportune Time
To Buy Securities Yf

|

John J. O'Brien

120

SOUTH LA

Teletype

CG

>

article in the May, 1944, issue of the "Mid-Western Banker,"
of John J. O'Brien & Co., Chicago, holds that

Four

bids

from

YYYYY'YYY;

same

Our

"While
stable

the

armed

whole,

probably

this

of

after
end

the last

John

than

war

the

J.

O'Brien

them

be exchanged for
Government notes."

point

When, in 1932, our

unemployment reached a figure
of some 15,000,000 people, our an¬

So¬

by

Would

war.

reasonable that

of

amount

be

must

a

it not seem

relatively small

present spending
allocated
to
bringing
our

reconversion?
problem has both¬
ered
enough people sufficiently
to produce the current reaction,
and the largest "short" position
existing in listed New York stocks
in the past six years. Yet, to me,
the present
market provides a
real opportunity for one with pa¬
tience and foresight. A year ago
about

orderly

an

No doubt this

this
were

industrial

the

time

averages

almost at the same point at

which they are now selling.

$38,000,000,000 last year,
approaching the entire

nearly

amount

value
on

all

of

the

the

New

securities

York

listed

Stock

Ex¬

the

"In

opinion, the best op¬
portunities are to be found in the
my

ular

develop¬
ment of highoctane

line

concerns.

One should by studying

.the equities of the sugar,
and

merchandising

lumber

companies




the

the award.

didn't

end

not

were

successful

there.

reoffered

syndicate

learned that

was

—

of

one

block

from

the

the

that

group

on

the

won

the street the

whole fiasco recalled another case,

involving the employe of

an

,

ex¬

the

and

tremely well known bond house.

performance

In this case, the unfortunate em¬

ploye submitted

military

by airmail, but after he had
mailed the letter—late that night
—he suddenly became aware that

and

Thomas

Midgley, Jr.

largely due.

FHLB Sell Debentures
The Federal Home Land Banks
sold
of

June

on

1, at par,

an

issue

$44,000,000 0.85% Consolidated

debentures, Series A-1945, it Was
announced

by Everett Smith, New

York financial representative.

issue

was

The

and

are

mature

proceeds

Banks' surplus
to

pay

1944,

dated June 15,

off

funding

for

an

15,

had crashed and that all the mail

sale,

to¬

fund, will be. used
Series

Aj

June

present case of the Loop
banks, though—there are several
red faces on the street.
:is

*

great many investment men,
Chicago and other parts of
Illinois, were visitors last week at

Giving effect to this
the

12

re¬

re¬

some

They heard
interesting talks, and
their

of

banking contacts.
of

the

out

of

town

One of the fea¬

affair

was

the

en¬

gional banks will be confined to

dorsement, by Illinois members of

the

the

new

issue.

he

City

American

Bankers

Associa-

Railroad

-

.

Municipal Issues

-

Bank

and

Trading Markets
Leading Over-Counter Securities

in the

E. H. Rollins & Sons
Incorporated

135

South La

Salle

;
CG 530

Central 7540

Direct

Wires

Principal

of Chicago.

Street,

CHICAGO 3

•

Company and of the Mu¬
Bank

Utility

Industrial

will

To

Our

Offices

In

Cities

Throughout
Country

the

Drac^sl! Securities
Specialists in

Offered By Van

Chicago North Shore

Alstyne, Noel & Go.

AND

Milwaukee Railroad

Van Alstyne, Noel & Co. headed
a

which
5%

group

$1,500,000
fund

15-year

debentures
of

and

June 7 offered

on

the

of

Cincinnati, priced

accrued

interest,

Comprehensive

sinking-

date

and

at 100
85,000

208

ceeds, $411,045 will be applied to
redemption of bank loans and
to

completion

and

im¬

and

available

to

up

current
on

com-

....

request.

Brailsford & Co.

shares of the company's common
stock at $8 a share. Of the pro¬

$540,000

analyses,

earnings

■

ment

Drackett

S.

La

Salle

Street

CHICAGO

4

Tel. State 9868

CG 95

provement of the company's soy¬
bean extraction plant. The bal¬
ance.

will

be

used

for

future

expansion.

SERVING INVESTMENT DEALERS

Among the underwriters are
Field, Richards & Co., R. S. Dick¬
son
& Co., Inc., Westheimer &
Co., Hill, Richards & Co., A. G.
Edwards & Sons and Johnston,

We

specialize exclusively in under¬
writing and distribution of securi¬
ties, providing investment dealers

Lemon &

partment

Co.

..."

-

with ; attractive

clients.
in

no

them

Strawberries in North West
By the sound of shining waters,
In the city named
Seattle,

of

way

All his

neighbors, green with

Watch the crimson harvest ripen.
Aided he by his fair daughter,

At whose hand the yield is

Till the

planting, heavy laden,

Burgeons with its luscious savor,
And for one fat berry last year

toothsome two¬

some.

Harken, all

compete
serve

Correspondence

FLOYD D. CEKF CO.
Exclusively

JL20

Wholesalers

South La

and

Underwriters

Salle Street

Chicago 3

Interesting Rail Situation
The
Co.

Morris

7%%

&

Essex

stock offers

Railroad

interesting

possibilities at the present time,
according to

a

discussion

of the

situation contained in the current
issue

of

"Railroad

B.

W.

Pizzini

Securities

&

Co.'s

Quotations."

Copies of this bulletin, which also
you

Vict'ry gardeners,

carries

Jack will share his wisdom with
you,

•

Incantations, imprecations
produce a super-harvest.*

To

*For

own, we

exclusively.

plump strawberries,
scarlet, sweet and juicy.

envy,

our

their

retail de¬

no

with dealers, but

Raises he the
Fat and

for

issues

Maintaining

invited.

Dwells the big chief berry-raiser,
Jack E. Jones of Hartley Rogers.

Association.

number of

tures

Chicago

'

*

.<

We Maintain Active

that

mean

tual National

the convention here of the Illinois

met

vice

Chicago in Septem¬

Now appears a

from

Bankers

well

doubled,

In the

a

maturing

operation,

the

Trust

destroyed.

1945.

from the

C. Rathje,
banker, for

Public

eventually assume the
presi¬
dency of the national organiza¬
tion, Mr. Rathje is president of

A

the

$64,300,000

offer, through an error in cal¬
culation, was outrageously high.
He didn't sleep all night, visioning
the. loss of his job and financial
difficulties
for
his
employers.
Early the next morning, on his
way
to wbrk, he'purchased a
newspaper, and read that the air¬
mail plane—carrying his offer—
was

at

1276

Investment Securities

is¬

his

*

Jan.

from

debentures

15, 1944.

The

heavily oversubscribed.:

The debentures

1944,

bid

a

sue

transport
plane
are

Teletype CG

Mr.

ber, it will

Blvd., Chicago 4

"

Frank
local

vention

Co.

story

To old timers

;

gaso¬

5690

Rathje is elected to
that office, at the A. B. A. con¬

of Educa¬

of the modern

securities of so-called commodity

companies that have not been
overexploited, and those of utility

a

award.

spectac¬

gether with $20,300,000

change.

of

the banks and that actually paid

tetra-ethyl

by

ably they will react further from

an

Board

$11,000,000

lead, to which

Prob¬

today's levels, but it seems to me
that
the
farsighted
individual
should now be scanning the in¬
vestment tables for opportunities
to buy securities.
What can be
permanently
unfavorable about
an economy when a public saved

the

%

However,

winning group at a compromise
price, between that offered by

the discoverer
of

of

the

the

June 3.
Dr. Midgley is
on

-

the

about

given

the six banks that had joined in
the Continental account bought

Univer¬

State

have

the next bid.

bonds

and it

Ohio

sity

of

cover

The

of Science

from

Trust

of

If

were "

The

degree of Doc¬
tor

would

account received

honorary

poses

expenditures for all pur¬
was about $10,000,000,000.
Today we are spending seven or
eight times that amount a year

Chemical

and

reluctantly forced to
bid disqualified, and
the Illinois Company of
Chicago

ciety, received

nual

on

a

over

declare

Midgley, Jr., President

American

the

the

of

war.

which

rate,

Scientist Wins Degree
Thomas

Bank

Company of Chicago, declared that
they had intended to name a 114%

fu¬

tion

re¬

at

Illinois National

appear

the

officials

much

higher

in

should

short-term

will

main

time

some

we

banks

pro¬

portion to the
population as
a

for

feel that low yield, longterm corporate bonds still held by
ture,

moment.

forces, it

; rates

money

Central

president of the A. B. A.

.

ter¬

141 W. Jackson

Phone

known

.

at

Quoted

—

York Stock Exchange
Chicago Board of Trade

and

ILL. ■;/ y

flotation.'tion,

received

were

is

minate

Sold

DANIEL F. RICE & CO.

(Continued from page 2370)

:

Board of Education bond

O'Brien III

to

—

Members New

STREET

Chicago Brevities

III, Of John J. O'Brien & Co., Chicago

sighted. individual should

going

Bought

CO.

SALLE

/,

1122

underwriting groups for the issue.
nothing "bearish about the invasion," and that "the far- Two of
them, offering a premium
now be scanning the investment tables for
for 1V2S, were out of the
running.
opportunities to buy securities."
V
'
V A third
bid, that of an account
"No doubt," says' Mr. O'Brien, "there will be many problems in
headed by the Illinois
Company
Op n v er ting
of Chicago, offered a
premium of
and certain other specialty com¬
our
plants
$33,660 for 114s. The fourth sub¬
back to peace¬
panies
having » good
post-war
mission, that of the bank group,
time enter¬
prospects. It must also be borne included a
premium of $115,606,
in mind that the utility industry
prise,
but
but the bid failed to include the
is a large owner of fixed prop¬
they.
should
interest rate!
not all
come
erty, and that the companies/as
The
representatives of the
a group, have only minor recon¬
at once. Both
banks, headed by the Continental
version problems.
wars
are
not
there

MUNICIPAL BONDS

Share

CASWELL 6.

CHICAGO 3,

Gives Views On Securities Market Outlook
an

$46.78

Market only slightly more than back dividends

Thinks Present

In

Wisconsin

Value

1944

y

John J.

Book

Back Dividends $26. Per

Street, Chicago 5

;

J

CG 878

Illinois, Iowa and

dealers in securities in the states wherein offering is made.

June 6,

'

3

Tele.

6960

share

Copies of the Prospectus vxay he obtained from registered

120 South La Salle

Preferred

Nu Enamel

1

w.s.

BISMARCK HOTEL

Common Stock

&

Delta Electric

MORRISON HOTEL 5»/2s/48

further

information write

quotations

on

guaranteed

stocks, underlying mortgage rail¬
road

bonds,

road

bonds, minority

reorganization
stocks

rail¬

and

guaranteed telegraph stdcks, may

be had upon request from B. W.
Hartley Rogers &
Pizzini & Co., 55 Broadway, New
Co., 1411 Fourth Avenue Building,
York City,
Seattle, Wash.

Jack E. Jones,

THE

2372

COMMERCIAL &

Thursday, June 8, 1944

FINANCIAL CHRONICLE

who' may not
position to ac¬
cumulate reserves during the war;

smaller

Nat'l Bank of Tulsa

(Continued from page 2362)

National Ins.

Northwestern

ket

Monarch Fire Ins. Co.

Consol. Water Power &

1

'

Central Elec. & Tel.

Koehring Co. V.T.C.

Com.

Compo Shoe Mchy. Com.

& Pfd.

Pfd.
A & Com.

Hamilton Mfg. Class

Weyenberg Shoe1

Old Line Life Insurance

MDHW2 & m.
j

MASON ST.

225 EAST

Chicago: State

PHONES—Daly 5392

for

products

my

a

\

period.

of Montana has
bill which con¬

Senator Murray

the, run up to about 10 billion
and Russia is in a

dollars

just introduced a

.

.

MILWAUKEE (2), WIS.488
0933
Teletype MI

Wisconsin Brevities

after

in

position to pay templates enlarging the authority
war?
for
these
purchases with gold, of the Smaller War Plants Cor¬
And the second one is:.
manganese,
and: other products poration so that adequate finan¬
Is there going to [be an end to
which have a ready world market. cial" assistance may be given to
all this government control when
Add it all together, and we have small concerns.
It would seem
the war is over?
an
enormous
potential demand that no insurmountable financial
Now it is curious that the two
and a larger actual demand than
problems face American business,
questions are really very closely
we have ever had in our history.
especially since not withstanding
related.
In answering the first,
Can we meet this demand and the tremendous war effort, 80%
we
shall find an-answer to the
what will be some of the prob¬ of all civilians now employed arqy
second.
1
lems that we may face? The first
engaged in activities where no
Of one thing we can speak with
problem is of course that of con¬ physical
conversion has taken
certainty, there is going to be a
version back to
peacetime pro¬
place.
tremendous potential demand for
duction. That will not prove sim¬
In
many
ways the period of
all kinds of products when the
We have had many head¬ changeover to peace will give our
war stops.
Ever since we changed ple.
aches when changing from peace¬
businessmen a better chance than
over from peace to
war produc¬

Paper

Mills Com.

Northern Paper

Nekoosa-Edwards Paper

World

This Scrambled

INTEREST IN;

CONTINUOUS

concerns

been

have

time to wartime production but
they would normally have had to
this process was relatively simple
other types of since it took place under the gov¬ develop new and better products,
and
above all, new and better
goods have not
Nekoosa-Edwards Paper Co. of Port Edwards, Wise., reports a
ernment umbrella. Financial as¬ methods of production and sell¬
been produced. Some of the less
net profit after all charges and taxes for the first quarter of 1944 of
sistance for conversion and ex¬
ing.
With all their past experi¬
permanent consumer goods have
$147,717, or $3.34 per share on the common stock outstanding, as also
disappeared completely from pansion was easily obtained while ence in war and peace, they start
compared with $128,778, or $2.04 per share for like period of 1943. the market or have become scarce. the government, in most cases, as¬ in many cases with what is prac¬
As of April 30, 1944, total current assets were $4,495,971 and current
sumed the financial risks. There
tically a clean slate., It would
Here is an enormous potential
liabilities were $1,351,335, leaving net working capital of $3,144,636.
was no selling problem, since pro¬
seem
that the principal problem
market. It will take several years
The ratio of quick assets to cur-*>
duction was largely on govern¬ before business will therefore be
under the plan of reorganization of normal prewar
production to ment order. When production
rent liabilities was 91.01%; cur¬
largely technical and engineering
has been ordered by the court,
catch up with this potential de¬
rent assets to current liabilities,
and it is expected that this will mand. But this demand will have problems arose, it was possible to rather than economic and finan¬
secure government assistance and
3.33%, and current assets to total
cial. And consequently, unemploy¬
be completed
in the immediate accumulated not only within the
advice in many cases, or to bene¬ ment will probably be limited to
debt, 1.75%.
future.
United States. In Latin America
fit from the experience of other
unemployment resulting from the
and elsewhere in the world out¬
The directors of the Wisconsin
manufacturers producing similar technical changes necessary dur¬
side* of Europe, consumers have
Investment Co. have declared a
products. '
•.
Dillon Head &
ing the changeover rather than to
been
compelled to do without
dividend of eight cents per share
But. when peace comes and we
ldck
of
employment; resulting
things they used to buy abroad. start.. converting: back to peace,"
on the capital stock, par $1, pay¬
from basic economic conditions'.
And on top of all this, there will
able July 1 to holders of . record
most manufacturing concerns will The
huge spendable funds and the
be a demand for consumers goods
June 10.
Payments in 1943 were
be once more on their own. Theirs combined purchasing power of the
Dillon, Read & Co. and Hemp¬
as
follows:
July 1, seven cents, hill, Noyes & Co., headed an un¬ and for capital goods, for machin¬ will be the decision how to re¬ domestic and foreign markets will
and Dec. 22, eight cents.
derwriting group of 95 investment ery, building material, and trans¬ tool, what volume of production be a guarantee of this. The out¬
houses that offered on June 7 an portation equipment in the coun¬
they will prepare to meet, and look therefore is good. :
tries now occupied by the Axis
Milwaukee Electric Railway & issue
of
$30,000,000 Alleghany
they will need to rebuild ;their
But there are problems which
powers.
This potential demand sales organization. The process
Transport Co.'s proposal to re¬ Corp. 3 V4 % secured convertible
may affect individual firms ad¬
will be indeed fantastically large.
deem bonds and purchase capital notes due on April 15, 1954, and
will be far more difficult.
And versely and may change the pic¬
stock held by its parent, Wis¬ priced at 102.15 and interest. The In Europe alone . the -■ destroyed the
problems of the individual ture for them somewhat. It will
consin Electric Power Co., has notes are secured by a first lien factories, ports, railroads, electric manufacturer will be still further
be of the utmost importance to
been approved by the Securities on 1,100,000 common shares of the power plants, and cities will rep¬ complicated by other factors over
individual concerns how the ter¬
and Exchange Commission.
The Chesapeake & Ohio Ry., which are resent a total value which/will which he has no control. "
'
mination
of war production is
Milwaukee Electric will redeem owned by the Alleghany Corp. run in the hundreds of billions of
The first question is will they
managed. What factories will be
dollars.
No wonder some people
on June 15, 1944, at par plus ac¬
and pledged as collateral under
have the funds necessary to this released from war work? — will
grow enthusiastic and predict the
crued interest, $100,000 bonds, and the indenture..
conversion?
? ? ;
\? *
/ "v
they be the large plants or the
All
dividends
paid
on
the greatest, commercial boom • this
purchase for cash at par, $100 per
?
>
?
This
is a. question to
which small concerns? i'4
country has ever witnessed. .
-.
share, 9,000 shares of its capital pledged stock and any other in¬
And if the large plants are to
every concern will have a differ¬
Before we can correctly esti¬
stock, or a total of $900,000.
come
on
it will be received by
ent
answer.
Much will depend be released only with respect to
.he trustee as a service fund and mate the true proportion of this
a
part of their war production,
upon the way in which the gov¬
Cutler-Hammer,
Inc., for the applied to payment of interest on market, we must ask ourselves
ernment will proceed in the ter¬ how will that affect their com¬
first three months
of 1944 ' re¬ the notes and their retirement, how much purchasing power there
mination of war contracts. If this petitive position? A plant work¬
ported a net profit of $471,931 except that Alleghany is allowed will be available.- For without
process takes place gradually and ing only at half capacity on peace¬
after all charges, including Fed¬ to withdraw Gertain amounts in purchasing power, this potential
adequate
financial
adjustments time products may not enjoy the
eral income
and excess profits certain contingencies for payment demand cannot be translated into
economies of efficiency it enjoyed
are made, the financial problems
taxes and Wisconsin income taxes, of taxes.
an actual demand.
The effect of of our manufacturers may be when working full capacity. The
equal to 72 cents per share on the
Each note is convertible into 20 the war, notwithstanding the high somewhat alleviated.
'
position of the firm released from
659,998 shares of capital stock Shares, of; Chesapeake & Ohio com¬ taxes, has put more free money
war
production
will
be still
If a partial conversion to peace¬
outstanding.
For a like period in mon stock at any time up to the in the hands of consumers and
further complicated by the fact
time production can take place
1943 company had net earnings
business
enterprise
t h a n •• they
that shortages of certain raw ma¬
last business day preceding re¬
while a part of the productive ca¬
of $537,653, or 81 cents per share.
have ever had before. It has been
terials and equipment will con¬
demption or call.
estimated that by the end of this pacity enjoys the continued sup¬ tinue to exist.
Proceeds of the issue, with other
port of war contracts the con¬
The
directors
of
Nash-Kelyear the funds which may con¬
With the introduction of new
vinator
Corp. have
declared a funds, will be used to redeem the ceivably be used for purchases of version problem may be simpli¬
fied—and because of the possibil- materials, such as the use of plas¬
$21,661,000 of 20- consumer
dividend of 121/2 cents per share, corporation's
goods and for new fac¬
! ity of offering continued employ¬ tics to replace metals or the use of
year
collateral trust convertible
payable June 30 to holders of rec¬
tory equipment will reach the
aluminum in place of sheet steel,
5% bonds due in 1949 and $18,ord of June 12.
enormous
figure of 100 billion ment, the purchasing potential¬ the relative position of many firms
ities
of the consumers will be
036,000 collateral trust convertible dollars.
^<?;'''??:?.?•■; yi'
will be changed.
Some firms al¬
maintained.
5% bonds due in 1950.
Two Wisconsin war plants were
When it comes to the purchas¬
though released from war pro¬
After this redemption the longAlready
some
12 billions of
among
25 awarded the Armyduction may be located in critical
ing power of the countries of the
Navy E May 29.
Awards were term debt of Alleghany will com¬ continent, we find that according dollars of war contracts have labor areas and may therefore
given
to
the
Kimberly-Clark prise this issue and a $9,000,000 to the best available estimates, been terminated and only very have difficulty to secure the labor
Corp. ordnance division at Nee- bank loan due in 1949, making a there will probably be about 10 few of these contract terminations needed to return to civilian pro¬
have
resulted in claims against
nah,« Wise., and to the Badger total of $39,000,000.
duction.
billion
dollars, in
liquid assets
'

-

*

c

-

•

..

.

i

„

,

■

"(i

tion,

<

^

millions

of autos, refriger¬

ators, radios, and
lasting consumers

Co. Offers

$30,000,000 Alleghany

,

-

,

,

•

.

Ordnance Workfc at

to

Amendments

incorporation

Baraboo, Wise.

the articles of

Chicago &
filed with
of Stat® of Wis¬

of

the

North Western Ry. were
the

Secretary

consin at Madison on May
The

15, last.

which
emerged
trusteeship effective June 1,
company,

from

1944, previously had been in¬
corporated in Wisconsin, . Illinois
and Michigan, but under the plan

reorganization it will retain its
incorporation only in Wisconsin.
With the return of the properties

of

by order of the court on
June
a

new

new

midnight

1, the company has elected
board

and a
Three Wis¬

of directors

slate of officers.

two of them
15
men elected to the new board of
directors.
Milwaukeeans elected
consin business men,

from Milwaukee.-were among

to

the

board

Walker,

were

W.

Frederick

Vice-President

of

the

Northwestern Mutual Life Insure
ance

Co., and William C. Frye, in¬

dustrialist and also
ern

a

Mtifual > official.

Northwest¬

The

other

William

E;

Tax-Free

of; the Ap-

pleton Wire Iron Works, Appleton.
The

issuance

of

new




securities

v.

Taxable Bonds

The

ing table comparing tax-free
taxable bonds indicating the

yield

proximate

which

bonds must return to
turn from

and
ap¬

taxable

equal the re¬

tax-free bonds yielding

to

quest,

41/2%

;

'?:

\

;
i—SMBw—

•

■

.

•

i

Dated Events War Map
Estabrook & Co., 15

State Street,

Boston, Mass., and 40 Wall
New York City, members
New York

Street,
of the

and Boston Stock Ex¬

changes, are distributing a
interesting "dated events

most

war
of the world showing the
progress
of the allied armies.
Copies of this map may be had
from the firm upon request/ as

map"

as

a

leaflet summarizing

the

principal features of the securities
offered in the Fifth United States
War Loan.

of the

the

government.

factor

in

»/

extremely

Another

the

post-war

industrial and

government regu¬

What kind of

important
■ financial

transportation picture is found in the carry-back
equipment to farms and cities will provision of the 1942 Revenue Act.
There will be inevitable delays in
run into the hundreds of billions
of dollars. There is every reason receiving this refund but the ag-;
to suppose that through private gregate amount of these refunds
and government channels, loans will be considerable. Moreover, it
will be made available which will is unlikely that all the accumu¬
enable these countries to purchase lated. savings will be. spent for
a
fair proportion
far more than their cash resources consumption;
will undoubtedly flow into the
would allow.
; V
/
'
•
The Latin-American countries capital markets. - It is likely that!

the

when held by in¬
dividuals or corporations subject
to
the top
bracket corporation
surtax. Copies of this table may
be had from the firm upon re¬
1%

needs

far exceed

Boland, Saffin & Co., 52 Wil¬
New York City, have
for distribution a most interest¬

liam Street,

well

Buchanan,- President

this country.'
continent will
this figure. Damage to

available to them in

lation must be

established to give

fair chance to return
production? Surely it
seem unfair to injure the

every one a

to

normal

would

competitive

position

of

a

firm

loyally engaged in war production
while its competitors through a
termination of war contracts are
in

a

position

to

recapture

the

market.
Our

with

business

men

government

understandable

are

Control.

that

fed-up

It is

they should

of govern¬
hope for the day, to come when
ment securities will be liquidated
once again
products at. fancy prices to the
they will be able to
and the funds reinvested in the;
United States but .haye not. been
direct their affairs without refer¬
securities
of business concerns.;
able to buy many goods on ac¬
ence to government bureaus.
But
All in all it would seem, there¬
count of the export restrictions in
it seems most unlikely that a sofore, that except in a few cases,'
this country and in Great Britain,
called "free competitive system"
no
special difficulties will arise
have now accumulated bank bal¬
can be established soon after hos¬
in connection with the financing
ances in this country, of approxi¬
tilities cease. Nor is it likely that
of our reconversion program, es¬
mately 3 billion"? dollars., These
it is to the best interests of busi¬
pecially in view of the fact that ness to- close down government
Latin-American neighbors of ours
our banks are in a liquid position
never were in a better financial
control. If we are to avoid con¬
and will be in a position to supply
fusion and dislocation of industry,
position than they are today.
a
good portion of the credit that
And finally, there is [Russia. The
the process of industrial demobili¬
will be needed. If the established
USSR has already placed .orders
zation must take place according
financial institutions find it im¬
for machinery and other equip¬
to. a carefully worked, out and
possible to supply this need, the
ment in .this country, and in Great
government-controlled pl$$L.
1
Federal
Government will unBritain amounting to; about 2!/2
There is also the ever-present
doubtediv
come
to the' rescue.
billion dollars.
Once the war is
(Continued on page 2384)
This will especially apply to the
over,
this figure will probably

which have been

able to sell their

substantial

holdings

Volume

THE COMMERCIAL' & FINANCIAL CHRONICLE

Number 4288

159

2373

I ^£<-j.
<r

i

of children's shoes ?

vi'.c

<,C'
4,' '>V

<

'

-n

*7f ?'1'' •"ir""-r»

warSame

answers

Yes
This

,

particularly true of dependable

brands of medium and better

to make

quality chil¬

Yes

better

today are' demanding

Parents

quality. Rationing has brought about a
keen

appreciation of the difference between

shoes that are

look

good, and those that merely

good.

possible

.

production?

effected ways

and

allocation and
children's

means to

for children. However, to

What

make

will

This

cover

replace¬

necessary

children's shoes?

more

should

In

some

instances production

shoes.

who in the past
What should I do to make my

needs of

use

our

men

and women,

children. However,

a

are

a

cloth
or paper to preserve
their shape, and dry
them- away from excessive heat. After they're
thoroughly dry, apply polish or other leather
preservative, i ■, • ' ->'

as

for

sufficient

,

3. At the earliest indication of needed repairs,

re¬

take shoes (if still the correct size) to the re¬

pairman. Don't wait until

quirements.

shoes

While fewer pairs of

children's shoes have

been made since the war started, the

mand has actually been greater

de¬

and the

shortage is felt more acutely for the fol¬

lowing

are

4. Alternate' the. wearing
.

older

ones

.

.

.

of

new

their shoes

adults.

also outgrorv

galoshes

have extra

And

more

because

quickly

feet
Good shoes

they seldom

their shoes,

I be

can

children

pairs in

reserve.

2* The rubber shortage has severely limited the
number of tennis shoes available to

and girls

.

...

this

boys

added to the

has

worn

are
are

sure

children's

my

properly fitted?

growing feet... built to stay that way.

dealer does the actual fitting
sure'you' go to a reliable dealer.

three

years

The range

o£^ sizes and widths

has in this emergency may not
as

he would like

.

.

so

be

.

<•.

but
so be

has also put a

as

dealer
complete

if he is unable to

furnish the exact size in. the style you

prefer,

Never

buy shoes too small... remember they
must give longer service now .. . . so allow
ample room for feet to grow.

heavier demand on leather required for
additional babies' shoes.

>

great many more pairs

v*

,

•

v

of




ST.

we

are

conditions

endeavor to

our

children's shoes

ards that

we

did

a year

make

more

will not disregard qual¬

determined not to use present
excuse for lowering the

as an

we

our

product... stand¬

have maintained for

more

-\0\;

than forty years.

We shall continue to make

worthy of

your

shoes that

are

complete trust... that are

constructed, inside and out, to give your
children real protection during
years

the vital

while their feet are developing.

You'll know these

trustworthy shoes

by the familiar brands and trade-marks

Company

LOUIS, MISSOURI

America's Largest Maker

than

production and, if possible, increase it.
But..An

reproduced below.

'>'

International Shoe
*

of

maintain this higher rate

>•

Y.

f:.;nli'vV

manufacturer

largest

children's shoes, we are now producing a

your

^

■■0

America's

problem? ;

*

suggest that you select another pattern in
the correct size that will serve your purpose.

sharp increase in the birth rate each year
for the past

As

moral standards of

made in the correct shapes for

we

demand for leather shoes,

3. A

ere

(when available) in wet weather.

your

,

shoes and
:y..

or

children's shoe

ity... we

wear out

than do

,

Company doing about this

ago. We expect to

:/

See that rubbers

5.

1

provided the older pair is still

large enough.-'

How

u

it's too late and the

beyond repair.

reasons:

1* Children

*

What is the International Shoe

2. When shoes get wet, stuff the toes with

being

essential civilian

meet

devoting part of their facilities to

them

quantity of good, serviceable shoe material
available to

manufacturers

production of shoes for children.
'
■d>

Always clean shoes thoroughly and treat
frequently with a good polish to preserve
the'upper's.
■;..'

decrease

well

as

there is

the

Some

have made only adult shoes

1.

allies have caused

and thus fewer leather shoes

made for

are now

children's shoes last longer?

The nation's military demands and the

is being di¬

verted from men's and women's shoes into
children's

Why is there a shortage

shoe manufacturers

are

doing to produce more

production of leather for

shoes.

produced to

of children's shoes?

provide

will take time.

increase the

leather available and enough shoes
be

ments

substantial increases in the leather supply

the Government has recently

.

.

increase

an

in children's shoe

dren's shoes.

t*

question

Has the Government taken steps

there is very definitely a shortage!
is

chxMven's
shoes

of

of Children's Shoes

1

'S

'

1

Thursday, June 8, 1944

CHRONICLE

THE COMMERCIAL & FINANCIAL

2374

something for nothing and, products, and the availability of
>.
•
/ •
the further > systematic, employment."
Furthermore,
"The ' credit
of
looting of the public ■ treasury?

to get

Dollars 0

join

first

(Continued fi
omists

recognize that as the na¬
debt
approaches the na¬

tional

tional wealth, the freedom of ac¬
tion of the individual diminishes,

comforts

declining years. Tens of millions
of men and women with savings

dictator must be: God

be
a

of

control

give us

big national debt!
Our

debt is ap¬

national

total

proaching dangerously near to our
total national wealth. By July 1, one
authority has said, the debt will
equal the value Of the entire cap•ital wealth of the nation, its fac¬

policies,
and millions more who have* pur¬
chased government bonds, will be
of

proceeds

at

.

insurance

loss to understand why "hu¬

a

manitarians"

drastic

advocate

of reducing unemployment

means

their

and at the same time direct

ingenuity towards lowering the
earning power of the billions of
saved dollars that many of our

mines,
farms, railroads,
forests, and so forth. By the war's
Workers have toiled almost a life¬
end, it will probably equal, if not
time to accumulate for themselves,
exceed, the total wealth of the
nation,
including
homes, bed- v* These millions of people are the
middles-class. folks—the very gait
sheets, and wedding rings. It is
obvious that the existing wealth, of the earth. They look forward
which is constantly wearing out, anxiously to the day when our
cannot pay tjie debt.
It will be leadership in government will be
aroused to
the gravity of
this
paid only out of wealth created
whole situation; whpn they shall
by future production, work, and
sweat.
War is a destroyer, not, a recognize that employed money,
creator of wealth.
We must not if honest, is only employed labor
confuse the savings resulting from in another form; and when they
tories,

.

time have

purchase and holding of war
with savings in the ordi¬ challenging

bonds

Impera¬

of that term.

nary sense

indirect

la¬

as
is the financing of-the bor, not only employment and se¬
obligated as we are by every curity, but equally an adequate

tive
war,

motive of

.interest, every thought

welfare

the

of

families,

our

patriotic .instinct to .aid in
the financing of the war by pur¬
chasing and holding as many gov¬
ernment
bonds as possible, we
every

_

that war is destruc¬
constructive—and that

cannot forget

tive—not

savings to us as holders
bonds
is
simply and
solely

the

charge upon us, our

of

of

evils
If

.generation or so, the
question is thrust into ther
public discussion. Now
that we are in the throes of the
most devastating war of all time,
the American dollar question
Every

of

takes

importance never be¬

an

on

approached in recorded his¬

fore

first

make

to

concern

the

secure

loose

theirs

What

and

exist,

always have,
will, welcome

and

citizens

re¬

by wise and just leg¬

moval only

islation. But what we should see
is

to

not

that

more

If

ease.

hoped-for cure is
malignant than the dis¬
the

are

we

v

fiscal

exploitation.
they do
all informed

capitalistic
evils

such

retain

to

any

vestige of the consent of the gov¬
ernment,
we,
like our fathers,
must stand out against any effort

policy.
We must
'
pronouncement!
solemn implied. promise!

avoid this danger."

What
a

that

But

this

At

the

in

which

liberty.

to public

:

-

'•

tingly accept the establishment of
a 'totalitarian
state in this land.
They will fight it if they are able
to recognize it as it creeps upon
them. There are among us, and

political * liberty " for
imagine is economic
In this they ignore the

exchange

they

neither

that,

fact

eco¬

liberty nor any other lib¬

nomic

possible without political

erty is

liberty. When will the mass pub¬
lic, who hold the voting control,
be' made to understand that sol¬

ug.

{hose"

*!_But.

we

have
work

elect

nationwide plan of economic
education. Or when, if it is not too
some

When it is known ,that the,

well-

readily un¬

sound money, we can

derstand

the

that

tran¬

problem

scends in importance parties,
itics and partisanship.

pol¬

■

and

conscious of
themselves are

sorely

become

the fact that they,

paying the bills for their alleged
security.
And
that educational

It is

'

*..

;

indeed, that even men

rare

the watch-tower

on

money

able to

seem

the

when

war

this

is

action."

-

themselves

•

connection
in a day of

One observes in this
that

living

are

we

a

paradoxes. Ceremonious occa¬
sions are created to bewail the sad

to

underprivileged and the
downtrodden. Men in high places

tutional

lot of the

lament

the

less

once

and

to

is

modify

or

nullify consti¬

restrictions

so

as

to

ex¬

tend its powers, then a represen¬
inadequate wages of tative republic is transformed in¬
socialistic
democracy
and
prosperous.
Mere spon¬ to

the

advocacy of higher
wages seem to bring those in publice life both applause and promo¬
sorship

in office. When

powerful enough,' by
application of such methods,
defeat or crush its opponents

party

the

and

tion, and the expectation of
ing retained permanently on

be¬
the
Yet here is the

eventual dictatorship.

Now,

that
Congress
continue to
ignore its constitutional responsi¬
bility and Cease to operate as a
suppose

should, after the

war,

check on government spending:
public pay roll.
striking paradox: The very same Suppose that the politicians then
agencies and the very same po¬ in office should further perfect
litical leaders who are exhausting the trick of corrupting the public
their

store

of

eloquence and

shedding tears out of commisera¬
tion for the worker because his

envelope is thin are largely
responsible for the vanishing re¬
turns upon the accumulated sav¬
ings of our factory workers,
clerks, teachers, mechanics, min¬
ers, farmers, and others who look
pay

forward
duce

an

to

their

savings to pro¬

income for them, so as to

supplement

their

personal




earn-

with its

and

suppose

that under the attractive

philoso-

ohy

of

own

an

money,

"economy of abund¬
under the pater¬

ance" promoted
nalistic
tion

of

government,

a

large por¬

the

population
could
continue to be so duped and de¬
luded
as
to
permit this unre¬
stricted political spoliation of the
national wealth, and suppose that
the people could be led to con¬
tinue to believe that it is possible

The

others

all

above

very

proceed to impress upon the pub¬
lic mind the vital importance of
honest dollars? Have the schools
a

to teach
government to the

sacred. responsibility

in

solvency

who

who

man

insurance executives who are the

of

world

A vast, maioritv of
industry. The Constitu¬
tion was made to protect this in¬
dustry, to give it both encourage¬
ment and security; but above all,
security."
•
live by

On

the

mortal

same

subject

im¬

the

stalwart

and

Democrat,
said, "To pre¬
independence, we must

Thomas Jefferson,
serve

not

our

let

our

perpetual
our

and

leaders

debt.

election

liberty,

or

load

We

must

between

with

us

make

economy

profusion and

ser¬

vitude."
And

listen

declaration

of

to

Mr.

this

ringing

Roosevelt

in

1932 in his bid for the

presidency:
"Upon the unimpaired credit of
the
United
States
government
rests the safety of deposits, the
security of insurance policies, the
activity
the

of

value

industrial enterprises,
of

our

agricultural

maintain
tain

gigantic

some

Whenever

sucked

in

men

and

of

life-blood

been

has

people

the

to

power,

to

up

sus¬

top-heavy
government,
money-spending,
no

a

fiat

from

what

matter

it

name

bears,

the

day of reckoning is at hand.
We are even told today to look

the present terrifying strug¬

upon

gle in the world as the result of
the scheming of a few despotic
shallow

How

individuals.

