Full text of Commercial and Financial Chronicle : March 11, 1954, Vol. 179, No. 5306

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\

ONItfERSTTY
CAN

OF MICH

/

ESTABLISHED 1S39

lu4

MAR 12

trasss isma

Tk £

Financial

Chronicle

Reg. U. 8. Pat. Office

Volume

Number 5306

179

New York

7, N. Y., Thursday, March 11, 1954

Price

Cents

40

Copy

a

EDITORIAL

A Look Ahead

As
The

that

danger

the

it

which

have

is

the

clear

and

urgent duty of Con¬
gress to enact at this session. Should adjourn¬
ment presently come before these vital laws are

We have

of

desire

no

place to

the

intention at this time

or

If

George substitute. No one well acquainted with
high-handedness of Franklin D. Roosevelt and

the

nothing of cer¬
history long before the'Thirties—can well doubt that a
problem exists
which Senators Bricker and
George have under¬
taken

solve.

to

It

is

likewise

By

and

is

are sure

in this

we

of in

do not
our

pretend to know. What

own

forecasters

dividual

erally

that all

are

sort

of

a

mechanism to

be

sure

alert and

Let

be

me

actions

In

accepted

I

an

want

themselves; digest the
submitted in huge volume
by 21 staff economists (to be pub¬
lished later) and by outside talent;

direct

page

26

a

influential

Congress

forecast

E

w

scarcely have

Hoadley, Jr.

to

(1)

well

developments

the next several

over

1954 in

place

better perspective,

years

(2)

as

Dr.

Melchior

between the two

to

The liberals

major questions.

and

economic trends

as

been expected

short notice.

on

delegated
by
divided between

revise

leaned

parties, could

their economics

one

the

way,

As to the

con¬

in order to

where

most

of

Presidential appoint¬

seven

large industrialists—it

them

stood

on

the

was

secret

no

relevant

issues

challenge to

the

Palyi

servatives the other way, with one or two in-between's on

fresh look at what lies ahead,

attention

members

equally

the two Houses

gen-

frequently

a

and

carefully phrased piece of
nearly 30,000 words covering a mul¬
titude of problems.
The ten highly

remind

any

decisions

momentous

write

a

warns

attempt to take
to

among

ees—five of them

of

foreign economic policy.

Continued

on

page

28

The

Chairman,

Inland

Steel's

brilliant Mr.

Clarence

i

♦An

on

out

strong

in

In record

material

of

rooted

its

six

time,

history

wary

it

traveling to and from
Europe and holding extensive hear¬
ings, the 17 members had to argue it

refinement of this

that

to

in

due.

was

com¬

prepare

delivering

report,

weeks before it
short

tougher;

diligent in the fight against
carefully and shrewdly planned subversion—so
Continued

majority

bring results different from those commonly foreseen.

As to

some

sufficed for the Commission to

year

point

produced in remarkable haste.

was

plete its studies and to

unanimity in outlook views, for in¬

discard.

McCarthyism and communism, there is
so
much to regret, so much
utterly needless
demagoguery, and yet so painfully obvious a

little

or

however,

you,

pushing really urgent matters into practical

for

get

an

make

really

"standard" forecast.

it, and to make the effort at the obvious risk

need

will

covering approximately the same
Starting

It

unexplained delay, 75 days

in 1954.

further rehash

Congress is warranted in making what ap¬
pears almost certain to be a vain effort to correct

-

the

report,

ground.
with

national business performance
1952 looks like par for the

a

There's

that

of

competition

course

urgent

so

Commission's

close to
we

mind is that the situation

respect at this moment is not

agreement,

common

the Paley report, the Bell re¬
and the Sawyer report, here comes the Randall

port,

you

ahead shapes up reasonably well; but
few new records are expected to be

dangers presented by their solution. What the

see

with

eral order of 5% from the 1953 level.

set;

answer

to

check

Holds

individual dissents.

>

individually, I'm sure I
would find that all of you are
thoroughly familiar with
the most widely held (i.e., the
"standard") forecast of
1954 business. Doesn't it go
something like this: General
business will be down moderately
this year, with the drop in the gen¬

the

easy

could

I

numerous

After the Gray report,

leadership,

or

Report of Randall Commission and

for the

reasons

Report "offers prescriptions wilhout diagnosis," and
lays failure to remedy the dollar gap to inability of soft
currency nations to raise per-man output, an issue side¬
stepped in the Report. Concludes distinction between
military aid and economic aid is a fallacy.

(1) a large home building
(2) a cautious inventory situation; (3) a
greater dispersion of profit performance among individual firms, and (4) an Administration that will be a
supporting influence in the economy. Concludes, 1954
will be a year of challenge to banking and business

judgment upon the merits
Bricker proposals or of the

his New Deal managers—to
say
tain incidents in our

the

program;

pass

so-called

Dr. Palyi discusses

favorable business aspects:

taken to the statute books, not
only the legislators
immediately concerned, but the Republican party
would carry a heavy burden of
responsibility,

in this

By MELCHIOR PALYI

Hoadley, pointing out current year requires some
sound means of bridging the moderate economic gap
ranging from boom conditions of the early '50s to re¬
sumption of still greater potentialities later, lists among

developed

Report-

Back to Marshall Plans

Armstrong Cork Company

Dr.

Republican party and the Administra¬
seriously interfere with legislation

will

which

Economist,

to have grown quite real

seems

controversies

within the
tion

We Se
It

The Randall

By WALTER E. HOADLEY, JR.*

address

Conference

of

by
the

Dr.

Hoadley

American

before

Bankers

the

National

Sixth

Association,

Chicago,

Credit
111.

Continued

on

page

32

(
ON THE INSIDE—A glance at the
tion of vital
is

U. S. Government,
State and

Municipal

3 vividly shows the wealth of informa¬
importance to the securities industry, investors and businessmen which
in the Thursday "Chronicle" every week throughout the year.
index

on page

*******

ALL
*

ON

ONE

■¥

CALL *

—

Municipal,

*

New

State and Revenue Bonds

Chemical

^

All Corporate & Foreign Bonds
Preferred

and

BOND

MABON & CO.

New

-K Members
115

N. Y. and Amer. Stock Exchs.

Broadway, N. Y. 5
Bell

System

4

THE NATIONAL CITY BANK

Teletype NY 1-2152

Bond

Dept. Teletype: NY 1-708

STREET

NEW YORK 5, N.

To

Active

T.LWatson&Co.

Dealers,

sugar
—

Liquid

Orders

CANADIAN

DIRECT

WIRES TO




PERTH

AMBOY

Detroit

Beach

•

•

NATIONAL

BANK

Pittsburgh

Coral Gables

OF THE an OF NEW

YORK

Geneva, Switzerland
Amsterdam, Holland

Hollywood, Fla. •

Puget Sound

CANADIAN

Power & Light Co.
Analysis

upon

request

y

DEPARTMENT

MONTREAL AND TORONTO

Goodbody
MEMBERS

BRIDGEPORT

YORK 4, N. Y.

All

Exports—Imports—Futures

DIgby 4-2727

CHASE

Bldg.

BONDS & STOCKS
On

Executed

Teletype NY 1-2270

American Stock1 Exchange

Established 1832

Bond Department

Exchange

Exchanges

other

Canadian Exchanges At Regular Rates

Members N. Y. Stock Exchange
Refined

Brokers

MINES, LTD.

NEW YORK 4, N. Y.

Inc.

Maintained

and

Y.

Commission

—

Banks

•

■,

Trade

SHERRITT GORDON

50 BROADWAY

Raw

Markets

of

THE

Miami

Net

WALL

Exchange

Exchange,

N. Y. Cotton Exchange

Chicago

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99

Cotton

Orleans Cotton

NEW

OF NEW YORK

*

RE 2-2820

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and

Sixty Years of Brokerage Service

DEPARTMENT

York

Chicago

^

Common Stocks

*

Bonds

Exchange

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Stock

Commodity

bank & trust

company

Municipal

Members

York

New

American

U. S. Government

1856

H. Hentz & Co.

Complete Brokerage Service
HAnover 2-3700

Established

i

MARKETS

Securities
telephone:

Slate and

available

Co.

NEW YORK STOCK EXCHANGE

115 BROADWAY
NEW

&

YORK

1 NORTH LA SALLE ST.

CHICAGO

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Grpokatioti
40 Exchange Place,

New York b, N. Y«

IRA HAUPT & CO.
Members New
and

other

111

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Teletype NY 1-702-3

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Boston

York Stock Exchangs

Principal Exchanges

Broadway, N. Y. 6
Teletype NY 1-2708

Telephone:

Enterprise

1820

2

The Commercial and Financial Chronicle

(1102)

We

The

position and trade in

Air Products
American

(The articles contained in this forum

they to be regarded,

are

GEORGE

Foremost Dairies

de¬

a

common

warrant

at

a

V

Tf

'

f.'

York 5

Teletype NY 1-583

specified

In

a

"call"

It is
an

p o

So

has

is

stock

a

selling

its

above

warrant's exer¬
dif¬

the

option price

cisable value is equal to the

ference, But it still possesses some

potential "value" even if the stock
sells below the option price. For

Members
York

American

instance, when Atlas Corp. war¬
rants were selling at 25 cents in

Stock Exchange
Stock

Exchange

BROADWAY, NEW YORK 5

120

1942, few persons thought it had
any possibilities — the stock had
to advance 18 points before the
warrants attained any value. But
these were ultimately to share in
the tremendous asset growth of
Atlas, rising sharply in price to a

Tel. REctor 2-7815

Trading Interest In

high of 13%.

American Furniture

The

Bassett Furniture Industries

lower

price

of

warrants

specific arithmetical
Of two securities en¬
joying an equal advance in price,
the. lower priced one will afford
greater percentage gains. So by
purchasing warrants, the investor
secures the advantage of this fea¬
gives them

a

advantage.

Camp Manufacturing
Commonwealth Natural Gas
Dan River Mills

Life Insurance Co. of Va.

ture.

Stock is selling

at

4%, and the warrants at 1%,
at which
price the latter carry
only an 11/16 point premium. The

TWX LY 77

LD 39

example, U. S. Air Condi¬

tioning Common

Lynchburg, Va.

should

warrants
in

move

.

a one

U. S. Air

holders
share

Conditioning Warrants

outstanding)
entitle
thereof to purchase one

(250,000

RED

the

with

point move in the
is equivalent to 57.1%.

24.2%,

warrants

Your

move

that while a one point
the stock is equivalent

stock, so
to

of

the

of

stock

common

for each warrant at a
price of 3-T/16 from March 24,
1954, until December 31, 1957.

company

CROSS

In other words, a three year

must carry on I

ten-months

call

these warrants

and
provided by

is

U. S. Air Con¬

on

ditioning Common, which is sell¬
ing at 4Vs

on

the American Stock

Exchange.

And Successor

Companies

New

York

Stock

25 Broad St.,

warrants

the

Ptow: HAnover 2-9768

Tele. NY 1-3222




outstand-

are

entered

up

ferred

more

usual ele¬

$7.00

par

scales

prospects

to

improvement has
productlve capacity
has been doubled
recently by lease of additional
manufacturing facilities, and fur(her
improvement
along
these
Steady

been made, however, and

forward

looked

be

to

confidently.

a

An intangible, yet undoubtedly
potentially vital factor, was the

appointment early
new president.
his

In

new

1953

in

Home

toward

time.

relatively

of

time he has been chief executive,

translated into

steps

and

$7,430,000 ' were

of:

sales

1953

profits of $108,090,
to

taken

were

ease

for

further

Trading Markets

secular

Fi¬

GENERAL CREDIT,

rec-

PANTEX MANUFACTURING

CINERAMA PRODUCTIONS

glass fiber industry
1931, when the
Owens-Illinois
Glass
Company
directed

its

research

REEVES SOUNDCRAFT

efforts

John R. Boland & Co., Inc.

toward the development of a new

product

stimulate

to

®®4

.

receding

30 Broad St.,

sales volume. In 1935, the Corning
Glass Works launched a similar

30 9-3242

million
(double last year's volume) with

ly

to

commensurate

and the staffs of the two
companies shared their findings.

the time the two companies
had jointly formed the OwensCorning Fiberglass Corporation in
By

they together had spent in
of $5 million on fibrous

excess

,

started

run

fiscal

new

smoothly.

year,

w!!™
were

$444,000, compared with $290,000
ln
November 1952, gain of 50%.
December

ed

shipments

were

afiect-

by expansion- moving opera-

tion

as

ary

shipments, bolstered by

ond

well

as

plant's

by holidays. Janu¬

output,

were

sec¬

about

^Pje Ihe $324,000 of January
19f double
/nt the
f$fbS?oynnnShr1^ml!ntS
$659,000 of Febru1953. March

GS m

jv

relatively

condi¬

air

new

expected to be

ln company s
.

I feel that

the

is

no

dynamic

herent

in

one

*2

air

It

is

.

.

in-

conditioning
,,

,

TT

„

A.

that U. S. Air

my opinion

Conditioning,

progressive management, and im-

blessed

is

by an extremely receptive
market. As

a

result, air

conditioning shares have

won

creasing

a

investor

favor,

in¬

in

many

cases

has

trend

pushed

with

proved finances is in

reasonable

values

performance.

based

on

cur¬

an

present

STOCK and BONO HOUSES

the

industry.

The

warrants

to be the

best and cheapest way to achieve
7
capital gams in this situation.
Market

.

(over-the-counter)

bid, offered at 1%.

reported

million

Funded

Debt and 3,140,694 shares of Common Stock.
Products

the

of

company

made from glass fibers

book containing over 8,000
all United' States and
Listings
are
arranged
geographically and
alphabetically,
and
are
comprehensively detailed:
1,400

listings

Firm

fine broomstraw,
glas air

usecj

ei

prom

of

hts

jn aircraft insula-

giass marble five-

one

inch

an

about

93

.00023

inches in

miles

of

diameter

in

basjc

filament

diameter

can

Street

have

of

many

of

Office

Post
"

Business

of

Clas»

&

Handled

Partners

or

Officers.

Names

Department Heads

Stock

E&gh^nge and Association Mem¬
berships '(including N.A.S.D.)

Phone

Numbers—Private

tions —Wire

An

city

Connec¬

in

Arrangements.

Clearance

—

ALPHABETICAL

showing

Phone

Systems —Teletype Numbers—

Correspondents

ROSTER

which

they

all

of

are

the

properties of ordinary glass. They
are
fireproof, - moisture-proof,
stretch-proof, rot- and
decaypr0of. They do not absorb ordors,

specific

tensile

either steel
The

or

in

durable

ENTER

HERBERT

YOUR

D.

limp fabrikoid—$12
TODAY

ORDER

SEIBERT

■

CO., INC.

&

New York 7, N. Y.

25 Park Place

REctor 2-9570

25S

higher

a

strength

than

aluminum,

characteristics

glass enable

a

application

of

of

fibrous

widely diversified
the

Company's
products. The latter break down

into

firms

located Is

another valuable feature.

Bound
fibers

including

Numbers

Character

Securities

Names

Is con¬

established

date

Address,

District

of

under which business

and

be

drawn.
The

name

General

used in Fiber-

as

filters, to the extremely

fine fibers
tion

a

cities.

ducted

are

ranging in

page

covering

Canadian

of

tke following major cateT

Over-the-Counter

Quotation Services
for 40 Years

Fiberglas
mainly

appear

last

as

$25

"Security Dealers of North America"
A

excellent

position to share in the growth of»

..

individual stock prices well above

its

of

weak alkalies, and have

.

factors

Owens-

OF

DIRECTORY

" are not affected by most acids or

will question

growth

the

named "Fiberglas."

Illinois Glass,
Corning
Glass
Works and the public each own a
one-third interest in the company.

size from about the diameter of

...

.

ir,_„

were

net

in

increase

profits if operations
AT

$15

about

to

run

New York 4

Teletypa NY 1-4487

program

consists

...

.

INC.

(Prospectus Available)

back, to

Capitalization

working capital pinch.
inc.

Bankers

industry

glass research and development
short w<>rkThe products developed

months)

Investment

&

Broadway, H,Y. 6 COrtlandt7-5680

excellent

ihe present

dates

1938,

undertaking he has

(11

Ltd.

18L7

Office Tokyo ^70 Branches

Brokers

111

ord of industry leadership appears
to be the best medium for participation in that growth,

not

can

Established

the

growth; and Owens-Corning
berglas because of its proven

fullest extent of its product

lines

ion,

Warman |

has

the

expand

Securities Co.,

opin¬
the glass

fiber

has

lines.

S.

Donald

are

shortages
of
operating
hitherto
to

Yamaichi

1
a

In my

and

able

publications

Japanese securities

on

seem

tilt

this

at

company

been

c a

»—

growth stocks

shares of common.

the

write

or

current

our

to

1* i

would
to

by
capital

Call
for

which

are

Hampered
difficulties

;

selection
eye

equities

999,500 shares of common out¬
standing. If all warrants are ex¬
ercised, capitalization would con¬

working

offices

in Japan

risk

of

fact

preferred

sist of 1,249,500

branch

our

Opportunities

currently

of

share,

closely held. There

are

to

Investment

than

cle,

the

no

Mobile, Ala.
wires

Direct

are

the

the

which has
the com¬
mon carries no voting rights. Over
50% of the 4,950 shares of pre¬

NY 1-1557

New Orleans, La.- Birmingham, Ala.

stages

attached

on

York 4, N. Y.

HAnover 2-0700

tfge of the

$77,962.50)
the

on

or

initial

enter, the

is

wealth of technical know-how,

rent

already

to

ment

industry.

i

Exchange

New York 4, N. Y.

have

be paid

can

Stock Exchange
Stock Exchange

^

for

tioning industry is marked by a

that

•

York

American

New

25 Broad St., New

WARMAN

company

dividend

a

of

cumulative

torv

consumer

@Mmheime/i &. £w

S.

DONALD

full priority. At present,

during this three year and tenmonth period, are of course, the
most
important
reasons
why I

The

Members

paid

.

Bought—Sold—Quoted

The

No dividend

total

cleared

ary

ingly attractive.

INTERNAL SECURITIES

Steiner, Rouse & Co.

2)

(Page

Members

self-contained

are

modest.

been

a

speculative possibilities af¬
forded by U. S. Air Conditioning,

think

GERMAN

City.

Members

were

The

I. G. FARBEN

S.

shown substantial progress, in the

For

STRADER,TAYLOR & CO., Inc

York

far, dollars and cents results

never

or

gains.

Bought—Sold—Quoted

Corp.

Donald

—

conditioners,
conditioners.

until all arrears ($15.75 per

Butler

A.

George

profitable
speculative medium for the inves¬
tor
seeking
long-term
capital

ffipONNELL&fO:

New

about

type

these

common.

t e nt ially

If

Co.,

we

store

window
of

have

a

therefore

Fiberglas

Stock

Warman, Granbery, Marache &

air washers.

packaged
units, accounting
roughly 73% of sales.

future

of

Corning

-

Common

products
Granbery, Ma rat-he & Co.,
are
widely diversified: refriger-^
New York
ated central station air condition¬
Members, New York Stock Exchange
ing systems, store conditioners,
window type room air condition¬
Gwsns-CDniing Fibsrglas Corporation—
Ccmrmn St:c!<
ers, home conditioners, fans and
blowers, coil unit heaters, evap¬
Because of the possibility ih?t
orative condensers, cooling tow¬

All

upon

company.

Since 1917'

New

Louisiana Securities

Corpora¬

lished trade position. Its

and

is

warrant

the

Owens

in¬

into the

capital

Kooler-Aire,

interesting,

Rights & Scrip

Conditioning

ma^e'TncIudrihr'he recessionary

essence,

success

Specialists in

Air

Largest selling items currently

period of time.

Exchange

risk

is a comparatively small
independent concern now exper¬
iencing rapid growth — U. S. Air
Conditioning. Successor to a firm
founded in 1933, it has an estab¬

ers,

stock

price
within
a
specified

1920

S.

I*

common

a

BArclay 7-5660

in

investors

is simply
an
option
or
right to buy

Member

120 Broadway, New

rise, lose less in

than

A

Corporation
Stock

cline,
stocks.

New York Hanseatic
Established

market

a

U. S. Truck Lines

Associate

By using warrants intelligently,
can
make more during

investors

Strong Cobb

Alabama &

Warrants—George A. But¬
Partner, Butler, Candee &
Moser, New York City. (Page 2)

dustry

Corporation Warrants

Corporation

Stromberg-Carlson

Week's

Participants and

ler,

nor

overlooked in the

less

or

of

rush

New York City

Pfd.

intended to be,

are not

More

BUTLER

A.

United States Air Conditioning

Standard Milling

U.

offer to sell the securities discussed.)

as an

Partner, Butler, Candee & Moser,

Investors Diversified Services 'A'

Mbrris Plan, $2.25

Thursday, March 11, 1954

.

tion

Cross Company

& Thermit

.

Their Selections

participate and give their reasons for favoring a particular security.

Brown-Allen Chemicals

American

different group of experts
advisory field from all sections of the country

in the investment and

American-Marietta

Polaroid

This
Forum

A continuous forum in which, each week, a

Maize Products

Metal

Security I Like Best

.

1%

as

wool products, used
thermal insulating ma-

terial and as sound absorbing
specially
gathered

formulated
in a wool-like,

ma-

National Quotation Bureaa

0*

Incorporated

glass,

Established 1913

light-

weight mass. Using its Fiberglas
Continued on page 35

46 Front Street
CHICAGO

New
SAN

Yorfc4,N.Y.
FRANCISCO

Volume 179

Number 5306

.

.

The Commercial and Financial Chronicle

.

(1103)

A

Long-Term Market View
1

INDEX

■ *

•

Articles and News

Partner and Director of Research, Arthur
Wiesenberger & Co.

Members, New York Stock Exchange

The

Randall

Report—Back

—Melchior

Asserting "we may well see a 150 point advance from recent
lows by early 1956," Mr. Gould declares the "law" of
the
business cycle has been altered, if not
repealed, and no major
bull market, such as the
present, has ended until there has
been

A
A

over-bought,
ridiculously high levels.
Says economic factors suggest a
period of rising earnings and dividends, and monetary con¬
ditions

Holds

indicate

to

as

A Dow of 400

well

see

150

a

1955

in

currently

of

fabric

under

for

way

21

the

years

have

quite

changed

past

indicated

re-

lieving

the

would
to

ac¬

etc., etc. The "law" of the business
cycle has been altered, if not re¬
in

the

form

banking

practices and normal competitive
operations
have
been
greatly

,

become

for be¬

reason

monetary

seriously

the

situation

sufficiently

tight

business

squeeze

True, the money
managers
have
assumed
a
far
more powerful and
important role
in economic

and

financial

than

ever

before

and

sions

and

actions

are

the

to

level

prices. Misgivings

as

general

were

their

tail-

carrying
many issues to over-bought, ridic¬
ulously high levels and greatly
inflaming long-term confidence.

At least 100 years of stock market

history suggests that before
bull market ends
such

will

we

this

just

see

development.

a

Here

is

some

of

the

reasoning

broken down by categories.

of

factors

the

are in a period of
rising earn¬
ings and dividends that will con¬

tinue rather than

In

reverse.

early
'51 the economy was
sufficiently
out of balance to suggest a policy
of

caution.

water

dustrial

$32 per

to

lot

a

of

the

over

the

dam.

Dow-Jones

In¬

rate for the

annum

blance

first-quarter 1951
rate for the 12 months

second-quarter 1952. Divi¬
dends per share of the Dow came
from

down

12

months

around

$17.50 for the

ended

second-quarter
1951 to about $15.50 for calendar
Since

1952.

then

Dow

easy

the

a

ris¬

ing trend.

fore¬

a

a

seem

next

dividend
not

of

$20

or

unreasonable

2 years.

On

a

5%

earnings
more

over

the

J.

-

more

No

a

less

or

City

15

We

Bank

indefinitely

think

they

are

too

intellectual

some

of

are,

enmasse,
never
volume
because

Bank

a

"Letter"

Cites

and

Coming

course,

high,

Unlisted

15 Broad Street, New York 5

Telephone
22

But

kind

of

credit

41

We maintain firm

trading markets in

Cover

Stocks—

16

stringency.

has been timid and

relatively

un-

wide

wave

calism

of socialism and radi¬

that

flowed

from

In

the

nation

pendulum
after

have

the

has

nation

Banks

and

.

•

Bankers

i__

was

recent

gone

simply

Continued
1 Now

9

on

a

con-

page

points.

I

Brunner
42

Prospective Security Offerings..

The Market

.

.

of

Washington

31

.

45

Corner

and

and

and

J

TELETYPE N. Y. 1-5
Glens Falls

Schenectady

•

Worcester

DANA

Park

Place,

REctor

C.

1

New

York
to

7,

DANA

N.

Thursday, March

11,

corporation

and

Chicago

city

news,

Offices:

3,

111.

135

news,

Subscription
Subscriptions

President

etc.).

(Telephone

STate

C.,

Eng¬

St.,

2-0613);

matter Febru¬

Union,
Canada,

of

Countries,

Bank

and

Note—On
rate

Members

$48.00

per

$51.00
per

U.

year;

per

S.

year.

year.

of

Record

the

—

Monthly,

fluctuations

of

made

in New

York

funds.

BROADWAY, NEW YORK 6
WHitehall

3-3960

Direct Wire to

PLEDGER

&

COMPANY

in

exchange, remittances for for¬
eign subscriptions and advertisements must
be

39

Teletype NY 1-4040 & 4041

(Foreign postage extra.)

account

INCORPORATE^)

of

in

Publication

Quotation

$33.00 per year.

States,

and

$55.00

Other

WM V. FRANKEL & CO.

Rates

United

Pan-American

the

Salle

in

Territories

Dominion
Other

1954

La

second-class

as

Possessions,

bank clearings,

South

E.

ary 25,
1942, at the post office at New
York, N. Y., under the Act of March 8, 1879.

Y.

Every Thursday (general news and ad¬
vertising issue) and every Monday (com¬
plete statistical issue — market quotation

Other

Remington Corporation

on

Copyright 1954 by William B. Dana
Company

9576

SEIBERT,

Gardens, London,
Edwards & Smith.

Reentered

COMPANY, Publishers

2-9570

c/o

Co.

Tracerlab Inc.

Drapers'

land,

and

A. Dunham

48

Experiment, Experience and Expansion"

HERBERT D. SEIBERT, Editor & Publisher

state

4
_

Reg. U. S. Patent Office

records,

Corp.

2

Industry

You

COMMERCIAL

WILLIAM

•

Superior Oil

Copeland Refrigeration

16
'

FINANCIAL CHRONICLE

ST., MEW YORK 4, N. Y.

Chicago

Manufacturing

Canadian

15.

•.

Exchange

•

1-1826

33

You—By Wallace Streete

Trade

'•"See "Canadian
page

-

Exchange PL, N. Y. 5

31

;
Securities Now in Registration..—

State

1952)

40

Teletype NY 1-1825 & NY

36

more

(in

HA 2-0270

18

,

Salesman's

5

-

—^

Public Utility Securities

Security

Singer, Bean
Mackie, Incl'

&

18

Railroad Securities

The

•

39

41

conservative parties and
individuals. Our election here last

•

12

4

Our Reporter's Report

Security I Like Best

TELEPHONE HAnover 2-4300

23

Governments

on

The

fall

bonds.
8

34

to

the

8

swung.

in

elections

__1

the

world-wide insistence on change
following the 1929-32 dislocation.
But

Investment Field

8

About

stocks and

*

Observations—A. Wilfred May

money

venturesome for years.
This was
a natural reflection of the world¬

48

Funds

Our Reporter

important

225 unlisted

Bookshelf

Securities

NSTA Notes
News

Politics

monejf,

NY 1-3370

Cites

(Editorial)-

Insurance

Events in

Mutual

This appears years ahead.

Big

Teletype

Dlgby 4-1680

23

Indications of Current Business
Activity

individual

many

Trading Dept.
☆

22

Economic Report Is Hopeful,

on

Exchange

REILLY, Monoger

Supply to

From Washington Ahead of the
News—Carlisle Bargeron

exceptions.)
They liquidate be¬
cause
they have to; usually the
compulsion
takes
the
form
of

Members New York Stock




\

21

Einzig—"Economic Aspects of Counterfeiting"

sell

(Thiere

Spencer Trask & Co*

Nashville

as

Dealer-Broker Investment Recommendations

25

•

Consumer Buying

Uncertainty

Man's

Canadian

WILLIAM B.

Manchester, N. H.

BURNHAM AND COMPANY

JOHN F.

Good Year, Says Hon. Walter Williams__

of

See It

Business

they
or fof

reason:

Sold

20

Regular Features
As

to

in

—

*

Eggleston Belittles Relation of Currency
Economic Growth

1954 Will Be

PREFERRED STOCKS

Boston

Cole

Unpleasant Facts (Boxed)

in history has ever
use'eventually all the
credit and money at its disposal.
We have in our banking
system
the possibilities of further
expan¬

1

•

M.

Stability

Elements

policies
been
quite

has

Bought

Expansion

Ball

Published Twice Weekly

Albany

Canadian Superior Oil

14
and

F.

The

25 BROAD

Federal Electric Products

sem¬

nation

failed

would easily justify a 400+ level.

specialized in

Glass Fibres

11

ahead.

At times of high confidence in the

have

Foremost Dairies

Financing by Commercial Banks

Joint Committee

policies, rather than
reverse, from this Adminis¬

basis this

For many years we

9

10

Weston

Howard

Experiment, Experience

Aiding

would

money

years

Attainment of $35-$40

National

"reactionary"

money

tration

earnings

and dividends have been in

and

of

toward

12

•ended

/

Members New York Stock

Since last May we had a 5-point
rise* in Treasury 2V2S. Apparent¬

down from

came

ended

$24

a

run

on

Average

months

then

Copeland Refrigeration

13

Sjt

credit.

some

has

Earnings
-a

Since

4-6551

7

SEC Rules and Form Revisions Under the New
Administration
—J. Sinclair
Armstrong

—Gordon R.

that they

manner

People,

we

Fred

Aims of New Housing
Legislation—Albert

stock

have,
namely, to prevent anything ap-_
proaching
real
tightening
of

stocks

that

NEW YORK

1

sion of many, many billions.

suggest

WALL STREET,

6

_

12

Canadian

to their pol¬
in the early

part of 1953, but it seemed
gone conclusion that they
act in

Economic
Economic

99

6

Fiscal Policy Important in
Anti-Depression Policy
—Alvin H. Hansen
'__i

deci¬

squelched in official quarters. We
can
reasonably expect relatively

typical

a

advance

Loeb

Eisenhower Tax Proposals—J.

—William E.

highly im¬

pended,

without

Making Tax Reductions
Humphrey

George M.

Interim Mortgage

affairs

modified, in some cases removed.
(2) No major bull market ever
•ended, no bear market ever im¬
volume

request

.

ly, anything approaching

end

•

or

has

markets.

icies

business

time in recent years was

no

stock

Deficits in

Prices—Roger W. Babson_

The

on

1 ■'

5

Dangers in Rapid Conversion of Short-Term Federal Debt
—Lawrence H. Seltzer
1
-

Background

there the slightest

prices and

standard,,

high level

a

confidence.

this

Progress Report

5
1

Investment Research in Present Economic Situation
—Harold B. Dorsey
j

high

on

stocks in Switzer¬

reflection of

a

Monetary

portant

tivity, stock prices and bond prices,

gold

common

—

investor

lationsh i p s
between stock

Limitations

obtainable

believe

Telephone: WHitehall

We MUst Avoid

Which Stocks to Buy?—Gerald M.

At

economic

past

war

to

'

Fair

two

social

our

and

improving and

this

are

(1) vThe
great changes

the

View

How Long?—A. Wilfred May

1

us

great speculative possibilities.

Cobleigh

'

Boomland Germany—For

3% basis. Even with today's in¬
ternational uncertainties only 3%

premises:

pealed.

Long

lead

4

■

market squeeze.

or

—Hon.

land

in

thinking

behind

is

grade

early 1956.

or

view

•of

Prospects—The

past this average has sold close to

is

recent

Inherent

the

Ed6on Gould

U.

'

*

3

a»!

Gum—Ira

NORANDA OIL CORP.

Cover

;

a

(approx¬

imate) point advance from
lows into late

'

■

Hoadley, Jr

Market

—Jacques Coe

unlikely.

The thesis here advanced is that
may

business

no

international political situation
is

\ve

and, Stock

by

Exploration and drilling activities of

^.Cover

Long-Term tylarket View—Edson Gould

Profits

AND COMPANY

Plans

....

such

are

Marshall

Page

Palyi

Ahead—Walter E.

Business

tail-end advance carrying
many issues into

a

Look

to

llCHTfOSTfl

"

■

.

By EDSON GOULD

LOS ANGELES

INC.,

3

4

The Commercial and Financial Chronicle

(1104)

of

ature

Business and Stock Market

Prospects—The Long View
By JACQUES COE*

fact

Asserting the atmosphere and temperature of the Stock Market

We live in

swells

be expected to continue irregularly upward.

large, wealthy, dy-

a

country

where

ground

times

assume

gigantic

at

brought with
changes

timing, and it is to their
stopped their de¬
flationary methods as soon as it

economic

an

up¬

in

the

heaval

in

Woodrow Wil¬

Hard¬

went

first

then

and

to

place

took

upheaval

in

•

.

io4Aic

1ft,M

the 1930 s and 1940 s,
this country had good business
and some times poor business but
During

sound

never

business.

big and
served to keep

—

one

while

ing

horse

Two

wars

small —have
the top spinning,

one

nation

a

as

flation

rode the in-

we

piling

up

govern-

fhi
foliar
the dollar

nf

in

of
a d
the cost of living.

P°wer

creasing

While

to

that

investment cap¬

of confidence in

-

to 1930.

A majority never

have had the privilege of operatjng jn an atm0Sphere of "down to
ear|<j1>» principles where
oppor^unities for venture capital
are

'

^

prices

and (a]]

jn W£>ves Qf

optimism and pessirhism, and do
reguiarfty, but periods of

gQ

only when

occur

everything is confused and

uncer-

penthouse,
private tain. None of these elements are
big and small, was in jn the picture at the present time.
the doghouse. Investment capital As a matter of fact, the amount
business,

had

confidence

no

because it held

no

in

the

future
of

measure

se-

curity.
The

present managers of our
economy would love to do a sound
job of rehabilitation; in fact they
started out to squeeze most of the

waste,

extravagance,

u

11

Prevention

octopus, but very
evident

that

soon

the

it became

nostrums

and
;

1

«A

talk

by Mr. Coe before the
York Society of Security Analysts,
York City, March 9, 1954.

New

New

.

T

In

j

top-heavy government controlled

three

past

years

we

selective

most

a

of

the

the

market

leaders

used

various

accepted averages
outperformed hundreds of

companies not in the averages and
which unfortunately have had a
bad time of

it. There will

come

when

and

priced

"blue

the

priced,

over

will

groups

chips"

the

of

some

are

under
in

come

Depression
,,

the

Stocks
is

There

the

near

of

managers
futurte should not be

big difference
opinion whether or not stocks
already

are

priced

over

ticularly the

today, par¬
chips" but if

"blue

look at the chart of the Cleve¬

dividends,
there

find

we

was

that

while

definitely

very

an

ex¬

again in 1946, the relationship ap¬
to be very far away from
any danger levels at the present

pears

time.

We

are

well

very

that in

aware

Taking
prominent, we

into

three

which

at

are

of the most

some

divide

can

sections:
or

those

near

There

the
or

highs

dissolution of De

Pasquale Co.

Corp.

Announcing the opening of offices of

which
the

GENERAL

INVESTING

there
have

In conclusion

CORP.

New York City 5, N. Y.

Teletype New York 1-3390

would

Investment Bankers

President

Vice-President

claims

for

prices

the

in

of

course

the

1954,

of

process

half

,

There will

periods,

as

year,

se¬

of

reported,

be

over¬

always

been, but toward the latter
of

1954, I would .expect the

depressed group of yesteryear to

join in and perhaps lead the
rade.

industries;

however,

noticeably higher than
the

double

ago,

year

benefits

insurance

total

of

a

number

of

Continued
slightly and

ago.

rose

New claims, it

ago.

year

the

year

a

was

in

rose

reached

the

week

in

ended

Feb.

compensation filed in
to

27, with

11

claims for unemployment

new

key states showing

171,400 from the week ended Feb. 20.
the

turn

for

still

well

in

better

the

above

compensation

the

totaled

week

a

in

104,683

decline of 26,100

a

While this indicates

situation,

employment

comparable

claims

when
states, it

ago,

year

the

a

joblessness is

same

new
was

noted.
All

the

state

refer

reports

to

so-called

initial

claims

for

unemployment benefits filed by persons who have been laid off.
The

number of continuing claims in these states by persons al¬
ready drawing unemployment compensation totaled 1,300,872 last
week.
This compares with 1,337,515 continuing claims in the
week

ended

Feb.

20.

A careful check
centers

national
is

of producers and consumers in major indus¬
the nation

across

metalworking

still

indicates, according to "The Iron
weekly, that an upturn in steel

expected.

i

,

Mills, it states, grossly underestimated consumer inventories
steel and some inventory correction may continue for months.

of

The mills themselves have

heavy inventories of ingots and semi¬
being drastically shortened and the
mills
are
using their semi-finished stocks to make good on
promises of quickest delivery.
Customers, it adds, are demanding and getting quality, serv¬
ice, freight absorbtion and quick delivery. Rate of new orders is
finished steel, lead times are

increasing,
is

but individual order size

is

small

and

gaint

tonnage

slight.
The
the

of

drop in

the

in

upturn

ingot rate is largely due to postponement

orders

steelmakers

had

expected.

There's

no

denying producers had counted heavily on an upturn in March,
they are disappointed that it has failed to materialize. But
their conviction that business will improve remains
unshaken,

and

continues' this

trade authority.
Although steel people have seldom been noted for their op¬
timism, a good many of them might qualify today. Many of them
still

betting on a* 75 to 80% ingot rate for the year. If they
right, 1954 production will be between 90 and 100 million

are
are

net tons. The industry has topped 100 million tons
only twice in
history—1951 and 1953, concludes "The Iron Age."
A light work week at
many plants, heavy snows and minor
cutbacks dropped United States car and truck manufacture 5%

below

a

week ago,

tion for

according to "Ward's Automotive Reports."

pa-

1954 stands

behind the

at an estimated 1,211,043 vehicles,
corresponding 1953 volume (1,311,047).

some

8%

"Ward's" pointed to the all-time high level of new car stocks
in the field
(over 600,000) as a principal factor in this year's
cumulative production total running 100,000-odd units below the
1953 period.

To

date in
1954, approximately 204,247 trucks have been
erected, almost 15% fewer than were built at the same time in
1953

(239,269);

while

the

car

output is pegged at

corresponding

volume

a

1,006,796

year

units thus far,
1,071,778.

totaled

ago

Last week's operations were hit by one of the worst blizzards
of

recent

any

with absenteeism and late reportees ruling out

years,

production gains.

The hardest hit group was the independents where manu¬
facture dropped 17% below the previous week and almost 72%
below the level of the same 1953 period. General Motors volume

dipped almost 11% last week, with Ford Motor Co. and Chrysler
Corp. operating almost level with the previous week. The latter's
aided by return to a second shift at the Detroit Ply¬
plant, with the division turning out 10% more cars than
week preceding.
A sharper upturn is expected there this

count

was

mouth
the

week

when

the

double

be counteracted

by

shift

15%

a

becomes

more

reduction in

coordinated.

car

This

output at Nash,

"Ward's" states.
Canadian
week

also

plants

turned

out

5%

fewer

vehicles

than

a

with an estimated 10,755 vehicles being built this
week, compared with 11,365 in the previous week. Cumulative
count to date shows that car production is up
13% and truck
ago,

assembly down 12% from the same 1953 term, with overall out¬
put showing a 7% gain (96,003 to 89,769), concludes this statisti¬
cal agency.

5

Steel Output
While the

«

s

Scheduled to Drop to 68.9% of Capacity

national rate of

steel production declined to 70%
capacity the past week, not all districts in the country showed
decreases, says "Steel," the weekly magazine of metalworking.
A few turned upward or at least remained unchanged.
The up¬
turns occurred in Wheeling, New England and Cincinnati, while
production was unchanged in the Far West, Birmingham and St.
Louis.
Decreases were noted in Detroit, Cleveland-Lorain, Buf¬
falo, Youngstovvn, the Mid-Atlantic district and from revised
of

_

,

a

decline of about 7%.

a

mildly but were down considerably from the high
January.
Improvement was reported in employment in industrial areas

can

irregular¬

there

appliance

unemployment

about

level

will

favorable than the

more

upward.

bought

Maurice Barnett, Jr.

in

to the future of

be expected to continue

have

Ralph Dc Pasquale

all

discounting the improved business

ly
and Financial Relations.

groups

at

security prices, I
predict that the trend of

of the latter half of the

Specialists in Corporate Stockholder




as

and

unemployed was

and

half—that

curity
Brokers and Dealers In Securities

shared

business for the last half

first

•

iron,

equipment and textiles.

should be

•

and

those

are

not

Member National Association of Securities Dealers Inc.

•

steel

market, noteworthy
among them are gold mining, dis¬
tilling
companies,
amusement
companies, sugar producing com¬
panies, meat packing, coal, rail¬

business

Telephone BO 9-4734

year

bull

road

80 Wall Street

a

zinc, drugs, farm equip¬

machinery,

Then

General Investing

,

where

group

television and rails.

and the formation of

were

previous week; adding that the current week was 14% under the
148,827 completions of the same period in 1953. Over-all produc¬

high;

motors, motpr equipment, chemicals, copper,
ment,

lines

some

Scattered reports told of the recall of laid-off workers in the

air transport,

lead and

production

Wednesday of last
counteracted by advances

groups

their

ago, and where substan¬
declines have occurred since,

wit:

industrial

This agency counted 127,692 vehicles, compared to 134,615 the

established

were

in total

change

Compared with the near-record level of

automobile

same

another

Index

Production

them

more

tial
announces

to

is

marked

no

output last week continued to show

in 1929, and again in 1936 and

cess

aircraft, banks, building materials,
so much how to prevent a busidry goods, electrical equipment,
ness recession as how to prevent
foods, grocery chains, installment
a
run-away inflation.
financing, insurance, office equip¬
The
atmosphere and temper- ment, paper, retail merchandising,

DEPASQUALE

others.

of

utilities and rubber.

RALPH

in

business

a

was

week, since declines in

trial

Over Priced?

groups.
„

concern

g0/ernlment ;„oney

lhe
in

of

.

opinion,

my

There

Age,"
Are

Industry

Price

for the country-at-large in the period ended on

to

the spotlight.

steal

Auto

Business Failures

v

a

time, however, when the pauper
of the recent past, once again may
become the prince of tomorrow,

inflationary

duplication

„

the

witnessed

Commodity Price Index
Food

and

Trade

Retail

State of Trade

were

sense.

these past many years, the Stock
ammunition that
Market has not risen or fallen as
has been poured into our econa
unit.
There was a time in the
omy
during the past 20 years
past when all stocks more or less
never has had a chance to spread went
up or down, but today, with
itself, because the elements of so
many issues listed, one can di¬
confidence were lacking.
vide the Stock Exchange list into
Government's Concern Should Be something
like 70 different
of

dissolute spending out of the

and

in

we

the

in

was

bullish

more

broader

abundant, without suddenly havland Trust Company, in their P]eb.
jng the rug pulled away, and
16 Bulletin, which has .adjusted
where one operates in a climate of
stock
prices
and
multiples
of
assurance

acute depression

government bureaucracy

this room

I venture to guess

that a relatively small percentage
actively were engaged in national
economics or security analysis
prior

1952
-p.

broadcast

people in

are

of all ages, but

Truman, and now after 20 years,
another

has

message

a

There

Jacques Cos

on

Roosevelt

to

rather

the future.

when

1 9 3 0's

have

business ini¬
than
government

a

a

market, and it happens that

that the govern¬

vast reservoir of

ital,

During
have

directions

favors private

assume

There is plenty of room in the
Stock Market for new leadership.

together

handouts,

ing and Cooland
again
in
the
early

should

temper and in

most

tiative

i d g e,

we

all

ment

edly limited, and once this fact is

accepted, then the entire approach
toward
the
security market,

easier money
with indications

policy,

overall

business movement will be decid¬

bull

Since last June, an

changing from
to

the country was

evident that

ready for the big switch.

not

early 1920's,

son

of

was

witnessed

such

it was

credit that they

philosophies.
We

made

managers

the outset,

at

mistake

one

them
in

If the economy
one

the

in

decline

Output

Carloadings

in

further

narcotics of the recent past, could
not be replaced by ordinary solid
foods overnight.

in political

proportions. Changes
power
have

has

accompanied by a greater
spending. Past expe¬
rience
and
going back through
these banking figures as far as
1920, warrant the opinion that any
decline

decline, Mr. Coe predicts trend of business in last half of 1954
should be more favorable than the first half, and security

namic

which

loans

Production

Electric

last

not been

beyond the temporary and decidedly limited business

can

bank

Steel

The

in commercial and

drop

sharp

a

industrial

prices

the

within

that

Thursday, March 11, 1954

.

e

signposts in these banking figures
the

.

are

number of months there has been

Members, New York Stock Exchange

looks

Market

Stock

looking far beyond the tempor¬
ary business decline. The nation's
banking figures predict a dynamic
rise in security prices—one of the
most
important
and
significant
is

Senior Partner, Jacques Coe & Company

the

.

t

(

Continued

on page

38

Volume 179

Number 5306

...

The Commercial and Financial Chronicle

9% annual rate; and have ex¬
panded from $50 million in 1947
to about $80 million for 1953. Net
earnings are distributable among

Profits by Cum
By IRA U. COBLEIGII

!

Author of

Chewing
Wm.
The

"Winning in Wall Street"

time

you

see

kid

a

strolling along the street chawing
a
cheekful of gum; or apply a
scratchy penknife to the sole of
shoe to

your

make

step

your
more

sprightly,
to

or

prevent

bit of

this

nowned

re¬

side¬

out

on

home

the
of

permanence

chewing gum industry. It's
big and getting bigger at almost
a mathematically predictable rate.
certain

class

of

Guate¬

there have, in
recent
been developed and deliv¬

chicle

synthetic equivalents of

by

Hercules

Powder

•

Chemical

and

mam¬

mals, known as ruminants, have
been
chewing their cuds since
they first began to populate this

About

Co.,

U.

S.

Recession

marched forward at almost exact¬

ly 3%

a

is the

for

year

years.

coincidence,

of

growth usually re¬
standard for the annual

as

increase

40

some

some sort of

rate

garded

in

industrial

in the United States.

industry has shown
resistance

production

Further, the
rather solid

a

to

depression,
with
slipping very little, even in

sales

planet, the widespread custom of bad business
years.
If you're los¬
chewing gum among humans is a ing
money, or out of a job, chew¬
relatively
modern
phenomenon, ing gum seems to provide an out¬
propelled to "big industry" pro¬ let for
energy, and a certain sort
portions in the past 50 years prin¬ of relaxation and
serenity. Gum,
cipally by the power of adver¬ somewhat like
Coca-Cola, which
tising.
Yet, common as gum is we wrote about here
three weeks
among us, feW have the slightest
ago, is one of the recession re¬
idea about the ingredients of this
sistant industries security
analysts
pliable masticatory, and not one like to
mention, particularly when
in a thousand could make a close
the market is high. The demand
guess as to the number of sticks for motor cars
and
minks may
produced and sold annually. It's fall
off, but, through thick and
a fantastic figure.
For 1952 there thin,
people choose to chew.

manufactured

were

the

in

U.

S.

22,350,000,000 single sticks of gum.
In the
same
year
candy coated
and ball gum (sold mostly in vend¬
ing machines)
accounted for a
paltry 4 billion units;
to

while that

popular bubble gum blew

ever

of

total

a

(I can't tell

pieces

what their cubic
would be, fully inflated!).

content

This all
sale

2,550,000,000

up

you

adds

price

to

uo

a

of about

total

$258

retail

million

(year 1952).
Who

the

answer

it

all?

Here

6%

surprise

may

candy,

chain stores,
Postwar, the
growing type was bubble
gum, a fact that will come as a
surprise to virtually no one. Sales

drug,
markets, etc.

of this inflatable item reached al¬

but

15%

the

of

industry

have flattened

to

seem

total,
off

a

bit

recently.
About ingredients, the two prin¬

cipal factors

in

big vats and

corn

Big

ground down,

churned

with
various assorted flavorings added.
Then the gum is rolled into flat
sheets

syrup

and

cut

into

up

sticks

or

rolled

into
balls or pellets.
At
point, fantastic machinery is
deployed into action, to wrap and
that

seal

the sticks and packages, and
them for national and

are

chicle and sugar

Important Moves Ahead

has

also

ment

enjoyed

develop¬
Egypt and, I

some

in

Germany,
believe, Japan.
About

27

companies

turn

out

national

our

supply of chewing
but the volume is accounted

gum

for

by the top three

American

who,
80%

Chicle

together,
of

We

the

shall

Wrigley,
Beechnut,

—

and

account

total

spend

for

the

New

output
little

a

(1952).

time

issue

of

1001

CHARTS

showing monthly highs, lows—earn¬
ings—dividends—capi taiiza titans—vol¬
ume
on
virtually every active stock
listed

on

N.

American
12

full

Y.

Stock

Exchange and
Exchange
covering
March 1, 1954.

Stock

years

to

Including

Up-to-date Earnings Reports
as

well

as

14

new

Charts

OrdeF toduy for

Single

Yearly

copy

(6

Prompt Delivery
(Spiral Bound) $10.00

Revised Issues)

$50.00

F. W. STEPHENS
13

William

St.,

N, •Y,

5




HA

2-4848

expansion, and thirdly,
because of a Tiffany-type balance
sheet position—year in and
year
out.
A snapshot of the current
position
better

would

than

4

probably
1

to

show

current

ratio, with cash alone well
For

the

reason

that gum is not the
tion
of its

primary sec¬
business, but rather
packing and canning. Gum or no
gum, however, it's an excellent

Wrigley

Company

Wrigley

Jr. Company is
largest chewing gum
producer offering the well-known

Juicy
P.

eminent
with

a

repeal

declines

1949,
net

of

Wrigley

both

increases

K.

Fruit,
brands.

industrial

DoubleIt's

an

enterprise,

continuous record of divi¬

offers

rather ingratiating value,

a

at around 81.

Second

in

American

Chicle

size

in

field

is

producer

of

Chiclets, Beeman's Black Jack

and

Dentyne.
in

In addition, it has gone

for

breath

sweetening
and
purifying by offering martini fan¬

lished and hss added

dimension

new

to

estab¬

important

an

ACJ

earning

Net

sales

have

advanced

from

$34.4 mil'icn in 1.949 to around $50
million last year.
Like Wrigley,
American Chicle has

sheet

ance

and

capitalization

merely

—

shares

common

and

uncluttered

an

listed

1,298,475
NYSE

on

now

there

1947.

was

The

split)

earned

back

way

1932.

for 1 split in
(adjusted for

$1.25

in

ACJ

gazelle,

3

a

shares

it's

paid

dreary

a

$1

year,

due

course,

in

supposed to

are

resin

was

we

civilized

folk

up

from

use

of gum

packs

a

day,

factories

the/ necessity of supplying the
Rocky Mountain and West Coast
About

the

earning

have

past

there,
a

Gum,

power,

advanced

ten

years

the

net

steadily for

at

roughly

a

12%

a

increase
20

in

the

22 V2

to

decline

compared

following

the

with

nation's

near
annihilation, and not for¬
getting the loss of her vital East¬

bread basket.

ern

After sweating

post-armistice
production rose
200%
dex

from

of

persons—resulting

from the en¬
of
new
people, notably
including refugees, into the labor
trance

force.j
We must

objectively list on the
side the obsequious¬

pro-recovery

the

of

ness

labor

unions, making

national recovery the number-one

their program.

plank in
A

in

rise

marked
of

living,

without

the

in

stand¬

accomplished

was

inflation, but with a rise
wages—20% in the past

real

three

years,

June,

1948—and with

build-up

and

of

91% since
a constant

individual's

in

❖

1 :<

Is

savings.

*

The

Recovery

the

country's

Props

sensational

of
the
principle of
"living to work in lieu of work¬
ing to live?" That the work-live
factor has been exaggerated as a

is indicated by the

recovery cause

to

114

1948 to

(based

surplus

1953.

by

The in¬

1936).

on

transformed

509

of

million

807
the

been

trade

industrial

sensationally

interval shot up from 79

same

has

it out for three

years,

marks

million,
country's
that

achievement

Export
from

so

to

gold and bullion

having

were

Germany
Hot

is

productivity
with

either

even

many

tries.

a

to

coun¬

far

pace

States.-.or

other European coun¬
...

.

.

,

.

of

institutions

of

In

great

foreign

discussing

the

interview

here,

economic

views

cited

the

segre¬

alone

gation of the functions under the
Constitution
of
banking
and

financing, which assure

Treasury
stable

a

.

financing

tionary
line with
ard"

currency

Erhard's

all

unswerving

Continued

of

and

on

page

into

our

American

be

way

of

life; and the leading companies
that produce it have given em¬
ployment and enjoyment to hun¬
dreds

of

City of Philadelphia
and

million

jaws, and made
distinguished contributions to our
enterorise

system

wind
a

uo

pack to

to

investor

over

and you

and

Chew this

buying
a

Philadelphia School District Bonds

anything

as

Joins

Marache

of December

31, 1953

couple of hun¬

shares.

Now available for

distribution

Write for your copy

Dofflemyre

(Special to The Financial Chronicle)

LOS
J.

ANGELES, Calif.—Joseph

Kudzia

Marache,
South

has joined

the staff of

Dofflemyre

Co.,

634

STROUD & COMPANY
Incorporated

Spring Street, mepibers of

the Los Angeles Stock
He

&

was

Exchange.

formerly with First Cali¬

fornia Company.

PHILADELPHIA
New York

•

Pittsburgh

•

Allentown

•

in

Minister "recovery wiz¬

place

extent

without infla¬
—

Equipment Trust Certificates

pop

an

high American
spokesman, noted for his liberal
a

Semi-annual Appraisals

produc¬

free

this at

million fold by ad¬
mass

,

importance to
has been the mainte¬

greater

the recovery
nance

kept

not

United

reserves

resting

the

Of

has
the

.

market.
a

increased

occurred

now

Money

other

with

Productivity, with 1936 as
base, has increased only by
14%, and with 1938 as the base
only by 3.8%, up to 1953. In the
case
of either interval,
German

a

since November, 1952.
Incredible though it may seem,
for

comparison

tries.

the

agricultural production in

have picked it
multiplying the

like

em¬

million

chewed

cigarettes,
baseball, seems to

and

tailored

areas.

sales

with

ployed—from

duction

in

plant is to be completed at Santa
Cruz, Calif., this summer, which
wjll free the, Chicago plant from

1953, there

V/z million unemployed, un¬
changed from 1949 but comparing

by the
Indians to slake their thirst; and

dred

Canada, New Zealand, Australia
and England. A new $2 million

In December,

were

in

from $161 million in 1950 to $1.11
billion
by the end of 1953, a

reflection

is

sensation¬

productivity record, absolute and

income

in

men

three

after

market

higher market quotations.
Prehistoric

began

a

logical

situation

not

observance

ledger's right side

which

doubling

should,

so.

but

of postwar desolation—a pe¬
riod which witnessed a 45% pro¬

increases

their

the

the remarkable production in¬

producer; and orderly yearly sales
find

employment

really the result of the
German-vaunted will-to-work; of

sound

be

Iron

comeback

on

creases

the

behind

assets

in

not

may

but

and

that

several

The Plusses

First

of

1926

the

sheet.

ance

deficit

and

to

ally

and liabilities of the nation's bal¬

was

from

in

inventory

us

trade

back

go

The

servicing of the Dawes
and Young loan bonds. Hence let

dividends

out

produces

to

the

may

5c

all
the
way
living standards
maintainability of the newly
ranging

from

satisfactory,

ard

fall?

a

worldwide

selling at 51.
1953 divi¬
dend was $2.50 and will
definitely
be
higher for 1954.
Unbroken
here

entering
Curtain.

renewed

strong bal¬

a

growing

The answer to this question has
deep implications in the economic

prewar,

power.

May

headed for

years

well

jug¬
jus¬

by ally
and foe; or, is her apparent highriding prosperity fortuitous and

motion

now

times.

worry

are

Operating from a main
plant in Chicago, which can turn
million

Wilfred

A.

item, while requiring heavy early
outlays for advertising and pro¬
is

of mod¬

tifying the

ciers and onion lovers a choice of
either Sen-Sen, or Clorets, a gum
laced with chlorophyll.
This last

cost,

resur¬

gences

gernaut,

from

this

Chicle,

re¬
eco¬

nomic

economic

sphere,
American

of

But, is today's
Germany
actually
an

will

investment; and to
seeking continuity and gen¬
erosity of cash dividends, WWY

epito¬

most

ern

preceding

those

—41 years.

also

the

and

common

f

in¬

one

markable

our

most durable

a

Ruhr

dustries

of

probably not appear on many lists
as a
"growth stock," it has been

serenity.

it

the

show

to

the

over

While WWY

years.

1938

able

was

o r

marks, an amount which
rapidly growing; supplanting a

is

gateways to

a

business cycle, might bring lower
material costs.
In the busi¬

dend payment going back to 1913

7V2

Dusse 1 d

over

pronounced downturn in

ness

prosperity

demonstration at the Cologne and

raw

soda

world's

and

withdrawing
Switzerland,
and
including
balances
circuitously

the

and

improve earnings this
capital improvements have
improved plant efficiency; and a

vertising genius and

Spearmint,

industries

will

tion.

mint

2 billion

mize

longer view,

war,

BONN, GERMANY — Admit¬
tedly the hum of the Rhineland

twice liabilities.

.EPT

that, in the absence of all-out

present boom will subside to normal healthy economic growth.

assets

spruce

Wm.

GRAPHIC STOCKS -SS-

re¬

newal and

viewing the first two, but leave

the

ern

able points, he concludes

do this

heavy annual need for plant

on-the-spot survey of Europe's new economic phenome¬
Mr. May weighs the elements which have furthered West¬
Germany's remarkable progress. After citing her vulner¬

an

non,

first, because of
the
great
stability
of
earning
power,
second,
because
of
no

re¬

company.

Action

In

a

out Beechnut only for the

The

MARCH

been

delivering to

have chewed gooey sap from trees,

ready for

Profit-Wise
See

to

over

Indicated by Stock Market
Be

afford

sugar,

or

is, of course, the dominant na¬
tion in this trade, but the
industry

fastest

most

whirled

are

is

35%

you.

gum

of the total is bought
vending machines, the rest

super

chunks of chicle
with

process

standardized.

international distribution. The U.S.

to 10%

from

well

again

is chewed by people
over 35, and 65% by people under
35.
Where do they buy it? Some
from

manufacturing

pretty

cartonize

chews

the

of

The

has

Long?

By A. WILFRED MAY

shareholders usually between 80%
and 90% of net each year.
It can

more

Resistant

growth, the industry has

This, by

For How

(sole

year,

Industry

to

the

the

a

in

but

ered some

for 'a

position,

regime

mala has disturbed the chicle
sup¬

say,

consider

the

munist-slanted

Monsanto

moment

and

shipped in 100 pound bales. Don't
just how much the Com¬

rubber Co.

pause

by

know

when

happens, I

60%

wild jungle tree, called
native to Mexico

a

Broadloom—

this

to

obtained

Guatemala. The sap is drawn
off, much like that from rubber
trees;
then it's
coagulated
and

years,

g

50%

chicle is

WWY

generous cash payer,

and

ply,

flatten-

your

While

Historically,

5

Germany—

per

Sapodilla,

from
n

is

gum

The

tapping
the

walk adhesive

i

Ira U. Cobleigh

a

chewing
sugar.

shares

common

Boomland

capitalization) listed NYSE and
share for 1953 shopld exceed
$5 against $4.25 dividends paid.

few facts about this almost
depression-proof
with a special look at the two largest
producers,

Wrigley Jr. Company, and American Chicle Company.

next

progress

1,968,484

over a

industry;

(1105)

9
Lancaster

•

Atlantic City

de-

33

6

The Commercial and Financial-Chronicle

(1106)

bill

We Must Avoid Deficits in

is

long

the

Making Tax Reductions

from

walks

all

of

Partner, E. F. Hutton & Company, New York City
Author "The Battle for Investment Survival"

Mr.

Loeb, contending that more people should buy and hold
says if the market were normal and keeping in step
with wealth and growth of activity of the country, we would
be seeing six million share days on the New York Stock Ex¬
change. Praises the Monthly Investment Plan. Holds the best
investment has now become the best speculation for capital
gain. Names stocks to buy.
stocks,

nomic

The Eisenhower Administration,
in its first year in office,

working
That

have

accomplish¬

the

toward

ment of two

security

more

ing

suf¬
not

ourselves
also

bring

world.
that

produc-

tive

power

that

it

12

the

George M. Humphrey

foreign
in

progress

We

stantial

steps

posture

of

have

toward

has

the

taken

defense

from

sub¬

shaping-

our

be

and

a

within

the

not

on

are

reshaping it

dent

limits

moment

istration's

tax
to

nomic problems because we must
find and maintain that
very deli¬
cate

balance
attack

between

from

and

has

course,

thankful
who

been

not

only

had

loved

involved

ones

being made

are

"new

look"

in

defense

greater emphasis
effectiveness of

permitted
in

the

the

in

out

of

the

use

and

which

not

the

as

but which
is

now

made

were

rently

against

bear

now

paid

in

a

and

burden

see

more

nancing

it

to

that

and

we

more

keep

in

our

turn

fi¬

present

taxes

sufficiently high to pay-asw^-go currently to the greatest
possible extent. In that ,way we
will not pass more and more debts
to

on

already over-burdened fu¬
generations which our chil¬

ture

dren- and grandchildren will have
to pay for
In

We

a

are

us.

now

passing through

period of transition.
peace

nor

real

Period

war.

a

amount

"an

will
tax

An

.

the

D. C., March

1,

of

reductions

to

something

that
more

$1V2

billion.

than

$6V2

billion

be released

to

the

people by
cuts this year. This is a tre¬

mendous

of

sum

which is

money

being left in the pocket books and
transferred
power of

We

'budget

purchasing

balance.

There

is

a

anticipate the reduction

of

government expenditures and be¬




the

of

budget, and with¬
out
increasing deficit financing
except
to
approximately
the
collected for

amounts additionally

government's trust funds.

there

will

dislocation

to

be

not

the
be

taxpayers

any

resulting

lack of these

sudden

' from

the

dollars being avail¬

put

into

the

nation's

spending stream. In that way
help to maintain stability.

the

in

Treasury

final
within

cooperation

will

be

Congressional
the

•

.

■

next

few

ready

we

to

that

we

and

time

determined

are

again

to

con-,

tinue to make tax reductions from
time

to-return

and

time

to

tax

to. the people, for them to

money

farm

stocks,

the

beach

th

spend for themselves rather than
have the government spend

it for

fortunate

about

equipment, etc., have done
well. And there are other
groups in between.
; /
.

Since

fret

-

as

valid

tax

picture

buy

bargain

Thus,

rates.

market

normal

were

not

Anyway,

enough people buy stocks.
and

keeping in
and

If the
just

substantial

deficit

fi¬

for

nancing which cannot be justified
the

at

present, time and which
have been working so hard to

Ave

overcome.

When

would

just

considering
in

increases

blanket

do,

what the

note exactly

must

we

revenue

what

exemptions

losses would be.

that for each $100
increase in exemptions above the
present $600
in

loss

a

of

ment

per

$2V2

additional

in

complete

nancial

So
to $800

year.

a

of

reversal
toward

management

all

that
fi¬

sound

of

the

gov¬

affairs.

to

public wants its government

itself, to shirk its

reverse

rent

cur¬

responsibilities and to pass
generations, our chil¬
and our grandchildren, the

to future

on

dren

that

costs

currently

the

When

Committee's
sented

ourselves

we

should,

Ways

detail

in

and

Means

millions

of

tax¬

in

fered

find

the

The release of
this huge amount of money for
the people to have this year, when
the
whole
program
is adopted,
past.

be

stimulating to the

econo¬

my

and will be within the limits

of

sound

financial

management

which is essential to further prog¬

Nation's welfare.

for the

It's

job

our

now,

it's

bills but to

own

so

country's affairs that
ally

make

in

peace

progress
we

progress

the

here

only

pay

handle

our

we

and

peace

at

continu¬

toward

wo'rld,

toward

job

real

as

in

home

we

the
must

sition

tools

jobs

making

peaceful

for

killing
life

to

more

and

more

worth while.

September, from 69 to

104,

the other side of the pic¬
ture, take Nash or Studebaker,
both lower than they were in Sep¬
tember. Even those who pay such
on

that they don't want
finding that divi¬
dend-paying ability is a badge of
success.
And they're finding that
dividend-paying
ability
creates
demand for stocks at increasing

high

taxes

dividends

are

of

paying stocks because they are
giving the best market perform¬
and

ance

for

the

have

capital

chance

best

'

gains,

Plan
investor with

did better than those that tried to

be

month, or even
only $40 a quarter. However, the
fact is first investors really should

Selective buying has paid off big.

your

Monthly

become

little

as

$40

as

a

have

$1,500 to $2,000 to begin with.
However, the monthly plan is
good because the plain math¬

very

ematics

of

savings
and
compound interest working
together pay off marvelously jvell.
think

I

systematic

that

also

Investment

these

Plans

themselves

to

a

Monthly
lend

ideally

special

purpose

Even large investors

account.

like

in

and

I

own?

I

vacation or travel and
or hobbies, etc.
very strongly of the opin¬

more

am

home

ion that for

here

the

MIP

I won't detail

for

securities

listed

are

like

reasons

best

the

trusts

investment

Tri-Continental, for example.

What

else

about 1954?

what's

Well, if

there

market

patterns

1946

if

the

had

you

a

me

market

new

will call

since 1954

really

time.. It seemed to

and

you

been happening

new,

stock

is different

are

new

since

that

that before

went

leading stock,

up

you

and

make

profit

more

and if the market went
suffered a loss. It was
important pre-1946 to know
you

When to have stocks and when to
have cash.

Now,
been

right
more

*

since

then,

I

imDortant to

more

think
have

it's
the

stocks.
There seems to be
divergence;
both
from
a

quality standpoint and a group or
company standpoint. For instance,
the Dow made a high in January,

it's

and
But

back there
had owned base

about

if you

,

*A

talk

by

Mr.

Loeb

before

Business,

1954.

New

York

City,

the Fed¬
in Ameri¬

March

stop buying listed

think

or

mutual funds

after

have

you

meeting there
and answer
period. However, I know one of
the questions I'm always asked is
what individual stocks to buy. So,
the

Following

will

be

I'm

ijoing

question

a

I

to answer that now. The

listing are picked on
long-term
merit.
temporarily over¬
priced. I think. however, that for
non-professionals it is better to
own tse right stocks at the wrong
price than to trv timing a market
which is something that is very
the

am

basis

of

be

may

difficult to do.

Among the oils I like Standard
Oil

of

and

Shell.

New

Among

Jersey,

Corp.

Texas

electronics

—

General

Electric and Philco.

.Aircrafts—United

Aircraft

and

Douglas.
Chemicals—du Pont and Allied

Chemical.
Motion Pictures—Paramount.

Rails—Union Pacific and Atchi¬
son.

Investment

Trusts

—

Lehman

Corp. and Tri-Continental.
Among the miscellaneous I like
American

Home

Products, Owens

Corning Fibreglas, International
Paper,
Minneapolis
Honeywell,
IBM, Goodrich, J. C. Penney, Rey¬
nolds

Tobacco,

Aluminum

Co. of

America, Minnesota Mining.
And for

York
eration of Women Shareholders

right time.

$2,500 to $3,500.

for
retirement,
educating
children,
improving
your

summer

the

try selective buying on your

Some

home,

at

Where do you

and

issues

come

out

investment trusts

put aside money regularly for
special purposes such as extra in¬

to

with the inevitable tran¬ '1951,
from war to
peace, from now.

making

since

And,

an

progress

jobs

example,

For

take General E'lectric up 35 points

Investment

down

the

ownership
with
saving.
On this

must.

a

a

ress

gain.

capital

has
speculation

best

Thus, since 1946, those who are
always long of the right stocks

pre¬

in it correction
of many of the tax hardships and
abuses from which they have suf¬
will

payers

the

funds will become

portion of

a

proposed bill is

to me to

sense

more

ways

the

bear.

this

on

basis, stock ownership for a pro¬

The

I do not believe that the Amer¬

ican

other

lets ypu

year

released

stock

compare

deficit of $5 billion

done

ernment's

makes much

govern¬

exemption, as has
would result in

an

publicity

for

;

investment

best

become

the

a lot of figures on
what prices. So that even if they pay
great gains you can make. I think out 90% of the dividends they get
that's really beside the point.
It- in taxes, they still want dividend

there is

suggested,

have

activity

people too.

The

the

to

billion

personal

been

and

also

the

in

industrial

the

includes

person

revenue

increase this

an

step with

growth

in

and

this

for

reasons

production picture.

G. M. Loeb

are

into

back

and

are

the wealth
of the
country, we would be seeing six
lieve
in
million share days as. a regular
task in a way that will bring per¬
thing. The New York Stock Exmanent benefit to all our people
c h a n ge
knows this and
they
and our country. But we will vig¬
started the new Monthly Invest¬
orously oppose blanket increases ment Plan. Of
course, they want
in exemptions that will throw us
the business but it's really good
rapidly as further
justified. We be¬
carrying out this vital

just

them,

reductions

The

up.

priced

management
at

a

cats and dogs, low
marginal stocks are
mostly down. Incidentally, there
are

for

don't

to

from

quality standpoint. The blue chips

And just

try

also been

divergence'

a

unpopular
—

.

there has

1946

of

more

earning

aside

aircraft

very

corporations
you own

of

owners

trical

the

of

t

m e n

a

insurance, office equipment, elec¬

at

manage-

e

You'd have

you.

On the other hand, the

shares, oaper, rubber, retail trade,

on

Miami and let

can

This

helped

yourself

o y

with

for

drug

stocks,

big loss.

en-

sunning

an

said

have

world

decision

days.

j

you.

Exemptions
We

its

to

metal

w o n-

derful

dividends

which the government will not be

back

pretty

Opposition to Blanket Increases in

spending,
so

Presi¬

dent's proposed

of this generation to not

developed by the Ways and Means

1954.

be

can

limits

the

gin to transfer billions of dollars,

Our costs of

Columbia, Washington,

accom--'
believe, substantially

we

within

very

good reason for this. We must al¬
ways

better peaceful

billion

$6%

plished,

will

cutting
taxes
even
have not arrived at a

we

1954?

,

as

millions of Americans.

are

though

the

to

This revision bill which has been

address

District

the
over

Neither real

by Secretary Humphrey
before the League of Republican Women
of

in

additional
more

Committee
*

changes

will, when enacted,

further

than

able

Transition

Further

will

and

'

This total tax reduction of more

than

we

system being worked out

Thus

fu¬

deficit

living.

cur¬

now

provide

•

and

anticipated

government
reduction in pro¬

This

recent months

has

must

approach

the
Treasury and
Ways and Means Committee

charge

Enough of this deficit spending
already been done and we

sugges¬

between

cur-,

upon

Ad¬

have

future

ex¬

ture generations.

avoid

from

and

the tax

then borrowed and

continuing

the

program

different

government.

spent

was

tax

different... about

our

The key fact is

the

billion

of fuller

ucts

in

wars

for

instru¬

leaving with the taxpay¬
ers
more
than $5 billion a year
which formerly was spent by the

tax

the

past

money

was

us

for

in

the de¬

making

What's

Well, for one thing, not enough equipment, gold, textiles, tobacco
farms,
people own stocks and they're be¬ or independent motors, etc., the
mines and factories, and by in-,
ginning to realize it. It's really recovery in the Dow Industrials
creasing the demand for the prod¬
has not

efficiency of

the

ing

days.

are

.

must

'to replace

fuller

posed spending made possible the
tax cuts on January 1. These cuts

lective security.
Added to this is
also the continuing
costs which
we

better

incentives,

by strengthening

by making more jobs, by increas¬

creation

outlines of

a

spending.

money collected from the people
still is being spent for our col¬

penditures

the

greatly

the

changed, despite

for

rent

the

dollar of

uals

which have been urged in recent

$12

high and about 70
every

for

in

past 12 months this Ad¬
ministration has cut more than

has

required

one-third will benefit all individ¬

that

In

reductions

However,

year.

still

and

weapons

expenditures

are

cents

new

substantial

coming

costs

the

on

made

in

for

broad

tions

result of the

a

jobs

not been

a

reductions which
as

be

contribute

jobs

new

The

ernment.

the

to

ministration's

financial requirements of the gov¬
This with

confi¬

my

future, is the Admin¬

confidence

clining

the

on

me,

ments. of death.

thing for all Americans

it, but provides less drain

for

tax

peaceful living

a

strong economy here at home. 1
During the past year the shoot¬
ing war in Korea has ended. This,
of

significance to

structure

our

of

security

abroad

the

minimum of

a

reason

recommended

Administration's

from

transmitting

program. Changes
which have already been put into
effect and others which have been

may

related directly to the
fiscal and eco¬

are

main

a

dence in the

^ppear.
The problems of our
posture of

defense

in

Of particular
and

the

ever,

said

Administration's Tax Program

our economy to
support
indefinite number of years,

knowing when, if

_

economic

our

this transition with

limits of

critical

in

difficulty.

that it will be

and continually modernized
progressively stronger and
stronger and still be within the

not

a

Economic Report in January, that
there is much that justifies con¬
fidence in the accomplishment of

for the

and

an

Economic

growth. I feel today, as the Presi¬

the

fluid

for

President's

to

taxpayers

the

people.
the

interruption

crisis-to-crisis basis. We
so

mass

period of less cost¬
preparedness without serious

ly

long pull if necessary. We are re¬
shaping our defense so that it is
a

The
com¬

possible interference in

transition to

will

at

economy to support

daily lives of the great
our

millions of individual
suffering from special
hardships and unfair taxes. About
rectly

Report to the Congress in January
said, this nation can make the

past

which

abroad

time

same

of

be

cases

the

As

growth. About two-thirds
of the
$l1/2 billion relief from
this tax revision bill will go di¬

change-over

least

of

provide reasonable security from
attack

the

as

the

re-

Administration

great

jobs must be created.

pleted immediately but by careful
management
and
proper
fiscal
policies it should be done with

can

months.

decline

continues cannot be avoided.

In both defense and

latibnis

jobs

war

switch cannot in all

continuously
support that military requirement.

made

of things

great

a

employment

ari economy of
such
strength

d

Men mak¬

manner

complish it without serious dis¬
locations being created. Some un¬

maintain

a n

war

employment

transition and it
involves painstaking effort to ac¬

real

And
we

is

men

of

peace.

As

peace

It

peace to a 11

the

living.

new

help

As fewer

weapons

find

to make all

for

but

to

on

must

ef¬

planned

for killing must change

guns

over

only to defend

work
men

products of

on

military

ficient

at

are

the

as

better

our

security increases.

great goals. They are:

we

strength

declining

are

fectiveness of

has been

Bny?

By GERALD M. LOEB*

tax
revision program will
help the nation make the transi¬
tion
to
a
period of less costly
military preparedness without
serious interruption in our eco¬

Secretary of the Treasury

Thursday, March 11, 195$

.

Which Stocks to

life.

This

By HON. GEORGE M. HUMPHREY*

.

of

included the
of hundreds of expert
which

appearances

witnesses

months

of

result

study

.

speculation, I like New

Central,

Pepsi-Cola,

Radio

Corp., Kaiser Aluminum and Stan¬

8,

ley Warner.

■

Volume 179

Number 5306

.

.

The Commercial and Financial Chronicle

.

(1107)
Reaction

Fair Piuces

law

is

powerful

a

which

cannot

be

out of existence. Economic

By ROGER W. BABSON

of

adjustment

not

are

just

Such

velop

out

the

during boom conditions. Business¬

despite

constitutionality

of

such

price-fixing legislation, final de¬
cision

lies

with

the

with

not

consumers,

Holds

courts.

price-

fixing won't solve our price prob¬
lems, any more than government
regulations, and says price-cut¬
ting

have

may

neither laws
outwit

the

its

Law

of

become too

misjudge
estimate

the
their

de¬

bullish; they

future;

they

markets

This

is

stuff.

course

of

shakes out

may

sharpens

the

of the

consumer

quality,

proves

wit

volume,

a

neither

I

that

that
stiff

a

court

action

of

-

will

out¬

.reappraisal

the

manage¬

get

me

profit

profit

These

system.

A

point out,

however, is

laws

symptoms of

come

for

lem. Let's get on with

profitless

problem

another

tween

of

of

more

can

tempest
some

is

PARKER DAM

that

paper

brewing

be¬

manufacturers

and

NEW ISSUE

the sellers
of

their

merchandise.
Cause

of

blow:

$10,000,000

the

mer¬

chandise

is

being sold be¬
low

Metropolitan Water District

fair-trade

prices.

Before
war,

the

the

on

Continent

and

in

especially

Shaded portions show
in the

Metropolitan Water District of

Southern California

as

Southeastern

Asia,
ever

of Southern California

included

areas

of June, 1953.

'llh% Colorado River Waterworks Bonds,

nobody
paid the

Election 1931

asking price

Roger W. Babson

unless

he

had

hole

ip his head. At that time,
America, very few ever ques¬
tioned the
list
price. Today, in
increasing
numbers,
Americans

a

in

Dated

April 1, 1954

Due

convinced

this

that

largely

encouraged

soldiers

from

AMOUNTS, MATURITIES

returning

by

Principal and semi-annual interest (April 1 and October 1) payable

their

After

abroad.

AND YIELDS OR PRICES

is

movement

experiences both in foreign

Water District of Southern California in Los

home,

it

very

them to pay

On the other

hand, courts of the
"Fair-Trade" laws

States

have

having
upheld the

laws.

Recently,

Court

of

favored

the

the

legality of such
the Supreme

United

States

to

all

the

of the District

apd

the

at

.

-

In the

"•

'

•

to

....

,

principal and interest and interchangeable with the
'

"v

■

•

,

'

'

1

--

,

"

■

■

.i

:

.

from all present Federal and State of California Personal Income Taxes under existing
regulations and court decisions.

manu¬

final deci¬
We believe that these bonds

ject

oleomargarine

to

legal investments in California for Savings Banks, sub¬

the legal limitations upon the amount of

a

bank's investment,, and

are

legal investments in California for trust funds and for other

funds which
Argument

ments

be invested in bonds which

may

for Savings Banks, and

for deposits of public

manufac¬

some

are

are

moneys

legal invest-

are

eligible

as

f

security

in California.

turers say, is necessarv in order to

the

get

widest

possible

distribu¬

tion. The argument here is that if

company's

a

is

product

being
undersold by a price-cutter, the
legitimate dealer will give up that
line of goods, distribution outlets
will shrink, orders drop off, pro¬
duction lag, and workers will be
out of a job. For this reason, these
companies say the time has come
for

them

lawyers,

to

spend

well

money

These bonds,

to

be issued under the provisions of the Metropolitan Water District Act,

in the opinion of counsel, will constitute the valid and

purposes,

binding obligations cf the Metropolitan Water District of Southern California and said5
•

<

~r=yt

said District, subject to taxation

cicnt for the payment

on

and interest

.

•

...

and is obligated

to

levy ad valorem

upon

by said District, without limitation of

of said bonds and the interest thereon

on

taxes

said bonds

as

shall

not

he

met

from

or

such

revenues

as on

out to them.

be added)
Yield

or

Price

Amount

Due

$250,000

1955

250,000

1956

.90%

250,000

1957

1.00%

.75%

250,000

1958

1.10%

250,000

1959

1.20%
1.30%

250,000

1960

250,000

1961

1.35%

250,000

1962

1.40%

250,000

1963

1.50%

250,000

1964

1.55%

250,000

1965

1.65%

250,000

1966

1.70%

250,000

1967

1.75%

250,000

1968

1.80%

250,000

1969

1.85%

250,000

1970

1.90%

250,000

19/1

1.95%

250,000

1972

2.00%

250,000

1973

2.05%

250,000

1974

2.10%

250,000

1975

2.15%

250,000

1976

2.20%

250,000

1977

2.25%

250,000

1978

2.30%

250,000

1979

2.35%

250,000

1980

2.35%

250,000

1981

250,000

1982

250,000

1983

2.40%
2.40%
2.45%

1984

2.45%

'

District has power

advertising.
They are ready to spend plenty to
curb price-cutting of "fair-traded"
merchandise. My sympathies
go
as

as
.

amended, for waterworks

to

1

opinion of counsel, interest payable by the District upon its bonds is exempt

likewise

Price-fixing,

as

;::

'i

•

•.

legislation.
The Manufacturers'

(Accrued interest

the principal office of the Chase National

or at

of the holder.

expense

statutes,

"fixed-price"

facturers. However, the

consent

has

sion lies with consumers, not with
the courts. Remember what hap¬

pened

Coupon bonds in denomination of $1,000 registerable

difficult to get
list prices anywhere.

is

Angeles, California,

the office of the Treasurer of Metropolitan

at

Bank in New York City, at the option of the holder.

coun¬

tries and in their canteens here at

,

April 1, 1955-94, incl.

shopping for discounts. I am

ar|e

all

property

within

rate or amount

part

stiffi--

of the principal of

of the District

250,000
•

The above bonds

arc

off ered when,

as

and if issued and received by

us

and subject

to

approval

250,000

1985

100

250,000

1986

100

250,000

1987

100

250,000

1988

100

250,000

1989

250,000

1990

2.55%
2.55%

250,000

1991

2.55%

the profit take in other industries

250,000

1992

2.60%

is

250,000

1993

2.60%

250,000

1994

2.60%

There

is

little

question
that
profit margins in some industries
are

slim.

Let's admit

fabulous,

and

around.

How?

nomics

courses

has

eco¬

Some

Simple

is my

belief that price-fixing

any more

lation.

our

price

once

the

to

keep
in

price

a

the

business

long-run,

level

inefficient
a

Fair-

may

help

it

In

may

Law

of

Merrill Lynch,

R. H. Mouiton &

The Northern Trust Company-

Action




Security-First National Bank

Company

of Los Angeles

Pierce, Tenner & Beane

A. G. Becker & Co.

The First National Bank

Weeden & Co.

Wertheim & Co.

Lawson, Levy & Williams

>

J. Barth & Co.

Oregon

Stone & Youngberg

incorporated

Wagenseller & Durst, Inc.

Gross, Rogers, Barbour, Smith & Co.
,

-

H. E. Work & Co.
Kalman &

the

only

prolong the day of judgment.
Newton's

:

Irving Lundborg & Co.

Brush, Slocumb & Co. Inc.

businessman

little longer.

however,

Company

of San Francisco

easy

main¬

upon

The First Boston Corporation

Blyth & Co., Inc.

of Portland,

an

problem.

trading and insistence

taining

problems

seemed

The Chase National B2nk

,

than Government regu¬

This

solution

Economics

Bank of America N.T.&S.A.
American Trust

solve

won't

Dawson, Attorneys, New York City and

O'Mclycny & Myers, Attorneys, Los Angeles, California.

schools

colleges,
buying
magazines, and by word of mouth.

It

-

gotten

consumer

in

public
consumers'

and

Messrs.

it, though—

word

Via

of legality by Messrs. Wood, King &

and

March

11, 1954

Company

Stern, Frank, Meyer & Fox

basic

solving the

efficient

Supply and

your

our

honest management.

more

I wonder if you have noticed in

columns

price-

is not the symptom, but the prob¬

margins.

Demand.

the

or

not the real problems.

are

are

pros¬

nowhere. What

difficulty. What needs to be cured

I believe in

wrong.

to

us

"Fair-Trade"

cutting

Supply and De¬

of

want

profitless

a

necked

the' laws

Don't

research, im¬

like

forecast
nor

nor

and

perity, will get

Perhaps the time has

efficiency,

makes

I

cost-conscious,

reappraise its pricing

mand, Action and Reaction.

it

deadwood,

production

activates

size of the consumer's
pocketbook.

some

policy,

be

may

because

economy

more

it to

policies.

reasonable

behavior, and it
our

ment

forces

legislation,

Have Uses

perfectly

a

re¬

a

somebody cuts

move some

good for

over¬

and

slackens,

and

Price-Cutting May

practiced

excesses

in

but

uses,

court action

nor

men

of

usually

demand

sets

prices to

acci¬

dents.

v/hen

action

periods

Mr. Babson discusses the "FairTrade" laws, and notes,

periods

So

natural

legislated

7

Hooker & Fay

and

8

The Commercial and Financial Chronicle

(1108)

Madison

Gas

Electric

&

Company—Special report—Loewi

Co., 225 East Mason Street, Milwaukee 2, Wis.

Dealer-Broker Investment

able

is

Manhattan

Shirt

15 Broad

Recommendations & Literature

New York

firms mentioned

that the

understood

It is

send interested parties the

to

will

he

pleased

following literature:

Lehman

Corporation, National Aviation Corporation, Petro¬

EVENTS

6arney

Company—Bulletin

Power

Corp.—Analysis—Ira

Light

&

&

Equipment Trust Certificates—Semi-annual

appraisal—Stroud
Company, Incorporated, 123 South Broad Street, Phila¬
delphia 9, Pa.
Also available are semi-annual appraisals
of
City of Philadelphia and Philadelphia School District
&

Bonds.

Co., 115 Broadway, New York 6, N. Y.
Inc.—Analysis—H.

Rayonier,

York

New

Haupt &
Goodbody

Stocks

issue

March

charts
showing monthly highs, lows, .earnings, dividends, capitaliza¬
tions, volume on virtually every active stock on New York
and. American Stock Exchanges for 12 years to March
1,
1954; includes up-to-date earnings reports and 14 new charts
—single copy, $10; yearly (6 revised issues), $50—F. W.
Stephens, 15 William Street, New York 5, N. Y.
—

containing

Security Traders Association 01
New York annual dinner at the
Waldorf-Astoria.

Soundcraft—Analysis—John R. Boland & Co., 30 Broad
Street, New York 4, N. Y.
,

1001

over

Riverside

Investment Opportunities in Japan—Circular—Yamaichi Secu¬
rities Co., Ltd., Ill Broadway, New York 7, N. Y.

ers

Bulletin

—

Filor, Bullard & Smyth, 39

—

Russell

Reinforced

Plastics

ing.

Board of Governors of Associa¬

Corporation, 111 Broadway, New York 6, N. Y.

tion

Sperry Corp.—Memorandum—Walston & Co., 35 Wall Street,

5, N. Y.

Vitro Corp. of America

Analysis

—

Leason & Co., Incorpo¬

—

cial

up-to-date com¬

an

National

performance

Quotation

Bureau,

over

Inc.,

period—
Street, New

13-year

a

46

Front

of

Notes

NSTA

Marunouchi, Chiyoda-ku, Tokyo, Japan.
♦

*

American Encaustic Tiling

Broad

Encaustic

—

NSTA

MUNICIPAL COMMITTEE

Ludwell

A.

Tiling—Memorandum—Hirsch

Street, New York 4, N". Y.

&

Also available is

—

Co.,
a

Miller & Co., Newark,
John W. Clarke, Inc.,

25

report

D.

Gas Company.

N. J.; John W. Clarke,
Chicago, 111.; William \
Securities Corp., Durham, ;

First

Croom,

N. C.; Henry E.

Broad

Pacific Railroad.

Francisco, Calif.;

Company—Report—Eastman, Dillon & Co.,

Co.,

15

Street, New York 5, N. Y.
Also available are brief
analyses of New York Central Railroad, Pittsburgh & West
Virginia Railway, Portland Terminal Company and Union
Caterpillar Tractor Co.
&

Chicago

a

memorandum

Woody

&

Christiana

on

cial

Credit

Dayton
ton

Credit

Price,

231

South

La

Ludwell A. Strader

Co.—Bulletin—Laird, Bissell

&

Meeds,

connection

&

Sept

J.

Board of Governors of Associa¬
tion

Power

Company—42nd

Nov. 28-Dec.

Light Company—Annual report—The Day-"
Light Company, 25 North Main Street, Dayton

Stores—Analysis—Lester, Ryons & Co., 623 South

General Acceptance Corporation

Analysis
Co., 25 Broad Street, New York 4, N. Y.
—

Company—Annual

—

Kalb, Voorhis &

report—Department

119-

2H, General Electric Company, Schenectady, N. Y.
Giant Yeilowknife Gold Mines, Ltd.—Bulletin—De Witt Conklin Organization, 100 Broadway, New York

5, N. Y.

Interstate

Gas

Co.

—

Memorandum

—

Rotan,

Mosle

&

with

will

their

Leach,

and

chairman

value

members

constructive

any

the

of

Mu¬

Mines, Inc.

Analysis — Eastern
Broadway. New York 5, N. Y.
and

—

Casualty

Insurance

Securities

Inc.,

memorandum

on

OF

ASSOCIATION

NEW

^

(Special to The

Points

Manson, Jacobs, Topol, Weissman, H. Frankel
Donadio, Craig, Gronick, Bies, Demaye
Serlen, Rogers, Gold, Krumholz, Gersten
Kaiser, Hunt, Werkmeister, Swenson, Ghegan
Growney, Corby, Siegel, Voccolli, Lienhardt___.
Bean, Bass, Valentine, Eiger, Bradley

25xk
20
18%
17%
16V2

Leone,

15%

Nieman, Gannon, Tisch, Greenberg
Burian, Gavin, Clemence, Montanye, Whiting

200

Point

"

5%

5

219

Charlie

200

Art Burian-

201

Julie Bean

214

Sam Gronick

200

'

Kaiser

Member

Attapulgus Minerals &

Hornblower

cago

N.A.S.D.

Broker and Dealer

CLEVELAND, Ohio — Andrew
now with Jaffe, Lewis

&

Co., 1723 Euclid Avenue, mem¬
of

John

La

A.

Brown

ATLANTA,

Ga.

—

Samuel

W.

without

2400

74

Trinity Place, New York 6, N. Y.




NY 1.

376

obligation

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

BOwling

Green

Head Office

with

Chronicle)

Street,
Stock

was

Co.,*T

North

members of the
Exchange.
Miss

formerly with Thom¬
and
Reynolds

McKinnon

Co.

Waggoner,

Parsons Adds to Staff

First National Bank Building. Mr.

(Special to The Financial Chronicle)

with

Wyatt,

Preston

was

Neal

&

formerly with Han¬

9-0187

Tokyo

has

(Special to The Financial Chronicle)

CHICAGO, 111.—Frank N. Plain
rejoined the staff of Fahne¬

stock

&

Street.

Co.,

135 South La Salle
He has recently been with

Goodbody & Co.

H.

Ohio—Harry

CLEVELAND,
Oberman

been

staff of Parsons

has
61

&

&

&

Dawson

Salle

son

(Special to The Financial Chronicle)

Rejoins Fahnestock Co.

I

Association

Ex¬

Stock

Midwest

the

change. • He was formerly
Slayton & Co., Inc.

111.— Edith
ML
Brown has become affiliated with

cock, Blackstock & Co.

on

Security Dealers

many

With Jaffe, Lewis Co.

(Special to The Financial

Donadio

Japanese Stocks and Bonds

Y.

for

Weeks

&

previously in their Chi¬
office.

years was

CHICAGO,

Material and Consultation

N.

the

Preston, Jr. has become affiliated

Corporation

Troster, Singer & Co.

with

Joins John A. Dawson Co.

207

5 Point Club

ijtonnmi Acclivities

associated

now

Club

Ernie Lienhardt

Joe

is

bers

13

Jack Manson„„

(Co., £trt.

Members:

Chronicle)

F. Borla is

With Wyatt, Neal Co.

HA 2-

Financial

(Special to The Financial Chronicle)

14
13

Krisam, Pollack, Cohen, Smith, Strauss, Define
Klein, Fredericks, Murphy, Weseman, Mewing
Meyer, M. Meyer, Frankel, Wechsler, King—

Packard Bell Co.

Chemicals

Beach

Weeks, Union Commerce Build¬
ing. Mr. Moe who has been with

16

—

Printing Available

Hollywood

Cleveland office of Hornblower &

Midwest

Second

at

With Hornblower in Cleve.

Moe

YORK

Team:

Company—Analysis—Equitable

—

TRADERS

120

Corporation, 322 Union Street, Nashville 3, Tenn.
Memorandum
Fewel & Co., 453
South Spring Street, Los Angeles
13, Calif." Also available
a

(Hollywood,

3, 1954

Hotel.

work.

Security Traders Association of New York, Inc. (STANY)
Bowling League standing as of March 4, 1954 is as follows:

Securities

Landers, Frary & Clark

Firm*

Investment Bankers Association
Convention

in

suggestions

Hunter, Brown, Alexander, Farrell, Barker

Cooper, 705 Travis Street, Houston 2, Texas.
Haile

Exchange

Fla.)

Gustav Klein,

report—Commer¬

&

Electric

Stock

CLEVELAND, Ohio—Walter S.
SECURITY

annual

Hope Street, Los Angeles 17, Calif.

General

of

meeting.

Ohio;

Cincinnati,

Strauss

S.

(Minneapolis.

1954

23-25,

Minn.)

La;

The

Committee

nicipal

1, Ohio.

is

Jr.,

Birmingham, Ala.; John J.
Zollinger, Jr., Scharff & Jones, Inc., New Or¬
leans,

&

Company, Baltimore 2, Md.

Power &

Fitzshnmons

Life

Heimerdinger,

Hill,

Traders Asso¬

Hotel Claridge.

Broadway, New York ,5, N'. Y.

Commercial

Gulf

&

& Co., San
Mead, Miller
Co., Baltimore, Md.; Alonzo H. Lee, Sterne,

Agee

White Motor Co.

Chicago 4, 111.

Securities

National Security

ciation Annual Convention at the

—

Corp.—Memorandum—Hicks

Salle Street,

120

—

Sept. 22-26, 1954 (Atlantic City)

Tucson,

Houston

Memorandum
Auchincloss, Parker
Redpath, 52 Wall Street, New York 5, N. Y. Also avail¬

able is

"

;

Dahlberg, Henry Dahlberg & (
Ariz.; Russell M. Ergood, Jr.,
Stroud & Co., Inc., Philadelphia, Pa.; Landon
A. Freear, William N. Edwards & Co., Fort
Worth, Texas; John N. Fuerbacher, Walter,

Carborundum

,

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

William

Attapulgus Minerals & Chemicals Corp. — Report — Troster,
Singer & Co., 74 Trinity Place, New York 6, N. Y.

.

members for his committee for 1954:
Roos, Vice-Chairman, MacBride,

lowing

Annual report

chester

Chairman, Municipal Committee, Na¬
tional Security Traders Association, Inc., has announced the fol¬
Strader,

>

Tiling Company, Inc., Lansdale, Pa.

Public Service Electric &

on

*

*

Company, Inc.

(New York City)

Bond Club of New
York 21st annual outing at West¬
Municipal

-

proposed new government measure in current issue of
"Stock Bulletin"—The Nikko Securities Co.,
Ltd., 4,1-chome,

Annual Convention at

Canada

June 11, 1954

Assets—Brief discussion

of

(Canada)

Jasper Park Lodge.

1

Reappraisal of Japanese Corp. Fixed

American

Finan¬

Conven¬

Investment Dealers' Association

York 4, New York.

American Encaustic

of

Societies

Analysts

June 9-12, 1954

parison between the listed industrial stocks used in the Dow-

market

(Chicago, HL)

Federation

National

tion at the Palmer House.

showing

Jones Averages and the 35 over-the-counter industrial stocki
used in the National Quotation Bureau Averages, both as to

and

Firm*

Exchange

Stock

May 16-20, 1954

rated, 39 South La Salle Street, Chicago 3, 111.

Stocks—Bulletin—Price, McNeal & Co., 165 Broad¬

Over-the-Counter Index—Folder

yield

of

meeting.

"

New York

Mass.)

May 12-14, 1954 (Boston,

Corporation—Analysis—Aetna Se¬

New York 6, N. Y.

way,

Investment Bank¬
Association 19th Annual Meet¬

Texas Group

Broadway, New York 6, N. Y.
curities

on,prelim¬
inary earnings for 12 months ended Dec. 31, 1953—Geyer
& Co. Incorporated, 63 Wall Street, New York 5, N. Y.

Company—Analysis—ask for report T-31—

Inc.

(Dallas, Tex.)

May 9-11, 1954

Co., 10 Post Office Square, Boston 9, Mass.

Bobbins Mills,

Insurance Stock Prices—Comparative figures based

Low Priced

Cement

Lerner &

City)

May 7, 1954 (New York

Reeves

Graphic

Dealer*

•

Potential.

Growth

(St. Louis, Mo.>

Louis; Municipal

Group annual outing.

Co., 60 Beaver Street,

Hentz &

18th annual conference

Apr. 29-30, 1954

Also available is a list of stocks with

Y.

4, N.

—

of

Association

at the Drake.

St.

Memorandum

—

Invest¬

proup

Bankers

America,

Co., Ill Broadway, New York 5, N. Y.
Puget Sound Power & Light Co.

States

Central
ment

Corp.—Progress Report—B.

Sound

(Chicago,

1954

1,

111.)

two bulletins on Railroad Switch Sugges¬

are

31-April

Mar.

153)—

(No.

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

Co.,

&

S. Lichtenstein and
Company, 99 Wall Street, New York 5, N. Y.

Puget

Field

Colorado Springs, Colo.

Railroad

Central

Oil

Investment

In

(Nos. 154 & 155).

Noranda

leum Corporation of America and Transamerica—Thomson &

McKinnon, 11 Wall Stteet, New York 5, N'. Y.

Co.—Memorandum—Hemphill, Noyes & Co.,

Brake—Analysis—Boettcher and Company, 105

Air

Also available
tions

Closed-End Investment Companies—Discussion with particular
reference to Atlas Corporation, General American Investors,

COMING

Street, New York 5, N. Y.

York

Smith,

&

Lakeside Laboratories, Inc.

on

East Pikes Peak Avenue,
New

Thursday, March 11, 1954

Also avail¬

report

a

...

added

& Co.,

to

the

Inc., NBC

Building.

With Anderson Cook Co.
(Special to The

Financial

Chronicle)

ha.—Walter

H.
Cook
208 South County Road.

PALM BEACH,

Herrington is with Anderson
Co., Inc.,

Number 5306

Volume 179

The Commercial and Financial Chronicle

...

plieS

who

Investment Research in

whv

performance of

sons

the

oast

25

have

I

years,

participated actively in the evolution of economic and investment

it

spective,
seems

to'me
this

that

has

evolution
some

teresting

i

tion

which
have

may

escaped

general attenThe

tion.
B.

Dorsey

de-

loeical
be

rea-

One

so

hebe

prke
price

IdC

investors are better informed to-

stock like U. S. Steel. However,
the

force

same

that was

having such a marked effect on
the price of that issue applies in

Mv

first

noint

therefore

to suggest that U has become

hazardous to make

an

v

very

of

investors.

fact that

the

the

investment

evolu-

research

ment prices—should focus atten"on on the need for keeping the
investment research procedures
up-to-date. As the director of a
research staff, I am very conscious
of the importance of stimulating
my specialists to develop new
techniques, to develop new sources
of infomation, and to include as
an integral part of their analyses
a logical interpretation of the
probable effects of changing eco-

nomic conditions.
I would like to focus your at-

investment

be repeated—

consideration

that the investment market must

time, because

is

likely

to

at

this

particular

interpretaforces at this

a proper

of necessarily repeat the errors that tion of economic
of were made in earlier periods. I juncture is likely to have an imforce have seen many instances wherein portant influence on the success

type

research work has become a

I would like investment mangers have made a of your investment policies. It can
speak about this force, make a mistake in their investment deci- be demonstrated that investment
few suggestions about the process, sions on individual i s s u e s . be price fluctuations are being
inand then discuss some of the cur- cause they were more influenced fluenced to a steadily increasing
as

well

as

a

!_xhe

annual

nf

avera„„

expenditures

for

dur-

w'th this particular aspect of the 53% higher than 1940 and 86%
altuatlon.1 feeI tha* » ia necessary higher than the 1935-39 average.
for
I™ \° understanding.
m!ke a plea fo,r
un' Bear in mind> this fi?ure is °ver
emotional
We are and above the effects of populaVOCnnnOl

haps

commitment on the premise that tention on this latter point as a
historical price performance of the matter that should command your

issue

Fact

con^mer

outlook

K1

O

fo

1 v-»

Trnr^wt

/-v v\

4-

/\

-£

4-i

^

J

v.

"L I

„

A _

...

s~\

researchers

in Investment
Tnvpstmpnt Research
Rpsparrii
in

velopment
this

w

some

good

accomplished

is

1940. On the

same

basis

—

that is,

by reassurin£ statements, but I making allowance for population
•

seriously doubt it. As

a

matter of

growth and price changes

ex-

fact, it is my own view that the penditures in the seven postwar
r?al villians of a business depres- years for construction and equip-

sensitive determinant of invest- jstic

fact that more

reasons

of

«,j

business

havior was the

sig! L

nificance

iccupc

often

expenditures lor aurDusiness ouuook abie g00ds. after making full al-

the

work has become a force—a more sion are the leaders

thp

practical

Harold

The

varying degrees to other types of
investments for precisely the same

in-

about

are

overlooked'

•

widely accepted by

as-

very

ions

in our analysis of

the facts. Now, I would like to
direct your attention to a few of

condition that should the pertinent facts that

integral part of an investappraisal.
At
this
very
moment, it seems to me that opinan

sion from the historical price be-

I think

we

sa vassirar*^ asx sarwra
but* It '"
?;'?;? 1 ",™cfa
*"lh" "v*"
™

the
tne

of
ot

investment

the

Fvnintinn
Evolution

procedures; and now, as I day than they were years ago.
studythis
I realize that very few in this
experience in group axe particularly interested
its broad per- in the price behavior of a cyclical

research

cause

a

eco-

ment

were

a

vestment commitments,
For

were

be

for

Herein,

9

raaP°nslble ,fo,r the investment of tion growth and higher prices. On
rioln^a hotter ioh and thei? °lher Pe0PIe s money. In dis- a unit basis, each theoretical perconclusions
thls, responsibility, we son was goods
spending
53% more for
conclusions
were beint
oeing
g more charging
must be completely realistic. Per- durable
than he was in

that

slackening of rate of debt expansion, and a
personal income. Advocates careful review of in¬

goods,

decline in

thpsp

bll"

influenced by broad economic

durable

fnr

Jerv
thltshould

diere
whv

bull

a

most
instances
sound reasons

in
very

HpmanH

important
important

procedure up-to-date. Says security price fluctuations
forces, and ascribes present
confusion regarding the business outlook to "unwillingness to
face certain facts/' which he enumerates. Sees as unfavorable
factors a saturation in supply of producers' and consumers'

research
are

thp

aSn

issue

an

likely to be repeated, stresses need of keeping investment

is

but

were

1953.

of

responsible

are

nomic maladjustmens.

marke/f' recognize

in

were

selves,

markets

experience

securities

Some

pointing out it is hazardous to make an investment

premise that historical price

the

bull

*?ear

S£m
all-ir^luslve
Witness the

there

President, Argus Research Corporation,
New York City

officer
investment
the degree to which they, them- pletely realistic
have

must

we

all-inclusive

market,

By HAROLD B. DORSEY*

on

the
J0,,

believes that

either'

Present Economic Situation

Mr. Dorsey,

(1109)

whose unreal- ment averaged 64% higher than

optimism <encourages the 1940 and 131% higher than the

overexpansion that subsequently 1935-39 average;

has to Ioe corrected by a business

setoacK.
Dr. Edwin G. Nourse, former
Chairman of the President's
Council of Economic Advisers, ex-

These heavy-type expenditures

are the most volatile segments of
our economy. They are > the
dynamic purchasing power creation segments; they have a

pressed this view very succinctly, multiple, or a spiral, effect on
when he said: "It is my conviction activity. The figures show that
that no one can scare a sound they have been running at a very
economy into a depression, and high rate, by historical comthat Pollyannas cannot keep parison, for a prolonged period of
business errors and government time, even after we make full
subterfuges from facing an ulti- allowance for population growth
mate day of reckoning. We stand and price changes. This phenoma ketter chance of checking a e"an must be one of two things:
^cession before it gets out ot either it is a new era, or we

initiating real and should suspect that it contains 1mtlmely recovery measures, if we portant elements of overexpansion.
unshrinkingly dig out and face port
Th for
s isthe
merely
statistical
supcommon
observation
tfte tacls> however unpleasant.
that much of the activity that we

banc*' anc*

Realism

Needed

process.

in

Investment

have

seen

in

the

postwar period

represented not only the satisfac-

Analysis

to

ai

of current needs; but it also
represented the filling of a back-

be inrent problems of the investment by outdated concepts than they degree
by the broad economic fluenced by hopes, fears, or any
officer as I see them.
were by the evident forces which
forces, some of which are beyond other emotion. Our work is an

lo£ of needs, a filling of pipelines,

All of

critically analyze the strongly suggested an alteration in

us

affairs of

a

given'Companybefore

granting it a loan or investing in
its securities. Our appraisal of its
worth is influenced by the man¬

the historical pattern.

This

.

thought, in particular, ap-

tion

attitude

Your

least,

cannot

,

and

afford

mine,

to

^^inde^
dances,
stances

wherein

cornorate
corporate

manl
man-

discharee
discharge

agements are slow to appreciate isfactorily

our resoonsibilities
our
responsibilities

unless

we

satsat-

an anticipation of future
needs" Bear in mind that these
expenditures for producers' and

and

com-

are

Continued

agement's ability to adjust opera¬
to
changing conditions. I

tions

suggest that we should undertake
little introspection at this time

a

to see whether our own

operating

procedures in the investment field
are giving consideration to chang¬
ing conditions. Like every other
component of the economic ma¬

investment

chine,

more

come

work has be¬

intricate

and

to

Not

a

New Issue

1,000,000 Shares

above-average performance, espe¬

in

the

of

light

buy any of these Shares.

more

highly specialized. The investment
manager who makes his decisions
by ear, or by his recollection of
historical behavior, does not have
much
chance
of
recording
an
cially

offer to sell nor a solicitation of an offer

This announcement is neither an

i

.

t

changing

business conditions as I see them

International Harvester Company

today.

with the de¬
tails that would demonstrate the
I will not bore you

Common Stock

improvement in the techniques of
investment research over the last

(No Par Value)

of a century. But I do
want to point out the significance
of the fact that there has been a
quarter

gratifying improvement in
of investment analysis
and in the scope of its applica¬
tion. Because a larger proportion
of investors are much better in¬
formed about real values, it logi¬
cally follows that there should be
an
alteration
in
the historical

i

.

very

the quality

Price $28'/2 a Share

pattern of the supply and demand
equation for investments.

extreme illustration
point that I have in mind:
Under conditions that prevailed
To give an

of the

during the first half of 1953, the

price of the stock of U. S. Steel
might have been expected to rise
to $100 a share, if it were to con¬
form with the 1937 price-timesearnings pattern.
But,, as you
know, the best price in the past
year

MORGAN STANLEY & CO.

in the middle '40's. It
contention that one of the

was

is my

important reasons for this digres•An

address

by Mr. Dorsey before the

Annual Savings and Mortgage

Conference

sponsored by the Savings and Mortgage
Division of the American Bankers Asso¬
ciation, New York City,

March 2, 1954.




March 10,1951.

THE FIRST BOSTON

CORPORATION

on

page

26

10

(1110)

The Commercial and Financial Chronicle

commercial

our

Dangers in Rapid Conversion of

sessed

would

have

of

many
due

University

the

to

been

these

portfolios,
banks

of

avoided;

failures

quality of bank
the fact that

poor

but

for
not

were

to

in

areas
suffering an adregional balance of payments, such as the agricultural
areas, could not sell their
local

be reasonably concluded that the inflationary
pressures of the war and the postwar periods are behind us,
Professor Seltzer cautions against speeding up the funding
of short-term Federal debt into long-term securities.
Points
out, if supply of short-term Treasury securities were reduced
too sharply, business corporations would be forced either to
hold larger bank balances or to seek short-term private obliga¬
tions.
Concludes, with our growing population and output,

1

pos-

Treasury
obligations
during the late 1920's and early
1930's, thousands of bank failures

By LAWRENCE II. SELTZER*

Asserting it

had

amounts

short-term

Short-Term Federal Debt
Professor of Economics, Wayne

banks

comparable

can

verse

continuing

a

growth

in

supply and other

money

I

liquid assets.

recall

vigorously GovBenjamin Strong
of
the

Jernor

Federal
I

should

pressing
the

like

to begin by exhigh admiration for

my

"Economic

President."

Its

of

the

amount in

of

the

tions

con-

dition and

re-

of

past

our

cogent,
comprehen-

sive

and

I

particularly
like its strong
emphasis

an

ex-

panding

econ-

omy.