I

reasoning!
The

who

men

such

,

now seem

to

con¬

trol the destiny

of all Europe are
self-elected. They were in¬

not

They came into power be¬
of the situation, which had

cause

created

been

culminating

in

persuasion,

of

coupled

with native political sagacity and

passion for
power,
recognized that their
They witnessed
the helplessness of those in pow¬
er.
They saw before them the
burning

a

men

beckoning, vacated seats of power
so
by the breakdown of

made

solvent governments. Coming out

of

the

learning into

halls

of

have

the

not

been

given

education
needed to understand the import
and significance of historical and
vitally

with

To

verify,

or

dictators

solemnity,

horseback

on

with

uttered

these

captured

of the unsuspecting and apathetic

That

masses.

how

is

it

all

hap¬

pened "Over There."
1

what

But

possible?

erosion;

That

advent

exhaustion;

•

ruthless

taxa¬

the terror. It

was

demon

for-

their

made

Economic

treasury

debt. A

of

was

disregard

solvency.

Why

it that the Blackshirts

was

able

were

march

to

without resistance
the

Rome

upon

take

and

over

of

reins

government? It was
because
the
government
itself
had tacitly recognized its inabil¬
ity to meet its own astronomical
current debts, plus its borrowed
obligation of 27 billion dollars.
It was Italy's debt that spelled
,

doom—the

its

ished
a

of

doom

cher¬

its

institutions

democratic

in

that has made such

country

a

picturesque contribution to world
culture, art, and civilization. And
so, whenever a people have aban¬
all

doned

hope, have been shorn

of all incentive to labor and pro¬

when

and

duce,

black

deficits and

debt,
every

of

clouds

taxes

shut out

of hope of rehabilita¬

ray

tion, they are invariably ready to
turn to the one who, with dis¬

eloquence

arming
the

that fact
we

the

of

It

countries

terrifying

the very
our

the

to

as

Apply
abroad

have the underlying cause

threatens

now

himself

"deliverer."

awaited

and

glowing

and

announces

assurances,

tragedy which
security and

the

existence of millions of

fellow

men.

until

not

was

the

German

government and its political sub¬
divisions
ness

and

put at rest

was

had

incurred

assumed

their

beyond

many,

my fear, I interviewed
graduates—boys and girls

declarations

Messianic

the imagination of the people and
rode to power amid the applause

important

events.

economic

obscurity,

comparative

dramatic

also

the

his daily toil.
us

the

the

out

his daily bread by

earns

wherever

tion.

generation? Is it not
the duty of the bankers and

the

has

interest in • sound : cur¬
rency, and who suffers most by
mischievous
legislation,
is
the

looms

terror.

oncoming

man

deepest

people,

day had arrived.

over,

understandings.

the

economic

these

in office to find
interest in that very kind of gov¬
crisis and
:: b V
sound and exhaust new sources of rev¬ glorious retreat!
ernment."
This
very
situation
Daniel Webster said in 1834, "I
enue,
to create more- unproduc¬
money will keep us from chaos.
'challenges the intelligent, coop¬
admonish
every
industrious la¬ erative action of education, busi¬
When the Ship of State sails home tive, jobs as reward for party ad¬
on
and puts into harbor to contem¬ herents, to permit more and more borer in the country to be
ness,
and labor.
There • are no
plate post-war problems, she must to fatten on the public payroll, to guard against those who would labor unions in dictator countries.
more
and
more
citizens perpetuate against them a double
be anchored to honest American make
Clearly, their interests, like all
fraud—a fraud to cheat them out .wholesome
interests,:are identical
money. Success cannot attend our economically dependent upon the
of
their
earnings
by
first
I fear that most of the young
planning if the American dollar public purse. By prolific spending
fiat
is reported "missing in political of
money,
they entrench cheating them out of their people in this generation coming
through

us

see

history, that back of each
ultimate uprising of

every

disintegration. And as for the
masses, they seem never to have
been able to identify the enemy
that * comes
to
destroy
sound
money
on
which political, eco¬
nomic,
and social
liberties* are
made.
I then pose this question:
of

made to that in¬

America

all

and

recognize the approaching forces

...

in

and

teaching

a

power

sound

of

sentence

its beginning when

had

Vitally

we

of

it is

know, and

office.

dehth

our

All
through history, govern¬ program is somebody's responsi¬ .custodians of the savings of mil¬
ments, by debasing their money bility.-.
lions of thrifty citizens to dissem¬
systems have multiplied t h.edr
inate education dealing with sol¬
/
Before the advent of this war,
functions at; the expense of; the
a
race
was
heing run, fraught vency? Unquestionably, yes! Em¬
property, liberty and lives of their
phatically
so!
Every .boy
and
with
iymre
Vital
consequences
citizens:. Representative republics
than any other in our time.
It every girl in school and in every
have not been spared in this procr
was" the - contest
between sound •college in this great, free nation

their perpetuation

We

the peo¬
ple failed* to understand the men¬
ace
'of
long
tenure
in public

servants, not

(or were) our
sovereigns. The

are

ess of exploitation.
Politicians of education and
;;'/■*
regimentation. Regi¬ 'should be required to complete
important, not only to all persuasions are disposed to mentation took the lead, as it a course and to gain a clear unmake
public office a personal,
the American people, but to the
respecting
dollars
always has done when Federal >derstahding
people of all other countries, is vested interest! Parties in power spending is out of control.
,created through the production
\ ■■*
the fact that 34 nations are giv¬ are built up and maintained by
of goods and services. It is axio¬
Someone
has
said
that
"the
ing consideration to a world-sta¬ the' common practice of feeding
matic, and therefore non-contro¬
retreat - of
liberal
principles
bilization plan at this very mo¬ their following out 'of the public
versial, that only on the founda¬
creating printing-press throughout the world is a conse¬ tion of sound money, is it possible
ment. You and I know, how vital treasury,
to
do
so,
giving little quence of the decay of the money for a free school system to thrive
enlisted dollars have'been to the money
and credit systems, that gave the
'or for a democratic representative
prosecution of this war, how they thought to the vital principle of
nineteenth century a unique ad¬
have made possible the planes, the sound money—the cornerstone of
form of 'government to endure.
vantage in the annals: of man¬
democracy.; They
tanks, the subs, the destroyers. representative
Young people should be shown
discover
that
it
contributes to kind." And what a contribution that they have a personal, vital
Men, materials, and money will

V..'

tory.

nations

of

collapse

civilizations.

through the years,
the very things
that are now transpiring, in the
tragedies "that are rocking
the
very foundations of civilized so¬
ciety.
Possessed
of
a
superior

office

-

;

the

for

principles: cited.

very -

are

the war:

demned and branded as the cause

man¬

politicians

Those whom we, the people,

always will, be, some who would
what

of

destructive

their

done

against

"1

to
have
conscious of
pause

us

many

continuously
methodical, deliberate

ner

a

■

point let

observehow
been

A

1932.

of- words' preceding

deluge of debt!

.

" *

in

back

was

barricade

multiply the powers of govern¬
It is this vigilance which
will prove to be the price of our
American citizens will not wit¬

sound

a

ment.

to

children and being and destiny of all free peo¬ late, they, themselves are made
ples centers in the preservation of to feel the full burden of the tax

money

arena

It therefore becomes our

rendered by
'
: j
y
talking about rep¬ vency .is.no small matter; ,that it What is to be-done to arouse the
resentative labor, dollars of des¬
is~ a sacred thing; - that it ,is the -people?
" yy,'" I;;"
-.or
tiny, and at a time when the sta¬ very cornerstone of the kind of
Really J: men, what power do
bility, of: the.dollar,is threatened government that makes and keeps you and-I possess to make im¬
by the gigantic spending program -men free? The answer is: when pressive these demonstrated his¬
necessarily launched to prosecute they become informed through torical axioms? How must we
services

return. for

each in all enterprise.

a

people of America which
bonds, like the bonds in the So¬
cial Security "Trust Fund," must
be met out of future taxes.
the

all

problem
and

definitely af¬
human

States

these' fundamental

values.

precisely the manner foundation. National recovery de¬
in - which all -preceding democra¬ pends upon it.
Too often in. re¬
cent history liberal governments
cies have destroyed themselves.
We
hear much today of the have been wrecked on! rocks of

that the security.
is to * guar-J historic

direct

to

antee

United

the
fects

that that is

shall appreciate the truth

the

of

political ' thinkers of all
repeatedly giyen us the
answer. In one voice they declare
wisest

secure
well-deserved
and relaxation in their

government in¬ accounts, and millions who have
creases, the demands of govern¬ holdings in building and loan as¬
and other millions
ment increase, the possibility of sociations,
rebuilding private enterprise di¬ whose hopes depend upon the
minishes. The prayer of the would- eventual purchasing power of the
the

and.>, the

Historians

then?

What

page)

and

ings

in

not

to

power

until

indebted¬

obligations far

their

meet;

bonds

it

and

that

their promises to pay had become

education hav¬
ing to do with the importance of
government solvency, one of the

worthless scraps of paper that the
German people
looked for and

principal pillars of a representa¬
tive democracy.
When provided
with sound economic education,

forward

—most

of

they had

citizens

whom

admitted

meagre

old

and

young

will

no

longer
be' deceived
by
catchphrases, violent demogogic out¬
mild
impeachments,
or
glowing reassurances, all intended
to frighten or appease. They then

hailed the

who should come
promise and
pledge to lift them out of their

ists. Please note

ists."

the word

in the
x

then will have the
facts
and
be
guided solely by
them. They then cannot be mis¬
led, terrorized or won over to
new-sounding
creeds which,

experience,

philosophies
in

stand

the

face

utterly

and
of all
con¬

sun.

And that

man

came.

But before

he came,

tragic inflation, follow¬
national
bankruptcy,
had

ing
taxen

its

Hark

"real¬

They

the

hopelessness, restore their confi¬
dence and respect and win for
them once more a coveted place

bursts,

will become adult economic real¬

one

with

so

in

toll.

back

,

for

a

moment,

not

long ago—because it happened
the memory of most who are

here today: At the height of Ger¬
man

inflation,

the

hundreds

of

thousands of Germans who looked
forward

to

economic

(Continued

security

on page

2376)

in

Volume 159

Number 4288

THE COMMERCIAL & FINANCIAL CHRONICLE

"T —

2373

FOR NEW THINGS

THAT'S RAILROADING!

Is it rails and

and

rolling stock, freight cars
LABORATORY MAGIC—Research

coaches, locomotives and signaling

to

devices ? Is it

electronic

Pennsylvania and other railroads

things that

in the dark?

see

}

:

almost

Railroading is

journeys,

a

TRAIN

by the

TALK—Pennsylvania Railroad,
Union Switch and
Signal Co., is
testing a train telephone system, follow¬
ing long investigation with telephone,

has led

with

increased

comfort,
speedier and heavier freight trains operat¬
ing on fast, specified schedules. From
•1929 to 1943, inclusive, P.R.R. invested

struggling to be free or

steam

faster

billion dollars for improvements.

radio
,

and

electronic

experts.

experimental installation is in
Belvidere-Delaware Branch.

The first
use on

the

1

of them. It is

not any one

all of them—and more!

Railroading is the flow of grain from farm
•

distant

to

city. It is

moved from mine

speeding

factories

to

and gear

going to

mountain of

a

mill. It is

to

raw

and

troops

...

ore

materials

guns

'/A

'

war.

v

NEW

AND

P.R.R.

GREATER

It

is the mother's

soldier steps

welcoming

off the train. It is heat in the

home.., and

a

V
''1

'

and

These

-

of

;




y. "'A-

;

■■■'

'

with

tric—to

at once

use

this fuel.

things

.

.

.

'

practical.

-

y'y-'yyyA ;••'yc

LIGHTER, STRONGER METALS-New
new

applied

the

;

sure

the track.

the horizon.: You

-

a

...

as

-

,

•

'

values

TRACK —In¬

necessity and branches1 reaching
RESTYLING

can

be

never

stand still any more
can

AT.

than the

stand still. It will

searching for

re¬

new

need,
were

always

readiness,
even

railroads

met

every

when specially developed

cars

called for. Refinements in standard

freight

car

design greatly increase capacities.

MADE-TO ORDER

WEATHER—Rail¬
roads pioneered in the use of air-condi¬

tioning, first applying it to cars at almost
prohibitive icost. Far advanced from its
original conception, air-conditioning was
installed

in 11,000 cars. The
will continue after the war.

"•-■

things and better

5TH WAR

DOUBLE WHAT YOU DID BEFORE!

LOAN-JUNE 12 TO JULY 8

\

\

•

LARGEST COMMUNICATION SYSTEM

RAILROAD

Pennsylvania Railroad operates the
world's largest private communication

—

It includes a teletype system for
reporting arrival of trains and position ol
cars and
keeping shippers and consignees
informed of the movement of
freight.

system.

y-

program

and'finding.

BUY MORE WAR BONDS.
4

FREIGHT CARS-War

quired the movement of items of peculiar
.shapes, enormous weights. With tradi¬

human mind

•'>

THE

continuing Thought

a

tional

V

OF

i

into the

It

CARE

genious machines'and new practices
improve track maintenance. More
comfortable riding, greater stability for
heavier loads result. Machines now help
replace ties, drive ispikes and clean bal¬
last, do track work faster, better.

growing tree with roots deep in the
of

soil

TAKING
,

know that railroading is not just

invention. It is

•

are

the dispatcher clears an

'

And you
an

way

processes

are
demonstrated.
in this field turned
out to be a great wartime asset. Modern
metallurgy permits1 safety with light¬
weight construction of great strength.

it in the swift, convenient schedules;

feel it in the

metal-making

Peacetime progress

inspiration in the ribbons of

l.' steel rail that
puncture
sense

.

is

from the forge of: the mind

creative and

see

everywhere in evidence. P.R.R.
always studying and refining.newengineering techniques to combine comfort
and luxury and light weight' in cars of
greater-than-ever strength.

mans are

that'f

alloys,

You

LUXURY-Signifi-

improvements in coaches and Pull¬

cant

yi y,/.> •'

inspired by dreams. Minds that are

man

economical

types

"STREAMLINED"

V-' A'/ s'v.V',., *■"-'■

L'L

]

'

And it sprang
:

a;.;

thousand

a

T;:railroading!

*

affords

developing revolu¬
of locomotives—turbine
direct transmission, and turbo-elec¬

tionary

ticket-seller serving you at U

his window.
.V"

without limit,
power.
P.R.R. is

!A

her

cry as

POWER-In

territory, bituminous coal, avail¬

able

■

Serving the Nation?

★ 46,834 in the Armed Forces

^

☆ 197 have given their lives for their Country,

ELECTRONIC MIRACLES-The

signalin-the-locomotive-cab, foremost railroad
safety device, has been installed by P.R.R.
at a cost of
$18,000,000. Through elec¬
tronics, roadway signals are reproduced
on
panels before the eyes of the engins
crew

inside the cab.

COMMERCIAL & FINANCIAL

THE

2376

Thursday, June 8, 1944

CHRONICLE

Hollars- Of Destiny

less

said

Huff, Geyer

& Hecht

the

possible

when it assumed
proportions of a prairie fire,
consuming all the substance of
the people.; There remained a de¬
spoiled nation. Then- came, the
emergency, then chaos, then; the
dictator who,
as
you know,
is

Stocks

com-

insurance

the

to

returned

Bos¬
America,

Such companies as

panies.

ton, Insurance

River,

North

of North

Providence-Wash¬
be fa¬
action

suming no recurrence
submarine losses.
Investors
in fire

of heavy

mainly longconsequently
should be concerned more with
the post-war prospects of insur¬
ance companies rather than with
stocks, however, are

investors, and

terms

Some thoughts

prospects.

ation"

ness

in

therefore presented

/ are

this column.

first of all, to
the experience of a group

of interest,

is

It

refer to

representative companies
following the Armistice of World
16

of

I

War

aggregate

The

1918.

in

liquidating value of these- com¬
panies on Dec. 31, 1918 amounted
to $204,545,000. Year by year it in¬
creased so that five years later it

119920345678

BArclay 7-3500

Telephone:

Teletype—NY 1-1248-49
Gibbs, Manager Trading Department

A.

u.

II, but it is a significant fact
the history of our country that

War

1941

jvery war

Harbor.

try

hitherto

peace

will

Its upward
fleet in the world at the end of
$655,274,000
Composite Index of Industrial the war and even though it may
was reached in 1929; thereafter it
Production, compiled by the Fed¬ only be possible to use but a por¬
dropped to the 1932 low of $378,- eral Reserve
Board, from the end tion of it for peaceful trade, yet it
925,000, but this still was approxi¬ jf World War I to the opening of
is doubtful that we will permit
mately 90% above the 1918 fig¬ World War
our merchant marine this time to
II, as follows:—
ures.
Currently, aggregate liqui¬
deteriorate into an inferior posi¬
1918—:
73
dating value stands approximately
tion. Normally, ocean marine in¬
72
15% above the 1929 peak. The
surance
is a profitable line, and
75
volume of underwriting business
any moderate to
substantial, in¬
58 (low)
written by these companies,
as
crease
in volume should hand¬
73
measured by their unearned pre¬
somely augment the earnings of
88
mium
$326,352,000.

reached

trend continued until

similar
the close
unearned
premium reserves totaled $120,046,873. Year by year the volume
expanded, reaching $169,164,688
five years later, and $216,328,023
in 1929, but dropping to $177,901,000 in 1932.
Currently, un¬
earned premium reserves closely
approximate the 1929 level.
reserves,

shows

a

post-war expansion. At
of 1918 their aggregate

investment

Net

growth in the post¬
moving from $7,961,000
in 1918 to $12,839,000 in 1923, then
to a high of $18,894,000 in 1930,
and declining to a low of $13,820,000
in
1933.
Net
underwriting
years,

profits are characteristically er¬
ratic, but these, too, despite some
of losses, moved irregularly
upward from $6,094,000 in 1918
years

$8,459,000 in 1927, $14,930,000
in 1930 and $16,711,000 in 1933.
This post-war growth of the fire

to

insurance

ings

business

market,

as

& Poor's
fire insurance stocks. At

measured
index of

stock

the

of

earn¬

in the

amply reflected

was

action

its

and

by

Standard

close

of

1918

the

index was

39.5; by the end of 1923 it had
steadily risen to 81.6, an apprecia¬

(high)

91

87

(low)

World

almost

an

1921-22 drop,
uninterrupted

luge

proportions by

war

produc-

ion, is at 242.

of 249.1

oeak

is pr.4

contention of this

column"that'' insurance companies
will

necessarily

experience

an

equivalfcn t expahsTun alter Woriu




observer

are

many

"prob¬

ability factors" which

proportions, yet
essential in order to relieve inade¬

boom of unknown

conditions; a grow¬
ing public awareness of the value
and cheapness

he

normal

Nation, and if the annual prenium volume and net operating
>rofits
>f

fire

of

a

representative group
companies over

insurance

he past 25 years are

plotted on a
*raoh against the annual index of
ndustrial production, very close
Hence.

correlation will be found.

after World War II the United

"tates is to
ion

of

uring

experience

an expan-

and

manufac-

commerce

and

is

to

he fire insurance

Currently it stands at 114.5.

this

volume of fire pre¬

^hanving degree of prosperity of

rise

to

new

whts of technical and industrial

a

as

quate housing

achievements. it must follow that

reached

the

There

miums.

Now, the fortunes of insurance
companies rise and fall "with the

in 1929.

of

II,

would ap¬
■ise in the index to the 1929 peak.
pear to substantiate this conclu¬
Currently the index, swelled to sion, for i example:
a
building

106%; it was 116 9 at the
close of 1926, 174.0 in 1927, and it
tion

War

it, there is likely to occur,
with minor set-backs, an upward
views

high)

trend in

the

for

was

insur¬

companies," even though its
relative
importance has
slowly
shrunk from 77% of all lines in
1920
to
approximately 48% in
1943.
In
the
decade following

99
110

Except

so-called "fire

the

of

ance

58

here

e

the

,

1937__„113 (new
1939 ._____108

shows similar
war

v

95

1935

also

'income

96

line

dso rise to
md

new

companies will

levels of service

prosperity.

This

is not

a

10,000,000, and, after a pre¬
liminary drop from our inflated

some

prosperity,", a rising
of national prosperity.
"war

never-

heless this writer believes in the

curve
•;

By and large the prosperity of
the insurance business depends on
the

prosperity of the Nation.

we

believe

America

after

that

still

will

the

be

If

war

"going

places," still will exhibit the spirit
of enterprise and still will face a
promising and prosperous future,

Yet,

likewise

believe
stock

must

that the best of
fire

insurance

companies also will face 1 a prom¬

ising and

prosperous

%

\

face,

,

embrace."
;

Mexican

Indians;

sight of
too
many of us, then came to endure
it, and now we have embraced it
and
that is responsible at this
very moment for the rearing of a
such

of

structure

dented

unprece¬

that unless halted in

size

the post-war period, it
the stage of safety and

will pass

future.

we
had
incident to

expenses

marvelous expansion from

a

the Atlantic Coast
until we occupied the bulk of the
entire continent,. And yet, despite
all
the
obligations incident to
these
struggles and expansions
and the drains upon the national
treasury, despite all the burdens
which
the
taxpayers had been
along

strip

we,

the

all

met

War,
first

Moreover,

War.

World

the

in

participated

and

We shivered at the first

debt

we

War, the Spanish-American

our

spending;

in wars with the
had fought the Civil

for many years

,

uncontrolled

all

shouldered

fought the War of 1812, the
War; we had engaged

had

—Alexander Pope

.

had

we

the burdens of the Revolution, we

;

,

meant

have

would

colonies,

■

then pity, then

endure,

first

We

called

to

upon

assume

during

the aggregate costs
government during all that pe¬
riod
fade into insignificance in

those

years,

solvency
and must, of its own weight, col¬
lapse, leaving among its ruins 150

of

free agency—a system
that gave to the world a govern¬
ment characterized by Lincoln as

which the present treasury

of

years

people, by the people, and
people."
VC
that picture is overdrawn,
then all history is a lie.

for the

.

,

If

verification, let

For the sake of

get down to the facts
our
accounts show.

us

and see
Let us

what

look at the picture.

Here it is:;

•

administration, in
the pre-war years, piled up the
largest debt in all history. It had
for
several
years
past created
larger deficits than all other na¬
•

The

present

In

tions combined.

a

statement re¬

viewing the last ten years,
entry

our

the

■

facts

sion

is

of

are

One

that

Trust

Cleveland

-i'

Company said:
"Two

before

the war, Colonel

into

of

Ayers

about

special
it

has

this

depres¬

significance.
longer

lasted

other period of hard
times in our national history. The
other is that among all the im¬

than

any

portant industrial nations of the
world there is only one other that
has made such laggard progress

that is
toward
recovery the United States takes
rank in the 21st place among the
toward

recovery,

France.

In

22

the

and

progress:

And

comparison with the depredations

erodeconomic life
and
holdings in the few brief
years
preceding theworld con¬
flict—and mark you, in years of
peace!
made upon our

ers

Now, why do I harp on the pre¬
period of prodigality? Here

war

is

the

answer—and

why? Because with one
worked the pump han¬

we

a

true

one:

If at the end of this war, the defi¬

cit

"we-owe-us

the

spenders,

not thrown
angry,
tax-conscious
and if sanity in fiscal
not re-established, the

boys,""

are

out by an
electorate,
matters is 4
boys—our

fortunate enough
with grievous
wounds, will have fought in vain.
The
kind
of
government they

boys—who

are

to

many

return,

gave

their all to destroy will be

enthroned here at

home and

we,

mothers, will
have broken faith with those gal¬
their

lant

fathers

lads,

and

many

of whom

made

the supreme sacrifice.
The

Founding

Fathers

were

aware

of

warned

against them. And why?

Because

they
They

these

dangers

and

historically
close students
of world affairs. They knew what

minded.

had

brought

were

were

about the

rise and

fall of nations. That is why. they

attempted
tion,'to

nations."

dle,- while-

we

Executorships

and

launching of our government, we
had assumed all the debts of the

oft, familiar with

too

seen

her

lieve

then

of

something more to us perhaps,
had we realized that since the

seen;

,

hand

otherwise?),

and

situation

frightful mien
As to be hated, needs but to be

(and what true American can be¬

America's

prophecy,

of fire insurance; a
in population of

increase

£2,000,000

also undertaken

"of the

the major

Fire insurance is still

91

1932

underwriters.

marine

82

£4,000,000

every description
exchange business

Trusteeships

;

/
monster of such

spending?

"Vice (debt) is a

years.
The United States
have the largest merchant

Capital

conducts

banking

into

continuation of a discredited

a

trolled

higher levels than
prevailed during

reach

should
have

Zanzibar

Fund_i._—„_£2,200,000

Bank

The

fiscal philosophy—a policy which
advocates
and
justifies uncon¬

too.

bysiness,

marine

Ocean

Ceylon, Kenya

Burma,

India,

Colony and Aden and

.

Reserve

republic if we permit our coun¬

has been followed by a

;

Paid-Up Capital

going to mean to everything we
cherish under this representative

by

In

Subscribed

of discernment?
What do present movements mean
to us? Do we realize what it is

$77,612,000 or 9.8%, in 1922 after
World War I. Since Pearl Harbor
the volume has
shrunk to ap¬

high ground.
True, a "primary
post-war
depression" also, fre¬
quently occurs, as in 1921-1922,
out this generally is short-lived.
In this connection it is of interest
x)
note
the
movement of the

.

Office: 26, Bishopsgate,
London, E. C.

Head

;

Branches

tam¬

were

the Government in
Colony and Uganda

to

Kenya

possess power

we

proximately 45% of the 1941 fig¬
ures.
It seems reasonable to con¬
period of business growth which clude that the 1941 peak of motorbusiness will
again be
aas
carried the general level of vehicle
National prosperity up
to new reached and eventually exceeded.

in

Bankers

oblivion?
Back then, to our question: Do

stock fire companies
totaled $275,500,000, according to
Best's "Aggregates & Averages,"
which represented 26.2%
of all
lines written. This compares with
in

Exchange

Stock

York

Bell

post-war outlook for the
and marine insurance busi¬

fire

New

liberty, we

and

another,

premium writings

vehicle

Motor

Pearl

since

extent

ing

BROADWAY, NEW YORK 5, N. Y

120

the

on

1

Members

of INDIA. LIMITED

beyond the

look

we

pering with the deadly explosive
of excessive debt that has blown
one civilization, one culture after

.

request

on

|

conclusion
seems to
be that there will be p
rush for
automobiles after the
war.
Americans have been deprived of this form of transporta¬
tion and recreation to an increas¬

Laird, Bissell & Meeds

"dur¬

relatively short-term

their

Company

Bulletin

insurance

need

But

NATIONAL BANK

,,

,

waters, or even cite the

foregone

Ltd.

Bank,

Glyn Mills & Co. y

r

already

the scene.

who appears on

dom

proportions.

substantial

:

•>

from

teachings
of history to be convinced that in
the eight years immediately pre¬
have found aviation insurance a
ceding the war, in our own land,
profitable, though a minor, line
in this reputed sanctuary of free¬
which inevitably should expand to
Another

Trust

duration of the war, as¬

the

for

that came, the Ger¬

man

Deacon's

Williams

impossible debts, broken down
their machinery t of government
and created the very kind of man

,

.

Associated Banks:

W

•' '

victims.

which had piled up upon

will
witness very great expansion in
private and commercial aviation?
Already a number of leading fire
and casualty insurance companies

New York

ington and others, should
vorably affected by this

£115,681,681.

guaran¬

people thought they saw re¬
their suffocating debt,

lief

post-war years

doubt that the

TOTAL ASSETS

-

.

"prophets of gloom." To be
little more specific, who can

I

64 New Bond Street,' W.

r

demon
that
civiliaztion after civiliza¬

In the

other
a

Burlirgion Gardens, W. I

...

that

tion among its

pessimists and

patience with the

only

the

be

against

counts

and has little

destiny of America,

Commission has recently authorized
vessels under construction to be turned
back to commercial ocean-marine insurers. The bulk of this insur¬
ance risk has been assumed by the Government since the start of the
wartime ship construction program. Also, insurance on war cargoes,
which has been carried by the Government since April, 1942, is being
of insurance on

tee

Charing Cross, S. W. I

49

moment, after the, war,

will

which

man

Insurance Stocks

States Maritime

The United

the business

as

Smithfield, E. C. I

West

reality by recapturing the control
of Federal spending at the earliest

slowly,

VAN DEUSEN

By E. A.

or

Bisbopsgate, E. C. 2

3

^

the final stages,

7008

Enterprise

Bank and Insurance
This Week —

tive

_■

.

throughout Scotland

LONDON OFFICES:

'•
-..j
We say it can't happen here.
Rather, let us say, it must- not
happen here. Then let us proceed
to make that declaration .a living

legisla¬
developed
it always does, until

by presidential
proclamation—it

come

Enterprise 7008

PORTLAND,

0011

PROVIDENCE,

analysis, is in¬
flation, is the greatest tragedy
that can happen to any civilized
which, in the final

state.

OFFICE—-Edinburgh

HEAD

Branches

Loss of confidence in its money,

accounts. The insurance
companies actually lost 93.5% of
their assets and 95.6% of their in¬
vestments. That inflation did not

0

TO

TELEPHONES

Enterprise

HARTFORD,

^

Boston 9
Post Office Square

5

Incorporated by Royal Charter 1727

nation gone

a

savings

S
67 Wall Street
10
135 S. La Salle Street
WHitehall
3-0782
HUBbard 0650
FRanklin 7535
NY 1-2875
CG-105
PRIVATE WIRE SYSTEM C6NNECTINQ:
NEW YORK, BOSTON, CHICAGO,
ST.
LOUIS, LOS ANGELES,
SAN FRANCISCO AND SEATTLE
York

a

as

policies, were handed worth¬
currency. The same can be
concerning those who had

ance

New

age

receiver for
bankrupt.

nothing more than a

result of their
savings accumulated in life insur¬

their old

INSURANCE STOCKS

BANK and

Royal Bank of Scotland

(Continued from page 2374)

IN

PRIMARY MARKETS

which

through the Constitu¬
out the safe way

map

we

should pursue to estab¬

lish and to perpetuate

the princi¬

of government and human,
wielded-the- sledge hammer to relations for which they gave, so
freely of their blood and trea^p're^
smash the pump. And4 we called
They knew
that any departure
this priming the pump!
.
from • that sale-charted highway
That almost" incomprehensible

witlw the

other

/

we

ples

Volume 159
honest

of

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4288
would lead us

money

into> a wilderness of confusion
where, in our helplessness and
ignorance, we, too, would add one
more name to the long list of de¬
Washington's farewell address,
the admonitions of Madison, Ham¬
ilton, and Jefferson

perhaps
appreciated
time, but what remarkable
reading to us in our generation!
How they bristle with wisdom!
Almost against their better judg¬
ment they provided for general
suffrage, for they hoped against
hope that in some manner, mass
understood

little

were

or

•,

at the

education would

be made

a

con¬

tinuing, accomplished fact. They
trembled as they anticipated the
day when the vote of the majority
could be bought in exchange for
social security.
They recognized that only when
people are informed, when they
discern, are they able to exercise
the voting privilege wisely and
effectively in their own interest

alleged

of

economic

United

fighting

to

to

perpetuate
them¬
control; that they sur¬
round
themselves
with
hungry
hangers-on; that they build up a
in

lows

the gloomy

picture of what
must inevitably follow a continu-r
ation of the mania of incurring
debts, borrowing and perpetuat¬
ing
deficits.
They,
too,
were
called
ugly names and looked
upon
as
calamity howlers.
Strange, is it not, that we experi¬
the

ence

in

day,

our

tinuation

How

debt?

citizens, be

than

ing

seize

of the people, by a sys¬
erosion
of
the
public

treasury,

individuals,

states

and

and

so

that

action

Who should be

done?

contributions

pockets

into

our

over

won

they, the victims of a deficit pro¬
gram, will act in the interest of
their own security and their own
personal liberty? How can it be

task?

tematic

con¬

trend

devastating

a

then may the masses,

should

Who
or

will¬

more

the

undertake

to

we

courage

the

against the

warn

of

Federal

of

reaction when we,

same

more

possess

determination

more

the power of discernment to

and

this

opportunity ere it be
too late? John Rustgard said, "If
we are too weak today to handle

the situation

in

set

under

up

burdens

the

national

our

of power

ance

ency

the

—

board

and

of

recognized

be
kept within bounds prescribed by
Congress, so that public money
would be spent only in the vol¬

abandoned
con¬

in the

and

ume

pro¬

made

was

clearly the financial condition of
were

government's

terfuge

to

studied

were

New

government.

coined

make

fiscal

nal

sub¬

upon him and his
Solemnly they set out to

that

one

which

obstacle

disarming plea for economy, to
provide reorganization of gov¬

Constitutional
mandate,
designated the volume of
public expenditures and the man¬

should

were

not.

illiterates.

ernment departments. vThat

lacked

began with
Red

Riding Hoods

dear

bringing

substance

Government

old

turned

out

be

to

substance
very

but

existence

We need

to

our

only

threatened
as

dled,

be made to relinquish their time-

row

our

not alone

assume

are

tives

independent

in

favor

of

preroga¬

ambitious

an

central

still weaker.
giving shelter to a vul¬
constantly eating out

ture that is

government. Those men
how human nature oper¬
ates; how easily men can be de¬

ment debt and deficit.

spoiled and sold down the river;
how readily they can be betrayed.

in

had

seen

Out of the wealth of their wisdom
their

and

they

of

power

to

gave

discernment

that

us

unprece¬

instrument of human

dented

lib¬

erty, the Constitution, providing,
among
other
things,
that
the

spending power shall be vested in
the House, the true representa¬
tives

of

the

burned

people. It had

into

the

hearts

been
the

of

Founding Fathers that any de¬
parture from this fundamental of
free government would be the be¬

ginning

of

the end of
government. '
■.•■"''O.v

that

free

But no sooner had that Magna
Charta, with its priceless Bill of
Rights, been placed in our hands
than

it

object
have

became

of

These

an

attacks

ceased. They have in¬
insolenceand inten¬

never

creased

immediately

assault.

in

sity. We need not recite the hap¬
penings of recent years. They are
grimly

familiar
But

group.

back

come

they

can

man

.

...

again

once

.

this

in

us

we

the

to

question: How
made clear to the

be

the

on

to

street—to

the

aver¬

citizen who casts the control¬
ling vote?.
-1'

age

Who

selves

have

willing

like

block

sound
so

we

as

we

in

our¬

gullible,

be silenced,
be betrayed,
sold
who

those

upon

have

us?

be safely asserted that in

can

other

have

to
to

willing to be

preceded
It

equally

willing

equally

no

that

shown

now

be

to

equally
equally
the

contend

dares

day

our

country

on

earth

could

principles
of
economics
ruthlessly been violated,
have
recently
violated

them, without suffering complete
and
to

absolute

our

wreckage.

Thanks

endless and apparently in¬

exhaustible

resources,

we

have

been able, up to now, to meet our

vitals."

The

vulture

referred

is the ever-increasing

govern¬

our

to

at

the

of

head

educational

our

forces, including our endowed inT

stitutions, already recognize and
appreciate that they, themselves,
are in peril; that there is no justi¬
fiable gulf between education and
business; that without the pro¬
ceeds that

stra¬

come

from constructive

private ./ business,
schools
must
(Continued on page 2382)

Can it not be shown to the

manufacturer, to the house¬
to
the
educator,
to
the
church man, to the farmer, to the
vast

army

even

to those who

of

sisting

upon

lence?

Can

honest

the

year^, under the
of
peace-time
spending that any government in
any period had ever attempted in
pre-war

the

then

orgy

history
to

of

civilization

become

the

arsenal

and
of

democracy to save the world. As
much of

aiarmrs'

our

us,

present indebtedness

it is

trend

our

after

apprehension
the

war

?OVM;;SU!




that

workmen,
today are sub¬

BANKING

it not be

told

to

eleven million service men,

whom

of

have

$10,000

a

the

most

govern¬

ment insurance

policy? Can it not
to the youth of
our
country, to all people, irre¬
spective of color, or class, that
they will all be made to suffer for
ruthless prodigality; that-they all
must now unite to plan and per¬
petuate a sound fiscal policy fol¬
lowing the war? With our wide
range
of contacts, can we not
be

demonstrated

the

speak

language of each of
groups so
that they will

these

understand
did

ever

or

that

no

government

ever

can

subsist upon

its debts; that the only source of
wealth

is

selves;

OVERSEAS BRANCHES
ARGENTINA

government benevo¬

that

with

the people them¬

government

support

£nNew York National City its first
1914, The established Bank of
national

in

bank

the foreign

Other branches followed in

field.

million

holders of life

insurance policies,
the 50 million holders of govern¬

ment

bonds, with the voting

trol,
rally to
united action,

such

they

once

are

for
con-,

vinced that the leadership in this
crusade is informed and passion¬

ately and patriotically devoted to
public interest?
Men will not struggle to save

London

Rosario

117, Old Broad
Street

BRAZIL

11, Waterloo

commer¬
Rio de Janeiro

cially important cities until National

Place

Pernambuco
India

City became first in world-wide bank¬

Santos

ing.