Seltzer

Since I have

been
to

tively,

to the total of adjusted
savings deposits.

time

or

invited

address

myself specifically to
monetary policy, debt management, and interest rates, I shall
the

posal

few

to

minutes

discuss

at

these

dis-

my

mainly in

relation to the requirements of

an

expanding economy. For the great
danger at the end of any inflation
period is the natural tendency of
public
the

officials

alike

zens

and

be

to

private

citi-

fearful

more

of

possibilities of further infla-

tion than of the possibilities of deflation and the severe dislocations
and

unemployment
that
often
accompany
it.
Historically, the
longest and deepest declines in
the

price
level
have
occurred
after major wars, such as the 35-

year

decline

after

the

in

Great

Napoleonic

the 30-year decline in

States

after

tween

the

1920

and

the United

Civil

and

Britain

Wars
War.

1930,

Be-

following

World War I, our wholesale

com-

modity price index fell 44%. This
decline

price

sharp in

was

121, then mild until 1930.
marked

1920-

It

was

by nearly continuous dif-

ficulties

in

of

some

interest

1

rate

.

.

What

is

outlook
If

' our

.

.,

price

,.

,

situation and

today?

•

for

made

the

grown

to its

up

war-

expanded

supply of money and
other liquid assets by the end of
1951.

The

sale

prices

broad

has

index

of

moved

whole-

mainly,

thcfogh gently, downward ever
since, and the consumer price index has risen

than

only slightly

2%—with that

—

less

rise

largely
accounted for by previously de-1
layed advances in such regulated
items as rent and public utilityrates. This stability in the general
level
of prices
since 1951

occurred

volume

the

in
of

face

military

of

superimposed
upon
public and private
r

new

~

ment,

and

occurred

of $4-4
♦

cir

construction,

a

huge

expenditures

record-high
outlays for
i

t

plant

.

equip-

consumption.

also

despite

an

It

addition

billion to the total of ad-

statement by Professor Seltzer before

EcononrUc

16» 1954.

final




'

the

corporate
years

against 30

as

Treasury
first

call

date

against

years

years

for the

offering, and for the
/shorter average period

somewhat
to

shorter

maturity
of
the
bonds — about
26 V2

average

25

about

—

18y2

But

years.

the

announcement of the 3 lA % Treas-

Bank

of

New

protested during the 1920's,

the

basis

of

the

needs

of

bond set off

that

sure

such

strong

called for.

was

Individuals

already own 50%
Treasury securities than

in

entire

Federal

net

standing at the end
billion
more
than

debt

of

out-

1939,

$21

entire

the

amount of net long-term corporate
debt
outstanding
in
1939,
and

$17

some

billion

of all

sum

commercial
state

and

curities
hold

than

more

the

farm, residential, and
mortgage
local

debt

and

government

se-

then

outstanding. They
present
amounts
of

their

smooth-working banking machinery, against funding too much

the face of

of

the Treasury to sell them United

the

short-term

Treasury

debt

into long-term securities.
To

the

extent

placed

their

tration

of

that

banks

re-

short-term

Treasury
holdings with long-term Treasury
bonds, they would face sharper
price risks. We had a good illusr

five

these

months

risks

in

the

first

of

1953, when the
price of long-term 2!/2%

average

Treasury

bonds,
turity of which

the
was

longest
less

ma-

than

and

currency

demand

deposits in

continuous offer by

a

demand

after

short

a

does
any

not permit such
large proportion

risks
of

a

think they need the
present volume of their currency

.

_

portion of their savings. These
savings could be absorbed by sella

lng

the

securities

individuals

to

the banks could directly, and by selling them to
seek additional private debt, such the life insurance companies, savas short and
intermediate term ings banks, pension funds, and
business and consumer loans and otner intermediaries through
longer term mortgage loans and wmcn individuals invest mucn 01
other securities. Commercial loans their savings. And the Treasury
are properly regarded highly by could use the funds so obtained

at

discount, and the
averag^ yield of Moody's Aaa
Corporate Bonds rose to 3.44%.
It

a

is

heartening, and a tribute to
flexibility of the authorities
that, when the results appeared

the

excessive, they
their

verse

The

quick to rerestrictive
policies,

3%s

new

(Feb.

were

12)

closed

in

Friday
22/32, to yield

106

at

2.85%.

last

,

the

light of the record since
1951, I think it can be reasonably
concluded that

the

abnormal

in-

the

increase

of

the

gi-oss

even

that the long-term

in

this

fashion

place

of

ment

in

securities sold

would

much

take

real

new

invest-

private industry and in
mortgage market that these
purchases
would
otherwise
be
the

seeking

finance.

to

There

might

be times when the authorities be-

lieved

that

money

for

much

too

investment

being made available
utility,
residential,

was

public

-

commercial, and industrial
struction, and state and local

have

now

our

peo-

a

our

29 millions greater

prospective

capital

as

large

and

are

as

in

constant

large. If

we

ernment

as

well

as

inflation,

our mon-

etary and debt management policies must be geared to these new
levels and to the strong rate of

under

exlsti

condi_

short-term Treasury securi-

+hp

jf

Pniinfrv

duced

hibited from pacing interest on
demand deposits, with the result,

term
cash

ar!*°nS

,

the

nf

amount

ot

substantially

itself would be

th

increased.

not

were

amQunt

met

uired

for

effect4would

reasong) the
^0Rary.
and

over

woul/'mean'
savjngs

^at

pvai^kig for
Qn

times

commercial

offer

corporations?

a

ondary

perfect medium

free

for

sec-

reserves. They have an in-

from

serious

part of

a

banks

and

business

Conceivably,

as

a

risks.

If

high interest rates,

we

could per-

attractive

investments

longnot

are

thing

short time into some-

a

like

30-

50-year

even

or

maturities.

Maturities
I

might add that

turities

because

a

reaujred

interest

usually

These
dictate

moderate

tb

price

in

changes

think

I

rates

it

in

sounder

countrv if the Treausrv is

paying at all times

of in-

rate

a

terest not far from the going mar-

ket rate for eacb
than
to
f

fjxed

rate

a

the

b

CQme

particular

Th£

mafurity
f0r

rather

iopg time

a

specjai conditions
vear

two

or

president's

recommenda-

tions that bear most directly
nolicv

monetarv

with

cerned

housin,,

governmental

anf

t

upon

those

are

con-

aids

th

to

heartilv in favor of

t

£

flpxihlp

f

determination

inan-va1iip ratios
t

matnritv

n

tatinns
•

t

f

f

th

f

imnnrtant

alone

newer

to

j;

•

Hit

nrnmntp
t

has

been
the

H

ti

readilv

restrictive
times

hut

Minns

limi-

restrict

times

ran

on

bank-

rentral

use

of

Would

he

he

choked

nolicv

credit

nrdinarv
tn

its
volth

iPPrPa<;Pd

an

had

1"

rates

VA-euaranteed

and

nrdinarv

nf

artinn

^

interest

and

pHA-insure'd
i

of

terms

credit

ease

in

central
do

w

nr

^avm

nmv

in

nnes

times

had

Pf Jarpa ^ l.dL

in

nar

ISn ~n't Lrm<T

joan^i/e ratios a^d
maturities
^Portant as^n^rest rates in Sending the
are

as

volume of demand for credit* and

volume .01■ aemano ror creau, ana

administrative

appropriate

P

!'T

n

quirements

for

,n

re-

incur:

mortgages

orPat1v snnin
n:frt
^«nfh ipnripr<f

mav

+v,p

fhccc

„

fha

rp«nnnw

nf

'to^eh^eTn

se^e

credit

on

hnr

nnH

Federal

Re!

DOlIcy

serve credit policy

Fmally, while it

jt

is reassuring

?a^th,e government has shown
aler* J° the possibilities and
Problerils oi business recession, it
also imP°Ftan.t that the authon!ies set their sights high enough
*n ProsPerous times. With our
growing population and output,
sha11 need a continuing growth

new

real investment.

the

substitute
in

Federal

succeeded

in

expansion
of

excess

the

would

be

otherwise

WOuld

be

substitut-

contemplated

who* favor

market

of

that
we

to

resp0nse

subject to wide

are

in

be

£f bank8credit
amounts

they

fluctuations

f

very long maobjectionable to me

seem

otherwise

a

rapid

by

those

large-scale

vigorous counter-infla- funding of the public debt.

market and are tionary policy, and at sufficiently
price

because

would

term securities to redeem holdings of short-term Treasury
short-term obligations held by obligations—a result that is not

corporations. For the banks they

quality of
portfolios, some-

average

long-term

our

considerations,
caution,

I

suPP^y

With
(Special

to

moderation,

and

other

Quail & Co.

The

Financial

Chronicle)

ALTON, 111.—William J. Fischer
has become associated with Quail
^

& Co. of Davenport, Iowa. He was

formerly Manager of the Buying
Department,

think

money and

"quid assets.

preseTt

institutions, and business

are

some-

absorption'

authorities

provjding

other

be defia_

periocj

a

If
an

pa"jfrs: £orr

nancial

market,

the

the other hand

j^pserve

by

Treasury
securities
outstanding notes of instalment paper coming_ -n sabstance> additional cash
highly important needs that
balances in the hands of the pubcannot be satisfied nearly as well,
rurtner
wnat would be the
to aether
with
long-term
if at all, by long-term obligations, source of-the funds raised by the
treasury obligations for
Thece
short-term
securities
are
Treasury through sales of long- liedbUiy oongauons, ioi piesent

^ Sy™ banksotherfri

amounts

the

the

upgracie
their

re-

by being funded into longobligations the ^demand^ for

demand

f

amniint

thd

am nf kwr fh„tbe
It
since the Ranirind
Banking Act
of 1935, the them countiy.
were very

°thers, that corporations
with large temporary' balances
growth in our population
and have been givem a strong incenproductivity.
tive to usie them
d^ct
f
short-term investments. If the
i
Deb* Management
supply of-short-term Treasuries
With respect to debt manage- were reduced too sharply
busiment I think this calls for a policy n?ss corporations would be forced
of moderation and caution in the either „o hold larger bank balsoeed and extent of funding the an.ces
or;
to see^, short-term
short-term Federal debt into long- Prlvate obligations; that is, to enterm securities.
|a§e m a quasi-bankmg business.
Under present conditions a conof. them alr<ra?y .4° the lat~
siderable part of the short-term tei'» buying such obligations as the
serves

by

times because institutions want to

capital

In

ays. Non-bank financ.al corpora- ti

We must remind ourselves that

Treasurv securi-

moderate

welcomed

outlays. At such
times the authorities might reasonably wish to absorb some of

out-

to avoid deflation and depres-

sion

in

ties

.

than in 1939'that our g™ss annual L°
° r slgnlflcant amounts of ties are, in a larger sense, a part
product in current prices is 3% tbem as liquid reserves.
of the effective money supply of
times

because

recurring peri-

are

Gds when longer

p° £

and for

postwar periods are

It is true that

Further, there

con-

assets. But it is also true that

us.

arising from

paper

their yields are commonly higher.

gov-

greatly enlarged
supply of money and other liquid

and

war

behind

pressures

term

preferred

the

of

some

°'
of these
proposais
j
thenart;cularlvfaVor broaderline the

for purposes that would not be these funds by selling long-term
well served by long-term obliga- Treasury securities; but at other
tions. Business corporations own times they might well prefer to
some $20 billion of them as re- move only slowly and moderately
serves for accruing tax liabilities in this direction.

flationary

serve

shorter

of

often

are

Objections to Very Long-Term

national product. In fact,
total bank loans, including
real estate loans and consumer
loans, constituted only about onehalf the fraction of the gross national product in 1953 that they
constituted in 1929. Moreover, the
small ratio of their capital funds
to their total assets would restrain many banks from adding as
much to their risk assets as they
lost in short-term Treasury paper,
A large part of the short-term
Treasury obligations held by nonbank investors is also employed

sold

anci

.

rates. Early in May even the new

3V4S

these

vesiors

purposes

and demand deposits.

Alternatively,

with

maturities

7%-year

bond issue
recently announced. For many in-

funded in

individuals

20

bank's assets.

pace

intermediate
the

as

forthcoming in adequate amounts
and the continuous availability in
jyjy remarks have been directedi
the open market of Treasury obprincipally against the view that
ligations
held
by
banks
and p.
Would he a fine thing if most
others. The presumption is, there- 0f
0U]r
puhlic
debt
could
be
fore, that, all things considered,

banks. But despite their growth in gradually to retire short-term obthe postwar period, the volume of ligations held by banks.
commercial loans has not keot
It should be noted, however,

ward

of

range

such

period,

nearly 514 points. A roucy ot uraaual anort-lerm
At the end of 1953, the member
Debt Reduction
banks as a whole possessed capital
Over a period of years, howfunds equal to only about 7% of ever, the Treasury could doubttheir total assets, and about 12.3% less sell them large amounts of
of their earning assets, a margin long-term securities by absorbing
for

is at nearly
all times a
large, though varying, demand for
Treasury
securities
in
a
wide

dropped

vears,

that

There

States Savings Bonds, redeemable'
term private

on

a general downreadjustment in high grade
bond prices and a corresponding
upward readjustment in interest

ury

*RepK>rt*8\vashing"ton^^C^Fe^K stant nationwide
'

an

Reserve

—i—i.v

prices nearly twice

judge by the most conclusive of all lests, the behavior of
prices in free markets, the United
had

that

than

somewhat

—i

-

we

States

higher

population is

Thc Price Situation
w,

restraints

tions commonly command a lower
rate.
Some
allowance
may
be

pie

1930,

brle£ dips'

credit

then-prevailing average yield of
Moody's Aaa Corporate Bonds —
3.18%—though Treasury obliga-

however, it was accompanied by high prosperity in industry interrupted by only two

our

1922

respec-

bond. These bonds carried

year

the

After

areas.

billion,

put into effect for precautionary purposes in the forepart
of 1953 had to be reversed so
quickly. As late as April 9, 1953,

agriculand„until

tural

$4.5

I think it is significant that the

nonnntonr

use

addi$4.4

counter-inflationary objective
was clearly implied in the Treasury's offering of a 314% thirty-

maintain-

ing

of

a

the need

upon

for

as

years

on

were

ex-

And

well

as

York

that

and

intensified

traordinarily
lucid.

1953,

during these

cur-

billion

economy

is

deposits and
and of half

1952,

Report

cent

H.

in

rency

analysis

current

Lawrence

justed demand

.

how

be

deflationary action
more

.

need

we

to

want

the

gaining
funds. With ample secondary reserves of short-term
Treasury obligations,
banks
could
readily
meet such inter-regional drains if
they snould recur.
were

Thursday, March 11, 1954

.

suaae

in

that

.

individuals to convert a careful timing in the funding of
significant portiofi of'-their, .exist- the present short-term debt,
ing currency and demand depositsAlthough I have tried to state
into such securities. The funds forcefully some of the
dangers of
would go to present holders of
hasty and immoderate funding of
short-term Treasuries, who would the short-term
public debt, I by
retain much of them as liquid bal- no means
intend to imply that the
ances in lieu of their present reTreasury
should
make
no
inserves
of short Treasury obliga- creases in its medium
and modtions. Before doing this we would e r a t e 1
y
long-term obligations,

loans and securities to other banks

regions

.

of

the

in

the

Municipal

Chicago.

Alton office,

Bond

Corp.

of

Number 5306

Volume 179

.

.

The Commercial and Financial

.

(1111)

Chronicle
write-offs

The Eisenhower Tax

Proposals

vided

Finance

Professor of

and dis¬

Finds difficulties under the pro¬

corporations.

economic stability, while, at the same time,
attempting to achieve a balanced budget. Holds if the goal of
a balanced budget is to achieve full employment, government

spending as well as taxes must increase greatly. And there¬
fore, under the circumstances, full employment can best be
achieved by a deliberate deficit policy. Claims Eisenhower tax
business

in tax system.

ments

evaluation

of

tax

a

raises three basic questions.
is
the aggregate
budget

capital
ests

effect

appropriate in the light of

ospective

p r

de¬

economic

12
a

velopments?
Second, is the
of

structure

tax

the

sys¬

desirable

tem

in

of

view

objectives for
the economy?

long

Revisions

tax

ter

run

it

benefit

to

follows:

as

the

Widows
dependent
permitted to

with

widowers
would

children

be

tax treatment would

same

later

and

1955

small

businesses, since l^rge firms
established research labora¬

tax

especially

burdensome

to

law

of

permit tax-

(A)

corporations

so

corporate earnings are
withdrawn. Such changes, he said,

long

as

would

remove

some

of

the

tax

which force the sale of
independent companies to larger
corporations. The President fur¬

dividends,

through the issuance and redemp¬
tion of corporate securities, and

business firms which

business ex-, the purchase

steps

current

basis

a

of

(B)

corporate

looking
of

pay¬

income

tax.

•

of

speeded to im¬
the economic impact of the

individual's

during

the

income

tax

business

duce

personal

position

downturn.

Technical, revisions

.

overpay-

should, be

prove
:

refund

The

ments

'

ther

proposed, however, that the
law be tightened to prevent the
withdrawal of corporate earnings

Additional

should be taken.

no

pressures

re¬

received af¬
These changes,
claimed, would promote in¬
mean

in

HI

i

Increasing Economic Stability

recom¬

ment

1, 1956.

would

he

interests

the exclusion,

turn

taxes,

ers'

years.

dividends

estate

toward

during the next 12 months,

Aug.

is

10%

to rearrange their inter¬
corporation in anticipa¬

rearrangements of stockhold¬

exclusion,

15% credit on all

a

income

would

taxes

re¬

by

$0.8 billion, and corporate income
taxes

this

by

$0.7

revenue

billion.
To offset
of $iy2 billion,

loss

corporations for
postponement of the scheduled
of acquiring their ductions in the

of

re¬

and the purpose
corporate income
official esti¬ rights to loss carry-overs.
tax and in excise taxes was pro¬
mates of the cost of this item.
(G) Accumulation of Earnings. posed. This postponement would
(D) Consolidated Returns. The A company which retains more retain revenues of $2.3 billion.
elimination over a three-year pe¬
earnings than the government

jobs.

their income for tax pur¬
poses, just as married couples now
do. The

currently

as

is

with

a

of

pansion and more production

split

be allowed for

of

vestment in
in

(A) Heads of Families.
and

in

credit

minus

Benefit

to

proposals
are

outlays

deductible business expenses. This
rule

free

during the
months starting April 1, 1954,

minus

Consumers

The

the

mended that tax laws

addition, it would give a tax
credit of 5% of dividends received,

and

consumers

velopment

14% below the

or

in

tion

In

v

Technical

that

Message

(C) Double Taxation. This pro¬
posal would exclude from taxable
income the first $50 of dividends
received in 1954 and the first $100

pro¬

First,

gram

rate

The President urged in

lion per year.

ceived

The

subsidiaries would

as
a

Corporate Reorganizations.

(F)

they would not produce de¬

received

j

is not inadequate to deal with any possible sharp
slowdown, while it contains constructive improve¬

program

taxed at

The
would

to increase

gram

be taxed

be

regular corporate rate.

ductions greater than those under

proposed technical revisions to benefit consumers

and taxpaying

to

the declining-balance method.

Prof. Weston describes the Eisenhower tax program,
the

years.

his Budget
appli¬ tories can usually make immedi¬
cable to reorganizations and re¬ ate deductions. In the interest of
new
depreciation policy
capitalizations be simplified and fostering rapid technological prog¬
apply to all investments made made more concise. Noting that ress, all companies should be al¬
after Jan.
1, 1954.
Cost to the owners of small firms frequently lowed current deduction of re¬
Treasury is estimated at $375 mil¬ find it necessary to secure new search and development expenses.

.

University of California, Los Angeles

cusses

earlier

the

permitting larger
depreciation charges in the early
years would also be accepted pro¬

By J. FRED WESTON*
Associate

in

methods

Other

11

single people sup¬

riod

There are

of the

no

deems

penalty taxes on con¬

reasonable

is

subject to

a

However, current reports indi¬
that the Treasury is now-

cate

penalty tax. The President stated willing to yield to the great pres¬
porting dependent parents even
rate dividends is proposed.
The <- that this tax, though necessary to sure for immediate excise reduc¬
if the parents lived in separate
President also recommends tight¬ prevent stockholders' avoidance of
tions, though with some changes
Third, does residences from their children.
ening of the law to remove abuses ' individual income taxes, discour¬ in the plan originally scheduled
the tax struc¬
(B)
Child
Care.
Widows
or
arising from the use of multiple ages the growth of small compa¬ for April 1.
The present plan
ture
accord widowers working outside the
corporations by a single enter- - nies whose expansion depends on would reduce to 10% all excises
with generally home would be permitted to de¬
prise. At present such enterprises retained earnings. He, therefore, now above that rate, except those
a
c c e p t e d
duct up to $300 a year of the ac¬
frequently set up several different recommended that the government on liquor, tobacco, and gasoline.
standards
of tual expenses incurred for the care
Dr. J. Fred Weston
but commonly controlled corpo¬ assume the burden of proving that
There would be no relief in the
equity?
The of children up to the age of seven. rations in order to obtain exemp¬ an accumulation is unreasonable.
tax on automobiles, which is pres¬
Eisenhower tax program may be The estimated cost to the Treas¬ tions from the corporate surtax At present the burden of proof is
ently at 10%. A $1 billion reve¬
separated into three parts with ury would be $40 million.
on the taxpayer.
rate.
nue loss would result from cutting
respect to the timing of changes
(C) Dependent Children. A pa¬
(H) Research and Development the excise levies on such items as
(E) Foreign Income. Business
and into four parts with respect rent would be
permitted to claim income from foreign subsidiaries Expenditures. Under present laws, telephone bills, telegrams,
rail
to the major types of taxes. The as
a
dependent a child under 18 or from segregated foreign companies are frequently unable
Continued on page 30
first part of the program went
earning more than $600 a year. branches which operate and elect to treat unusual research and de¬
into effect in January, 1954.
Al¬ The parent would have to provide
though
the changes had
been more than half the child's sup-'
scheduled by the previous Admin¬
port, and the child would have to
istration, the act of accepting them pay tax on earnings above $600.
This advertisement is neither an offer to sell nor a solicitation of offers to buy any of these securities.
The offering is made only by the Prospectus\ ~~
represented a policy decision. The Foster children and children in
largest change, measured by its the process of adoption would
revenue effect, was a decrease of
also be classed as dependents for
March 10, 1954
«hf.
NEW ISSUE
roughly 10% in personal income tax purposes. The estimated cost
tax rates, estimated to involve a to
the
Treasury would be $75
revenue loss of $3 billion per year.
million.
Elimination of the Excess Profits
(D) Medical Expenses. Taxpay¬
Tax resulted in a revenue loss of
ers
itemizing their deductions
$1.7 billion per year. The,com¬ would
be
permitted to
deduct
bined rate of social security'taxes
medical expenses in excess of 3%
was raised from 3% to 4%, a rev¬
of
income instead
of 5%
as
at
enue
increase of $1.3 billion per
present.
The present maximum
year.
The changes of January, tax allowance of
$1,250 fori de¬
1954, therefore, resulted in a net ductible medical
expenses of an
reduction of roughly $3.5 billion.
-

solidated

returns

and

intercorpo¬

601,453 Shares

Fireman's Fund Insurance Company
Common Stock

would

individual

the

tax

$2,500.

program in respect to time
cludes changes scheduled

in¬

recommended

second

The

April,
cut

1954.

phase

$1.3

of

allowable

tightened to exclude both or¬

rate

cor¬

on

excise taxes.

indirect

would

pack; on gasoline, from
2 cents to IV2 cents a gallon; on
manufacturers' price of automo¬
7 cents

a

These re¬

biles, from 10% to 7%.
loss of $1

combined
billion.

phase

of the Eisen¬

ductions would mean a
revenue

The

third

tax

hower

program

changes scheduled for

Representing

involves

the future.

technical

25

some

revisions, these changes may

summarized

briefly

main categories:

the

and

Price $57 per

expenses.

share

Treasury

be $65 million.

affecting
la¬

beled by the

President's Economic

Report

increasing

as

stability.

(It

first two

may

economic

be argued that

also meet this

cri¬

Benefit

(A) Loss Carry-Back. At pres¬
losses

ent,

Economics

may

be

carried

year

to offset prior earnings

and

may

be carried forward five
reduce taxes on later

to

years

earnings. It is recommended that
the carry-back be extended to two

Dr. Weston to
of Town Hall,

Angeles, March 4, 1954.




^

the
Los

The First Boston

financial

suffering

panies

hard¬

Cost to the Treasury would

ship.

Dean Witter & Co.

Blyth & Co., Inc.

Goldman, Sachs & Co.

Eastman, Dillon & Co.

Glore, Forgan & Co.

Harriman

Kidder, Peabody & Co.

(B) Depreciation. It is said that

Lehman

depreciation

present

deductions
below actual deprecia¬

often

Ripley & Co.

Lazard Freres & Co.

Incorporated

$100 million.

are

Corporation

to benefit established com¬

years

be

I

back

one

in

tion,

especially

This

is

early

replacement

early
to

believed

years.

Merrill Lynch,

Brothers

Pierce, Fenner & Beane

Stone & Webster

Smith, Barney & Co.

Securities Corporation

discourage

equip¬

of old

ex¬

Union Securities

Corporation

White, Weld & Co.

Wood, Struthers & Co.

pansion, and other investment, and
to make it difficult for

especially

small

ones,

companies,
to obtain

Dominick & Dominick

Clark, Dodge & Co.
i

f

financing for capital investment.
The

proposed change would

mit the

use

of

a

per¬

are

double

those of the straight-line method.
This

would

but

to

not

write

the

to

Hemphill, Noyes & Co.

Drexel & Co.

Ilornblower & Weeks

Hallgarten & Co.

W. E. Hutton

Co.

declining-balance

method at rates which

applied
by
Section

address

Copies of the Prospectus may be obtainedfrom any of the several underwriters, in¬
cluding the undersigned, only in States in which such underwriters are qualified to
act as dealers in securities and in which the Prospectus may legally be distributed.

Corporations

off

each

the

original

unamortized

II would moan larger

W. C.

Langley & Co.

Lee Higginson Corporation

Carl M. Loeb, Rhoades & Co.

year

twice the straight-line percentage,

terion.)
*An

I

Technical Tax Revisions to

three ment, long-range production

those

(3)

and

corporations;

in

(1) those affect¬

ing consumers; (2) those

1

supplies

travel
to

loss

II

Most

$10.50 to $9.00 a gallon; on malt
liquor, from $9.00 to $8.00 a bar¬
rel; on cigarettes, from 8 cents to

the

household

certain

estimated revenue loss of
billion.
The other change

important, in terms of their im¬
pact on revenue, were reductions
in the tax on distilled spirits, from

tax

dinary
Revenue

deductions

medical

an

would reduce

..be

the

be

tax

(#2.50 Par Value)

it was
definition

abuses,

that

for

porations from 30% to 25%, re¬
ducing the total corporate
tax
rate from 52% to 47% nnd involv¬
ing

avoid

To

to

One of these would

normal

the

of

doubled

be

F. S. Moseley

& Co.

Paine, Webber, Jackson 8c Curtis

cost,

balance.

depreciation

1/

12

The Commercial and Financial Chronicle

(1112)

indeed

Fiscal

Policy Important
In Anti-Depression Policy
By ALVIN II. HANSEN*

Stressing the size of the 1955 Federal Budget

University

curb against

as a

spiralling collapse, Dr. Hansen holds expansion
a strong and sound
Sees little aid to avoiding a depression by means of

tax-relief

accelerated depreciation,

or

Urges

public works.

fears of inflation

burden of

or

but emphasizes

can

rising public debt.

a

first

that I am
happy to note that the Economic
Report presents an excellent
me

statement

of

peacetime goods reached unprece¬

say

anti-depression policy.uviore spe-

cifically, the
importance of
the role of fis¬
cal

policy

stressed

is

and

I

this

welcome
note.

Much of the

Report
with

deals
w e

11-

dented levels.

fronts

accumula¬
(and
time when

point to

was

a

problem that

con¬

would

whole

a

which

called

process of

the

to

the

repeat,

ods

meth-

and

de¬

vices designed
to

mitigate

These

economic

fluctuations,

Alvin H. Hansen

including

want

to

the
mum

important automatic stabili¬
zers which have, during the past
20
years,
been built into the
economy. And I was particularly
pleased to find that the Report
very

does

rest its case

not

on

the

au¬

tomatic stabilizers alone.

The
deal
of

attention

preventing

pression in
the

itself
and I

hazardous,
I

am

ble

the

1954

in

is

says,

very

am
not going
forecast for 1954.
prepared to accept as plausi¬

make

to

spiralling de¬
Forecasting, as

a

1954.

Report

good

a

the problem

to

see

of

drop

moderate

a

5%; i.e.,

around

de¬
cline from $367 billion to about
$350 billion. Budget expenditures
in fiscal 1954 will run, it is esti¬
mated, at $71 billion. With this
massive rock bottom expenditure
—unaffected by cyclical factors—
it is, I think, plausible to hope
cumulative

lapse

of

spiralling col¬
proportions is

serious

unlikely,

i

not

then,

It

for

1954.

cut

in

he

mild

four

1952 and

1953,

output

I

want

to

pansion of the last four
solid

a

which

confronts

maintaining

the

1950,

years

1951,

lifted the level

we

goods

of

strong, in

economy

cial

condition,

and

services

in

the

Economic

that this is the

the

1954

year

to

dollars.
This
spectacular
achievement

which

find

as

it

would

parallel. It

a

fiscal

stimulus

operations

ment.

Yet

the

of

difficult

achieved,

was

knows,

everyone

powerful

be

and

the

from

fluctuations,
history.
No

as

is

now

balance.

and

for

level.

1951,

ajter

taxes)

billion, in terms of constant dol¬
lars.
The
liquid
accumulated
savings of individuals increased
by $41 billion.
In this interval
added

we

4,716,000

stock

our

ployment
the

of

new

units

urban

rose

houses,
by 3,200,000,

to

em¬

and

aggregate investment in

new

producers' plant and equipment
reached the massive total of
$140,000,000,000.

Over

and

above

the

rapidly

expanding military pro¬
duction, the output of civilian

I

*A

statement

Joint

by

Committee

Dr.
on

Hansen
the

before

Economic

Report, Washington, D. C., Feb. 18, 1954.




of

of

This

per year.

of price

stability

slack in the economy. It was
in
excess
of
the wellknown 3V2% long run trend.
us

GNP
a

3V2%

a

starting

year

the

assume

—

from

$367

each

seriously

the

respect

policy
to

consumer

above

the

1951
were

billion

in

1960.

deliberately

I

chosen

to

the

moderate figure of 3V2 %—a

more

stability.

high de¬
It would,

be very difficult to
period in our history
high a degree of price
combined with so large

growth

in

Now

To¬

up.

I

ly not each
short

tory
we

one

1951, 1952 and 1953.
for
example,
the
peaceful years before the

Con¬

not

sider,

quite
First

year,

in

the

for

next.

but

we

could

make

potential in 1955.

wholesale

Compare

this

prices

with

1954,

period

a

the

be

it noted

1%

1948

to

which

Korean

price spurt.
Wholesale prices, I repeat, have
risen
during the last six years
only one-third as much per an¬
ful

as

they did in the 15

years

And

let

A 5%

was

the

increase per annum from

includes

peace¬

us

a

drop this

also

be

noted,

and

We

shall

a
on

to

our

billion

below

our

an

Continued

forecasts and
on

page

man, as

calling for

no comment from him
And I still think he would have

emotional issue not only in this country but in

vote,

advisers.

or so

squelching of McCarthy will not bring it to an
end, either.
His is not the
only scalp that is wanted. The Leftists would like
to

silence the

American
use

this

entire conservative
wing of the Republican party;
Fascists, the Leftists call them. And the fact that
they

term

evidence

that

to be.

As

against the most substantial part of our
country is
they are just as ruthless as McCarthy is pictured

was

a

a

«

matter

of fact they have
just added a victim to their
string, by the same falsehood technique which
they charge McCar¬
thy with using. For months they kept up a
running fight against
"Scotty" McLeod, the State Department's
Security Officer. McLeod
former FBI agent who landed

of Senator Styles

Bridges.

It

a

few years ago on the staff

.

:

from Bridges' staff that UnderSecretary of State Lourie enticed him to take over the
security
job at State. Bridges didn't want to let him
go. Lourie had known
McLeod out in Iowa.
But from

was

the very
day McLeod rolled
set out after him

work, the Leftists

up

his sleeves to go to'u'

charging he

was a McCarthy
"stooge." This charge was repeated a hundred times to
this writer's
knowledge by even reputable journalists.
McCarthy had not the
slightest thing in the world to do with
McLeod's

McLeod knew
at

appointment.

McCarthy, of course, by virtue of having worked

the Capitol but he

had

no

unusual

However, coincident with Lourie's
McLeod's

authority,

supervision

him, to the high glee

of the

Financial

Vance, Jr., has been added
Jefferson

to

Building.

Joins First Boston
(Special to The

Financial

SAN

Andrew K. Leh is

First

Boston

36 Montgomery

now

Calif.

personnel,

was

taken

from

LOS

Financial

ANGELES,

Chronicle)

Calif.

—

Lea

Tseng has become connected with
Merrill

Lynch, Pierce, Fenner &
Beane, 523 West Sixth Street.

California Investors Add
(Specfal to The Financial Chronicle)
—

with The

Corporation,

Street.

*

Chronicle)

FRANCISCO,

him.

resignation, half of

(Special to The

the staff of Vance Securities Cor¬

poration,

recent

Merrill Lynch Adds

Chronicle)

GREENSBORO, N. C.—Charles
R.

of

contact with

Leftists.

Joins Vance Securities

1955.

are not

more

A

year would

But this is again about
$30
billion below the 1955
potential.

is

into its
than it gains in trying
get

well.

(Special to The

if we complacently
accept that as
pretty good, by the same token, a
GNP of $365 billion could be re¬
garded as a good comeback for

to

matter, the

McCarthy the

as

his

were

full

potential. Now

likely to lose far

it

All the excitement is the work of devilish
minds;
McCarthy, himself, is amazed that it could have ever
happenedBut the President was ever mindful
of the "liberal"

substantia]

give
GNP of $350 billion or
$30

prior to World War I. These figures
it

Europe

full

reach

before

in

our

the full
employment
goal of $380 billion for this year,
recovery and move

3%.

fall

example,

recover

World War.

increase

we

due say to inven¬

readjustment,

years

In the 15-year period
World War I, the annual

enough to

But if

year.

should aim to

potential

as

naive

think that it will be an
easy mat¬
ter to reach this
goal, and certain¬

three

output

not

am

Leftists—"liberals"

eye

McCarthy to be

em¬

use

these

of

feeling it incumbent *to say something,
he would have expressed his disgust with those
who have built up

declaration

have, however,

It is

President of the United States.
been on sounder ground, if

market

while-

some

as

to take

"maximum

support of

prefers to apply—that has caused

get out.

conduct of

1953. This would give us
GNP at 1953 prices of
$380 bil¬

with

the

it

dignity of his office. He should have cast
at his very first interrogator on the
subject and
no uncertain terms that
he considered the ques¬
tion insulting. He could have made it
very plain that he consid¬
ered the hullabaloo about
"McCarthyism," ana for that

billion

we are

This goes

made it known in

of

minimum targets if

aren't any more sensitive to the decencies

name

us.

particularly for the newspapers that
bloodthirsty of all. Indeed, they have made McCarthy
bully he has come to be. But their real

hold

to

term

withering

a

moderate

growth

very men¬

It is far beneath the

fact

Let

popu¬

screaming bloody murder at the

place, and that he should have permitted himself to be
dragged into it, in the second place, is one of the most
amazing,
and frankly,
disgusting episodes I have witnessed in my long
experience iln Washington.

no

some

figure

Americans,
mouthful, and you can

That Mr. Eisenhower should have
been dragged into this mud;
that there should have been the determination
to drag him into it

exceptional performance,
due to squeezing out of

partly
in

a

in the first

an

the

a

to

over

was

McCarthy's

the most

present mess.

value dollars

average

have bitten off

tion

the

has

believe,

num

the

There

Wholesale prices

so

(i.e., income
increased
by
$36

$18 billion

an

slightly down; consumer prices figure which cannot, I believe, be
(due largely to delayed rent in¬ challenged by anyone.
1

with

The

dis-

constant

by

he

don't like McCarthy

However, if the Administration doesn't repudiate
McCarthy,
the spleen which the Leftists have
been leveling at it will
become intensified. It is the hope and desire of
the Administra¬

not

no
serious
inter-in¬
deed, there are not a few econ¬
maladjustments.
Whole¬ omists
who, impressed
by the
sale prices have been
stable or massive
technological
research
moderately falling for three years. now going on both inside and out¬
The panic
buying price spurt in¬ side the government, believe that
duced by the shock of the Korean
prospective increases in per work¬
crisis in June,
1950, had already er productivity justify the use of
subsided by February, 1951. 4% as the rate of
growth. On this
Wholesale prices stood in Decem¬ basis our GNP at constant
prices
ber, 1953, 4.1% below the aver¬ should reach the figure of $500

$18

individuals

the

things for which

then

1950, 1951, 1952
Gross
National

years,

the

or

say you

complaint is not his "unfair" methods; their real
complaint is that
he is pursuing the job at all.
The Jenner Committee has been
conducting its similar work
in a very dignified manner.
Yet the
McCarthy critics jeer and
ridicule it on every possible occasion.

on

of

him
can

the seemingly impossible

1954, 1955
1950, 1951,

increase

like
You

than the rest of

worker productiv¬
the labor force, sug¬

annual

that to answer in this vein,
repudiate the Wisconsin Senator;
say,
in effect, that the President

doesn't

are

per

in

an

thing.

stands.

tion of

ployment, production and pur¬
inflation, chasing power" contained in Sec¬
expansion of bank tion 2 of the
Employment Act. In¬

excessive

any

of

entered

necessary.
in reason¬

structure is

gree

rose

itself

process

govern¬

by only
disposable in¬

ity and
gests

"McCarthyism."
What
No, the President hasn't done

lation who have been

up

based

embraced

is repudiated the division in the Republican
Carlisle Baryer«
party will be widened. There are millions of
Republicans who may be very well disgusted
with McCarthy but who, at the same
time, will be more disgusted
with the Administration for
surrendering to the groups that are
after him. Make no mistake about
it, those elements of our

The Congress has

experience,

of answering
President Eisen¬

At last the Leftists have got the Adminis¬

maladjustments, lion in
1954, $407 billion in 1956,
inventory $436 billion in 1958 and
$467 bil¬
any time in our lion in 1960.
These are, I submit,

the

debt

in

did

we

job

that

tration just where they want it. It is damned
if it does and damned if it doesn't. If
McCarthy

reason
on

the

charged

follows

must

you

usual

massive

public

bal¬

from

purging

stock

find

billion.

We

of

the

finan¬

Report

creases) were slightly
gether they represent a

under

move

assigned

has

rest assured of that.

less than 3Vz% per annum in the
total output of goods and services.

ex¬

the

good

free

as

apart

in this four year interval

come

in

case.

tortions

no

the

There is abundant evidence

ance.

prices stood 3.5%

(1953)

Past

doubt

left

sound

and

age

constant
a

2

years was

which

growth

by $73 billion, calculated in terms

for

Sec.

contains

that

stress

of

was

growth in

Economic Structure Is in Balance

dustry

the

6f

which

Act.

policy

increased

in 1955. Our attention needs,

of

as

and 1953?

In the four
are, however, as far as I
1953,
discover, nowhere set out in and
Product in
this Report.

credit,

problem

1956

1952

targets

no

that

and

good

not

full potential in

can

been

expenditures

our

power

among other things the goal re¬
ferred to above. These levels or

problem, at least
The first really sharp

the last four years.
In

the

to

any

been

but when you repudiate those things for which
he stands in the eyes of millions of

set

purchasing

section

The price

growth, expansion and momentum
of

shall

carry out the
as
declared in

Act

the

will

—

to

the

—

of

and

needed

good

agree,

therefore, to be given to the really
us

levels

duction

ably

Federal

serious

"maxi¬

then

should

we

has

Stevenson

Nixon must

so-called rolling adjust¬

there

has

such

any

the in fact set the goal at maximum
forth employment, production and pur¬
employment, pro¬ chasing power in the Employment

Report

is

may

we

main

our

come

the

readjustment

Effect of Budget Cuts in 1955

This,

them:

Is

I why

and

employment, production and

Economic

widely held opinion that

may

a

underline

the

of

1946,

any

GNP

that

words

of

Act

purchasing power."
Indeed
Act
specifically says
that

of

devotes

Report

of

the

are

Employment

Nixon

Stevenson.

hower

,

known

.

an

is Nixon to say?

is this: Can
ment.
On this point, it is heart¬
we, as
we
move
farther into a
peacetime economy, maintain ening to note that the Economic
itself firmly
repudiates
this growth, this expansion and Report
"the once fashionable theory thatmomentum, or are we going to
a
sharp liquidation was good for
move
at first on a flat plateau
the economy" (p. 20). At the end*
with the danger that this level¬
of
this
remarkable
period
of
ling out process will eventually
growth and expansion, the econ¬
some
years
hence
engender
a
omy, as the Report reveals again
spiralling depression?
Stated in
and again, was strong and healthy;
another way, the problem is: Can
and in about as perfect balance as
we
keep the
economy
moving one
could ever hope to reach in aforward
at
"maximum
employ¬
constantly changing world.
ment, production and purchasing
power?"
Can We Still Move Up?
I

us,

get into

Adlai

economy

even

-

Administration has certainly permitted itself
awful mess on the so-called McCarthy issue. To

Vice-President

maladjustments

—

for

BARGERON

The Republican

indicate any serious

in

CARLISLE

By

=

an

maladjustments
as

Now the real

inventory

Washington
Ahead of the News

apart from these

anyone

which

Let

customary

Thursday, March 11, 1954

.

From

absolutely perfect
balance?) I have seen no convinc¬
ing evidence, including the data
presented in the Economic Report,

of

use

But

there

the

were

in

tions.

private consumption, and belittles

more

there

swings

of last four years was a solid growth with
economy.

unem¬
years—

and

cumulative

a

underscored,

of high price stability—
averaged only 2.7%. Most econ¬
omists had formerly believed that
it was
not
possible to achieve
price stability with so low a level
of
unemployment.
Toward the
end
of
the
period, agricultural
surpluses were indeed developing,
years

"

Professor of Political Economy, Harvard

that

ployment in the last three

..

405

LOS

ANGELES, Calif.—Douglas

F. Roberts has

been added to the

staff of California

Investors, 3924

Wilshire Boulevard.

'

Volume 179

Number 5306

...

The Commercial and Financial Chronicle

SEC Rules and Form Revisions
*

;

*

Under the New Administration




HALSEY, STUART & CO. INC.
R. W. PRESSPRICH & CO.
WM. E. POLLOCK &.
March 4,1954

L. F. ROTHSCHILD L CO.
CO., INC.

;

lf

FREEMAN & COMPANY

McMASTER HUTCHINSON & CO.

14

The Commercial and Financial Chronicle

1

(1114)

.

.

Thursday, March 11, 1954

.

'V

Interim Mortgage Financing
Commercial Banks

by

tains

banker's

Vice-President,

and

sale

method

of expediting

its

of mortgage

the

to

loans.

mortgage by

a

ultimate

mortgage

a

Describes

investor.

tween

commercial

mortgage bankers
of degree

ences

for

When

a

and simplifying this interim financing
Foresees some reduction in the demand

damental

and

only differ¬

are

not purpose

—

—

to

sound

satisfy

credit

public.
the

that

relatively
long-term
credit,
while

limited

deal

short-t

William

i

Howard

E.

each

ment

other

banks

and

that

in

com¬

position
to help mortgage bankers during
the
short-term
period
between
the latter's purchase of a mort¬
gage and its sale to the ultimate
are

a

investor.

methods

During this period, your prob¬
as mortgage
bankers, are

lems,

the

of

maintain

products

an

their

to

though they do
not have enough capital to cover
the cost of creating their product
without some
type of financial
assistance.
Your
customers, like
those of a
manufacturing com¬
pany, have an equal right to de¬
even

uct;

an

this

fact

that

can

assigning

Or the
be immediately as¬
the ultimate purchaser

and

yet still be eligible as collat¬
eral, if the ultimate purchaser
agrees to re-assign the loan in the
he

event

None

does
of

need

above

to

carry

seek

manufacturers,
sort

some

you

interim

of

collateral.

chaser.
lem

the

Mortgage

Banker

Now,, since short-term financing
is

desirable

others,

to

our

in¬
terests and ours definitely coin¬
cide.
In general, your loans are
well secured, and you can offer
substantial compensating balances
through the escrow deposits that
many

control.

The

your

only

question

is to find

the method of financing
that best meets your needs.
The
to

first

extend

thought, of
credit

you

course,
on

an

is

and

with

to

And

collateral

mitted

the

we

loans

being

as

"warehouse"

the

of

the

unusual

your business.

and

nature

of

In comparison with

the credit that
you

on

an

can

be extended to

unsecured

great enough to

cover

basis

is

your needs.

naturally, we, as commercial
bankers,
have
explored
other
ways of

Of

helping

course,

mortgages
*

Remarks

we

you
of

Mr.

you.
can

hold

Howard

the

just

so

before

the

as

Midwestern
cago,

commercial

above

Mortgage Conference,
III., Feb. 25, 1954.




Chi¬

bank.

standings

All

the

of

and

included

are

for the

and

arrangements

still

under¬

in

a

sep¬

arate agreement covering all such

loans.
You

will

notice

that

have

we

not

required an assignment of the
mortgage to the bank. This is not
because

necessary,

have made

we

any

non-conforming

that

he

does

submitted

not

security under
handled

payments

on

bank

this

usual.

collected

by

The

retained

funds

on

some

simple

And

then

set

of handling

way

them.

ments

of

principal

with the bank in

New

Procedure

The procedure that
tablished is not very

we

1

in

All

have

es¬

follow.

to

this

salary is
mortgage banker

billed
as

porary

the

a'tem¬

employee, he is automati¬

Each time

agent

a

is

portfolio.

cludes

the

monthly
By actually placing

fee.)

cally covered by

this

to

a

a

our

surety bond.

mortgage is closed,
given possession of
This

portfolio

certified copy of the

in¬
re¬

mortgage, the original note
or
bond, a copy of the recorded
assignment to the permanent in¬
vestor,
a

report of the title search,
policy of fire insurance with
a

mortgagee clause in favor of the

volume

setting

interest

deposited

are

the

be

bank,

account

in

—

drawn

must

the

to

ceeds from the

to

—

handling rela¬
tively few committed mortgages
will probably find this system un¬
and

necessary

obtain the

would

The

of

committed

probably

in

discuss
his

this

When
and

of

sort

regular

—

will
worthwhile to

it

the

sale

follows

he

should

always at¬
tempt to anticipate the maximum
—

amount

of

credit

because

need,
bank

with'

the

bank

he

has selected

our

be used

the

pro¬

of

Reasons for

line

of

what

to

this

does

not

•

the

mortgage

commercial

well

as

all

as

principal

the

deposited
re¬

account,

are

the

and

delivered
notes

are

brief,

is

the

method

handling

requirements of those
bankers that have ob¬

tained prior commitments for the
purchase of their mortgages.

Now,'what has happened
result

of

this

cumbersome

so

plan.

procedure?

steps

The

work

adapting
of

reasons

are

out

method

a

for

services to the needs

our

customers.

our

Second, we re¬
mortgage debt of
the country stands in the neigh¬
alize

that

borhood

the

of

Federal
in

hundred

one

debt

banker,

have

as

a

Many
been

the

more

of

as

well

as

from the point

of view of the commercial

banker,

system has worked out satis¬

factorily. By following this plan,
commercial
your

loans

banks
as

credit

profit,

but

the

to

our

general

welfare of the country.

Whitcomb, Tenbusch
With Morrow & Go.
CLEVELAND,
Whitcomb
busch
with
&

and

have

Ohio —Cecil

George

R.

become

B.

Ten¬

associated

Morrow

Co.,

Hanna

Building,
members

the

of

Midwest

Stock

Ex¬

change.

Mr.

Whitcomb

formerly

was

with

Gordon

Macklin & Co.

the

in

and

past

was

officer

an

the

of

Stock

Ex¬

change.

Mr.

Tenbusch

was

Ross,

C.

Borton

B.

Whitcomb

Simon

&

and

may

"loans

consider

secured

by

Steiner, Rouse Has
Investment Exhibit
Steiner, Rouse & Company, 19
Rector
Street, New York
City,

and

tance,
range
upon

in

in

impor¬

for it regards the longwelfare of the economy
whose condition all of us —
last

the

though

resort

it

volume

—

depend. Al¬

likely

seems

of

Is With Hecker Go.

of

PHILADELPHIA, Pa.

service

a

however,

others

residential

B.

that

the

construc¬

in

may

—

1954

than

be

in

1953, the

supply

reduction.

Incoming funds to in¬
and savings

companies

surance

institutions

available

for

invest¬

in mortgages are not likely
to decline to any great extent. In
ment

large

measure,

funds

is

the flow

of

by contractual
as life insur¬
premiums and amortization

ance

such

mortgages already
held. Nevertheless, it is clearly
the policy of the Federal Govern¬
on

to foster the ready
avail¬
ability of mortgage money as one
of the ways to combat the busi¬
ment

ness

U. S.

decline. In fact, much

as the
Treasury desires to lengthen

the Federal

restrict its

debt, it will probably
long-term financ¬
be

can

the

done

as

it is

con¬

without

amount

of

re¬

money

available for mortgages to an un¬
desirable

extent.

probably

would

done

long-term financing, if

it

more

had

not

been

keeping mortgage
The

attitude of

think, underlines

Exchange.

&

the

and

poration.

of

Mc¬

Mr.

formerly with H. M.
Company, Incorpo¬

was

Byllesby
rated,

department

Co.,

Stock

Farland

James

Liberty
Trust
members of the New

Building,
York

First

Boston

Cor¬

i

With

Mitchum, Tully

(Special to The

SAN

Financial

Chronicle)

FRANCISCO, Calif.—

Meader

Fletcher

filiated

with

has

become

af¬

Mitchum,

Tully &
Co., 405 Montgomery Street, mem¬
bers of the Los Angeles Stock Ex¬
change.
He was formerly with
Davis, Skaggs & Co. and Shaw,
Hooker & Co.

With Paine, Webber Co.
(Special to The

LOS
ward

Financial

ANGELES,
Cronin

T.

Chronicle)

Calif.

and

—

Ed¬

Monroe

E.

Prell have become associated with

Paine, Webber, Jackson & Curtis,
626 South

nin

was

Spring Street. Mr. Cro¬

formerly with Hannaford

& Talbot and Hill Richards & Co.

Joins

own

ing to such amounts

trading
&

—

associated

now

such

governed

arrangements

the

Hecker

somewhat le~s

side of the mortgage money equa¬
tion is not likely to show an equal

is

McFarland

tion in the country — and there¬
fore
the
demand
for
mortgage
money

Stock

an

James B. McFarland

to

source

reason,

the

York

ing held at Madison Square Gar¬
den. The firm reports a great deal
of
public interest in the new
Monthly Investment Plan.

with

third

transcends

New

dealers

afford

find

of the

Exchange, is operating

is

the

of

As

cannot

we

billion

amount

Government.

credit,

ducing

the

mortgage

exhibit
at the National Antique Show be¬

vinced

from

of

redound, not only to

members

to

usual

methods

and will

able

making
collateral
loans
against mortgages.
From
the point of view of the
mortgage

eliminated

to

manifold. First, I am glad that we
commercial
bankers
have
been

payments

that we—and several other banks
have developed for

mortgage

do

cooperative
effort
efficient will increase the

are

that will be useful to this market.

,

credit

sup¬

credit.

are

profitable

make

the

doing, per¬
wondering
much importance

we

of you

some

—

the

banker

Plan

must

Continuing

to

the

banker.