Sao Paulo

gained during these 30 years of
overseas operations are available to
American business and industry in

CANAL ZONE

ence

staffed with

men

and

women

been

trained

respective countries.

both

at

abroad. These foreign
will

and

trade experts

gladly consult with you, and help

formulating

seas

home

business

your program
now

or

Cristobal

Lima

CHILE

PUERTO RICO

Santiago

San Juan

„

Arecibo

Valparaiso

Bayamon
Caguas

CUBA

war.

Ponce

Cuatro Caminos

(Havana)
.

Galiano
La

I,

Mayaguez

Havana

REPUBLIC

(Havana)

OF PANAMA

Lonja (Havana)

Panama

Caibarien
URUGUAY

Cardenas

Montevideo

Manzanillo

VENEZUELA

Matanzas

Caracas

Santiago
Branches in China, Japan
Islands

are

for over¬

after the

City

PERU

who

speak the language, know the local
customs, and are thoroughly familiar
with business conditions and oppor¬
tunities in their

Mexico

Balboa

planning post-war expansion abroad.
National City's overseas branches

in

^

Bombay
MEXICO

Today, the background and experi¬

con¬

call

a

ENGLAND

(Buenos Aires)

United States

Coordinating their work is a group
of National City officers in Head
Office in New York. These men have

69

Plaza Once

branch—in Buenos Aires. It

the first unit of any

was

Medellin

(Buenos Aires)

f

overseas

bank

the

Bogota
Barranquilla

Flores

are

depositors,

COLOMBIA

Buenos Aires

entirely from the earnings,
production, and savings of the
people; and that not one cent
originates in the elaborate mech¬
anism of government? How read¬
ily will the millions of savings
comes

in

and Philippine
enemy territory.

Correspondent Banks Everywhere

if

they know that they are ulti¬
mately to he denied the fruits of
their labors. No trick of logic will
be able to destroy that hu¬

ever

man

trait. That fact is

known to

those in power. That is. why they
have introduced political magic.

rapidly

greatest

IN WORLD-WIDE

wife,

sound is that it
in

man

the street, to the merchant, to

They have made

able to endure

illilPi

y'iv

the

obligations and to remain solvent.
The best proof that the Ameri¬
can
pattern
of
government is
was

First

us

class-minded.

As individuals and classes

losing

our

we

national

are

The National City Bank
of

New York

out¬

look. Our group consciousness has

brought

about group greed. We
have proved that we can be pur¬

65 Branches ill New

Head Office: 55 Wall Street

chased, big business included, and
silenced
by
carefully
planned
doles handed out to us by some
branch

or

other

of

philanthropic
call

our

protests

against

the

Yorh City

iHIHiHl
■-

^

s

y x\

that

great
which we

agency
central government. Our

unlimited

»Ui

FOR VICTORY-BUY AN EXTRA BOND—5th WAR

LOAN

the

responsibility
for
inaugurating
and
conducting a needed factrevealing process of education of
the masses. Our great school sys¬
tem will prove an able, willing
ally. It is my belief and convic¬
tion that many of those who stand

and the next day

We

honored,

our

free people.

a

shall be weaker tomor¬

we

our

Grandma,
a
hungry

wolf that devoured not

tegic key to government solvency,

be

We

it should be han¬

as

their political subdivisions can all

All

longer historically mind¬
imagined
that history
us. We were the Little

no

We

ed.

officef extended

in their extravagant path.
And they succeeded, under
the

Heretofore, Congress had acted

they

of

lay

under

which

term

vengeance

remove

ingenious invention!

in

continuing

denied, with the result that

office.

appear

had

ner

for the

former

a

the Treasury eroders swore eter¬

the

plausible. For in¬
stance, "recoverable assets." What
an

under

beyond the bounds of any exist¬
ing administration. He was made
the watch-dog of the Treasury.
Any
demands
made
upon
the
Treasury not in keeping with the
provisions of the appropriation,

constitutional

Furthermore, by a new kind of
bookkeeping, it is difficult to see
Federal

did

We had grown selfcentered and group-conscious. We

who

manner

control of the budget; a comptrol¬
ler of the budget was appointed,

pillars of government have been
largely eaten away.

terms

We

showed ourselves to be

we

economic

vision

whose

authority of sqch

cause

hard-earned

gation

our

And

significance of

perpetuated largely be¬

was

specific¬
ally prescribed by Congress, pro¬
administration

the

substitute.

the

"reform"?

that

conscious voting public.
So that all spending might

and

that

catch

we

emerg¬

exercising undisputed leg¬
islative, executive and judicial
powers, there has resulted a dele¬
portion

helpless

did

Government
final analysis

spring¬

many

of

tive—a

education.

safeguards.

creation

government

subject to the will of the Execu¬

upon

non-tax-con¬

not to incur the wrath of the tax-

Through
operation of
numerous, ever-increasing, alpha¬
betical agencies and commissions,
the

heaped

control, of

that

time-honored

our

stitutional

have

we

the

strict

disbursements, has been quietly
effectively removed. In its
place we have a glorified book¬
keeper under the domination and

this

implement to despot

Thus

many

extreme

were

of

to

but

nothing more than deferred
taxation, deliberately deferred by
politicians, in all parties, so as

declaration

an

of

control

had

is

willingness to abdicate under the
exists

that

backs

taxpayers.
borrowing in the

have shown their

manufactured

whole

scious

the

Constitution to maintain the bal¬

ism.

and paint to their fel¬

up

ing army of servile public em¬
ployees; that by means of lavish
from

government

stand

Vast ever-increasing tax-consum¬

taken

losing their constitutional au¬
tonomy.
Federal
projects
and
grants
have
done
their
work.
branches

the

expenditures

gotten
out of hand.
For lo, what Con¬
gress authorized, constituted only
a visibly small fraction of the tax

are

Even

But

public

States and their local subdivisions

there

done

men

made.

outpouring of borrowed money
growing fainter and fainter.

are

throughout the
centuries. No doubt in days of
yore there were men who dared

have

so

stimulated

situations

moment

very

be making some progress.
Just as we today are meeting,

for

selves

as

insurmountable
barriers
to
preserve
solvency.
Their efforts seem at the moment,

lust

that, once en¬
they reluctantly yield
positions; that they create

such

States,

against

fellow

power;

pa¬

Democrats

—

this

at

own

trenched,

un¬

(God bless him)—

Byrd

are

perpetuation of their
rights. They knew of men's

their

not

are

stalwart,

Republicans—in the Congress
the

who

the

and for

those

Americans

triotic
and

We

us.

of

mindful

Senator

civilizations. v

funct

overwhelms

2377

:

L'

"iif!"

■

•

'J

THE COMMERCIAL & FINANCIAL CHRONICLE

237!?

of

$5.99 per share, as compared
$2.76 per share in 1943 and
per share in 1937.

with

Common

Union

Deweg Sees Revival Of States

$2.75

[

(Continued from page 2362)
The

:'|i

issue

current

presents

of Abstracts

interesting

an

have
a
steadying unity of purpose.
First of all there is unity in the

compari¬

of the performance of Affili¬

son

ated

with

Fund

the

Dow-Jones

Average
during
the
"round trip" in the market from
May 28, 1943, to May 26, 1944. The
Dow-Jones
Industrial
Average
stood at 141.18 at the beginning
of that period and at 141.03 at the

Prospectus upon request
OF INVESTING COMPANIES

Lord, Abbett & Co.

the other

INCORPORATED

3.99
CHICAGO

JERSEY CITY

♦

LOS ANGELES

»

Food For

!||

Here, for example, is the closing

at this critical time.

is

not

intermed-

the

by

^

labor, their natural
the

the

lives abroad.

for duPont.

ducted

Corp.

commanders. The superb achieve¬
ments of our trained military and

52%

to 8%

Keystone
bined

net

reports

of

assets

Custodian

the

Funds

high of $82,500,000
of

37.5%

naval
serve

from

RAILROAD

prudence
that

the

now

we

Our rulers will best pro¬

hope.
mote

the

people

improvement

all

their

to

A Class of Group Securities, Inc.

of

Prospectus

2xw

to find its most lucrative course,

dustry

and

actual

reward,

their

intelligence

v DISTRIBUTORS
Incorporated

GROUP#

folly their natural punishment,

total

had

net

April 30,

on

*

National

*

Securities &

Corp.

presents

series

of

articles

Research

fifth

the

in

its

"Scientific

on

Viewpoint"

de¬

fairs

ing

the

price

observing
every

Let

by
in

law,

department of the State.

the

The

and

economy

of

strict,

do

Government

will

people

this.

assuredly

do

the rest."
*

*

public
the

a

Investors

of

in relation to

Rer

on

Fund

performance

stock

folder

little

showing

the

the nine im¬

the market from June 10, 1940, to
March 20, 1944.

might be expected from the

common

stock of

Republic

leverage fund,

a

declined

common

somewhat

faster

rate

at

than

a

the

Dow-Jones Industrial Average in
each

Fund

1

7.,

of the four market

declines

during the period. On the up-side,

against

as

•

.

The

new

.

'

*

*

]'■[

;

The

recently

panded

in

should

selected

time."

World War I

after

comparing automobile stock
prices with production of cars and
trucks
over
the
26-year period
Another chart

1918 to date.

from

shows

the

performance

with

the

in¬

alloy

,.!. '7'

and
; "-7

Group

Distributors

pects

.

.

Research

&

National
tional
dum

National

.

Corp.

Notes

Bond

—

H

letter

issue

Series.

the

folder for June.

of

the

stock

"Need

has

+

three

by

Profits"

buy

points:

The

railroads-

3.

DISTRIBUTORS

•

new

Son Fronciico 4

An

of

and

Important."
The

.

.

need

new

highly

on

"Tax

folders

have money to

equipment.
estimated

Data

post-war

railroad

equipment

held

by

ment Shares will

15 leading
stocks cur¬

earn

share

per

Railroad
an

Shares
June

Equip¬
average

from

authorized

dealers,

or

The PARKER CORPORATION
ONE COURT

ST., BOSTON

Management Associates, Boston, Mass.




120
LOS

Corporation

BROADWAY,
ANGELES,

BOSTON,

CHICAGO,

634

NEW

YORK, (5)

S.

Spring St., (14)
10 Post Office Square (9)
208

So.

La Salle St.

stockholders

3%0

Group

of

record

distribution

share

on

A

500

Series "Bl" and 350

Series

"K2," payable
1944, to stockholders of

on

15,

—

of

at

the

close

of

business

May 31, 1944.

..

Wellington Fund—The Welling¬
ton Fund has declared
at

National Securities &
Research

of

Insurance

the

rate

of 20 cents

a

dividend
per

share

payable June 30, 1944, to 'share¬
holders of record June 17, 1944.

Prospectuses upon request

obtained

Current

distribution
on

to

share

record

may be

a

covering all

30, 1944.

June

Prospectus

Also

Keystone Custodian Funds

a

SECURiTiiiS Series

portfolio

of the four Key¬

funds.

semi-annual
per

NATIONAL

for

Institutional Securities, Ltd.—A

It is estimated that in the first

rently

Refunds

Dividends

equipment

full post-war year the

informative

folder for June

in¬

Keynotes,

Revised

each

on

10 Keystone

profits.

railroad

of

a

Corporations."

Seemed

Keystone Corp.—

containing

semi-annual

\

.

Things

issue

current

(4)

until

they

not

as

again

sit

Co., 1 Wall
Street, New York City, members
of the New York Stock Exchange,
announce
the
appointment
of
Alonzo P. Ewing as representative
in

the Detroit

area

of

advisory division.

the

its

invest¬

quar¬

future

we
shall again be
people which our heri-:
tage and our vigor command.
The means by which our pres¬
ent
unity in war can be pre¬

served in the peace to come is the

vital

problem
to

seems

has

zen

time.

our

that
has

that

sense

of

me

war

in

much

It

our'

of

from the;

come

individual citi¬

every

personal job to do.

a

While there has been

a

maze

of

regimentation,
some
necessary,
some inexcusable, our
strength at
home has come wholly from the'
genius of

free

our

in indus¬

men

try

and
the
devotion
of
our
workers and our farmers to their
jobs. F
-f
7 ■/..</;. ■
Our

success

failure after the'

or

will

war

depend on whether we;
nation, take to heart the les¬

a

the

son

has taught us.

war

permit

the

continuance

regimentation

which

earnestly desire,
We

the

cannot

practice

totalitarianism
and

be

We

we

the
so

in

peace

which

brought

our:

enemies

to

either

If
of

•

some

shall fail.

we

centralization

free

successful,.

or

release and rely upon the

can

energy and spirit of the freedom
for which we fight.
In that way
we
cannot fail to be both free
and

successful.

In

:

this

'•

•

meeting

think

I

I see.
the means by which we
forward again but the fresh,

not only

and

fuehrers

and

and

to

about

be

the
or

war-lords

competently

what

go

concerns

with positive determina¬
join in preventing future

Our

great.

this nation
beacon

founders
as

one

conceived

destined

to

be

all the world.
For one hundred and fifty years
we
moved
steadily forward to
a

light to

nation
to the

came

State and

your

with

the

force

new

hation.!-;;

your coun¬

and

influence in

j

;

.A-

."-V

FV

f This is fundamental, I believe,because it represents an adminis¬
trative revival.
It stands for a:
revival

of

people.

It stands for

close

powers

the

to

revival of

a

responsibility close to the people.'
It means, that we are
emerging
period in which the

a

munities
in

and

the

States

com-,

engaged

holiday of surrendering re¬
sponsibility to the National Gov¬
a

ernment.

It

marks

at

least

beginning of the end of the
render

of

people.
Our

their

the
sur-,

by

power

the

.-K'■

.

future

demonstrated how free

solubly tied

could

the

you

The result has been that the
Governors of the States are heard

realize that great vision.
We created here a society which
men

of

try.

from
also united in the fresh

are

leadership

Each

job for

on

observers

mere

in the

success

of

our,

and the

war

country

indis-

are

with the mainte¬
of competent State Govern¬
up

together productively in an
atmosphere of intellectual stimu¬

nance

lation and

spiritual enlighten¬
ment. Throughout that period the
great American experiment was
an
inspiration to the peoples of

cities,

the world.

All of us, I am sure, no matter
which our party, are

work

We

of

had

good-will everywhere
are,
by our conduct
and example, a life-giving nation.
At times our progress was inter¬
rupted, but we recoiled only to
move forward.
American genius
found a way to overcome disloca¬
tions when they occurred.
Then in the years before the
war while
the pursuits of peace
were possible, we experienced ten
years
of retrogression in many
important respects. 'F During these
years we lost confidence in' our¬
selves.
We had a ten-year de¬
pression, ended only by the fever¬
because

we

ish

and .deadly stimulus
We had never before

enced

of

war.

experi¬

which
we
did not quickly rebound to
greated progress. No material rea¬
son was adequate to explain what
had happened.
•
\
The American people are the
most competent, vigorous and in¬
telligent in the world today. There
lie before us'opportunities which
are immeasurable.
There is only
a

depression

from

.

Ewing With du Pont
Francis I. du Pont &

ment

be¬

that engulfed

determination to keep our nation

other

Also the current

"These

stone Bond Funds.

in

crease

ten months ago.

issue

discussion

main

1.

=

Distributors

The memorandum stresses

2. The railroads

NORTH AMERICAN SECURITIES CO
2500 Run Building

issued

entitled

equipment.

★
GENERAL

Money to Buy

been

Group.

Shares

grow

1

We

Selected In¬

market

to

the great

memoran¬

.

Equipment

Rail¬

to

must

tion to

financial indicators with levels of
on

that

conducted

wars.

A

...

so

end

an

head of your Government in a
pe-!
riod of crisis, determined to do a

us,

of

revised current information

a

directed

and

vast catacysms

determination

showing portfolio changes in
various
funds
during May.

Also

management

attention than heretofore to

concerned

Na¬

to

here

see

grow;; : strong and
perfect their
plans for aggression. The Ameri¬
can people are united in their

tions, comparing the current level

7

memorandum

new

road

Request

are

and

in

with

confident

ers

Securities

An

released

be

In

as

and

work

faith

system,

our

reling, the American people will;
again go forward. They will re¬
capture their self-confidence and
self-pride in worthy achievement.

and

commentators, while future kais¬

;.|/7j!;£

devoted

be

We

right

A

—

all

us.

suggested mailing to "Pros¬
Who Are Corporation Ex¬

a

labor

sidelines

vestments Co.—An issue of Selec¬

date.

to

sjj

on

the

to

They

and

needs.

came

pro¬

the

at

■',- 7:,..;G

,

of

hard

of

restoration

ourselves

allowed

ex¬

the

and

Industrial
lows

com¬

of

Average

Chrysler

1942

New

Series in

Stocks Auto

York

parison

of

result

of

Mutual Fund'Literature

by

and

A

★

and

inefficiencies

they

With

profound truths
live.

men

tion, troubles elsewhere have been

ex¬

remunerative when

wisely

■

announced

is

capacity,

a

stocks

prove

ecutives."

from

Prospectus

capacity.

that

by which free

what goes on in the rest of the
world.
Twice now, in a genera¬

ducing and fabricating companies

showing the performance oFauto¬
stocks

as

production

vestment

and

mobile

conclusion

should be keen

Hugh W. Long & Co., is now avail¬
able. This folder contains charts

Dow-Jones

xA Mutual Investment Fund

efforts

effective

be

to
our

about

must

more

"While competition

on

Industry

Wars,"

*

article.

in

pressed that:

"The Auto¬
and Two Great

study

mobile

common

portant advances and declines in

As

period, Republic Investors
showed a net advance of

entire

49.2% for the
Dow-Jones Industrial Average.

W. R. Bull Management Co. has

published

Republic Investors common sub¬
stantially outperformed the DowJones Industrial Average in each
of the five advances.
Over the

82.8%

*

But the civilians

home

disasters like the present one will
hot recur.
We shall have to pay

loys" is the subject of the current

by

peace,

de¬

harmoniously to insure the earli¬
est victory and the quickest pos¬
sible return of our youth. This is
one fundamental
upon which we
as a people
are united.
Our people are united upon the
proposition that our foreign af¬

*

fending property, by diminish¬

maintaining

and

won

the home front.

must

the current issue
of Investment Timing. "New Al¬

by

people.

of

source

Developments from the Investor's

street—new york

63 wall

on

with year-earlier

compare

;■■■-

and

idleness

have

their

bungling

totals of $8,760,593 for Series B-2
and $1,138,613 for Series S-3.

Request

on

S~3

$1,818,088

imate duties—by leaving capital

commodities their fair price, in¬

being con¬
efficient

and

Labor
and
industry are per¬
forming valiantly. But every re-f

figures

legit¬

own

leaders

our

limit

are

trained

in the simple, yet

success

the continued confidence of

sacrifices

approx¬

1944, the semi-annual accounting
period for these two funds.
The

confining

strictly

by

themselves

by

want

the

$10,915,285 and Key¬

Series

assets

the

of

efforts at home

worried

stone

SHARES

look with comfort and good

energy

same

figure of

their

net assets of

people,

and

asset

save

new

of June 2,
represents

as

The present total

increase

this,

Key¬
a

our

Military affairs

com¬

10
at

possible in terms of the
young men. Because
they want to know how

as

lives of

losses,
ranging
for Anaconda Copper

from

stone

little

of

$60,000,000 reported last
year at this time.
:
./
Keystone Series B-2 had total

civilization;

same

of war they can
They want it to be as

to

an

hitherto been

in

forward

implements

produce.

imately

carried

and

resources

net

combined

and it is to

as

substantial

dling of the omniscient and om¬

that England has

far

as

be in terms of their

use

nipotent state, but by the pru¬
dence and energy of the

any necessary

best to

1944.

paragraph:

possible, to

from 3.61 to

rose

decisively and at

They want that cost,

further

down

Thought

Sanders & Co. has reprinted in the current issue of
Brevits an article which appeared over 114 years ago in the January
1830 issue of the Edinburgh Review.
The article gives much food

"It

hand,

war,

pointed out by
Lord, Abbett, the sponsor, that
during this same period
many
leading individual stocks showed

Vance,

for thought

is

this

win

to

all fronts and to win

on

cost, v:

share.

per

It

Mutual Funds

to win it

it

people of this country

determined

are

Affiliated Fund common, on

end.

The

war.

Industrial

•

American""" people

the

.

Stock Fund nBn

NEW YORK

Thursday, June 8, 1944

„

thing that can stop us from
resuming forward progress. That
is loss of faith in ourselves and
one

ments, competent governments in!
counties, towns and viK
lages. That is the essence of the:
Federal

system
maintain.

we

are

sworn

deeply

cerned

that

maintain

the

and

war

succeed

in

meet

we

our

their

to"

con¬

respective States
responsibilities in

after.

But

effectively

can'

we

that objective

only

our

as

oppor¬

tunities to advance the welfare of
our

I

people..
%'
have first-hand

:

evidence

in'

State, as I am sure each
his, that the people
bring responsibilities andobligations closer honied In the"

my own

of you has in
want to

field

of

finance,

for instance, itencouraging to witness!
approval bythe great majority of New
-York-;

has

been

the

whole-hearted

ers.-

of

the

-

buttressing

State's finances.

.For: the
will

most

emerge

part,-

.

our

from: the

the'

of

'T

'

war

V

.

States'in

a

relatively stronger financial posi-'tion than that of the Federal Gov-'ernment.

ment

will

enormous

annual

The
be

National

Govern¬

confronted with

debt and

an

an'

enormous'

charge for debt service.
v
the
States
have

Meanwhile,

been_ able to strengthen their fi¬
nancial nosition greatly in recent'
We have found it possible

years.

Volume

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4288

159

the

all

industrial activity and of employ¬

manufacturing firms of
It is obtaining figures
about their volume
of employ¬
ment both before and during the

ment

war

effect

to

economies,

many

some

permanent, some temporary. At
the same time, the high rate of
has,

in

general, increased
revenues.
Inevitably, this

.State

.situation evokes

large ques¬

some

tions of fiscal policy.

,In

State, and I am sure
that others of you have had the
same
experience, there was cer¬
tainly no lack of helpful sugges¬
my own

tions about how

surplus.
it

that

would

reduce

to

to see

eager

aid

to

away

particular

or

State

they

causes

favor.
We

felt

neither

that

morally

was

em¬

ployment
potentialities
in
the
post-war period.
;
Business men are being encour¬

We
investigating as accurately as
possible the approximate disloca¬
tion of workers in war produc¬

these

of

econom¬

or

tion

so

There is still another vital ques¬
tion with which I know

That

concerned.

of

tion

food

the

is

for

culture.

again,

are

all

it,
•

not

was

to

give

which

fund

to spend nor ours

ours

It

away.

rather,

was,

a

trust for

in

held

we

.those who had left their homes to

the battlefronts or to
work in the munitions plants.
Moreover, we know that fiscal

.fight
.

upon

policy is following
when

course

,

•

it

treacherous

a

taxes

reduces

in

relatively good times only to face
the necessity of increasing taxes
in hard times.
^
' > •'
•
We adopted the

.

principle that in

agri¬
people

prosperous

the

themselves and the units of Gov¬

closest

them

to

can

do

.

out

expenditures with-

adding to the burden of taxes.

What

:

did with

we

plus, therefore,
The

entire

State sur¬
to lock it up.

our

was

amounting

now

sum,

to

-

$163,000,000, has, by act of the
Legislature, been put into a re¬
construction, fund.

It will be available during the
>

;
.

;
•

.

.

chinery,

sometimes
not
even
enough gasoline to plow or culti¬
their

vate

save up

period

war

reinvestment

for

in

United States Government securtities to help the national war ef-

fort. When the
be there to
war

war

help

us

is over, it will
finance a post-

of

program

de-

necessary

fields

the

toward

'

But the

.

■

Administrator

;
.

In

industries.

war

ad-

dition it has been possible to provide full unemployment insurance
and extensive educational and

cational

•

for

:

opportunities

training

Our people pro-

veterans.

our

vo-

to sta rt with a healthy effort

pose

and it always

many

ob¬

agencies

manpower

have

The American

win this

must seek to

the
development
of
employment opportunities.

; encourage

;

there

extent

some

will

be

public
works
help to stimulate the

post-war

which

can

\ real jobs.
In New York

-

,

'

our post-war PubPlanning Commission

Works

lie

is preparing a program of needed
public works construction which
will also provide immediate em¬

ployment when needed. The

alone

volunteer

a

workers of

I

army

com¬

the

T sists

.

None

these

of

work"

getting

for sound

tion
out

.

will

projects.

ahead,
•

and

be

essential

and

"made

We are pushing
blueprints ready
construc-

anji tossing all of the frills

tl^e window.

By these and similar plans the
various

•

State

governments

are

doing much to cushion the effects
of
•

,

post-war
the

that
life

.

But

ment.

of

economic

we

must

heart

the

of
is

America

readjust-

never

forget

economic

business

and

industrial enterprise.
It

provides the great prepon¬
of employment opportu¬

nities for
State

our

people. Here, again,

government

can

help.

Our

Department of Commerce is
.

'J

en¬

help

But if we

magnificent spirit
leadership and neighborly

is

making

an

inventory




of

to

harvest

wish

unessentials,
unify in peace, as
keep and build our

could

we

that

done

each

the

hear

the

of

The

it.

This is amply recog--

increased

for troop
As

a

movements and furlough travel.
unprecedented volume of traffic

result of the

created by the war,

Company in
vious year.

revenues of the
than in any pre¬
Despite heavier costs, the record vol¬

1943

the operating

were

greater

of traffic enabled the

ume

Company to

earn

a

net

ernment and the Company.

with

1942,
44.3%

open

is

It

to

result

The

operating revenues increased 18.9% over
the, increase in passenger revenue being
and in freight revenue 12.2%.
volume

of

freight moved, as measured by
one mile, reached a new

in 1942 when it was 8.65 mills.
Passenger traffic, as measured by the number
of
revenue
passengers
carried
one
mile, the
heaviest

increased 56% above 1942.
Revenue per passenger mile averaged 1.905 cents,
compared with 2.058 cents in 1942.
The movement
of armed forces in active military service continued
to contribute largely to the increased volume of
passenger traffic, as did travel at reduced fares by
members of the armed forces on furlough.
Railway operating expenses (before taxes, other
deductions and fixed charges) increased over the
previous year by $74,667,501, or 18.5%, reflecting
the greater volume of business as well as increased
rates of pay, higher costs of fuel and other materials
and supplies, and larger accruals for depreciation

is

the

a

preju¬

not

a

eager
determination to

else.

It is

significant

of

this

group

Taxes
•

„

There

was

increase,

an

compared "with 1942, of

that the

in railway tax accruals, the total of which
absorbed more than seventeen cents of every dollar

of

of

Gov¬

largely in early middle
life.
You are not tired by long
doing.
You are fresh for great
are

ernors

operating. ratio was 67.60, the lowest
slightly lower than in 1942, when it

67.83.

State's

of

It is a matter of affirma¬
tive acceptance of local responsi¬
members

Railway

since 1916 and
was

matter

record,

on

and amortization.

and

eyes

someone

is

bility.

47.2%

operating revenues, was equivalent to $18.93 per
share of stock, and included $78,437,781 for United
States and Canadian income and excess profits
taxes,

or

$12.16

per

share.

tasks ahead.

This group will be a wholesome
influence when we face, as we

the redistribution of func¬

Net
Net

Income

and Dividends

placed to

see

ceed

close

With

to

their

That

source.

is the. people.
the

influence

help

of

of

the

the

men

driving
in

centration

of

national

power,

There will be

no

reaction after

1942, and $1,108,807,952 at the end of 1932.
Interest charges computed on an annual basis,
the obligations outstanding at the end of 1943,

on

$12,323,586 less than on the obligations out¬
standing at the end of 1932, a reduction of 26%.
were

Wage Increase
As stated in the annual report

representing fifteen

for 1942, organiza¬
of railway em¬

requesting
a

a
minimum

rates.

groups

further increase of thirty per cent with
increase of $3. applied to the daily

Following the various steps in the procedure

prescribed in the. Railway Labor Act, culminating
the findings of emergency boards appointed to

in

consider such requests,

the railroads accepted the

findings of these boards, although the organiza¬
tions rejected them.
In the months that followed, a solution of the
controversy was sought by further conferences be¬

representatives of the carriers and of the
A committee of Congress took the
the
United States offered to arbitrate the questions at

tween

organizations.

matter under consideration and the President of

Meanwhile

the

organizations had called a

December

30, 1943.

Possession and control of the railroads were as¬
sumed by the

United States on December 27, 1943.

Subsequently

agreements

carriers and the

the
was

were

reached

between

organizations, the strike call

cancelled, and the railroads were returned to

their
As

owners.
a

result of these agreements,

the non-operat¬

ing employes received, retroactive to

February 1,

increases in their basic rates of paV on a
graduated scale from 4 cents to 10 cents per hour.
They also received certain additional increases
effective as of December 27, 1943, for the duration
1943,

in lieu of overtime payments after
week; which latter increases, when
added to the aforesaid graduated scale of 4 to 10

of

hostilities,

40

hours

per

cents per

hour,

produce aggregate increases rang¬

ing from 9 to 11 cents per hour.
The
operating employes, in accordance

with

received, effective April 1, 1943,
an increase of 4 cents per hour in their basic pay,
and in lieu of claims for time and one-half after
40 hours per week and for expenses away from
home, an additional increase of 5 cents per hour
effective as of December 27, 1943, for the duration
of hostilities, and, commencing in 1944, an annual
vacation of one week with pay at the basic hourly
rate.
(Pursuant to existing agreements, non-oper¬
ating employes already
receive vacation with
these agreements,

pay.)
'

These increases will add
000.

the annual

to

based

on

present

approximately $33,912,-

payroll costs of the Company

employment,

and will require

payment of additional railroad retirement
employment insurance taxes estimated at
400, a total of $35,978,400.

and un¬
$2,066,-

Freight Rates and Passenger Fares

freight
all railroads early
1942, were not necessary under the conditions
existing at the time of the decision.
The authority
to continue such increases was therefore suspended
from May 15, 1943; until January 1, 1944.
No re¬
duction was required with respect to standard in¬
terstate passenger fares, but authority to continue
increases in commutation fares was revoked.
In a
supplemental report of the Commission, dated
November 8, 1943, the increases in freight rates
and charges were further suspended until July 1,

The

Board

a

to the credit of

of

Directors,

on

dividend of $0.50 per

stock,

this

room,
there will be determina¬
tion
never
to
permit that con¬

crossing eliminations, and
of equipment acquired
under railroad equipment agreements assigned to
banks) of the Company and its lessor companies
outstanding in the hands of the public.
At the end
of the year, the total of such obligations was $891,967,063, compared with $917,737,246 at the end of
grade

May 12, 1943, de¬
share on the capital
payable July 15, 1943, to stockholders of
record June 11, 1943, and on November 10, 1943,
a dividend of $1.00 per share payable January 15,
1944, to stockholders of record November 20, 1943.
The amount of these dividends, $9,671,091, was
charged to Earned Surplus.
clared

transferred

plus.

ideally

of

account

on

amounts payable in respect

decision, dated April 6, 1943, the Interstate
Commerce
Commission found
that the added

Government.
are

cluding arriounts payable to the State of New York

income, after all deductions, was $62,734,050

was

powers and people which
have swarmed about our national

that all possible functions of gov¬
ernment in this country will pro¬

Capital Obligations

Earned Sur¬

and

tions,

You

lished and maintained in peace.

nation-wide strike to become effective commencing

the number of tons moved

ex¬

good job and not to pass the

buck

have

During the year, a reduction of $25,770,184 was
effected in the amount of capital obligations (in¬

issue.

Operating Results

v1*Total

States

future without

to face the

a

we

shall be re-estab¬

war

ployes served notices on September 15, 1942, re¬
questing a further increase in pay of twenty cents
per hour with a minimum hourly rate of seventy
cents and on January 25, 1943, other organizations
representing locomotive enginemen, firemen, con¬
ductors, trainmen and switchmen, served notices

further

It is a revival of growth, the
principle of growth in our com¬
mon life.
It is a new willingness

do

at

FROM ANNUAL REPORT—1943

highways and waterways contributed
The growth of the armed services still
the transportation requirements

over

to the load.

ica.

minds.

re-won

re¬

determination by our

tions

beginning of a new revival that
goes down to the roots of Amer¬

-

new

moved

ing out boldly, as they have done,
challenge of war. The

dice,

a

continued diversion to the rails of traffic normally

to meet the

has

God.

overwhelming

people that the freedom

about

the Government,

our crops.

is

is

by the Governors of the States
flects

to

nized in statements of executives in all branches of

will all again plant and

we

gaged upon a program to encour- 'power which would wipe out our
age
business
development
and republican system and substitute
a
stimulate job opportunities.
disguised totalitarianism. :
It

war;

is

1919 except

source

derance

task

evidence

ourselves, in
our

new competence, the new
acceptance of responsibility shown

is

I

pensability to the war effort.

each of the States is

similar need.

a

must,

-

crusades

The

in

that the

people against another in vio¬

can

lent

in

The

part of the Ameri¬

During the year 1943, transportation, and par¬
ticularly rail transportation, again proved its indis-

of farm

rights.

funds

of political leaders
one

continue in the

municipalities
in the
preparation of plans.
Many plans arek already completed
and
on
the
shelf
for
needed and sound improvements.

allots

The task
not to lead

faith

country and in

our

it must be won for

of local

This

also

won

peak and was 11% larger than in 1942.
The reve¬
nue per ton mile was 8.75 mills, the
lowest since

facing

new-found

enemies must

To the Stockholders:

140,000.

sure

am

as-

mission

victory is
good.

EXTRACTS

the coming months

fact

needed

war

our

THE NEW YORK CENTRAL RAILROAD COMPANY

shall need in New York State

within their

To

people intend to
and to be done with

fighting both at home and abroad.

esti¬

:

sound

determined to remain free.

women

critical problems to meet.
State
and
Federal
farm

more

;•

;

will go forward be¬
free men and

its people are

cause

perience of all the States in strik¬

power,

has

farmers

the returning veteran to find employment, the States, so far as lies

:

in Govern¬

always

to harvest and process

I

to help themselves.
In this job of helping

or

country

against

were
able income of $62,734,050, equal to $9.73 a share.
Other
their crops' factors contributing to this result were operating
last fall without any loss, thanks efficiency and lower fixed charges resulting from
to the help of. a volunteer army the Company's policy of debt retirement.
As
of
December
of 111,000 workers.
27, 1943, the United States
Despite temporary surpluses of assumed possession and control of the railroads of
the country to prevent interruption of transporta- '
some products and removal of ra¬
Such possession and control were re¬
tioning of others, I fully expect tion service.
that our Emergency Food Com¬ linquished as of midnight, January 18, 1944, and
mission this year will have even mutual releases were exchanged between the Gov¬

The

stacles.

we

<

"i

overcame

unsurmountable

apparently

mated that in

and women who will
return from our armed forces and
men

the

were

Emergency Food Com¬
the Farm Manpower

of the

from

they

and

mission

economic and social rehabilitation
,

Our

ment.

The

contribute

will

and

confronted with excessive regular
from Washington.

ferred works.
It

civil life

either in

tion

meet necessary
.

quate help, hardly any new ma¬

for

should

one

aggregations of power

war

be pursued inflexibly, efficiently
and to a quick solution.
When

who have highly commended the
outstanding service of the railroads.
Wide public
recognition of the importance of the railroads in
the prosecution of the war and of the efficiency
come glaring in the food problem
of our State.
To meet the situa¬ with which they have performed their service is
tion we created the Emergency also apparent.
Your Company, as one of the great rail carriers
Food Commission and appointed
of the country,
had an important part in this*
a. Farm Manpower Administrator
transportation job.
It carried more passengers and
to work with that commission.
The farmers of New York rose moved more freight more miles in 1943 than ever
Further expansion, of the nation's tremen¬
to the occasion in a fashion that before.
dous industrial production for war was chiefly
made
the
people of the State
The
proud indeed.
They had inade¬ responsible for this record-breaking traffic.

rainy day in order that, if hard
times come, there may be funds to

good times
<a

to

The

the

increased

or

render

produc¬
and

war

a

Here,

we

spending iq; the job best if they are encour¬
times like
thepresent would be aged and permitted to do it:
When I had the honor to speak
equally unsotTna and irresponsi¬
to you over a year ago the conse¬
ble.
7
'
The State's surplus, as we saw quences of remote control had be¬

duction

America never goes
There will be no sur¬

war.

backwards.

to be able to meet their

as

ernment

ically "defensible^

the

aged to plan for the future.
are

tnaintenance of

courses

their

of

estimates

and

suggested ■needs. '

used

were

surplus < given

them

the

use

groups

be

Others

taxes.
the

to

Some

the State.

2379

Net Working Capital
Current Assets and Liabilities are set forth in the

Condensed

General

Balance

Sheet

and

show Net

In

a

revenues

rates and

resulting

from

the increases in

charges, authorized for

in

Working Capital at the end of the year of $107,-

1944,

112,821, an increase of $55,650,319 over the amount
preceding year.

Statistical

at the end of the

For

Comparative
Issue

Income

dated

June

Account,"
12tli.

Balance

Sheet,

etc.,

see

THE COMMERCIAL & FINANCIAL CHRONICLE

2380

Thursday, June 8, 1944
of* collectivism

Production Trends And Outlook

Links Canada with

"C.P.R."