—•

this

own

with

it starts.

business

investor along

to

to

sale

in

to

As you listen to this short out¬

My

the

bank

This,

so

By doing this,
be assured of

overlook this

paid off. Any excess funds are, of
course, returned to the mortgage
>

before

success

or

alone

Cleveland

correspondents,
will be prepared

mort¬

cap, together with the purchaser^
check and a check drawn on the

the

be

bank's

they

notes.

sheet,

payments

the

that

the

behalf, he 'ships all

to

and

final

will

unable'to meet his total require¬
ments, it would generally be wise
to talk the problem over with one

to

the

investor.

payable

banker

will

know, limited by its capital and
surplus. So if it seems likely that

only

agent

instructions

check

he

ability of a
money is, as you

lend

to

that

the

second

the

of

off

pay

final
in

banker.

talking with his banker
regardless of the plan he

the funds

point, however, be¬
plays an important part
delivery of the mortgage

papers

with

set-up

commercial

total

this

the

better

commercial

availability
-

type of

mortgages, he

find

in

he

cause

make

collateral loan. On the other hand,
if he anticipates a large volume

and

with

job of the

at

do

usual

more

the

more

agent's

gage banker who is

dollars

Agent's Continuing Job

end

the

pay¬

only

can

against

made

and

conjunction

gage

transactions.

files periodically. Thus, the mort-

to

and

is involved in

check

must

banker

plying
the
short-term
Everything that we can

the agency. The bank's

up

auditors

of

expense

banker

with the mortgage banker
finding
a market for the
long-term credit

Generally speaking, this agenttype of interim financing is de¬
sirable
particularly
where
the
mortgage
banker has a rather
and

mortgage

by the two of them working
together
in
close
cooperation,

minor.

why T attach

cash collateral

a

checks

account

able

to

difficult to

but

the

account, withdrawals from which
can
only be made by the bank's

collateral
The

out; but I am sure that the neces¬
sary revisions will
be relatively

haps

by him and
deposited in

are

in the collateral
account. This

receivable?

commercial

All

appropriate trust account. Pay¬

an

—

by ithe

the

as

Agency Plan
as

counts
up

is

keeping a steady supply of
mortgage credit available for the
public's use. This can be done
not

mortgage

a

our

banker.

is

escrow

it

for

Gordon Macklin & Co.

much

are

mortgage
portion:

mortgage

buy when

is pledged with

are

bank

as a

financing.

him.

to

Payments made
that

the

the

been

'

•

business to the economy
whole and paints up the need

your

that will have to be ironed

handle any excess.
the operation can

to

of

Obviously, certain problems will
occur

assign

deliver

has not

handle your interim

to

of

and

Although

it seems to hold
really efficient way

a

blanket agreement with the ul¬
timate purchaser that he will re¬

a

listing the proceeds received from

loans

corded

regard

expense for him

and

the

not

So

needs,

mortgages assigned to the ulti¬
mate purchaser as loans on ac¬

the agent on our payroll as

"to your

he

committed

consider

service

business, your dol¬
large in relation
net worth; and therefore

that

we

other types of

runs

work¬

eas3%

inventory, why can't

lar

volume

eliminated.

an

bank. When the check is'
returned,
the agent prepares a
recap

paying him a salary for his serv¬
ices. (A dollar amount
equivalent

cause

borrower

been

have

as¬

or

the

the

numerous

loans

as
on

con¬

uncom¬

lender; but, unfortunately, in your
case, it is not very practical, be¬

perhaps the easiest and simplest
both

save

act

we

banker
minimum,

a

supply the mort¬
banker with the short-term

gage

credit

to

on

as

method to

of these
opera¬

to

for

has

we

commercial

mortgage

need

Instead,

thought of

decided: if

ac¬

The
and

back

the

the

signments
able

simpler?

papers

reduced

the

the

First, we select a reliable
employee of the mortgage banker
and designate him as our
agent,

for

and

as

prob¬

be

of

and

to

some

mortgages

same

the

simplify the

tion.

un¬

basis—that is, credit de¬
termined by your general repu¬
tation and the net worth of
your
firm.
Of all forms of credit, this

explored

sider

secured

is

bank

later they have
against receipt and

trying to eliminate

loans

the

So we, with a number of

banks,

further

steps

send

accompanying

to the ultimate pur¬

on

mortgage banker's

could

has been

Then

be released

to

must

all

and

order

commercial

between

agent.

it.

to the bank to be held

other

financing.

and

in

are

the

that

indicate

to

papers

it to

forth

this

banker

mortgages

must

you

not purchase

these

mortgage

and

over

forwarded

this

re-assigning it

can

most

and

then

and

like

as

method,
mortgage
to the

the ultimate purchaser.

papers

such

nominee

the

nominee

mortgages during the time
that they are being inspected and
approved for final purchase. So,

bank

the

use

is

you

your

Financing

can then
of
the

flow of your prod¬

even

and

the

ex¬

methods, how¬
ever, seem entirely satisfactory to
us.
They are all clumsy and ex¬
pensive to operate, because the

I

mand

For

he—in

mortgage
signed to

must

followed.

name

banker,

turers,

flow

the

be closed
mortgage
turn—giving an
unrecorded
assignment
to
the
bank.
Thfs method, I might add,
is not always satisfactory to the
legal counsels of many banks. Or
in

similar to those of most manufac¬

even

in

used

the whole picture
Customarily, several

are

to

customers,

of

is definitely
capital.

your

ample, the loan

we

who

value

But | if your mortgages are al¬
ready committed to a responsible

changes.

credit, only emphasizes the point
that our lending services comple¬
mercial

be

must

by

purchaser,

n

e r m

initials

he

the

banker.

mortgage

plan"

used,

promise

large

to acquire mortgages

commercia 1

primarily

can¬

purchase of every mortgage, with
the consequence that your ability

deal

in

banks

funds

own

mortgage

loaning bank.
agent
receives
the

the

by

note to the

your

fact

bankers

full

the

are

count.

mortgages but must provide
for a decline in market price. This
simply means that a part of your

quirements of
the

the

you

we

marked

be

contents

the

the

transmittal

practice,

should

the

bank,
which credits the proceeds of the

mortgages.
This
however, has one
in
accord
with

banking

of

"agency

Time

all

your

lend

not

re¬

And

for

be

this

receivable."

widely

signed
This

making a typical
"warehouse"
loan
against their
value.
And, as a practical mat¬
ter, we do exactly this, when you
do
not
have purchase
commit¬
of loan,
disadvantage:

file

of

What

type

and

accounts

mortgage portfolio, he also re¬
ceives a collateral demand note

sends

much inventory,

ments

are

same:

the

banks

be¬

ob¬

jectives

help

exist

fun¬

our

the

that

The

indicate

undesirable extent.
differences

mortgage
cabinet

This

should

property

for mortgage money in 1954, but indicates supply of funds
for that purpose is not likely to decline.
Holds Treasury
will restrict its long-term financing to such amounts as will
not encroach on available money supply for mortgages to an

The

the

office.

and

ant.
to

Mr. Howard discusses role of Commercial banks during the
banker

in

us

sufficient
quality to be entirely fire-resist¬
key

The Mellon National Bank & Trust Co., Pittsburgh, Pa.

period between the purchase of

for

should be under separate lock

By WILLIAM E. HOWARD*

I

investor, and a commitment for
the
purchase of the loan.
He
places this material in a separate
filing cabinet, which he main¬

Goodbody & Co.

(Special to The

FT.

MYERS,

Spooner
with

has

Financial

Fla.

become

Goodbody &

tional Bank

Chronicle)

James

—

C.

connected

Co., First Na¬

Building.

The

Treasury
already
have

concerned
money

(Special to The

Financial

Chronicle)

CHICAGO, 111.—Howard Martin

easy.

the Treasury,

the

Reynolds Adds to S*aff

with

I

importance

has

become

associated with Rey¬

nolds & Co., 39 South La

Salle St.

Volume 179

Number 5306

.

.

The Commercial and Financial Chronicle

.

(1115)

befoie.

Canadian Experiment,
■

discusses hopes
Canada's growth, along with the problems

and

perplexities which becloud the immediate outlook. Reveals
great strides in Canada's youngest industry, oil, and notes
rapid economic progress in other fields. Says Canada's eco¬
nomic progress is due to investment of home as well as
foreign capital, and belittles fear of U. S. control of Canada's
oil industry.
Points out advantage in having U. S. capital
participate in Canadian oil development.
Looks for wide¬
spread adjustments in period just ahead.

was,

"Ex-

pcriment, Ex-

perience and
Expansionfell into

place

d

in

Canada.
Gordon Reginald Bali

should

a

of

I

tricks. I confess that I cannot even

keep track of the new words like
polystyrene and polyethylene and

coincidental!

While
which

seemed

this does
tell

to

choose

that

work

not

I

and

It

shall.

busi-

recent
against

in the oil, gas and chemand by us in the

There

are

-

points of simi-

many

larity

between
enterprise. We

kinds of

two

our

both concerned
with
the
Canadian
economy
in
its
broadest
aspects and
in
its
are

smallest details. The well-being of

is

businesses

our

related

the

to

well-being
of
the
economy
at
large, and to the levels of production, employment, foreign trade
and

the

At

that

on

so

whether he lives in

in

or

it.

to

has

years

account.

just

eaten

The

food

could

hardly

transported,

been

without

seasoned

have

preserved or
products of

the

plants. But neither could

your

have

from

moved

where

it

it

was

to the plates 'in front of us

grown

without

aid

the

the

along

of

hank

of

course

mean

that

we

gamblers, but rather that we
considered the

are

take the carefully

thoroughly appraised risk. Ju'st as
an oil exploration company would
not embark on a drilling nro^ram
before

it

examined

logical

structure

neither

would

loan
♦

An address

cf

2,

bank
a

Canada"

the

than

this provi-

future

been

in

exploration

the

development- of oil

more

and

gas

is

development

that

should

b

taken

a

Mexico

na-

iia"~

business

clzt~a-

that

..

1
Petroleum industry
oew discoveries in nai

3

+

^

toclay-

.

„

■

>

rIvJplr°i *2

US

enearsing.

Future Prospects
f

th

fl]tnrp9

is in

th

f

^ to q^st&S

outlook

you

raiv*

what

L

th

everyone's mind?

fully appreciate, the oil point that
industry is uniquely a world in- in gauging
As

Jr7°r
3 Z

^

j

A J?* Ip

id

be understood before it is criti-

can

be

the

made

demand

One

is

that,

for

its

dustry, its international structure products in the immediate future,
and organization having sprung the petroleum industry can be
from the fact that oil can, and m0re confident than most. The
does, move freely across national large number of motor vehicles,
boundaries. It is an industry, 0n burners, diesel and other con-

probably your impression
large part, if not the major

moreover, that is controlled to a

suming units that have been-corn-

major extent by U. S. and British jng jnt0 operation is a solid basis
capital. It was only to be ex- 0n which to predict further gains

.

the consumption of petroleum
products.
In

the

economy

as

a

terrain,

howeverj

A

investment and it SY eTT .J^e
a}
•
character hidicators as industrial producbe inferred that 01 unit a states ioi eign invest- tion, employment, income, retail
Canada's expansion as a whole ments everywnere. here we una saies> exports and government exhas been financed mainly by ex- tnat tne amount oi p lvateiy eict penditures.
The same sort of
ternal capital. It is true that this u. £>.
nv tment m con i
a tbjng bas been happening in the
country's growth has proved at- Q,
P s j3 , , . , . .,
1n
United States. As to how long
tractive to outside investors. The ^tates nasi aouDiea^in t e past iu the adjustment will persist' and
foreign stake in Canada has; in- y£ais' Jtrom a lime under
bii- how far it wm gQ> it ig yet tQQ
creased in seven years by a little .....
t
soon to say. Such adjustments can
over $3 billion, from $7 billion Q
ai * . J ° t f' -JJ; be corrective in nature, or they
ft the end of 1945 .to over $10
•
> _
i n d u s 1 r v elsewhere can be become cumulative,
btllion at latest reportjat the end Petroleumi in a u s tr y-elsewhere
Q{ one
^ ^ bg
of 1952. These figures, by the way,
foreign investment sure. There will be greater comrepresent the outstanding book ut all at,lorei|n investment
tui
^
wj]1 ^

place

earnings.

during the depression years.,
There ™as an unforeseen growth
m population. There were broad?m"g export markets, particularly
ln the United States. There were
expanding social security paymerits by government, together
wlt,h the rearmament program
suddenly imposed by the onset of
Korean War.
t;

in Canada during seven postwar cumuiatjne benefit
years, with the figure of $30 bilA11 thess £igures' and j apolo.
lion of new Canadian capital ex- .
f
th
n®mbe'r o£ them tbat
penditures as a whole in eight f have inflicted upon you but not
years, it becomes clear that less £
their size underscore in my
than 10% actually a little under mjnd the advanta„e o£
s par.
8%, of Canada s total postwar £icjpa£jon jn Canadian oil develspending of a capital nature has
'ent Th
emphasize too, the
been f inanced by outside investors. n'ped to guide that development
And I might add that the 92% ajong sound lines, as it has thus

When we compare this increase

of $3 billion in foreign investment

»nde™"tten bV Canadian capital
ls .? 1?1?her Proportion than preyaile,d ln earller Periods of rapid
uU Y 3S dynamic+3s any 0 development.
baf, been be ,vasJ? eP*ar&e~
Nearly all the $3 billion inm^nt °f the country s physical as- crease of foreign investment in
0

ranada's Phvsical

nf

Assets

,

.

„

«

•

,

ment

of

...

•

h

t,

DrofHs

In
lt

,

b

a

other
c

drain

words

invesimf,,!

but

an

c.

once of improving efficiency and
cutting unit costs by every tech-

nique that can be devised, short

of reducuing wages. Canadian income levels are the second highest in the world and we want to
keep them high. Labor costs can
be a factor in pricing a product
out of the market but they do
n°f have to be, if wage cost per
unit of output can be reduced,

In th? efforts that must be made
capital expenditures of recent years, which have

£ar been
ided b £he conserva.
£ion
lices of the governments brought more and more outside
concerned and by the production energy to the hand of the worker
policies of the companies in- *n.
factory and on the farm,
voived< gui
best 0f judgment
stand us in good stead. To
must continue to be brought to the growing use of energy sources,

o! IShfuSfobult^nndu^ry the °U a"d

thls capital

expenditure pro- Canadian

ha™

Government has made

They rui] the Z'amut of a sPecial study of this Question
mobde construction and explora- and you may be interested, altion eQuipment; fixed plant and though I doubt that you will be
machinery for manufacturing, surprised, by the findings. They
pr°cessing, transporting and stor- showed that, of the total book
ing £°ods' and for providing util- value of investment in the Cana«y services, municipal services dian petroleum industry, the
a"d Public works; they include proportion controlled in the

When all these forms of new end of 1945 to 62% at the end of

luncheon

Petroleum

ecaCn

eight

amounts to

year
'

years

has

1946
through 1953
$30 billions. In every

and selling petroleum products,
U. S. control has always been high

since 1946 the annual total and
been

greater

than

Specializing in Bonds of

Canadian National

Railway

(Payable in United States or Canadian

Orders

Executed

in Canadian

Dollars)

Stocks and Bonds
\

stock had risen from+58% at the

aP^ments and houses.

ca^tal
expenditure are put to- 19ol In those companies engaged
gether, their total value in the mainly in refining, transporting

Montreal,




buildings, hotels, stores, United States, by virtue of mahospitals, schools and1, not least, jority U. S. ownership of voting

°"lce

a

a

:

wh0le

.

good look

and

1954.

eeo

advance

by Mr. Ball at

the Xhemicai

Innsgtitutrn|f
March

a

the

the

of

it had had

until

meeting
'

had

for

has

Since

seek.

?ram-

Again, banks and oil companies
both risk takers
Byr that I
not

are sometimes exfar
to
about the widening area +?1
of American control in the Cana- ^
A™
dian oil industry and the fact that irl
C a n a d i a n investors participate country
mainly by taking the funded debt.
This, I should add, is typical not iq20,
only of the oil industry but also Tv. p
of certain petro-chemical and iron
" .J
ore enterprises. While I do not
q
contend that it is entirely desirable, I feel it is in many ways a
Wh t

for consumer goods that had been
deferred, not only during World
War II, but also to some extent

in

credit

wav

are

do

direction

mnspmienep*

general growth. It is this went into the oil and gas Indus- CcapitaHhat is made ^vahabfe made a notable contribution. On
faaetu °f Canadian growth to tries m one way or another
fQr £he development o£ oil re- a per capita basis, Canadians are
whlch the engineer s work is priThe exceptional degree of for- sources on a world-wide front, the second heaviest users of oil
r^lated and it 1^ about it eign participation in this one in- and which has been COming to in the world. I know that your
^ba^
®
duftry raises the question^of the Canada in such generous quantity, jndustry js keenly conscious of
^ou are ^ doubt familiar with extent to which it is actually con- doeg nQj. ajways have to move in
Continued on page 37
i1331]?•? individual projects ti^olled outside the country. The ^be same direction. There is keen

have

we

Misgivings

natural

develo^rjLatu^Srees capUaf fn^se

'Ind^f p'rotebly^hasl

bank

no

thp

nf

pressed

+u

probably "on our books," for he
uses petroleum and chemical prodrealizes

in the
higher

than
much

Fxamn]P5

in

case

Maniples of the consequences

.

„

a

of foreign
should not

a

1

1

a

remote settlement, is

a

and

something yesterday, is
point

.

polysyllables. But I get

Fvnan,inn

the individual

time,

same

Canadian,

city

contribute

the

value of both direct investment today close to. a third is in ban
It wi) fee feM jn e jort
by foreign companies in Canada ^^tour times as much as m^lhe markets and jt win be feU at
and foreign holdings of Canadian
worth Dointine'out that home, not only among domestic
securities, and they reflect both over it is worth pointing out tnat
ducts but between domestic
There have been many factors, the movement of new capital ?^ons.aeiabie pait^oi tne increase an(J
_m
ducts
guch
There were the pent-up demands funds and the reinvestment of 'n tne "J. b. investment stake here condiUons emphasize the import-

industries

banking business.

States

.

background of rising
business barometers. The two, of

mediate outlook, which are shared
you

of

dis-

in Australia about which
Doufflcis
Copland
told
yon

the wind seems to be
cbangjng and tbe peri0d ahead
promjses to be a testing time.
^fter the long stretch of good
exploration programs are massive
a moment.
years
that I llclvv,
have already x**,deand backed by ample equipment scrjbed, a fairly widespread ad°t Iwteinal Capital Financing and tiained personnel.
justment appears to be under
But the oil industry is not a
wayis evident in a leveling
typical example of the incidence is.interesting to look at the otnei ou^. or decbne in such general

ess.

perplexities that becloud the im-

ical

end

oil industry's expansion has been financed by, invest-

"experiment,"
"experience" and course, are not independent. Each
"expansion" are words that Cana- has contributed to the other.
dians in every walk of life might
What has given Canada the
well keep in mind. What I hope seven-league boots that have ento do in the next few minutes, abled her to make such strides in
therefore, is to traverse with you so
short a period?
What has
some
of the common ground of caused
this country's .total pahopes and
aspirations for this tional output of goods and servcountry's growth, and some of the ices to increase in phvsical volume
common ground
of problems and by a third between 1946 and 1953?

by

the

part of the

Be that as it may, the phenomenal growth of the petroleum
and petro-chemical industries in

the
in,

feel that

I

other

that

impression that every "poly"
requires a "cracker" at some point
in the cracking and refining proc-

about

more

higher proportion

notable

the

intend

I

own

your

far

ever

to

engaged
that

mean

know

that than

the

words

apply

are

about

you

three

to

you

You

ness.

my

'

I

at

but exceeded 46% by the
end of 1951 and is by now probably well over the 50% mark.

than in most other countries.

re-

re~

anv

quarter of our national output—

United

title and
the "XXX" that appesrs on bottles
and casks in comic strips is purely

^ia^

*

between

country

assets, rather than consuming
immediately, between a fifth and

a

add

semblance

this

more

cal

posi-

14%

development

oil

covery'

Pected, therefore, that much of
stimulus to explore and develop the oil potentialities of the
ment
capital
from
the
United Canadian west in the wake of
It is in very recent years, too, States or elsewhere. That is quite Eeduc
should come from U. S.
that the petro-chemical industry true in the case of the oil indus- companies, whose need for new
has opened up its amazing bag of try and I shall come back to it in reserves is insatiable, and whose

in-

tries

us

even

have been
plowing back into durable physi-

that have been made in discoverfeatures of ing and developing Canadian oil
the petroleum, have
been made in little more
gas and petro- than seven years.
ing certain

chemical

in

we

In

points

Sir

than

for

the recent initial

and

American Control in Canadian Oil ^ness
a to
can
.w ^Fon? unwilling¬
recognize the international
Industry
nature of the oil business are not

time. Bv contrast, the giant strides

highlight-

a s

are

less

field'! and the building of pipelines,
nesses there are also points of dif- refineries and by-product indusference. One of these is age. The tries.
It is a rule of thumb, I
bank where 1 work is in its one understand,
that to bring one
hundred and thirty-seventh year, barrel of oil per day from the
It has seen a good many changes well to the consumer requires a
in
business conditions in
lhat capital investment of $5,000.

ally, the three
words

there

which

business

competition
canital

semblance between our two busi-

Eventu-

take.

m

if

survey

Canadian

to

What is

sion

But

thorough

that

devoted

exploration and development, on
the other hand, U. S. control was
war,

Canadian Oil Industry Is Young

to

tacK

very

In companies, mainly

and individuals are,
planning larger expenditures of a capital nature this
year
than they made last year.

tion of the client.

"A
Banker Looks Down an Oil Well,"
but that seemed a rather dangerous,

underlying financial

the

at

re-

Mr.

significant, the
additions to physical capital have
represented nearly 21% of
Canada's total national production
in the postwar period as a whole,
and
an .even
higher percentage
in recent years. In other words,

Head of leading Canadian banking institution

my

recently

once,-again,

By GORDON R. BALL*

choosing a title for
marks, my first thought

just

enterprises

••

President of the Bank cf Montreal

In

a

shows

Experience and Expansion
and aspirations for

And

C. D. Howe announced the results
of

15

the

year

has changed little

—

from

68!/2% in 1945 to 69^2% in 1951.

Burns Bros. & Benton, inc.
Tel.:

DIgby 4-3870

IP'ires

to:

37 Wall Street, New York 5

Toronto

•

Montreal

•

Ottawa

TWX: NY 1-1467
•

Winnipeg

16

(1116)

The Commercial and Financial Chronicle

in

use

for

THE MARKET... AND YOU
WALLACE

By

sales

were

issue

was

hardest
short

Stocks put on a consolidat¬ nents

ing movement generally this
week, which
sic

in the clas¬

was

pattern and left most of

the market

analysts satisfied

that the basic

strength wasn't

disturbed. The fact

that

sell¬

ing was so moderate, and in
this, the pre-income tax week
moreover, was a

prise

#

The

bit of

sur¬

a

the pleasing side.

on

*

is

now

an

"industrial"

while Western Union has

majority view

after the

was

that

45-point climb of the

since

become

long

non-index

a

called for,

was

correction of

instead

the

some

market

holding within
the 300

late

iJC

1929.

industrial
was

the

first

intra-day basis

week

since

was

of

for

the

first

The

closing
however,

index,

having trouble crossing

%

encouraging for the

of

It

the

two

at

more

bow to the hard facts of

a

present

than to

that

first

picture

historical sequence
inaccurate
anyway,

the

time

kept

the

and

for

the

1947

❖

of comparison, the

Something of a surprise in
Oct. 26, 1929
closing of 298.97
the week's
has now been
trading was the
exceeded, leav¬

other

dividend

of

obligations

&

Utilities
For the

Income

ings

generate

a

chore is far
fore

more

historic

reached.

up

far

a

at least in

one

ses¬

better-than-average

what,

the

Glens

levels

have yet to
Boeing Airplane was sub¬
February high of jected, at least momentarily,
103.49
hef^ro
tackling the to a harrowing time as the
112 21 of 1953, or the 112.53
speculation mounted over
of 1952. And the
targets of a whether a split was or wasn't
the

works

through

1930

and

189.11
•■'t

as

1929.

movements. It

t'fi

The utilities,

basis, have

of

as

readily
on a

statistical

much of

the rails but there

a

chore

are some

to

however.
crafts

and

went

rather

some

erratic

a

the

actual

continue

to

split,

the

air-

feature

if

were

current

to

dates

of

the

old

make

nigh

impossible
figures of
108.62, thg 1930 high, and the
utterly fabulous
144.61
of

far this year.
❖

center

Market's

postponed

un¬

for

the

year

the

on

Technical

*

Southern

*

concentrate

on

the

to

find

For one, the
utility average
which was started in

1929,

more

of the

extremely high 1929 prices
well

as

as

the

corporate mon¬
strosities of that era, than the
senior indices started in 1897.

Only

a

couple of the compo¬




to

out

to

of Northern

more

Pacific,

typical
ran

in

increase

article

conviction.

New

earned

time

Fire

Insurance

shown

are

Camden Fire

1952

1953

1952

the

in

50%

both

_

:

...

,

income-

inc.

on

earnings

last

is

year

not

$4.65

writes

do

not

coincide

Chronicle.

necessarily
with

a

$933

$4,558

$2,768

$1,743

$1,740

1,533

670

580

592

$3,025

$2,098

$1,163

$1,148

with

concerns

valid.

The

little

automobile

respect

Glens

on

volume

Camden

Fire

liability

Falls

on

the

property

or

fire lines for its business with

derived

from

this

Some

source.

showed

higher
was

gains.

usual

reserve.

figures, investment operations
Glens

Falls

by approximately

reported

11.4%

were

true

was

in¬

same

for

Camden.

were

equal to

The results

year.

period amounted to $2.33 per share

compared with $2.30 in 1952.

as

the

higher and reflected larger

against $3.23 for the previous

as

earnings

while

about 6%.

share basis earnings of Glens Falls

per

-

.

adjustment is made for the equity of the stockholders in

an

the increase

in

the

unearned

premium

reserve

standards, the earnings of Glens Falls

mately $6.18

according to the

woitfd

be approxi- share for 1953 and $5.92 for 1952.-The
adjusted 1

per

figures for Camden Fire would work out to be$2.77 in 1953 and
$2.81 in the earlier period.
"
"
'
..

is

NATIONAL BANK
Bankers
*

any

to

the

Government

Securities Co.

in

Kenya Colony and Uganda
Office:

26,

We

Bishopsgate,

Branches

in

India,

Aden,

Uganda,

Pakistan,

Kenya,

Zanzibar,

land

and Somali-

banking

and

£4,562,500
£2,281,250
^£3,675,000

The Bank conducts

every

glad to supply

Ceylon,

Protectorate.

Capital
Capital

Fund

prepared
which

we

on

a

new

will

be

request.

Tanganyika,

Authorised
Reserve

have

Bulletin

London, E. C. 2

this

of the
presented as

Christiana

of INDIA. LIMITED

those

They are
those of the author
only.]

$990

from the above

seen

source

in 1953

If

,

year

at

premium

instances

over

in

$2,379

straight fire business.

very

for Camden

in 1953

'

expressed

$807

,

full range of insurance coverages with only about

a

for Camden Fire for the

picture drastically.

views

$2,651

$753

entirely

Income taxes of Glens Falls

dimin¬

last

$389

underwriting earnings while the opposite

margin is only

late

$1,907

comparison between the two

of

this

crease

list

volume

$69,866 $62,724 $15,403 $14,667
39,327
35,550
7,933
7,408
28,632 - 26,786
6,717
6,452

_

expenses

operating

Paid-up

[The

the

have

$72,711 $67,718 $16,028 $15,397
2,845
4,994
625
730

res.

taxes

hand

from

intra-day

3,000,000 shares

with

some

premium

concentrated in

Burma,

rate

in

which

Accordingly, the figures for

Camden

loss expenses-

writes

Head

alters the

Haven, which passed the vot¬
ing deadline in midweek for

and

companies

|

As can be

volume, the commission

out

of the

illustrated

are

insurance

premium

all

was

brokerage offices'

and while the

1953

those

allowance should also be made for difference in the rate of
gains
in volume with respect to the unearned

Action

on

Overall

the

around

equity

on

Even so, operating earn¬

generalities

two

written

operations

24%

first

contributing /to black:

of steam for the most
and ap¬
peared on the

casualty side

Insurance

direct

group

volume

of

gyrations much

of

Op. gain before taxes
Income

On

contracting

more.

ink

payments

generally close to

Investment income

.

Pacific, which
a
long lethargy
emulate, to a degree, the

came

has "frozen" in it

,

a

fixed income

on

result of the gains in statutory

a

were

foregoing

^Underwriting

gleaned little from the

movements

good,

con¬

Investments:

good, although tne careful ob¬

or

New Haven Active

the

Underwriting

other

The technical action

*

,

1929.
❖

:JE

i

of

Premiums

comparisons

so

basis

statements

Losses and

during selling
prominently on the new
highs lists. They weren't half periods and expanding on inas
important on the side of creased volume when
faulty. The Dow average has
broken into the clear since strength,
however, as they
strength was around.. New
were resistant to
1931 and has be^n
any of the
toeing with
moments
of
easiness
the 1931
else¬ highs not only for this year,
high of 55.21, a mat¬
but for 1953-54 as
ter of pennies to
where,
well, con¬
altogether
a
sterling
go after the
week's initial session. But be¬ performance in' markets less tinued to far outpace the new
hind that mark are the well- spirited than they have been lows
by eight and ten-to-one

mitigating factors that

some

as

damage and depends primarily

ished

dividend

was

including

year.

Incr. in unearned

over

still

in

substantially higher.

were

adjusted

an

Premiums

arbitrary

any,

in

quiet strength and had candi¬

increase

some

Underwriting:

responded day-to-day action and had to

Otherwise

number of factors

Glen Falls

quarter report.

servers

a

averaged close to
increase

the

1953

exceed their

quarter century ago are even in
more formidable— 157.94
of

reflected

This

or

A

ing

instances

all

gain.

are

individual

below.

best

Thev

in

taxes, primarily

Falls

Net

difficult be¬

a

the other hand were uni¬

on

recently distributed annual reports.

on

in the face of

up

decisions
til

on

previous

Anaconda reached its better tax climate, kept the
price of this year at least, issue fairly buoyant. They
this week to
although well below the best also heightened, well in ad¬
following, the of 1953 and 1952.
vance, the interest that is go¬

rails, which showed

inclination

no

chalk
sion

and

underwriting,

final quarter
sudden power generated
report showing
by
ing the 301.22 of Oct. 25, 1929
the non-ferrous metals stocks a drastic decline in
as the next
operating
target. The others,
as
prices of some of the profit of four million against
working back up history's
metals firmed up. Stocks in 29 million for the
most precipitous market de¬
comparable
this
group
had been so period a year earlier. The un¬
cline, include 305.85 of Oct.
and known factors, such as how
23, 326.51 of Oct. 22 and the thoroughly depressed
neglected that the traders had much writing off was done to
famous
381.17
of
Sept. 3,
to rush a bit to catch
lessen the impact of the final
1929.
up with
the implications and Kenne- Excess Profits Tax
payment

Long Wav for Rails

fact,

underwriting

OJM*

washed

cott, particularly, was able to and

during 1953,

The gains in investment income

although

Some

split

In

years.

statutory

con¬

maintaining

holdings.

the

treatment

difficulty

showed

report

institutions

in the previous

as

actually

able to

were

in this business in contrast to profits in the eariler period.

operating

a

level

same

had

coverages

of risks

The companies writing

larger volume of invested funds, improved yields

s;<

hopes of

run-up on

fire

companies

siderably higher.

side, last week's

nervous

the

of

6%-7%

200.

over

straight

formly good.

high of nearly 175 and
#

diversification

broad

a

underwriting results while the

Investment results

arbitrageurs busy
heavy. Ahead

1946's shade

the

Climb

losses

for

are

in

earnings at
number

stock

use

large groups writing

large gain in

centrated

postwar issues

comparative

The

primarily casualty lines, in most instances,
a

165

string

available for last year.

now

showed earnings close to the level of 1952.

since

has been
the

as

convertible

already broken out into
high territory.

Issues

tions.

was

it

Insurance Stocks

—

Generally, reports have been in line with previous expecta¬

quality issues in

list than

all-time

Non-Ferrous

insurance companies are

It

the

time

JOHNSON

Operating statements for most of the major fire and casualty-

selling on
5.4% yield basis, more in

a

is

have

utility

surely.

across

the

H. E.

This Week

a

Westinghouse continued

way

By

the

on

loaned

but

back

for

fact

indices, which

put together with

the

line

some

other

were

is the

tf

its

Bank and Insurance Stocks

and the

borrow

steadily

moved

a

%

utilities followers
that

hill

line.

By

of

one:

to

line with the

More

a

been

easy range

on an

last

time

has

mark, which

achieved

even

extent. But

road, had

numerous

1947, when it

stock.

last six months, some sort of
pause

the

operating utilities,
the bulk being the now-sim¬ premium steadily with Good¬
rich which has been on the
plified utility holding com¬
premium list for weeks.
panies. In addition, American
Telephone's better than $310
price tag, almost double its
A. T. & T. Forges Ahead
present level, and Western
American Telephone con¬
Union's $272 helped make up
tinued to ignore the seesaw¬
that utility index's
lofty
standing. v Moreover, T e 1 e- ing elsewhere and work up¬

phone

*

of

side.

were

Thursday, March 11, 1954

.

forthcoming fight

control

erratic existence. Cash

an

STREETE

the

..

description of

exchange

business.

'

Trusteeships and Executorships
also undertaken

Laird, Bissell & Meeds
Members New Tork Stock
Members
120

American

Stock

Exchange
Exchange

BROADWAY, NEW YORK 5, N. J.
Telephone: BArclay 7-3500
Bell

(L. A.

Teletype—NY

Gibbs,

1-1248-49

Manager Trading Dept.)

Specialists in Bank Stocks

Volume 179

Number 5306

...

The Commercial and

Financial Chronicle

(1117)

17

,

5,300 INDEPENDENT

TELEPHONE COMPANIES

...A GROWING

NATION-WIDE INDUSTRY
and

a

for I

growing outlet

T*T engineering

and manufacturing
facilities.

Greater

capacity for existing tel¬

ephone lines is made possible by
the

and economical

compact

"carrier" system

of telephone

communications. Carrier can pro¬
vide

as

cuits,

18 additional cir¬

many as

superimposed

lines without the

stringing
dium

Typical of advanced design and performance in dial telephone switching systems is Kellogg
Crossbar, developed by Kellogg Switchboard and Supply Company, a division of IT&T, for
use

in

telephone exchanges. Together witli

voice
sion

Kellogg Relaymatic, as well as Step-by-Step and

other

equipment and supplies for the

as

are

existing

wires. Short, me¬

long-range types for

well

as

signal transmis¬

available. With the Kel-

logg Type No. 5 Carrier, shown at

Rotary dial switching equipment made by Federal Telephone and Radio Company, also a
division of IT&T, Kellogg provides a complete range of automatic switching systems as well
as

more

and

on

necessity of

right, four simultaneous conver¬
sations may

independent telephone industry.

be carried on one

wire circuit.

Th

e

same

skill in

research builds better

manufacturing and

performance into

products for home, business and industry
made

by the manufacturing divisions

of IT&T—a great

Microwave radio

relay carries telephone circuits over mountains, rivers,
without wire lines. Between Bartow and

lakes and other difficult terrain

;
■

deserts,
Tampa,

Co. has installed the first independent telephone
company microwave link connecting with the nation-wide inter-toll dialing system. The complete equipment was designed and produced by Federal Telecomjnunication Laboratories, research division of IT&T at Nutley, N. J.

3Fla., the Peninsular Telephone




American trademark.

INTERNATIONAL TELEPHONE AND

TELEGRAPH CORPORATION

67 Broad Street, New
For information about

York 4, N.Y.

telephone equipment and

Kellogg Switchboard and Supply Co., 79

,

supplies, write

W. Monroe St., Chicago 3,

*

111*

.18

The Commercial and Financial Chronicle

(1118)

$525,000

operating
sales

NEW

BRANCHES

OFFICERS, ETC.

Bankers

and

in

the

of

Directors

Board

of

tional

City

held

meeting of the
Na¬

York

New

of

Bank

The

York, to engage in
ness

Daniel

and

dents

Nelson

and

Vice-Presi¬

Assistant

appointed

C.

Menocal

De

Wheeler

P.

were

ap¬

pointed Assistant Cashiers.
Mr.
Miller, until recently a Second
Vice-President of the
Guaranty
Trust Company of New York, is
associated
ities

with

unit

Util¬

Public

the

National

of

City's Spe¬
cial Industries Group. Mr. Swen¬
an
Assistant
assigned to the

Cashier

and

is

Southwestern
Menocal

District.

and

Wheeler

Mr.

signed
to
the
New
England District.
!",•

as

as¬

York-New

its

of
the

increase

of the

capital

bank
sale of

the

shareholders,

notice

the

companying

of

Vice-Presi¬

the

meet¬

Trust

well

Company,

New

the

as

"The

Horace
Mr.

the

C.

3

by

is

the

for

the

capital

from

increased

interest

best

that

bank

Williams joined the staff of
Bank and Trust Com¬

State

in 1920, and

pany

to Manu¬

came

facturers Trust through the merg¬
er of that institution in
1929. He
in

urer

1950

Assistant Treas¬

an

and

in

1953

was

Department.

embraces

the

His
of

States

of

should

$1,250,000

to

if

and

Kentucky.

National

from

advanced

tary in

to

1934.

facturers

Assistant

an

He

Trust

be

Bank

Mich.,

$300,000

ther

to

The

directors

"Your

the

one

$40

share.

per

share

per

(par

Of

000

be

result

added

to

this

will

of

sale

to

came

Manu¬
mer¬

ger of the two institutions in 1950.

Mr.

Taylor

is

assigned to the
department
territory embraces the

out-of-town
and

his

business

State of West
tion

Virginia and

if

of

new

if

Shores,

Fla.,

Bank

of

increased

its

capital stock from $375,$475,000 effective Feb. 26

The

$20

V

ofj Pennsylvania.

announced

Mar. 5.

on

Mr. Petry joined the State Bank
and Trust Company in 1921 and
came
to Manufacturers Trust at
the time of the merger of the two
institutions in 1929. In 1942, after'

working
Mr.

in

Petry

various

departments,

placed

special
assignment in the president's de¬
partment.
He was advanced to
Assistant Secretary in 1947.
was

on

Appointment of WUliam H. McGraw
was

as

Assistant

an

announced

Mr.
from

March 10.

on

York

University

Administration at New York

University.

Mr. McGraw came to
Manufacturers Trust in February
1952.

He

is

assigned

Fifth Aveune

office

Sloan

Bankers

to

of

#

.

S.

the

surplus.

mon

capital

23 from

The

that

sale of

the

the

bank.

*

York, announced

Company,
March

on

of

New
8

the

election of M. E. Gevers as VicePresident of the bank. Mr. Gevers
an

dent since

Mr.

i

His

the

the

staff

of

Company in 1932.
with the bank has been
foreign

division.

He

served for two years in the Paris
office and from 1933 to 1937
in
the
London
office." In 1938 he

joined the foreign division's New
York staff.

He

ant Treasurer
ant

was

in

elected Assist¬

1946

Vice-President

handles

business

and

in

in

Assist¬

1949.

He

Europe, the

Near East and Middle East.
*

Alan
as

C.

Assistant

Manhattan

branch

York,

will

the

of

Fed¬

be

opened

at

Street, Flushing, early
month, its President, Thomas

next

J.

Shanahan, announced
if

if

5[:

Gardner

*

com¬

effective

Feb.

stock.

new

if

if

if

resigned
Vice-President of the
Savings Bank, New




Mar. 5.

on

stock

tional

Bank

Texas,

was

000

to

Jost, <72, President of
the Danbury National Bank, Ban¬
bury,

Conn.,

died

the

Holland

aboard

liner

Nieuw

ship
Mr.

Jost

New

in

President

in

previously
the

York

harbor.
Vice-

Conservator

1933,

and

1939.

been

Mr.

Jost

the

Manufacturers

of the

was

and

of

Col

in

Chester

stock.

Company,

and-'

Chester, Penn.,
Philadelphia
National

The

Bank, Philadelphia, Penn., merged
under the charter and title of The

Philadelphia

National

fective

23.

Feb.

Bank,

Previous

ef¬
item

about the merger appeared in the
Jan. 21 issue of the "Chronicle,"

there

from

to

new

short-term issue
deposits was used by
working pretty much
very

much

on

time-to-time.

its

272.

if

stock effective

President

and

bank's Hemet branch.

The

staff

will

the

across

quarters

time

some

In

the

en

into

in

four

new

late

Sep¬

month

-

8,500

over

the

on

feet

former

.•*:

An

stock

of

Warren

Bank,

Warren

The

Penn.,

effective Feb. 26.

new

made

was

Of this increase

accompanied

was

dividend

sale of

National

and

b,y

$112,500

a

times

the

size

of

the

combine

the

qtmost in customer

convenience
with

•

is

and

staff

architectural

an

outstanding
bank

The

bank

Washington,

D.

facilities

in

C.,

if

of

its

*

mittee
Trust

cf

East

the

occupy

the

Presi¬

Colonial

Bank

that

the

entire

for

the

new

underwritten

initial

want

if

small

a

700 square

'

sorbed
pany,

on

Bank of

Los

Feb.

12

and

was

ab¬

by American Trust Com¬
San Francisco,

of

stock

due

again around

are

the

of

these

work around the
Even though

level, there is

par

no

the
no¬

bonds.

Continue

s

in

Favor

Market
short-term

deposit banks

recently

very

so

issues

now

taking

well taken

Briefs

still

are

liquid

had

the

over

role

in

that

demand

has

of by corporations.

care

taxes has taken funds which
purchase of near-term

have

1

much

very

been

Payment of

ordinarily would be available
Treasury obligations.
Accordingly,

to

curtail

government

rather

sharply

with
until

for the
corpo¬

commitments. in

the

securities.

Pension funds, both
private and public, have been
among the
active buyers of the longer-term bonds. However, some
profit-taking is being reported in the 3Vis due
6/15/78-83 by these
same funds with the
proceeds going
mainly into the Vic's.
It is indicated that one
of larger life
insurance companies has
been in

mo^

market

for

a

fairly important

government issues.

securities

amount

Likewise, it is

were

also

of

the higher

reported that some of

bought by this

concern.

(Special to The Financial Chronicle)

SAN

Thomas
ated

FRANCISCO,
W.

with

Witter

Dean

is

Witter

Montgomery Street,
Stock

and

Calif.

now

&

Two With

—

affili¬

(Special to The

Co., 45

members

of

San Francisco

Exchanges.

Griggs Co.

WATERBURY.
A.

Jones and

with

The

R.

With E. M. Bradley Co.

Financial Chronicle)

Robert J.
F.

(Special

Conn.—Clifford
Ryan

Griggs

are

Co.,

Now With Sutro & ,Co.
(Special to The Financial Chronicle)

SAN JOSE,

Calif. —V. McLeod
Taylor has become associated with

B.

35

Sutro & Co., 55 North First Street.

through

the

He

Boston

William

Chronicle)

Bradley & Co., Inc., 215
Street,

members

the

of

Stock Exchange.

(Special to The Financial

E.

Tague has become affiliated with
A. C. Allyn & Co.
Inc., .122 South

formerly with William R. La Salle Street. He was fnrmerW
Staats & Co. and prior thereto w'"th
RmVer &
Co.
and
was with H.
John J. O'Erien & Co.
Irving Lee & Co.
was

Financial

C. W. Scranton Adds

(Special to The-Financial Chronicle)
—

M.

Church

Joins A. C. Allyn Co.
111.

The

HAVEN, Conn.—Edward
Spacing is now connected with

Fdw.

Leavenworth Street.

CHICAGO,

to

NEW

i

has

of

get some money to
bit here and there.

a

Eligible 2

the

Calif.

bank

capitalization

pur¬

eligible 2V2s due 9/15/67-72 have been
among the favorite
issues for commercial banks even
though there have been reports
that some of these same
institutions were sellers of this
security
when it made the 100 level.
It seems as
though certain banks
wanted to clean out this bond
when it hit the price at which
they
were
carrying it for on their books. '•

yielding

and
an¬

switching
the 2%%

is

The

rations

of

business

for

banks

There is evidently a
plentiful supply of money around which
has to be invested and not a few of
the institutional investors are
still sold on the belief that the
Treasury securities are the best
buys in the market today.
To be sure, some of these banks were
able to make purchases of the
most distant 2VzS when
quotations
were much lower and this has
given them a cushion which allows
for some commitments
being made at prices above 100.

if

common capital
$50,000 went into vol¬
untary liquidation at the cloge of

stock

issue

commercial

to

take

or

111.

participation of 300" subscribers.
The

level, give
longer-term 2V2s

the

Gatos, Calif., with

serving! as
the Advisory Com¬

of

smaller

out-of-town banks

en¬

National

Company, Chicago, IT.

nounces

been

Beutel, Sr.,

South

Chicago,

Chairman

the

among

6/15/64-69, with competition also coming from the 2V2s due
just
six months
later, the December 1964/69. It is indicated that the

most

the New York

Bank

reportedly next most popular

Dean Witter Adds

increased

recently issued
only has appeal to these institu¬

not

Money Supply Plentiful
The

The

'structure, except for

*

❖

A.

the

of

1

the near-term

capital stock from $400,000 to $500,000
by sale of new
stock, effective Feb. 25.
'
Clarence

11/15/61, which

contem¬

by

common

*

due

X

design.
will

Popular

banks

treatment

rental unit of roughly

The Anacostia National Bank of

dent

space

stock.
*

Most

is

curve

tions from the income
standpoint but also as far as the maturity
is concerned.
The absolute maturity of 1961 likewise adds
to the
attractiveness of this security.
The issues that come due in 1955,
1956 and 1957 are
being sold by these institutions and the pro¬
ceeds are being put to work in the 2'As of
Nov. 15, 1961.
There
have also been reports of switches out of
2V2s due 12/15/58 into
the newly issued
2'As, with certain of the larger money center
banks competing with the smaller ones in
this operation.

the

occupied by Citizens Hemet
office, the
new
structure
will

$750,000.

$650,000 to
$1,250,000 in the common capital

stock

of

Almost

now

The First National
from

$487,500

in¬

ft

increase

2%%

[will take

site

historic Alessandro Hotel.
four

masse

its

strikingly modern build¬

a

ing of
shape

move

street

feet, to be expanded later.

creased from $500,000 to

in¬

1961

ticeable let-up yet in purchases

Watson, ViceManager
of the

Bank,

was

of

ccmmerc'al

loan

move

poses

W.

tire

Penn.,

smaller

the

are
the leading operators in
which is extending the
maturity of the government bond
holdings cf these institutions. It is reported that the favorite obli¬
gation of the out-of-town deposit banks is the

the

of

'

.►

Feb. 25, the common capital stock
of the Lancaster County National

Lancaster,

as
though the overall picture still shows that
trending down in a not uncertain manner.

ment

W.

.

creased.
This is attributed to
borrowings which have been made
in order to make
payments of income taxes.
Nonetheless, it seems

-vV?*

T

if

National

by

Declining

ported that loans in many instances have dropped rather
sharply.
have been
cases,
however, where loans have remained
pretty much on an even keel and other cases where they have in¬

2V2%

porary
new

Curve

in¬

the teale

$125,000 office in Hemet,

new

Loan

lengthening of maturities .by the commercial banks is still
the main feature of the
government market, according to advices
that have come to hand. The desire to
protect earnings is the prin¬
cipal reason for the pushing out of commitments since it is re¬

Calif., during the latter part of
April, according to an announce¬

that

By sale of

•*'

the

of

by

"

,

if

•••

terim

*

Cambridge Bank and

-

made

was

tember.

New York.

Trust

$150,000 of the
by a stock

made

$100,000

Bank, River¬
side, Calif., will break ground for

had

staff

Trust

if

Na¬

Falls,

increased from $250,-

dividend

Citizens

common

Wichita

Wich'ta

named

was

on

the

as

Executive

was

President and

4;

American

-

Amsterdam

entered

bank

March

on

of

$500,000,

crease

the

the

of

increase

new

if

Reb. 25,

capital

Charles

•

$525,000
has

in

2 Vzs
Bank,

$1,000,009 to $1,500,000 by

v

*

joined

Trust

career

New

1949.

Gevers

Bankers
with

Assistant Vice-Presi¬

the

The

The

National

stock

Effective

eration Bank and Trust Company,

513

Colt, President

Trust

lias been

Queens

graduated

was

New

and the Graduate School of Busi¬
ness

A

page

McGraw
both

Secretary

also

v

Houston

Houston, Texas, increased its

surplus $1,375,000."

a por¬

appointment of Edward S.
Petry as an Assistant Auditor was

in

very

though the government market has been

stock.

new

capital will be $1,375,000 and the

.

of the State

The

used

the

as

There

National

to

per

be

by

Peoples

by sale of

will be
share

$20

a

sold

this,

value)

added to capital and

will

be

stock

by

common

proposing

are

additional

$450,000

$500,000

Miami

shares of stock held.

that

increased

was

to

Mount

of

stock, effective Feb. 25.

is approved by

rights to purchase

Secre¬

through the

factor

if

stock dividend and increased fur¬

$1,-

41-84 Main

Mr. Taylor joined the Brooklyn
Trust Company in 1929, and was

Even

is

of

course

the

capital stock of the

common

Clemens,

the

as¬

territory
Ohio

a

of bank

Treasury appears to indicate they are
hand-in-hand with the Federal authorities.

May.

if

will receive

signed to the Out-of-Town Busi¬
ness

that

fact

The

issue

the

opening,

'

appointed

was

The

certain amount

a

the end of the

near

determining

longer-term

or

raising efforts.

which will create

the

vestors

First

the shareholders, each shareholder

at

Flanigan, President.

middle-term

be

ter part of

The

growth of the bank makes

necessary-additional capital and
your directors have voted that it

York

March

on

a

money

warrant.

so

doubt

no

as

interme¬

an

professional side there has been an impressive amount of
buying in selected issues by the deposit banks with non-bank in¬

V

anounced

was

whether

personnel

bank

if conditions

year

picture will

money

made

be

executive

and

if

10

Manufactur¬

will

fiscal

business

however,

seems,

for either

open

which is expected to be in the lat¬

bank, said:

sistant
ers

rectors

ac¬

additional share of stock for each

of

current

It

years.

ing, Walter Jeffreys Carlin, Presi¬
dent of

"If this proposal

Wil¬

T.

arranged for

shortly of the appointment of di¬
as

to

letter

a

dent and J. Paul Taylor as an As¬

Treasurer

Announcement

tax

though the Treasury has left the door
diate or long-term obligation for new

night and after-hour depositors.

stock.
In

been

weeks

level for the first time in three

par

xo

cilities for auto-banking as well as

a

shareholders for
on a proposal to

through

$125,000

by

called

has

Y.,

was

committee

interim

financing by the Treasury through the medium
anticipation bills was pretty well expected by the
money markets because prices in most instances not only made
new highs for the
year but the longer-term 2V2s went back to the

of 13

institution.

new

has

375,000.

John

of

Assistant

an

is

N.

March 23 to vote

if

Appointment
liams

De

Mr.

is in the Middle Western

District

meeting

lease

Governments

on

By JOHN T. CHIPPENDALE, JPv.
The

suitable quarters which will pro¬
vide both parking space and fa¬

The Lafayette National Bank of

formerly

was

son

A
v

*»'

,

Reporter

years-

Mr. Beutel

the

1

fv

Brooklyn,

head

to

Thursday, March 11, 1954

.

Belmont-Central

bank.

new

organize the

sultant.

ler and Roderick B. Swenson were

the

two

<

initiate the organization

to

asked

busi¬

own

realty and mortgage con¬

as

March 9 W. Howard Mil¬

on

his

last

community Chamber of Com¬

merce

regular

Our

of

brought about the efforts of

of this
the

volume

the

in

the

throughout
area

CAPITALIZATIONS

At

rise

.

with

reserve.

Rapid

CONSOLIDATIONS

REVISED

divided

be

$350,000 in the capital account,
$100,000 in surplus, and $75,000 in

News About Banks
NEW

will

.

NEW HAVEN,

.

R.

Chronicle)

Conn.

—

Philip

Reynolds hps become affiliated

with
209

Chas.

Church

W.

Scranton

Street,

the New York Stock

&

Co.,

members

Exchange.

of

Volume 179

Number 5306

(1119)

Commercial and Financial Chronicle
The

...

1953 ANNUAL REPORT

Why General Eleclrk's

the future

emphasizes research and development for
Today all business phases of the General
pany are

As you

processing; machines that automatically
and others that

in the Annual Report, the Company not

see

guide their operations. General

personnel, but also is applying

solving its

own

volume of

even

■

research

BAUttk

1947 (to more

been

'.

|

than two and

accomplished

new

Oy

-i'ii

1947 volume)

one-quarter times

buying

'

businesses

plementing its

progress

research in many new

>r

■

.

'i

>

market research groups

more

a

cal

•

put distribution

scientific basis. Typi¬

example: through research a

complete new method of merchan¬

equipment could be rented

doctors, hospitals and indus-

up,

through

developed, whereby

was

tries. A

new

market

was

which inceased 54

opened

per

cent

last year.

fields.

In order to

RESEARCH:

TIFIC

1953, General Electric further in-

SCIEN¬

AND

ENGINEERING

MANAGEMENT RESEARCH: In

I

•

on

to

companies. Instead, General Elec¬

from within, im¬

'•

at work to

x-ray

other

tric has grown

,

were

dising

without
or

1

'

1";: j

to?

*»**(«»*<

has

.

MARKET RESEARCH: Fifty -five

pany's 135% increase in sales
over

'

businesses. The Com¬

new

automation equip¬

industries.
_

is generating new and better products-

time

goods produced by 1963—is at the same

ment to other

General Electric's substantial investment in

Electric, in

productivity problems—to double the

laying the groundwork for supplying

manufacturing.

and development

control quality;

electronic sensing

tape recordings or

devices to

advanced research methods to new fields from manage¬
ment to

use

laboratories

only is expanding its research through new
and additional scientific

product, position it for

oped: machines that can "feel" the

Electric Com¬

under the stimulus of research and development.

will

■

tensified research in the problems

explore metallurgical and ceramic

of

materials, to study combustion, to

management itself. One impor¬

tant

ciples
to

sound-test large power

project, for example, was con¬

cerned

with

ers,

applying the prin¬

of cybernetics—providing

management useful data now

available

from

new-type

com¬

puters, processing equipment

and

modern statistical methods. Re¬
search in management

techniques

and manager development will help
the Company

and to develop

ty/'s /,/

'

'' '

,

'•/'

'

'

'

steam

■

turbines and

aircraft
If you own
a

broker

—

gas

or

in

a

nominee

name

of

a

bank

or

trust

company—write to the General Electric Company,
Dept. 119-2H,Schenectady, New York, and we will
place your name on a list to receive regular mail¬
ings of share owner publications, including the
Annual Report, Share Owners Quarterly, and the
report of the Annual Meeting.

laboratories
der




efficient
powerful
new

were

approved
In

or un¬

addition,

plans call for a 50 per cent in¬
crease

in

Research

Laboratory

personnel in the next five years.

i

RESEARCH: Twenty-five per cent

will likely

more

turbines, five

construction.

For

a

full story of

General Electric's research and

development in the physical

electrical

more

General Electric shares held in the name of

1

of automatic machinery for industry

transform¬

i

take full advantage of technical progress.

MANUFACTURING

the

19

come

from

equipment manufacturers. Already devel¬

GENERAL

business

Annual

functions,

write

for

sciences and in other
a

copy

of the 1953

Report, General Electric Company,

ment 119-2H,

Schenectady, N. Y.

ELECTRIC

Depart¬

/

20

The Commercial and Financial Chronicle

(1120)

Aims of New Housing

Legislation

J

By ALBERT M. COLE*

v

Finance Agency

Administrator, Housing and Home

housing legislation,
Mr. Cole lists as important provisions: (1) flexibility in poli¬
cies governing terms and interest rates in FHA and VA home
loans; (2) replacement of government by private funds as
source of supplementary secondary mortgage
credit for FHA
and VA home mortgages; and (3) a program for a new broadscale urban rehabilitation program. Stresses role of private
enterprise in new legislation, and holds principal function of
government is to supplement private efforts with technical and
discussing Administration's proposed

In

\

the

Presi-

the

of

Ad vis-

dent's

r

v

Flexibility in FHA and VA Loans

and Programs.
It

embodies

The bill introduces, for one
thing, the principle of flexibility

new

proposals

in government policies governing

and

and VA home loans, so that these
policies may be carried out consistent with current market re-

which
incorporate

the

construe-

tive

interest rates in FHA

terms and

con-

new

'

ideas

and
Albert

Cole

M.

in

ing and avoid distortions and dis-

well

known

mortgage operations in the bank-

and changing market conditions,

ing field who contributed particularly to the subcommittees con-

the

with

cerned

FHA

the

The

VA

and

the general field of housing credit.
In

purposes.

equalize FHA mortgage insurance terms as between
new and existing housing, opening
up a broader, more secure mort-

report, in these

words:

conviction

the

gage market for the improvement

of, this

Committee that the constant

would

It

President's Committee stated that

is

mort-

secondary

mortgages, and would restrict the
use of government funds to special and extraordinary needs and

tion, it is fundamental that we
keep in mind the policy and approach which motivates it.
The

"It

establish

also

credit for FHA and VA home

gage

consideration or discussion of the new housing legisla-

own

would

to replace government

supplementary

any

policy in its

bill

means

with private funds as a source of

home loan programs and

and

im-

marketing

of

older

houses

living conditions of all the people is best accomplished under a strong, free,
competitive economy, that every

ar|d providing more people a
wider choice and opportunity to
better their housing situation,

action

port to loans for the repair and
modernization of existing homes,

the

of

provement

It would give

taken

by government in
housing should be for
the
purpose
of facilitating the
operation of that economy to provide adequate housing for all the
people, to meet demands for new
respect

to

and

And

no

of

areas

has

group

do

we

and

would

provide

as

changing

serve

liberal

sup-

nation
total

cities.

our

about

it.

We

investment

of nearly

as

$300 billion in

nonfarm

housing

At the end of

outstanding nearly

1953

$65

sup¬

had

we

billion

in

residential mortgages, in addition
to the private and public security

represented

by the facilities

establishments
these

and

which

residential

Yet

support
neighborhoods.

requirements

of

and

conserve

to

protect

housing and
The program

stop this waste. It must be stopped

organized, coordinated
action
by official and business
leadership at the community level.
To correct this steady drift into

slums and
for

blight in

vision,

new

the

of

city

officials

yourselves in
business
life.

as

community

Many

attitudes, and

from

and leaders such

cities calls

our

new

methods

new

I

the

such mortgages.

when he said:

anH*

best

that
be

our

city

declining
and rising expendi¬

revenues

tures

reflected

in

the

mounting
taxes imposed on the city's good
properties and areas. If you are
to protect your own mortgage in¬
vestments in these properties, you
will need to look to the financial

soundness not only of your loans,
but also of your cities. The Fed¬

Government

eral

in

posals

the

the

under

pro¬

of

needed

made

progress

insurance

opodIp "

."

our

for

in

their

ment, but

this

real

task rests with you.

competitive

measures

bill

not

pro-

dependent

are

on

govern-

the initiative and

ac-

Ihe

official
in our

and

business

leader-

communities.

♦An address

prepared by Mr. Cole and
by his assistant Neai j.
Hardy at the Annual Savings and Mortread

for

him

SStU^H'mSHS,
Association,
3, 1954.
aara

New
;

York
,

City,

■




nroeedures

to

necessary

New

the

families

You

must

these

help

conditions.

establish

to

workable community plan and
mobilize a coordinated attack
the
of

causes

as

well

as

the

to
on

results

This

This

that

from

continued

must

forbid

to

decline,

the

itself

save

city

a

misuse

its

of

is

One of the most important and
far-reaching proposals in the new

bill is the program for

broad-scale

program

to

embrace

a

renewal

urban

the

conser-

vation and rehabilitation of urban
areas,

as

slums.

well

the clearance of

The opportunities and

quirements
ment

as

in

for

this

mortgage

program,

rehabilitation and

re¬

invest-

both

for

is

self-evident

clear

slums,

to

redevelopment,

are

efforts

the

futile if effective action

experience

fact

is

be cleared until the

ily is given

our

to

eral assistance that may be need¬
ed to help the community to pro¬

tect

its

I

hope

into

program

to

the

Of

mortgage

institutions is far greater than the

new

investment

opportunities

it

that

this

you

will

at

problem

deal

basis

of

that the spread

blight is stopped and the trend
slums is

that

unless

reversed.
is

Until

done, Federal

not be extended.

It
gage

is

enough for the mort¬
lender simply to write down

values

from

and

areas

withdraw

your

financing

own

the

on

and

sense

But

or

race, are

we

re¬

giv¬

the

en

opportunity to abandon
slums, we also have those
regardless of race, are still

economically
these

expect
the

to

afford

we

cannot

be my hope that
experience it could

established

sound

basis.

as

and

necessary,

do

on

But

felt,

I,

a

reasonably

the

Committee

that it was proper
at this stage at

least, for the government to
sume

as¬

larger part of the risk in

a

that

private lenders could
with the government

participate
in

enabling this

obtain

to

group

good housing.

Certainly

it

to

seems

approach

an

be

can

plied, than the

is

that

me

far

better,
successfully ap¬
of direct sub¬

use

sidy—better for the family which

responsibility in return
opportunity to become
independent,, and better for the
assumes a

for

real

a

from

the

of

point

view of its ultimate cost.

to

The

families

'find

basic

answers

in

normal

This

been
nition
for

that

ments.

with

But

govern¬

it

was

the

as

we

can

means

to

part

of

who

short of outright

bring

this

cannot

good

of

lower

a

qualify

meet

substantial

for

group

normal

rental

require¬

ments for good housing.
For that puroose the

Commit¬

tee

or

recommended,

proposes,

9

-new

and

special

the

bill

experi¬

mental program of FHA
mortgage

100%
make

which

contemplates

insured

terms up

mortgages with
to 40 years, in order to

housing available to

many

that have deteriorated.: of the families who would be dis¬

"

full

has

recog¬

now

qualify
require¬

mortgage

lender,

provided

not

insurance,

only

under

a

separate program, but he may
also assign such mortgages to the
FHA Commissioner in return for
debentures at the end of 20 years,
thus

lihuting his risk more
ly to the normal period for

near¬
com1-

parable home loans.
I

beleive, however, that this
program
offers a frank
challenge to private enterprise to
join in the effort to solve the
special

problem

of

decent

housing

lower income families

velop

alternative

ernment

program that will

only

gov-,

ot

many

It is

a

succeed, in fact,

private lenders

as

to

as

possible.

as

for

and to de¬

means

subsidy for

these families

are

will¬

ing to assume responsibility for
helping to solve this need, and to
lend their skills and imagination
to
developing
this
and
other
measures
for
the
rehousing of
low-income slum dwellers.
Over
the
past
several
years
mortgage lenders have been sup¬

porting the greatest expansion of
housing and community develop¬
ment

that

the

known.

It

and

that

one

tained in

high

a

But

at

a

to

economy

productive
the

be

to grow

same

ever

record,

ahead

years

are

our

has

striking

needs

the

and

prove

country

is

communities

main¬

if

our

and im¬

kept'

be

level.

time

that

we.

have been building up new areas,;
have been losing old ones..
While millions have been
newly,
left

other

go

at

time that

structures.

we

is

these

can¬

same
time.
It is,
knew not only what

the

in

are

leav¬
,

the

concept

problems,

renew our

we

us.

Embodied
bill

We

the

ahead, but what

ing behind

a

been,

moving backward and',

on

forward

lies

millions have

behind, stranded in slums and

substandard
not

housing

income

therefore

with

mortgage

is

FHA

housed,

through

Standard

cannot

The

therefore

cumstances. We have tried to deal
this problem heretofore in

judgment, of the President's Com¬
mittee, with which I fully con¬
cur, that we should develop as far

it

standard

we

fashion

of

program

developed

functioning of sound
private credit under existing cir¬

limited

Question

Mortgage Requirements

at

housing.

insurance,

not

own

examine

responsible business conscience.

credit

and

in

business

good

leadership, has first mustered its
see

your

with this situation

areas
can
be justified
only" if
the
community
itself,
through its official and business

forces to

in

once

communities, and will undertake

hordes and redevelop its subsidy

blighted

of

minority fam¬

neighborhood.
businesses

within the reach

own

they won't

—

fair opportunity to
housing in a decent

a

obtain decent

ment, subsidies.

needed

blight and deterioration
housing supply. Any Fed¬

prevent
in

have

we

inescapable

forcement

help would be wasted and should

this

thi^

.

significance

won't let them.

that from the lim¬

with

PurP°se*
the

a

men

takerji to prevent further
destruction through effective en¬
measures

anomalous

an

good
business
home because

tell you

For

not

of

me

gardless of color

towards

However,

to

seems

its

up

re¬

already
had in assisting cities to clear and
redevelop their slum areas one

well.

that

clean

mortgage

and

tremendous, and special authority would be provided for the
FHA to insure mortgages for
are

Vnk- I™5.1"6.5? of ?UJ banks and savings
March

It
to

as

Negro
in slum

assuming, as I think
must, that those able to pay,

This is not merely the

that

of

much

when
can't buy

can

to

means

equal¬

fact

quirements.

a

blight.

place,

Program

is

conservative

ited

program,

was

the

proportion

good business

Legislation

of

with

higher
areas, a surprisingly large number
of these families could, if given
the opportunity, qualify for home
mortgage
financing
under
the

I

As mortgage lenders, you not
only have a major stake in this

that

facilitate

Broad-Scale Urban Renewal
*

new

L0n °f.Prlvate enterprise and of

ship

while

risks

Stake of Mortgage Lenders in

rubbish after the storm has taken

financing homes }j0lIsing

success

on

be

can

by full and effec-

government mort-

spokesmen. I

impressed

good

policy, for the

posed

ly

ity of business leaders

new housproposals it is important that
bear in mind these statements

we

ernment

—it is very much the responsibil¬

J

be

the housing

on

the urgency and seri¬
the minority housing

as

of

situation,

the

as

would

government

problem, repeatedly emphasized by
industry, welfare, and local gov¬

acjjustment in

be

citi-

fn considering these

.

sleeve conferences

financial

But

prejudice
and
the
financing

in

no single factor that
impressed me during the cross¬
country tours I made this past
year in connection with my shirt¬

most

assistance.

the

it,

the test of

so

legislation
would
undertake
to
supplement
your efforts
with technical and
new

pay

who
have
housing

of

out

through

ousness

by

on

housing,

consider

so

could meet

with trial and

order

purchase of good homes.

unable

our

that will not

It

need.

re¬

decent

know of

responsibility of the local official

..

mg

I

Atd positive
nr!!ramme
a£~

tive utilization of

for

and

the

must

areas

discrimination

who,

ZS^C^frgiLderf^ UP0"
Ply their housing needs
WeTilieve

market

regulations, and by undertaking
vigorous and effective en¬

grams

for

in

of

frankly and admittedly a
risk program intended to
a
special and
emergency

meet

govern¬

means

families

'blocked

their

p

find

to

these

decent

been

forcement.

avoided that would make

the

as

nomically able and willing to
for

proposal is well worth the serious

4.

v.

III!?

help

field

is

high

provide, the community

need

housing

consideration of the banks, investing institutions, and we will be
prepared to discuss with you any

n

i

.,

will

4.

'

ifnnc

We believe this

such
can

problem

brought

vestors with responsible and eco- properties by revitalizing
nomical means for investing in housing and related codes

Congress,

With
ment

losses

shares in mortgage loans with
local correspondents, both as a
means
of obtaining
a
broader
spread
of.
mortgage
financing
throughout the country and as a

•

and whose
inability to obtain decent housing
in the community has made slum
property profitable and unavoid¬
ably necessary for their housing.

know, have al¬
ready become alarmed as you see
you,

nomic health of

to

It

the slums,

such

mortgage investors develop the
possibilities of participation

Message

the

where it

ernment

create
hazards
to
public
safety and welfare and to the eco-

ing

into

the

requirements that are nor¬
mally expected in private lending.

these families is not primarily an
economic one.
There are a large

housing

new

correction

measure to provide mortgage in-

which

problem of people who have been
forced

in

all the

prop¬

also

Committee

number of minority families eco¬

the

Committee's recommendation that

The President himself expressed
the same philosophy in his Hous-

is

the
one

however, is not a program to do
this for you.
The Federal Gov¬
is, in fact, powerless to

in

up

In this connection, I want particularly to mention the Advisory

tinued."

erties involved. There

standards

bill,

set

conditions

communities,
and that only those measures that
prove to be successful in meeting
these objectives should be con-

more to the prob¬
rehabilitating declining
and of clearing slums than

protecting and restoring the

relatively

a

private financing, that is true. But
this program has not been put
forward, nor did the members of

of

areas

high-ratio,

in

nomic

protec¬

But there is

lem

such

A basic part of this problem is
economic, and its solution is not
easy. But the problem of many of

.our

neighborhoods.

our

and

our

the

to

quarters and in

efforts

home-owners,

that

lestored

are

the

program.

are

tion of law.

again become slums.

successful

building, to assure the maintenance, restoration, and utilization
of the existing stock of housing,
of

areas

and

under

long-term loans
high-risk market
economically unsound. I think
we must frankly
admit, that from
the point of view of accepted eco¬

enforce¬

it is part of your responsi¬
bility to see that such violations
brought to an end and such

into

are

but with your intimate
understanding and knowledge of
the
city's values,
you
have
a
major contribution to make in the

the elimination

code

of

losing these assets
through neglect, through inaction,
through failure to organize our
community and business resources
we

government

to develop new devices,
the open-end mortgage to

support
such

more

lack

and

operations

This program has
been criti¬
cized I know, on the grounds that

are

much to lose

so

nothing

estimated

an

ply.

conflict

from

and contradiction between government housing credit policies

for

spokesmen

resulting

ruption

hous-

the

Prominent among them

ing field.
are

the stability of mortgage financ-

of

leaders

many

it seems to me, has so
gain through restoration
protection of the good and

much to

This should improve through

quirements.

thinking

to

ards

-

,

a

i^fg°npolicies

cepts

and

alarming rate.

our

to mortgage lenders.

Commit-

ory

decline

sipated
and
destroyed
through
blight and
deterioration
at an

a

an

rehabilitation

urban renewal

this

help re¬
move the sources of this growing
insecurity. Where the security of
urban areas is being undermined
through disregard of sound stand¬

have

«»i?i

by

clearance

of

if

expression of confidence
challenge to your leadership. Let me discuss some of itsprovisions of particular interest
both

^recom-

'..mendations- and

placed

ing the basic values of the city in
which you already have heavily
invested but which are being dis¬

reclaimable

{

Thursday, March 11, 1954

.

others to examine into the causes

No^ group in the business com¬ ment,

That includes your own important function*in the housing
progress
of your communities,
The new housing hill is, therefore,

housing
legislation now before the Banking and Currency Committees of
the Congress is based largely on
comprehensive

joip with

.

fact, directed at saving and restor¬

munity,

financial assistance.
The

It is necessary that you

generate. This program is, in

may

.

to

cities,

we

comprehensive

new

that

housing
to

meet

and

conserve

must develop

coordinated

tack in place of the

piecemeal efforts of the past.
it

is

even

at¬

hit-and-miss,
But

that
the same principle be applied at
the community and business level,
for the Federal tools that this leg¬
islation
idle
are

and

more

would

necessary

provide

unused

except

will
as

lie

they

employed to implement and

Volume 179 * Number 5306

help

The .Commercial and

...

purchasing power does not follow
the
industrial production
index
down at anything like the same
rate or to
the same extent. As

out essentially private

carry

local programs.

and

constitute

You

indispensable

an

that

part of the community forces
must

for

programs

From

ment.

that

confidence

the

if

resourcefulness

Feb. 18.

to

the

fill

gap

(Special

is

with

Nelson

S.

Burbank

has

With Cruttenden & Co.

to The Financial Chronicle)

joined the staff of Founders
Mutual Depositor Corp., First Na¬
tional Bank Building.

Street.

Gustav Wurzweiler

(Special to The Financial Chronicle)

DENVER, Colo.—Frank R. Hall

j

the staff of F. I. F.
Corporation, 444

joined

Sherman

With Founders Mutual

has

tp The Financial Chronicle)

DENVER, Colo.—Ruth E. Gibbs
Management

Company, 80 Federal Street.

between

ventories."

With F. I. F. Management

BOSTON, Mass.—Frank A. Rhuland

.

21*

DENVER, Colo.—Richard Small
is now with Cruttenden & Co.,
First National Bank Building.

Wurzweiler, member of

Gustav

the

passed

Stock Exchange,
March 2.

York

New

away

on

lend your full

will

and

away

:

will

others in the private industry

respond

only

being met by drawing down in¬

and

you

Munro, partner
in
Rodman & Linn, Chicago, passed

place,

production and consumption now

housing and community prog¬
ress.
This bill has been written

of

Joins Nelson Burbank
(Special to The Financial Chronicle)

W.

(Special

financial power to turn

in

demand holds up rela¬
increase in orders and

Alex W. Munro
Alex

an

output will eventually take

must flow the
the wheels

you

as

tively,

advance¬

community

and

ment

long

execute such
housing improve¬

and

develop

(1121)

Financial Chronicle

progressive

and

spirit to this all-out drive for the
conservation of our cities.

Consumer

Buying Seen

Aiding Stability
Bank "Letter"

National City

symbol of

says

figures give evidence that con¬
sumers will respond to attractive
offerings, and, despite lower in¬
comes,

they have money to buy,
"if they choose."

In its review of

service...

general business

conditions, the March issue of the
"Monthly Bank Letter," issued by
the National City Bank of New

points out that a potent
preventing a spiralling
decline into a depression is the

York,

in

force

prospect of
of

continued high level
buying. Discussing
sentiment of con¬

a

consumer

the widespread

fidence, the "Monthly Bank Let¬
states:

ter"

"Undoubtedly
this

The

all

basic

a

is the

confidence

seasonally
stores

retail

rate

the

first

store
of

weeks

seven

DP&L'S

in

or

Department

1953.

in

sales

December

in

as

January,

this

approximately the

at

were

same

focus of

auto¬

than

other

motive dealers in January of
year

for

reason

belief that

will hold up.
adjusted sales of

buying

consumer

within 1% of the
opening weeks of 1953 and slightly
ahead of the same period in 1952.

the

were

year

"These

that

figures

consumers

attractive

have

year

Since prices
stable for

offerings.

been

biggest

give evidence
will respond to

relatively

time, people see little reason
purchases and wait
for price declines. Although un¬
some

to

postpone

afford

cannot

this

at

The

a

in

reduction,

pensation,

wage

stabilize

disposable

the

is

job

haie

who

The
year 1953
marked
theofend
ofDayton
the mostPower
strenuous
chapter
in the
history
The
and

some

which

influences

other

consumer

buy is not,

to

major problem.
payments is
degree by tax
unemployment
com¬
accumulated
savings,

time,

decline

cushioned in

and

and over¬

lower,

pay

who

higher
the

is

employment
time

Light Company. Eight years

help

went into an

income. Thus

We will be

and over $126,000,000

expansion program that has placed this

Annual

attract consumers
money with which
to

the emphasis returned to Service

year

"Throughout the postwar period
living stand¬
ards has been a powerful force
in the economy. Consumers have
been
reluctant
to
curtail
their

their

creased

,

during

sales and greater

slower

rate.

Whereas

rate

of

already under

saving

actually

rose.

•

Completion of the $50,000,000 O. H.

and

sumers

"It

is

too

consumer

a

a

cushion

for

to

expect

expenditures

will

the shrinkage in incomes

and demand

increased

not

private

was

goods and

-

Nel income

PREFERRED

Earnings
Number of

•

....

Earnings

$

9,837,189

7,758,715

$

8,275,442

$

7,326,672

1,561,747

slock

,.

1

.

.$

6,809,945

•

948,770

948,770

shares out¬

standing at December 31
1

..$

.

DIVIDENDS

common

i

1,828,421

i.

on common

9,587,136

per common

....

..

2,585,728

2,573,697

shore
$285

added

POWER

DAYTON
(

.

■

.

AND

LIGHT

•

25 North Main Street, Dayton 1,

•

COMPANY
.

Ohio

are

Never¬

theless, it is;. plain that consumer




$

INCOME DEDUCTIONS

'

natural gas customers were

.!•,

purchases

year.

new

E

production

services, which

anticipated this

reached 26,871,000 Mcf
consumption of natural gas

.

43,119,588

47,913,806

..

income

$ 52,956,777

.$ 57,500,942

during 1953

largely offset by

government

were

.

EXPENSES

,

electric customers

1952

1953

REVENUE

Total sale of natural gas

6879

$"189,381,401

RESULTS OF OPERATIONS

1
added during 1953

averaged 131.7 Mcf
•

$199,081,454

in¬

that year

from

new

14,081,520
28,360,788

..

-

consumption for 1953 averaged

Annual residential

that

they did in 1949, for in

derived

9004

18,552,612
32,039,188

.

Hutchings

Gross

Annual residential

con¬

as

crease

•

challenge to sellers.

much

$146,939,093
Current liabilities

generating station
Electric generating capacity reached a total of

2,454 kwh

quarter of 1953 con¬

both

stitutes

254,296

Tf89T381,401

1

LIABILITIES

580,000 kw

disposable income saved

in the fourth

15,025,309
536,436

..............

for 1953 exceeded $57,000,000

Annual gross revenue

•

7.7%. of

Other asset*

New Records—*

•

the
The

way,

.

Reserve*

•

was

,

Solid Basis for Continued Progress

1953, however, when the contrac¬
tion

1952

Current assets

'

Annual Report Cites

5.6%

.

$173,301,796

..$184,095,615

1

$199,081~454

•

of

earnings.

a

disposable personal income was
saved in 1948, only 3.6% was set
aside in 1949. In the latter part of

...

December 31
1953

ASSETS

inspires confidence, increased

<i'

of

.

BALANCE SHEET

the importance of funda-

Properly and plant.,.

liquid asset holdings at that

a

on

•

LIGHT COMPANY

'

*

time; they merely added to them
at

period of normal operations and the re¬
emphasis

•

•

THE DAYTON POWER AND

mentals—highly trained personnel ready to provide

period of moderately declining in¬
come, through saving less. On the
whole, individuals did not reduce
their

a

new

the efficient service that

business.
In
actually
in¬

spending

to

turn

longed unemployment of a drastic

in

request

,

major expansion completed, the company

moved into

spending, except in cases of pro¬

consumers

'

T

With the

the drive to improve

decline

on

and Sales.

buy if they choose. *

1948t49

Report

company's facilities in the best condition ever. Last

to

general

pleased to mail
of our 1953

you a copy

A'f
,

VVw

22

(1122)

LETTER

The Commercial and Financial Chronicle

TO THE EDITOR:

human

phenomenon

taken

Belittles Relation of

Currency
Supply to Economic Growth

form

and

shape.

first

dollars

next

Let

day,

us

say

G-day,

market

a

rate

pa¬

day, $40.15; the next, $40.10;
thus, ad infinitum the public

on

would know how much their bank

fantastic

its

accounts, their paper dollars would

"gobbledegook" and its incomprehensible

be

provisos.

worth

in

Secretary of Commerce
to

reason

terms

of

gold.

The

Federal Reserve could be

a buyer,
seller, a hoarder, or what have
you, the private banks the same,

Addressing

the

Convention

of

.

America

in

Chicago

March

on

1,

Walter Williams, Under Secretary
of Commerce,

Chronicle:
In

writing

monetary matters
to your publication I feel like the
who

man

with

is

suddenly

millionaire's

a

appurtenances

in

even

provided

bath

all

and

and

parapher¬
For it is impossi¬
country like ours

nalia possible.

ble,

to take

a

the

of
self-immolation
which its very nature enforces on
it.

process

■

'.Vv-

■■

this lies almost the complete

In

bucket of water,

small

a

who

the

on

has always had

his bath in
and

cheque does its duty, and having
so is condemned, happily, to

done

A

answer.

in

the

issues

any

will

will

be

stimulated,

but,
arises, the lack of
sound logical basis and the long

when that time
a

and

wide

education

necessary to
take calm and correct counsel will

have

We

gone.

could

then

"Apres cela, le deluge.
For

that

moderate,

depreciation,
to

6%,

shall

or

which

say,

.

.

modest

5%

we

3%

say

annually

lops

its

fatal quota from the value of

our

currency will mean that, in 40
years' time, an electric light bulb
will cost £1, in 70

years' time, a

bar

of

soap

and

in

80

our

will

years'

cost

the

time

a

same,

copy

of

newspaper, the "Times," will,
mere
arithmetical
sequence,

by
cost

the

rarifying

sterling.
follow

For

readers

those

who

£1

wish

the

of

notes which are
convertible
at

cities

When

years

arid

them;

when
ruins

perhaps

studies

and

which

Greek

prosperous

flourished
ago,

deserts

step

considers

one

ruins of

which

3.000

first

colossal engine of

a

enormous

not
the

metallic

a

the

takes

being

destruction.
the

into

owner

equivalent,
towards

the

surround

now

one
considers the
in Sicilly, and looks

the
impoverished
shepherds
tending their scraggy herds near¬
at

by

(in

the terrifying se¬
depreciating paper
they ma^ shudder to know

equally.
One must bear in mind, in con¬
sidering this, that the progress
from commodity to
money, from

we

huge

that

be

can

for

found

this

hand freely,

it

now

nestles behind

thrice-barred doors of deep vaults,

and, in its place, the paper locusts
of inconvertible paper money pro¬
duce
the

destruction of wealth which

a

great engines of production
hardly outdistance.

can

For,

the

in

modern world, to
awful prospect which

the

escape
even

is

now

taking

form

and

would

all

Kight Standard of Silver, till Dalton
forged the faulty link, and
substituted cupro-nickel, so do we
owe a
duty to those who will come
after

I,
most

us.

\

,

therefore, look with the ut¬
disapproval, as also does Dr.
E. Spahr,* on the
long-

Walter

policies of the Federal Re¬

range
serve

in

supply

—-

increasing the money
aiming at growth and

stability.

For

in

ment

the

germs

are

decay,

of

that

violence

tiny state¬

o£ ruin and
and

disturb¬

its

world's

position

most

dictator.

The

and sell its

For the

increase will be in in¬
notes

nates

the

from

when

it

ema¬

fixed

incon¬

an

intercon¬

no

will

coin

daily.

Let

market

then

the
as

down

into

the

of

shorter

hand to hand, with
accelerate
and

ence

duce

the

a

fly

from

tendency to

and

both by its
by its acceleration

well-known

pres¬
pro¬

effects

of

inflation.
Let

us

consider

another

paper Central
note

has

Bank inconvertible
defects.
In this I refer

cheque,

extent,

or to a much

lesser

the

promissory note
Exchange. These
spring into being, not at the
the

of

a

Bill

of

ple

can

fiat

group of government officials

marvelous process of

buying some¬
things material, whether a house,
a
car, a share, or even a risk of
gain

or

as

provided

insurance policy or

ing
*

of

in

a

by

an

future deal¬

practically anything.

The

See Dr. Spahr's article in "Chronicle"

January

and

shorter

devastating

a

the

last

the world of

of

human

century or
brought about. It has
defrauding of the peo¬

proportions.

Even,

astronomical

21,

1954.




be

Law,

indeed

or

and

for of

have

been,

Gresham's

Law

could

and

emerge

such

according to the requirements
There is

commerce.

out of
cum

10

million

a

withdraw
of

boom, and

a

pockets

modi¬

a

gold will percolate into
circulation, trade increases and
more

the

cheques are created and de¬
stroyed in the processes of clear¬
ing and final payment, bills of
exchange

come into

being, and are
discharged, and the notes would
only be increased if the calls from
banks

could

be

way

of

excess

would

notes

is

evident,

the

they

liberal

and

philosophy

complicated

no

its

gobbledegook
incomprehensible provisos,
but might indeed be based on the
and its

unwritten

law

Gresham

of

and

the Old Testament, great truths of
the "just balance" which to all of
us
in
this
planned paradise of

parasitism would be

clear water

as

in

to

take

one

the

desert.

But

finally

Spahr,

monetary matters,
given my thoughts a
"The

Commercial

Chronicle" in

for

a

the

the world

at the Equator,

along the Congo, and Nile and
half-way. up the Limpopo!' But

having

lead,

and

and

Financial

the other side of

on

Atlantic

fully to
what, in

in

rendering it possible

thinker

frankly

and

truth¬

his thoughts in
mind, is the world's

express
my

greatest problem and which holds
the world's fate in its balances, so
distorted

the

and

falsely weighted at

Yours
•

-

-

EGGLESTON,
Lecturer to the City
of London Society.

16 Parkfield
Crescent,
Harrow, London, Eng.

us

in

expressing what is a weakeniing of the conscience of the whole

during the

ding.

done in

Much
he

year.

world

towards

debt—and

money

has announced

changes.

represented by inconvertible debts.
Let

then

us

of money,

I

have,

to

as

of

supply

the pattern

survey

I would envisage it.

not attempted
figures, for one

course,

exact

cannot—and

I

hope

all

planners

will read, mark and learn this—
calculate 24 hours in advance. At
a

given moment, the United States
all

removes

restrictions

deal¬

on

ing in gold, and becomes

a

seller

Stock. Exchange
the following firm

Wesley C. Morck,
Exchange,
and

member

the

partner

in

Brinton

March 1 became

in

the

&

Co.

on

limited partner

firm;

Edwin

from

a

of

general

a

G.

the

the

New

will

partnership

Blosser & McDowell

in

on

retire

Straus,

March 19.

Mildred T. Vogel will become a
limited partner in Spear & Leeds
March 18.

1

^

itself

of gold coin to all comers.
Most of the large banks would be

supplied with stocks of gold, deal¬
in gold; goldsmiths and
every¬

Joins David Means
(Special to The

Financial

one

who

market

so

can

that

should
a

enter

market

the

rate—a

BANGOR,

—

James

-"specs,'
with the

fullest

industry members.
kinds

us

the

"I

Walter

healthy

Williams

a

climate'!

the

on

Com¬

situation,

convinced

am

that

economic

Mr.

stronger

and

tem,

security, a
enterprise sys¬

private

healthier climate for

a

Williams said:

business

"The period of inflation is past.
The consumer's price curve has

prosper.

practically

riod of readjustment in

leveled

off.

wise

By

budgetary policies and teamwork
between the Congress and the Ad¬

diture

requests'

expen¬

reduced

were

approximately $13 billion.
der

if

one

billion means?

often

we

than

billion

a

I

There

are

minutes

in

spending

been

have

to

subject

the

system

to

sudden

severe

Nevertheless,
has

been

effect.

been

taxes.

The

sonal

taxes

these economies

possible

10%

will

moved.

mate

controls

This,

more

income

with

effects

or

have

of

all

/busi¬

on

is

cli¬

vigorously pur¬
policy of elimi¬

strong

nation of government competition
wherever possible. 1 For example,

Inland
and

partment

plants

Corp.,
by the De¬

Commerce

for

for sale.

up

In ad¬

dition, Secretary of Defense Wil¬
has ordered the Armed Forces

son

to

possible

their

processing
steel
boxes, paint, etc.

proved

dustry

channels

so

of

views.

the

are

provide

tion."

of

a

of the

consumer's

which

come

'disposable' in¬

in

is

advise

on

be

a

to

hard
the

accept

must

a

industry and to ad¬
officials

on

economy.

These
meetings continue to be
held, when requested, industry by
industry. To the greatest extent
possible, government actions are

interests of the industries in¬

bring it

the

a

little closer

Consumer

for

He

fact

will

that

we

sellers' market,

improve

his

operations

his product in order to meet

strong competition.. However, on
other hand, it will be a pe¬

the

riod

of

challenge,

of

self

satis¬

-

faction and accomplishment made

possible

by

wise

leadership."

Distributors

Group
Appoints J. L. Abbe

PALM

BEACH, Fla. — Distrib¬
Group Incorporated, sponsor
Group
Securities,
Inc.,
an¬

utors
of

nounces

the

appointment of John
Ahbe

Palm

of

Beach,

Fla.

its

as

wholesa le

in the South¬
eastern

states,

with

head-

Durable

in

quarters
Palm

Beach,

119

Reef

Road.
Mr.
was

Ahbe

until

re¬

cently Florida

tech¬

'Industry Con¬

the

work

businessman.

longer in

no

are

of

year

alert

have

John

manager of
H a r r i s, Up-

L. Ahbe

affecting their in¬

on

for

prospect

this year. Let me repeat, this will

Groups

of
proposed legislation,
taxation, etc., which have an im¬

home,

increas¬

the
country.
must work hard and ef¬
fectively to obtain their fair share

of

matters

to

strong

a

ever

different

Advisory
to

effect

by

implications of the
ing population
of

being employed

now

Departmental

To

about

and

representatives of several
industries to discuss broad prob¬

volved.

construction outlook and the

free

ciation

portant

brought

im¬

Department

So-called

of their

in¬

new

this kind, of coopera¬
in

of

ties

in

ferences' have been held with top
level executives and trade asso¬

lems

potential

communica¬

several

problems

dustry.

the

con¬

be

information

Industry

called

are

nical

of

dole but

or

representative

is

must

to provide for

interchange
In

recognize

government and in¬

as

also

because

year

making

scijap,

there

tion between

good

ex¬

operations

Administration
that

not

However, it will

L.

discontinue to the greatest

tent

a

reason

buying power through tax
reduction,
increased
opportuni¬

20

ownec^ synthetic rub¬

are

1954 will

us.

was

creased

been sold and the

now

government
ber

Waterways

operated

of

has

years,

even

because businessmen by and large

cer¬

for businessmen.

owned

a

re¬

"This Administration has

the

be

and

itself, has
improved the

and

that

good year.

a

He

been

in

greatly

adopted,
suing, a

believe

be

the

opportunities

tainly

reduce

produce

'disposable'

restrictive

ness

to

reduction in per¬

power.

"Direct

their

to

pe¬

They

of

reason

has

buying

the

without any appreciable

adverse

"By

water
of

out

squeezed

economy

it

shock.

the

amazes

a

manner

speaking, 1953
banner year.
There is no

government hand-out

so

a

(.generally

less

economic

much of

think

I

and

grow

passing through

are

which

to

not

1900

gradual

not

"We

which

in

just

Reductions in government

years!
as

won¬

realize what

these

of

greater

economic

menting

coopera¬

accomplishments, under
this type of leadership, will set
our
feet firmly on the • path to

on

road

toward

A.

Byrnes has
the staff of
David G. Means, 6 State Street.

Administration

responsibility for
and most impor¬

ministration,

and

Maine
joined

the

which,
he
holds, has
started

bid¬

tion of your trade association and

Ad¬

being tailored to reflect the views

Chronicle)

ers

has

tantly,

of

the

of

some

government

Services

these

accom¬

of

an

of course,
is being
cooperation with the Gen¬

which

to

plishments

vise
Moeller

in

This,

eral

this

of

ascribes

remove

so

frustrations

current

to

The New York

Blinds

Venetian

and

methods

Weekly Firm Changes

not attempt to be humorous

developing

tions

outlook

.

let

is

Commerce

-

dently regard¬
ing the busi¬
ness

Commerce

New York Stock Exch,

in

revision of the Federal Specifi¬

bring it more in line
your commercial specifica¬

"This

J. F.

tion
a

on

vinced

faithfully,

Business

the

to

present time.

examples, the debt
Urban District Council of

around

I thank Professor
fine and a deep thinker

a

in

of

and Defense Services Administra¬

effort

re¬

legislation

fantastic

Division

Goods

no

year.

with

consumer

age-old hon¬

on

good

a

cation

normal

when

exchange for gold.

system based

with

the

But

flow back into the Central

Bank in
A

in

not

satisfied.

be

not

spoke confi¬

ministration, 1954 'budget

harmonious

tiniest

Harrow, undertaken by reason of
the "Cheap Money" policy of Dalton and his exegetes, would, if ex¬
pressed in coins of copper, stretch

and

working on the basis of figures
already out of date, but by the
volition of a person who
is, there
and then, about to enter into
that

loss

would

slowing

go

then

instrument of paper
money which
has almost as many virtues as
the

to the

wide

a

gold

pendulum

most

have

my

to

of

rate

a

which

facts

of

begin

Law

swings-.
But the segregation of
gold by the Central Banks is one

facilitating

will

Gresham's

add, that, in

me

move

the

It

it must buy
notes against gold

and drive gold
into hoards—but fluctuating

of

tion.

Gresham's

aside

How

intervene,

nected scheme for self-destruction
when it has

discharged its task of
exchange or produce

must

Bank

notes,

own

for

—

would

allowed

And

fatal

and

commod¬

a

,

ing organization.
has

Central

the

goldsmith and to buy and sell gold
oyer
its counters at a rate, not

two

note

being

over
its
own
counters, it must
allow every bank to become as a

printing presses
of the Federal Reserve
note print¬
vertible

of

powerful

printing

stop

ance.

convertible

be

tossed

esty

as our forefathers main¬
tained for 1,000 years the Ancient

silver

being

the hundreds of thousands of reg¬
ulations passed concerning gold,

quires

then, but,

countries, the
coin must, I re¬

many

paper

ity, but then, as always, the only
legislation that should affect gold

from

dead

so

.

35

to peace arose. Gold

menace

would return to

peat must, come into its own, and
the
Central
Bank
must
retire

be

of about

currency

swer

imper¬

dollars per double eagle and thus
be "money."
Let us say that a

farthing.

shall

rates

say,

production,
the
telegraph,
the
telephone) the greatest single an¬
amazing paradox is that, whereas
before, gold went from hand to

is

count-money and gold coin a corhmodity, in a period of absolute
quiescence gold coin would pass
freely from hand to hand at, shall

shape in
gold and

we

commodity

In certain circumstances,
"money" would be paper and ac¬

money,
that in 100 years £lwill be
worth
iVud and in 200 years 1/30 of a

True,

to

money

ceptible.

alone remains.

to

of

individual

spite of the inventions of
steam, electricity, aeroplanes, mass

further

quences

lies

it

banks.

pursuing

money

when

is

and
commercial
The Central Bank, when it

immediately

leading us to¬
wards a paper
money hell, to get
anyone to publish a long letter on
currency matters.
Perhaps when
that breaking-point arises, when a
man's daily work will not earn
him hiis daily
bread, interest in

credit

private

where successive governments are

policies

hands

safest

with

of

structure

the

and there is

manner,

believe that 1954 will

the Venetian Blind Association of

passing through

we're

says

amazing

an

a

Editor, Commercial and Financial

Thursday, March 11, 1954

.

Good Year: Williams

a

period of readjustment in

Double Eagle; the

per

and

with

Under

that
there

40

of

J. F.

Eggleston, of London, holds a monetary system, based
age-old honesty does not require ^complicated legislation

1954 Will Be

.

—

emerged
per

has

100,000 years of
evolution
might take

the

on

which

perhaps

human

.

ham
and before that

in

the

security

Beach

under

business

the ' firm

John L. Ahbe &
Mr.

New

Co.,

in Palm
of

name

Co.

Ahbe began his career in
England as an institutional

bond

War

&

for five years

was

salesman.
II

officer

he

in

During

served

the

U.

World

overseas

S.

as

Army.

first postwar connection

an

His

was

in

a

sales promotion and sales research

capacity with

the

Keystone

Co.,

Boston.
He
ment

brings
the

experience
both

levels.

the

to

his

advantages

in

of

mutual

wholesale

assign¬

new
a

broad

funds
and

at

retail

i

6

Number 5306

Volume 179

Joint Committee

.

.

(1123)

The Commercial and Financial Chronicle

.

Economic Report Is

on

Economic

27, the Joint Committhe Economic Report, set

devices which might be acceptabie in the face of need. We agree,

Congress in the Employment Act of 194-3, whose Chairman

however, with the President in
his statement that 'the arsenal of

On Feb.
tee

on

by

up

is

Rep.

now

of

Wol-

ernment for maintaining economic

stability is formidable.:' We must
be prepared to use these weapons

P.

released

its

statement

on

the

need

as

the

President.

In

of Bank of

the

England notes

i

■

confidence,

these

LONDON,
for

reasons

judgment

no

of these

the

the

of

Eng.

nize
t'rv

While

rec-

future

in

required

be

will

which

shifts

the

at

look

ahead if the economy is
at the level of
'maximum' sustainable production

the year

maintained

be

to

Specifically

disinflationary measures of the
authorities. It adds yet another to
the incalculable factors monetary

the

extent

unemployment

fully reflected

in

degree

of

weeks

Work

be
statis-

layoffs,

apparent

as

from

WOrk force fall short of

^j0n has

in~view"of the"n um berof

comply

to

with the ideals of the

currently issued

the econ-

how

useful

may

be in themselves

Employment

mittee

the coming year The
committee as a whole is confident
Act during

series

The com-

the

that

and

agencies

involved should promptly seek to

can

serious further recession
be avoided and that this in-

remedy the present situation so as

demand can take
place in the interests of economic
stability and growth if the available tools are used in a timely and

and consistency in the various se-

in private

Our confifollowing

manner.

courageous

to

the

assure

cits

relating

tations

factors:

dcrse

in

analyze these iimidetail.

We

en-

recommendations

set

There, is a general feeling
basic economy is essen-

forth to correct the situation and

tially healthy, in part because of
the
institutional
improvements

exercise its statutory authority to

"(1)

the

that

been added

have

which

and in part because

cent decades,

the
it

inflation, serious as
brought under

postwar

has

was,

re-

over

been

control without many of

the worst

tistical

associated witn

been

infla¬

tions.

recognition by
those who
appeared before the
committee
and, we * beneve.
by
Americans
ericans
generally that there
are powerful, wn6-iui.
long-run sustaining
There is

forces in

the

a

Tnese lie

economy.

in the needs of

growing popula-

a

nomic activity has sometimes been

the capabilities of an

adjustments

It would be

experienced in
a

-d*

mistake,

that

sired

new

developmental

and

research

ex-

members

While

"(3)

committee differ

this

of

to the relative

as

emphasis which should

currently

given to the encouragement of
investment
expenditures and to
the
encouragement of expanded

be

present

backlog of

mobile,

housing,

durable

demand

and

So the

consumer

from

current situation differs in that
much of the compelling drive inherent in this type of pent-up de-

unanimous

mand

spirit of the Employment Act it¬
self as a strong reason for view¬
the transition years optimis¬
tically. If the government accepts

ing
its

responsibility to create
and

mate

to

cli-

a

programs

pursue

which will advance the objectives
of

tho Employment

lieve

Act,

that complementary

private

demands for investment and

sumption

con-

sufficient

be

will

be-

we

to

forestall serious economic declines
and

to

bridge

'gap' which
"(4)

Confidence
by the

that

the

or

longer present.

no

forming

a

judgment

as

to the out-

lock at this time, to recognize that

we are now
hoped-for
defense
f

face to face with the

possibility

of

expenditures.

reduced
the

While

making for contraction

mav

|°lces m^ing *oi contraction may
no

than

more serious

a

minor

readjustment in the economy, they
are

is

further

occurring

at

time when

a

a

basic and fundamental shift in the

re-

not

Administration

is

matter what

Government's position

to^get out

a

every

ments to spend on

placing of forged notes on

And the recipients of easily earned money
are themselves likely to
spend it

inate

spending spree.

rj^-g

brjngs

us

the

call

economists

spending. The

effect 0f additional

ated

and services is taking place.

The

reorienting

purchasing power erethe issue of forged

chases.

task

the

in

on

shady

the

and

claim

question

full

bave

made

suing

notes

new

against

House of Lords,

final appeal was

heard, decided that Waterlow and
Son had to pay the full amount.

though the Bank of Portu-

Even

?

to

JL

the

S *Va? iu

practlce

cost of the replacement

their

pur-

the re-

spend more than
have been .f
had

received

the
txxc
llulw,
notes.

And

iiuu

againSSuntil ^he^additional
chasing

power

d

of

have in¬
creased by the addition to its note
circulation.
And Portugal as a
the

country was entitled to compen}
f
th
additionai purchas-

vocative

list

of

specific

might be presented,

we

such'

list

also-

that

complete

no

or

pro-

could

be

anticipate all of the




...

(assuming, of course, no

measures

recognize

,

..

the

worsening

of

situation),

should

looked."'

'

.

..'

.

disappears

- this

pur-

either

through
tax payment.
Even the use of the
nbtes for payment into a bank account or for debt repayment does
not end their career as a factor
making -for inflation.
For addi-

.

to

tbe

,

banks'

to
iu
.

several
scvcidl
,

,

.

times
hi1ics

the
u1c

And the
,,

international repayment of debts enables the
not

be

England notes above

is

amount

lawyers

prohibited.

would

no

doubt

argue that the notes> not being
genuine, were not in fact Bank of

Engianc} notes and therefore their

fmport did not constitute an ofagainst the exchange regu-

fense

]anons

'

.

..

.

counterfeiters

th

t

f th

Lents

their

or

to

counterfeiters or their agents to

Wlthdraw
from Britain their -ill-gotten gains would of course con¬
stitute

an

offense, unless they re¬

over-

creditors to lend the money again,
During a period of rising prices

W.

insurance

D.

O'Connor

stocks.

O'Connor

Mr.

formerly for many years with
p^zgerald & Company, Inc., as

was

of the bank and insur-

manager
ance

stock department,

With Brush,

Slocumb

(Special to The Financial Chronicle)

SAN

Calif.

FRANCISCO,

of the
claim on a

corresponding section

of the na-

Co., Inc., 1 Montgomery Street,
members of the San Francisco
Stock Exchange.

iona]

possession

the

uh
,

tiror,

^

_

produced a substantial net addition to the Bank of Portugal's forn
TD"v,+,,rt"1 "

eign exchange reserve. There are
few Central Banks which would
not

be

prepared

to

issue

addi-

tional notes in return for a cor-

J; Earth Adds to Staff
(Special to The Financial

Anada

Chronicle)

Calif.

FRANCISCO,

SAN
J.

Micoud

is

now

^
aL ^ ^rLCisco

—

with J.

Ex-

Stock

a£d ^an *ran"sc0 ^tocK
cnan8es-

mgr'ofTtlrling^And the'execu- With Hannaford & Talbot

tion of the Judgment brought a

invisible

export to

(special to the financial chronicle)

•

FRANCISCO, Calif. Charles Weston has J0iued the
From the point of view of the staff of Hannaford & Talbot, aii#
balance of payments of the coun- California Street,
try whose notes are forged, it
makes a considerable difference
Stewart, Eubanks Adds

substantial
Poitugal.

SAN

_

amount of the additions.

interesting and

Qever

0f

notes, have acquired a

through

duration

an

certain

Stephen A. Netherton is now connected
with Brush, Slocumb
&

within or outside the country. If
they are
~ residents of the country
"

gest that

a

ing power distributed among hundreds of thousands of people who,

amounting
ailluuiilillg

we
wc
du&sug-

gank

its liabilities

notes,

whether
w11cu1c1
ii is
it
is of
longer
or
shorter
1uij&ci
ui
&i1u1 ici

..mic

Act> under which the import

0f

those

The

before which the

withdrawn.

whether the counterfeiters reside

While

of-

Con_

of

cash reserves

a

within

Exchange

notes, or only the cost of is¬

the

enable the banks to grant credits

available.

also

the

law^er^1and„eJ°S^^ailkf^;It

It is exercised by

iulcivcu

value

nominal

^ons

are

the

Portugal was entitled to

the

with this basic shift, regardless of

vx^v-o

under

which had

whether

was

passing

of

Position to

nyji

main

decided
of

EJe" so, the judgment was regarded with mixed feeling by

cipients of the notes who are in

not17

be

Bank

individuals

thin

into

vanish

not

does

once

tb|m

a

The
to

variety of additional tools and devices

the

in

courts.

stren£themng our economy in line

.

of the offend¬
act of in¬

any

printing firm and the matter was
brought before the British law

or has recommended, if the
downturn
continues, but that a

,

It would be interesting

compensation from the

It claimed

n€ceseitv

{

be

the

losses the Bank

0f recipients from

prepared to use the powers it now

has,

to

from

unauthorized

through

notes

air

to what the
"multiplier"

through note hoarding or
as

purchaser and consumer of goods
for

Britain

gal notes

prices

high

thev aet baci,

large scale means an indiscrim¬

engaged

Federal

assurance,

a

additional

It is highly important, in

appear.

inforced

only

deiiciency

any

may

is

"(3)

be

lon2-'

in

what

matter

how

and
so

and

fieelv

not

en-

forged

the

still largely unsatisfied. The ' easily!

consumption,

t h e committee is
in
recognizing
the

"

those

For

tney
pay 50 10ng
38
y currency.
get B3eK
the change
in genuine

the period of wartime restrictions

was

buy
n

legiti¬

the

on

snent

does

pro¬

corresponding

a

notes

It does not

haste

tbev

auto¬

inherited

a

of

more

of

that

nasein2

It

thev

stabilization

tremendous

of

nc.iallv

nn+Po

haste

about the deand
growth.
The slackening of business activity in 1949 came at a time when
the

penditures.

the

in

issue
in

in -circulation

rather

than

nounced

omnunt

be

can

So counter¬
guilt.y not

are

notes

be

to

gagfgd

forces

similar

tends

mate

believe,

similarities between the two periods

stantly

system whicn is conopening new vistas for
products tnrough large-scale

we

1949.

up"

t—m

forged

ting

justment,' and has been in this
respect likened to the economic

enterprise

in

'inventory ad¬

an

wholly relied on
situation to bring

and

eco¬

notes

forgery but of infringe¬
ment of the government monop¬
oly of currency inflation.
The inflationary effect of put¬
of

only
,

as

of

feiters

agencies.
"(2) The recent decline in

the modern

uphold this privilege.

other sta¬

and

tfie

be

England

equally determined to 0f Portugal redeemed the notes.

era' were

of the executive

programs

characterized

"(2)

tion

those

for

support

supplies of goods availpurchase. Now inflation

for

cratic governments in

urged

are

sufficient financial

recommend

to

The Aepro-

Committees

priations

and disastrous effects which have
often

jrto cf^ct.

nu1

trol

deflationary spiral, there is
justification for governutterly useless
public
works
and as digging
holes m the ground and filling
them up again—for the sake of
creating
employment and purchasing power. In such circumstances it is arguable that counterfeiters may even render a pubof

of

and delivered them to incorporated, 63 Wall Street, New,
persons
who
put York City, specialists in bank and.
through the issue of paper cur- them into circulation for their
rency has always been a govern0wn
benefit.
The
amount
inment monopoly.
Despotic rulers volved was considerable, and in
in
medieval
China
and 'demo-'order to save the large number

able

the Bureau of the Budget to

urge

The

fense

strongly

h°ld

economists

the
con¬

balance

intended

were

to

f0rged"^ote7but

a

reflationary^ policy.

the view that, in order

then

the

on

Bank

should
caught

be

abroad

transaction

Geyer & Co., Inc.

and
committee

The

some

the

accuracy

employment

to

staff materials

dence is based upon the

in

utmost

unemployment.

coming tourist
season.

statistical knowledge

our

serious

Einzig

s

opera¬

depres¬
a
whole»

troducing
such
notes,
whether
they would be charged not only
with
possessing and passing on

period of business depression, on
th
0ther hand, the issue of forged
notes tends to reinforce the government

a

authorities have taken appropri- lie service by assisting the gov- side within the sterling area. The
ate measures td frustrate the ernment in its task and by re- non-withdrawal of the proceeds
Plans- Before very long this mat- lieving the taxpayer of the neces- would mean an increase of for¬
ter is^ikely to come before the sity to finance sooner or later the eign-owned sterling balances,
!aw c°"rts. 01 fore than one coun- reflationary public works.
.
.
.
additional loss
try• "s legal aspects need not
The economic aspects of note ^nicn again is a
concern us> but.it may perhaps be counterfeiting were subject to lu LUC
°* some interest to consider searching inquiry on the occasion
briefly the economic aspects of of a notorious lawsuit arising Wm. D. O'Connor With
note for8ery.
'
from the issue of counterfeit PorObviously, the issue of coun- tuguese notes in the early '30s.
teifeit notes is inflationary, foi The London printing firm W'aterWilliam D. O'Connor has betends to create additional pur- low & Sons, misled-by false erechasing
power without creating dentials, printed Bank of Portu- come associated with Geyer & Co.
additional

matter

no

individual

the

Dr. Paul

different

that any

crease

plans for
passing
them
on ;in
Britain
during the

beiieves that these limita-

tions in
are

rate

been inevitable

substantially

vestment is necessary if

is

series

have
elabo-

made

and

moreover

of

notes,

to

During

policy has to cope with.

Many

large

quantity
and

expressing

private demand on the part of
consumers
and for
business in¬

omy

fully

have

forged

for
the

reasons

is

11

to

very

short-term

of
withdrawal
well

as

Scotland

,

produced

short

involuntary
of

by

not

may

current

and

o

said

Available information upon

^he

on

u_.

Yard.

involun-

of

indicate that a substantial increase
in

covered

the continent

materials
prepared by the committee s staff
The

employment.

which

to see,
ers

the

This would

the

introduced

It tends to offset the

the

burden

a

with

notes

counterfeiting adds to the flood of

inflation.

from

on

payments,

case

dis-

Have been

some

promptly decreases in
employment
arising from
such
forms of underemployment. Pubjjc confusion respecting the situa-

and

of

engaged in counterfeiting
one
pound and 10 shilling notes of the
Bank of England is reported to

are:

that

e^mzing the fjcs

to

also

well

stitute

the European continent, discusses

syndicate

A

—

"(1) It is only proper to recog¬

Committee
states:

economic activity, it is

in

situation.

rent

declines which have already taken

place

proceeds

counterfeiting. Finds coun¬
terfeiting has an inflationary impact and, when accomplished
by foreign counterfeiters, this effect is intensified.

arises.

"Over against

'

.

on

if

community as
stand to gain. On the
hand, if forged notes are

continent.

re¬

of

port

Wolcott

even

other

effects of widespread

economic

Elements of Uncertainty

economic out-

h.

the

may

Indeed

place during

introduced

dealing
with ouhook can afford to ignore elecurrent, orients of uncertainty in the cur-

look,

take

sion

Einzig, in calling attention to reports of counterfeiting

the

Jesse

tions

January,

1954 Economic

Report of

off.

worse

By PAUL EINZIG

Dr.

gov-

(R.Mich.),

Jesse
colt

disposal

the

at

weapons

brought about by their operations,
but the country as a whole is no

Aspects
Of Counterfeiting

Hopeful, But Cites Elements of Uncertainty

7

23

the transac^

redistribution. The forgers make
a profit at the expense of the
community which has to bear the
burden of the increase of prices

(Special to The Financial

"
cfPwart

Chronicle)

FRANCISCO,

SAN

Calif.
xxrith

Stewait,

Eubanks

LubanKs,

Meyerson

lueyeisua

&

Montgomery Street,
members of the San Francisco,
and Los Angeles Stock Exc anges.

York,

216




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Dilon N&uve n Peltason,

Eastman,

John

Bacon,

H&aupt Do&minck of Newburge, B&ros. 8,1954
Ira

First

Sutro

March

26

The Commercial and Financial Chronicle

(1126)

the

seize

Continued from first page

much that is unfortunate and so

the

i

•—-—~

Continued

goods, ob¬
viously in excess of the needs for
current replacement and popula¬
tion
growth, were creating new
purchasing power that generated

Impossible

second round of demands.

a

2—All
was

sharpest
ernment

that

debt

in

had

have

we

our

penditures were dependent on the
debt expansion factor to an un¬
precedented

doing is beset with hazards of the first order of
magnitude to us all.
Among these hazards are those which are almost
certain consequences of a failure to present a Republican

degree.