(Continued from first page)

the Four Corners of the World

reaction at the termination of the

eight-page pamphlet outlining the
substantial financial improvement that has marked the

We have prepared an

Copies of the

•

reaching

This

operations of the C.P.R. over the past five years.
is illustrated by graphic

of

terribly depleted
capital.)
To implement

deficiencies,

of Finance

succession
on

the threshold

on

appears

As reported several months ago,

both sides of the border for many years.

according to a report
agreement
has
reached between Canada

Now,
from

—

Ottawa,

been

in

arrangement

"■

the

the
of

CANADIAN BONDS

Canadian

for

comparatively restricted
in
this
double taxation

scope,

such

caused

estates

in

trustees

se¬

CORPORATION

its
of

been

sharp

body liquidated all

a

the first

whether

Canadian securities held,

important section of the invest¬
ment community will shortly feel
free to

portfolios,
the

with

welcome

development of the approval by
overwhelming majority of the

of the City of Mon¬
reorganization
plan.
The essence of the plan is that the
maturities of the city
are
uni¬

will

1975

reduction

debt

and
be

by

approximately $14,-

j 000,000. As the city revenues in
ithe past four years varied from

$49,000,000 to $54,000,000 approxi¬
mately, the debt service will be

;less than 30%
•

of total revenues.
great Canadian metrop¬

Thus this

and

olis takes on a new
! financial lease of
'

!

simpler

life, and it can
anticipated that in
view of this and its leading posi¬
be confidently

tion

among the Canadian cities,
credit standing of Montreal

i the

should in due

than

ever

course

rank higher

before,

j

During the past week market

j

activity was at a comparatively
low ebb. In view of the development previously discussed, Mont¬

I

real

issues

feature

[large

and

turnover

principal

was

fairly

a

higher

at

Dominions

Direct

the

were
there

prices.

retreated

from

N. Y.

cumulated,

for

more

accentuated

July

1,

as

we

the call date..

Pacific

approach
Canadian

4sj>VVre!

perpetual

strong and touched
There

new

a

scattered

was

wise there was little

change.

Internal issues continued in fair
demand

and the Canadian

"free"

in

the

its

strength at 9

market

shares

was

maintained

^16% discount.

intensified

An

dollar

demand for gold
contributory factor;

a

results of recent diamond

drilling,

principally in the Northwest Ter¬
ritories, have been quite spectacu¬
Thus it would appear that
past predictions concerning the
potential wealth of this region
were by no means unjustified.
As
as

labor and machinery be¬

come

readily

little

doubt

Northwest

will

of the richest
of the

available
that

rarer

the

there

is

Canadian

to

prove

be

one

in the world

sources

metals.

should, if anything, become

Now

stocks of semi¬

(such

with

it

seems

investment

as

of various sorts
accumulate, and

goods

zinc)

as

the great decline in

building and
construction, to say nothing of
machine tools, shows that the war
plant has been completed. At the
same
time, civilian production is
held

the

as

and,

private

on

of

is

plans

the

war

which

however,

production

midst

of

a

and

must

in

that,

markets

as

gent

erally, invasion influences have"?

the

ends.

war

*

64 WALL

&

Company

STREET, NEW YORK 5

/

-

Canadian
.

-.

-

-

WHitehali 3-1874

■

-

•'

-recent

market

months

steadily to reach

here

has
a

during;

advanced

point where 4

mean

a

"managed economy," which would
not le,t

the purchasing power al¬
come
into
use.

.

ready

created

That

deflation

substitute

would

for inflation.
*

*

*

So the question

America, to say
nothing of the business forecaster,
has

decide

to

reference

with

to

production trends and outlook, is,
the attitude of its

What shall be

government toward the system of
free private

hesitate
tude

to

is

words

enterprise?

I do not
that if that atti¬

say

be

to

of

represented by the
high Department of

a

Commerce official, when he says

that, with the aid of the Govern¬
ment, we must try to spend more
than

combined

our

that

the

basic

maintain
will

is

income,

and

requirement is

full

to

that

income

national

a

create

future

employment, the

dark.

.

Much of the trouble lies in the

that the Govern¬

smart-alec idea
ment

"create

can

purchasing
the people

power" — or make
think so—by taking
from

its

hands

citizens

that

Sometimes

this

money away

fast

as

as

it

them.
disguised by

out

money

is

to

saying that the people will enjoy
saving, and will continue to hand
their

over

money

Some¬

gladly

times there is talk about the de¬

Government

sirability

of

bonds,

if "saving" were the
"investment." Never is

as

same

as

there any

buying

definite idea of giving

the money back in terms of iden¬

tical

power. You see,
that the Government,

purchasing
is

after giving

money out and tak¬
it back, will then have it
again so that it can spend it again,

ing

otherwise

or

it back again
whom it took
The more the Govern¬
give

the people from

to

it!—-again!

ment borrows, the more it spends;
and the more it spends, the more
it

That is about the

borrow.

can

basis for

saying that we need a
income

national
number
order

of

to

of this

this

of

billions

support

or

That is

a

of

that

or

dollars

in

national debt

that number of billions!

what

is

meant by a
The managed
economy has become one in which
the Government manages to keep
people from spending their own
money
as
they please.
Anyone

managed

who

now

economy.

thinks that under such

has

estimated

been

that

student

in industrial

the

by

one

real

in¬

production in

the three years from 1939 through
1942 has not been 68%, as the

Federal* Reserve

index

says;

we

ing

likely

are

prosperity and

full

to

con¬

have

employment,

to fall for this shell game,
I'll, tell you when the big

and

crease

post-war
way.
now

boom

will

Now they

see

they don't.

shell shocked.

get under
their money;

People

are

But when the

is in the bag,

they will

more

now
war

and

but;

really only; 35%. J This* compares;
with an increase of32%, from'

willing'1;tp;save; They:, will* want'•

through ; 1917, the "icorrefj mo.re vo.f; a> ruii for their money;
spending period in World War I,.; than- they' can get at/1 or'.2%;
The two increases are substan¬ Then they will buy and buy! They
tially the same.
(Incidentally, I will not tolerate ^rationing. Prices
1914;

i

been thoroughly discounted. The

would

That

boom.

war

Tell, me how long. the people,
and'notably: the laborers, are go¬

of the term.

sense

note

that

has been

there

identically

the

almost

will' rise;.,; Profits %]ll;gro4y;?OhCe

rise

in the

the

same

war

.

is won,

.price control 'wilt

!,x j
the two be like prohibitipn-^-futile!
periods of the two wars.)
Thus ! It is sometimes, said * that'if all
we -do
not start from any. such of us-spend
freely,; we, wjll'haye
extraordinary peak as the Reserve production brought to full, canap-f
Board statisticians wouldsugges^. ity > and full 'employment 1 This
price

.

price-fixing in the post-war pe¬
riod, W© need not expect a post¬

The only

It

J In

Taylor, Deale

data

no

is not in touch with the realities.

careful

be foreseen; civilian pro*
ductioii will be stepped "up,»' which
before

for

substitutes

labor.

for

the, postrwar „period; there
is- usually a relatively* short de*
cline, lasting; perhaps' for some

index,

things we have too much of, are
war
goods
and
non-productive

can

be

be

ditions

nary

lumber,;;; Invasion;" uncertainty
prevails; but just as soon 'as the
end

expansion

other

are f

will

industrial production in. any ordi¬

the

are

allowed to rise,
great gain in
production or in employment. If
we are to continue rationing and
there

showing actual output of prod¬
ucts, that it does not truly reflect

carry

demand

and

great

no

would make
namely that
such relatively

by which most ob¬
judge the expansion of
production, is itself inflated!
It
is based so largely on man hours,

production above the preceding
peak. This, too, may be expected.
At the present time, for example,
we
are just
ending the landingbarge and landing-mat stage in
steel

a

tion

the first dip in
boom, there is a recovery,
not,

point I
negative one,

servers

after

does

sequence

down
to
the
present time as some fearful an¬
alysts have fancied.
The plain
fact is that the industrial produc¬

be held in abeyance.

Usually

first

great

action

course,

post-war

of

question,

usual

there has been

pending greater cer¬
to the final outcome of

war;

the

to

this

The

back

tainty

pro¬

Why
of
carry
through from
here?
If the war ends in 1946,
why should there not be a minor
recession in 1947, followed by a
post-war boom before the end of
1948, which might carry on for
at least two or three years?
1

case.

dip recently,

finished

war

because

true

not

events

"shell steel," heavy ordnance, and

Turning to possible future de¬

velopments,

the

now

is

great

should

There has been

lar.;

soon

is

as

prices

less

the idea

dip in

a

reached last Fall.
a

will

which

comes

peak of

This

creates,

Is
this not exactly what has
happened since 1939?
Probably
the peak of war production was

very

high of
trading
in the provincial issues and price-

97.

Nationals

short-term

there

to

a

shortages which war
particularly in capital
goods, and the use of technolog¬
ical
developments
which
are
usually stimulated. -

is

effi¬

effort and

period is almost
return
to, or exceed,

preceding

the

war

it

Then periods of man¬
shortage are apt to become

power

effective,

still ;a steady replacement de-

fmand

NY-1-1045

RECTOR 2-7231

their recent high levels, but there
„was

for

however,

production.

debt

interest

increased

to

the

set up, and stocks of materials ac¬

NEW YORK 5,

bondholders

formly arranged from 1946 to 1975
so that the yearly service of the
■debt which will provide for both

industries

Partly,

certain

emergency.
After this initial spurt, the war
machine having been completely

TWO WALL STREET

an

treal

expansion of production and em¬

a

war

coin¬

news

further

period of great so-called

a

prosperity—a period of post-war
inflation, characterized by great

of convert¬

way

get

that is already beginning.
Following
the first
post-war
decline,
however, there always

ciency under the stimulus of the

INCORPORATED

encouraging

This

cides

civilian

due

A. E. AMES & CO.

the

to

pay

duction.

in

efforts

for the reduction of overtime

up

war.

purposes.

desirable additions to in¬

v

of

their

increase

comes

three years

post-war

It all comes down to socalled post-war planning by gov¬
ernment.. Unless industry is given

period.

higher hourly wage rates'to make

calls for a
production during

or

higher money wages.
the end of the pres¬
draws near, labor leaders

war

will

shape of

as

ployment. Such

ing

consider Canadian securi¬

as

vestment

ent

the

in

for

activities

or

is to be

ties

two

uncertainty

any

head

a

Certainly,

sequence

in

phase,

This "war boom" is
due to the production of
needed plant and equipment, and
great
partly

CANADIAN STOCKS

not to this taxation. It
hoped, therefore, that on
removal of this impediment this

subject

rise

to

strikes

of

usual

this

come

after great wars.

so

The

that

feeling

34 bil¬

general,

struction

MUNICIPAL

Although

curities in this country.

a

private credit
This is seen
some

production
gradual rise in ci¬

results in the first
reaction—a minor one.

have a considerable retard¬
ing effect.
Perhaps uncertainty
concerning radicalism, by check¬
ing incentives to investment and
enterprise, may delay the pick-up
of civilian production. Perhaps, as
the first strain of readjustment is
felt, the demands of labor may

war.:

retirement of

the

into

controls

war

war

may

therefore, the de¬
capital throughout
the world, and the disruption of
the productive mechanism, invite
and challenge a great upsurge of
productive activity. It has always

PROVINCIAL

equitable state of affairs is timely
market

In

the

In

the

of

in

affecting post-war business plans

be

been

composition of
forces—the relatively

more

post-war

of private debt, and
abnormally low level of
bank loans.
V

GOVERNMENT

in view of the growing importance

should
has

There

The

vilian output,

of

system,

all.

to

the

and

war

more

cost

two

.

sharp decline

dollars

lion

This correction of an obvious in¬

of

the

banking

in the

in

joint international conven¬
is imminent.

tion

much

or

throughout the

where announcement

stage

a

taxes

subnormal'"use

re¬

of succession duties, and
negotiations have reached

these

and

vast

a

momentum.

than
have
living.
The
vast
potential inflation existing
in the shape of bank deposits, the
growing effectiveness of which is
finding expression in the dimin¬
ishing excess reserves of the cen¬
began,

tral

spect

is

have soared since the

comes

known

and the United States for a new

reciprocal

there

these

purchasing
power
in
of currency. Individual in¬

terms

headed by the indefatig¬
of another noteworthy
the Canadian Minister
took the initiative in clearing up the highly troublesome
duties situation which has plagued executors of estates

Ilsley,

from

growing

Canadian Department of Finance,

Mr.

picking up, gains
Indeed, there can
hardly be a complete shift to a
civilian economy before the ex¬
pansion in building activity and
other heavy
industries pick up

wants.
counter¬

come

after

are

slowly.

more

a

that

soon

while

duction,

postponed

the

year,

are
being "cut
being cancelled.)
On the other hand, civilian pro¬

ofunsatisfied

and

a

Many

back." Some

se¬

and
post-war
with, we have

the desires

By BRUCE WILLIAMS

able

renewed.

ex¬

normal

as

mem

anticipated. On the one hand, war
production is apt to be curtailed
freedom to expand, how can one
sharply.
(Today,
for
example,
-be'■.;sure; that :if-"will expand?.'Un¬
many war contracts are not being:

rea¬

same

always

this

war

business,

(In

Canadian Securities

have

period

the coming of peace is known or

a

amount

business

achievement.

in

To begin

desires

London, England

the

are

part of this is

The

such

situation

denouement

explain

vast

a

New York 5

Winnipeg * Vancouver

to

quence
events.

Incorporated

Montreal

whole

that

now

isted

Wood, Gundy & Co.
Toronto

its

Surely there
sons

14 Wall Street,

the

great post-war boom?
.,y 'y ■
.$7\

comparisons of 1938 with 1943.

pamphlet gladly furnished upon request

new

with

war,

(which kept- ten

unemployed inwthe
pre-war- period)',, 'and the; active
propaganda* for the projection of

;milliorr

of

farm

lands

in

.

"

V'\\
-v
«'

•'--••*;

■»

a

:V-

•■';'.■•

.V

canadian securities

Government

slight reaction would hot

[Note -the big difficulty, and the

bej
surprising. /However, there ap-j
pears no reason to < expect -any!

look

basic

that dm other wSrs, -lifcs. in the-re

change of trend, as there;
is still the important: factor to

big difference between
for-'

tentioh

production'

' of

Provincial




*'

Municipal

*

Corporate

fOrCeS, rwhich

interest

These.

in

this country in Cana-;

certain
.

be taken into" consideration that
♦

"

is

now

the

today'

outjan

destructive

threatened

head_ up in "a lack of •; inj-

diari securities" continues ;to de-;

centive to

velop.

I "refer to

enterprise.
are

may

be." true, rbutr one: might

.well. say^AIf you
a

'eatch'it'|,
.they-'GpY^hment'-; has;

bii'd's; "tail; " you* can

10
ai

a$.

caajput salt 011

larger part. ©£■ the" spendng.; "and

if rRrmakes disturbing

The forces ;try

that'American forifV Vestments'* will:be "

,

conditlpps.
indqs*.

,sa-that incentive'' to* private"

cut;;,andtidlq

2381

& FINANCIAL CHRONICLE

THE COMMERCIAL

Number 4288

Volume 159

i

will in¬ ibegin a long period of expansion.
will arise |
Studies of employment, includ¬
and say that if businessmen won't, ing both civil and military, indi¬
cate the
probability that, with
the Government will — which is
the coming of peace, the followcollectivism.
idle

and

men

Then

crease.

I assert that the only way to

,

get

:

production increased in a free
country is to let people earn and
spend their own incomes, and to
allow prices and profits to in¬
crease.
I am confident that un¬
less and until these things are
no full em¬
maximum produc¬
tion. With still more confidence,
however, I predict that the Amer¬
ican people will soon be fed up
with the shell game which con¬
sists in giving them money and
taking it away, without giving
them anything they want in re¬
turn; and I therefore go on to
predict that something approxi¬
mating the usual post-war se¬

ployment

or

developments
may
be
pected (barring collectivist
periments):
;
ing

three

(2) At about the

to continue so as a total.
Prices of many materials will be

likely

easier

be

for

general

The

time.

a

shortage will certainly

'

civilian

But

production

goods

champing at the bit.
It has
great possibilities, and requires
little
urging
to
expand
with
growing momentum.
While the
volume of effective war contracts
is

the shortages of
accumulates, and

is being reduced,
civilian,

goods

purchasing power in civilian
pockets expands enormously.
A

the

dency of

women

the

is

illustration

current

workers to

war

As the in-

return to their homes.

dexes of

ten¬

production and em¬
ployment decline .(partly on ac¬
war

count of the retirement of women

workers) the demand for civilian

the homes..to
should grow.
political handicaps
(expressed
in
the
easy-money
policy, the full employment no¬
tion,
and
post-war
planning),
never
will
a
great war have
in

goods

for

which

they return,

use

from

Aside

ended with

as

much

reason

for

a

three

or

p. m.

(4) The decline in the number

payrolls will then
however, and the cumula¬

tive growth in peace

employment
will cause total employment to
expand during a long period of
post-war prosperity.
It

is

tentatively

idea that,

my

if the New Deal element were to

in

1944,

policy of Gov¬

the

ernment would be unfavorable to
business

that

the

until

expansion

such time

1948.

as

ends

war

some

Now suppose
in

1946.

That

the low point of

the
first post-war recession sometime
in 1947.
Then, if it became ap¬
parent that Roosevelt would not
be reelected in 1948, which is a
development that would occur in
1947, the result would be a great
pickup in business and an expan¬
sion in the shape of a post-war
boom which would begin in 1948.
would

mean

If the
last

this

put

in

speeded up,
be
quicker.
then

is at

Deal element

New

"time

would

its

however,

place,

will

schedule"

be

and expansion will
Post-war planning
be

helpful

to

enter¬

prise and productive employment.
The low point in the first post¬
war

recession
Prices

would

not

and

be

The following

have been nomi¬

officers of the club:

In 1887 Mr. Carter married Miss
Alice

sister of the late
Morgan of this
She died in 1933.
He is
city.
died on June 3 in New York after
survived by two children, Lt.-Col.
a long illness at the Knickerbock¬
Bernard S. Carter, and Mildred
er Club, where he had been stay¬
Countess of Gosford, and seven
ing. He was in his eighty-second
grandchildren; by his sister, Mrs.
year.
His
daughter,
Mildred Arthur L. Fisk of this
city; and by
Countess
of Gosford, his sister,
a
brother, the Rev. George Cal¬
Mrs.
Arthur
L.
Fisk, and his
vert Carter, now retired.
daughter-in-law, Mrs. Bernard S.

-

Vice-President:

Treasurer:.

•

Carter

were

with

him.

His

is

serving
Army.* 7

"Mr.

became

of the

one

widely known and respected
American residents in Europe. He
was a Grand Officer of the Legion

'•

Ridgely Carter was born
Baltimore, Md., on Nov. 28,

of Bernard Carter
Ridgely Carter. He was
graduated from Trinity College,
1862, the

Carter

most

John
in

Joseph Parks, Ber-

•' ;7

Fellowes

It is also announced that:

son,

Cie., Paris,
in the U. S.

overseas

Morgan,

William

Lt.-Col. Bernard S. Carter, also a

J. R. Burkhol-

T. Moore & Co., Inc.

wyn

Ridgely
Carter,
senior
partner of Morgan & Cie., Paris,

partner in Morgan &

Otto Ruth, James C.

President:

Willson & Co.

son

and Mary

d'Honneur,
American

a
Governor of the
Hospital of Paris, and

and

warden

Treasurer

Church

American

of

of

the

the

Holy

Trinity, Paris.
In 1911 Trinity
Hector Bohnert, The Hartford, in 1883, and after taking College conferred on him an hon¬
his M.A. degree there in 1885 he orary doctorate of laws. Mr. Car¬
identified
with
Nat'l
Committeeman:
Thomas studied in Leipzig for a year. ter was
many
Graham, The Bankers Bond Com¬ He took a law degree at Maryland philanthropic activities. One of the
chief of these was the "Light¬
1887,
and
after
pany;
H. Allan Watts, W. L. University in
Lyons & Co., as alternate.
studying for a year at the Harvard house," organized after the last
Law School, he was admitted to war in France by Miss Winifred
A golf tournament will be held
Holt to care for men blinded in
during
the
afternoon
for
the the Maryland bar in 1889. He be¬
the war. °Mr. Carter served this
Arthur Sedley Memorial Cup do¬ came Secretary to the American
institution as General Secretary,
nated by the Bankers Bond Com¬ Ambassador in London, Thomas
F. Bayard, in 1894, and two years and its building up and mainten¬
pany.
7 '
Secretary:

Bankers Bond Company.

.

of honor will be Elliott

Guests
Lemon

Securities and Ex¬

of the

change Commission in Cleveland;

Ransdick, chairman, and
Sheldon Clark, secretary, of Dis¬

Neil

trict No. 10 of the N. A. S.
Eban

D.; and

later
to

made

was

Second Secretary

the Embassy.

American

Charge d'Affaires in
serving as Asso¬

After

London.

ciate

of
Tribunal

Secretary

Boundary

Counselor

was

In 1897 he was

the Alaska
in 1903, he
American

the

of

sioner

$2.50

are

per

plate

Ambassador.
ter

to

the

He

was

Balkans

It

of his chief in¬

one

was

largely due to Mr.

Carter's

personal gifts and funds

that he

obtained

from

his

many

friends that "Le Phare de France"
and

Braille

France

press

and library in

maintained.

were

1909

to

1911, and was sent to Constanti¬
of Merrill nople as our Acting Ambassador
from 1910 to 1911,
On Sept. 21,
Lynch, Pierce, Fenner & Beane.
1914, he became a partner in
Morgan, Harjes & Co., Paris, and
Ora

M. Ferguson

Production

As

soon

more

revise

light

then

would

all-time

high.
Dr.

as

reach

a

Gallup throws

the subject, I will

on

he

continued

dence

-

this forecast!

to

that

in

make

city

his

resi¬

until he

turned to this country late in
He

the senior partner

was

firm

banking

Post-War Possibilities

Minis¬

our

from

(free drinks) and should be made

new

became

terests.

Securities Commis¬ Embassy in London from 1905 to
of the State of Kehtucky.
1909, when Whitelaw Reid was

Reservations

with

ance

Fuller,

so

profits would
thereafter rise faster and farther.
low.

:

followed by dinner at 7
and the election of officers.

der, Almstedt Brothers.

of those on,war

win

worse.

no

em¬

decline

ployed

cease,

will occur.

Already the trend of war pro¬
duction
is
downward,
and
is

manpower

noon,

number of

total

its

Friday,

9, at the Louisville Country
Golf, swimming, tennis, etc.
will be featured during the after¬

nated for

will
therefore
during these first two
years of peace.

hold

on

June

time, ci¬

gradually.
The

outing

summer

Club.

employment in productive
industry, will expand, but more
(3)

will

Louisville

of

annual

vilian

,

quence

Club

in

(say

years

same

KY.—The Bond

LOUISVILLE,

through 1947).
r

Outing

ex¬

forces, will decline rather sharply
about

Morgan Cie Partner

Annual Summer

industries, and in the armed

for

Harjes in 1926, when its
changed to Morgan &
Cie., Paris.
was

name

John

ex¬

employed

number

The

(1)
war

Mr. H. H.

John R. Carter Dies;

To Bold Election And

«

there will be

done,

Louisville Bond Club

money

someone

re¬

1940,

of his

since the death of

Eversharp, Inc. offers attractive
post-war
possibilities, with no
conversion problem expected, ac¬
cording to an analysis of the sit¬
uation being distributed by Stan¬
ley Heller & Co., 30 Pine Street,
New York City, members of the
New York Stock Exchange. Co¬
pies

of

may

be had from Stanley Heller

this

& Co. upon

interesting

analysis

request.

^post-war boom as will exist in,
say, 1948.
Some of these reasons
are:

(1)

Hardly

biles

any

new

automo¬

household

electrical

and

equipment for home uses in four
five

Or

This announcement is not

years.

(2) Hardly

building, and the materials and
equipment which usually go with
it.

an

ojjer oj securities jor sale

solicitation of an offer to buy securities.

or a

residential

any new

New Issue

>

.j

''7-7%•

\ 7

The

-7

iiiv/

ion

3/4% Secured Convertible Notes

individuals has risen

paid to all

71

about

from

June 7, 1944

$30,000,000

accumulated' demand
for a great variety' of consumer
goods (e. g. silk and nylon stock¬
ings).
(4) The total business capital
of
all
active
corporations (net
worth) is far below pre-war lev¬
els, and requires expansion.
(5) The estimated total income
(3)

.

'V

•

dollars

billion

ft''

in

Due

1939 to around 150 billion dollars

April 15,1954

V•

now.

of taxes has
greater than in other
wars, and relief from it will stim¬
ulate expansion.
(7) There has been an enor-^
mous
rise in bank deposits, and
The

(6)

•

(With conversion rights into pledged Common Stock of

burden

been much

The Chesapeake and

Ohio Railway Company

as

provided in the Indenture)

<

an

actual decrease in bank loans.

(8) Private debts have been re¬
duced by

which

,

possibilities, and aid expansion in
the reconversion period.
(9) Installment credit has been
reduced to

■

Price 102.15%

about 34 billion dollars,
.important
credit

7

means

a

plus accrued interest from April 15,1944 to the date of delivery

1

minimum.

(10)

Many business concerns
have greatly strengthened their
financial position.
»

Copies oj the prospectus may be obtained jrom such oj the undersigned (who are among the underwriters named in the prospectus)
as may legalty
ojjer these securities under applicable securities laws.

717 77-

On top

of these facts, we now
signs of a. more favorable
political climate, to the extent of
tax
provision
for
a
tworyear
carry-back
of] operating losses
and unused excess profits credits,
find

a

fair

bill,

contract

war

and

termination

reasonable

a

assurance

that surplus war property

don't

forget

the

The First Boston Corporation

Hemphill, Noyes & Co.

Mellon Securities Corporation

Smith, Barney & Co.

will be

wisely disposed of.
And

Dillon, Read & Co.

building

Goldman, Sachs & Co.

Kidder, Peabody & Co.

Lehman Brothers

cycle. Building activity has fallen,
to

levels

imate

the

which

closely approx¬
There are

minimum."

plain

statistical indications that
the Curve of building activity is
.

■'ali of
peace

near

it

bottom, and. that with 1

will

almost

inevitably I




Dick & Merle-Smith

Merrill Lynch, Pierce, Fenner & Beane

•YO;

THE COMMERCIAL & FINANCIAL CHRONICLE

2382

Thursday, June 8, 1944

,

**

....

I

Dollars Of Destiny

do will prove to be

cally-equivalent, managed dollars

powerful factor in deciding not
our own future but also the

but in dollars that shall be of such

What
a

we now

only

nature
of the legacy to future
{America. Will it be the despotism
Restore to the States their of debt or the security of govern¬
once
proud position as inde¬ ment
solvency?
pendent commonwealths, sup¬
We should lack neither guid¬
porting their own enterprises, ance
nor
inspiration
for
we
providing for their own worthy should have a clear understand¬
ones
in need, and remaining
ing of our rights and obligations.
safely within their own in¬ We must now determine whether

(Continued from page 2377)
starve!

In return, with a healthy I 6.

atmosphere

in

free

"isms," the
be in a position to
generation of sound

of

schools
raise

kept

schools,

the

disturbing
will

up

a

thinkers

observers

clear

and

prepared to become resolute, in¬

comes.

formed participants in the affairs
of government and everyday life.

Schools

business are

and

army composes

allies.

is worth saving, all decent cit¬

citizen
the first line of defense in a
of

consciousness
that

every

assessed

repeat

then

history

Will

lions.

ing under such

a

welcome

not

crushing loan,
the man on

has made his appearance—
some
political adventurer, who
will clothe himself in robes of
ages,

superhuman wisdom and succeed
making us believe, that our
salvation depends upon his reten¬
in

Then democracy
surrender to despotism, per¬
power?

in

tion
will

haps

complete

as

which

of

nations

and
cringing in slavish

culture,

education

today,

nations

which

under

and

people and so
have gone down,

many

so

nations

many

that under

as

are

courage,

impotence. What a sordid specta¬
cle! What, a disturbing sermon to
who

us

still free!

are

opti¬
clearly. intended to charm

Let

dismiss

us

mism

and disarm

gay

any

The time calls for

us.

action—speedy action, intelligent
action,
determined action—even
at this time before the conflict
It must be organized action,

ends.

while action

is still possible; and

robbed of our
before we lockstep un¬
der the whip of a despotic gov¬
ernment that
may
continue to

before we, too, are
weapons;

sing

mock

praises

Constitution:

The

to

defunct

a

"democ¬

name

racy" will be maintained, but its
substance

will

have

departed.
What to do? We must map out our
for

course

peacetime

We must select

enactment.

few fundamen¬

a

tals upon which to rebuild. What
are

they?

They

stated

be

may

8.

the

abandoned

control of the budget under an
official whose term of office

shall

be

shall

be

for

ten years; who
authorized to check

all

requisitions from any and
sources, for moneys to be
paid out of the public treasury,
confining all such disburseall

ments

those

to

authorized

specifically

and

approved by
Congress, and in such amounts,
in such

manner

for such pur¬

Congress has speci¬
fically stipulated.
Strip all Federal agencies, ir¬
poses

2.

as

respective of
tion, of the
under

power

any purpose

or

circumstances, ex¬
direct Congressional

any

by

cept

descrip¬
to create

name or

obligations for

sanction.
3.

Call

Congress

upon

tion

the

as

authority

to

func¬

to

exclusive

one

contract

indebtedness—the

is

money

current
ment

public

only

one

needed to

ernment

require

govern¬

to

sys¬

and

of

the

its

United

States

subdivisions

so

that

it

be

complete, intelligible,
honest; so that it will reveal,
and

not

financial
5.

Make
from

conceal,

our

withdraw

government
the

to

actual

condition.

against its
zens;

to

nor

relief.

with

deal

Let

citizen

no

enough to believe

be

naive

a

change

solve that
cause

competitive
own

field

taxpaying citi¬

continue

to

regulate

and

supervise, justly and con¬
structively, but not to partici¬
pate in the manifold affairs and
transactions

of

business.




of

enumerated

procedure I have
few of the indispen¬

a

fundamentals

controlled

fiscal

of

sound,

a

which

policy

must be restored and made oper¬

in

ative

all

if

affairs

the

republic is to sur¬

Without

structure

them

have

can

the

super¬

that

On

stand.

cannot

we

government

our

differences

no

the

that

of
government
will
problem overnight, be¬
technique of capitaliz¬

We

this

know

war

approximately what
is going to cost

program

in dollars and

of

the

The burden

cents.

charge alone on this debt
back-breaking.

Certainly
to the

government

owes

it

people whom it asks to buy

its bonds to do everything it can
avoid unnecessarily increasing

to

the total cost of the defense pro¬

arid to keep the ultimate

gram,

debt

down

to

which

amount

an

ing the relief vote has been so
perfected
and
its
vote-getting
efficiency so clearly established

the

that

I have been somewhat shocked at

politicians of the future, if
left unhampered, will be disposed
continue

to

tricks

the

and

ruses

employed by the politicians of the
present. Unless then relief oper¬
control

and

ations

decentral¬

are

from Washing¬
ton and placed under State con¬
trol, our elections will be mere
contests in the purchase of the

ized, taken

the

of

votes

away

distressed,

and

our

government with its
free, coordinating checks and bal¬
ances,
will
be
doomed.
Our
of

system

worthy needy must be taken care
of< but not corrupted.
This is sound doctrine, because
at the close of the war, the states

and their subdivisions, will large¬

ly be debt-free, while the govern¬
will

ment

burdened

be

debt nearly equal to

tional

with

the total

a

na¬

wealth.

the starvation
of production brought on by everincreasing government doles and
deficits will mean ultimately the
loss of our capacity to take care
of the
needy. It is the thrifty
citizen
that

must

does

and

for this

money

the

not

and

without

met

value

destroying

the dollar,

of

the
value of the savings of the people.
radio

of

tax

have

I

announcements

heard—announcements
out

and

for

paid

and made for

money

the purpose of inducing the peo¬

ple

to

their savings to
have heard over

entrust

I

government.

the

Finally,
are

the

once

defense bonds and

these

stamps:
"Your
interest

principal
is

investment

Your

safe.

Your

safe.

is

restoration

the

affairs

of

Federal government.

handed

"An

opportunity to make

ments

to

the
us

the

fathers
instru¬

of freedom,

shaped on the
anvil
of
experience,
providing
these safeguards for solvent gov¬

to

we

Christian

and

ernment

conduct.

disposed and determined
unimpaired, to
are to follow us, who

transmit them,

those who
will

bear

our

names,

and

who,

too, claim the right to be born in
land of individual freedom and

a

liberty; to live under a Constitu¬
tion that has full meaning; and
to behold the Stars and
an

an

Stripes

as

enduring, intellectual, spiritual
political triumph? Men have

in¬

power

of

these

bask. It lies in

to determine the fate
unborn

of

ready

now

generations.

to

exercise despotic power ,
destroy the very founda- '
tions of personal liberty and the'
rights of a free people.
'(r
to

Our most dangerous foe is

not.
longer under foreign!'.;
the war will be won.

to be sought

flags,

for

faith

credit

and

of

United

the

to abandon that which

sought?

Are
by

they have

going

we

the

voice

the

to

be
hu¬

the

of

manitarian whose hand

"They

pties

can

'go down'

:

representation

the

on

they

never

simple

in

government

that

do down in price,

never can

decency

should make good its promise.

'No

administration

can

violate

its promises and preserve the con¬
fidence the people reposed in it

it into the serv¬
ice. When any administration, no
matter what its personnel or its
deceives

politics,

people,

the

it

trust

ever

was

imposed

upon any

government than the duty to keep
with the people. This is a
sacred obligation,

divine

laws

imposed by all
that

have

ever

No man, no party, no
government can break faith with
those they govern and escape re¬
tributive justice. God is slow to
been given.

forgive
false

who

those

"Thou

brother.

their

betray

shalt

bear

not

from

him

his

substance

under

the

at

time

same

ments

are

those

carried

;

experi¬

with

on:

the

people's savings? It is not too late
to repair the harm that has been
We

done.

believe

not

There is but

too late.

for

must

one

it is

The government, upon

all con¬
siderations, not the least of which
is its

own

perpetuation, must see

that it handles its finances
when

so

that

this

tragedy is played to
the people can have re¬

which
they trustfully put into its keep¬
ing; and the government must see
to it,t that the money shall be

pursue.-We must be
active participants in the affairs
of government—local,
state and
national.
We must give " to the
of

cause

government

efforts

our

must

and

our

endeavor

mask of

our

it

vigorous

tions

established

institutions

the

We must
organiza¬
preserve the

in

part

American

to

the

and

,

liberties

people.

not

merely in

numeri¬

the

backed by
intelligence
dollar

becoming

most

resolute
can

of

save

destiny

cas-:,

post-war

a

integrity, recognized
and genuine capacity
administer

of

experience

chosen
provisions of

the

Gonstitution

the

are

..

the

of

United

Constitution

of

the

United

dying words of Lincoln.
We must rise to the full height
of

Is There A

manhood

American

true

rededicate

and

and
our¬

laid down
by the immortal Washington ex¬
pressed in his final admonition to

vation
the

of

Listen

freedom.

of

Of Children's Shoes?

government,

your

to

and

of your present
happy state, it is requisite that
you resist with care the spirit of
permanancy

innovation
however

its
principles,
the pretexts.

upon

specious

V->:

America's Largest Maker of Chil-,
dren's Shoes Answers This
Vi-.?
tal

Wartime

The

i-J;

Question.

Internation

Shoe

of<
Chairman !'

which Frank C. Rand is
and

Co.,

Byron A. Gray is Presidents

the reasons, elsewhere
the "Chronicle"
today,

gives

'

in

why there /•

is

a

shortage of children's shoes,

and what can be done
to remedy
the situation. "
£

The

St.

International

Shoe

Louis, manufacturers
brands

mg

of

Co.

of

of lead-

shoes;""!'

children's

state that since the nation's
mili4'v
tary demands and the needs of

allies have caused a
decrease
the supply of leather
available
for
civilian
use,
fewer leather
our

*

m

shoes

are

being made for

men

and -'

women, as well as for children.
The company also observes
that
while fewer pairs
of children's

shoes

have

is

age

been

felt

made

more

(1) children

since

!-

!

the

/

acutely because

wear

^

out their shoes

more

quickly than do adults; (2)
the rubber
shortage has severely-

limited the number of tennis shoes
available to boys and

,

girls, thus j"

adding to the demand for leather
shoes; (3) a sharp increase in
the

birth

past

rate

three

heavier

each

has

years

demand

for

year

on

also

put

leather

j
>

the

-

"
In¬

a

re-

quired for additional babies' shoes.
According to the company, the
Government has taken steps to in-

-

■<

crease the allocation and
produc-J
tion of leather for children's
shoes ;
and the shoe manufacturers
are V'

in

some

instances

diverting their !

production of shoes for adults to "
the production of shoes for chil-"
dren.

the preser¬

"Towards

■r'H

Shortage

We must war started, the demand has
ac-'
of proved tually been greater and the
shorts-

to it that only men

the

We

off

appears.

take

to

time,

means.

tear

to

corruption wherever and

whenever

The

International

producing
a

year

Shoe Co. is
shoes than it did
and expects to in-

more

ago

.

crease

output without disregard- !
the
standards
of
quality!

ing

which

tained

the

for

has

company,
more

One method of assault may be to

than 40

main¬

years.

effect, in the form of the Consti¬
tution, alterations which will im¬

pair the energy of the system, and
thus to undermine what cannot be

overthrown. Liberty,

directly

self, will find in such
ment, with
tributed

a

it¬

govern¬

properly dis¬
adjusted, its surest

powers

and

guardian.
It is important, like¬
wise, that the habits of thinking
in

free

a

country, should inspire

caution in those entrusted with its

to confine them¬
their
respective

administration,
within

selves

constitutional

avoiding
in the exercise of the powers of
one department to encroach upon
another.
The spirit of encroach¬
tends

ment

real

the

form

be

it

of

no

is

which

a

bankers, give

Interest of the late E. Clarence.
Miller of Bioren &
Co., Philadel-;

phia, ceased

on June 1.
Thomas R. Cox, member of the >•

Exchange, retired from

tinues

change by usurpation . .
customary weapon by
.

governments

are

de¬

a

and

prophet could have
described

with such

clarity and exactness the manner
which human nature operates

in

men

become

member of the
of

Merle-Smith

the

in

Exchange,

late

Dick

in public

intoxicated

office easily
with

Van

&

S.

Merle-

Smith, New York City, ceased
of May 31.

>

as

*

Roy E. Smith, partner in Moors ]
& Cabot, Boston, died on
May 26.
■

'—

—i—1—II

t

v

■

Attractive for Arbitrage

"

Old

Chicago, Indianapolis &
Louisville Railway Co. bonds are,!
attractive for arbitrage or
purchase and the
also
to

a

new

bond issues

appear interesting, according
memorandum

situation in

some

discussing the

detail which has

been prepared by Vilas &

Who but
foretold

as

Interest

the

free

partners-

ship in Brinton & Co., New York
City, on May 31. The firm con¬

outright

ear

"Let there

stroyed."

—how

Exchange
Weekly Firm Changes

the

government,

warning:

final

New York Stock

the

despotism."

his

to

consolidate

to

departments
and thus to create, what¬

into one,
ever

spheres,

all

of

powers

,

returned

from

kind,

menace!

Therefore;-!?

of

ualty.

course

to

us

And now, you

false) pretense?

national

statesmanship)

heroic

is that of

Will we consent to
become the regimented subjects
of experimenting theorists when

witness

against thy neigh¬
bor," came from Sinai, and what
false
witness
could
be
greater
against your neighbor than to take

I

is Demon Deficit.

only

despot?

womanhood

States Government.

America's No.
now

to

accept what they abandoned, and

savings bonds backed by the full

turned to them the money

now

we

address of Washington; in the un¬

struggled throughout the centur¬
ies, up from serfdom to freedom,
we

"opportunity"

Are

country might well
investment in defense

other

every

the end,

our

America.

States; in the memorable farewell

citizens

and

in which

virile

of

the

that

vestment

the

not idle words when

down

and

■

faith

that

clime

every

States, which is an immortal deed
paid for of trust.
We must declare anew'our al¬
them. Cash them in at any time
if need arises, but always for full legiance in thought and action to
value for prices printed on thet the principals enunciated in the
Declaration of Independence; [in
face of the bonds.

for

declare

the

to sell for less than you

betrays its sacred trust. No higher

are

of

is safe. No chance for these bonds

when they called

immediate

ceed

and

.

for

see

reference to

sturdy

women

the

ment in

the

nation, who sought the gift of
self-expression. They were will¬
ing to exchange the devitalizing
"security" of their home lands

invest¬

with

and all
like-minded,
citizens must declare
and contend, without compromise,

These

our

the gates to the
of destruction.

If government, as a partner of
the people, is offering its securi-

needy

in

Since

the radio these statements, among

others,

open

provide

We

operation

will

words:

discerning

our

walls

waiting agencies

lovers

The eight points mentioned are
simple fundamentals of a sound,
solvent,
representative
govern¬

and

bankruptcy riding in the

his

the dead end.

their

mere

saddle—once admitted within

all

capacity of the thrifty, saving
people of America has reached

ment.

of

compromise. Com¬
Trojan horse, with

into them."

purpose.

the

without

promise—the
national

government

thrifty Americans. And why? Be¬
cause government cannot continue
for

do

and

kind

selves to the principles

identical with the interests of all

care

to

lowest

in
price. You'll never get back less
than you pay—but you do get
more—much more than you put

the interests ofthoseon relief

to

be

can

envy—an

tion of savings and

honesty: Are our leaders
these things? They must—

tricked

illusions.

or

will be almost

perhaps one statement at
this point is necessary. It has to

the

the /American

But

Are

Change the bookkeeping
tem
all

comment

neither

>

as

defense.

the

Constitution.

will

obvious

so

seems

sense

money

held in check by some established
set of rules and
regulations, pro¬

and

plan

point

need for the restor¬
honest,
and humanitarian gov¬

a

and

of all these keys to

solvent,

we

of

expenses

and

meet

anticipate future
obligations; to be the only
borrowing or bonding Federal
agency, as prescribed by the

.

out

the most common, and in

courage and

vive.

relief

The crying

ation

authorized to determine what

4.

its

We must know that the destruc¬

Re-establish

*

of

conscious

power;
This would be but the most ordi¬
nary,

gained through spending the sav-'
mgs of all the people; and how,' *
if
they are not restrained and

Pilgrims set
foot upon our soil, America has
been the land of promise to men

sable

not

of politics.

briefly:
1.

an

on

are

priceless worth.
Take and keep all

through the

horseback who, down

to

perpetuate it, will

to

be

never

itself? Who then among us, groan¬

may

pay

who

Those

vation.

will approach 300 bil¬

war

must

all

order

equitable basis for its preser¬

national debt at the close

Our
of the

it,

save

In

admit.

will

izens

balanced budget.

free country is a

America's best

citizens. That this government

be burned into the

It ought to

"'self-reliant

This

electorate.

natural

tax-conscious

the

Maintain

purchasing

will accept our share of that
responsibility
to
educate
our¬
selves and our fellows to stay the
threatening process of disintegra¬
tion. As a constructive suggestion
we

7.

substantial

49

Wall

Hickey,

Street, New York

City>;

members of the New York Stock

Exchange.

Copies of this

memo-;

randum may be had
upon

request1

power, from Vilas &

Hickey.

Volume

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4288

159

"cannot fail to be the occasion for

U. S.

Supreme Court Decision Holds Insurance
Inter-State Trade And Subject To Anti-Trust Act
A 4-to-3 opinion that insurance is business in interstate com¬
merce
and hence is subject to the Sherman Anti-Trust Act, was
.

,

handed down

by the United States Supreme Court.

Justice Black wrote the Court's decision,;of June 5, which was

.

.

June 5

on

in

concurred

Justices Douglas, Murphy and Rutledge.
Chief
Justice Stone wrote a dissenting opinion in which Justice Frankfurter
concurred.
Justice TTackson also<£—
—,
V
'—1 ■' ..." '■—r.
wrote

opinion in which he dis¬
part.
Justices Roberts

an

sented

by

in

and Reed took

From

the

/

Associated

Press

from Washington,

counts
we

part in the case.

no

ac¬

June 5,

"The

specifically involved

case

stock

insurance

fire

held by this court
beginning, is vested in
the Congress, available to be ex¬
from

the

ercised for the national welfare

Congress shall deem
"No

quote the following:

196

That power, as

com¬

any

State

across

lines

has

order

been

to

establish

new

boundary

between State and national power,

N. Y. Dealers

Outing

Hartford Bond Clti

Promises Gay Time
For All Attending

Elects Hew Officers

raising questions which cannot be
answered for years to come, dur¬
The Outing Committee of the
ing which a great business and the
regulatory offices of every State New York Security Dealers Asso¬
must
be
harassed
by
all
the ciation is reminding all members
doubts and difficulties inseparable that time for making reservations
from a realignment of the distri¬ for free member tickets, and guest
for the
bution of power in our Federal tickets
Annual OutingDinner of the Association is grow¬
system."
ing short.
Frankfurter's Opinion

as

necessary.

commercial

enterprise of
kind which conducts its activ¬

ities

loosing a flood of litigation and of
legislation, State and national, in

2383

The

Justice Frankfurter, long noted

his appointment to the
Supreme Court as one of Presi¬

prior
dent

to

Roosevelt's

most

"liberal"

outing will be held at the

North Hills Golf Club at Douglas-

ton, Long Island
reservations

on

June 15

should

be

in

and
the

hands of Alfred E. Loyd, Exec¬
advisers, in supporting the Chief
panies, and 27 individuals con¬
utive Secretary of the Association,
Justice, said:
nected
with
the : Southeastern
"The evidence is overwhelming at 42 Broadway, New York City,
Underwriters Association in Flor¬ the Commerce clause. We cannot
as soon as possible.
that
the
inapplicability of the
ida,
Virginia,
North make an exception of the business Sherman
The outing promises to be the
Alabama,
Act, in its contempora¬
Carolina,
South
Carolina
and of insurance." '
most enjoyable affair of its kind
neous setting, to insurance trans¬
Justice- Black brushed aside a
Georgia.
actions such as those charged by ever heald by the Association, and
"Anti-trust charges brought by host of arguments made before this indictment has been con¬ among other recreational activi¬
the Court to the effect that Con¬
the Department of Justice were
firmed and not modified by Con¬ ties the following will take place:
dismissed by the Federal District gress in the last 50 years had
Golf in charge of Stanley L.
gressional attitude and action in
Court at Atlanta on the ground tended to consider insurance com¬
Roggenburg, will start at about
the intervening 50 years."
that the Supreme Court had held panies as being in an exceptional
In his dissent, in part, Justice 11 a. m. and two principal prizes
.for 75 years that the business of position.
are
th'e beautiful silver "Presi¬
Jackson
raised
the
question
The fact that exempting legis¬
insurance was not commerce and,
whether it was the Federal desire dent's Cup," and a new one, the
jbence, the companies were not lation is pending in Congress, Jus¬ to
"Governor's
Cup," and other
nationalize
insurance
com¬
subject to the Sherman act, which tice Black added, had no bearing
"Kicker" prizes. Green fees $2.
panies.
"If it be desirable" to do
"If exceptions are
prohibits combinations or con¬ on the case.
Soft Ball in
charge of Duke
this, he said, it should be done in
spiracies ' which restrain Inter¬ to be written into the act, they an orderly manner by legislation, Hunter will start at about 6 p. m.
state Commerce.
must come from the Congress, not
i
Horseshoe Pitching in charge of
not by court decision.
teld to be

wholly beyond the reg¬
ulatory power of Congress under

...,

,

HARTFORD, CONN.—The Bond
Club of Hartford
the

following
have

ernors

announced that

officers

been

and

elected

gov¬
for the

coming year, beginning July 1st:
President:

Van

Vleck

H.

Vos

Burgh, Unior^Securities Corpora¬
tion.
Vice-President: John H. Beards-

ley, Conning & Company and Bal¬
lard.

Secretary: Willard A. Snow, Jr.,
Higginson Corporation.

Lee

Treasurer:
Edward F.
Dustin,
Day, Stoddard & Williams.

Governors:

Whaples,

H.

Viering

three-year

term;

H.

Whaples,

& Co., for a
Oscar Depatie,

Coburn &

Middlebrook, and L. H.
Wiley, Adams & Peck, for one
year! terms; Alex Pardee of Day,
Stoddard

Haven,

Williams

&

was

in

New

elected the non-resi¬

dent member of the board.
In

addition

to

the

above

gov¬

ernors, Ernest H. Cady, Jr. of R.
C. Buell & Co. and Charles W.
Gould

of

the

First

Cor¬

Boston

poration are on the Board, having
previously been elected for terms
which have not expired.

.

|

-"Added interest
by

case

the fact

given the

was

that legislation

this Court."
On

hand, Chief Jus¬
that Congress,
always holding the power to reg¬
ulate the insurance business, had
specifically failed to assert that

;is pending before Congress to ex¬
empt insurance companies from
the Federal anti-trust legislation
and to leave their regulation to
the States.

stated

authority.

>

,

-

"It

In the Polish National Alliance

other

the

tice

Stone

*

would

be

•

.

case,

Justice

Frankfurter

agreed

Irvin

"have

that

insurance

services

close, intimate and sub¬
stantial relation to trade, traffic
and commerce among the several
a

will

start

about

5

..

In addition to this and other

with the National Labor Relations
Board

Hood

p. m.

ac¬

.

t

.

Own Investment Firm

tivities, there, will be Barrel Golf
Hoyt Peck is forming the Hoyt

and Dart Poker.

Peck
There

will

be

Co.

with

offices

at

120

attractive
Broadway, New York City, to en¬
prizes given to contestant asr well
gage in a securities business. Mr.
as Door Prizes.
For the entertain¬
Peck was formerly Assistant Man¬
ment of those who do not play
ager of the municipal bond de¬
golf and who come out after the
partment for Tucker, Anthony &
market
closes,
there
will
be Go.
'
among
other things a soft ball
game at 6 p. m.
Dinner will be
many

indeed,"
"Thirty-five States filed briefs
States and tend to lead to labor
urging the Supreme Court to hold he wrote, "if Congress, in adopt¬
disputes burdening and obstruct¬
that insurance was not commerce ing the Sherman Act in 1890, more
ing commerce."
Therefore "un¬
and not subject to Federal reg¬ than 20 years after this Court had
fair labor practices" affect com¬
ulation. To rule otherwise, it was supposedly settled the question,
merce within the meaning of the
contended, would destroy the had considered that the business
Wagner Act.
of insurance was interstate com¬
'sovereignty of the States.' "
served at 8 p. m.
Chief Justice Harlan F. Stone, merce or had contemplated that
Members of the committee are:
writing the principal dissenting the Sherman Act was to apply to Investors Syndicate Message
J.
Investors
O'Kane, Jr., John J.
Syndicate,
Roanoke John
^pinion, stated (according to a it. Nothing in its legislative his¬
Washington dispatch June 5 to the tory suggests that it was intended Building, Minneapolis, Minn., Okane Jr. & Co. Chairman; Irvin
New York "Times"), that the de¬ to apply to the business of insur¬ have this message displayed on Hood, Cohu & Torrey; Welling¬
a
stand next to a silk American ton Hunter, Hunter & Co.; Hanns
cision would unleash for years to ance."
come
a
flood
of litigation
Chief ; Justice
Stone
pictured flag: /v.;
and
:;r---v: E. Kuehner, Joyce, Kuehner &
"Our America was founded on Co.; Stanley L. Roggenburg, Rog¬
legislation that would harass the great confusion as a result of this
"insurance
business
and
every new interpretation of the Federal the idea that we, the people, run genburg & Co.; John F. Sammon,
State while new boundaries were power.
the
Government, not the other I J. F. Sammon & Co.; Melville S.
drawn between Federal and State
The majority decision, he stated, way round."
?vV
'
Wien, M..S. Wien & Co.
strange

Hoyt Peck Is Forming

Good Post-War Outlook
Sylvania Industrial Corporation
offers
an

an

interesting situation with

attractive post-war

cording

to

detailed

outlook,

study

ac¬

issued

by Loewi & (Co., 225 East Mason

•

powers.

The

,y
advices said:

same

Street, Milwaukee, Wis.
this study may be
the firm upon

Copies of

obtained from

request.

.,

v

-

4

"In

the

of

absence

Attorney

Francis

General

Biddle, officials
of the Department of Justice
would

discuss, whether

not

Black

opinion

well

other

as

panies, but
the

applied to

the

life

insurance

This advertisement appears as a matter

as

of those close to
the ruling as

some

■

construed

case

of record only and is under

no

circumstances to be construed as an

offering of these securities for sale, or as a solicitation of an offer to buy any of such securities.

com¬

The

offering is made only'by the Prospectus.

embracing life insurance."
In part, we also quote from the
"Times"
A

advices:

of

decision

second

high im-

Shares

'

portance to the insurance busi¬
ness, written by Justice Frank¬
furter with the concurrence of all

other

members

of

the

court

ex¬

National Airlines,

cept Justice Roberts, held that the
life insurance business of the Po¬
lish National Alliance of Illinois,
one

of the larger fraternal orders,

was

subject to the commerce laws

Incorporated

the

under

Wagner

Labor

Common Stock

Rela¬

tions Act.

(par value, $1.00

questions formed the basis
Underwriters

Two

per

share)

for the Southeastern

Association

answered

' case,
and each
affirmatively
by

four-to-three margin.
stated
"1.

as

was

the
They were

follows:
the Sherman

Act in¬
conduct of fire
companies which re¬
monopolizes interstate

Was

Price

tended to prohibit
insurance

strains

or

fire insurance
"2.

If

so,

transactions
State

lines

■s

do fire insurance
which stretch across

constitute

Tit

'commerce

Copies of the Prospectus may be obtained in any State from such of the Dealers participating in
including the undersigned, as may lawfully offer the securities in

■

Justice
gress

under the commerce
wrote that

the offering,

such State.

Con¬

has power under the

Con¬

stitution

Black
to

govern

which "affect the

transactions

peoples of more

'■

'•>"
yf

one."
basic responsibility in in¬

States than
"Our

'

Share

trade?

'among the several States' so as to
make them subject to regulation
by Congress
clause?"

$13.75

terpreting the commerce clause,"
he said, "is to make certain that
the power to govern intercourse
among the States remains where
the
Constitution has placed it.




LEHMAN BROTHERS
i

y>.

^ rt:

June 7, 1944

t.\

Public works have been postponed

This Scrambled World
is

Industrialization

life.

nomic

■danger of inflation. Thus far we
have succeeded remarkably well
in

giving them not only a more di¬
versified economic life, but it is

need for

also

holding down prices—but the
price control will be even
greater once the demobilization of
industry starts. It will take a con¬
siderable period before the civil-*
ian
market is once again
ade¬

importation of manu¬
factured
goods and thereby
is
making them less dependent upon
exports. They will want to con¬

supplied.

back

are

after

Even

time.

tories

couraging.
:
As a part of our policy of eco¬
nomic warfare, we have devel¬

production schedule, they will not
supply the demand that
The

exist.

will

pur¬

enormous

oped

will be bidding up
the prices of the inadequate sup¬
ply of goods unless strict controls
power

Here

continued.

are

government

why

reason

material

control

because

period after we
peacetime conditions.
there

But

return

other

are

to

never

problems

war.

refrigerators are now laying
plans to enter these fields. This
may well mean that under
the

or

Take Bolivia as an
are

a

more

Once
war

the

vacuum

pound. You may say poor
business; and so it is. But all this
is a part of our war effort. Once

created by the

capacity will

pro¬

be needed

the

years.

going to compete with the
high grade ore we shall again be
able to obtain from Malaya and
the

Dutch East

Indies, where we
will be able to buy it not for 63c
but for 3oc to 45c a pound? Many
other newly developed resources

over.

It is difficult to see how such a

be prevented.
Surely it cannot be prevented un¬
der what some like to call the free
can

in Latin America will find them¬

selves in

The foreign
demand will aggravate this situa¬
tion. The influence of the foreign
demand will be particularly dis¬
turbing because it will in all
probability be for some time con¬
centrated upon a" comparatively
small range of products.
Russia
will not use its purchasing power
to obtain many consumer goods.
The principal demand will be for
factory equipment, roadbuilding
machinery, railroad
equipment,
and
hydroelectric installations.
The 3 billion dollars of ready pur¬
chasing
power
owned
by
the
competitive

is over, we are not going
And how is Bo¬

livia

trial decline after the initial boom

development

war

to continue this.

If this over-expansion
should indeed take place, then we
may well face a period of indus¬
is

for

50c per

than during the first hectic post¬
war

example. We

buying their poor, low-

now

the Metal Reserve Corporation

stabilized economic life.

has been filled far less

ductive

obtain
unfortu¬

grade ore at 63c per pound. We
transport it to this country, smelt
it and distribute the tin through

"catch up economy"

productive capacity of many lines
will increase far beyond the needs
of

But

cient sources from which we used
to obtain our raw materials.

before manufactured radios

a

the Far East.

high cost producers. This in fact
is the principal reason why they
did not develop in peace time. It
is almost certain that they will
not be able to meet the competi¬
tion of the older and more effi¬

may

stimulus of

ma¬

raw

nately for Latin America, many of
these new sources of supply are

The enormous
induce some factories to enlarge their productive
capacity and will stimulate others
to enter the field. Many firms that
demand

needed the

we

the

in

existing
necessary

was

terials we could no longer
from

that will arise in the early years

following the

this

All

sources.

already

of

expansion

cannot be relaxed for a consider¬

able

of raw

new. sources
and have aided

many

another

is

not en¬

Latin- American exports is

be able to

chasing

for

outlook

the

since

opment

fac¬

our

their pre-war

to

they have made a

good start with our financial and
technical assistance. They are all
the more interested in this devel¬

years no new

take

the

tinue now that

For some five
automobiles, refrig¬
erators, and radios will have been
produced. The change-over will

quately

making them less dependent

upon

system.

a

to
find

will

countries

^
these

similar position.

unable

Being

,

self,

themselves

compelled to develop still further
their own .manufacturing estab¬
lishments so that being unable to
sell, they will no longer need to
buy abroad. Much of the buying
capacity of Latin America will
therefore

concentrated not

be

on

but on perma¬
nent industrial and transportation

consumers

goods

equipment. And the same thing
will apply to the countries of the
Continent of Europe.
view of

In

the

tremendous de¬

Latin-American countries will in

struction

all probability be used largely to
purchase more factory equipment.
Luring the war we have assisted
these countries in developing new
industries. Brazil has recently put

place, the 10 billion dollars they
will have to spend will be only
a

well de¬

to the United States.

On May 12, our newspapers re¬

ported that Mr. J. C. Maciel had
started
the

for

the

head of

United

States

at

delegation of Bra¬
expect to
spend
$100,000,000 to
purchase
machinery and tools. The great¬
est percentage of this money will
be spent for textile machinery but
they will also buy machinery for
a

come

zilian businessmen who

many reasons

The fundamental

reason

and

will

the

most

essential

items, they
must
take
second
place.
First
comes
the need for rebuilding,
and the need for the building of
factories
that
can
supply local
needs and can produce goods for
export. Not until exports can take
place again in adequate amounts

are

lies in
coun¬

consider that 50 billion dol¬

we

approximately the

lars represents

states and cities have
plans to provide em¬
ployment
to those
temporarily
displaced and to the men of our
demobilized
armed forces.
And

by the retail trade of the United
States in any normal year, then
we can see that we
face a prob¬

plans are all similar in that
they contemplate road building,
the construction of airfields, and

tance to

of

many

our

elaborate

the

improvements of public util¬
ities.
This means that this do¬
mestic demand and the foreign
the

demand

concentrate

will

Upon

a

lem of

dimensions. It is

mean

no

therefore

the

of

utmost

chosen

be

rapidly

to

not

as

so

upset

prices and markets, thereby ham¬
pering the readjustment of busi¬
to peacetime production. Not
slowly so that the surplus
stock may not continue to hang

materials.

Thus

they have
been until recently the tail to the
kite of American and European
industry.
This has
created
in
raw

.these ..countries

an.

unstable-




eco-

.

German

govern¬

operate after the war. So it was
announced recently by the chair-i
man of the Board of Trade.
'V
this. does

All

like

look

not

which

in

world

a

decide

can

we

shall do business abroad.

position to meet this demand. Nor

over

would

be

it

wise

to

expand

our

not

Once the first rush is

this demand is destined to
shrink
substantially.
It
would
over,

therefore, that some kind of

rationing

international scale

on an

well be necessary. And the
need for some international ra¬

may

occupied territories. This
that unless the rebuilding

means

Europe is carefully
controlled and directed, and the
relative
needs
of the occupied
program

of

countries

are

given first consider¬

ation, Germany may recover be¬
fore her victims are able to do so.
But

the

to

similar reasoning applies

a

occupied territories.

The

countries that have suffered most

have

and

the

-

It

might be possible to use some
surplus stocks as a means
of controlling prices in the estab¬
of the

lished

rapidly.

But this

is

without

not

affect

some

prices

at

home

we

shall

products for which there
will be a rapidly diminishing de¬
mand
after the
first period of
rebuilding is passed. As if there
were not enough problems facing

already, there comes the prob¬
of the disposal of surpluses

us

lem
to

plague

small

us.

problem

which

can

be

turned

to

civilian

group of items, in fact
individual
item represents

its

that

can

we

use

problem. The method to
adopted in disposing of the
surplus of each item must be de¬
vised
fect
upon

with

due

regard to the ef¬

which

its disposal will have
the domestic and the foreign

market.

The

problem

is

not

of

negligible proportions. It has been
estimated

that

approximately

50

billion dollars worth of commod¬

ities will need to be disposed of.
How

are

posed of?

these goods to be dis¬

If

they

created

4"

abandon

to

us

see

problems

our

.

shall face in

we

the post-war period are too com¬

plex and too large to fall within
the

of

scope

enterprise.

and

single business

any

Coordination,
plan.therefore control and

will

remain

we can

necessary.

reasonably ask for

these

is that businessmen both

There

small

surplus stocks to sell abroad.
undoubtedly will be an op¬
portunity to,use substantial sup¬
plies in the relief and rehabilita¬
of

tion

give

liberated

the

of

Some

we

shall

be

supplies
others will

away;

large and
given a larger share in
determining the policies of our

pur¬

for distribution within their

bor¬

be

Government.

.

However much

countries.

these

chased by the liberated countries

we

may

dislike

the

thought, it will be some time
we can hope to see the free
competitive system of which some
of you dream.
:
before

.

ders.
But not all

In order

nomic

surpluses

be

can

to

life,

so

sound

eco¬

countries

will

build

these

a

need to rebuild their industries

rapidly

posssible,

as

they

Erdmann Heads Nat'S |

Savings & Loan League
Arthur

G. Erdmann, President
Savings and Loan Asso¬
ciation, Chicago, was elected Pres¬
ident of the National Savings and
Loan League at its first national
business meeting held May 30 and
of

Bell

31

at New Orleans. Mr. Erdmann

Vice-President

League and
The

of

one

League

was

..

4

Mr. Erdmann

ident

of

the

the first Pres¬

was

Chicago

Bank

of the

Bank

System and is

that

through normal
they will be in a
accumulate balances

trade relations,

position

to

the

to

industries

so

of

its founders.

organized last
supply constructive
leadership for the 6,400 thrift and
home-financing institutions of the
country, constituting a $6,600,000,~
000 business.
'
December

as

will

First

was

need to develop once more export

tor and

a

Federal

Regional

Home Loan

direc¬

now a

member of its Executive

Committee.

He is also

a

member

of the Federal Savings and Loan
for their
imports. No monetary stabiliza¬ Advisory Council of the Illinois
tion will be possible until such Building and Loan Advisory Board
normal commercial and financial and a past President of the Illi¬
relations are once more estab¬ nois Savings and Loan League.
abroad to be used to pay

In

lished.
If

our

surplus stocks, improper¬

ly handled,

likely to upset our
how much
more disturbing would their dis¬
posal be in countries with far
smaller
purchasing power
and
smaller populations. It is thereare

domestic market,

own

fore&not likely that the countries
abroad would welcome the influx
these

of

They

commodities

surplus

would

will

threaten

recovery
reason:

to

retard

of industry.
a
few

better

accepting the Presidency of
National
League, Mr.
Erdmann said: "This league has
been formed democratically and
will be so operated.
In its oper¬
ation every one of the 6,400 thrift
the-'.; New

and

home-financing institutions of

America

voice.

have

can

The

an

members will be the chief
of all action taken

istration.

Having

by
as

with the Federal

a

the

Moreover, it is doubtful whether
the channels of trade will be open
to these
surplus stocks on any

Much of the buying
on
the part of the countries of
Europe will for some time to come
large scale.

admin¬
league no

political preferences, we can best
achieve our aims by cooperating
ernments empowered to

nomic life.

of

source

our
a

ages

years of hardship and short¬
if at the end we can attain
normal and sulf-sustaining eco¬

effective

recommendations

more

own

be

The

direction

hold

the^ normal

Each

for

cannot

one

future it will be

near

government controls.

All that

which

each

But I for

how in the

optimists

ex¬

of

tion

of it.

vor

but leave others untouched. Some

foreign exchange will disposed of nor do all kinds of com¬
special concessions modities fit into the relief pro¬
if they are not to see their more gram.
Nor will a general policy
fortunate allies outstrip them in of disposing of these commodities
the reconstruction period.
Con¬ in the foreign market have the
siderations such as these coupled approval
of
the
governments
with
the economic necessity of abroad. To be sure they would be
dovetailing the foreign demand to interested in securing cheaply the
the domestic demand will make goods their countries need.
This
international rationing necessary, would diminish the drain upon
and most certainly a coordinating their foreign balances needed to
of the various domestic post-war pay for imports. But most of the
construction plans.
governments abroad will look be¬
Unless
some
scheme
is
de¬ yond the period of relief and will
think in terms of the rapid and
veloped to bring about a planned
allotment of supplies and equip¬ healthy recovery of their com¬
merce and industry. "
ment, we shall face chaos in the
and

Many voices are raised de¬
manding that we return at the
earliest possible moment to a free
competitive system. I'm all in fa¬
egg.

ning,

would

need to receive

pand our. production in the direc¬

opinion that it is a
simple matter to unscramble the

prices

uncertainty

that I da

now

the

possible

of

of available

world

hold

an ele¬
which may
well
discourage
investment
in
new factory equipment. Moreover,
since these surplus stocks cover
only a limited number of items,
use
of
the
surplus to
control

amount

smallest

market, releasing supplies
prices show a tendency to rise

as

ment

industrial problem.

industrially, than its unfortunate
neighbors.
The German people
have been better fed than those
the

cies.

only danger since it introduces

not

results

scheme

our

The systematic looting of the
occupied territories by the Nazis
may
well leave Germany in a
relatively more favorable position,

of

should be clear

It

ha^ proposed, for a group of agen¬

temporary.

from

job for some gov¬

a

At one of your earlier
conferences, I spoke of
business world as scrambled.

by others.
the

ernment agency or as Mr. Baruch

meet

to

we

national

demand will be largely

since the

tioning

Again,

threatening

it

capacity

productive

seem,

the market.as a

cloud.

thrift

and

and State

home

Gov¬

safeguard

interests

of

the

people.
We shall seek the
help of all progressive legislators
of whatever political faith.
The
time has

come

for the nation and

its

representatives to realize that
the savings and loan industry is
a

most democratice institution be¬

government con¬ cause it represents substantial and
trol, or in the hands of govern¬ progressive people in every city,
ment agencies. Very little oppor¬ town
and
country—more
than
tunity will exist to dispose of 6,000,000
Americans
united
in
goods in the countries of the con¬ thrift and home ownership."
be

under

strict

are sold through newly
channels, through auc¬ tinent except with the approval
Latin America, and from Europe, tions, and other emergency meth¬ and cooperation of the govern¬
the initial demand will therefore ods
at low prices, the regular ments concerned.
In the Netherlands East Indies,
be for substantially the same type market
for
competing products
the Emergency Export Office will
of goods. This foreign demand will will be very
seriously affected.
x>ut - can they be4 sold through be in charge of the selling abroad
overlap * the
domestic i 'demana.

of

the

;

agencies in the markets of
East will continue to

Near

Most of the decisions will be made

quirements be satisfied with im¬

From Russia, from

the

how

pendent upon the income from the
exportation of a limited number

ported goods.

of

too

can

re¬

1940 to combat the ac¬

formed in

ness

tries have been almost wholly de¬

the less essential civilian

Kingdom Com¬
Corporation which was

mercial

proper

posal of this surplus and that the
disposal take place carefully, not
too

The United

ment

dis¬

time after the end of the

some

war.-

tivities

the

for

for

impor¬

business that the

channels

exportable goods of the
of the world,
government buying and selling
agencies will continue to operate
of all the

•Indies. In other parts

comparatively small group of in¬
dustries.
It is not at all certain
that these industries will be in a

con¬

goods will
be
needed but with the exception of

for this.

the fact that thus far these

largely through gov¬

channels

Consumers

There is

There

us

goods, transportation equip¬
ment, machinery tools, and the
materials required to rebuild the
ports and public utilities.

to expect that as far
lies in their power, they will
that road.

to

If

total value of all commodities sold

ital

every reason

on

Their abil¬

the established channels of trade?

Moreover,

sist largely of a demand for cap¬

Latin Amer¬
ica has definitely started on the

as

public
deteriorating.

uses.

the manufacture of hardware and

continue

taken

secure

ernment

ether steel products.

road of industrialization.

and

ment

This indeed is no
and unless it is
properly handled, it may upset all
they will need to be long-term our
optimistic calculations.
The
loans for reconstruction purposes.
problem of the disposal of sur¬
With limited funds available and
plus is extremely complex. There
faced with the gigantic task of re¬
will be a large variety of products
construction, the governments in to be
disposed of. Machinery for
Europe will
be
compelled for
manufacturing purposes; shipping
some time to plan their purchases
supplies and ships; aviation equip¬
carefully.
The most
essential
ment;
industrial raw
material;
things' must be bought first—and and
finally,
consumers
goods,
so far as funds allpw.
This means
clothing, medical supplies, and
that the demand from Europe will
other supplies of the armed forces

to other Latin-American countries
even

have

loans in this country
will be limited especially because

veloped that it can supply not
only most of the domestic demand
but can even export its products
and

will

drop in the bucket.

ity to

into operation a new $100,000,000
steel plant. The textile industry
of that country is now so

that

equip¬
utilities have

during the war, municipal
been

(Continued from page 2372)

Thursday, June 8, 1944

CHRONICLE

THE COMMERCIAL & FINANCIAL

2384

Elected

to

tions of the

the

new

executive

league

posi¬
also

were

George M. Eason, Los Angeles, and
E. Wood, New Orleans* -VicePresidents, and John S. M; G1 idW.

den, Natick, Mass., Secretary.'

.Volume 159

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4288

in fact the whole world is

U. S.-British Post-War Relations
of

because

coffee,

everyone

tip there wants two cups a day, but

New Yorkers like
maple sugar.
You can see that
Vermont would go short of coffee
under bilateralism if it could get

only

few

a

afraid,

that the American domestic

planning

the Economic Development

Com¬
mittee spoke to you and suggested
that the greatest obstacle to full
development of American business
activity is fear. I don't know in
what context he developed that
theme, but it is certainly true

is

abroad

based

on

ployment in each country, to be
attained in different ways in each

national

;

would

we

pull

those

down

trade barriers between the states,
state would feel it necessary to

no

find

certain

a

finaly

discovered

with

note:

a

T

His

book.

and

it

am

an

wife

left

old man,

contributes to full

trade

employment.
As yet these seems
be no great emphasis on this

it
I

to

objective in the United States, and
am
very easily disturbed
by a
relatively little planning to this
interstate trade great many things, most of which end has been made public.
But
never happened.'
Would fall into a pattern governed
if we can only set ohr American
"Among American business men, house in
by, the volume of
production
order, develop a high
within each state. Under that sys¬ judging by what they tell me and
degree of prosperity in the United
balance its accounts with each of

the

others,

tem

Vermont would

and

buy all the

by what I read in the American

States and maintain the American

coffee it wanted from New York,
and it would pay for it by ship¬

trade press, there is a wide-spread
fear lest the British, by the exer¬

standard

ments of

cise of

maple sugar, not only to

New York but all

try,

increasing

the

over

if

output

coun¬

neces¬

sary, and tapping a country-wide
demand for that rather specialized

ly

crook

will

States,
wrest

mercial

some

by

kind

hook
of

of maple sugar.

consumer
.

"As

between

Britain

the

and

tude

is

seek

to

agreement

international

two main objectives

on

—absolute undiscriminatory treat¬
ment
as
between
nations, and

general action to lower
trade barriers

or remove

by tariff reduction

by elimination of import and ex¬
port quotas, by getting away from

no

the

but that is

additional

or

com¬

such

ambition

an

will find

here,

point

wouldn't cost

a

as
it
much—some 91 %

especially

and

will

we

tariff

obstacles

dent of the

reelected

be

to

do

Britain would also like

some

the type

bulk* purchasing,

developed

so

of

Taliaferro

we

omics. I have

one

more

The

Daniels

North

ago,




Carolina

Philadelphia, will
Foundation

rep¬

that

on

estimates and fig¬
presented in the
study, copies of which will be
sent by the firm upon request.
ures

Marie
Road

post-war

up;

Commission.

recent

Kimball, author of the
biography, "Jefferson—the
to
Glory," was appointed

are

The Foundation

owns

at

and oper¬

According to

Charlottes¬

York

Stock

Exchange and other

leading national Exchanges, New

England

Co., Russ Bldg.,

San Francisco, Calif., have avail¬
able
an
interesting
report on
of this

detailed circular

Haupt & Co., Ill Broadway, New
York City, members of the New

Interesting Situation

Hearst Consolidated "A."

a

the situation prepared by Ira

on

ville, Va.

H. R. Baker &

-

.

Utility Attractive

"Monticello," the shrine and

home of Jefferson

also

WKmrnmv

Curator of the Foundation.

ates

To be due

offers

Public
attractive

Service

be had from Ira Haupt & Co.

may

the firm upon request.

upon

request.

have talked

are

about

power,

what

will

we

v'y-v';

"The British

also

■

15, 1959,

^

;

inclusive:

To be guaranteed jointly and severally uncotiditionally as to principal and dividends by
endorsement by Central "Railroad Company of Pennsylvania and by the Trustees
0} the property of The Central Railroad Company of New Jersey, Debtor. .,

1

;

■V

-

-

-

Certificates will be issued under an Agreement to be dated June 15,1944 which Will
provide for the issuance of $3,720,000 principal amount of certificates to be secured by
new standard
gauge rolling stock estimated to cost approximately $4,971,157. The
Agreement will provide that the Railroad Trustees will guarantee the due and punctual
performance by the Central Railroad Company of Pennsylvania of all the obligations
of the latter under the Agreement and Lease.
MATURITIES AND YIELDS

0.95%

1950

1.90%

1955

21,30;

1946

1.20

1951

2.00

1956

2.35

1947

1.40

1952

2.10

1957

2;40

1948

1.60

1953

2.20

1958

2.45

1949

1.75

1954

2.25

1959

2.50

Issuance and sale oj these
Circular may

Certificates is subject to approval by the Interstate Commerce Commission. The Offering
any State in which this announcement is circulatedfrom only such of the

be obtained in

undersigned and other dealers

as may

lawfully offer these securities in such State.