Debt

expan¬

in the postwar years has ex¬

sion

ceeded the

percentage rate of such
that was recorded in

expansion
final

the

five

of the 1920's,

years

which

history has recognized as a
period of excess debt expansion.

program

'

arises

There

whether

question

a

the

economy

to

as

con¬

can

tinue

to spend this much beyond
earning power indefinitely.

its

Fact 3—In

addition

"inventories"

of

hands

of

to

building
in

durables

the

"inven¬

and

consumers

stage where it is a little difficult (to adjudge them.
All these, or certainly the
larger part of them, must be

tories" of plant and equipment in
the hands of business, part of the

dealt

business

in

journs this

business

a

like

way

before Congress ad¬

Failure to do

would

certainly open the Republican
the charge of incompetence if not trifling with
public weal. It could be used most effectively to begin
so

party to
the

the process

of getting the New Dealers, the Fair Dealers
again into power. Almost anything is to be
preferred to such a calamity. With all its shortcomings
and their kind

and with all its failure to shake off the influence of the
nonsense

power

of

the

past three decades,

the regime

now

in

is infinitely to be preferred to another quarter or
of the like of Franklin Roosevelt and Harry

half century
Truman.
Let

not

be overlooked

that

it

was

from

all

the personal

popularity of General Eisen¬
convulsive revulsion to the New Deal

hower and not any
and the Fair Deal that

changed the party label on the
White House door and
gave to the Republicans a small
advantage in Congress. All legislators and all officialdom
in Washington with the
good of their country at heart
should feel it their first

duty to do all that they can to
encourage by a good record this year a thorough popular
awakening to the serious shortcomings of all political
philosophies and tactics such as those of the New Deal
and the Fair Deal.

The

Department

of

the second half of

1953

in

were

a

declining trend, With the Decem¬
ber figure the lowest since May of
1950.
Shipments were also in a
downward
months

in

trend

of

last

the

last

four

Record

Essential

Essential to any such endeavor is a
good, constructive
legislative record this year, and intra-party squabbles are
getting definitely in the way of that record. Some

although very slow progress, is being made in
the matter of taxation. It
definitely remains to be seen,
moreover, whether a fear of the
forthcoming election con¬
progress,

tests will lead

Congress to shy off from the constructive

parts of the tax program now in preparation and to em¬
body in it quack remedies designed (although without
warrant) to head off a depression

mortally feared by the
Republican party.
The rate of
progress needs to be speeded up
sharply in this matter.
There are also other
large areas in which the Ad¬
ministration and the
Republican party must make a con¬
politico

managers of the

structive

record

question of

our

in

the

very

near

future.

The

whole

foreign relations, including both trade and

foreign aid, awaits action. It may well also await the de¬
velopment of sharply divergent views within the

But

whatever the

afford to make
own

party.

mind

record

or

a

to

ultimate outcome,
record of

the party can not
being unable to make up its

get anything done. It

whi^ph made it possible




was

this sort of

for Franklin Roosevelt to

policy

but

year,

new

were

19% below the rate of ship¬

ments.

An

would

inventory adjustment

seem

to

be

logical ex¬
pectancy, but it is going to be dif¬
to accomplish in the light
a

ficult

the narrow margin
income and required

of

trend

be¬
ex¬

would

debt

mean

loss

a

certainly

expenditures

at

there

much

when

to

seems

in

that

me

fore¬

the

data ample justifi¬
suspicion that we
have passed the crest of one of
the longest periods of unusually
high activity and sharpest private
debt expansion that the nation has
ever seen. That is the reason why
an
investment manager is likely
to make some serious errors if, in
his appraisals of investments, he
looks upon the experience of the
postwar years—and especially the
experience of the 1951-53 years—
as
normal. Furthermore, I think
it is highly debatable to contend
that it is wise to try to sustain
that rate of activity as if it were
normal. By so doing, I am afraid
that we would merely prolong and
enlarge some of the maladjust¬
the

for

After

ments.

thing

there is

all,

temporary

as

demand

such

saturation

a

in

and

consumers'

for

of

the

downward

ments and

trend

of

ship¬

orders. The condi¬

new

tion suggests a further intensifica¬

tion of competition in an effort to
stimulate
sales
and
reduce
in¬
ventories.
Fact 4—For

of

time, the rate

some

instalment

new

exceeded

debt

granted
repayments
that

the

required

to

instal¬

off

pay

That is why outstand¬
ing instalment debt was rising.
Thus, for the 12 months ending
last March, this factor was pour¬
ing
money
into
the
spending
stream at the annual rate of

$6

billion in

that

were

purchasing
on

this

new

debt. The

was

contributions
in

$4 to
funds

granted and
closed up so

now
no

to

balance

net

the

December

of

economic

on

a

season¬

the.

question of
how
much expansion the economy can
digest at
a

sitting. The welfare
who has a funda¬

one

person

ailment

mental

encouraging
him
to
avoid
diagnosis and prescrip¬

At

from

least

prehension

record

10.9%

of

personal

disposable income.
This

is

merely one evidence to
support the argument that the in¬
come

brackets

mass

markets

that
now

represent
have

a

the

"high

break-even

point." Their "fixed
charges" for instalment and mort¬
gage

debt interest

and

amortiza¬

tion have been rising sharply, and
so
have their operating expenses
for

food

ices.

and

necessity-type serv¬
moderate decline in

Thus, a
disposable income would probably

eco¬

nomic

background is vital to the
interpretation of current
developments and their effect on
investment

values.

it

Since

is

statistically provable that we have
had
an
unsually prolonged
period of unusually high business
activity — entirely aside from the
military program — dependent to
an

unusual

(degree upon sharp exi-

pansion of non-government
then

economic

that

debt,
dictates

history

should

we

durable

goods,

competition

casts

considerable

is not likely to be an
aggravating
depressant; but, on the other hand,

stimulating effect

business

on

However,
this

supply

element

that

increase

the

supply and

will

tend

demand

to

side

of

the

for

Where

other

things,
of a large

equal, the assurance
supply suggests a continu¬

money

of unusually low yields and.
good demand for the best qual¬

a

ity investments.
Improved Government Attitude
Toward

Another

Business

point to be considered

in the present situation is the

proved

attitude

in

toward

business.

It

has

sledge hammer. Clearly, this is
plus factor of considerable im¬

a

portance.

Thus,
the

tabulate
with

of

only

little sharper than

Washington

in

few weeks ago; and,

pos¬

restoration

of

invest¬

the

a

assur-,

very large money
the
unfavorable

On

supply.
side, we

have:

(1)
the
broad
economic
background that I have already
outlined, (2) the evidence of an

unsatisfactory inventory condition
in the important durable
goods
industries, (3) accumulating evi¬
dence

that

there

is

temporary

saturation

in the demand for pro¬
and
consumers'
durable

ducers'

goods,

(4)
the possibility of a
slackening in the rate of debt ex¬
pansion

part of

that
our

has

been

purchasing

(5) the threat that
cline

velop

in
a

a

moderate de¬

personal income will de¬

against the "high 1
point" of individuals.

squeeze

break-even
This is

by

the

of

set

a

conditions

investment

formulates
To

his

be

should

any

that

carefully* 1

officer

investment
bit

a

analysis of

ment

creating

power, and

as

he

deci- \

specific, I
type of invest-!
that the i
more

recognize
of

record

a

business

or'3

individual for the past several

years may

next

an

insecure base for»

power of thet
three
years.
We t
examine
the
effects
on

two

should
each

be
or

investment

lower

level

of

of

somewhat

a

general

business

activity. This applies to mortgages
have to examine as and bonds, as well as to commons
as
possible what steps stocks.
Furthermore,
we
must
be taken by the government analyze the supply and demand
a

sequently,
carefully
may

a

factor

including the prospect

-p

judging the earning

anticipated

of

may

unpredicable

incentives—and
of

side

we

confidence

its

further

ment
anee

favorable

situation,

this

all

sibilities
for

the

on

current

activity has approximated the per¬

high to the 1949 low. This seems

so

cessation of raps on the head with
a

an

1948

been

ington that it is very difficult to
judge the economic effects of a

financial

the

im¬

Washington

many years since business did not
have to fear attacks from Wash¬

As you know, since last summer
the percentage deciline in business

from

an

ation

an

Avoid Depression

as

further4

equation

justment.
Steps of Government to

ac¬

consider

factor

demand

investments.
are

have to

we

money

sions.

decline

con¬

.

we

to counteract the downward! tend¬

conditions of each industry. Many

encies in business.

industries

The

assurance

money
we

policy is

cannot

From
must

t

tivity.

must be considered very

centage

-

of

earning power. From. the view¬
point of business activity, there¬
money and credit factor

each

examine

of

Possible

and ;

the prospective level

on

easing in business ac¬
tivity to see whether that period
might develop into a major ad¬

period

was

a

com¬

a

proper

to have been

were

viewpoint of

manager,

the foregoing

of

quarter,

requirements

the

investment

'

a

when the resultant threat of keen

benefited

not

medical

ally adjusted basis. In the fourth
repayment

is

tion.

spread between

debt

repayments has

stream

the

being withdrawn from
power for repayments

instalment

that there

of

excess

welfare. The differences of opinion
surround

so

temporary saturation
supply of producers' and

the

going factual
cation

is

•

of

I doubt that it will have any great

contained

is

there

doubt that easy

time

in

personal income.

the

to

heavy-type

fore, the

by

propitious

\yill encourage the dynamic ;

the,rate of debt expansion, so
that the mere flattening in
the

of

high
crea¬

years
has been
important degree

an

credit

a

doubt

the

the

power

upon
the high rate of debt ex¬
pansion. Hence, we see the Reason

penditures. Unfortunately, how¬
ever, an important portion of per¬
sonal income has been dependent

It

that

us

recent

evidence

Commerce

ment debt.

Good

monetary authori¬

to

purchasing

of

credit

producers' durable goods.
for
manufacturers
of
It seems to me that a discussion
durable goods show that the ratio
of these facts does not involve any
of inventories to shipments at the
question about the desirability of
end of December, 1953, was high.
obtaining objectives that are in
New
orders
booked
throughout the best interest of the economic

were

A

r—

figures

orders received in the last quarter

•

the fact

appearances

activity we have seen is
for by the increase in
operating inventories.

accounted

year.

squeeze

of

time,

debt expansion.

tween

ever

history. It can be
demonstrated that heavy-type ex¬

now

with

the. present

the

is

dependent to

on

of
the
foregoing
accompanied by the
expansion of non-gov¬

Fact

activity

mistake about it—what he is

a

of

tion

\

durable

consumers'

right in believing that there is no
reason
under the sun why the one might not be ac¬
complished without introducing the other. And if the
Senator were to handle his assignment consistently in a
way more in keeping with the spirit and traditions of
this country, he could proceed with the utmost vigor and
still avoid the damage and the dangers inherent in acting

in

it

as

consumers'

President is

further progress toward the general welfare of the public.
Some of them are not to be desired; still others are still

to

ties

for

9

page

evident

level

Present Economic Situation

organizations in their effort to deal with the insidious
work of the agents of the Kremlin.

and actually enact it into legislation. The Ad¬
ministration working with committees of both houses of
Congress has developed an extensive program. Some of
these proposals are highly desirable, almost essential for

—

At

there is every indication that the
credit
situation
will
not
be
a

Nevertheless, I

again evident that there is need of something or
arouse and invigorate many executive

no

from

1

Thursday, March 11, 1954

.

negative force, but rather it will
be, trying to function as a posi¬
tive force. I presume that it is as

Investment Research in

other which will

otherwise. Let there be

the American Con¬

of the Administration, where improvement is
needed, and to get constructive legislation to the statute
books. Why can it not be done?

frequently inexcusable. Often, he is obviously trying to
gain political stature by claiming credit for disclosures
which are not disclosures at all. Plainly, he is either un¬
aware of or indifferent to the hazards he is creating to
the very America that he is trying to protect. - On the
other hand, from day to day it becomes again and again

.

conditions.

authority for

assume
nor

program

Obviously, the outbursts of Senator McCarthy are

The

points

gives sanction. It could now lead to, a return of
tacti(Tby just that sort of individual.*- ~ ,
It would appear that there are sufficiently strong and
constructive elements in Congress to improve upon the

much that is npeded that

dispassionate observer hesitates to agree with
extremists on either side of current controversies.

Not

at

that sort of

the

and

and

stitution

We See It

As

initiative

which neither Americamtradition

.

an

of

afford

to

overlook.

some

we

of the

periods of major

adjustment

varying

easy

viewpoint,

remember that

earlier

very

element that

an

economic

a

were

degrees

business
aggravated in

by

tight

credit

are

overexpanded; and,

consequently,
encounter

they

difficult

going to
competitive

are

conditions—if they have not done
so

already. We have already seen

industries

tical

that

constitute

prac¬

this condition;
might have been embar¬
rassing to hold the securities of
examples

and 1 it

of

Volume 179

the

Number 5306

.

.

companies
whose
earnings
declines. The same

try to anticipate the probable ef¬

suffered sharp

fects

thing, in my opinion, is going to
happen in numerous other indus¬
tries. It is extremely difficult to
forecast the intensity of competi¬
tion and its effect on profit mar¬
gins and earnings. However, the
experience of textiles, antibiotics,

mitments.

would

and zinc

upon

p e c

much
pass

(3)

t i

Try

v e.

in

My

to

that

direction

that

the

up

sound

situation

gest

that

be sanguine about the profit mar¬
gins that will be shown by other
industries as they encounter the

mitments

ner

you

cur¬
sug¬

foregoing

the

thoughts in mind, now.

competitive tests. I think that all of
this

is

in

important

particularly

the selection of individual invest¬
ments.

Especially |

mind

here

second

bonds

quality

and, in some instances, individual
mortgages.

luncheon

Perhaps in

desire to protect-

my

results

that

embarrassment

the

from

will

the

meeting1 of

vestment Analysts
cago,

the investment manager from

leaders

well

the

Society of Chi¬

Continental

Can

members

Stock

Drachman
120

Ex¬

Stock

Harvey
the New

of

Exchange, will form

&

Co.

Broadway,

effective

the

as

with

New

April

1.

offices

York
Mr.

at

City,

Harvey

Agnew

Branch
SAN

MATEO, Calif.—Shuman,
&
Co.
have
opened a
branch office at 57 East Fourth

Agnew

management of

Avenue under the

Mr.

delivered

teresting talk
eral

and

Midwest

Co.,

on

the

most

a

securities in

workings

of

in¬

B.

Bohny is

a

princi¬

Norman

the

in

a

Rosen

K.

securities

CHICAGO, 111.
Stock

N. K. Rosen

gen¬

Opens
engaging

is

from

business

at 5210 Broadway,

New York

The Midwest

—

Exchange

has

elected

Dom-

inick

Com-

R.

Comenzo,

& Co., New

enzo

Alfred J. Betar,

D.

of

pects

the

negative

the

Arthur M. Kren-

sky & Co., Inc., Chicago, 111.

as¬

That

situation.

is

a

major difficulty in making a talk
of
this
type; there is a strong
tendency to carry away only the
extremely favorable or extremely

Commercial Credit Reports

unfavorable implications, whereas
it is my purpose to encourage the

application of the favorable forces
to

investment situations and

some

the

unfavorable

I

realize,
impractical
officer

As

the

for

the

others.

to

that it is
investment
his

of

funds

extreme

an

justified

by

I doubt

position

can

balanced

a

ap¬

praisal ,of the facts of the present
situation.

it

When

ing

judgment

top

quality,

to

comes

pass¬

investments

on

of

where there is good,
concluding that the

for

reason

Record Year

on a

100% defensive posi¬

a

matter of fact,

a

that such
be

forces
course,

hold

to

accounts in

tion.

of

We

In operations
1953 volumeamounted
handled by
financing
to the
more
than

want to

Credit's

income

net

and

operations, expenses, credit losses and earn¬
ings. Capital funds exceeded 148 Million
Dollars and total resources as of December

include

bonds

good

stocks.

the negative
conviction
that many otherwise good invest¬
ment
records
are
going to
be
emphasis

My

on

factors is caused by my

ruined

As

nomic conditions
dustries
that

and

Dollars

were

operating funds. Particularly, we

our

pay

tribute to the officers and

Subsidiaries for their intelligent
astic handling of

Copies of

and enthusi¬

their company's affairs.

42nd Annual

Commercial

available for credit ,to future

Credit Company
Chairman. of the Board

<

'

BALTIMORE 2, MARYLAND

Offering services through
subsidiaries in

31,1953, were more than 1 Billion Dollars.
All of these

our

Report available upon request

Million

100

over

facilities

more

than 400

Offices in U.S. and Canada

figures represent new highs in

President

Commercial Credit's history.

individual in-;

on

companies,

think

I

quite

a

'

that

sure

am

realize

all

you

this

type cannot take up every
problem of the investment man¬

all of the numerous broad
bearing oh our

ager, or

forces that have a

subject. It has been my purpose
this morning merqly to point out
greatest importance at the
Within these

moment.

directed your

have

the

SECURITIES

$

143 194 074

$

153 919 460

$

641 240 127

$

570 189 287

Motor and Other Retail
Motor and Other Wholesale

i

investment
business
has become more highly special¬
that

realize

must

We

ized.

the

$

483 290 000

622

$

577 165 500

40 302 307

48 598

257

125 396

126 048 068

Receivables

090

121

27 474

76 048 758

71 896

230

192 625 000

124 000

000

100 000 000

60 000

000

Common Stock

45 770 510

45 645

060

Capital Surplus

15 591 922

15

369

499

Earned Surplus

86 735 773

73

194

733

134 209

292

31 581

INCOME TAXES
RESERVES
LONG-TERM

942 739 276

$

$

37 207 083

37 053 609

ACCRUALS
U.S. AND CANADIAN

Commercial and Other
NOTES

-

607

895 517 256
SUBORDINATED LONG-

Less: Unearned Income'.
Reserve for Losses

Total receivables, net..

FIXED AND OTHER

44 863 451

41

084

860

14 246 328

14

012

726

883 629 497

$

OTHER CURRENT ASSETS..

The

(1)

333

151

135 148 774

..

Direct Loan Receivables

limitations,
attention to

following:

SHORT TERM

ACCOUNTS PAYABLE AND

v

RECEIVABLES:

of the items that seem to be

some

of the

1952

NOTES PAYABLE,

CASH AND MARKETABLE

thirty-minute discussion of

a

1953 and 1952

of December

as

LIABILITIES
1952

•

Conclusion
I

Balance Sheets

ASSETS

few lemons,

■

that

Cotideiised Consolidated

investment

of

have to choose from

we

include

does

a

basket

the

fruit that

I

after U. S. and Canadian taxes on
Reserves of

our

few "lemons."
I diagnose the effects of eco¬

portfolio includes

r

Million

of

others who pro¬

employes of Commercial Credit and its

Million Dollars and 23

income.

manufacturers,

investment

the

because

taxes exceeded 52

vided

before

would

common

use

facturing companies were over 110 Million.

mortgages and even a fair number
of

made such substantial

and to stockholders and

Commercial

power

to the

premiums of the insurance companies
exceeded 47 Million. Sales of the manu¬

behind the invest¬
ment is stable, I am inclined to
put the emphasis on the favorable
factors, especially the large money
supply and the improving incen¬
tive to invest. In this category, I
earning

grateful

wholesalers, retailers and consumers who

Earned

3 Billion 100 Million Dollars.

are

ASSETS

TERM

$

840 419 670

22 924 942

21 385

278

13 06.3 893

10 708

186

5 520

118

5 884 287-

DEFERRED CHARGES

widening scope
in the application of investment
research work has, in itself, be¬
come
a
force that is influencing
better quality and

$1 068 696 693

NOTES

,

NET WORTH:

$

Total Net Worth

148 098 205

$1 068 696 693

$1 031 952 712

$

$1 031 952 712

the demand for the different types

ments

that
to

our

commit¬

our

to be timely,

are

A Few Facts

it is vital

changing conditions.
As

(2)

I

search,

of

tions

of

the

for

consideration

to

him to give
the supply,

full

but

effect
he

broader
stand

in

upon

must

earning power;
consider the

also

economic
relation

forces
to

a

as

they

probable

evidence

suggests

that business conditions

in recent

normal.

The

Gross Finance Receivables

$3 111 621 259 $2 907 587 057

Acquired

Gross Insurance Premiums,

have been abnormal; and
an
adjustment is made down
more normal levels, we should

49

to Reinsurance

718

572

53 278 791

to




on

28

Income

305

583

$42 350 470
22 536

163

Net Income of
Net Sales Manufacturing

110

Companies

709

890

102 223

306

Finance

$

Companies

Earned Insurance Premiums, etc.

82 837 816 $
47 003

..

129

67 276 338
43 455 275

Companies.

Manufacturing Companies

Companies
Investment and Sundry

081

187

836

718

283

2 947

224

15

2
..

$

148 679 862 $
389 320

68 494 366

25 136 968

18 552 284

71

Expenses and Reserves, etc.

129 397 120

454

085

3

531

614

3

901

856

4

085

265

$19 814

307

$23 847 991

Surplus

Common Stock Per Share
Net Income

Income.

Gross Income
Total

16 651

...

$12 197 428

5

Total Credited to
Earned

Gross Profit—Manufacturing

$14 492 050

Companies.

Insurance

Gross Income—Finance

years
as

$52 153 574

Canadian Taxes

Less U. S. and Canadian Taxes

Prior

de¬

mand, and competitive conditions
of
an
individual
industry, and
their

Net Income before U.S. and and

officer

of the func¬
economist. Not only
many

on

vital

it

re¬

1952

1953

1952

1953

investment

investment

the

take

of December 31,1953 and 1952

integral part of this

an

must

as

be alert

research should

intensification

is

If

investment.

of

U. S. and Canadian Tax

$5.21

$4.34

6.18

4.94

on

Income

Dividends
Book Value

2.40

2.40

32.35

29.40

3.07

3.28

■

Interest,and Discount Charges.

...

,

R.

York, N. Y. and

injudicious investments, I tend to

overemphasize

Interest and Discount Charges—
times earned

to

membership the following:

of¬

City.

business conditions.

Inc.

O.

pal of the firm.

general fices

and

Exchange

Avenue.

Midwest Exch. Members

offices at 5614 Swiss

formed with

as

investment

other

of San Antonio.

Day

Antonio

San

of

special guests,

as

bankers

In¬

the industry to be discussed
be

present

were

CHICAGO, 111. —At the March
25

Midwest

the

dustrial

Chicago Analysts to Hear

have in

do I

York

—

New Shuman,

and

27

change, was held in the Pereaux Drachman has been active as an James T. Love and Edwin E. HenRoom at the St. Anthony Hotel on individual floor broker.
drickson, both of whom were coMarch 5.
Sponsors of the dinner
managers of Hooker & Fay's San
were Russ & Co., Dittmar & Co.,
Mutual Funds & Sees. Co. Mateo office.
Rauscber, Pierce & Co., and Dewar, Robertson & Pancoast. About
DALLAS, Tex.—Mutual Funds
75 of the leading bankers and in¬ & Securities Company has been

investment com¬
should
be
carefully
with

of

dent

your

reviewed;

ANTONIO, Tex.

Drachman

Drachman,

Day

A din¬
in honor of James Day, Presi¬

SAN

values.

diagnosis of the
impels me to

rent

seem

Honor James

avoid
the
"lemons," but don't generalize so

s

To Form Drachman Co.
Nathan

should -be viewed in balanced per-

to

lead

(1127)

San Antonio Dealers

investment com¬
this
adjustment

our

But

suggest that there is no reason to

and

Chronicle

The Commercial and Financial

.

£3

Continued

nized that

A Look Ahead
(3)

nomic

which

what

this

affect

be

eco¬

country —
and gov¬

businesses,

ernment—will
to

principal

in

groups

consumers,

emerges,

now

the

doing this year

business

and

banking

activity.
Let's Take

The

single

greatest

American
in

Longer Look Ahead

a

business

opinion,

my

in

neglect

banking,
longer range

planning.

The risks of trying to
forecast any business over an ex¬
tended

period

admittedly
are
great, but the risks of not fore¬
casting almost certainly are much
greater, for every policy decision
rcade
today
has
an
important
bearing

upon

tomorrow

oily

but also
I

a

business,

our

and

not

week,

next

the months and years

over

lead.

quickly time

Looking ahead

passes.

from 1949. five years ago, the cur¬
rent year 1954 seemed far off; yet

JUere we are! Similarly, 1959 may
now

seem

remote

so

to

as

defy *

prediction and planning. But it is
really not very far away. Con¬
sequently,

cannot afford to ig¬

we

the longer range future.

nore

The

most

descriptive

of

word

what lies ahead is

change. Not to
is, not to plan—is
changes lie ahead. A

forecast—that
to

imply

no

moment's reflection will show this

type of forecast is absurd in
dynamic

A

economy.

this
can

decade

and

confidently

in
ex¬

pect the rate of new family forma¬
tions to rise sharply as the chil¬
dren

during the
'40's reach

bprn

and

early

The

people

'30's
maturity.

late

alive today in suf¬
ficient
number
to
provide * the
basis for another great boom five
to

eight

are

for

outlook

alone

rest

of

t"at further

changes

offing?

Do

we

ticipate

and

coanges

in

say

not in the

are

have plans to an¬
meet impending
businesses?

our

We

the

doesn't

country

the quantity of our

on

Perhaps
while

I

you'll

economic

mist

clues

some

bear

through

peer

to

me

murky

try to discover

to

as

with
the

what

we

may

expect during the next few years.
We've

able
toe

already found

consider¬

1954.

I

business

find

however,

far

outlook

for

less

agreement,
whether business

rising pressures for still bet¬

exert

living conditions.

ter

The surest forecast one can now.
make is that our nation

will

con¬

vigorously over the
Competent manage¬
ments in banking and other fields,
therefore, should concern them¬
selves less with the question of
whether they will
be doing in¬
tinue to grow

ahead.

years

business

creased
and

questions of
their businesses

when

and

how

years,

the

with

more

future

in

At no previous time
American
economic
history

will expand.
in

could

look forward with great¬

we

confidence

er

longer

to

than

now.

much

As

to'

scribe

thoroughly sub¬

I

as,

this

exceedingly

en¬

observers to
assume-that these strong secular
of

some

eliminate

trends will automatically

business

the

have

Great strides
publicly

cycle.

both

made,

been

minimize sharp
swings in business activity. More¬
privately,

over,

sion

to

economic

severe

a

depression

or

States is generally
tantamount to

the

reces¬

in the United
conceded to be

political suicide for

is

There

economic

however, in
either that (1)

weakness

to

first

pick

half

of 1954 but begin
by fall—following in

up

general

the

saucer.

In

contour

outline

of

a

(2)

or

trend

cannot

occur,

rather
that

Both groups,

overall

business will average

pear.

only

trend

1954

moderately

snould

make
in

ence

p

1

under

1953.

considerable
a n n

i

It

differ¬

however,

n g,

whether the worst phases of eco¬
nomic
adjustment will be over
this

year

All

trouble

of

much

whether

or

economic

us

like

still

lies

more

beyond.

no

doubt

to

believe

would

that

very
pre¬

vailing economic adjustments will
•come
are

to

end

this year. There
indications that general

an

good

business will

at least

sea¬

sonally this fall.

We will be

for¬

tunate,
pletely

such

recover

however,
in

pressures

1954
as

to

check

com¬

downward

reduced

lays and possibly

capital out¬
defense expen¬

ditures

which promise
to "test"
the economy at least as much in
1955 as during the current
year.
Let us appraise these
longer range

developments

more

closely.

•

:

On all sides, we find
spectacular
evidence of the tremendous

growth

ahead

for

our

national

economy.
The
record-breaking
birthrate—nearly 4 million babies

last

year—is

ally.

-

publicized

continu-

Moreover., it is well known




better

are

weakness

be¬

it gets really out of hand.
Moreover, those in positions of
economic responsibility through¬
are

a

downward

but

conviction

my
we

check

to

economic

happen,

fore

fairly persistent
throughout 1954.
keep in mind, believe

anticipate

of

nation

a

prepared

out

the

because

as

"sliders"

contrast,

a

can

on

the

country

determined

steps

to

take

to

The

dynamic

and

positive

they

end

all

to
if

Even

ap¬

far too
however,

complex,

expect an
fluctuations..

ten¬

may

is

economy

to

ever

"recession"

combat

whenever

dencies

than

more

business

this

could

be

achieved, such stability would
come at the expense of individual
initiative
and
longer
range
growth.
For

than

more

American

two

economy

periencing

caught

vestment

ductive

gree

a

ence

for

unique
the

looming

pro¬

perhaps in

capacity and
durable

many

goods

well.

as

Many sustaining economic forces
are
readily evident throughout
industry, but the next few years

do

not

promise

offer

to

seem

much

too

"automatic"

major

of

expansionary forces such as have
been operating in the economy in
recent years.

My

outlook for
fairly

range

thus

involves two

and

More

My sug¬
gestion for meeting this challenge
is

that

deeper" to find
opportunities
for
robust national eco¬

maintaining
nomic

health.

economy
creative

Where

be

today
of

use

executives

the

porting lines.

But

rest

on

ing

economy.

still

more

The

convinced

am

banking

and

that

elsewhere

careful

ness

by

their

own

fields

experi¬

While

ad¬

overall

situation

strong.

the

in the
during

(e.g.,

is

to

important to

to

what

ours—residenial

We

all

—

for

key
ex¬

steel,

improved

eight

have

been

derlying

in

real

greatly

million
built

tribute

is

families.

because
homes

new

since

due

to

1945.

A

every

one

growth trend, and (2)
subsequent period of indefinite
duration
beginning
toward
the

labor, industry, and
government who helped meet the

close of the decade and persisting
in the 1960's when the economy

needs.

faces

building

a

the

huge task of meeting
the rapidly expanding needs of a
maturing wave of young adults
as

well

the continuing demands

as

of the public at large for better
living standards generally.
'■

i

Challenge

The
a

to

ahead

year

Leadership
(and

probably*
thus becomes

few years beyond)

a

period

of

of

bridging

what

bd*

can

mod¬

a

erate

economic gap between
boom conditions of the
early
and the

boom

the

'50's

resumption of still greater
later in this

potentialities

decade.

urgent

postwar

housing

peak

1950.

A

the

in

down

in

has

subsequent

oc¬

period.

level

overall

business

of

excellent

by almost
but economic

ards;

is

still

stand¬
barometers

any

typically are static or moving
slightly downward. There is dan¬
ger

that

now

ticular

to

serve

to

be

in

deflation

a

industries

prove

and

par¬

will

areas

powerful infla¬
tionary
force
by
touching
off
hasty and unreasonable demands
for
public actions which could
eliminate

a

rather

postpone
certain

than

fundamental

thus

becomes

perspective

on

ments.

We

must

selves

to

be

drastic

and

either

on

the
is

best

not

devel-

allow

stampeded

our¬
-

into

actions

inflationary

side.

healthy

the

economic

unwarranted

the

flationary

keeping

or

Continuation

de¬
of

"rolling adjustment"
of

means

eliminating

uneconomic products, policies, and
practices in the interest of attain¬

values

to -the

forecast,

Any
which

does

not

raised is sadly

normal

is "the

ble

consuming

solution

-

in
offer

to

t h

opinion,

my

some
e

lacking.
starting-point

/

public

to the economy.

possi¬

problems
A forecast
in

policy¬

definitely

par—and highly important,

living in them know

of

the

dissatisfaction
public with the

American

quality of its housing is shown
clearly in recent surveys, which
reveal that during

fixing

the

ahead

year

the house will be given

up

for

be

to

fur¬

roughly 1,100,000 units last

year

to

around

million

one

in

1954.

construction

of

ingly

how

business

is

Quite understandably, many in¬
people in banking and

elsewhere

are

concern

home

now

ever,

at

about the future of

building

industry.

Al¬

though the postwar housing boom
much longer than gen¬
erally expected, there is wide¬

has lasted

belief

that

must

now

every

one

as¬

lower level of

until

family
basis

bide his time at

activity for several

the

upsurge

formation
for

a

in

generates

another

still

new

the

greater

housing boom.
Nothing could be farther from
the truth, in my opinion, for there
exists today a tremendous oppor¬

75

a

that for every
being-spent for
building, at least an¬
now

is

cents

to
There
doubt—"fix-up" activ¬
being spent

existing dwellings.

up

can

After

present.

opinion

home

other

expressing fix

appall¬

deal of investigation, how¬
I would venture the con¬

servative

new

the

in

are

and no one really
large this "fix-up"

weak,

knows

dollar that is

terested

statistics

Government
field

built, good

homes

new

is

family

average

budget.

of

1954

the

in

ditures

ber

for

from

deep

standards,

are

The widespread

num¬

tion

homes

it!

outlook

the

income

and

of

the families

slight reduction in the

years

the

under

The

drums."

way,

millions

ther

sociated with residential construc¬

another

education

in

trend

construction
the

home

new

reached

was

gradual

residential
curred

of

boom

moment, our country is
experiencing a period of what
might be called "dynamic dol¬
Put

school educations. By present

mar

1

top priority among major expen¬

The

spread

the

At

most

great

challenge to
leadership in this country.
The
challenge is to find sound means

finance,

were

More¬

use.

common

over,
these same homes over¬
whelmingly reflect the tastes and
pocketbooks of people with gram¬

and particu¬

their

in

appliances,

automobiles

and

or

built

were

major

radio,

television,

who

neither

are

today's homes

invented

larly the desperate housing crisis
for

of

before

construction.

veterans

siz¬

are

generally
homes in

badly dilapidated
to be beyond repair. More than

business and

years,

which

country

half

mean

vividly the
housing shortage during the

acute

over

economy

automobiles,
and
machinery v— which enjoyed ab¬
sellers' market conditions'

I

remember

now

the

this

room or

very new nor so

market .which

a

your

will face a
continuing test to maintain eco¬
nomic momentum despite an un¬

which

"fix-up"
needs
among
the 35-million

prof¬

already

areas

by adding a
addition, there
or

able

as

illustrate

me

reference

In

two.

in

The national housing situation has

later
1956-59)

utilizing unfinished

available,

offing.

Let

by

in improv¬

ing existing dwelling units, either

itable opportunities to help bridge
whatever economic gap may be
in

problems to most

considerable degree

a

busi¬

homes

and strength

several

in

uncover

sought

years

space

in

investigation
can

II,

answer
to
the mounting
problem must be found to

The

needs

leaders

War

families.

young

credit

until

few

serious housing

policies,
and particularly in the period we
are now facing.
I

World

of

end

fourth births per family now pose

can

us

nation

creative

be

no

ity will continue to expand in the
if

the

can

ahead,

just

years

related

and

financial

especially
questions

be met.

Average

American

families

know how to obtain credit for the

purchase

of

an

automobile

or

major appliance, in large, part
cause

you

educated

a

be¬

people have profitably
on
this subject.

them

But

financing "fix-up" work is
quite another matter in most sec¬
of

the

families

are

tions

nation.
in

the

These

same

dark

when

they begin to think about how to
tunity in the residential building finance their badly wanted and
field for private- enterprise to needed home improvements.
maintain a high and healthy level Home owners who have "fix-up"
of activity in this important sec¬ work
in
mind
commonly have
tor of the American
partly amortized mortgages, and
economy.
major
Actually there is little reason cannot hope to finance
to anticipate that the level of new
home 'building will decline sharp¬

stantial, numbers of

economic

major in¬

of

the

predominantly small homes have
been
built.
The
unprecedented
increases
in
second,
third, and

have played

none

their living quarters.

outgrow

Since

pride

laurels in this chang¬

our

ly

de¬

bank

You

great

automobiles, major ap¬
pliances, and their numerous sup¬

duced,

some

to

as

labor

to

record numbers of children

the

take

In

of acute space squeeze as,
begin

period

our

growth of such

dustries

homes.

present

in

space

would

in the part which you

in

ing

fact, the nation is now entering a

without

credit?

can

modernization).

and

units and more for additional liv¬

"dig

we

private

new

in the "fixrepair, mainte¬

(i.e.,

field

population of the country
certainly is not adequately housed,
but the pressing need over the
next three to five years will be
less
for
entirely
new
housing

few

next

distinct periods: (1) one from now
decade

construction

home

new

The

II.

ship in government, business, and

heavy goods industries
ample,'

War

aspect of the challenge to leader¬

and

recently,

the

over

World

confronted

a

of

nance

than at any time since the

of

ex¬

nation.

the

has remained

end

which

justments have been acute in par¬
ticular industries and areas, scat¬
ing greater efficiency in opera¬
tered .expansions have offset de-j tions which will insure greater
clines

pronounced
years

early postwar

longer

business

expansionary
forces in the economy, aside from
those generated by some new na¬
tional crisis, are likely to be less

volume

basic

in

term

"rolling

of

with demand at
This prolonged
adjustment"
has
been

fortunate

developments

sufficient

in

completely the tempor¬
moderate contraction in in¬

level

up"

short

has been

up

very

stimulating
occur

that

Thursday, March 11, 1954

.

that

economic weaknesses. One critical

prevailing prices.

"rolling

indication

.

with expanding work

the

adjustment" during which indus¬
try after industry has returned to
more
normal
selling and com¬
petitive
conditions
as
supplies
have

little

is

scientists.

and

.

making and certainly not the con¬
cluding point. I've tried to show

years,

period

a

across

offset

ary,

danger,

assumption

ally

investors

there

will
to

centers

country more and more bring
reality the hopes and dreams

both

The

couldn't

tlie

development

But

party in power.

believe

fore¬

"growth"

range

levels of production, em¬
ployment, income, and earnings

higher

I

those

war

New

these

it

describe

and defense require¬

by huge
ments.

the

grounds

"Saucerites"

record-breaking additions

of

because

casters who feel that general busi¬
ness
will drop gradually during

pe¬

plant capacity touched off

into

"sliders"

evenly

extended

the

of

experiences under a period of ex¬

balanced.

about

now

follow

to

new

tended boom obviously combine to

jargon, "saucerites" and
ire

porary

and

(2) sliding down into further de¬
pressed conditions. In forecasting

(1) recovering—i.e., mov¬
ing up—at the end of this year, or

can

however, to expect a tem¬
period of reduced invest¬

now,

ment

ably greater education, and living

persistent downward
always be quickly re¬
versed.
I agree with most ana¬
lysts that a major downturn is
now
very remojte.
This is not

over

v/ill be

who studies our
plainly see, Ameri¬
industry in no way has be¬
to stagnate. It seems logical
one

any

stantially higher incomes consider¬

uniformity of opinion about
general

other industries.

many

products
are being born each month as the
expanded activities of research

and

should.

gun

to

tendency

Who is to

can

riod

changing

economy.

As

economy

hence.

curing the past five years in itself
clearly
reveals
that ours
is
a

operations

reaching and deep-rooted im¬
upon the economy
than

pact

population. Qualitative factors
will be equally important.
Sub¬

our

review

credit

and

The Commercial and Financial Chronicle

changes in these heavy

changes in

in the longer range

years

Confidence

couraging
view
of
the longer
range
business outlook,
I am,
nevertheless
concerned
by
the

tanking

*

1960's

+

In banking and
business gen¬
erally, we all know too well how

^

in
we

later

that
the

and

is

G

goods lines tend to have a more
far

and

L

longer than most industries, have
finally entered their own period
of adjustment.
It is well recog¬

from first page

leadership

aft'■:">■?■

Ci'iu

...'■.OS;''

H.;)(»!>

(1128)

in

the
but

years

just

ahead.

nonetheless

still

Re¬
sub¬

home
term

families

most

being formed, continued

popula¬

lem

movement,

demolitions, and
losses should support a level of
at least 800,000 new housing units
annually over the next few years.

on

a

short

Solving questions on "fix-up"
finance, in my view, poses the
important single credit prob¬

new

tion

improvements
credit basis.

likely to face American bank¬
ing in the years just ahead. The
basic housing requirements of the
public are far too significant so¬
cially

politically to be ig¬
Moreover, if families are
to
finance
their
major
But it is
home
well
below
improvements on a short
the
1,400,000
new
term consumer credit basis, obvi¬
homes
started
in
1950,
and
it
should be added, considerably un¬ ously they will be unable to buy
der the rate of new homes to be the full output of the aulomobile
appliance
industries,
with
.built once the family formation and
rate]I begins to move up at the clear cut repercussions upon the
whole economy.
What seems to
close of the decade.
be recuired to meet the "fix-up"
How can the residential build¬
problem is general adoption of
ing industry be stabilized in the
a sound method of adding to pres¬
years just ahead?
The opportun¬
partially
amortized
mort¬
ity lies very convincingly in com¬ ent
This

level

is

high by all but the

most recent experience.

and

nored.

forced

bining this temporarily moderate gages,

very

likely

involving the

a

Number 5306

Volume 179

..

A

is

to decide.

tained

overall

closely related credit problem

after

business
prepared for "spasmodic"
by the public this year.

arising

now

whenever

sell

purchase

and

home

his

the>jaation

across

homeowner de#des to

a

coordinated

buying
of

real

fected.

development would give the en¬
tire housing market a new and
tone.
Homeowners and
others await your plans to
help develop an active trade-in
house market, parallelling to some
extent
other
profitable
resale
markets which give protection to

much

residential build¬

of the

industry—both of more than

ing

passing interest to banking.
This "fix-up" area is but
illustration
to

ferret

business

what

of
out

one

be

can

done

profitable

sound,

opportunities which will

contribute

wel¬

economic

the

to

of the country.

continually
such

opportunities

business

of

familiar.

for
line

lookout
in

every

which

with

are

we

the

that

Now

of

necks

We must be

the

on

bottle¬

have been
broken to provide both guns and
butter, we must direct our efforts
toward breaking the bottlenecks
production

of consumption

(so

butter be¬

no

rancid).

comes

other group in

through
nomic

overall

be

a

selecting

risks

those

business

ership

banking lead¬

and

lenge and opportunity. We need
not ponder the cost of failure.

Government

Managements, and
React This

All

ness

of

Year?

and
appraise the busi¬
economists

often,

tend

purchases, however,
reveals that buyers are very value
conscious.
Any
business which
of

to

figures

man

actions

.individual
has

been

based

are

and

is for

hu¬

upon

different

very

business

situations.

pointed

out

■"standard" forecast of
ness

that

statistics, forgetting

,-such

1954

busi¬

decline from the

5%

a

It

the

that

Ob¬

level

experienced last year.
viously, even if this figure

were

precisely correct, it would be at
best

of widely differ¬

average

an

performances.
very little to

individual

ent

forecast

means

A
me

unless it focuses attention on what

people

certainly for

and

But

omist.

we

have

lor if our forecast

to

appraisal
econ¬

an

no

escape,

is to have

prepared for hard sell¬
ing is asking for trouble, but those
companies with aggressive mer¬
is not

make some allowance for

human intentions and
Consumers

spend

actions.
more

the

and

country,

.given to recent scattered lay-offs
in a number of industries, it is
not

surprising to find some rising
among many families re¬

•concern

garding
ture.

their own economic fu¬

Aggregate income after taxes

remains virtually at a record high,
.but many
'

now

lost

industrial families have
their overtime money.

farmers generally there
has been a noticeable reduction in
•cash income which has affected
.

*

Among

their spending and use
In view

of credit.

of the uncertainty sur-

rrounding some jobs,

but with a




day
our

dominates present manage¬
thinking, but any^wavering
this position must
be re¬

ency

from

programs offering at¬
values to the public are

Divergent profit results will
not
only the extent of

pect to continue to do so.

having

executive

business

No

anything like normal eyesight and
hearing can honestly say that he
has been surprised by recent busi¬
ness developments.
Readjustment

doldrums"
have
widely advertised for a long

and

"dynamic

been

carefully

prove

their performance this year.

plant
beginning

cutbacks

moderate

reflect

as

the

wave,

As a

the outlook over the year
ahead is for a gradual rather than

result,
a

precipitous decline in new capi¬
investment.

tal

ranks

trol

of

subject

a

as

just

top interest for most man¬

about

Banking and other fi¬

agements.

showing

also

nancial

leaders

concern

about the inventory

situa¬
is

obviously

caution

Such

tion.

are

healthy for the economy inasmuch
as
excessive inventories and
forced

liquidations

have

can

depressing influences
production, employment,

upon

income.

and

Since close control

tories has been

over

inven¬

good business poL

icy for many months, however, a

deal already has been ac¬
complished in bringing excessive
accumulations into better balance
good

The period of greatest

with sales.

ceased, but
liquidation has been in prog¬
has

net
ress

months. ' Some

several

for

further

correction

inventory

remains

doubtedly

be

to

un¬

com¬

particularly at retail; but
there is now a real basis for be¬

pleted,

the

lieving

worst

of

phase

indicates

over,

that

inventories

allowed

to

Another

ment, in

rise

rather
will

strongly

not soon be

unnecessarily.

encouraging

business

develop¬

the

is

election

can

do

than

better

their

indus¬

better

is

a

values

for customers. This

major "plus" factor in judg¬

ing near-term prospects.

round-up of
intentions,
I must add that here and there I
now
detect some small note of
To

complete

this

Henson,

Bernard

M.

Barto

R.

J.

has

—

Loren

staff cf

joined the

Steichen

&

Co.,

-

Roanoke

L.

ST.

PAUL, Minn.

Arthur E.

—

Lemon,

and
Stoff have joined the

Reiter has been added to the staff

Field & Co., Inc.,

of Kalman & Company, Inc., En-

E.

T.

dicott Building.

#9^

are

Sales established

t

a

record h igh

of

$8,098,981

compared with

probable impact upon the

$7,622,249 in
1952.

election

years,

public pretty well gets what

the

good

is

There

wants.

•

reason

consequently to believe that meas¬
ures which might have a net de¬

a

weighed
Washington.

in

carefully

very

Whether
exceeds

share

OF

MANUFACTURERS

versus

$1.07 in 1952.

is likely to

million

3

N

were

unemployment
be

not

or

Earnings
$1.05

flationary effect will be

important determinant of the
Administration and

an

mm

final course of

Wi Mi

Congressional actions this year.
The present jobless figure is some¬
what

safe

seems

to

the

the

in

$.55

a

share to

supporting

$.60

a

share.

FLOOR

recently

program

is designed to encourage

possible. Adher¬
to this sound principle will

the fullest extent

provide more substantial and en¬
during benefits to the
country
than more direct assistance pro¬

mm

SM

AMERICAN

•

Federal and Excess

Profits Taxes totaled
$2.10

share,

a

almost 67%

ENCAUSTIC TILING

of

earnings. E.P. T.

ac¬
and not mere¬

of

ly upon the acceptance
principle involved.
In

35 cents

the

a

share.

continued

in the

economic

Product sales
were

raised 5%—

since 1950—
despite the fact that
costs of labor and
materials have
increased 22%

strength

and

1953
Annual

Report

15% respectively.

period ahead. We now have

pledge of government that a
environment for such

wholesome

planning will prevail.
The
pretty much up to us.

prices

the first

ership is now on trial as a

for

mm

COMPANY, INC.
•

respects, private lead¬

many

imm

alone amounted to

heavily upon the

rests

tions of individuals

mm.

mm

grams.
The success of the Ad¬
ministration's program, neverthe¬

less,

fM mc
:&* Sgaf:

mm

announced

private initiative and private so¬
lutions to economic problems to
ence

TILE

during

clearly,

President's

the

WiW£:

from

aheail We must recog¬
however, that the

year

nize

mm

&

mm-

increased

economy

WALL

were

conclude that

government will be a
influence

Dividends

•

2 million.

over

•

rest

A

new

was

seems

warehouse

opened in

St. Louis to better
Let's Add Up the Score for

'54

4n as real¬
istic fashion as possible the out¬
look for the coming year in the
I've tried

to present

have

lost

their

the

needs

of the tile trade

expanding

Mississippi Valley
and the Southwest.

temporarily

momentum.

The

possibility of a moderate economic
gap

serve

in the lower

perspective of longer range pros¬
pects. The broad economic poten¬
tial continues unabated, but the

looms.

•

1954 Started with

four months'
backlog; prospects

a

1954 thus becomes one
tremendous challenge to lead¬

The year
of

ership everywhere

in this coun¬

banking leadership in
particular. Just as current eco¬
nomic activity reflects in no small

try and to

the plans made a year ago
and earlier, what happens to the

way

the period ahead to
a large degree Will be shaped by
the
policies and actions being
complacency creeping into busi¬ planned now.
We can and should look to the
ness
thinking.
The root of this
view seems to be that government future with confidence. Ours is a
growing economy in
somehow can and will guarantee dynamic,

•business sentiment and

MINNEAPOLIS, Minn.

builders—let's go to

voters in November.

tries, general business, and many
competitors — through aggressive
merchandising
and
determined
efforts to reduce costs and provide

real assurance that
bridge successfully
economic gap may lie

ORLEANS, La.—William

NEW

year.

elections

wide¬ expansionary forces

spread conviction among manage¬
ments that individual businesses

(Special to The Financial Chronicle)

can

perhaps much of
for¬
tunes are at stake. No legislative
action
can
be considered
apart

in¬

ventory adjustment is behind us.
Current business sentiment, more¬

Joins R. J. Steichen

calibre

here to¬

the Administration's political

it

business.

Kalman Co. Adds

Wash¬
know that

to

days

critical

critical

Building to engage

securities

(Special to The Financial Chronicle)

L.

IX

Building.

result
overall
inventory build-up
was
of recent and impending economic
during the second quarter of 1953.
developments. Private plans must
Subsequently, inventory accumu¬
be soundly conceived to provide
lation not
only

and

of Congress and

from its

National

the

D.

with offices in the

(Special to The Financial Chronicle)

uppermost in the minds of politi¬
cal leaders everywhere for control

It

the moment, inventory con¬

At

laid

Congressional

The

in

Harry

Three With Renyx, Field

It isn't necessary to go to

a

first

Co.

Harry

—

formed

plans to im¬

their

these

Opens Co. *

Tex.

with

managements carry through

is

Walker &

me

Carondelet Building.

During

Company budgets for new

give

nation

staff of Renyx,

time.

and equipment are now

determination

planning to meet more competi¬
tive conditions, but also the per¬
sistence
with
which
individual

1954

has

2&.

just ahead.

years

reflect

1

PASO,

Walker

dispersion

profit performance among in¬
dividual firms than in many a

year.

greatly influenced

work!!

can

we

be

ahead. Bridge

of

ington

only doing well but can ex¬

ahead,

year

expect to see a greater

tractive
not

the

EL

strength for the economy in

whatever

sisted.
Over

will

The

currently prevailing,

are

as

H. D. Walker

The nation's future economic

of the people represented

condi¬

economic

mixed

my

chandising

than

income in this
thus are the most
: important
single segment of the
•economy.
With all the publicity
all

of

«€0%
•

now

any

of being correct, we must

-chance

try

likely

are

any

psychology is risky busi¬

-of human
ness,

doing and

are

Admittedly,

do.

to

consumer

situation and outlook in terms

mass

the survey

findings, for retail buying is being
well maintained. A careful study

sharply

too

-others

Business

Consumers,

Will

flow

spending

January

to be bearing out

seems

which

faces its greatest chal¬

now

in

rising labor and other costs.

promise to strengthen the econ¬
omy in the near-term period. Pri¬
vate

far

Thus

the

turn to worry. Certainly
determination and not complac¬

tions
it's

will persist at or
1953.

buying

new

signs of relaxing un¬

any

such

der

close to rates established in

run

[growth outlook of the nation con¬
tinually before you should be a
bulwark to your confidence as
well as an aid to your judgment
in

ijbecome less concerned about

erjsjihow

credit will al¬

major indispensable

a

by the job which you do in 1954
in developing and selecting the
credit risks which will help build

thelbusiness outlook. But if lead-

indicate

just

gap" over the years
Keeping the longer

.ahead.

1954

in

improve efficiency as an offset to

any

as

merchandise suc¬
cessfully in the face of more dif¬
ficult marketing conditions, I tend
to

play

health

and

efficiently

spend¬

consumer

temporary "eco¬

role

a

America in helping
leadership to meet

your

what could

of

produce

to

efforts

their

double

buy

productive capacity expansion
aided by accelerated depre¬
ciation, moves past its crest. Most
managements, however, are well
aware
of the persistent need to

important

as

role.

continues at a
these same families

intentions

ing

to

i

As bank lending executives, you
have

generally

after-tax

as

which banking and
ways

power

Recent polls

'

fare

long

so

further economic re¬
So long as leaders
are determined to re¬

any

adjustment.

fubstantially,
ered attractive
especially
values.
when of-

credit needs
which deserve your urgent atten¬
tion. At stake not only are profit¬
able credit opportunities for banks
in every community in the nation,
but also the quality of American
housing standards, and the future
of

within

against

ment

private

are

periods

economy

will reenter the markets and

ail concerned.

of

investments

But

level,

high

buoyant

Here

rigid

spending

a

many

fairly

families, following perhaps some
news implying a threat to income,
or
an
important
expenditure.
Business will be immediately af¬

finan¬

recognized

by

in

us

There will be intermittent

an¬

estate, and builder au¬
thorities. Once accomplished, such
cial,

all of

taxes,

•must be

other, especially a new one. By
some
sound
procedure,
these
transactions must be effectively

the

for well main¬
personal
income

outlook

general

open-end principle. But this is for
you

(1129)

Financial Chronicle

The Commercial and

,

for continued
capacity production
this year appear

of the Annual §§§|§
be obtained nil
by writing the Company at mm
w
Lansdale, Pennsylvania
A copy

Report

may

mm

good.

Malcolm A. Schweiker,
President

economy over

§|§||

mm
mm

mm
■vs.'.

■ss.'s

wq

ggg *fjg

%<ii

4: :Sc '<-4x ■////>

5S8? ft*? gig igg ££;>
■■v-9

vs. vi 'ssX<

'&Ss w.*>

30

The Commercial and Financial Chronicle

(1130)

Continued from page

study

11

by competent people.

though

concentrated

form and

The Eisenhowei Tax
with

plane and other passenger
tickets, furs, jewelry, luggage and
and

theater tickets and
cabaret bills, cameras and films,
cigarette
lighters,
light
bulbs,
sporting goods, and fountain pens
preparations,

the

primary

employment,

by a delib¬
policy of running a deficit,

erate

which

will

modest

result

in

in

increase

the

most

government

This
cism

that

the

too much

criti¬

provides

program

stimulus for production

and too little for

consumption. Of
the total $6 billion tax cut, only

tax.
Hence the remaining
$3.5 billion represent consumption

corporate income tax by $2.4 bil¬

well

extent

lion, decrease excise taxes by $1

ment

billion, and increase employment

time

by $3.8 billion, decrease the

taxes

by $1.3 billion.

taxes

fect

would be

tion

in

over-all

an

of $6

taxes

The net ef¬

stand

it

reduc¬

billion/.;

This is the program.

,

income

personal

decrease

How does

when

tested by
criteria suggested earlier?
up

the

be

spending

To

If, on the contrary, the outlook
promises relative stability, a bal¬
anced budget would be a desir¬
able

objective, but
not

spending

be

outlook.