-

HALSEYi STUART & CO. INC.
OTIS & CO.

L. F. ROTHSCHILD & CO

HORN BLOWER & WEEKS

(incorporated)

FIRST OF MICHIGAN CORPORATION

GREGORY & SON
incorporated

THE MILWAUKEE COMPANY

THE FIRST CLEVELAND CORPORATION
F. S. YANTIS & CO.

WALTER STOKES & COMPANY

incorporated

NEWBURGER &HANO

ALFRED O'GARA & CO.

Principal and semi-annual dividends (June 15 aftd December 15) payable in Philadelphia or New
denomination of $1,000, registerable as to principal and also in multiples
registerable as to principal and dividends. Bearer and registered Certificates interchangeable. Not redeemable prior to
maturity. These Certificates are offered for delivery when; as and if received by us. It is expected that Certificates in temporary
or definitive form will be ready for delivery in New York, N. Y. on or about June 20,1944. The information contained herein
has been carefully compiled from sources considered reliable, and while not guaranteed as to completeness or accuracy, we
r
believe it to be correct as of this date.
1 ;
To be dated June IS, 1944.

York City. Definitive Certificates in coupon form in the
of $1,000,

is'

j
are

June

,

1945

do not make it too diffi-

cult for them.

15, 1945 to

..

These

of our terrific
and
worried
happen in the

All they ask,' really,

Certificates

■

frankly afraid of

the United States,

Company of Pennsylvania

.

June 8, 1944.

.

..

..."1
,1

afraid, and

j
pi

Trntr

i

Co*

possibilities.

Copies of this interesting circular

Copies

report may be had from

annually $248,000 June

June

Raymond & Co., 148 State St.,
Boston, Mass., have prepared an
interesting
discussion
of
the
profit
possibilities
in
Frisco
issues, and how current holders
will fare by the new capital set¬

at Washington who, to¬
gether with Dr. George J. Ryan
of New York City and Dr. Fiske

the

year*

Profit Possibilities

was

mission

resent

on

ment of other officers.

Thomas Jefferson Memorial Com¬

Kimball of

this

Board will meet

Josephus

member of the

a

this

occurred

new

'

our

point to geared.

I understand, Mr. Hoffman of

of

nominated to be

Hon.

one

Governing

12, for organization and appoint¬

was

member of the Board of

a

of Presi¬

period of

Equipment Trust of 1944

ish national income. Would it hurt

that

The

The Hon. Edward K. Stettinius,

Directors.

a

6 members and therefore no va¬
cancies

Jr., Under Secretary of State,

office

for

Committee
reduced from 10 members te

was

Assistant

sistant Secretary.

elected

The

year.

F, Tate, As¬

2\i% Equipment Trust

would

make, and I regard it as the most
important of all.
Some weeks

Paul

o;*;:';'.(Philadelphia plan)

post-war world.
They are afraid
permit this, that we will resist strongly any
Britain might undertake not to
sign of a British intention to ^ell
use such purchasing as a
device more in the United States, and
for stimulating her exports to our
they are trying hard to work out
disadvantage.
certain lines of export trade which,
"All of this is rather tentative, promise
to
find markets here
and speculative, however, and we without competing directly with
don't know what the final answer our
important industries. They
will be.
The important thing is feel, for example,-that they must
on
that the "Economist" one of the concentrate
products which
Soundest
and
most
influential can compete on the world mar¬
ket only if a large element of
journals, in appraising the chances
for Anglo-American economic col¬ labor cost is added in Britain to
laboration in this particular field, imported
raw
materials.
This
estimates that already we are in would mean in practice a ten¬
dency for British trade to concen¬
agreement on most of the. im¬
portant points and that the era of trate on highly finished, rather ex-,
agreement can be appraised as pensive goods—fine cottons, for
about 75%. That is a fairly good example, or fine woolen fabrics,
figure, and Certainly far better fine leather goods, and so on—
than the 50-50 or "split the dif¬ which appeal to our luxury mar¬
kets rather than to the mass mar¬
ference" type of compromise.
ket
to
which
our
industry is
"Enough of the higher econ¬
If

and

the

to

serve

■'V'**'

ficiencies and economies to be at¬
tained.

elected

was

Treasurer

Central Railroad

exports to Britain re¬
presented about 2V2% of the Brit- i
come;

extensively economic

during the war, because of the ef¬

dent to

Charlottesville, Va., was elected
Secretary and Treasurer. Winston

of British

cessities.

Peoples National Bank

of

assuming

*>•

an¬

election

in

us seriously,
would it injure our
imports represent foods, economic interests, if British ex¬
raw materials and semi-manufac¬ ports to the United States doubled
tures the country cannot do with¬ in value? I would find it hard to
out, only 9% are manufactured believe.
goods; and most of them are ne¬
"The Britishers with whom I

us

we

obstacles

no unnecessary

nual

of
the Baltimore
Long,
Assistant
Secretary of State, as Vice-Presi¬ Stock Exchange on June 5, How¬
dents. William S. Hildreth, Presi¬ ard R. Taylor was unanimously

way

quotas, at least for a time, to pro¬ national income it is even more:
tect her rather shaky balance of striking. British exports to this
twopayments by cutting down imports country represented only
of luxuries or articles not neces¬ tenths of 1% of our national in¬
concede

part,

on our

Breckinridge

an

of general non-dis¬ 000,000 were four, times our im¬
13%
of
criminatory
treatment
between ports and represented
nations.
On two points, however, British imports. I won't fall into
the trap of suggesting that we
the British and American positions
are not identical, due to force of should balance these figures, be¬
circumstances.
Britain, for ex¬ cause that would be to advocate
ample, feels that she could not cut bilateralism, but I do suggest that
herself off altogether from the we are at no disadvantage in
possibility
of
imposing.import Anglo-American trade. In terms of

may

We will

BALTIMORE, MD.—At the

placed in the way of its realiza¬

tion,

desirability

They

we

find the whole world applauding

out

vantage would have to be matched value came from Great Britainagainst disadvantage in revising some $118,000,000 worth. On the
the tariff structure.
There is al¬ other hand our exports to Great
most complete agreement on the Britain to a value of over $447,-

for her people.
hope that we could

(Continued from first page)

high

consumption,

but those of the world.

of developing her sales
Government bulk purchasing. The in this market, or even lower our
tariffs somewhat, if she will lower
advantages of tariff reduction are
hers. What would be the result?
obvious, to the British as well as
"The Department of Commerce
to ourselves, and there is little
doubt that much could be done in in Washington gave me some fig¬
in
1938
this direction although naturally ures which show that
it could not be one-sided and ad-< about 6% of American imports by

sary

a

aim with which
leadership in economic rehabilita¬
we
should have a great deal of
tion in the most effective and
sympathy, as it will work defin¬
itely and directly to our ad van- practical manner.
age if Britain, one of our most im¬
"But we must banish fear and
portant foreign markets, has a
suspicion."
strong and healthy economy. Sup¬
pose that we should, to assist Bri¬
tain to gather her strength, place
war,

United States, the American atti¬

living with

wiljl not only "serve our own ends

of
our
They will certainly try
product. Everybody would gain- country.
Vermont as a consumer of coffee, to improve their economic posi¬
New York in a wider market for tion, which will be in great need
its coffee, the whole country as a. of restorative measures after the
advantage

of

level of civilian

type of wiliness common¬
attributed
to
them
in
the
a

United

imore Stock Excb.

a

fundamental objective of full em¬

country—in Great Britain by a
housing program and by some ex¬
pansion in exports. This objective
only a value in terms of coffee
of full employment, the econo¬
equal to the value of maple sugar that fear is one of the most seri¬
mists agree, is also really neces¬
which New York would accept. At ous obstacles to full realization of
sary if we are going to be success¬
the same time New York would the benefits to the world of fullful in developing multilateral in¬
multilateral
international
not be selling anywhere near the scale
ternational trade to best advan¬
You remember the story
value of coffee in Vermont that trade.
of Oliver Wendell Holmes, who tage. Full employment builds in¬
could be consumed in that area.
ternational commerce and inter¬
flew in a rage because he couldn't
"Under the multilateral sys¬
tem

Taylor Again Heads

econ¬

will develop relative insta¬
bility after the war. Economic

omy

(Continued from page 2363)
lot

2385

j

w

a

relatively good financial

foreign

position.

relations, especially foreign com¬
merce.
At home it had the job

mulated

Many States, have accu¬
surpluses. This present

ments

Indeed, the issue reaches to the

have
worked a miracle of war produc¬
tion.
The American people *are

heart of the American form
government. Shall government
be kept close to the hands of the
American
people and ever re¬

actuated by a
is every

of

singleminded deter¬

win

mination to

very

restrictions,

this war.

sponsive to their guiding will, or
shall it be completely usurped by
an already highly centralized na¬
tional
authority which is ever

There

evidence that we are now

strike decisive blows
both in Europe and in the Pacific.
We
cannot safely predict the

ready

to

growing more powerful?
Shall
the people preserve home rule or
shall they sit passively by while it
is being strangled to death? This
is the issue to which the people
must be constantly alert. To set¬

But I think it
part of wisdom, in develop¬

length of the war.
is the

ing

our

post-war plans, to as¬
the Axis Powers may

that

sume

that they have
nothing to gain by further resist¬
at

see

time

any

it, there must be a sweeping
change in many current philoso¬
phies of government.
My second objective is that we
must devise a system of taxation
tle

ance.

suddenly be confronted
by problems of converting our
economy to peacetime production
and providing jobs for our return¬
ing soldiers. There is much to do.
Nothing would be more encourag¬
ing to the American people than
some substantial
progress in the
solution of our fiscal and taxation
We may

These

problems.

and

spirit of our

than

a

the necessary incentives
investment in industry and

for

production

provide

these

anced

budgets,

our

taxation

severe

than

of

the

geo¬

taken of interstate commerce.

More businesses were

held by the

interstate
within
purview of Congress.

courts to be carrying on

the

Thus

the more minute
regulation of
business

began

Federal

organization
and the

the

involved

which
of

and hence came

Federal agencies

new

This led

expansion of old ones.

hinder,

search for new sources

the

to

death taxes to the

depression

the

introduction

new

Federal system.

of

The

'30s

the

of

saw
more

many

those on pay¬
extension of old

taxes, such as

and

rolls,

the

developments had an ad¬
effect upon State and local

These
verse

It

govern¬

with it home
is by taking
financial
indepen¬

governments, and
rule
in
America,

their

away

dence.,

■'

;

Coincident with the centraliza¬

opera¬

resulted from the

also

tion of

ing

and more of the tax-r

more

the

in

power

Federal

Gov¬

which ernment and the increase of Fed¬
started in 1939 and which was ac¬ eral subsidies to State and local
rise in the national income

in Europe, governments, a similar trend has
and, finally, been going on within the States;
our
war
production.
Notwith¬ There has been a steady expand
standing this condition, however, sion of the State* taxing power
with increased subsidies from the
we should not be oblivious of the
celerated

by the war

defense program

local governments.
' "
perfectly natural that ex¬
tension
of the subsidy program
governments — their
traditional should have some support from
It
financial independence. The time State and local office holders.
has come for the adoption of fis¬ is always more agreeable to a lo¬
cal policies which will preserve cal official to have money to spend
for the benefit of his constituents
that financial independence.

underlying currents which are in¬
evitably washing away the very
foundation of our State and local

Attention should first be direct¬
ed

the

to

mainstay of local gov¬

States

It

ital

ernments—the property tax.

is

gets from the State Cap¬
Washington than it

from

or

his

This
reduced by the
purchase of more and more land
by the Federal Government, thus
withdrawing it from the State

to

is

which he

has been severely

it by taxing
who elect him;

raise

to

have

to

constituents

Ther

same

officials

be said of State
respect to Federal

may

with

grants.
But we must realize the
implications and results of this
trend.
State and local govern¬
30, 1937, it was estimated ithat
total Federal real estate holdings ments become a sham and a pre¬
if
they
cannot
support
(including the public domain) tense
were
395,000,000 acres. This was themselves and must go to another

and

local

of

June

of the total area government

20%

than

more

As

rolls.

tax

If taxed at local

country.

for

An excellent

•

handouts.

illustration of

ex¬

rates, this Federally-owned prop¬ tending the subsidy theory into
erty would have yielded some more and more fields has been

sponsibilities resulting from the
depression, they found their tax
resources
being
cut into very

in

encourage,

full

local

and

State

of

$91,000,000.

and

tion

tion

ments.

of the

ones.

economical

efficient v and

governments.
Confronted with
their own increased financial re¬

produc¬
high employment,
it
must devise a system of taxation

rather

of

graphical frontier and the rapid
growth of cities, the Machine Age
was upon us.
Soon a wider view

commerce

condition has resulted from more

the

sumptuary nature.
With the
closing

was

in

are

restrictive

and

If Government is to

the
National
State and local

on

war

the overwhelming threats

higher taxation
legislation.

considering the

taxes, largely customs, and a few
internal revenue
duties of a

dead center because of unbal¬

on

I have attended
conferences. At every meet¬

Government

the

economic machinery was virtually

years

ing we have been
encroachment
of

management

by

Before

labor.

and

problems have
and dampened
people for more

decade.
six

To that end we must

for

and
For

a

machinery.

easily met by indirect

of
revenue.
The income tax amend¬
ment was ratified in 1913 and im¬
scale of rates that
mediately a new Federal tax was
our entire economic
imposed. World War I brought

will revitalize

confused enterprise
the

adopt

were

require¬

financial

Its

terways.

in spite

agriculture,

and

burdensome

was

small army and
and improving internal wa¬

navy

(Continued from page 2363)
of

with

mainly

concerned

of maintaining a

Balanced Bndget
dustry

Government

Federal

The

Gov. Bricker Calls For Post-War

Thursday, June 8, 1944

FINANCIAL CHRONICLE

THE COMMERCIAL &

2386

That amount exceeds the recent proposal of the Federal
property taxes Government to subsidize the pub¬
34 of our 48 States.
lic schools of the nation.
By dan¬

all collections from

in

1939

Harbor

Pearl

Since

there

has

been, of course, further substan¬
tial acquisition
of land by the

Federal money

gling

before the

of the public schools a very
attractive-lure is presented. But

eyes

severely by the revenue demands
of the Federal Government. Nev¬ Federal Government and its in¬ the difficulty is aside from the
The Defense loss of financial independence,
for the ertheless they have continued, strumentalities.
own rights.
At this time of crisis
short
pull.
It must understand without forethought, to go along Plant Corporation,Afor example, that there results a proportionate
there should be complete unity of
that
frequent changes in fiscal with a trend which, if continued, by December, 1943, had acquired surrender of the States' control
purpo|e in all segments of our policy throw our economic ma¬ will lead to the loss of their fi¬ more than 10,000,000 acres and over their educational systems.
governmental authority. On the
When an effort is made to change
chinery out of gear and cause nancial independence. Our Fed¬ 20,000 city lots.
Federal Plan we have builded and
confidence to give way to mis¬ eral
To make up the loss in revenue, the government of a country, one
system is founded upon the
produced mightily. We are serv¬
giving and uncertainty. Govern¬ necessity of maintaining strong, instead of permitting the States of the first steps is to take over
ing America's best interests when
ment also must understand that
independent State and local gov¬ and local governments even a the education and training of the
we battle to maintain it.
This is¬
if risks are to be taken, there ernments.
This is
They cannot be ^de¬ limited exercise of their own tax¬ youth of that country.
sue
of
centralized bureaucratic
must be a fair balance between stroyed without also destroying ing power, the Federal Govern¬ what Hitler did in Germany.
I
power as against a larger degree
ment devised the scheme of "pay¬ am opposed to the dictation of our
opportunity for reward and haz¬ freedom. As Dean Pound said:
of local autonomy cuts across our
ard of loss.
"All experience
shows that a ments in lieu of taxes." Adher¬ educational policies from Wash¬
fiscal and tax policies.
In order to grasp fully the im¬ domain in continental extent has ence to this policy will help to ington.
In considering our fiscal policies
the financial independ¬
mediate and far-reaching signifi¬ always been ruled as an autocracy destroy
The question then is: What is to
I am guided by two.basic objec¬
ence of local governments.
cance
of State and local fiscal or as a Federal Government." A
be
done
in the
face of these
authority. We have had to fight
own Government to keep our

our

tives.

The

tion of

our

first

is

the

for

truth

is

that

run,

not

.

'

changing

have

From

tion

|

ours

"The

public fiscal

the

founding of our na¬
20th century

until the early

was

essentially an agrarian

Individuals felt far removed from the Federal Government — even from State government. Their governmental rela-

economy.

tions

as

Wilson

was

liberty is

the

Woodrow

moved to say:

of

or

centration

resist

we

of

not the increase

power

.

we

.

.

are

con¬

re¬

sisting the processes of death, be¬
cause
concentration of power is
what always

precedes the destruc¬

tion of human liberties."

the

It
and

with

When

it.

of

town and the county.

primarily

were

ernmental power,

is

local

owned

needs, should be returned to pri¬
ownership as soon as prac¬

that now the States ticable after victory, thus restor¬
governments generally ing it to the local tax rolls.

true

local

construed as an offer to sell or as an offer to buy the securities herein mentioned.
The offering is made only by the prospectus.

direct

our

Federal

State

which we

ulti¬

may

expansion of what might until we abolish our present bu¬
be
termed
the
subsidy theory. reaucracy and return to a respon¬
There
This means that more and more sible cabinet government.
functions of government hereto¬ is a limit to the tax burden which
locally administered and fi¬
are becoming centralized.

Changes

in

our

time

to

economy

can

bear.

Second, the States working to¬

and social gether,
the
local
governments
require, from working together and the two

economic

conditions obviously

time,

a

reallocation

of

governmental functions. But this
should be done only when such

Incorporated

must

have

we

nanced

R. B. SEMLER

Government

mately pre-empt the entire field
of taxation, leaving nothing for
State and local governments."
I

recent

fore

101,300 Shares

tions.
y

repeatedly pointed out that
expect no substantial cur¬
attention is the tailment of Federal expenditures
and

to

to

threat

next

governments

should
is not to be

Federally-

vate

The

announcement

of

taxation

property, with proper re¬

trends? I offer three recommenda¬

First, it is essential that the
strictions, would help to maintain strictest economy in government
their financial independence. be
practiced. This applies partic¬
Even
more
important, all this ularly to the Federal Government.
property acquired for the conduct Unless Federal expenditures are
of the war, not needed for our limited
to
absolutely
essential
permanent post-war military items, it is inevitable that the

local

This

for

authorization

Appropriate
the

history

history of the limitation of gov¬

township

self-government.

our

which

policies.

growing centralization of pofaer
in Washington.
The threat is so
serious that today we face the

administrative units with little or

trends

certain

been

threatened by an ever¬

question whether the States will
remain
active, cooperative and
equally sovereign members of our
governmental system, or whether
they will be reduced to provincial

Or

policies it is necessary to bear in
mind

the

The

States

no

long

preserva¬

Federal system of gov¬

ernment.
are

the

working with the Con¬
should
take
immediate
steps toward appropriate segrega¬
groups

gress,

benefit tion of tax bases, preserving ap¬
public at large: with no loss propriate fields of revenue for the
national, State and local govern¬
enue raising and spending activi¬
ments. One of the most serious
ties of the Government assuming problems confronting not only na¬
such function.
J;;.v '
:
tional, State and local govern¬
In 1932 Federal subsidies to the ments, but especially the taxpay¬

a

change results in greater

to the

in democratic control, of the rev¬

Common Stock
$1 Par Value

Price $10.50 per

States amounted to ^$217,000,000. ers, lies in overlapping tax bases.
By 1937 the figure hall more than Our tax structure now is only a
doubled.
In
1941 iti was more planless patchwork held together
than triple^ reaching ($744,000,000. by; nothing \ more" substantial than

share

all. i. Jn 1941, in political expediency.
$744,000,000 grant¬
Third, whenever State govern¬
ed to the States, over| $95,000,000 ments reach the point where their
went to local governments.; Of revenues may reasonably be an*
all taxes' collected ii$$the.- United ticipated to exceed necessary de¬
States in 1932, the Federal Gov¬ mands for any material period of
ernment's portion was: 22 %, leav¬ time instead of increasing local:'
ing State and local governments government subsidies, they should
78%.
In 1939, before jVorld War repeal such taxes as will
best
II started, the share of State and
open fields of revenue for local
local governments had dropped to
governments. During recent years
62%
of all
taxes, the Federal the
present
administration • in
But

this

is

not

addition to the

Copies of the prospectus may be obtained from the under signed.only
which the undersigned is qualified to act as a dealer
in securities and in which the prospectus may legally be distributed.

in states in

F. Eberstadt & Co.

•

having

share

Government's

jumped to 38%.
Make

June 6,1944




;

no

mistake

most effective
if

maammumamtmusaamii

independence

way

Ohio, after paying off its inher¬
ited deficits, has been confronted
the constant demand from

it, the

with

to abolish the

local

about

of State and-. local
,

governments that the State's
surplus7-be {distributed- to .them.

^Volume 159
It

,

.was

had

THE COMMERCIAL& FINANCIAL CHRONICLE

Number 4288

position last, year, that
been' confronted with

my

we.

■?

President's Invasion Prayer Marking Opening Of

not

(the. uncertainties of

war

and .the

Allied Assaults On Hitler's European Fortress

-necessity of providing for a much,
needed post-war building
pro¬
A prayer, written by President Roosevelt incident to the start of
gram,, we should have launched
the invasion of ; Europe with the; landing- of Allied troops on the
upon a State; tax repeal program,
coast of France in the early hours of June 6, was read in Congress,
rather than one of increasing sub¬
on June 6, on the floor of the House, where it had been dispatched
sidies to local governments.
' .
that day by the President by motorcycle.
It was read by Dr. James
J, Of equal importance to the es¬
Shera' Montgomery, House chaplain, who departed from custom to
tablishment of fiscal policies to
ask members to join him in the*>
maintain financial independence of
scribed
by
the
New
York
State and local governments is the opening invocation.
In Associated Press
accounts, "Times," follows:
shaping of those policies so as to
June 6, it was stated that, aware
"My Fellow-Americans:
aid and encourage rather than
of the invasion date, Mr. Roose¬
"Last night when I spoke with
stifle and suppress American pri¬
velt began work on his prayer you about the fall of Rome I
vate enterprise. Sound govern-,
knew at that moment that troops
several days
ago,
but did not
mental
fiscal
policies, national,
of
the
United
States
and
our
/State and local, are the foundation complete it until June 5, accord¬
ing ; to
Presidential
Secretary -Allies were: crossing the Channel
V stones of a stable economy and
Stephen T. Early, correcting >an in another and greater operation.
; American prosperity.>;
"J//;//. earlier
impression that the Chief It has'"come to pass to success
^ There is need for further. co¬ Executive did not start it until thus
far.y/V
' •■ '■
operation between the States in
the attack was at hand.
"And so in this poignant hour
The ac¬
extension
of ; reciprocity
provi-%
counts added:
//;/ !'//.;// P'sy,•■•/ I ask you to join with me in
sions in tax statutes. In view of
"y; ••.'■'■'.
>
"Describing the President's ac¬ prayer:
Recent decisions' of the Supreme
;; "Almighty
God:
Our
sons,
/Court/ two or more States may tivities : to reporters, Mr. i Early
mow
tax the same income,* the said Mr.; Roosevelt went to; his. pride of our nation, this day have
set upon a mighty endeavor,
a
bedroom • -'early
last
evening
same
inheritance ; or
the same
his struggle to preserve our Republic,
property. ; The necessity .for- ap¬ shortly after he delivered
our religion and our civilization,
radio address on the fall of Rome.
propriate
reciprocal
legislation
and to set "free a suffering hu¬
has become more pressing in or- •-/"He said the President received
manity.,;'
y;y v: 1
,der to avoid this form ofidouble steady
invasion
reports-^com"Lead them straight and true;
taxation.
While; in a sense mul¬ plete and in: detail—-from 11:30
give strength to their arms, stout¬
tiple
taxation
has
existed . for p. m. on/into the actual hour of
ness to their hearts, steadfastness
the
many years, it is my position that
assault.",.;////
V
in their faith.
there is no justification for the 4
In his prayer the President had
"They will need Thy blessings.
imposition
of
such
inequitable: asked that- the people of the
Their road will be long and hard.
double taxation as I have men¬ nation
>join in it with him, and
For the enemy is strong.
He may
tioned .I;
Appropriate/ •■ reciprocal although not read by him over a
hurl
back
our
forces.
Success
legislation will also relieve not nation-wid'^t broadcast" until f 10
not
come
with
rushing
only business, but individual cit¬ p. m., J tine • 6, its text had been may
speed, but we shall return again
izens from double taxation aris-

238,

"Many people have urged that
a single day
special prayer.
But because
the road is long and the desire is
great, I- ask that our people de¬

Calif. Utility Revenues
At All Time High

I call the nation into
of

Total

for
12
major
public
utility
com¬
panies reached an all-time high
in 1943, according to a study just
completed by Dean Witter & Co.,
45
Montgomery St., San Fran¬
cisco, Calif., members of the New

of

As we rise to each
day, and again when each
day is spent, let words of prayer
prayer.

new

be

on

to

our

our

lips, invoking Thy help

efforts.

"Give

York

strength in

our

.

.

■

-

.

,

.

v

,

.

issued

/

/a|/ mid-day / to

:

ing from questions of domicile.

Americans

I

that construc¬
tive work along these and other

recital

I

am

convinced

.>

him

follow

to

ofj* the

prayer.

permit
in

his.

In asking

blessings/ for ourtroops,
the
President said:///;:/ //•
;:/.://///';/;/

Similar lines will aid rather than

hamper

business,; to which we
must look for high employment.
But if this program is to be ef^

/

possible date.
That would .give
more
jobs than ■ all the madework the Government could pos¬

sibly
plan.
Simplification /and
stability of tax laws are desper¬
ately needed. We are given little
^encouragement
along
this
line
: how.
Adherence to the principle
-

that the taxing power exists pri'-.

•marily for the

purpose

necessary revenue
; be used as

of raising

and should' not

undercover, method

an

of - effecting

,necessaryi

end Of battle,

'

the
;

haveii

■'//;/ / / •/

for their return to

of:home."'/''/v.://;'•'■;///

*Stating-that he had been urged
that

he "call

the
#

that

as

victory.

Such

able

as possible after
action would* en¬

soon

business

to

-

out' con¬
without con¬

map

structive programs,

crease

hearts be stout, to

our

a high degree of investor
regard for its securities.

they

soever

"And,

O

our

us

Lord,

our

faith

may

in

united

Let

crusade.

the keenness of

of

this

interesting

people devote themselves
in continuance:of
prayer."y;.
y

The President's invasion

which

prayer

he/read to the nation with

his

introductory words on /.the
radio,
IMf recorded t and ; tran-ytr..

be had from Dean Witter &

Co. upon request.

not

Mallory Interesting

spirit ever be
dulled.
Let not the impacts of
temporary events,
of
temporal
matters of but fleeting momentour

P. R. Mallory &

Co., Inc., offers
interesting situation, according
analysis prepared by Steiner,
let not these deter us in our un¬
Rouse & Co., 25 Broad St., New
conquerable purpose. *
York City, members of the New
"With Thy blessing, we shall
York Stock Exchange. Copies of
prevail over the unholy forces of this
analysis may be had from
our enemy, f Help
us to conquer
Steiner, Rouse & Co. upon re¬
the apostles

of greed and racial
Lead us to the sav¬

arrogances.

ing of

an

to

an

'

quest.

country, and with our
sister nations into a world unity
that will spell a sure peace—a
our

Attractive Situation
H.

peace

invulnerable to the schem-

H.

which

Robertson

is

tax-free

in

ings

of unworthy men.
And a
peace that will let all men live in

,

.

and

be rent by noise
". Men's souls will be

flame.

shaken with the violences of
.

•

"For

these

war.

lately

are

men

from the ways of peace.
They fight not for the lust of con¬
quest.
They fight to end con¬
quest.
They fight to liberate.
They fight to let justice arise, and
drawn

among all

Thy people, f. They yearn but for
end of. battle," for their return

tHe

be

little

assurance

of

an

is

just

tion

and

:"Some will

never

v.?

Laird, Bissell & Meeds, 120
Broadway/New York City, mem¬
bers of the New York Stock Ex¬

change, have prepared an inter¬
esting
bulletin
discussing
the
current situation
in! New York
Trust Co.' Copies jof 'this bulletin
may be had from Laird, Bissell &
request.

upon

Rails Offer Interest

Bright Possibilities

Father, and receive
Gary Railways
common
and
servants, into Memphis
Street
Railway
pre¬
ferred offer interesting possibili¬
Thy kingdojn.
;
brace

these,

them,

Thy

/

/"And

heroic

for

us

at home—fathers,

children,

mothers,

wives,

sisters

men

over¬

mighty
selves

God,
in

to

rededicate

renewed

faith

in

our¬

Thee

developments
earnings,

in

and

may
on

Portland

Cement

&

Co.,

10

Post

Office

cular may be

the situations
be had friom

had from Lerner &

Co. upon request.

request.

these shares having been sold, this advertisement appears
neither

an

offer to sell

nor a

as a

solicitation of an offer to buy

matter of record only, and is

any

of these securities.
June 5, 1944

NEW ISSUE

100,433 Shares

;/;■/// ,'/'
the

In my judgment,;, the
■pre-war Federal policy of spend,

!

Government,,

the towns-y the cities, the
and the
States of. * this

essential to our
Federal system. The; strength of
icy that will be needed for recon- America stems* from the practice
struction and rehabilitation after of representative < government -in
the

.

way

war;,

waste, borrow and tax will wreck

When

State

counties
;;nation.

par

value)

Subscription Warrants for these shares
of the
/

*

Company and
were

sold.

upon

were

issued to the holders of the Common Stock

the exercise of such Subscription Warrants 92,435 shares

The remaining shares

have been sold by the Underwriters.

f

ments become

.

.

,

($25

are

and local govern¬
economy
if continued
paralyzed, the door
is open to every form of absolu¬
iji the post-war period. A nation
which builds its financial house tism arid-evetfy form of demagogy.
upon
shifting sands. of deficit When local Responsibility is de¬
financing in peace .times/cannot stroyed, citizenship atrophies and
dies.
Survive as a nation.
But when State and local
//'
Nor can
such a nation be a governments,, flourish, when men
and women practice representa¬
powerful influence in world af¬
fairs.
Thcf United States must tive home rule, the foundations-of

"American

Creamery Company
Common Stock

ernments/ as well as the National

toward the kind of Federal tax pol¬
proposal points

Beatrice

Copies of the Prospectus
circulated from only

may

fye obtained in

any

state in which this announcement is

such of the several Underwriters

as are

in such state.

,

•

the

Republic- are secure. The more
help solve such problems as cur-,
the history of the Republic is
rencies, credits, air rights, mar¬
kets and international trade. So written at the crossroads and the
less at the Capital, the freer we
long as the world is inflicted with,
.

discriminatory

trade

agreements,




shall, be.

; 1,

.

"

,

,

...

Glore, Forgan & Co.

Square,

Copies of this cir¬

as

All of

a

Boston, Mass.

in

Rut.

is;

low-priced stock in an industry
with a bright future and offers in¬
teresting possibilities, according
to a circular prepared by Lerner

ties, ' according
to
memoranda
issued by Bittner & Co., 80 Broad
Street, New York City.
Copies
of these memoranda, into which
are
incorporated news of recent

Bittner & Co.

:in.this hour of great sacrifice.

Giant

r

of-the war.". ;

*****

""""

.

N. Y. Trust Co. Interesting

Meeds

Em¬

return.

en¬

necessary - asycqllabqrasolving world diplomatic
political problems. y /yy;
;;

.......I,.I.,

Schenley Distillers Corporatior.
have prepared an attractive book*
let
containing
the
first
arti¬
cles in the series they have beer
running in the "Financial Chron¬
icle." Copies of this booklet may
be had upon request by writing
to Mark Merit, in care of Schen¬
ley/ Distillers Corporation, , 350
Fifth Avenue, New York 1, N. Y

to the haven of home.

and brothers of brave

can

Available On Request

will

darkness

quotas, /cartels, *; exchange wars^
seas, whose, thoughts and prayers
barter; systems and the like, there
are ever with them—help us, Al¬

for. ; all
these > purposes
stant fear of changes, and to pro¬ America; must be strong.
To/be
vide
jobs for all who wish.r to strong,r.Vto be influential, . to; be
work.;////,/////v/'/-.U-'*;';•-/.V ; helpful. ;in the world, we; musty
i) The recent Baruch-Hancock re-; above everything-' else, build our
;port,;went.; even- further. It said: own house upon vthe solid rock of
; "Until/it is definitely known that financiaf soiyeincy, equity and j uspost-war. taxes are to be. reduced, tice.'v Our power to.'help -others
;the launchingof | new enterprises willbe/dependent upon, the •: de*-;
:
and the v expansion of existing :gree -1 in/< which / we; . strengthen;
"phes will be deterred.'^ ". Aceord-; - private enterprise and preserve
ing'ly,/ it Recommended "that a Individual; opportunity;:,,,
j;;
post-war tax law be drafted now,
.Let us then remember, as the
during the war, and put, on the guiding principle of domestic pol¬
shelf to go into effect at the end
icy, that our'State and local gov¬
r.:: This

and

attractive booklet, discussing the
situation and outlook in detail,

be.

may

give us faith.
Thee; faith in
sons; faith in each other; faith

Give
in

Copies

courage unto our sons where¬

our

its volume of business and

retains

wait out the long travail, to bear
sorrows that may come, to
impart

our

eral tax policy,that will stimulate during p£ace./. Collaboration; be¬
incentive and encourage venture, tween liations in solving -world
capital.
Federal taxes should be economic and monetary problems
reduced

armed forces.

our

"And let

Company,
Pennsyl¬
vania,
offers interesting possi¬
bilities, according to a memoran¬
and again; and we know that by freedom,
reaping
the
just re¬ dum being distributed by Buckley
Thy grpce, and by the righteous¬ wards of their honest toil.
Brothers,-* 1529
Walnut
Street,
ness of our cause, our sons will
"Thy will be done, Almighty Philadelphia, Pa., members of the
tnumph. ' ;y..
:-y God.
New York and Philadelphia Stock
./"They will be sore tried, by
"Amen."
///'"
Exchanges. Copies of this memo¬
night, and by day, without rest—
randum may be had upon request
until the victory is won.
The
from Buckley Brothers.

nation intd/'a •tqleyance'/an^-1 goodwill

single day of special prayer,' he
said
that "because the road
is
long andythe desire is great, I ask

social changes is also

■ /•

r Moreover, there is a vital need
-for a sane and constructive Fed¬

■

from

The Federal Government should

balance its budget at the earliest

make

in the physical and the material
support of

Stock-

.

"These/are

men lately drawn
the/ways of peace.' They
fight not/for; the lust of conquest.
fective, the Federal Government They fight to end conquest. They
also must do its part. This means
fight to -liberate. ; They fight to
that recent fiscal' and tax policies
let justice arise, and: tolerance
/pf the Federal Government must and
goodwill
among y. all : Thy
/be completely overhauled. //;/;/•. v.
people. /They yearn but for the
.

we

Francisco

Despite being
and
subject to

taxfarreaching governmental controls
and criticism, the industry, the
study shows, has continued to in¬
damaged

,

double the contributions

San

and

Exchanges.

strength,
too—
daily tasks, to re¬

us

,

revenue

California

vote themselves in a continuance

registered dealers^

>

THE COMMERCIAL & FINANCIAL CHRONICLE

2388

DIVIDEND NOTICES

Tomorrow's Markets

Small Business Fate Vital Issue

Walter Whyte
AMERICAN LOCOMOTIVE COMPANY

sion

PREFERRED DIVIDEND NO. 144

Dividends of

five cents (25(0

Common Stock of this Company
1944. to holders of record at

share

per

share

per

on

of

on

have been declared payable July 1,

the close of business

By WALTER WHYTE

Alongside the actual inva¬
sion news everything else
pales into insignificance. The

June 30, 1944.

■

CARL A. SUNDBERG,

May 25, 1944

first

Secretary

last
the

of the

taste

came

news

Saturday afternoon when
AP flashed, and later re¬

on

5%

a

thought was an official com¬
Packing Company munique. But it being a SatJune 6, 1944 urday afternoon with the

COMPANY

CAN

three-quarters

cent

per

declared on

was

Company, payable

July 1, 1944, to Stockholders of record at the
close of business June 15, 1944. Transfer Books
will remain open. Checks will be mailed.

on the common stock of the
Company, payable June 30, 1944, to
stockholders of record at the close of

June 17,

1944.

COLUMBIA

GUARANTY TRUST COMPANY OF NEW YORK

ELECTRIC

New

Board

of

declared this day the following dividends:
Cumulative 6% Preferred Stock,

No.

quarterly, $1.50-

71,

Cumulative
'*

No.

quarterly, $1.25

61,

per

Preferred Stock,

We still have

Series A

No.

quarterly, $1.25

50,

per

;'v;

.

jobs

V'.■'

on

the SEC and its affiliate the NASD, but of all the

market or almost no market for the securities of
corporations belonging to many widows and orphans through
inheritance.
Keep up your good work.

that way than no
small

BUFFALO, N; Y.

share

standing Preferred Stock of this Company, and
a
dividend of
75c per share urion
the out¬

Stock of this Company have
payable July 1, 1944, to holders
business June 12, 1944.

standing Common
been
of

declared

record

at the close of

JOHNSON,

THEO.

Secretary

NO.

DIVIDEND

of

Board

The

has

fTO°nty-f'VP

of

diVdmri

of
the
MARGAY
this day declared a
cents a shore t>-y O"

Directors

CORPORATION

OIL

If]

57

the

due to

is

there

But

news.

cer¬

no

com¬

From

a

however,

viewpoint,

the word "invasion" is an ab¬

which

around

straction

are

As

built.

a

through more confidence by investors in dealers.

the actual invasion

was mere¬

Y.

ATLANTA, GA.
It will

largely destroy it.

■

' 7 ": ■/

^

CHICAGO, ILL.

Unfavorable, unless the small dealer is permitted to charge up
to 10% on certain of his business he will be compelled to close up
his shop.

-

/

.•

.

,

-

-

NEW YORK CITY

convinced it will seriously restrict the market for

am

securities

Good marketability should be worth
more than 5% of the value of any man's investments.
A 5% mark-up
is totally inadequate to cover the dealers' efforts in creating a market
for issues of the smaller companies.
I believe the 5% mark-up rule
is not in the public interest and this is an unprejudiced opinion as I
am

smaller

not

now

a

corporations.

broker-dealer.

the

market factor

NEW YORK TOWN

GLEN FALLS, N.

I

was

inevitable.

■

.

...

It certainly will not help them.

of the

invasion

an

was
market

.

(From firm favoring rule)

ference does it make.

ing

J,

SMALL UPSTATE

tainty. And anyway what dif¬
*

and

penalize them by cutting down their distribution

favor the listed securities.

,

;

BOSTON, MASS.

hopes and fears of millions

CORPORATION

OIL

MARGAY

Secretary.

It would

a

impending effect of Tuesday's

That

Incorporated

Dale Parker

June 1. 1944

was

misguided

tape, etc., etc. ad infinitum, well, I think Mr. Andqgson, now Pro¬
Anderson, is correct forr calling for its abolishment. I'm sorry
many of my friends will lose their present pay checks, but it is better

that that day's

say

'

'■

red

Saturday flash had been
In retrospect it is
to

enforce
the Federal
financial af¬

Attorney Generals and District Attorneys to

fessor

cancelled.
easy

America
>:

laws

no

saw

Isn't this

Regardless of the intent behind this Federal regulation, which
intent might be honest, I believe the results are harmful to the public
of this district. I know and like personally many of the holders of

though

even

y*

Racine, Wis., May 31, 1944. dividend of $1.75 per share upon the out¬

A

August 15, 1944, to holders of
close of business July 20, 1944.

—

Secretary.

JR.,

market

J. I. Case Company

share

on

record at

a

share

5% Cumulative Preference Stock

payable

declared

however,

Monday,

limited to 5%

against fraud and crime and I believe that
Government should keep out of local affairs including
the

the

of

;

-

BOSTON, MASS.

Better market

nervousness

7, .1944.

June
has

MURRAY,

T.

MATTHEW

5% Series

per

York,

Directors

quarterly dividend of Three Per Cent, on the
Capital Stock of this Company for the quarter
ending June 30, 1944, payable on July I, 1944
to stockholders of Tecord
June 14, 1944.

has

Directors

of

Board

The

CORPORATION
The

Secretary

was

effect

the

nervous

the

R. M. Waples,

there

closed

market

a

business

&

272

declared

R. A. BURGER, Secretary.

GAS

No.

special meeting of the Board of gauging
Directors, held in Palmyra, N. Y., this
news.
day, a dividend of 50( per share was

At

quarterly dividend of one

Frcferred Stock of this

the

DIVIDEND

COMMON

STOCK

PREFERRED
On May 31, 1944, a
and

-jr*
^

>

mark-up rule.

everybody

what

tracted,

wasn't built

The Garlock

AMERICAN

.

why should dealers in other lines be allowed over 5%?
called discrimination?
What about the Anti-Trust Law?

fairs.

picture.

June 16, 1944.

on

closed. Dividend checks will be mailed

Transfer books will not be

by the Bankers Trust Company on

Events

•

If the dealer is

Then the client will suffer.

research.

following

news

clarified.

is

Tuesday haven't changed

market

the

Averages

until

invasion

($1.75)

dollar seventy five cents

one

the Preferred Stock and of twenty

follow

jitters

news.

vance

COMMON DIVIDEND NO. 73

Mark-Up Rule

(Continued from page 2364)

Inva¬
show
selling level beginning 144.
Don't expect too much ad¬

New York 8, N. Y.

30 Cliurcli Street

In NASD 5%

Says—
Market

/-Thursday, June 8, 1944

Dealers will shun commitments with the result

Decidedly bad.

that spreads between bid and asked will become increasingly wide;
The situation will deteriorate to such an extent that many heretofore
small

reputable companies whose securities have enjoyed

justified

outstanding stock
of the corporation
of the
Issue of 160.000 shares provided by amendment
to the certificate of
incorporation of April 27,

ly a culminating event in a
building-up process of months.

popularity will find little demand for those securities.
The result
will be that markets will be demoralized and respectable securities

1944, to stockholders of

As such its market effect was

will suffer

pavable

1926,
record

PHILIP MORRIS"

July

the

at

10,

close
E.

D.

Oklahoma,

Tulsa,

of busings June 20, 1944.
OLDENBURG, Treasurer.

June

rate

41/4%

Stock,

of

hereby given that a dividend at th
$.50 per share on the issued and out¬

nical behaviour we

Corporation has been declared payable on June
1944, to the holders of record of such shares
at the close of busines on June 16, 1944.

Cumulative Preferred
and
a
regular

E.

H.

BACH,

Treasurer.

have been declared pay¬
able August 1, 1944 to holders of Pre¬
Series,

ferred
of

respective series
the close of business on
of

Stock

record

at

the

RADIO

July 14, 1944.

CORPORATION
OF AMERICA

There also has been (declared a regu¬

share
on the Common Stock, payable July 15,
1944 to holders of Common Stock of
lar quarterly dividend of 75c1 per

record

at

Dividend

on

First Preferred Stock

on

June 23, 1944.

The Directors have

L. G. HANSON, Treasurer.

declared, for the

period April 1,1944 to June
a

(MINERALS

Wacker Drive • Chicago

4%

the

Cumulative

Pre-

!

of record

holders

at the

!
i

ROBERT P. RESCH, Vice

bonds

prices

ket

action

(Tuesday)

AND

of

a

yields which the holder of sink¬

such calls.

MANUFACTURING

OSPH ATE* POTASH* FERTILIZER




'

Copies of this interest¬

ing bulletin may be had from the

»CHEMICAtS
■

element of
his

own

issues

went

"

effective

lack of markets.

The

profit is the one reason a dealer will buy securities for
We have been instrumental in making markets for

account.

of small

securities

our

corporations.

However, if such a rule becomes
V;

margin of profit will not warrant the risk.
BOSTON, MASS.

Ruin them.

Some

was nervous.

work for Stock Ex¬

CINCINNATI, OHIO
The effect of the above rule will mean the

mar¬

during the,play

PENNSYLVANIA TOWN

change houses.

BOSTON, MASS.

On the up-side it was

up

went

some

Steel and Mo¬
climbed nicely. In

the leaders, e.g.

that

tors

going to the above figure the
market is up against a supply
area
which proved strong

enough

restrain-it

to

times in the

past year,

(From firm favoring rule)

and small will uniformly mark-up their sales
services to buy us

If all firms large

the full 5%

instead of some firms offering their

wholesale price plus a small com¬
principal at 5% mark-ups and even
more, then all would be making a reasonable profit gnd confidence in
the business on the part of the public, because all would be treated
alike by their brokers, would be considerably increased.
agents for their customers at the
mission, and some firms selling as

five
Here

there

and

individual

stocks

■;yBUFFALO, N.:Y. ' 7.7;\^

managed to penetrate it. But

Too

many

sibility in

a

endeavor and purpose

Toll Bridge revenue

schedule of call
applicable at the various

giving

ing fund bonds would realize from
MINING

Stock

paratively small.

SMALL

that

the increase was com¬

news,

If the former proves

i

firjn upon request.

averages

through the levels

that

BOSTON, MASS.

have

But

instead of being

bullish

such

event

an

may

(Continued on page 2389)
!

/■■♦■■rra

BOSTON, MASS.
Wouldn't know.

stopped it in the

past.

r*. h ,Vsl

Ruin.

the

may even carry

i

mnmuB

powerful

enough it

redemption dates and a tabulation

President

and Treasurer

■

York, N. Y., June 2, 1944

Oakland Bay

close

1944.

business June 16,
j Checks will be mailed.

A

Put them all out of business or force us to

reflected

ferred Stock, and fifty cents
| (50c) per share on the $5.00
j Par Value Common Stock,
I payable June 30, 1944 to stockj

j of

,

salaried people, who have had no personal respon¬
business of their own, are making rules for men of honest
who have enough American initiative to ethi¬
the market as a unit doesn't cally run their business without unsolicited and unworkable forced
rules.
The Commercial and Financial Chronicle has shed enough
show enough get-up-and-go to
light on this unnecessary 5% mark-up.
It may, if placed in effect, be
Yields on San Francisco
follow suit.
As the market another destructive means to small industry security markets and to
Oakland Toll Bridge Bonds
small investment dealers maintenance of worthy service to both small
Kaiser &
Co., Russ Building, stands today, it gets its am¬ borrowed and small investor. The relatively few large-profit dealers
San Francisco, Calif., members of
who gauge the public are normally caught up with.
The maiority of
munition from news
the New York and San Francisco
dealers don't need this restriction. Better spend this time selling war
Stock Exchanges, have an interest¬ in mass hopes rather than
bonds with no 5% mark-up.
;'■
: V/-,"
ing bulletin on the San Francisco- from
any internal strength.
New

*

on

June 12, 1944.

Vice-President and Treasurer

j On May 25, 1944, the Board of
;! Directors declared a dividend
; of one dollar ($1.00)
per share
•

Stock, payable July

GEORGE S. DE SOUSA

7/:

General Offices
20 North

Cumulative

1944 to holders of record at the

close of business

& CHEMICAL

CORPORATION

I

$3.50

outstanding

First Preferred

1,

30,1944,

dividend of 871/2 cents per share on

the

i

see

(Dow) moved up
Tuesday to 142.74. Volume
increased but considering the

down.

business

close, of

the

7

(

hopeful view.,.

Ruihous.

the averages

30,

Series,

quarterly dividend of $1.12% per share
on
the
Cumulative
Preferred Stock,

4'/2%

Disregarding all sentimen¬
analyzing the
market strictly on its tech¬

tal factors and

standing snares witnout par value of the Como*
high / Jb.
St&tiC^TV

Va

A regular quarterly dividend of $1.06
per share on the

STATIONERY

&

Notice is

inc.

more

a

Sorry

lack of interest on the part of investors.

severe

take

SYRACUSE, N. Y.

CORPORATION

June 2, 1944.

Philip Morris & Co. Ltd.

TABLET

a

cannot

1944.

1,

NOTICE

DIVIDEND
WESTERN
New York, N. Y.

we

nil.

NEW YORK

Dealers will concentrate
where the market is close.

hit severely

.

,

,

•

Think the whole/idea silly.

on

'

CITY

the larger and more

Market

on

active issues,

smaller corporations will be

and will not be able to raise capital to expand.

May

^Volume 159

THE COMMERCIAL & FINANCIAL CHRONICLE

Number'4288

eventually put them; out of business, as soon as competition sets in
after the

i

war.

when

there

quently

•

will

be

more

than eventual income.

.expense

stocks will have

many

2389

Conse¬

market.

no

NEW YORK CITY
;

davenport, iowa
biark-up dealers will not handle securities
They will have to depend on some government financial
disap¬
Holders of these securities will have to find their own buyers tion for their capital funds.

With limitation

':

on

of smaller corporations and markets so they will practically
pear.
and

sellers.

'

.■

.■

.

NEW YORK CITY
Do

curities

not believe the small firms who

they

retailing

are

can

v,:'^rXOS'

lincoln, neb.
Certain to restrict

cannot take position in se¬

live.

.

,

regimentation.

It is obvious to anyone who has the

t

' 1 "-Vi «-<•"'

«y-.- •'

'•

••

•

A

entailed

in

the

same as

distribution

in favor of it.
Washington's—all brokers are crooks.

''

.

SMALL TEXAS

1%

a

or

on

or

effect

/ '

the

new york city

-

-

new

issues

on

If

*

'

'

j

"

and bonds

coming out; that in my

market.

\

2

are

necessary

..

.

..

.

to the writer'as if

seems

to-do about this situation.

;

..

T-;

■

induce

making

a

'■.

.

TERRE HAUTE, IND.

;

'
-

•

.

' '

5
_

*

handling them.

DENVER, COLO.

'

;

>

>

~

•

;

Rather think it will be a handicap in selling such securities.

{• * -Will'restrict market."5 •*.

1

a

"fair"

obtain

a

on a

a

-

sponsible for

metamor¬

For this

such issues

reason

as

Hayes and Mur¬

known before the war as
body builders, are also in the
up and coming class. All this
however

as

in

or

real

the

future.; I

merely pointing them out
candidates to be included

in the

buy list when market
permit.
;
*

conditions

*

*

*

•,

.

to

slop off to about
rally when the news

or so

stock selling at

is

good and decline when it is

bad.

The

ures

value

in the

and fail¬

successes

that will follow the inva¬

sion will

play a major part in
picture.

the market
■'

v.-

*

.*

More next

%

.:

Thursday.

—Walter
[The

views

article

do

expressed

•

Whyte
in

this

not

necessarily at any
time coincide with those of the
Chronicle. They are presented as
those of the author only.1

sale.
in¬

buy.
ark.

5% mark-up would

:/'y,
be

harmful to

NEW YORK

SUGAR
Exports—Imports—Futures

I

believe it would

have the

effect

of stiff ling such markets.
I
retarding the financing of smaller
corporations with resultant undesirable effects on employment of
many thousands of workers throughout the country.
I believe fur¬
ther that this question of
regulated mark-up would be disastrous to
the investment business should it become law.
Certainly too great
a
mark-up can be prosecuted under our present fraud laws.
believe further that it will lead to

new york

time

involved

He will have to

DIgby 4-2727

Established

city

in

investigating securities to discover ones
worthy of recommending, and then the follow up on these securities
(furthered and continued examination of them, which means inter¬
views with officers and
directors, inspection of plants, etc.) all this
work means either one of two
things.
2.

restrict his clientele

to those who

mark-up,

Member«
New

York

New

York

New

or

unscrupulous security

York

Stock

Exchange

Curb

Exchange

Cotton

Exchange

Commodity
are

very

1856

H. Hentz & Co.

Chicago
New

This would leave the small investor to the
mercy of the ignorant

the destruction of all

5, N. Y.

the

wealthy and buy in large quantities.

mean

WALt STREET

99
as

:
wichita, kans.

v

Orleans
And

Exchange,
Board
Cotton

other

of

Inc.
Trade

Exchange

Exchanget

(or insecurity) salesmen.

with
new york

small assets to secure capital.

city

N. Y.

Will impair the markets for securities of smaller
TOWN

from marketing or redistributing little
known but otherwise sound values in small corporations. Why should
a dealer spend time and money trying
to establish a good market

corporations,;,..

-fd

new york city

Will discourage dealers




this

phosis, should it take place.

new york city

-'

of the small dealers and remove the opportunity for corporations

SMALL VIRGINIA

bond selling

market of real value and

We consider the 5% mark-up rule would
market for securities for smaller corporations.

A SMALL WEST VIRGINIA TOWN

A

of

139

1. A dealer cannot
generally cover his cost with a.5%

'

If the dealer is confined to 5% it will

to

Broker¬

'-/'•'

'

.

ABILENE, TEXAS

care

trading.

The

COLUMBUS, NEB.

not

be able to

tremendous

business is a sideline for us; ?v

-'-Ruin it!

dog to the
chip side. The fortunes
war will be
principally re¬

'■

Marketwised it should make them better

you are

;No one will be very much interested in

age

t

-.').//

not

a

blue

market

-'vsv

boston, mass.

will

of

one

number of stocks which
may
well pass from the

Meanwhile I expect the

or two markets for a
given security, money invested is locked in
permanently unless a dealer can make more than 5% on a sale. The
subject requires considerably study.
Lacking any other standard or
vote for the 5%
rule, hoping it will be relaxed in some cases.

Probably restrict obtaining

withstand

can

Incidentally, while
discussing National Gypsuhi
it
might be interesting to

LAMBORN & CO.

.It may be sounding the death knell for

interested in it.

stocks

tide.

-

''

little rock,

spreads, but I for one
feel that the elimination of such dealers would be all to the good.
I
believe that we are going tor have to get along with less in the future
and I think that we should begin to school ourselves along these lines
at once.
This may be aside from the point, but just what is your fear
about this 5% mark-up?
Have you read an emanation of Thomas
D. Sheerin Company of Indianapolis, Ind., dated Feb. 29, 1944, en¬
titled "As We View It"?: Why don't you send for it as you should be

*

to present the

'

less rigid rule.
Manifestly a mark-up of 5%
100, is too much. Similarly, a mark-up of 5% on

-

,

certain dealers who have believed in terrific

i

these
the

am

we are

Brokers will

(From firm favoring rule)

Frankly it

Gypsum at 103/4 (now about
11) still act okay. Yet if the
market goes down neither of

one

Wilmington, del.

.

long of—-Crane at 22
(now about 25) and National

.

(From firm favoring rule)

is too little.

*

still

is

few

a

vestors

It will kill what is left of the business.

1

rule

Too rigid application of the rule would lead to destroy the market
for securities of small and little known
companies. If there exist only

FORT WORTH, TEXAS

'

5%

not to be persecuted by the SEC because of lawlessness
unscrupulous dealers, there must be some rule as to the
amount of mark-up which can be taken.
The present rule is an at¬
tempt to establish this amount. We believe that out of it will evolve

at

judgment cannot be handled on a 5% basis; and are really worth a
higher charge. Hence, this 5% rule would be hurtful; and certainly
is arbitrary.
•
/
HOUSTON, TEXAS
;
:
a

the

.v

■

new york city

TOWN

me;

of both stocks

There won't be

that

to do the business, due

us

.

*

the two issues this column is

enjoy at least 10% net commission without having to split it with

-

.

sjs

ray,
feel

we

high overhead caused by research, etc.

their employers..

The actual inva¬

Mullins "B,"

securities of the smaller corporations, and furthermore it will drive
a large number of
good salesmen into commercial fields where they

.

and about all of my business is on
2% basis; but this rule will affect trades in low-value stocks
no

corporations

preclude small

can

/DALLAS, TEXAS '•'/

:Uv/''

In

less

or

con¬

On the individual stock side

Consequently he will follow line of least

Think they will go to the bottom. r

It will have

sold.

'

some

•

be

more

It will not make it worthwhile for the broker and salesman to

longer be able to pick out and study the

SMALL MISSISSIPPI TOWN

A

find

less unknown

' :

devote the extra time and effort which

if not destroy.

Will retard

must

can

expense

sold to the investor.
Hence fewer sales are made and cost
of obtaining names of prospective investors is
greater, so that more
than 5% of the sales price would be absorbed
by expenses.
For
this reason it is our opinion that the 5% rule would

of

A

which

With¬

changed it.

point out that it is

new york city

resistance and sell investment trust issues and new underwritings and
his clients will be the chief losers.« Furthermore, the business will be
Increasingly concentrated in the hands of the large underwriting
houses.'
"
.":'V

/'

or

specialists in inactive securities
would frequently make it impossible for

NEW YORK CITY

most attractive situations.

more

As

Their attitude is the
,

or

it cost them 2 points on bonds

me

securities

corporate financing.

are

unlisted block

an

must be

Brokerage houses should not belong
What do they do for the brokers?
Whatever brokers

no

of

ready distribution whereas small

NEW YORK CITY

A small dealer will

told

large, well-known corporations

lot of business.

support they'd collapse—we

for

expense

mark-up does not permit sufficient margin for the

other words,

to

to the NASD.

selling of

new york city
A 5%

:

V

or

curities, hence contributing nothing to the investment business.

They will have a poor market;'for, no salesman will waste his
on
them; and new. issues of that sort will probably find no
market.; In times such as these I'll sign X.

a

marketing

This will vary on amount of business done.

;;

It will kill

once

before that.

small invest¬

Trading
houses, or trading departments, or members of exchanges who are
primarily order takers like a grocery store, and do not render any
service nor have retail salesmen would not earn the 5%.
Likewise
they would never have or create a market for small or isolated se¬

time

:

distributing

or

ptetty large bank

to do busine'ss.

NEW YORK CITY
.

the

a

advance.

taking invasion into

•

death for

issue of securities.

^

;•

wholesaling

or

new

slightest knowledge of the

sure

,

ity,

a

sion hasn't

'

small corporations securities.
It allows nothing for a salesman who
has to make many personal calls.
It would allow nothing for liabil¬

If your interest

■■■•> <■"

city, mo.

investment business that the 5% rule is
ment firm.
It will completely freeze

in this matter is purely one of a financial publica¬
tion endeavoring to serve its subscribers, we earnestly feel that you
would be doing them a great service by acting in cooperation with the
best minds in the investment business rather than attacking the re¬
sult of much hard work and study by men who merit the confidence
of everyone in our profession.
'
'
If you have any other interest than this, you will, of course, be
guided by motives which we cannot here even attempt to analyze.
Let us say, however, that the writer of this letter has been in the
investment business in California for more than a quarter of a cen¬
tury, that he has been connected with the Investment Bankers Asso¬
ciation and with the NASD in an official capacity; that in all of his
conversations with the various investment dealers in this territory
concerning the letter of the Directors of the NASD; he has yet to find
any worthwhile legitimate organization who has not been perfectly
in accord with the philosophy expressed.
And, insofar as we can see
here, the only dealers that might not be in accord with this policy
letter would be those dealers who have not the good of the investment
business at heart.
<;
* i
''

'■

kansas

-

r

.

toward further

a move

<

top last week, and the week

a

this, but it is decidedly

2388)

sideration 144-145 looked like

memphis, tenn.

investment business in this country.
•

out

state town
,v>.•

Don't know about
a

page

sig¬

nal for

.

small new york

Detrimental.

ANGELES, CALIF.

v.<v

.

a

good many months we have been receiving from your of¬
fice reprints of articles which have been published in the Commercial
and Financial Chronicle concerning what you call the "5% spread
rule" of the NASD.
We have, of course, disregarded all of these
communications but when we received, under date of Mar. 22nd, a
questionnaire from you in this matter, it moves us to become more
articulate as we are considerably concerned with the future of the
.

/

the market.

I

(From firm favoring rule)
For

(Continued from

prove to be the culmination
of a move rather than a

.

V;

.

corpora¬

Tomorrow's Markets !
Walter Whyte
Savs

Will

certainly

lessening of market activity and will eVenUially prove injurious to the stockholders of small
cause

corporations.

Cotton

NEW
b

.

'GfilCAQO

t

Exchange Bldg.

YORK
'

DETROIT

4, N. Y.
'
PITTSBURGH

„'^.q.».ttEKgVA. SWITZERLAND

2390

THE COMMERCIAL & FINANCIAL CHRONICLE

2. The

Hearing On NASD "5%
tection

of

investors

whether the

that

aforesaid

of

Oct. 25 and

the

on

3.

question

By letter dated Oct. 25, 1943, the Board of Governors of said
announced to its members, among other-things, that it
had approved the following interpretation of the meaning of the rule
quoted in the preceding paragraph:

Nov.

by the New York Security Dealers Association to the
SEC, as well as the petition filed by the Securities Dealers

Committee.

Association

"It

equitable

4.
of

a

"The said

is

••

customer

a

the

on

in

inconsistent

and

District Business

security

its

illegal

power.

it

nor

■

Director

sent

v.

.

general import of this statement and the construction

5%

over

on

the

exercise

of

a

In such

situation,

a

a

a member, it raises the ques¬
violation of the Rule and interpreta¬

duty is imposed

no

we

of the hearing has been thus

feel this is not the end.

If the

philosophy

is held to be

a mere
interpretation, the other questions will
necessity have to be presented at some time, to another
forum, or other fora, for determination.

of

The full text of the SEC's

notice of

order for

proceedings and

hearing follows:

filed

^;^:v

V'-y,

■

of

Section

■

'■■Vry;y vVyv..; ' V;,IT IS

•

y..;: ■

m

.

HEREBY ORDERED

that

shares of

Securities

SECURITIES

1934

INC.

as

amended.

DuBOIS, Secretary.

the Merchant
be

Armed Forces Overseas
Postmaster Albert Goldman
nounced
Office
D.

Washington,

Department,

C., advises that in order that
parcels may reach the

Christmas

time

on

condition,

and

in

good

arrangements
have
the Post Office De¬

been made by

partment, in cooperation with the
War and Navy Departments (the
latter including the Marines and
Coast Guard) for the acceptance




mailed

Marine-should also

addition

address

of

to

the

which

sender,
inscriptions

such

is
as

"Please Do
Christmas,"
"With Best

Not

Open
Until
"Happy New Year,"

Wishes"

and

placed

the covering of the par¬

cel in such

the

like

manner as

fere with the address

enclosed

of,

be

may

not to inter¬
or

therewith.

on

Attractive Situations
Ward &

and

name

the

required,
"Merry Christmas,"

on

taxes

between

Sept. 15 and
1944, if delivery by Dec.
25, 1944, is desired.
"In

income

card

a

Books

may

York
lars

Co., 120 Broadway, New

City, have prepared circur
situations

several

on

which

offer attractive possi¬
bilities, the firm believes. Copies
of these circulars, on the follow¬
ing issues, may be had from Ward
& Co. upon request.
:
currently

.

Mont

Du

.

,

,

Laboratories

"A";
Merchants
Distilling;
CrowellCollier Publishing; P. R. Mallory;

the continental United States. The

General
Instrument:
Long Bell
inscrip¬
Lumber Co.; Great American Inpersonal
correspondence. Stickers or labels dustries; Mid-Continent Airline^;
Massachusetts Power & Light $2
resembling postage stamps are not

announcement states:

permissible

such

of
our

parcels

armed

for members of
serving outside

forces

"Christmas cards and Christmas

bear

forces

overseas

must

be

mailed

simple

tions not of

nature of

the outside of par¬

on

"The

term

'armed forces

seas' includes the

armed

forces

mail

P. O. in

the better.

dedicatory

a

cels.

parcels for personnel of the armed

who

through
care

over¬

personnel of

an

receive

A.P.O.

or

our

Department

envelopes

and

advises

prepaid

at

with

tion

Isle, Maine,
through

or

requests
from
the
ad¬
dressees are required in connec¬
Christmas

parcels
mailed to Army personnel during

period only. Patrons should
gift parcel "Christ¬
Parcel."
Special effort will

made

to

effect

parcels

delivery of all
mailed during

more

or

than

one

Christmas

package will be accepted

mailing in

any one

week when

sent by or on behalf of the same
person
same

or

concern

to

or

for

the

addressee.

"Christmas mail for members of

Mohawk

Fleet

station
of

in

Minneapolis, Minn.,

naval installation

care

of

the

Seattle.

or

postmaster

Co.

common,

the

St.

which is

Louis

Stock

.

1 v<

offers

Gas

&

an

attractive situa¬

tion, according to a memorandum
issued by Boenning & Co., 1606

Street, Philadelphia, Pa.
Copies of this interesting memo¬
randum may be had from Boen¬
Walnut

ning & Co. upon request.

Attractive Situations

listed

a

on

Exchange,

interesting situation,

cording to

•

Common stock of Federal Water

The

Laclede-Christy Clay Products

an

American!

.

Attractive Situation

offers

and

Interesting Situation

of the postmaster at

or
a

Rubber,

Export Airlines.

New

postmaster at Miami, Fla., Presque

War

ac¬

memorandum issued

situations

current

in Loft

Candy Corp., Majestic Radio and
Television, and Allen du Mont
Laboratories offer attractive pos¬
sibilities

according to

dum issued by

a memoran¬

J. F. Reilly & Co:,

by Herzog & Co.,

170 Broadway,

111

New York

Copies

Copies of these interesting memo¬

City.

memorandum

from Herzog

may

& Co.

of this

be

obtained

upon

request.

.

preferred; Majestic Radio; Magnavox
Corp.; Brockway Motors,

their

York, N. Y., San Francisco,
Calif., New Orleans, La., Seattle,
Wash., or an A.P.O. in care of the

for

as

of R. B.

stock

$1,346,120, amounted to $484,553,,
equivalent to $1.21 per share. Net
profits for the three months to
March 31,1944, amounted,to $142,160, equal to 35 cents per share.
According to the prospectus, the
company intends to apply for the
listing of its stock upon the New
York Curb Exchange.

Oct. 15,

an¬

that the Post

June 5

on

addressees

parcel

Exchange Act of 1934

6

101,300

new

Federal

after

i

Christmas Mail For

Christmas

Inc., is a
provisions

June

on

sold

Giving effect to the new financ¬
ing, the company will have out¬
standing 400,000 shares of $1 par
common stock. Net profits for 1943,

a

a. m.

ORVAL L.

"Not

1. The National Association • of
Securities Dealers,
national securities association
registered pursuant to the
of Section 15A
(a) of the Securities and

common

represents

Dealers, Inc., the New York
Security Dealers Association, and the "Securities Dealers Committee"
personally or by registered mail not less than seven (7) days prior
to the time of the hearing.

that period in time for Christmas.

The Commission's official files disclose that:

Co.

Of the stock

the National Association of Securities

on

be

Amended

&

quickly

Semler, Inc., at $10.50 per share.

hearing on such question be
on Tuesday, June 13,
1944,
at the office of the Securities and Exchange
Commission, 18th and
Locust Streets, in the City of Philadelphia
3, Pennsylvania.
'

held before the Commission at 10:30

mas

(k)
of
the
Exchange Act of

and

9, 1943, constitute a rule or rules and,
if so, whether the Commission should take any action
pursuant to
Section ISA (k) of the Securities Exchange Act of 1934 as amended.

endorse each

15A

NATIONAL ASSOCIATION OF

DEALERS,

Proceedings
and
Hearing
Under

Eberstadt

F.

offered, 15,000 shares
financing by the
company
for general corporate
purposes,
the
balance,
86,300
shares, having been acquired from
y.y.d, certain large stockholders.

said letters of Oct. 25 and Nov.

this

for

Notice

~

Offered By Eberstadt
offered

sealed

session of the Securities and Exchange Commission,
held at its office in the City of Philadelphia, Pa.,
on the 1st day of
June, A. D., 1944.

on

Sender, Inc. Common

Commission, having considered the aforesaid, deems it neces¬
and appropriate in the public interest and for the protection of
investors that a hearing be held on the question whether the afore¬

sary

the first-class rate.

Exchange Commission

Order

Jersey, whose trustees
principal and divi¬
the
equipment trust

i 'i

upon

.V-It

"The

regular

In the Matter of

issuing company is wholly
by the Central Railroad

Corp.; Walter Stokes & Co.; F.
Yantis & Co., Inc.; Newburger &
Hano; Alfred O'Gara & Co.

their petition, and requesting "the rule herein
cancelled, revoked and declared a nullity."

hearing

a

referred to be

"No

The Rules of the

are

Weeks; Gregory & Son, Inc.; First
of Michigan Corp.; The Milwau¬
kee
Co.;
The
First
Cleveland

was

that Christmas greeting cards for
soldiers overseas must be sent in

United States of America
Securities and

Commission ;j
to provide not more
new equipment esti¬
mated to cost $4,971,157. This will
include 1,000 seventy-ton gondola
cars,
500 fifty-ton hopper cars
and 100 seventy-ton flat cars.
1-.
Commerce

the offering
Otis & Co., Inc.; L. F.
Rothschild & Co.; Hornblower &

petition referring to the letters of Oct. 25 and Nov. 9, 1943,
as a "rule" of the Association, asserting that the action
illegal upon various grounds stated in the petition, request¬

a

taken

Philadelphia

the

certificates, subject to In-;

Other members of

aforesaid,

the earlier

COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 3574
Before

The

terstate

'Securities Dealers Committee'"

as

during the period beginning Sept.
15, 1944, and ending Oct. 15, 1944,

SECURITIES AND EXCHANGE

at prices to yield 0.95 to
2.50%, according to maturity.

group are:

6. Thereafter, Messrs. William S. Baren, Baron G. Helbig, and
Benjamin S. Lichtenstein, as "representatives of a voluntary com¬
mittee of securities dealers known

By the Commission.

limited because

offered

dends

"(k) It tends to limit and destroy the markets for securities

It may be possible that as to some of these, the SEC is
without jurisdiction. If so, the Commission should make that
determination. <
1

to
are

certificates.

of the smaller corporations of the country and is therefore

Clearly, what the Securities and Exchange Commission
has done is to single out an issue and limit the
scope of its
hearing. We do not assume to pass upon its power so to do.
However, we are of the opinion that the public and the secur¬
ities industry would have been best served, if all the issues
raised by the petition were embraced within the
scope of
the hearing.

maturing

will guarantee

25, 1943, has the practical effect
of a rule and requesting the Commission to direct the National Asso¬
ciation of Securities Dealers, Inc., "to sumbit said 'rule' to its mem¬
bership as required in Article IV, Section 2 of its by-laws," or in
the alternative that the Commission "grant to the representatives of
the New York Security Dealers Association an opportunity for a
hearing to present its point of view." '
/
M

sales.

against
public interest and against public policy.
"(1) It is unconstitutional because it deprives securities
dealers of property rights without due process of law."

certificates,

from June" 15, 1945
June 15, 1959. The certificates

Co. of New

IT IS FURTHER ORDERED that this order and notice be served

scope

trust

ment

The

Following the events recited in the preceding paragraphs, the
New York Security Dealers Association adopted a resolution asserting

ing

on

public

annually

owned

the member to

upon

Inc.,

the

to

$3,720,000 of Central Railroad Co.
Pennsylvania's 21/4%
equip¬

5.

commerce.

"(j) It is contrary to the common law and to trade practices
and usage by inferring fraud merely from the spread between
purchase and sales price of securities despite the fact that no
representations of any kind accompanied such purchases and

regret that the

Equips

Co.,

of

the part of
a

&

than 75% of

Conduct Committees containing
•

offered

approval,

a

The

■

constitutes

,

j

any

7

violation has occurred."

the following grounds,

legislative function
which the Congress had neither the intention nor the power to
delegate to NASD, and which the Congress in fact never so
delegated.
'
"(f) It is a modification of the law and of trade custom and
usage, which the NASD is without legal right to effect.
"(g) It is unconstitutional because confiscatory since it dis¬
regards the profit motif in business.
'
"(h) It constitutes an illegal exercise of legislative powers
and governmental functions by a private association.
"(i) It constitutes a burden upon and impairment of inter¬

,

into

Stuart

Halsey,

price not

any

show the satisfaction of the Business Conduct Committee that

We quote them all:

upon

the manner of its passage has been
approved by the Securities and Exchange Commission.
"(c) It is monopolistic in its operation, contravenes the antimonopoly statutes in that it tends and will tend to eliminate the
small dealer in securities and thus cripple competition.
<
"(d) It was promulgated by an organization, to wit, NASD
created under an illegal statute, to wit, the Maloney Act, which
contravenes the law of the land because it is special legislation
in effect giving to the NASD certain exclusive and monopolistic
privileges amongst them that of having its members participate
in certain financial advantages and dealings to the exclusion of
non-members; as a result, the NASD is a body which is not
legally constituted and is therefore without any rule-making

a

and

that the Association's letter of Oct.

"(b) Neither

At

just

enter

at

Executive

things:

to whether there is

as

tion.

"(a) It° was not submitted to the vote of the NASD mem¬
bership as required by Article VII, Section 1 of the by-laws of

We

to

member

a

any

with

Nov. 9, 1943, the Chairman of the Board

Association

among other

mark-up of

..

said NASD.

"(e) It

"The

/

com¬

others:

state

of

following,

tion

"

.

number of issues.
rule

conduct

that should be placed upon it is that, when transactions show a

issue, the order of the Commission is
'

mittee raised

.

with

Subsequently and

Governors

the

"5% spread philosophy"

deemed

reasonably related to the current market price of the security."

However, the petition of the Securities Dealers Com¬

*

be

principles of trade for

transaction

interpretation.

plete.

among

shall

letter to all of its

As to that

Central RR of Pa
June

of said Association.

sent

or

Halsey, Sluari Offers f

being found in Section 1 of Article III of the Rules of Fair Practice

Our readers will recall that the columns of this paper
heretofore carried the full text of the resolution and letter

—rule

V;'.::'''

,

9, 1943, con¬
stitute a rule or rules, and, if so, whether the Commission should
take any action pursuant to Section 15A (k) of the Securities
Exchange Act of 1934 as amended."

All of these raised the issue of

provision reading as

a

' •'

•

member, in the conduct of his business, shall observe
high standards of commercial honor and just and equitable prin¬
ciples of trade."
'
!

.

held

be

hearing

a

letters

v:

•.

•

:

"A

Spread Philosophy"
(Continued from page 2363)

rules of such Association include

/

follows:

Thursday, June 8, 1944

Broadway,

randa may be
upon

request.