For the current cal¬

1953, the Federal Gov¬

ernment incurred

deficit of

a

some

$6 billion on a cash budget basis.
the

For

fiscal

1954, on a
budget basis, the Federal Govern¬
ment is expected to run a deficit
of $3.3 billion, or virtually a bal¬
anced budget
on
a
cash basis.

Similarly,
lion
on

year

deficit of

a

budget basis.

a

fiscal

Message of Jan. 22.

Budget

(

However, receipts for the fiscal
1955 are expected to be some
$62.7 billion, a decrease of ap¬
proximately $5 billion. The fail¬
ure to postpone the excise tax cuts

year

of the tax

ple,

the

from

Eisenhower

budget

of the fiscal year 1954,
with the bulk of the cut coming
in

military expenditures.
Some

of

the

-

economic

objec¬

tives of the Eisenhower Adminis¬

a

reduction

ing;

(1) an honest (stable)
sound economy; (3)

are:

in

government

(4)

and

spend¬
budget.

balanced

a

Under certain circumstances
of

these

objectives

contradictory!.
duction
and

in

For

or

mutually

example,

government

achievement

budget

are

of

surplus

a

some

re¬

spending

they

may

important goals.

more

plete

clarity

numerical

models

showing the effects of such
pact would be necessary.
the

situation

in

the

an

im¬

Suppose

economy

is

such that the level of1 business and

national

income is declining and
unemployment is in pros¬
It can be demonstrated that

severe

pect.
three

routes

nomic

stability and full employ¬

for

ment are open to

If

the

restoring

eco¬

the government.

government

deliberately
incurring a
deficit, a relatively small increase
in government spending will re¬
sult. Tax yields will rise because
pursues

a

policy

of

of the rise in national

income; the
resulting deficit will be relatively

sons,

the

are

funds

will

re¬

be

financing business
If, furthermore, tech¬

supporting

a

influence

is

An

appraisal of the over-all im¬
pact of the fiscal program, there¬
fore, leans heavily

upon

nomic outlook.

a

of

For

the

eco¬

full analysis

this factor, let us consider the
criterion for evaluating the

next

tax

program, the long-run point

of view.

of

based

lates:

the following postu¬
There will be relative

on

(1)

economic

stability in tti^near and

intermediate term
reform
ment

and

of

futuie/ (2) Tax

technical

(the

tax

improve¬

structure

will

strengthen and invigorate the en¬
tire economic organization.
(3) It
is desirable at this time to have
tax

system

both anti-inflation¬

and conducive to

ary

economic

an

environment in which real income

capita

per

means

will

increase.

encouragement

This

to

the

growth of the capital stock and im¬
provements in productivity with
confidence that any demand de¬
ficiencies

be

can

remedied.

Eisenhower

that

program

the grounds

on

(1) it gives inadequate
to

economic

vides

too

business

the

prospect

downturn;

(2)

con¬

of

it

concessions

many

an

pro¬

to

and

inadequate stimuli
consumption; (3) its reduction

to

in expenditures at the
expense of
the military budget is unwise in
view of the international situa¬

tion; and (4) it is
program

based

a

rich man's tax
the

on

overflow¬

ing-cup or crumbs-off-the-table
philosophy (meaning that the poor
get what overflows from the
of

the

are

rich

or

what

few

cup

crumbs

brushed off the table after the

sumptuous feasts

of

the

well-to-

do).

Let us examine each of these
criticisms.
There
review
this

is

insufficient

the

economic

presentation.
the

other hand

space

to
in

However,

assumption

of

a

even

severe

the gov¬
downturn, the Eisenhower tax
the goal of the
program is not vulnerable in this
balanced budget to achieve
fullt respect. It is
easy to fear each
employment, government spend¬
possible deflation and to combat
ing as well as taxes must increase it
with policies
giving rise to a
greatly in order to avoid any def¬ little
more inflation.
Also, by con¬
icit. If the government seeks to
centrating on the danger of de¬
reduce
spending, however, and
flation, policies adopted to deal
still
maintain
full
employment with short-run
situations may in¬
ernment

under

pursues

the

conditions

it will incur

a

postulated,

substantial deficit.

Tax levels may be

reduced. This
indicates that under the economic
conditions assumed
balanced

budget

is

offset

to

consideration

that

terfere with the
long-run growth
and development of the
economy.
The Eisenhower tax
program at¬
tempts to achieve fundamental

goal of a
inconsistent




tax reform.

visions

are

The technical tax

re¬

the product of careful

On

not
that

However, in ag¬

gregate terms there remains
reduction

billion,
the

to

of

consumers

amount

an

reduction

to

Furthermore, it

a

$3.5

business

firms.

be noted that

may

the stimulus to business firms
bodies

distinctive

a

em¬

philosophy,

this

is

Conclusions

Eisenhower

contains

York

tax

program

constructive

improve¬

for

ments

tax

our

system.

does not deal with the possi¬
bility of a sharp downturn, noth¬
ing in it will prevent additional

rate.

in

reductions

And

the

tax

result

regardless

of the

finally, there| is nothing

tax

to

program

further excise tax

prevent

if

the

econ¬

needs additional stimuli.

omy

It may

still be argued, however,
that the tax program gives insuf¬
ficient attention to the problem of
dealing with a major, recession,
should one develop. But tax cuts
are
always
politically
popular.
Hence
in

this

is

sures

in

them.

On

greater
in¬

tax

inflationary

the

items

Eisenhower

not

tax

covered

in

for

balance, therefore, the
does not

deal

to

sharp

with

that

President

pos¬

any

downturn.

given

in¬

appear

It

is

evi¬

Eisenhower

consideration

this

to

possibility, for the newspapers of
Feb. 18, 1954, reported his state¬
ment

that

unemployment does
drop in March, there will be

not

further

cuts

an

tion
tax

for

relief

tax

indirectly
tax
of

if

in

the

form

directly

or

individuals

of

in

excise

the

form

increase in the $600 exemp¬
under the
personal income

and/or

additional

an

in

cut

receive

They

are

in

local

securities

nated.

objection to the tax
proposals of the President was on
the

spending

side, in connection
with the $4 billion reduction in
military expenditures. This was
made possible by altering the phi¬
of

defense

retaliation

large

and

Much

debate

issue.

rather

with

army

weapons

to

rely

on

than

on

conventional

large
manpower.
is possible on this

the

If

decision, which is
not
essentially in the realm of
economics, was based chiefly on
budget balancing considerations
and

willingness to accept the
risks of the international impli¬
cations of such a decision, it would
on

seem

a

to

sound

been

have

made

on

un¬

that

the

grounds.

The

fourth

objection

tax program is

relates

gram

a

to

rich man's pro¬
the third major

criterion

for evaluating the pro¬
posals specified at the outset, the
justice of the tax system. This

argument
crease

is

not

of 10%

valid.

The

de¬

in the personal in¬

tax rate merely reverses an
which
previously took

come

place.

If the decrease benefits the

rich,

then

the

hurt

them

more

previous

increase

severely. On a
net basis the tax
system is un¬
changed in this regard. The tech¬
nical

revisions

of

the

personal

income tax, it will be noted, bene¬
fit almost
entirely the lower in¬
come

groups. This is also true of
the excise taxes.
Of the increase
in
the employment

taxes,

comes

Even

initially
the

from

technical

50%
employers.

revisions

the

corporate income tax

the

main

small

directed

to

are

benefit

the

that

local

governments

subsidy
loss

is

to

in

firm, especially those with

regard to tax loss carry-backs,

re¬

search and development expenses,

Mr.

this
tax

rities.

Such

undesirable

device

exemptions

for

discourage

tax

He

plans to return to

of

Central States IBA

in

Annual Conference

and

risky
nual

agreed

that

income

tax

revenue,
that

generally
high personal
are

very

rates

serve

useful

no

They produce very little
land it is very probable

purpose.

they

have

undesirable

dis¬

(3) Excise taxes in general

can¬

incentive

not

be

effects.

defended.

A

strong

case

be made for elimination of all

can

excises

possibly

except

those

on

liquor, tobacco, and gasoline.
In addition to the technical

(4)

revisions

in

the corporate income

there

tax,

is

Association of

It

is

unde¬

is borne by the

government.

unwillingness to

reduce

There

will

day

cor¬
as

be

luncheon

a

forums

and

afternoon

ad¬

Wednesday

on

and

Thursday morning
and
afternoon; a formal dinner
Wednesday at the Blackstone Ho¬
in

tel

honor

ment

of

T. Jerrold

Dodge &

President

of

Co.,

the

I.B.A.,

dinner

Bryce,
York,

New

and

an

entertain¬

and

Thursday evening/ Speakers

are:

The

the

porate income tax rate to 47%

America, is sched¬

dress both Wednesday and Thurs¬

informal

50%.

sirable to incur marginal expenses
because more than half the cost

an¬

Central

Wednesday, March 31 and
Thursday, April 1, at The Drake,
Chicago,
it was announced by
William D. Kerr, Bacon, Whipple
& Co., Chairman of the Group. -

tax

under

18th

the

of

uled for

Clark,

a

111.—The

conference

States Group, Investment Bankers

strong case for
keeping the total corporate income
rate

New York

high

CHICAGO,

Economists

Tuller

May 17.

enterprises.

(2)

N.

France.

eco¬

rates

investment

and

provide

avoidance

income

personal

Robt.

Switzerland

and

the

to

The

Land,

Turkey,
Greece, Italy,

elimi¬

state

itinr

will in¬

Egypt,

demon¬

through

equal

other

to

or

gain

not

be

studies

Dr.

Frank

Columbia

President,

Stanton,

Broadcasting

System,

Inc.

promised

for April 1, 1954, un¬
doubtedly reflects a fear of criti¬
that

cism

the

Administration

is

doing too much for business.

It is

ironical

Ad¬

that

the

ministration
action

an

is

constrained
business

for

economic
the

political

from

supported

arguments

of

fear

Republican

because

taxation, the lower rate of tax
capital

device

It

system.

ments

Joseph F. Clark, E

this

Finance

abuses

in

to

invest in

and

hence
in

be

improved.

consequence

•

$1,000 to $5,000 with¬

any appreciable revenue loss
and with very desirable effects in

stimulating investment in venture
enterprises by persons in the

changes

Eisenhower

proposed

by the
Administration, plus

those which have here been advo¬

cated, would provide us with a
system which would contrib¬

enrolled

western
of

the

University, will be guests

Between 400 and 500 investment

bankers

to attend
according
to
They will come
mainly from the states making up
the Group—Illinois, Indiana, Iowa,
the

Kerr.

Nebraska

and

Wisconsin—but

all

other sections of the
also

the

country will
represented, particularly

be

Eastern Seaboard.

Conference arrangements are in
charge of G. Fabian Brewer, Wil¬
liam Blair &

of

Company, Chairman
Meetings and Entertain¬

the

ment

Committee.

Officers

any
undesirable movements
business conditions.

of

in

expected

are

conference,

Chairman

Group, in
Kerr, are:

stability

classroom

Group.

and
growth in the economic system.
It, would, as well, provide us with
a vehicle sufficiently flexible and
adaptable to counteract effectively

long-run

the

for

in fundamentals of invest¬

banking, sponsored by the
Group in cooperation with North¬

tax

to

Ex¬

and

ment

me¬

dium income groups.

Securities

Employees of | member firms that
are

course

the

out

the

of

change Commission."

of

missible deduction could easily be

The

J. Sinclair Armstrong, Commis¬
sioner, Securities and Exchange
Commission, on "Federal Regula¬

a

risky
How¬

use
of capital loss
during the depression.
However, as the President's "Eco¬
nomic Report" suggests, the per¬

ute

Motley, President,
Publications, Inc.

tions Under the New Administra¬

deductions

raised from

1954."

H.

tion

may

a

Problems in

Arthur

induce¬

only $1,000 of capital

as

e

provides

loss can be deducted from regular
income. This severe limitation was

imposed

ut iv

present

enterprises.

tax

present

strong

a

investment

to

venture

on

x e c

Director, Municipal Finance Offi¬
cers
Association, on "Municipal

the

companies

stimulus

ever,

in

individuals

to

growth

At

provides

gains

incentive

and

Business Outlook."

Parade

(5) With regard to capital gains

tax

Charles T.
Broderick, Econo¬
mist, Lehman Brothers, on "The

repercus¬

sions.

of

the

Central

addition

Vice-Chairman:

Evans,
tional

Continental
Bank

and

States

Chairman

to

Thomas

Illinois

Trust

W.

Na¬

Company

Chicago.

.

Secretary - Treasurer: David J.
Harris, Sills, Fairman & Harris,
Incorporated.

Rodman & Linn Adds
(Special to The Financial

Chronicle)

for

the

the

world.

Holy

should

Statistical

strate

of

third

The

around

Hawaii, Japan,
China,
India,

future

follows:

as

on

trip

clude visits to

might

program

attention

(1) Tax exemption for state and

by

personal income tax rates.

flying

Tuller's

the

pres¬

call

economy

program

has

The

achieve

to

when

creases

dent

great difficulty

no

direction.

problem

tax

is

there

Tuller,

erary

Some

personal in¬

or

reductions

tax

come

will

by

a

should

a

rate

ac¬

has set out

it

changes in this direction
they become necessary.

City,

companied
Mrs.

While

direct

better

N.
Tuller,
Robert N.
Co., 25 Broad Street, New

Tuller

nomic effects of tax exempt secu¬

a

Trip Around World

a

that
technical" improvements in
the tax structure itself rather than
in

on

pos¬

Robert

tax

than

greater

Thursday, March 11, 1954

.

Robert N. Tuller

balance,

seem

developments in the tax structure.

the lower in¬

on

receivers.

<

the

does

.

rich man's tax program.

some

increase

outlook

it

establish

impinge heavily

atomic

tax

to

well

a

The

has been criticized

is

the

by

losophy

An Appraisal

therefore,
sible

the employment tax increases will

sible

As I perceive it, the philosophy
the Eisenhower tax proposals

is

This

adequate
Long-Run Goals

on

on

For exam¬

taxes

achieved.

small.
If

full

nical revisions stimulate corporate
investment activity for other rea¬

sideration

The
following discussion will
illustrate this, although for com¬

of

for

desirable

are

objectives, but with respect to
their impact on economic stability
defeat

increased

balanced

a

under certain conditions

reductions.

investment.

a

tration

dollar; (2)

stability, and

objective

corporate

duced,

duce

billion

if

available

scheduled for April, 1954, will re¬

receipts by another $1 bil¬
lion, thus increasing the deficit
by another $1 billion. Expendi¬
tures for fiscal 1955 are expected
to be reduced by a little over $5

the

realize

situation

a

employment, it can do so by stim¬
ulating investment through some

1955

These figures

from the President's

come

$3 bil¬

some

for

estimated

is

taxing

However,

spending and taxes in
of relative economic

cal

and

achieved.

still

and

receipts,
briefly examine the fis¬

endar year,

reduction in

a

ernment

spending

same

budget

a

stimulus.

come

the aggregate cash impact of gov¬
must

the

at

if the government wants to reduce

judge the appropriateness of

we

govern¬

attempt to create

an

government

Effect

Budget

and

in

surplus.

could
The

reduction

a

come

flexibility in charging

depreciation.

The

relates to the second

$2.5 billion is in the corporate in¬

If the economic

off

the economy.

it

achieved

and greater

growth, the tax program does not
bar changes which will stimulate

outlook, there¬
fore, indicates inflation, the appro¬
priate government policy might

summary,-all these changes

In

would

t

If

full

be

spending.

mechanical pencils.

and

is

best

can

of reduced govern¬

spending.

toilet objective

and

cosmetics

handbags,

ment

re¬

structure of the economy so as to
achieve long-run real income and

Proposals

the goal

Al¬

tax

on

improvements in the

on

.

CHICAGO,

Grant, Jr. is

111.— Robert
now

L.

with Rodman &

Linn, 209 South La Salle Street,
members

Midwest

of

the

New

York

Stock -Exchanges.

and

With Hamilton Managem't
(Special to The Financial Chronicle)
1

DENVER, Cole.
Edwards

is

with

agement

Corp.,
Boulevard.
,

Gordon
T~a

niton

Cr~~t

at

W,

Man¬

Speer

Volume 179

Number 5306

Continued

from page 3

.

.

(1131)

Financial Chronicle

The Commercial and

.

Some allowance should be

crease.

unfavorable

operating
the other
hand, conversion of the remaining

made

for

in

conditions

A
linua'ion

of

before.

Public

Long-Term Market View

'

started

trend

a

Wh'ch

recent

and

bad

are

not

have

There

politics

at

been,

cogent

time,

any.

believing that we faced anything

% per.od in which property rights
"are respected, in which money

stock

be

can

•

that

of

plete.

is

structure

due

course.

jor bull market would have to be
removed prior to
its inception.
Essential ingredients have been:

War

Peace

-

1

-

•

of the road blocks to a ma¬

some

chances for and
probable mdrket ef(1) Change to a more propertyfects thereof have importantly in-,
minded Administration;2
fluenced stock prices for 15 years.
(2)
Reasons for believing the
War fears that so damped down
markets of recent years may sub- peak of the tax load had passed;
or

against

war,

and

side in the period ahead.

:

There

signs that

are

with the Russian

well

passing

The

Bear.

in a
series of events that suggest that
Ivan may be awakening.

<

Stalin

of

The great social changes in the

Western World have been partly

f.

result, of technological progress,

a

international

similar social

creating

In any case,

pressures.

Prospect of greater
vertibility of currencies;
(6)

the Russian leaders

] people

hard as before and more

as

to
pursue
less hostile,
amicable, international pol¬

willing
more

icies.

the

ally

powerfully favorable force

come a

go
disillusion.

for

Russia,

the

the whole

S.,

U.

world.

and
to

famine

There is

time content to

a

psychological

attitudes

fairly constant. Just

pears

long

periods

broken

up

about 33

ap-

the

as

of history can
into generations

years,

can

so

be
of

the life of
attitude

intermediate-term

an

mass

that

or

climate of

feeling be measured by
same number
of months. The great bear market
something like the
lasted

1929-32

of

The

months.

33

into

'46

from

reaction

mid-'49

about 34 months,

was

end

of change and re¬

years

form followed in due course.

sequel this

It is to be hoped the

history will tell.

Nevertheless, the long-term

for

probability

time

and

roaring bull market.

and

has

time

in

to look

come

for

investor

overall

a

psy¬

stock

reflect

hu¬

emotions

(as

prices
and

quite distinct from anything ap¬
proaching judgment and logic),
they display distinctive and repet¬
itive behavior patterns. Both ad¬
vances
and
declines, large and
small, tend to come in waves of
three. The presumption for years
that this

was

started in

successive

bull market,

which

1942, would have three
bull moves. The first

from 1942 to 1946 (92 to 213
Dow). The second started in 1949

; was

have ended early in 1953

and may

295

(160 to

Dow). We may still

*

But

even

if

this

the third and final

proves

to

phase, the

be

way,

economically, politically and psy¬
chologically, has been paved for
an
advance that should last for

and be at least as great as
either of the two that preceded it.

deal with

which

things

those

all

people, be liberal, be human. Ip all those
things
which
deal
with the people's
money or their economy, or their form
of
Dwight D. Eisenhower, Feb. 5, 1954.

I

Genera! Inv,

Corp.

"n

Formed in New Yorit
Street,

Ralph

by

nounced

Maurice Barnett, Jr. is

President.

Vice-President

will

which

in

bankers,

porate

at 80 Wall
City is an¬
De Pasquale,

with offices
New York

Corp.

of

serve

the

new

brokers

as

securities,

investment
in

soecialists

and

firm
and

stockholder and

cor¬

financial

relations.

The first was

120 points, the sec¬

points. This should be
of the order of 150 or rpore

136

more

points.
Six

fairly reliable long-term
indicators suggest ex¬

technical

pectation of a rise to something
364 to 415.

between
of

the

reason

6

is

391.

is

ing to fix a date, or even a

matter,

on

Oreg.—George C.
Gladden and Robert M. Holoubek
are
now
associated with Zilka.
PORTLAND,

813 Southwest

Smither & Co., Inc.,

some

might represent h top, but
there's no particular point in try¬
that

Smither

(Special to The Financial Chronicle)

Street.

Seymour N. Sears, Jr.

that January

1956

for

Two With Zilka,

The average

There

for thinking

the

at this time.




limit,

advance

and

a

nartner

York

gas.

the

now

appear

in

of

the

estate,

and

property
financing de¬

partment. Mr.
Stanley was
formerly
James

R.

Stanley

Executive
Vic e-Presi-

final

the

Di¬

oil

The proceedings be¬
Commission
be

and

mortgage

Maryland

to

as

e-Presi-

rector

.

fore

c

real

Con. Gas applied for-increased
§as
eJec1rates in Decem^er'
but There has been some
opposition from local oil interests
due
to
their
loss of business to
natural

dent of the Dallas Trust Company.

stages, and a decision is anticiwithin

a

few

The

weeks.

BIyth & Co. Adds

jncreasej if granted, would add an
estimated 370 to share earnings,

hydro

ing

p0Wer)>

SAN

weather which affected gas

28%

to

.

.

yield

The
,00

4.

—

Blyth & Co.,

Inc., Russ Building.

With F. S. Moseley Co.
Chronicle)

(Special to The Financial

selling

4.9%.

Calif.

Taylor, Jr. has been

added to the staff of

house-r

currently

FRANCISCO,

Richard'W.

warm

and

v

(Special to The Financial Chronicle)

depressed by a below-normal flow
the Susquehanna River (reduc-

round

BANGOR, Me.—Virgil H. Good¬
win
has become associated with
Wm
n«a

price-earnings ratio is 16.9, or 13.8 p g M0seiey & £0 0f Boston. He
if based on the pro forma figure w'as formerly for many years with
past decade. The company's including the requested rate in- Halsey, Stuart & Co. Inc.

growth in the past decade, electric
revenues having increased 82%
in
the

steam electric

which

now

over

and

generating capacity,

totals 830,500 kilowatts

above

the

the

from

available

......

,

resources

hydro

two

the Susquehanna
more than doubled in
the
past
10 years. During this
decade 125,614 electric customers
have been added to the system—

companies
River, has

on

increase

an

been

has

for the

The

38%.

of

rate

of

CENTRAL HUDSON

1953 and recent years

in

increase

higher than the average

10 years.

Revenues

reports on
72%

about

are

• • •

elec¬

tric, 26% gas, and 2% steam. The
breakdown of electric revenues is
32%

commercial,

29%

electric,

DIVIDEND PAYMENTS

For 50 years

30% industrial, and 9% wholesale.
from

gas

domestic

dicated

are

revenues

in¬

The

business.

on

residential elec¬
of 3.260 per kwh. in 1952

the

dividends have been paid consecutively
stock of this Company and its principal

common

predecessor companies.

average

tric rate

above

was

of

69%

Some

national

the

indicated

Revenues have

at

or*

"heavy

in

reduction

The

rates.

of the Com¬

pany's post-war expansion program.
I

V

EARNINGS

GROWTH IN REVENUES AND

During the past five years, revenues,

earnings and

dividends have all increased:

converting to natural gas, part

amortized at the
year. The large
gas plant was con¬
verted to production of oil
gas
with heating value to natural gas,
for
standby
and
peak-shaving
purposes. The initial contract with

except 1933.

Capitalization has doubled since the start

spent about $8.6 million

company

recession year

consoli-1

in every depression

GROWTH IN CAPITALIZATION

difficulties due to

some

increased nearly four times since

j dation in 1926, including increases

competition from other companies,
natural;, gas was obtained by the
inducement. of
offering an im¬
mediate

GROWTH AND STABILITY

average,

consumption

1,714 kwh. was below.
The
gas
division had

of this cost being
rate of

$500,000

a

manufactured

a

Columbia

Gas

subsidiary

was

maximum of 70
million cubic feet per day but this

for

delivery of

Income

Earned Per

Available

Common

Per

surplus power

for

Share

Common

(Average)

Share

960

700

transactions)

Year

Dividend

Revenues

(Excluding

Dividends

-

*

1953

$21,378/000

$2,661,000

1952

19,918,000

2,335,000

9or

67Vii

1951

17,544,000

1,673,000

760

600

1950

16,025,000

1,562,000

730

580

1,367,000

650

520

a

recently raised to 91 million,
and
the
company
is willing to

in

Farrell

City,

March 2 at the age

passed
of 48.

&

raise

it

peak

day

million

Co.,

away

to

million.

95

had

cubic

a

The

latest

send-out of

123

times

the

feet—2V2

when
served.
While
the cost
of gas has
in¬
creased from 300 to 400 per mil¬
lion cubic feet, earnings from the
gas division has been steadily in¬
creasing
and
President .Crane
hopes that the company will earn
nearly 5V2% on its gas investment

maximum of four years ago

manufactured

in

Seymour N. Sears, Jr., member
of the New York Stock Exchange
New

growth.

V i

was

Pasquale also announced
the dissolution of De Pasquale Co.
Mr. De

Alder

>ngton. The attractive rivers and
creeks in the Bay area are bnngabout large summer colony

converted.

enjoyed good

Life

dent

issue

about 40%

now

in

Formation of General Investing

years

ond

is

first

And after

±t>y:

-

Fidelity
Union

Building,

being fully heating sales
converted, while the present issue
The stock is
the

tures,

going" during the 1940s, when the
be conservative."—President cost of
manufacturing gas trebled.

government,

dealers

in the same phase.

i be

Events

conspiring
to suggest that this exciting spec¬
tacle may not be long delayed.
developments are

2 "In

attitudes

man

great

a

see

recent

in

has been partially through
the mediunti of convertible deben-

and

Technical
Since

would

we

been

has

years

in the middle or

32 months. Man is

was

financing

Equity

ing.
years

different—but only

be

will

time

normally optimistic and hopeful.

into

chology^

'

ensuing

themselves specula¬
of 1929of the road.
The

the disillusion

the

at

1950's

change

j

32

late

The

-

vestors found

Sep¬

'51

February

tember '53

'

in the middle and late
millions of would-be in-r

some

From

re¬

Again,

tors with

stock

preferred

4%,

Stanley With

is being fed by overflow of population from Baltimore and Wash-

follows. pated

as

was

James R.

Columbia line. The intervening
farming and residential territory

HZ0' aJu common ?ock e?mty raising the 1953 figure from $1.68
?
J
7
company s mortgage to $2.05. Last year's earnings were
bonds have a triple A Moody rat-

fires of

that

j

debentures

'

1920's,

„

1953

31,

of

as

Mortgage bonds 48%, convertible

eventu¬

financial

and

form.

c

structure

slightly

a

Keith Reed & Go.

,

,

0i

^

Dec.

great
speculation, only
followed by the panic of
and
seven
years
of Wall

Street

Psychology

to

financial

The

profitable

be

$1.20

in 1953.

of the century
great expansion,

of

inter-

or

when it was raised
$1.40. The payout
rate during the last 10 years has
averaged about 77%, but was 80%

great financial activity and

1907
Investor

of

decreased

been

from

years

time

began

company

The company has

early
a

—

the

through

to

were

bath

market

stock

-

four years ago

generation is immersed in

Each

'

rupted since that date. The latest
increase in the rate was nearly

(8)
Prospect of something ap¬
proaching, if not peace, at least
a reasonably enduring armistice.

The

Perhaps the Russian revolution
died with Stalin. If so, it could be¬

con¬

expansion

for

Chance

(7)

present

never

world trade;

less willing to drive their

appear

The

policies by the U. S.
\

Government;

*

paying dividends on its common
stock in 1910, and the rate has

domestic and

tion of well defined

j It

may not be too far-fetched to
»imagine that industrial progress
behind the Iron Curtain may be

Edison.

have

stock earnings.

on

ice field extends outside the City
of Baltimore, covering about 2,300
DALLAS, Tex.—James R. Stan¬
square miles from the Pennsylvania state line to a point 50 miles ley has become associated with
Keith Reed &
below Baltimore, and from the
Company, InChesapeake Bay on the east to
cor porated,
points close to the District of

in
the
early
1880s, only
slightly later than the old Pearl
Street
Station
of
Consolidated

and articula¬

Formulation

the

World,

from

Recovery in lagging foreign
economies, especially in Europe;
(5)

in the
business dating
1816. Electric operations be-

New

(4)

ushered

27 "ancestors" was the

first chartered gas company

Ending of the war in Korea;

(3)

all is not

&

on

diluting effect

American cities. The electric serv-

gan

long been apparent that

has

It

Light

Electric

Gas,

Company of Baltimore) is
the oldest U. S. utilities,

of

One of its

the flow of
stock market

big money to our
restricted, by low visibility.

com-

in

be ' completed

will

and

down,

been

has

sentiment

Financial

The frame-

solidated
Power
one

damped

It is to be hoped the edi-

-

serious decline in
a serious spill in

a
or

(Con-

Baltimore"

of

Gas

"Con

business.

venture with
confidence, do

bull markets flourish.

\ fice
•

at

of

degree

•work
«

placed

approaching
prices

Consolidated Gas of Baltimore

for

reasons

1953;

debentures would

By OWEN ELY

"which good do not concern us. We
do know historically that only in

; some

Utility Securities

Conclusion

long

~

31

gas

was

1954.

Baltimore,
New York in

a

seaport

next

to

importance, is also a

of well-diversified industry,
experiences less in the way of
economic swings than most large

city

and

1949

14,503,000

5-year
increase

95%

48%

A copy

48%

35%

of the ANNUAL REPORT for 1953
will be sent

on

request.

CENTRAL HUDSON GAS & ELECTRIC
GENERAL OFFICES

CORPORATION

POUGHKEEPSIE, N.Y.

-32

The Commercial and Financial Chronicle

(1132)

Continued

(applicable to most of Europe and
beyond):

from first page

"The weaknesses which stand in

The Randall RepoitBack to Marshall Plans
known as an ardent "economic" aid (loans), subsidies
the Marshall Plan to investments abroad, "military"
and a "free trader."
The Vice- aid, stabilization loans, etc., are
Chairman
heads
the
world's not made dependent on specific
greatest cotton export firm; his concessions or efforts on the part
is

of

supporter

partner was instrumental in "sell¬

Marshall Plan to Con¬
gress.
The one economist on the
panel, an outstanding one, has
been prominent in advocating the
"key country approach," meaning
aid to Britain, and the chief of the
ing"

of

industry there are all too fre¬
quently a lack of enterprise, vig¬

as

outdoing

course,

behind

rival

his

Reuther

not

governments just do
buy abroad de facto if they
their

CIO,

for

foreign
tune of $1 trillion.

attitude

this

for

cation

Given this set-up, it is not sur¬

than

fact that the outer world is

the

gain¬

prising to find that significant ing gold and dollars at the annual
proposals were carried by a nar¬ rate of over $2 billion, while our

rules.

union

industrial

in

capital development and re-equip¬
by

jure;

quota-agreements
trade

increase

an

rather than

actly where its (Democratic) pred¬
ecessors
left the problem child:
long ago on our own doorstep. It does so
aid to the without offering a better justifi¬

so

price-rings,
established

efit of only those

automobile

the

of

who

workers,
clamored

the

in

of
or

ment

else in virtually un¬ not
generosity at the expense can help it.
American
taxpayer.
Of
In other words, this (Republi¬
Mr. McDonald could not can) Commission takes it up ex¬

the

Mr.

record,

on

expected,

adaptability, an obsession
with security, an unwillingness to
compete,
to
take
risks
or
to
emerge from the protective shells

proposal that the "Buy American"
the ben¬

countries which
reciprocate in kind. But European
countries have no "Buy Domestic"i
laws which they could scrap de

soft

behind

most

in

very

are

is limited in many places

...

attitudes

in

industry

itself

by a lack of savings.
Too often re-equipment is inhib¬
ited by the reluctance of organ¬
ized labor to permit economies

a

of

to

in

return

misdirected because the rigid¬

are

ity of the
nomic

has obscured

economy

the real basis

which valid

on

eco¬

judgments should be made.

These weaknesses
to

development

crippling
the

torts
tween

taxation, which dis¬

whole

risk

due in part

are

and

relationship
reward.

To

be¬

some

extent, too, defensive and passive

weapon

domestic

necessary

without

th£

which

convertibility would be
experiment. The British

argument that their gold and dol¬
lar reserves have to be "adequate"

—meaning that

a

credit

made

must

be

huge American
available—

implies that they refuse to make
the necessary adjustments in fis¬
cal, monetary and trade policies.
If so, a multi-billion stabilization
soon

the

as

1947.

$5

would

be wasted just

billion

American-Ca¬

loan

dissipated

was

Without making the domes¬

outside

needed.

In

aid

would

be

fact, the "aid" would
in the shape of

naturally

commercial capital inflow

as

well

the long period of combined gov¬
ernment control and

because

letter to

no part of'the
the two fierce be¬
lievers in the tariff, Representa¬
tives D. A. Reed and R. M. Simp¬

fect that he wants

way:

report.

much, at least,

disbursing twice as
in pure handouts
as
the world needs today.)
The
Commission jumps to the conclu¬
son—leading Republicans in the sion that this country has to take
powerful Ways and Means Com¬ the necessary steps in order to
mittee—challenged in a shorter alleviate the gap.
This is, of
minority
report the
majority's course, a typical case of trying to
whole approach not only as falla¬ cure symptoms.
The mere exist¬
cious and unclear, but as unfair ence of a dollar shortage does not
And

we

are

sellers'

by

mar¬

ket.

In part they go much deeper
—down to the whole philosophy
of

security which has been taking
for
many
years."
(Italics
mine.)
root

Evading
If

the

not

counting the "indirect" sub¬
sidies, since the last war did not
eliminate

such

impediments

to

higher productivity, what is to be
justify the claim that it is Amer¬ expected from further support?
ica's
responsibility.
The
Commis¬
short, the Commission pre¬
And low labor productivity is
admits that the Europeans
sents a fair replica of our political sion
only one-half of Europe's dollar
are
in
many
ways
at
fault;
why
set-up and of its deep-seated di¬
problem. The other half is: wages.
visions, rather than a balanced not, then, make further assistance The financial tragedy of Britain,
guide in the maze of our foreign conditional on their mending their for
one, is summarized in a few
economic relations. This bodes ill ways?
comparative
data
on
manufac¬
for translating the majority rec¬
Randall vs. Convertibility
turing:
ommendations
into
legislation.
Percentage Increase Between the Average
Could it be that the dollar gap
Yet, they are of political signifi¬
of the Last Three Prewar Years and lfLVJ
to

vital interests of this nation.'

In

Undoubtedly, they express
of thinking in the Ad¬

cance.

the

drift

ministration.

The President's ap¬

pointees must have been selected
under

that
point of view; and
they constituted the hard core of
the majority.

Prescriptions Without Diagnosis

Curiously, the Randall (major¬
ity) report is devoted to a prob¬
lem which

cerned

not

was

'This report

.

.

assigned to it.
is primarily con¬

.

with

the

can

take

country

that

steps

this

toward

solving
the world's dollar problem.
."
However, Public Law 215 gave the
.

Commission

.

long list of "duties"
referring to the dollar
shortage with a single syllable.
a

without

would vanish if the soft currencies

made

were

formidable

is another matter.

pose

one

The clear

implication,

evident* throughout
the report,-is that it is America's

"leadership" responsibility to find
and

ways

dollar

From

to

means

of other

gap

beginning

report's

concern

bridge

the

nations.

to

is

end,

indeed

the
with

tie question, what ice should do
In order to alleviate the dollar

shortage—to harden the soft
rencies.

tions

Practically all its
that

serve

cur¬

sugges¬

objective. Dollar

shortage is the overriding problem
on the
majority's collective mind.
Its
report emphasizes that
the
of the outer world to¬
ward financial
sanity would re¬
flect to our own benefit—in the
progress

"enlarge ment of international
trade," especially. And it does not
fail

to

warn

American

the

themselves
houses

ings

in

recipients

hand-outs
order.

are not

suggestions.

should
But

of

that

they

put

their

such

warn¬

translated into policy
Tariff
concessions,




of

the

of

experts

Atlantic

on

and,

what is more, leading Belgian and
other
statesmen
believe 1 in
this

U.S.

U.K.

Volume

of

production

Output per
Labor

28%

+

+12%

man

40%

+

+175%

earnings

113%

+

+130%

ions alien to its

position.

It

preconceived

own

lip-service

pays

to

convertibility and mul¬

tilateralism—who

Europe

does

against

not?—but

haste

in

stupidity
anti-capitalistic policies.
The

Economics

The

their

American

labor

costs

per

such

the

as

perverted

economics

of

majority

Double-Talk

of

the

Randall

Commission
was
up
against
a
problem in dialectics that blurred
its

thinking and resulted in mid-

d 1

e-o

f-t h

which

are

Its

facts

compromises

unsatisfactory
They

all

to

too timid for

are

side, and too bold for the

one

other.

d

e-r o a

concerned.

the

report

life:

of

is

that

of the

aware

dollar

no

The

answer

is

need not finance them. In

we

aid

the

official

That means,

British

fact,

happened
while.

sider the true

recurrent

cause

of their dollar

tively

ity to raise per-man output in
industry. It might have done well

ruthless

to

off)

over

Graham Hutton's

reduction

demonstrated with rich documen¬

area,

that

British

productivity
by 10% in two
years, thereby solving the Ster¬
ling Area's basic balance of pay¬
be

raised

ments

trouble, without additional
capital outlay; or over the follow¬
ing

editorial

Times"

of

English

on

with

London

which

greeted

"The

the

New Year's day, 1954

short

a

of

terms

dollar

non¬

rela¬

of

trade;

imports

by

restrictions; living on (or
inventories;
moderate
in¬

crease

tation

for

circumstances:

favorable

book, "We Too-Can Prosper," that

could

—

Presently, it is due to

trouble: their self-inflicted inabil¬

ponder

before

of

exports

to

the

dollar

thanks to heavy export sub¬
sidies; the windfall of gold from
Russia; relaxation in the Cold

War,
out

reducing the capital flight
of European
currencies; rec¬

ord-sized American aid, etc.

tually every
able

one

Vir¬

of these favor¬

circumstances

might

be

tinued

be

taken

into

subject

what¬

proper,

should

covers,

be

con¬

to

military-politi¬
considerations only, i.e., with¬
any financial limitations;

cal
out

(d) even outright grants, not
just loans,
are
recommended
"where support is needed to main¬
tain military forces
military operations
economic

to conduct

or
..

beyond the

.

capacity of

sustain,"

a country to
makes
almost

which

country,
from Korea
to
Norway, eligible for political
every

handouts; lastly,
(e) if Europe wishes to make its
currencies

convertible,
the
at¬
should
be
supported by
putting at its disposal the $3.3
billion now held in the Monetary

Fund,

plus

unspecified stand-by
by the Federal Reserve—

back to monetary stability on the
back of the dollar—with no con¬
trol

whatsoever

over

the

funds

thus engaged.

Aid, Not Trade
As

to be expected, the pro¬
perpetuation of large-scale
foreign aid is
accompanied
by
was

posed

vehement

expostulations

about

no farm representative
among the
Presidential
appointees!), which

leads

nowhere.

admits

that

The

Commission

farm

problems are
beyond its competence, and offers
solution.

no

creating

It

the

is

satisfied

with

misleading

impres¬
sion that our domestic
commodity
supports, plus agricultural import
duties and embargoes, are a major
factor in the world's dollar short¬

that Britain is

nan

with,

putting the burden of
dollar shortage and cur¬
rency stabilization on the Ameri¬

can

In

respect,

one

marks

lingo

however,

significant

a

the

over

litical

economic

the

of

and

last

the

prog¬
po¬

decade:

there is no more ballyhoo about
raising the living standards of the
world's underprivileged millions.
claim

The

to

areas

and

underdeveloped
to

American

answered

sistance is

gorical,
right."

of

right

a

"We
(Mr.

other

with

as¬

cate¬

a

recognize no such
Milton Eisenhower

protagonists

those areas?

of

hand¬

Or merely that such

aid should not be construed

"There

the

now

appears

for further

need

form

of

as

an

be

to

economic aid

grants"

to

no

in

Europe.

This sounds reassuring; in reality,
it is little more than an irritant
to the Europeans who do not like
to be

reminded of their humiliat¬

ing position. Otherwise, it
nothing because:
(a)

"exceptions"

are

in the form of off-shore

means

permitted
procure¬

ment, the volume of which is not
defined by
than the all

on

top

anything more precise
embracing generality:

experimenting
of subsidies, tariffs

and quotas for farm products)

altogether

taxpayer.

our

"gradualism." It by-passes what
many Europeans themselves con¬

that

to advocate

line

of

could

military aid

(c)
ever

global

spending proficiency in¬ obligation of the donor? In any
their behavior.
in practice, to leave things as they duces
Why not case, no such language is ad¬
to
the
take it- easy and run into deficits dressed
European Allies
are; the soft currency countries
who clamor more insistently for
continue their mutual commercial if Uncle Sam stands by to pick up
American
subsidies
than they ever
the bill?
And what guarantee is
throat-cutting, preserve their eco¬
there that by continuing the sub¬ did for German reparations. The
nomic
rigidities,
and
maintain
we
would pave the way obvious implication is that what
their vicious discrimination against sidies
"gradually" toward all-round con- is not sauce for the backward
American exports.
vertibilitv?
goose, is sauce for the "forward"
The Commission made no at¬
gander. And it is a rich sauce we
That
lately Europe's over-all
tempt whatsoever to justify this
are supposed to keep dishing out,
stand.
It follows through thick dollar position is improved, offers
as we shall
see presently.
no promise for the future.
It has
and thin
bringing them about.

defaulters

countries

productivity and relatively outs to Latin America will not
nor
will the Latins
high wages (plus exorbitant like this,
"fringe" benefits!). But, one may themselves.) Does this mean that
ask, what can we do about other no more aid should be granted to
people's folkways?

tax

self-support¬ age. It does so by failing to bring
ing if their own policies stymie home that the viciously "autarchenterprise, discourage incentive, ist" farm policies abroad (such as
saving and work. Yet, it chooses the double-price system a la Branmake

can

of low

that

well

as

and

of American trade policies. Our farm
policy, in particular, is subjected
to a scorching.criticism (there was

the

generally,

ress

of
Her

of

output are rising faster
Germany's Dr. Erhard, in than those of the
U. S. (and of
particular, is more than willing to
-Germany!). The same holds, more
"dash to freedom" and to scrap at
or less, for most of our "wards."
once all foreign exchange barbed
The Commission made no effort
wire as well as their twins, the dis¬
to appraise the discouraging re¬
criminating
import
restrictions,
sults
and
consequences
of
the
and to return to undiluted multi¬
global
spending
spree,
lateralism. He is stopped by Brit¬ postwar
ain's objections.
But the Randall
Report pays no attention to opin¬

and,

report

unit

inconvertibility of

respective currencies, the in¬
sensibility of the tax systems, the
inflexibility of price structures,

well

ahead,
equivalents.

the

of

the

In
Britain, labor productivity
lags far behind, but wage bills run

cure.

warns

pur¬

body

sides

both

universal

ing it into consideration is
thing; making it the prime

is,

the minority report
alleges
(but
without
facts
or
analyses to support its thesis). A

trade and financial policies is
pos¬
sible without taking that
thorny

But tak¬

This

in effect, what

One may argue, of
course, that no
discussion
of
America's
foreign

issue into consideration.

convertible?

as

Issue

$46 billion in direct aid,

some

if

credits

1 any

Senator

fostered

been

guarantees

privileges for private loans should
be provided in lieu of grants—as

if

attitudes

have

beyond that, loans

tempt

adjustments,

come

;

.

Federal

convertibility
would boomerang in the form of
gold and dollar withdrawals. But
if the adjustments are made, little

tic

majority and
vigorous
dissents.

punctured by "economic" and related aids alone
In
addition, are running at the rate of $5 bil¬
Millikin inserted a polite lion, leaving a dollar gap of $2 to
the chairman, to the ef¬ $3 billion.
(Putting it the other

(b)
as

broad strategic

or on

.

in

through the re-opening of gold
and
dollar
treasures
held
pri¬
vately.
They are hoarded today

row

icy at home,
judgments.

convertibility

decisive

to

futile

a

nadian

and

the

the

adjustments

outlay

re-equipment

where

as

force

the

too,

is

comes

the

Often,

over-in¬

Thursday, March 11, 1954

.

court;

That

credit

involved.

still

flated.

to be realized and by
reluctance of capital to risk

manpower

systems

currency

and

Even

exception is the

monies

the

way

act should be relaxed for

one

every

limited

fall

went

be

to

was

beneficiaries.

One (apparent)

the

steelworkers

of

of the foreign

accounts

of

[of a major increase in precarious situation, the respec¬
tive
national
budgets far from
production] are easy to recognize
and hard to cure.
On both sides balanced, public expenditures and
the

our

Randall,

out of the world markets. The in¬

ternational

.

.

independent

of

are

ours.

And it

sidesteps the fact that our
high agrarian prices—which help
to boost our wage level—are a
boon to Europe: they reduce our
competitive powers.
As to the tariff, the report sug¬
gests that the President's expiring

under the Reciprocal Trade
Act should be pro¬

power

Agreements

longed for three
be

reduced

at

years,

his

duties

to

discretion

by
4% annually. Of course, tariff ad¬
ministration should be simplified
(though it is far less "barbarous"
than

the totally

arbitrary admin¬
of European and Latin
exchange restrictions and import
'"contingents"). All of which would
add up, the London "Economist"
istration

commented,

to

increase

an

of

American imports by a few hun¬
dreds of millions of dollars
a
—

drop in the bucket.
bucket has

a

At

that, the

big hole: the

escape

clause and the peril clause are to
be strictly observed.
*
Small as these and related trade
concessions
was

are, in view of what
expected, they aroused the ire
protectionist wing of the

the

of

Commission.,

In

one

minority report's

respect, the
is fully

censure

understandable.
our

It points out that
tariff barriers are
very mod¬

erate compared with the trade ob¬

structions

erected

by exchange
abroad; and
that American industry is "en¬
titled" to protection
against mani¬
fest dumping—selling with the aid
of exnort risk
guarantees, dollar
retention schemes, "switch"
rates,
and direct subsidies—practiced
by
European competitors.
and

import controls

"Our

actions

must

by comparable efforts

be
on

matched
the part

"the Commission recommends that

of other nations of the free

contracts

world,"

be placed abroad on

the Randall report announces sol¬

fresh

the basis of considerations of cost,

5% "wage round," which is a dis¬
tinct possibility, may price Britain

availability, and quality
that
govern effective procurement pol¬

emnly. But this is not followed up
by concrete ^^nosals. The under¬

versed

on

short

notice.

A

re¬

...

.

.

.

lying

philosophy

.may

be

sum-

Volume 179

Number 5306

..

marized

and

commercial

own

briefly by saying that the
concessions proposed
scarcely significant; instead,

-are

handouts

are

amounts

for

"With

no

•quid

pro quo

control

unlimited

over

primarily

time,

real national

without do¬

The balance sheet of that theory

budget for fiscal 1955 shifted the

supported with

Fallacy of Military Aid

by an
being
isolationist: by W. G. Mallory,

for

excuse,

the' Randall

proach

the

the

War's

Plan

idea

at

Marshall

now,

from

gamut

having
charity

run

end

the

Europe self-supporting

making

matters

sistance

"needed"

as

standards)
friends

to

do

allies

their

Which is tantamount to the
omist's

self-effacement,

.

From the earliest times

.

have

allies

gency

assistance

given

As

emer¬

an

methods

such

measures

to

neutrals

bribed

and

enemies.

their

and

have

utility, but they soon become
self-defeating.
Once
an
emer¬

and

share.

own

.

their

as¬

(by military

enable

to

to

Years, ago,

Ohio,
in

strategic outlook ("peri¬

new

a

and

French

nations

presently is military aid,

combined with such economic

only, from manpower, bricks and
ships
to
planes, super-weapons
and research. Whether this is due
on us

by

Italian reluctance

to

1954, issue of "Foreign Af¬ pheric defense"), forced

edge.

the fa¬

-—

"Tradm* Places With the Customer"

emphasis, if cautiously

armament

gency

econ¬

the age of

to

turns

parel.
how

admirals

the

to

or

—

Continued

the
very
distinction be¬
military aid and economic
aid is a fallacy. The Randall re¬
port, for one, makes no attempt at

definition.

In reality, every soeconomic aid, provided it

worth

anything, is of military
value, if only by strengthening
the "potential" of the respective

country.

Vice

tary aid

versa,

from

economic purposes,

serves

directly

or by indirection, if only
toy relieving the subsidized nation

•of

arms

expenditures.

In fact, it

is largely military

aid to France,
totaling in the current year about
"$2.5 billion, that covers most of
her

balance

of

deficit

payments

"while the counterpart funds of the
handouts

same

take

her

of

care

*

The concept of
volves more than

military aid in¬
one fallacy.
In
the first place, it is self-perpetu¬
ating.
The
sinews
of war we
burden

are

the

on

unbearable

an

recipients,

so

or

they complain, unless we shoulder
the high cost of maintaining, stor¬

servicing and renewing — at
to $2 billion already,

ing,

annual $1

;an

••according
The

votion

the

to

more

not

Randall

weapons

One

account

even

for

the

ob¬

build up a Maginot line in

we can

Europe that would match Russia's
still

—

and

if

as

they would

match

not

our

stand

prepara¬

tions bv

adding to theirs. Leaving
aside
the
waste
and
corruption
•cropping up in our world-wide
"infrastructure" projects: how far
We

can

carry

of

some

this race?

along further
The
ibe

What if

"Allies" refuse

our

build-up

The

wasted.

risk

go

"neutral"?

turn

or

tremendous

to

that

would
a

huge

amount

of

abroad,

might fall
into enemy
not negligible either.

hands

is

equipment

Perpetual
If

stopped,

stored

Sending?
appreciably

or

re¬

duced, foreign aid; is bound to
boomerang—to make enemies in¬
stead of friends. Tn
it

may

major war;
out to have been a

turn

a

colossal mal-investment. In peace,
it

discourages

actually

military
Eh rope that by
this time should be perfectly caopreparations in

a

able of taking care of
six nations of the

even

and

itself.) The

without the French, Belgian
Dutch

colonies* have a com¬
of 158 millions,
equal to America's; and a steel
capacity of 40 million tons, su¬
perior to Russia's, to say nothing
bined population

of their superior skill dnd

how.

should

Britain

With

Eurone
match

mar¬

whose ex¬
accompanying

country far more good than does
off-shore procurement which uses
up
real resources, and is to be

should
for

the

they

comfortable

armament

an

be

more

Soviets.

know-

the

and

rest,

than

But

a

why

down
their
domestic
rigidities

break




12%

with the

contrasted

or

economy's

Long?

in

items.

He

first

my

took

to¬

step

education.

As

so

of

forms

free

a

If

nature."

there

emer¬

were

Included

in

the still awesomely

"show
most

strategic political necessity, this

Distressed Area,

employed, is
financial

S.

U.

a

to

used

the

Whereas

the

be

source

of

criterion;
been

ders

on

of

extent

an

burden

the

billion

1.2

marks

($300 million) last year versus $37
million

given

by the U.

S.

Par¬

ticularly in view of the continued
refugee influx,

no

solution of this

political-economic problem is in
sight.
Another continuing minus is the
absence of a capital market, with
a shortage of a long-term capital.
Highly-taxed bonds and stocks
must compete with a government
bond yielding 5% tax-free.
Sie¬
mens
just had to pay 8% on a
long-term bond issue, and even so
the
operation
was
largely
re¬
funding.
Mark

A

i.

the

"gap"

a

mark

rency

relative to the soft cur¬
countries—must be included

with

the

negative

in

trade

function

EPU,

as

she

Leslie,

B.

M.

Frederick

Treasurer.

and

Riekert,
Both

stock.

I

Inc.

Three With E. F. Hutton

first

E.

Brown,

George

H. MacGregor

and

Clarence

L.

Warren

been

added

the

staff

to

of

have
E. F.

South
Spring Street. Miss Brown was
previously with Merrill Lynch,
Pierce, Fenner & Beane.
&

Hutton

623

Company,

Three With Sam. Franklin
(Special to The Financial Chronicle)

W.

ANGELES, Calif.—Russell
Robert L.

Gerst,

with

ciated

&

Company,

Samuel

215

B.

West

Franklin

Seventh

Street.

Hemphill, Noyes Adds

is

(Special

LOS
A.

ANGELES,

Dalton

staff
510

to The Financial Chronicle)

of

has been

Hemohill.

Calif.—Joseoh
added

to the

Noyes &

West Sixth Street.

Co.,

story

other

customer

thanked

he

should

able

and

she

mportant consideration*

she

and

snagged

little

country

satisfied and go around town

tell¬

few who

to

when

If

buy.

don't

in

every

value

any

advertising I

can

other

I can't

long

living
more

and

the

old

valued

his

of

sometimes

for his family.

time

good

a

both-

continue

as

exists
do

to

reigns

freedom

today
as*

so

in

this*

i
'

f

John M. Barbour Adds
Chronicle)

(Special to The Financial

PASADENA,

John

M.

has

;

Calif.—Adelyn S,

joined

Barbour

the

ot

staff

& Co., Citizens

Bank Building.

in

i

.

With Hannaford Talbot
Chronicle)

(Special to The Financial

SAN FRANCISCO,

Calif.—Jack.

little Bayliss and Otto C. Dockter are

He was one

merchants
name

many

businessmen

land of ours.

Jepsen

years when there was a nation¬
wide-panic he was able to keep
his doors open and during all that
time he never failed to earn
a

and

father

opportunity
will

and

It pays me
other form of
do."

Even

In fact, it was pe<v-

my

unsung

same

know

business.

the-

better America

a

and small who built thiss
country into a nation of moral
and
intellectual integrity.
Th«

Goodwill Must Be Earned

town

of

large

My father went through a pe¬
riod of about 40 years running a
small

like

ple

received.

than

better

a

today you

become

will

today

of tomorrow.

me
up.
That's why I sell good
merchandise and try to give peo¬

ple

discourage

tomorrow—the

double

foundations

that the
firms from whom I buy will back
I

our

other

help it and usually the manufac¬
I make the re¬
because

not

integrity that we buildL
relationships with each,

of

into

turer can't either.

fund

to

don't make

earn

kind

happens

line of business.

mad«i>

ever

or

you

will

for my
things \I

that

defective;

are

I

prospect

a

think the timing isc

you

afraid

be

sions

get

Sometimes

business.
sell

can

told

I

prospect from making
unwise decision. The commis¬

an

unfair make the best
I

in

ago

wrong—the investment is wrong;
anything else is wrong—-

those

find that even

I
are

store years

The best sales talk
was

to

dis¬

as

Ohio.

it.

knew

develop

taking the advice givers,
to
me
many
years
ago?
"Put:
yourself in your customer's place
and you'll never have to look forcustomers"; and it works today
just the same as it did in that-

the

But rather than have anyone

will

that

business
result of

That sweater

was.

commis¬

1,700 who do you think will get
order? And how about other

unreason¬

are

a

the

while I find

a

passed

I

1,700 shares of stock but.
customer's
welfare is
the-

customer

"Once in
people

hold

on

—or

some

informal

encouraging.
agreed that
the
remaining"

and

me

When the time comes to sell that

father, whom he knew quite
and asked, "Why did you

that

customer

latest

more

was

He

the

were

turned

called the

I

that

most i

accomplished.

mission

her

at least temporarily„
the
future
of
this?

velopments.

and

left

and

turned

I received infor¬
to change

him the

told

sion

back."

money

as*

1,700 shares pending further de¬

remember
any¬
buy here must be sat¬
your

next day

company.