New

York

City.

had from the firm

Volume

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4288

159

2391

1

Calendar Of New Security Flotations
series

ALLEGHANY

filed

regis¬

a

convertible

for

1944.

proceeds,

"Chronicle,"

in

Details

'

Offered

Inc.,

CREAMERY

common,

scribed

for

pay

•7,998

shares

made
;

amount

to

of

1948,

$3,500,000;

to

improvement,! and bet¬
and

the

Dean

1,

properties

close of

be

&

&

Co.,

Co.,

San

New

Fran¬

,

v

.

Offering—Price to the
public
will be
by amendment.
Registration Statement No. 2-5383. Form

,

S-l.

(5-23-44).

MANUFACTURING

registered
Porter

paid

to

Net proceeds will be received

Associates,

the

The

Inc.

corporation

by

moneys

Porter

Asso¬

ciates, Inc., on account of the purchase of
shares

said

will,

of' $187,500,

sub¬

part

for

the

reimburse

the

estimated amount

the

in

$200,000

Inc., underwriters.
31,

Filed

corporation

expended

purchasing such shares.
May

registration

a

by

of

registered

and

souri-Kansas Pipe
Address—1221

City, Mo.,
Chicago.

stock,

common

shares

The

outstanding

CO.

without par
are
issued

owned

are

by

Mis¬

Line Co.

its

capital
the

135

necticut.

South

LaSalle

25.

stock,, of

EXCESS

INSURANCE

record

Mokan.
on

of

Such

3,

B

'

■

in

of

Pan¬

will

be

pf

sum

to

used

and

insur¬

$5,050,000.

payment by Mokan of the indebted¬
it

OF

will
stock

common

cording

to

holders

on

privilege
of

shares

nine

or

B

such

of

of

of

Class

Mokan

B

Panhandle

of

common

capital stock

combination

of

full

for

of Panhandle,

shares

two

part

any

or

stock

stock

common

shares

of

any

its
ac¬

by the stock¬
the right and

adopted

27, last,
exchanging all

basis

the

holder

March

the

of

of

capital stock

Class B

or

holdings

shares

each

to

plan

a

of

his

on

offer

180

or

of Mokan,

Class

and

common

capital stock of Mokan equivalent there¬
The

exchange

will

offer

April

expire

15, 1945.
Registration Statement No. 2-5390. Form

AMERICA

S-l.' (5-31-44).

$3,000,000

THURSDAY, JUNE 22

■

■

tional cash from its general funds as may
be necessary, will be used to redeem $3,mortgage gold
boHds, 6%
due 1951, at 102 and interest.
Filed

series

1944.
Details in "Chronicle" May
Bonds awarded to Kidder Pea'body & Co., June 5 on bid of 3.6448. the
'coupon rates varying from 1V2% to 4%. >.
Offered June 7 by Kidder, Peabody &
3,

May
11,

Business—General
and

first

'567,700

1944.

.

Pierce & Co., Inc., Equitable
Corp, and associates at prices

Securities

Offering—Shares
record
at

DRACKETT

THE

for

statement

tion

CO. filed a registra¬
$1,500,000 5% 15-vear

due June 1. 1959,

sinking fund debentures
and
$1

shares of common stock, par
Proceeds will be used tor

85,000

share.

per

payment of serial promissory notes $411,'045, plant and equipment $430,000, reim¬
burse
treasury
for
improvement
made
$110,000, general corporate purposes $1,033,955.r Details in "Chronicle," May 31.
Filed May 20,
1944.
Offered June 7 by
Van Alstyne, Noel & Co,,
Field Richards
& Co. and R. S. Dickson & Co., Inc., the
•bonds at 160 and interest and the stock at
.$8

INC., filed a reg-

113,333 V3

shares of

stock, par $1 per share.

Proceeds

'istration statement for
-common

.will be available for general corporate pur¬

pending specific application of

poses

Details

"funds.

"Chronicle,"

in

such
31.

May

May 23.
Offered June 7 by Lehman
•Brothers.at $13.75 per share.

'.Filed.

for

'Statement

tration
common

filed a regis¬
101,300 sha-res of

INC., has

SEMLER,

B.

R.

company's

Of the total 15,000

stock, par $1.

'and the remaining 86.300 shares

to be sold

Net

proceeds

by

stockholders.

present

for general corporate

be used

to

.are

15,000 shares by the company,

sale of

pur¬

F. Eberstadt & Co., heads the list
underwriters.
Filed May 20, 1944.
De¬

poses.
of

tails

in

"Chronicle,"

25.

May

by F. Eberstadt & Co. at

Offered June 6

$10.50 per share.

15,000
stock

—

shares of 6% cumulative preferred
$100).
Proceeds will be used
acquisition of a maximum of 8,649
of Western Grocer Co. 7% preferred

(par

for the
shares

of shares and $575,000 will be

,in exchange

Company also plans to issue
$3,250,000
face
amount
of
installment
promissory notes and use proceeds as ad¬
ditional working capital.
A. C. Allyn &
•Co.,
Inc., underwriter.
Filed March 16,
1944.
Details in "Chronicle," March 23,
share.

6%

and

Co.

OIL

SUNRAY

CORP.
for

statement

has filed a regis¬
$13,000,000 sinking

Bond

Preferred

proposed merger of Darby
Tulsa, Okla., into Sui*-

the

of

tion

•Petroleum Corp., of

!

in

Details

Offered

Dillon,

Corp.,

8

at

May

18,

May 25.
and interest

103

&

NEW FILINGS
of

statements

days

ago,

which

on

in

One

—

normal

registration
filed less than twenty
whose

issues
were

grouped

according

registration
course

to

statements

become

dates
will

effective,

un¬

SEC.

of

its

Seltsam

used

increase

to

work¬

Place,

(6-3-44).

OF

of

We

below

present

twenty

days

offering
mined

filed

000

shares

FIRE

INSURANCE

CO.

registration statement for 50.common: stock, $20 par,

a

of

a|fd
"

voting trust certificates for said stock.

>

Business—Company is proposed to be or¬

ganized

as

a

succeed

to

the

Pennsylvania

which

and

business

the Mutual Fire

Insurance

will

then

corporation
property

Co.

exist.

or

list

a

more

dates

or

of Mutual are.
pre-emptive rights to subscribe for

Offering—Policyholders
to have

stock

common

at $20

per

for

and

of

share in pro¬

policies

insurance

upon

Mutual.

issued

Co.

Filed

sale

have

the

exchange of the above mentioned letters will undoubt¬
edly assure this being the case to a still greater extent. How¬
ever, this does not alter the fact that the "5% philosophy"
does in effect constitute

Voting

trust

shares 'in

voting

the

company '^capital share
in legal securities.

for

trust

A.

to

Mr. Fish's letter of

1616

deter

a

retained

account

and

invested

Cushman
Trust.

as

(5-29-44)j

"Chron¬

INC.

debentures,

Feb.

1, 1951
Shares (for

and

capital.

Pacific

Co.

and

Calif,

H.

Details

in

pre¬

filed

E.

Dearnley,

trust

commcra

Address

members

voting

trustees,

BISCUIT

Germantown

form

voting

a

See

years.

March

Avenue,

trust

above

MONDAY, JUNE
AMERICAN MACHINE

for

a

registra¬

shares

of

cents.

Proceeds

working

statement

stock,

common

will

capital

be

and

for

METALS, INC.,

will

debentures

be

supplied

by

of

11*

Details in

1944.

the

Registration

Sixth

Avenue,

New

York

one

to

other

underwriters.

share

subscription
and

68,450

of capital

for

each

price

time

filed

with

names

shares

of

capital

for subscription to
stock at the rate of

four shares

The

well as the record
subscription warrants

amendment.

price

the

The

debentures

public

amendment.

by

of

held.

as

when

by

correct in interpreting the

is

Very truly yours,
■

(Signed) Irving D. Fish,
Chairman, District Committee 13

ASSOCIATION

SECURITIES DEALERS, INC.

OF

has

12'A
augment
corporate

Filed

May

"Chronicle," May 18,

$30

PAPER

stock

common

lic

withdrawn

May

share,

per

employees

at

a

group

$21.50

per

registration

and

($446,000)
capital.

1616 Walnut Street,

Philadelphia 3, Pa.

-

.

"

-

June 6,

Mr. Irving D. Fish, Chairman,
District No. 13 Committee,
111

Inc.

'

Broadway,

New York, N.

1944

■*/..;

National Association of Securities Dealers,

,

Y.

Dear Mr. Fish:

of officers and
share under a

Net

prospectus.
to

are

being

are

be

for

used

Filed

March

Co.
1944.

30,

"Chronicle," April 6, 1944.

EQUIPMENT
registration

will

be

registration statement for $300,000

of the debentures and stock will be applied.

FINANCE

statement

non-cumulative
Price

to

the

filed

CORP.

for

series

public

a

KANSAS

Very truly yours,

(Signed) Ralph Chapman, Chairman

acquisition of factory and
buildings and additional trucks,

NEBRASKA

-

NATURAL

GAS

has filed a registration state¬
$1,500,000 first mortgage sinking

INC.,
for

fund bonds 4%

series C,

Republic

derwriter.

Co.,

Price

Chicago,

exclusive

1,

1944.

un¬
accrued

of

Proceeds

Details in

purposes.

icle," April 27,

due April 1, 1959.

Inc.,

107

froih April

construction

for

"Chron¬

underwriters

&

-

NEBRASKA

ment

has

for

2,000

preferred stock
of

common

the
mon

held.

filed

NATURAL

registration

a

shares

($5

of

$5

state¬

cumulative

Holders

par).

of

stock of record May 12 are offered

right

to

at $6.59

Rights

subscribed

purchase
a

one

share

of

com¬

share for each four shares

expire

shares

May

will

be

26,

1944.

taken

up

a

share and offered

at

Harold

Topeka;

Co.,

Paul;. Rauscher,

St.

United

Trust

Co.

of

E.

Wood &

Co..

Pierce & Co., Dallas;
Abilene, Kansas, and

Un¬

by the

ment

7%

amounting to $7.83 V3

stock

a

share on the

share on the 6%

,

April

1944.

25,

Details

in

"Chronicle,"

OF

OKLA.—$1.-

May 4.

SERVICE

registered 15,000 shares of 5%
preferred
stock
($100 par).

cumulative

offering to holders of its out¬
7%
cumulative preferred stock,
A,
and
6%
cumulative preferred

Company is

SERVICE

CO.

cumulative

5%

500,000

has

a

The exchange offer will expire
at
noon
on
May 20.
Underwriters are
Milwaukee
Co.,
5,750 shares;
Wisconsin
Co., 4,750; Morris F. Fox & Co.,
1,500;
Loewi & Co., 1,500; Bingham, Sheldon fo
Co.,
1,000 all of Milwaukee, and A. C.
Tarras & Co., Winona, Minn., 50O.
Filed

PUBLIC

"Chronicle," April 27, 1944.
MISSISSIPPI VALLEY PUBLIC

CO.

and $2.66%

preferred.

Inc., Minneapolis. Details

GAS

(no par), and 58,636 shares

stock

common

public

Frank & Belden,

1944.

INC.,

$6.50

at

$7 per share.
Offering
price of the preferred to the public is
$105 a share.
Proceeds from sale of stock
will
be
used
to
defray
costs
of con¬
struction expenditures.
Underwriters for
stock are First Trust Co. of Lincoln. Neb.;
Cruttenden & Co., Chicago; Beecroft, Cole
the

to

in

KANSAS

CO.,

review under the Rules of Fair Practice.

or

$100 per share.

May 19, 1944. Details in "Chronicle,"
May 25.

interest

directed by the Board to

preferred, par

Filed

Central

was

for

warehouse

CO.,

1

advise you that you are correct
in your understanding that the policy announced by the Board in
its letter of Oct. 25, and the subsequent letter of Nov. 9, 1943, is
not a rule, but should be considered by District Business Conduct
Committees as a desirable objective or yardstick, neither more nor
less and be employed by them in the light of the circumstances sur¬
rounding eaeh transaction which may be the subject of examination
I

:

shares

14,000

2

Board of Gov¬

18, 1944, was presented to the
1944.

at its meeting June 5,

ernors

to pub¬

Kirkpatrick-Pettis

underwriters.

Details in

Price

1,717 shares

proceeds

are

CO.—15,000 shares

(par $1).

currently offered to

to be offered

are

holders

be

underwriter,

supplied by amendment.

Offering—The

whether District Com¬

policy announced by those
letters as constituting a desirable objective or yardstick to be con¬
sidered by the District Business Conduct Committee in applying the
Rules of Fair Practice in the light of the circumstances surrounding
the particular transaction under examination?
13

value

par
used

for

statement

CARPENTER
of

ment

City.
Business—Manufacture. of machinery etc.
Underwriting—Hornblower & Weeks is

the

Board of

1943.

Would the Board of Governors advise us
mittee

200,000

Alstyne, Noel & Co., and
Higbie Corp. are named repre¬

M.

Proceeds
&

amendment.

of others to be

25 and Nov. 9,

of Oct.

Governors

9,

Van

purposes.
sentatives

$100.

19

a

principal

questions from its

outlined in the letters of the

•

4%

Address—100

■

working

CORPORATION

registration

a

separate

Registration-Statement No. 2-5389. Form
F-l. (5-29-44).

the

the policy

under

NATIONAL
BURRY

filed

working

,

f,,

,

,

1944.

CO.

Jones

'

ten

of

W.

capital stock, par $20.

5521

—

Purpose—To

period

INSURANCE

Arthur

registration
statement for
certificates for 50,000 shares

of the

;

•

Your letter of May
FIRE

a

voting

Chapman:

and

"Chronicle,"

:a

"

...

1943.

Dealers, Inc.,

30,1944.

Emhardt,

Charles

Governors,

Walnut Street,

Wyeth
Filed Dec. 20,

Co. named underwriters.

Chapman, Chairman,

conversion).

loans

of

1943,

of

prior

of

purpose

retire bank

$300,000

—

series

11,400

1944.

.,

GERMANTOWN
—William

stock,

May 18 and the recent reply thereto

District Committee 13 has received numerous

Courts

underwriters.

Details in

1944.

to

&

Cushman

A.

principal

PRODUCTS,

Proceeds

Registration Statement No. 2-5388. Form

filed

rule and should therefore be abro¬

Philadelphia 3, Pa.

us.

L.

Allen

1944.

29,

convertible

due

of

Cushman

named

are

March

Carlton

period of 10 years.
Proceeds—Will be added to and

have

a

gated or rescinded so that members of the NASD may have
no
qualms about conducting their business in accord with
trade custom and usage as had formerly been the case prior
to the birth of the "5% philosophy."

National Association of Securities

whose

been

not

that

Bryan

BEN-HUR

5%

is

L.

of

icle," April 6,

by

certificates repre¬
senting shares not subscribed will be of¬
fered
to the general public at the same
price.
All stockholders will be asked to

and

members

country.
■/"'
1
•
Fortunately, due to the "Chronicle" campaign agaigst
the 5% rule, it has not been enforced in most districts and

portion to the respective premiums paid by

S-l.

in the next issue of NASD "News," which
of the Association throughout the

appear

to

Board of

Issue*

but

ago,

unknown

are

Martha

trustees

ferred

Philadel¬

Co.,

&

of

of German-

to

cease

Underwriting—Bioren
phia.

in

sent

May 18, 1944

AMERICAN BAKERIES CO.—13,000 shrs.
class B stock (no par).
The stock of¬

fered

to

Proceeds—The net proceeds from the sale




they will
is

Dear Mr.

&

Address—5521 Germantown Avenue, Phil¬

adelphia.

has

INC.,

sent at this time to all members in District No. 13 and that

Mr. Ralph

whose registration statements were filed

incorporation,

(5-29-44).

them

Governors, which met

City on June 5 and 6, Chairman Chapman re¬
plied to Mr. Fish under the latter date, and declared that the
"policy announced by the Board in its letter to District Busi¬
ness Conduct Committees of Oct. 26 and the subsequent let¬
ter of Nov. 9,1943, is not a rule," but was intended as a guide
or
yardstick in determining the merits of dealer mark-ups.
Both the letter sent by Mr. Fish and Mr. Chapman's reply
are
reprinted below and we understand that copies will be

OFFERING

UNDETERMINED

of

the

At the direction of the Board of

automatically

may

by NASD Chairman Ralph Chapman are given herewith;

DATES

Jersey

investment.

Proceeds—For

town

and any infraction thereof
disciplinary action.

in New York

Registration Statement No. 2-5392. Form
A-2.

Registration Statement No. 2-5387. Form
A-l.

filed

SUNDAY, JUNE 11
a

be

rule

a

result in

•

sell and hold for

certificate

offering

filed

and

Kansas.

total

Offering—At market.

will

CO.,

Co.,

&

ing capital through the reduction of bank
loans.

to the provisions of a trust agreement.

date

MORRISON-KNUDSEN

Cole

Securities- Corp.

Co., Inc., Topeka,

investment, securities subject to the limita¬

named

accelerated at the discretion of the

less

Exchange

" ; \
Business—To purchase,

on

by

Co., The First Boston
Blyth & Co., Inc. and associates. 1

List

Beecroft,

—

Offering—Price to public $103 per share.

stock, without par value. The interest rate

Filed

,

"Chronicle,"
June

Read

53,702

Fund,

194*.

underwriter.

cipal

business.

Columbian

154,173

and

Stock

registration statement for $2,000,C00 15-year sinking fund debentures, due
June, 1959, and 68,450 shares of capital

Eastman,

debtedness.

for

"C"

Fund

has

INC.,

17th

Topeka,

&

and to retire mortgage in¬
Dillon & Co., prin-

Oil Corp.,

ray

a

of
par

mercan¬

tile

tute

shares.

Address

tions

$100

Street,

City, N. J.

the funds required for the consumnu

vide

to

Proceeds is to piu-.

debentures.

fund 33/4%

added

funds.

statement

Union

and

filed

shares

2,500

tion.

associates

tration

will be

FUNDS,

Union

207,875

East

Proceeds—To

registration

a

INC.,' has

for

cumulative,

Kan.

;

shares

preferred

May 31 by A. C. Allyn &
at 100 and dividend.

stock
■

shares, of

15,000

Offered

basis,

rata

pro

a

surplus

TRUSTEED

Philadelphia.

1944.
'

and

shares

applied to retirement of 5,750 shares of 6%
cumulative preferred of Sprague at $100
per

(5-29-44). V.

UNION

deposit

CORP.

SPRAGUE-WARNER-KENNEY

on

proceeds

capital

5%

Business—Engaged in wholesale

of

Registration Statement No. 2-5386. Form
S-l.

COMPANY,
statement

stock,

Underwriting

Proceeds—Net

'represent stock to be sold by the company

from

1944,

for

be

share.

per

has

NATIONAL AIRLINES,

•

preferred

Address—311

offered

stockholders

to

are

GERMANTOWN

share.

per

fidelity

value.

present

to

May 31,

$8

filed

maturity.
'

and

surety business.

subscription

100 and interest to 102.5496
according to coupon rate and

ranging from

casualty

FLEMING

registration

Underwriting—None named.

Co., Rauscher,

'and interest,

-

numerous questions
members," the nature of which, judging from the
contents of the communication, is that members of this dis¬
trict believe that the 5% mark-up policy does, in fact, consti¬

from its

or

common

banks

to

the

of

stated that District No. 13 "has received

•!

proceeds

companies

the basis

on

stock

capital stock' of
offer will expire

purchase

indebtedness

1944,

163,710

rata,

shares

1944.

Proceeds—Net

off

July

B

of Panhandle,

share,

per

Class

of

12,

Aug.

Class

on

common

10

the hold¬

and

pro
stock

common

each

for

shares

200

stock

purchase,

to
the

share

one

to.

CO.

letter, which he addressed to Ralph Chapman,
Governors, Mr. Fish

Chairman of the Association's Board of

will offer to

the price of $30

of

handle

for

^

In this

Street,

•

common

right

shares of

in

Details in "Chronicle,"

May

Irving D. Fish, Chairman of NASD District No. 13, which
embraces the States of New York, New Jersey and Con¬

Baltimore Avenue, Kansas

and
:

Offering—Mokan
of

Mark-Up Rule

(Continued from page 2363)

Underwriting-—None stated.

ers

in

it

Porter Associates,

SATURDAY, JUNE 17

statement

LINE

After

has

CO.

shares of common stock

100,000

$2 par value.

by.

PIPE

registration statement for 531,-

a

shares

and

EASTERN

ness,

HAYES

April

filed

has filed

ance

13

first mortgage serial bonds has filed a registration statement for 48,dated June 1, 1944 due each June 1 from
981
shares of capital stock,
par $5 per
1945 to 1959, inclusive.
Proceds from the, share.■
■
•sale of the bonds, together with such addi¬
Address—99 John Street, New York City.
■for

PANHANDLE

pay

TUESDAY, JUNE

And The 5%

Registration Statement No. 2-5391. Form
(5-31-44).
r

at

1945.

Read

Witter

to

NASD Board Oi Governors

Gauge Co.

.

plant

prior
and

RAILWAY & TERMINAL COM¬

has

of

States

S-l.

due

May 4.

"unromcle,"

PANY

$5,000,000

3 % %,

supplied

'

DALLAS

filed

Street,

Underwriting—Dillon,

cisco.

taken up by the undet29, 1944,
Details lu

were

Filed

writers.

Richards

additions,

terments

balance

The

shares.

92,435

for

stockholders

offered,

shares

(100,433

for

statement

principal

the

share.

per

LTD.,

in

Rights
'expire June 1.
Proceeds, together with
lother. treasury funds, will be used to re¬
deem
on
Aug,
1,
1944
approximately
'29,788
shares
(3316%)
of -company's
(outstanding
$4.25
cumulative
preferred
'stock at $105.50 per share.
Glore, Fofgan
!& Co.," are principal underwriters. Of the
$27.50

at

held

CO.,

promissory notes due June

one

shares

United

638

..Filed May 23,

ELECTRIC

lateral

Holders of

stockholders.

Daly,
Details

&

underwriters.

as

.

May 19 are given right to subscribe
additional
share for each •four

■record

tor

Idaho

Wegener

the

Mor-

Any part
orficials

Honolulu,
Hawaii.
>
I „■;
:
Business—Operating electric utility.
Proceeds—To pay the company's 3% col¬

subscrip¬

for

by

company

through

Address—900

Company

par).

($25

offering' the shares

offered

be

by

mortgage bonds, series D,
1, 1964.

Feb.

shares
is

100,433

for

statement
stock

common

initially
tion to

sold

registration

first

has filed a

CO.

sold

"Chronicle," May 31.

York

registration
of

Boise,

a

associates.

BEATRICE

$200,000

value.

!by Dillon, Read & Co., Hemphill, Noyes &
Co., The First Boston Corp., Mellon se¬
curities Corp., Smith, Barney & Co., and

.

and

Co., Inc., at par.

not

HAWAIIAN

interest

and

102.15

at

7

June

issue

be

in

stock

prefei'red

preferred stock, both $100 par

Serurities. will

the

will

25.

May

5%

rison-Knudsen
of

together with other
funds
of company,
will be used for the
redemption of all of the outstanding bonds
of Alleghany within 60 days from the date
of issuance of the notes,
including $21,66i,000 of 20-year collateral trust con¬
vertible 5s due June 1, 1949, and $19,137,000 of 20-year collateral trust convertible
5s, due April 1, 1950.
The notes are. to be
convertible into shares of the pledged com¬
mon stock of the Chesapeake & Ohio
Ry.
(or into substituted units of collateral as
'provided in the indenture).
Piled May 19,
Net

L 6%

value.

$30,000,000
3(4%'■
notes
due
April
15,

statement

secured

1954.

has

CORP.

tration

K

series

OFFERINGS

together wtyh additional funds from the
company's treasury, to repay a $3,000,000
temporary bank loan which was incurred
in the purchase last March of control of

preferred

stock

$100) and $6,600,000 first mortgage
bonds, series A 3 Vz % due Feb. 1,
1971.
Stock Is for exchange of $6 preferred of
(par

Southwestern

Light

share for

Power Co.
(sub¬
share basis.
Bonds
competitive bid¬

&

standing

sidiary)

series

will be offered for sale at

stock, series B, the privilege of exchanging
their

old

stock

share for share

ding.

on

Registration effective Jan. 10, 1944.
21. 1943. Details in "Chronicle,"

a

Filed Dec.

basis, with a cash adjust¬

March 16,

for

new

preferred

on

1944.

REMEMBER

Teletype—N. Y. 1-971

HAnover 2-0050

Alleghany Corp.
...

3%%, 1954

The Hecht Co.

Markets

Firm Trading

Thursday, June 8, 1944

FINANCIAL CHRONICLE

THE COMMERCIAL &

2392

IT is important to you, that, through us,
contacts

CUBAN SECURITIES

and local

nation-wide

R. B. Semler,

private-wire connections,

ARE placed entirely at your service, in making
GOVERNMENT

SUGAR

RAILROAD

,

HARL MARKS & HO. INC.

OVER- THE

trading markets in

and firm

accurate

New

-COUNTER SECURITIES
Alivays)

(Actual Trading Markets,

FOREIGN SECURITIES

"

England Pub. Serve.

M. S. WlEN & Co.

1

SPECIALISTS

50 Broad Street

AFFILIATE: CARL MARKS & CO. Inc.

HAnover 2-8780
Y. 1-1397

n.

Teletype

CHICAGO

Ass'n

Y. Security Dealers

Members N.

25 Broad St., N.Y.

New York 4, N. Y.

,

Inc.

The Drackett Co.

Company

Kobbe, Gearhart &
INCORPORATED

"Our Reporter
'

,

Members

On Governments"

By E. P. TEE

estimate made by the Federal Reserve Board

in its March

to increase central bank pur¬
much as $3,000,000,000 in order to keep
the market supplied with credit up to the time when the Fifth War
Loan starts, seems well on the way to fulfilment. ...
Government holdings of the 12 Reserve banks on March 1 aggre¬
"Bulletin" that it may be

REotob

Gary Railways Inc.

YORK 5

NEW

Bell
new

6015

Enterprise

2-3600

Association

Dealers

telephone

philadelphia

telephone

The

Security

STREET,

NASSAU

45

York

New

Teletype

Memphis Si. Railway

necessary

chases of Governments by as

gated $11,624,000,000.

.

.

.

These have been increased by over $2,600,-

000,000, to $14,250,000,000 as of May
Practically all of the securities

31

acquired came from the com¬
mercial banks.
This is indicated from the drop since March 1
to the latest reporting period of $1,700,000,000 in the holdings of
reporting banks in 101 cities. . . . These institutions have about
60% of the nation's commercial banking resources. ...
The principal factors necessitating such open market activ¬
ity have been the increase in money in circulation which rose
by $1,290,000,000, to above $22,000,000,000 during this period and
the loss of gold through foreign earmark which resulted in a
$448,000,000 depletion of our stockpile. ...
The balance of the credit need arose from the transfer of bal¬
ances
in War Loan accounts to private deposits (which must be
covered by reserves) as the Treasury drew on its funds to meet
.

.

.

Preferred

N. Y. S. E. And Others To

.

Counsel of the Treasury, appear¬

ruling of the General

A recent

in part¬

have

The banks

the application

and

law,
tax

of the

retroactive for a

be made

can

...

.

the indirect purchase of

DEFICIT

.

.

.

.

partnership changes among
firms and secur¬

Stock Exchange

Stock Exchange

cases

dealers

of

mon

ruling of the General Counsel

covering

Treasury

transfer taxes in connection

partnership changes:
"Advice is requested
of

admission

the

into the M

change

in

a

new

stock
with

whether
partner

Partnership effected a

the

ownership of

the

ship's books and a transfer of
legal title thereto which is sub¬
ject to stamp tax under Sections
1802 (b) and" 3481 of the Internal
Revenue Code, as amended.
"Sections 1802 (b) and 3481 of
Code,

as

nearly 10%.
Once

amended, impose a

tures.

we

continue to operate under deficit financing,

...

success,

of ultimate
cutbacks in war
resulting lower monthly Treas¬

of Europe

ury

outlay.

gives indication

expected in some quarters that

production will be sharp with a

The

which

INDEX

...

Pressurelube

Stocks.

Calendar of New Security

Standi. Coated Prod. Pfd.
Cent, of Ga. Mobile

5s, 1946

Canadian

Our

Utility Securities.,

Railroad
Real

2380
2378

Reporter on Governments

Public

W. T. BOM & CO.

Flotations 2391

Securities

Funds

Mutual

Securities

Estate

Telephone

New York 5

COrtlandt 7-0744

Teletype NY 1-886




Tomorrow's

Says

raise

is

$16,000,000,000 additional war financings,
apparently organized with greater care

^

Securities

been freely

raised.

more

C.C.A.

Commissioner

v.

2,

1935), 76 Fed. (2d), 520, Ct.D.
1009,
C.B.
XIV-2, 278
(1935);
Helvering
v.
Smith
(C.C.A 2,
1937), 90 Fed. (2d), 590; Ct. D.
1297 (C. B. 1938-1, 227.)
It fol¬
of

interests

effects

transfer

the

that

lows

such

the

of

joint

owners

change in ownership of

a

constitutes

securities which

incident

an

transfer

stock

to

and

tax

which

bond

transfer tax apply.

71

tions

(See Regula¬
Sections 113.33

(1941),

and 113.63.)

(f)

"It

is

held, therefore,
of

admission
the

M

new

a

that the

partner into

effected
a
ownership of the
securities carried on the partner¬
ship's books and a transfer of
legal title thereto which is subject
to stamp tax under Sections 1802
(b) and 3481 of the Internal Rev¬
change

Partnership

in

the

Code,

enue

amended.

as

:

,

"This problem is not a new one.
Stock
Exchange
officials have
been

the

discussing it off and on with
Treasury for years and, in

recent months, have been endeav¬

oring

to

At

licly.

them

argue

stand they

now

one

out

of the

have taken pub¬
time it was sug¬

basis for compromise,
tax be applied
the percentage of change in
partnership
interest.
In
other
words, if one 2% partner leaves
and another 2%. partner joins a
firm, the tax would be payable
only on 2% of the stocks owned
by the firm."

gested,
that

as a

the

transfer

to

Offerings Wanted

2368

Markets—Walter Whyte

2388

American Dept.

.

.

.

require vigorous techniques to stimu¬
The money is around, however, as indicated

Quaker City
Cold Storage 5s

by the recent Federal Reserve

that the goal will be

reached.

.

.

.

Incidentally, the banks might well publicize more the
and effort they are giving to make these drives go over. .
is

a

general lack of understanding on
large sections of the public.

among

Stores

6s

I

Nevertheless the job will
late the individual.

&

4s

...

Board survey of deposits which show
2392 large gains on the part of individuals. . . . The job is to pry this
2368 cash loose, particularly from the free spenders. ... With the selling
2367 experience gained in the preceding campaigns, it is safe to assume

i

Broadway

to

Monday,

than any of the previous campaigns. . . . Quotas have
employed among the banks and broker-dealer organiza¬
tions which normally account for about 80% of the total amount
2376

Page
Bank and Insurance

drive

starts

individuals

of

and efficiency

Eastern States Pfd.

Bell

invasion

as

the partnership's prop¬
erty in 'tenancy in partnership'—
a
form of
co-ownership.
(See
Sections 24, 25, Uniform Limited
Partnership
Act, and Commis¬
sioner's note to subdivision (1)
thereunder, 7 U.L.A., 31; Ross-

In

partnership agreement
was
amended to provide for the
admission of a new partner.
At
the time of such amendment the
the

FIFTH WAR LOAN

Tennessee Products

120

it is

association

an

the

1942

Act

adopted in a number of jurisdic¬
tions, is not a juristic entity but

stock
and
corporate
bonds, respectively, with certain
exemptions not here applicable.
"The M Partnership has both

corporate

general and limited partners.

Uniform

the

under

Partnership

the partnership's

...

the

or

stamp tax on the transfer of legal
title to shares or certificates of

preparing to contest the new rul¬
ing, and will, if necessary, carry
their case to the courts.
It is
contended that Congress merely
overlooked
the
change-in-part-

FINANCING

law

Limited

of holding

securities carried on the partner¬

the

a

new

a

nership and the formation of a
new
partnership, it is believed
that a partnership, either at com-*

remedy the situation.
The following is the text of the
the

effects

of

has never applied the
capital gains taxes, in
changes in partnership

edly be brought to have Congress
amend the Revenue Act and thus

associations, are

security

that the

the

whether

of

partner
dissolution of the part¬

admission

or

set-ups.

Firms and other

and this
may be expected for another year at least, some notable progress
has been made in closing the gap between receipts and expendi¬
While

Teletype
NY 1-492

,

"Irrespective

.

the drive securities.

St., N. Y. C. (4)

Telephone

securities.

partnership owned certain cor¬
porate securities. A new partner
in addition to drive subscrip¬
was admitted in that year and the
tions.
period it is estimated they took
question has arisen whether any
on
$3,000,000,000 on the same basis. ... In the August-November
stamp tax liability was incurred
1943 period it is estimated they bought $4,000,000,000 and.'during
nership situation in failing to with respect to the partnership
the January-March 1944 period they acquired $4,500,000,000. . . .
Thus it can be seen the amount of bank accumulation during each
For example, during the first 11 months of the present fiscal
.succeeding drive period has been in larger volume. , . .
year our gross receipts amounted to $37,700,000,000 compared with
There is every reason to expect this trend to continue, with
$17,700,000,000 in the corresponding period of the 1943 fiscal year.
bank purchases before, during and immediately after the Fifth
Higher income taxes were the answer. . . .
War Loan likely to aggregate as much as $5,000,000,000. ...
Our expenditures, which amounted during the same period to
The reason for this is that the new basket contains some ex-;
approximately $84,000,000,000 against $68,500,000,000 in 1943, resulted
tremely desirable bank paper, notably the new 114% notes and
in a net deficit of $46,500,000,000 compared with approximately $51,the new 2% bonds of 1954/52.
So the banks may buy not
000,000,000 in the preceding fiscal year. Thus, while our outlays have
only old issues for their particular needs, but engage actively in
been higher, we have succeeded in cutting the actual deficit by
open market issues
For the; March-June 1943

$2,400,000,000

80 Broad

BOwling Green 9-2590

Pressure will undoubt¬

Treasury
income

period of four years.
As

It is argued, also,

Code.

during the together with the Association of

caught on the technique of buying

period as indicated by careful estimates of purchases made in
the open market during the four previous campaigns. . . . During
the November 1942-February 1943 period it is estimated they bought

SlTTNER & CO.

is based

ship and the formation of a new partnership."
This ruling
Sections 1802 (b) and 3481 ol^the
Internal Revenue Code as exempt it from the provisions of
Section 1802 (b) of the Revenue
amended under the terms of the

on

.

drive

developments—earnings
incorporated in our memoranda

Recent

ing in the Internal Revenue Bulletin, holds that any change
nership of a firm subjects the new partnership to payment of the
stock transfer tax or securities held by it "irrespective of whether,
the admission of a new partner effects a dissolution of the partner¬

of the war. . . .
ity dealers occur with relative
Treasury bills and certificates accounted for the bulk of the
frequency, this ruling will in¬
central bank purchases. . . . Holdings of the former rose $2,118,000,000
volve
a
serious additional ex¬
and certificates advanced $450,000,000. . . . Notes also increased $294,pense to many firms, unless it can
000,000, but bond investments were off $238,000,00. , , .
be avoided by some device, not
MARKET ACTIVITY
•
.
vcontemplated in the law. Avoid¬
This over-all picture serves to explain in some measure why we ance may be had, it is believed,
have had limited market activity during recent montns. . . . v/hac by each firm when a change in
necessitous selling that the banks were confronted with in order to partnership occurs, setting up a
meet their reserve needs went directly into the central banks via the liquidation account in this way
bill repurchase agreement. . . . Some certificate dealings took place closing out its security holdings
and banks which had a little excess on hand presumably were active in the name of a single partner,
buyers of the bond section. , . .
acting
as
an
administrator or
Look for this condition of affairs to change once the Fifth
trustee.
War Loan gets under way next week. . , , It may be only tem¬
Although the issue has been
porary, but it should provide market activity and the oppor¬
under discussion between stock
tunity for some turns in the Government list. . . .
brokerage
firms
and Treasury
As soon as private balances start to swing over to War Loan officials for some time, the ruling
account (which are free of requirements), and this will happen as came as a surprise, and there is a
individuals and corporations buy the new securities, the excess re¬ complaint of insufficient warning
serve position will again build up rapidly. . . . Remember, War Loan
given by the Internal -Revenue
Moreover, if the ruling
accounts are down over $11,000,000,000 since the middle of Feb¬ Bureau.
ruary.
They stood under $7,000,000,000 at the start of this week is upheld some firms estimate
and will be close to $5,000,000,000 when the drive starts. . . . Before that they will be required to pay
the Fifth Loan is over they should go back close to the $18,000,000,000 from $10,000 to $240,000 in back
mark with an attendant large temporary unfreezing of bank credit taxes, because of the retroactive
and surplus of funds for investment. . . .
provisions in the law.
The New York Stock Exchange,
BANK BUYING DURING DRIVE
,

Contest Treasury Rule

Applying Transfer Tax In Partnership Changes

the heavy costs

,

Common

,

11576

yobb

free time
. . There

this phase of the situation
>

Hill, Thompson & Co., Inc.
Markets and

120
TpI

Situations

for

Dealers

Broadway, New York 5

PFVtor 2-2O20

Tele. NY 1-2660