Then

you

that

mind,
concerning

register

money.

sorry

the

told

I

whole

sold.

well,

Mullins and

Minnie Stober have become asso¬

said

ability

my

things didn't

Some

completely as K
said, "I have 2,70(1
about selling 1,000?"
I agreed.
The 1,000

He

my

but

advertisement

ANGE'LES, Calif.—Lucille

speculative*:

a

of

and
How

The

as

word

a

the

to

her

am

or

got here,
-

(Special to The Financial Chronicle)

the phone and;

best

the

client of

new

a

on

promising.

give that woman her money back
without an argument?" My father

was

Secretary
for¬

day
me

it.

too

were

him¬

excused

Without

went

"I

replied,

were

Profession Musfc

or

the

checked

I

the

that
snagged

customer

o£l

foundation

opinion of

To

could.

ing people what a bad deal they

LOS

other

asked my

a

heard.

woman

my

and

merly with Bonner & Bonner,

surpluses

d creditor.

his

you

The

Wall

President,

loyal to him and.

solid

Business

The

entitled.

refunded

store,

been

industrial, public util¬

in

were

a

mine called

Anyone could

He

and
al¬

Serve Well to Grow and Prosper

refund to which
My father
the
rumpus
and walked
where I was standing with

said,

The

ity and railroad stocks and bonds,
bank
and insurance stocks and
mutual fund shares.
Officers are

father

my

yourself in theplace."
He did that„
"Put

People

Any

or

not

father

my

Street, New York City, to act as
underwriters, distributors and
dealers

soon

seen

been

nail

had

thing

52

at

watching

as

one

years,

many

because

built

tion

from

I

as

potentialities.

piling up
of unus¬
able
goods — a real
problem
which may be costly to a nation
which
has
not
yet learned
to
pluses

offices

that

anything else
for that little

goodwill.

quietly asked the woman the
for
her
complaint.
She

and

with

formed

good

a

said,

customer's

heatedly told him the same story

in lieu

believe

than

possible

was

ways

reason

Formed in New York

Along with her embarrassing sur¬

huge

that

and

to

self

will settle at a healthy

Leslie Securities Corp. has

for

per

and

isfactory

LOS

Ironically, Germany's great ex¬
success, combined
with her

import austerity—creating

had

customer.

he

war,

I

got-

never

telling all.

am

country store to go on and pros¬

large tear had been made

was

over

Leslie Securities

Gap

port

a

displeased

ability to pay
has now
largely shifted to the shoul¬
Harry
of the Federal Republic—to

subsidy here,

the

with 220,000 un¬
permanent heavy

burden.

more

it

improperly knitted

readily

some

he

a

that

thing
made

Dad
I

reason

straight

a

it unravelled

trying to obtain

is

is

is

if

even

The

this

other jagged pro¬
jection that had caught in the
yarn and that this customer was

of boom.

economic "institution.

costly

rich.

condi¬

business

and

mation that caused me

by

Behind this

freedom"

of

window

these

of

rubble-ridden

City of West Berlin.

A

bal¬

house

our

look

was

that

heard

all-out

an

1

was

de¬

a

commu¬

always ate regularly in

we

husband

that

sheet must be included some
Foremost

tions

shares.

sweater

expan¬

economic growth,

normal

objective

of

holocaust

the

a

build

You

same.

or

the

of

customer a
came into the
store and complained to me that
a sweater she had bought lor her

she

little

relatively

With

the

member

competition

a

degree only. The funda¬

are

day while I

have

i;<

i-t

applied in
it is

store,

he tried to wear it.

sionary

Items

our

are

business by -exerting effort con¬

and

white collar contingent.
$

be

can

retail

father wait on
very irate woman

unemployed, with
incidence among the

particular

town

One

still 223,000

are

which

small

my

of

virtue

by

they

that

fact

those

good customer

a

the

difference between
policies that

any

sold

nity needed credit. Regardless of

he

"human

had a one
for cash,

He
he

and

customer

were

economy

facilitated

greatly
the

the country

ance

unless

and

It's Good Advertising

we

of

existing slack and more.
Bearish

I

older I worked in that store
I learned quite a few things

structively.

activity apparently still
Should self-armament come in ahead,
and with production al¬
with EDC, inflation may then pos¬ ready showing some tapering off,
sibly break out here, taking up it would be our guess that, barring
the

a-

after I learned
job of tnat,

store

serving

too.

a

must realize that the
institution of urgently needed re¬
Again

gross

product wasted in defense.

(still-born) Eu¬

Defense Community alone,

ropean

with

started

business

a

ap¬

standing.

price

grew

mentals

vulnerability, is contained in our
large-scale troop expenditures. A gency steps enacted in an occupied
country;
with
the
necessary
major contribution to the coun¬
measures,
politically
unpopular
try's surplus in the dollar area is
though they were, enacted under
the
$250 million received from
the aegis of those/ forces.
How
our troop expenditures, of which
long will that honeymoon carry
$210 million flows from personon?
1,
ney
pay
and the balance from
And midst theTteperity there
P-X sales. This does the

liabilities.

of the military
implied assumption that

is its

interest

matter of

prop,

harbors

report.

Another fallacy

forces

recovery

istence

provide,

we

solescence of weapons.
aid

competitive

kets.

the higher will go the costs which
<do

free

to

recipient

toudget.

furnish abroad

added

an

wearing

credit

successful in selling securities and

5

page

Boomland Germany—
For How

mili¬

every

which

on

merchandising

But

called

about

was

neat

a

other

he

is

tween

is

of

he

First

about

com¬

manding politicians.

a

first recol¬

counter

shirt, and

to make

ward

dering his function to the generals
and

the

assortment

an

back¬

step

a

the

wrapped packages and pa¬
tiently showed me how to tie up

self-defeating

such methods
him against the Marshall Plans.

measure,

recipient

surren¬

ward:

definite

of my
when I

as

in

up

he

inhibited, the other in an equivocal
a

grew

of age my father took

behind

me

of both—the one in an un¬

fashion—is

One

known

was

I

was

five years

ad¬

Commission's

days

lections

man's

Randall

The

those

business.

long ago.
vocacy

in a little town in
father operated what

my

general store.

it

lost

has

assistance

Economic

Corner

s

By JOHN DUTTON

much join the E.D.C., is immaterial.
emphasized in recent years, seek What matters is that military aid
to charm
the alien by gifts of to Western Europe, disregarding
money,
by wide distribution of special situations of limited scope,
the printed or spoken word, by is on the way to losing the last
of
rational
justification.
the sharing of technical knowl¬ thread

last aid to end all aid. What

mous

Securities Salesman

"Governmental programs,

ap¬

to

of

up

suspected of

fairs":

proach, leaving aside other argu¬
occasionally thrown into
the bargain. That is where official
the

drawn

not

Foreign Relations (in the Janu¬

on

ary,

ap¬

ments

thinking stands

sharply

Executive Director of the Council

National security is the reason,
or

or

share?

own

American
an

The

mark of

a

indeed, if con¬
tinued long may bring the giver
to the same level of poverty."
Fortunately, American military

was

security interests.

—

subsidy is

and,

inferiority;

thinking is not likely to be stag¬
nant. President Eisenhower's

ing their

ation for guidance but our alleged
or

ours

adopted the in¬

The

donor.

they have to

be

their use, no

other consider¬

no

not

stake,

at

which is

—

coherent theory that

asked from the~ben-

■eficiaries, and

security

armed

when America has

to flow in indefinite
an

increase the efforts for their

33

(1133)

Financial Chronicle

The Commercial and

.

and

who

his

now

with

Hannaford

519 California Street.

&

Talbot,.
_

j

t

34

The Commercial and Financial Chronicle

(1124)

fered

.Crossman, chairman of the board
of

directors

firm,

Mutual Funds
Colonial

The

Fund,

into

Inc.

an

open-end investment company, or
mutual fund, is referred

to in the

quarterly report mailed to stockholders.

anniversary this

Orr, President, in his
stockholders, states that

the directors have the matter
der active

plans

consideration

and

un-

that

being formulated,
He points out that problems of

a

are now

technical nature

there

is

Fund

w

that he

no

exist

assurance

would

and

that

that

the

be

1

is

"open-ended " but
keeping the stockhold-

informed "since such

ers

and

be

fundamental

would

require

a

change

in

nature

stockholders'

is the old-

year,

est leverage investment

The

investments

0f

the*General

are

diversified with about 81% of

Children.

net

assets

in

oils,

ga^

in

stocks

common

bonds.

and

He

Electric

utilities,
utilities and chemical and

drug

stocks
form
the
largest
groups in the portfolio.
The in-

vestment

Colonial

adviser

firm

^und>

Colonial

Fund,
formerly
known as Railway and Light Securities Company, was founded in
1904 and, in celebrating its 50th

which

in

acts

Dividend

last

method

50%

a

Thrift

on

FOLDER AND

of

PROSPECTUS

a

versified'lislT'of
SECURITIES

&

purchases

under

the

Etfablithtd 1930

Dividend Thrift Plan average ap-

120 Broadway, New York 5, New York

proximately $500, twice the required sum, and subsequent purchases

approximately

average

"WHAT YOU

Dividend Announcement

ing
on

BALANCED FIINU

*-

Worth

shareholders throughout the
country. The new high mark fol-

Fort

together with
with other
other
togethei

Rmrnr
Bornai

:

th

J" ™

Fidelitv

y

■

,i«

located

are

Union

Life

Bids

g"

_
.

,

Investment
some

of

Texas

jndusJrialists,

.

.

advisors
most

.

_

include

outstanding

businessmen

and

paid
computation

by

in

sharehold¬

P.M., March 15, 1954.

Street, Boston, Massachusetts

fund

bv

and

current

a

i

return

r

r

-

listing the

a

•

f

♦

u

w

investment hold-

■ ■■■»

■ ■■■■
'■■■a
iiui

?a Ia*'„ and William

AlSIar!11° ran%hei/,,

Clifford,

..

„.

advisory group.
Mr. Bomar
brings to us a wide knowledge of

our

general business as well

tailed

understanding of the

J^ which
they have paid
dividends. More than

f.

40%

of

investments

panies

that

have

in

are

paid

com-

dividends

without interruption for

15

to

50

years

WILLIAM

P.

BOMAR,

Fort

Worth,
President
and
General
Manager of Bewley Mills, has
been
the

nominated
board

western

of

as

member

a

advisors

of

of

South-

Investors, Inc., Jerome K.

TOTAI

NFT

^ NLI

.

investment

assets

•

Of the six

companies

in

this

country and in Canada under the

that

people

more

funds

mutual

investment

ceive the

and

companies

staSes

greater

popular

tu+

first

its

onternrise

organized

Mr

than

CObe^tlve;y

latest

of

1928

the

Fundamental Investors, Inc.

000

10%

stores;

vestment
ent

Diversified Growth Stock Fund

ago.

in

of

other

in

assets

shares

added
more

415

policy that is
than it was
Morgan

Inc.,

of

the

$7,400,362

Value

reported
the

in

bringing

VALUE

of

as

the

with

LINE

Fund

re*

Dec.

end

for

of

pany

and

describing the Com¬

its

shares,

available

upon

request.

1952

reflecting steady
with

co^oared

posite Average
in

Standard

as

well

as

and

5.7%

a

Poor's

and

10.6%

a

EBERSTADT
39

Broadway

&

CO. INC.

New York Citv




YOUR

ON

THESE

drop

Value Line Composite
100 stocks in 1953. In
the

12

cents

share

a

from

At
U.

year's

S.

capital

gain

divi-4

paid

18

period.
the

end

;n.
Fund

34.7%

held

LOCAL

MUTUAL

INVESTMENT

ing

bonds;

industries

19

commitment

.Portfolio

with

its

National

in

changes

in

the

heaviest
Homes

fourth

single

Corp.,
quarter

EATON & HOWARD

BALANCED FUND

STOCK FUND

FUNDS

DEALER,

YOUR

EATON

OR

&

INVESTMENT

DEALER

OR

HOWARD

INCORPORATED

BOSTON

Chicago
Angeles

Hugh W. long and Company

San Francisco

Incorporated

Westminster

at

Parser, Elizabeth 3, T^ew Jersey

24 Federal Street

BOSTON

i

Governments

and
other cash re-j
9.7% secondary bonds; 8.1%
preferreds and 43.1% commons, represent¬
serve

years

FROM

>

addition to

cents a share,*
income during the;

earned

12-month

the,

in

Average of

distribution, the Fund
totaling

drop

EATHN & HOWARD

OBTAINED

a/

Average

Cleveland

Los

F.

AVAILABLE

FROM

including

the price and terms of offer¬

ing, is

PROSPECTUSES

■-

a

PROSPECTUSES OF THESE TWO INVESTMENT FUNDS MAY

A Prospectus

j

1,593,996

Diversified Investment Fund

UE

of

total

Fund's

iU7

Manhattan Bond Fund, Inc.

rec- s

month

6.8% drop in the Dow Jones Com¬

20,-

summarized

-

fields.
8.5%
in
bonds,, and

President

$1,535,279

r.^r^or^p nno

differ¬

25

agri-

in

balance spread

31, 1953.
After
capital gain dis¬
tribution of 12 cents a share, net
asset value was $6.11, unchanged
from the $6.11 per share value at

growth

no

Watson,

to

adjusting

$34.7 mil¬
than

3.8%

the

ported total net-assets of $7,130,4-

y'„

impressive

as-*
rep¬

industries

outstanding at Jan. 31, 1954.

THE

Mor-

Fund's
stocks

28

ih milling and baking;

supplies;

Distributors,

1954,

January,

timei

the

and

invested

was

of

sales

net

a.

manufacturing

H.

Fund

ord

cents

preferreds.

Gavin

Line

4.2%

building

capital

4.3%

value;

Dividends)
45

of

equipment and

in

out

$553,141

aircrafts; 7.9%
in depart-'
6.9% in mining and metalr
in steels; 6% in machinery;?
parts; 4.6% in sugar; 4.5%

in

auto

in

dends

today
Mr.,

in

of

common

companies

with

$5,com-:

income.

79.7%
in

of

Asset

totaled

end,

63

the

Income

1953,

$4.55.

earned

invested

ment

cultural

stated conservative in¬

a

year's
was

5.7%

shareholders last year—is the

story of

3, PA.

from

of

Line

1952.

1953

in

3.9%

prospectus, is in ex¬

Fund—it

first

assets

assets

of
was

lurgical; 6.1%

$1,000,000.
the

each

of

REPORT

net

net

end

resenting

Today this multi-million dollar

the

to

share

sets

.

share

per

year's

of Dec. 31,

as

the

paid

individually

" / d ^

was

divi-;

.

showed

share

friends could be better managed
(,0iw,Uvelv

1953

Both

income

ANNUAL

per

gan with the idea that the investment accounts of his family and

Behind

investment dealer

hv

In

dividend

share.

the

of

at close

15, 1954.

quarter
per

during

pared
at

all-Philadelohia

was an

divi-'

share. This
quarterly divi¬

wotfiiiCiii

v

865,083

oy,Q

record

At that

$194,769.

were

Howard :

&

per

15-month-old Value

Walter

of

vear

dividend

declared

approximate the

*.i

Fund

lies

increase

March 25,

Eaton

have
cents

machine tools;

comolete

1929,

first
cents

At

nearly $20 million

quarterly.;

quarter.

va ue'

a

of

of 22

THE

m.edlu™.
investment companies wb}ch fluctuate in price, yet
ar<T entliely sound in long run

President,

share.

per

is payable

consecutive

fund

ahead-.B e thlaks that people are
^idti^m li keinvestmenTmmna

ported by its
L. Morgan.

cents

dend

aawv

much

noonio

30

Fund

dends

re-

acceptance

Howard
declared

consecutive

90th

21

care

in

is

that

and

&

29 cents per share.

the

large inJ**™®4 Irowtae' po^ulari y'"of
early

of

business March

to

and attention provided
jnvestments

>

dend is payable March 25, 1954, to.

medium

funds

happy

a

have

stockholders of record

combine

can

professional

same

lion, in assets and

PHILADELPHIA

the

as

through which they
their

turning

are

Eaton

1953 the first quarter

Stock

u«

+

of

TRUSTEES

33 500.
1

finding

Fund

88th

was

Mr' Johnson attributed the
growth of Fidelity to the fact

of

or

In

net

outstanding.
The
individual investment

amouilts to

cess

your

with

then

average

to

FOUNDED

1953

management of Calvin Bullock company is nationally-known
exceeded $250,000,000 at the end with a list of shareholders numof February, according to an an- bering
approximately 120,000 in
nouncement
made
today.
The the 48 states and in 23 foreign
largest fund under this manage- countries. Moreover, members of
ment is Dividend Shares, Inc. with the
management of Wellington
assets at a new high of
$128,- and their families continue to be
429,000. The next largest is Ca- substantial holders of the Fund's
nadian Investment Fund, Ltd., of- shares. This ownership, according

Prospectus from

a

1954, to stockholders of record at
close of business March 15, 1954.

$91,793,299, equal to
share on the 5,326,261

per

shares

as de- the Fund
speci-

As

but

straight
result,"

Wellington's balanced

distribution

assets since the close of last year

.

df1pdthe
C°?m01? st°cks are clas; affiliated.
with which he is
according to the number of fic./uduftries
continuous

«■■■■

of

closed

in

dividend
This

'

j.

30% weighting
preferred
stock
and

bonds,

CaTIn

<y
■ ■■««*■■■■

Fund

people

bonds

jumping

stocks.

common

TRUSTEES

*

are

to

of

President,
Magnolia
Petroleum
Co.;
H.
N.
Mallow
President,
Dresser Industries, Inc.; Stanley
Marcus, President, Neiman - Marcus Co., all of Dallas, and Robert
McWhirter, President, First National Bank of Paris, Texas.

with

of

Balanced

of

The new high mark climaxes

In

afraid

vestors have been

1S our e^or^» said Chairman when resources of the Fund toof the Board Crossman, "to repre- taled $280,894,213.
By way of
#
^
WS
iCJ?rfS? y sent the broadest Possible cross- striking contrast, Wellington's
h"?
common stockholdings section of business and industry in total resources at the'end of its
balanced

™

Quarterly lliviilend

L^^thnor
L Latimer,

Pas

first

de"f> Texa® ^dusfries tec all of

Co

the

bv

F\ Flor-

PresKdent, Repubfic National

?one''star

the

ln

quarterly div-

completed

&

record of

a

idends

ihI

22 CENTS a SHARE

I^i-ed

that

find

dissatisfied

are

he concluded, "more and more in¬

lows a more
than $8 million in¬
assets since

crease

demand.

on

iThe trust firm'c offices

mutual funds,

on

We

are

into

the year and climaxes a $50 million growth since 1950,

the

just

Long

j

STOCK FUND

24 Federal

fund

W

folder

new

a

which is 5%

EATON & HOWARD

25

that

folder is

88th IJoimecutitie Quarterly llinidrnri

March

in

Hugh

30 cents a share

of record at 4:30

625>71,5 owned by close to 30,000

THE CROSSING of the $300 rail¬
lion mark in assets by the 25-year
old Wellington Fund * was re-

Fund" is the title of

EATON & HOWARD

Dividends payable

the

changing

general and balanced funds in

particular.

th£ Fand> ^lch ??r}ed b£sl~

Directors include Mr. Crossman,
investments exper.t and attorney;
Joseph N. Fisher, real estate operator' Dean p* Guerin, investment
bankerI RalPh B- Rogers, Presi-

gain by investDiversified
Investment
can

"I'm still bullish
in

President, Edward C. John£' W1K) sa^d tbat resources

Airmaid

$10.81 pei shaie, and investme^ts m the pool may be con-

"stocks

aimmon

$100.

ers

Utmties Co

Mills

Rail-

meet

to

,

Service

Life Insurance Co.

Lone btai Las Lo. J.

Initial

times."

"Today," Mr. Morgan continued,

,

!^ss back ln 1930 ^lth less than
State Re- «0,000 now amount to
$100 -

Electric

tile NaHonal Bank;

agement.

CORPORATION

901fi (,'ofigrciitine

Texas

Co

c?n^"uQally' CU1Ienly at,tbe ra*e

program

under constant, professional man-

~i

Missouri-Kansas-Texas

publicity0'TtSated'The"interest lorFXmvn^res'idenTMercan"
investors in
based

FREE INFORMATION

.

_

program."

Federation,

in-

this

_

of

National

verted back into cash

that

A

Fund has just moved into that
small and select group of mutual
investment companies whose asset£top the.$1M.™lll!Lmai
,e,cr0^\nf-.°
^
'T1
?n

Plans

licity generated by the New York
Stock Exchange's instalment pur¬
chase plan.

time

to

medium

Millers'

Mr

This plan is a
purchasing Dividend
a
periodic purchase

states

RESEARCH

Fort

advisors of the investments firm

WRITE FOR

NATIONAL

the

of

time

with

SrnL

,

The company gives much of the
credit for this gain to the pub-

SERIES

Cook
for

club and of the Whalev Co

ninn
P

SECURITIES

Center

director

a

Hosiery

year.

of

all

conditions.

w

«

Shares

NATIONAL

Hospital

_¥TT,

Corp.

JHE 24-YEAR-OLD Fidelity

will help plan the investments of
krm,s participants in stocks
The
started in the first two months of and 5°?
iands are b€;ing assets
1954, compared with the similar added to Southwestern ^Investors $17 23
in

period

A MUTUAL INVESTMENT FUND

Insurance Co., of
Co., of the
Casualty Insur-

General

0f

serve

of

sponsor

Em-

&

and of the W. I.

Cof Texas

the

ment Trust of America.

CALVIN BULLOCK,
mutual funds, reports

crease

in investments at

ance

companies

^rpr^Jp^f #d^SrHre^°r ?^y

wav

capacity for Gas Industries
inc. and The Bond Invest-

same

that policy this way: "Proper bal¬

Worth Grain & Cotton Exchange,
the Fort Worth Freight Bureau,
The

is

Fund

Management Associates,

Boston

a

the

of

is

Carriers &
$11,418,000.

is chairman

Insurance

Fire

Co.,

ance

Bomar,

Associated

of

plovers Lloyds

Memorial

ig%

investment

Thursday, March 11, 1954

.

Balance, as defined by the Well¬
Calvin Bullock manage- ington executive, means invest,are Canadian Fund, Inc., •ment not in just one type of se-,

of directors ?ef the

board

Houston

action.

The

;he

Fund

the

of

Mr.

of

nomination

leader of Fort Worth

company

in the United States. Its net assets
were $13,994,000 of Feb. 28. and
the net asset value of its common
stock was $22.76 per share.

James H.

letter to

Other

of

.

under
nient
investments trust, is scheduled for
$25,303,000; Nation-Wide Se- curity, but in different types, such
approval by the full directorship,
curities Co., Inc. $20,462,000; Bui- as bonds, preferred and common
Mr. Bomar, a business and civic lock Fund,
Ltd. $16,284,000 and stocks; and these are varied from
The

By ROBERT R. RICH

converting

in Canada, with assets
$48,482,000 on. that date.

investments

announces.

by the board

THE POSSIBILITY of

the

of

.

333

Montgomery Street

SAN FRANCISCO

f
-

Number 5306

Volume 179

included

sales

Pruehauf

N.

Standard

Brands.

Muller

Douglas
Morris;

Brass;

Philip

Brake;

Air

Y.

Colortype;

American

of

Trailer;

Aircraft;

Purchases

The Commercial and Financial Chronicle

i

.

.

Loew

Canada

were

ments

s;

have

from 40% to 60% of
since April, 1951. He stated

ranged

invested assets
it

far

their Value Line Rat¬
stocks have again
reached a buying juncture as in 1949. and
(2) if the Ratings, which now point down¬
ward
in
reflection
of
declining dividend
payment estimates, should level out and
to

begin

below

that

indicate

upward,

pointing

wool

which

will

be

dearth

no

tion

million in

net assets of Television-Electron¬

go
of

ics Fund in its first fiscal

"The

reported.

was

Fund

closed

this
year

will

the

be

'Labrador

Trough'

insulation

tion

of

which

and cords

quarter with the largest number

companies
the

newly-constructed railroad to
outstanding in its five- tidewater."
year history. They totaled 4.384,Preliminary figures for Can¬
527 on Jan. 31, last, as compared
ada's economic situation in 1953
with 4,019.842 on Oct. 31, 1953, also
are
extremely encouraging,
after adjustment for a two-for- Mr. Vance
pointed out. "The Ca¬
one stock
split.
nadian gross national product is
shares

ADDITIONS

ment

in

the

invest¬

holdings of the Bullock Fund

months

three

ended

during

the

Jan. 31

last, included 5,000 shares

of American Natural Gas Co., 900
shares

Atlas

of

shares

Powder,

Lorillard,

of

4,100

shares

1,300

estimated
increase

Vance

Mr.

income

of

stocks

last

HUGH

H.

will

Corporation,

York

New

Securities

National

Research

leave

Assistant Vice-

FOSS,
of

the week-

over

already

shares

of

Co.

Canada,

2,000

uum

Oil Co.

Electric, Texas Util¬

Hugh H. Foss

Los Angeles by Rufus
Resident
Vice-President

in

joined

Knitting Mills, and
Carter,
Wheeling Steel.
of the
REASONS

TIIE

why

than

more

50,000 investors and investing in¬
have selected Funda¬
mental Investors'
shares is the

stitutions

of

subject

an

eight

folder

page

just completed by Hugh W. Long
&

Co J

fund's

The

record

of

accom¬

fund's existence.

chart

Another

shows

the

how

paid by the fund have
than kept pace with
the rise in the cost of living dur¬
more

ing the past -ten years.
also

in

the

Included

folder is the most

re¬

HOLCOMBE, Jr., has
associated with The
J.

FRANK
become

Corporation of Boston,
distributor of Fidelity

Crosby

general

Fund and Pur-

will

111

Broad¬

New

uate

a

grad¬
Rut¬

and

business

are

dustries.

of John A.
Fuller, President and director of
the Shawinigan Water and Power

of Canada, as a mem¬
the

of

ber

in
F. J. Holcombe, Jr.

for

He has been

mutual fund

a

1948

and

this

in

the

a

d

General

a

Fund

was

an¬

Henry
Vance,

of

dent

T.

Presi¬
the

Fund.
Mr.

who
in

was

born

Montreal,

attended

Hotchkiss
School
John

A.

Fuller

in

Connecticut
and graduated

from Princeton, class of 1924. Hisi

of

weeks

Services,

1954.

NORTON,




for

anticipated

are

considered

line

with

rate

of

the

1954.

normal

in

and

Company's present

has

the

for

been

•

General

elevated

board

of

20

past

by the

directors

to

office of "Vice-

greatest potential growth
is in the field of Fiberglas rein¬
forced

plastics

1942, it
for

use

(FRP),

field

a

the Company. In
first recognized that
glass was especially suited
as a reinforcing material

pioneered
fibrous

by

connection

political

A

of

with

the

polyester

material for

plastic fuel cell sup¬
port linings in self-sealing tanks
for military airplanes. Next came
other wartime applications, such
radomes and small boats.
After

standing

career

graduate

of

Minnesota,

to

the
he

join

Uni¬

served

in the Minnesota state

legislature,

and for many years

was

he

Chair¬

of its House Rules Committee.

because of

—

which they can

with

be

FRP.

The automobile

industry is be¬

coming increasingly interested in
Fiberglas reinforced plastics. Socalled "sport" cars represent the

V-J

Day, furniture, fish¬

ing rods, translucent sheeting and
various
other items were made
from this new
the

try

material, FRP. And

production of this new indus¬
was

material

soon

into

flowing
a

large

as

a

raw

variety

of

manufacturing operations.
At the

present, FRP is used in

& S. A.
offering fit*,*

are

The

Election
1931, maturii t
1955 to 1994, imlusne.
bonds
are
priced to ykbt

from

.75%

Bonds,

April

1,

to

2.60%, according to

maturity.
Other members of the

offerirf

include The Chase

Nation*!

group

Inc.: The I ».*t
A men* »fi
of San Fran* two;
The Northern Trust Company
ft

Bank; Blyth & Co.,

Corporation;

Boston

Trust Company

H. Moulton & Company; Sceuuty*

les An*

of

Bank

National

First

geles; Merrill Lynch, Fierce,f fi¬
ner & Beane; Weeden A Co
Th#
First

Bank of

National

Earth A Co; A
tk
Becker & Co. Incorporated, War*
theim &
Co.; Law son. Levy A
J.

Oregon;

Stone A
Youngberg;
likely present field for ex¬ Williams;
Gross. Rogers, Barbour, Smith A.
use of FRP bodies. The
primary reason for this is that Co.; Wagonseller A Durst, li e , I!,
E. Work A Co.; Irving l.nndNrg
sport cars are turned out in rela¬
,& Co.; Brush, Siocumb A Co. Inc ;
tively
low
volume;
and
FRP
Hooker & Fay; Kalman A Com¬
bodies in limited volume can cur¬

most

panding

made

be

rently

economi¬

more

cally than can those of steel or
aluminum, because of the savings
further

The

of

use

expansion

the

is

an¬

boat hulls

in

FRP

of

other

growth potential. Industry
finding
an
ever
increasing

is

both

for

It presently
includes file drawers, chairs, fish¬
ing rods, bathtubs, lamp shades,
luggage and toys, to mention just
growing

FRP

few.

a

is

especially

for

a

raw

gopds

consumers

well

special and unique qualities; and
as to form, it may be said that its
molding process type of fabrica¬
tion permits an almost unlimited
variety of decorative and func¬
tional design at non-prohibitive
appraisal

conservative

of

expectancies suggests that
will be moderately above

1954

sales

of

with

(Special to Th*

fW

E
A

Shu ton

Co.

Bail hr g.

With Investors

Planning

Fimwmi «"«-•••*<■ • **

Flhot Fil¬
M* !»«•** are

BOSTON, Mass—I!
and

ler
now

Joseph

O.

associated

I

with

vc*Nif

Planning Corp. of New
Inc., 68 Devonshire Stm l

McCoy & Willard Add
(Special to Tm

raglia is
30

F>«»»*.

«.

Mi*

earnings, aided by the absence of
the
Excess
Profits Tax, should
increase.

(Special

conditions

Owens-

should be able to show
earnings of $2.75 to $3.00 a
share. This estimate is based on
accelerated amortization charges
which
will
reduce earnings by
17

cents

a

share.

In

other

accounting
procedure, the estimate of $3.00
share

using

normal

»Sperdl

the New York
over-valued
market wise in relation to current
earnings. But when viewed in
the light of the normally prevail¬
ing price-earnings ratios for equi¬
of

nies in

listed

on

Exchange,

the

is

highest grade compa¬

other rapidly growing

dustries, I do not believe

in¬

that its

»# 7*1

f

is

Bl-tg

Staff

„v.

•«%

with

now

Co,

A

Gage-WN y

FRANCISCO

SAN
Galatz

M4
A

C f
W*

Company, Ru^s Bu.Jn

He

&

previously with C*q f >!■ N.ua*
ties Co.

Indianapolis Branch

to

Stock

with

Waldron Adds to

basis,

common,

—

Inc., Third National IN. k

for 1954 would be raised

$3.17. On such an earnings
the stock at 54 would be
selling at 17 times earnings.
Admittedly,
Owens - Corning

f{■*>**»< >h

C. McCorkindale has Nn?" e con¬

1954

about

Gage-Wiley Co.

to Th*

SPRINGFIEL, Mans

Corning

words,

Federal Street.

nected

these

under

that

estimate

favorable

Whihrd,

ith Mi Coy A

w

With

profit
margins
somewhat;
and

1953;

widen

should

ties

now

BOSTON. Mass —AlNrt J

A

a

is

tius

Illinois State Bank

costs.

I

Cm

QUINCY. III.—Donald

the

from

standpoints of both substance and
it has many

Slayton & Co.

Joins

material

form. As to substance,

Ifjrwv is

with

(Special to Th* Fj*v»iu

rapidly.

suited for use as

('»**«! I

to T«

Negley, Jens A Itowe,
Jefferson Building.
now

The

goods.

Negley, Jcns# Row#

PEORIA. II!.—Ned O

list of FRP consumers goods items
is

and Stern, Frank, Meyer A

(Special

consumers

industrial

and

goods

pany;

Fox.

With

dies.

on

was

World War II. The
first .practical
application
was
during World War II, when glass
fibers were
used as reinforcing

as

1934, Mt. Norton left an out¬

contours

fabricated out of

those

rapid growth.

The

in their modern form in the years

Diversified

Investors

the newly created

versity

$5

around

just prior to

Inc.,

company's

I.D.S.

to

similar expenditure

a

resins, which had been developed

I.

man

amounted

in the

for

In

cost and for effec¬

low

at

nearly $10 million

President-Law."

Fuller,

more

in

Counsel

years,

are

more

mark,

WILLIS

b y

nounced

in

million

five

$100

advisory
board of Can-

that

forms

Capital
expenditures at that annual rate

capacity will represent the Crosby
Corporation in the East. Fidelity
Fund, ''whose assets recently

first

in

economical

and

have

is

the past 2 5

gained

available

ties

1953, such outlays are understood

securities

crossed

how to make these proper¬

million and

wholesaler since

ELECTION

Company

been

years.

Personal Progress
THE

the

cover

to

Holcombe,

in the oil and gas, public
utility and chemical and drug in¬

ings

portfolio

portant part of the Company's re¬
search program has been to dis¬

performance.
the period 1946-52, $53,977,000 was spent for property addi¬
tions and capital equipment. In

Banks

of

ner

and
im¬

tive

sity and for¬
merly a part¬

complicated

having

Farts

structural

associates

000,000 Metropolitan Water IN*
trict of Southern California 2N'#
Colorado
River
Water***ks

airplane

material*

terials

Univer¬

gers

for

armor

BUMS

Bank of America N. T.
and

applications,
an
important instance of which is
the fuel cell lining. Another bal¬
listic application is flak and shell
fragment
cockpits.

t

w

UmilU

Ballistic

number of uses for FRP as a raw

Fiberglas has many rare
valuable properties and an

,

Waipr IlKlfiCf

parts,

tems.

products and how to
fabricate or apply Fiberglas ma¬

-

of

combe,

of much smaller diam¬

In

Ho 1

Mr.

has

investment

filters.

of
are

Highly stressed non-struc¬
for example, doors,
hatches, fairings, bulkheads, etc.,
which require a combination of
low weight and high rigidity.

Gromfi

Offers So. California

the

purposes,

lightest Aerocor is made
almost exclusively for the aircraft
industry for acoustical and ther¬
ms! insulating purposes.
Fiberglas filters are replace¬
ment-type filters developed by
the Company for warm air fur¬
naces
and air conditioning sys¬

and

Citv.

York

are

usable

be

way,

at

which
shows that the fund's largest hold¬

cent

i

itan Fund. His

dividends
much

company.

office

plishment is set forth in a tenyear chart, and in a 21-year table
covering the entire period of the

chemical

and

yarns are

The

eter.

i

Wayne

dust

fibers

Steel, Chrysler, Collins end for a week's tour of the com¬
Radio, Consolidated Edison of N.
pany's mutual fund dealer organ¬
Y., Lily-Tulip, Ohio Edison, Port¬ ization in California. He will be
ities,

Fiberglas

field,

certain

(2)

made into

are

prices.

Bank of America

follows:

as

ease

of N't

postponement
paying higher than

mean

may

tennae.

(4)

feel that

eppartur s-

that

chances

the

materials, that its use is oblig¬
atory. Included in this category
are
plane structures housing an¬

(3)

1

do

such

aircraft

For

tural

of

ties is not strong enough to

much better than those of other

so

the

fabrics

the

Rather

out.

current

(non-conductivity
electricity) properties of FRP

high

Fiberglas
Aerocor
resembles
fiberglas wool, except that the

1,065

Ludlum

land General

tapes,

hose,

also used as a
base for coated fabrics, such as
awnings, convertible automobile
tops and tarpaulins.

Allegheny-

were

binding

steam

dustrial goods.

Fiberglas

shares of Socony-Vac-

Eliminated

papers,

temperature belting and other in¬

and

shares of Lockheed Aircraft Corp.,

and

of

pressure

marquisette
cloths and
tapes for pipe and duct insulation,

Goods Corp., 3,800
Mining &
of

and

used for the reinforce¬

ment

high

strands

are

curtains and draperies,

Consolidated

Smelting

Fiberglas yarns, or strands are
used alone or in conjunction with
Fiberglas mat products for the re¬
inforcement of plastics. Fiberglas

yarns

California, 5,000 shares of
U. S. Steel, and 1,300 shares of
Western Leaseholds, Ltd.
Sales included 2,500 shares of

Associated Dry

insu¬

rubber;
industrial

fabrics.

filament

concerns

dielectric

con¬

a

and

are

(1)

sold to other

paper;

the-

date

yarns

electrical

of

plastics;

decorative

and

In

of

Oil

lation;

continuous

held in¬
cluded 2,500 shares of Bethlehem
Steel,
1.000
shares of Murphy
(G. C.) Co., 1,500 shares of Sea¬
board RR., 2,000 shares of Union
companies

manufacturers

of

manufacturing

say

likelihod

the

industry the
principal applications of FRP to

raw

a

20

In

material for
highly di¬
versified
list
of
end-products.
The principal demand comes from
as

manufacture

yarns

&

of

5%

than

more

1945,"

year."

President

purchases

4%

a

personal

"and

said,

rose

nolds

Additional

shown

1952, a continuation

of the trend in effect since

of Mead Johnson, and 3,000 Rey¬
Tobacco.

have

to

over

are

ruled

past six years.

tanks and
transporta¬

strands,

cold, reduces replacement and
costs, has decorative
savings in

have expanded some 1000% in the

(marine, railroad,

Fiberglas

of

NEW

ap¬

Fiberglas textile products

not to

certain applications. Sales of FRP

truck, automobile and aircraft).
sist

appraisal of a
potentialities. This is
that substantially Ni¬
ter than present market opportu¬
nities for buying the stock are

company's

value and provides cost

by

pntnanly

the stock market's

maintenance

insulation

.equipment);

process

the

over

and

for

similar

and

pliances);
industrial
(roof,
pipes, ducts,

this year from

made

hehters

water

hydro-electric plant
Niagara Falls is scheduled to
into operation. The first phase
the great power development

ore

its first fiscal

products

quieting;
appliance insulation (commercial
and domestic refrigerators, ranges,

of

quarter at Kittimat for the manufacture
ended Jan.
31, last, boosted its of aluminum will be completed
total to an all-time high of $31,and the first shipments of iron

509,881, it

acoustical

and

sound control and sound

the huge new
of $3.6

principally from the

comes

following fields: building insula¬

for 1954.

developments in Canada
year," Mr. Vance said. "This
at

building and construction in¬
dustry in the form of corrugated
or flat sheeting. It transmits dif¬
fused light, insulates against heat

Company
manufactures
a
number of products, demand for

announcing Mr. Fuller's elec¬
tion to the fund's advisory board,
Mr.
Vance
expressed
optimism
concerning
Canada's economic
"There

its purchase tr

to

ignore the interim fluctuations of

the

the primary raw material,

as

the

progress

deterrent

a

interested in long range appreci¬
ation
and
who
are
willing to

The Secnrity I Like Best

In

1949.

AN INCREASE

as

those investors who are

rector.

in

did

they

as

present price should be con si rue J

Continued from page 2

the

President; the British
American Oil Co., Ltd., director;
and Montreal Trust Company, di¬

was

enough

ings

others

among

pany,

management's belief that ad¬
vantageous opportunities would be found
fox full employment of capital in common
stocks in 1954 and 1955 if (1) stocks fell
that

in¬

affiliations

Quebec
Company, President; The
Canadian Light and Power Com¬

clude,

Power

National Theatres; Universal
Pictures; Warner Bros. Pictures.
Arnold Eernhard, President, reported to
stockholders that common
stock commit¬
Dry;

business

present

Z%

(1133)

INDIANAPOLIS
Webber,

opened

a

Building
of

Ja<

bra'«U i

I
A

IV"**
*
h

<

t

tN t

>

<•

IN •».

under
G

William

u

With Goodbody &
iSjrft'.ai M t»l

TAMPA, ru

1

'
•

C >

Co*
'

'
-

b!y has Nwn a-! h t r*
Goodbody A ( ♦> Z u i

* i

%

**

*•>■*'-

*4*
*

h*

r? H-5**
#

Tke

.

*■

tS, &%& FimrmaM Ckrmacfs

J

Ttursisj,

Vh-r-v

,,

.1351
itinaed

fap^ujcaiSe to meet cf Enmpe sni

frwn jtm rcr?

the way

Report-

fen a. maygr .increase _to
prwdncttonj are easy to recognize

and hard-to

Back to Marshall Plans
SSsjrsfeB

the

ci

(

fueads

brrs&&

P

*

..4

Tl^e Vj.»-

"free totSarT"

a

the?

v t -

f

t *

„

•<*

s

to

are

pieesrtons stasttom

a

the

ky si borne,
Fudgmextz..

vesy

respen-

far

from

hSuEZJced, puhSs
puktor cxpeniitums
ex;
ami

m

cr cm

brosd

beyond tha% Uarjs,

cver-in-

~r

Federal

as

privileges Bor pirate

li-fl

^ providsd
to Er*
provided in
a2£3 Cf

Tf 5°'^
""

—

still

*>„*

p

„

If defaulters
theme are all too frecimli
f-shedL
€£D£zS2j a lack of enterprise, vtgccrnrt;
~
Thst
cm
is
where
—s~r
..^.pC^r".' Ity, ^ 1 cose; *
cmvertihlllty
.»V.",J
?.
'AT
'*&*%,
I c> midtary aid prvne*
r*
.* #,d niters
with, secmriry, an enwf-hngness to comes ia-sss the icecisve weapon
ever tbst
tary""
nr." *"* f* atmuki
covers, shoSi
cKnpete.
to
take risks cr to to fsme the neoesssry ^Ksestfc
s»»
emerge too the prcterthre ^ehs adjustments whimii which ■ the
a-.'4. repute*1! cc fuecu5.e
of prieg-ringSp sgauto-a.ireen.en.ts retuzm ts ccnvertmility would he
ccst any fcazadal
1 cr tiltrs cc tie psrt
It

if 1exros as as" art'--!

*&CZ£T

Cto bach snes

cure.

cf the seS monies

cf industry

ag

F-IX

o-

temattocal ■ssxxxzz:is behind mast

ceycod;:
The weaknesses xbkh stand to

he Ran da.1!

cf the wncM' markets The

out

iBSj

1

'

«v

^

"

test

cottsei

xraSiSwadBctal

rjsr >:«££

Trie

* J.

r. " $*

3»IirK2s2 FSaus

the
&,

f r*~.

expszt

f»*.

EgqTber

%fe©

6red

fiat

o>t

2

i-.r«
air'' ta

-

*-

*

eals were carried by

4«-

r-

■

dissects.

' j
id*; ". '.'•

Li

,

Millixxs inserted

cr.

Hi.

a

f

v

n

$-

tat fee warts
Ar.d

3..i Bsedszd R. 1, B.
ieadio?

'

-

#

Bepu.lbczn*

ir'

arid locl&ar, teti:
al isierests cf SLii

a

.fair replica oi
and of its

rather

wl

the

m

:

maze

rsic relators.

■

.

v

*

.

.

This.

*

*

.-

'+

t

'

■

.

•
<

f../1-■

our

<sf

*

; ,.;ii

-..'

ciM

i-.-jkr .snurtage dtes not

'fa

a

.4''."it

t

■.
.

r

.

at

farther ai.iatar.ee

a.*n

•.fern mtncmrg

w

they

eliminate

higher prcductsvity. what is- to.be
expected from ftorther support?
Aid

lew

labor

problem. Tke-oiier half is;
Tie

financial

data

-

The Preside Hi

ratietL

hade been

in tat

t-§

that

pci.it

cf

a

v*.-i

'

1

*. a!
«

,

\.

,f

b +

y

the

steps

t? at

take toward

can

4.*,

■

$c!

the

<+■"

4

-

0/

•

■"**,

s

t

consideration

Is

'v.'.

another matter.

f

evident

gap

s

concern,

est ion*
to

er

is

what

k-

alleviate

%

the
it

r

emphasizes

of

the

outer

financial sanity
o

our

ft

(

rgement

•

t

.'

f

'

1

warn

se&es
in

the

*

wort

•1

1*

7

e not
tons.

such

"

7,

Fto*p,;t

* r i. e

,

&*

d-

t'

n«

in

well

Hittons

r.

i

f
,

>

a

T

•'

1

*

*

'

1

g

r*

"

?:
Jj

4

"

--

♦

;

,

^

•

r,

to

*

•.

-

•"

tor." that"

translated inU, pch—•
Tariff
concesibxuf.




:-f

T

*•

'

'

mg

spree,

perverted economics

of krw

ask, what

can

do about other

we

people's- folkways?
that

fact,

we

duces

The

answer

is

need not finance them, in

our

spending proficiency in¬

their

behavior.

Why

not

take it easy and fun into deficits
if Urxle Sam stands
by to pick up
the bill?
And what guarantee is

there that by continuing the sub¬
sidies we would pave the

way

con-

veT1^b■^Ii^v',,
That

no

Europe's ".over-all

promise for the future.

v t r

'*"*

.

recurrent

tively

It has

circumstances:

favorable terms

rela¬

of

trade;

reduction of dollar imports
by
ruthless restrictions; lining 011 (or
cff>
inventories:
moderate
in¬
crease

of

aifdional

the f allow-

v

rich

The

exports

to

the

dollar

area, thanks to

tot

*4

«*;

!.•

to

Itcw

*

5

.

freetHi

c*r s

the

day, I&54

stand-by

Heserrei

stabiitv'cn the
dollar—«i^*Co con.

back of the

the

.Randall

against

up

As

was to be
expected, the proposed perpetuation cf
large-scale

foreign

ail.

is accompanied
by
exp-stihtiors about
American trade policies. Our
farm

vehement

a

no farm representative
among the
Presii enHa I

appointees!),' which
The Commission

leads

nowhere.
that

farm

problems

are

thinking and resulted in mid¬ beyond its

its

dle-© f-t he-road

which

compromises

competence, and offers
solution.
It is satisfied with

no

unsatisfactory to all creating the misleading impres¬
concerned. They are too timid for sion that our domestic commodity
the one side, and too bold for the supports, plus, agricultural import
are '

Its report is a-ware cf the
of

life:

that

dollar

no

aid

duties and

embargoes,

major

are a

factor in ike world's dollar short¬

make countries sell-support¬ age. It does' so by failing to bring
ing if their own policies stymie home that the viciously "autarch-enterprise, discourage incentive, 1st* farm policies abroad (such as
saving and work. Yet, it chooses the double-price system a !a Brancan
.

to advocate

global
can

putting the burden of

collar

shortage

stabilization

on

and

cur¬

the Ameri¬

taxpayer.

nan

that Britam is

with,

experimenting

top of subsidies, tariffs

on

and quotas for ism products) arealtogether' independent of ours.

there

Er.go of
is

last' decade:

the

ballyhoo about

mere

no

boon to

Europe: they reduce our

competitive

powers.

As to the tariff, the report sug¬
raising the living standards of the
world's underprivileged millions. gests that the President's expiring
power under the Reciprocal Trade
The
claim
cf
underdeveloped
Agreements Act should be pro¬
areas to a right to American as¬
sistance is answered with a cate- longed for three years, duties to
be reduced at his discretion by
llphkal. We recognize 110 such
annually. Of course, tariff ad-1
righ-tL*
{Mr. Milton Eisenhower

other

and
outs

to

like

this,

protagonists

Latin

will

nor

themselves.)

of

America

hand¬

will

the

Does this

not

Latins

mean

that

aid should be granted to
those areas? Or merely that such

no

more

aid should not be construed

obligation of the donor?
case,

as an

In

any

such

no

(though it is far less "barbarous
than the totally arbitrary admin¬
istration

of

American imports by a

to

escapJ

reparations. The

obvious implication ■ is that what
is not sauce
for the backward

is

for the "forward*

sauce

gander. And it is
are
as

we

shall

need

see

now

sauce we

presently.
be

for further economic aid

form

of

grants*

to

no

in

Europe.

This sounds reassuring: in
reality,
it is little more than an irritant
to the Europeans who do not like
to be reminded of their humiliat¬

ing position. Otherwise, it
nothing because:
(a)

^exceptions"

means

of

are.

in view

expected, they

the

,

related trace
ofto

these and

aroused tne
ot

protectionist wing

Commission.

In one

understandable.
our

compared with the

that

by

erected

stractions

and

titled" to

protection

retention schemes,

may

a

dis¬

price Britain

availability, and quality

.

.

.

govern effective procurement

g

hy

subsidies—practi

the Randall

on

nh.

exc

against w

European competitors.
"Our actions must be

placed abroad

mod*

trad

dumping—selling with
exoort risk guarantees,,

and direct

be

|

that

fest

in the form of off-shore
procure¬

...

r

import controls ^y°?a'„en-|
American industry* is

ment, the volume of which is not

generality:

out

It points

contracts

possibility,

respect

tariff barriers are

erate

of

permitted

are

observed.

as

minority report's censure

to

appears

Small

concessions
was

rich

supposed to keep dishing out,

'"There
the

a

be strictly

the basis of considerations of cost,

5% "wage round,* which is

:

the

circumstances might be re¬
on
short notice.
A fresh

these

few nu -

language is ad¬
dreds of millions of dollars -European Allies
drop in the bucket. At that,
who clamor more
insistently for
bucket has a big hole: the
American subsidies than they ever
clause and the peril clause are
did lor German
dressed

cf other nations 01
of uie
the

of

and Lam?

European

exchange restrictions and import
•"contingents"). All of which wouJo
add up, the London "'Economist
commented,
to
an
increase o

rihe Commission recommends that

one

simplified

ministration should be

favor¬

every

S3"}

monetary

by comparable

tually

tinct

by the Federal

bank to

Vir¬

versed

Iifchkr

naoetSEed

credits

defined by anything more
precise
than the all embracing

ord-sized American aid, etc.
able

was

goose,

lately

t

,n
-

effort

no

appraise the. discouraging re¬
and
consequences
of
the

I tot

whtoto,

to"11

(

cf

heavy export sub¬
~'*duct;vity sidies; the windfall of gold from
Russia; relaxation in the Cold
m
two
*i"'| the S'er* War, reducing the capital flight
out of European
to lane cf paycurrencies; rec¬
tod

1

^

t.r
w*.

lire

ir*bi1-

.;..itoi

3*to-t

--

*

land

thick dollar position is improved, offers

b dAdumen-

f

order. But

British

.

rocs

pu*

tm^zh

(*

f'*

a I*

ro

citify this

;

"ito.

'"

the If. S,

—

that

should

against

Hey dollar

-

"to

recipient

hand-outs

>

^

to

of

the

of

po¬

rising .faster

are

for a short
It
.'-passeswnat happened before
*»a—-^ives con- while. Presently, it is due to non¬

,

I*.

*•

-an

ton

.a

.H;

#

:

^

*

i

I

.

,

sngi-*-

of inter: a*;

maintain

male

.n

.

■

of

sults

as

disposal the

spa: toli q fee SioseSn

And it sidesteps the fact that our
productivity
i Inone
respect, however, the
bills run report marks a significant prog¬ high agrarian prices—which help
to boost our wage level—are a
their American, ress over the economic and

The Commission made

such

«st

i

.wage

Germany! 1. The same holds, more
cr less, for most cf our ""wards.*
to-

biSoa

problem in -dialectics that- blurred admits

Her labor costs per litical

output

those

-I3i'V

"gradually"* toward all-round

•--<.•;•

1

*

fc.-

wcrli

especially. And it

ami

Aim.

-

-

•

p **terv« toeir eco-

T'.
a

1'

-

tat

„***to commercial

tn «.*.
^

I*

v

benefit—ti

own

co-ntries

£,::e^.y

,2

\

t

overriding j ro .1
majority's collective n ;

ss

ito to s as tney

Ave

*.r

,

ge is the

port

B

means,

*,•

*+-'■

<j.

that objective.

terve

In

e %

shrn.1 i

Practically all its

i;

.

*

,

end*

ge—to harden the

to.

■

n#

*

*

indeed
toe

e

;

fcrk ge

to

haste

That

h

,u

♦

.•

'

of other natiers,

beginning

<•

*

^.

The *"w

4

n

rot?—but

d-tet

a I*, to.

,e

'

thnug

to

tohtol.ty and mul-

-

is that it is Aiier*
means

.■

* •

*

-.

e

rship" responsibility i?
and

r.#>«

'

•

ation,
port,

/»to

H

t

£

"to.

making it the pri-

*,

1*

cf

majority,

rency

-

prodixtivity and relatively
high wages (plus exorbitant
n preconceived
"fringe*
benefitsl). But one may
..1 p-senuce to

to ar»~nun to opin-

■#

••

•

restrlcttor-j.

Bjt toe Randall

*;■*,»

ahead,

eqtoTalents.
unit

m

pi»Aitng

1

*♦

scprened

labor

Britain,

lags far behind, but
well

-

—ITS U

if',p;«ed ty Brit-

a

<;

0

tamed

uto.toed multi-

to

He

!

f.

••

without taking that trr - r.to consideration. 5 *t %..
into

to':™"

it
4.

-

;.

scrap at

tu*ts.thedls-

:.'*pcrt

•"

Arr.enca'f ftr*
and finarxial policies h

a to to

ex:ton.ge

't

>

of

■?

>

tr:s

'

ui

In

ts."

.u-1121

-23"#

earsoasi.

Erharto to than
tnar -aitong to

^ u*.:

**

•

/

-,T

single ;2.^"
cf course t. at

a

&i.ysi;

Br

n

«

•^e, with
I nay argue,

II ion

■'

i*

.

to

•

!

,

on

and.

to

c*:..,eve

r -;r»

■**•'

,

&

perts

-

orld's dollar proble.d
Public Law. 215 £ j. e t .■
rhssion a lor.g list o!' c 1 *•?.'

referring

•

;

ver.

.Oit

4

..

?

,t

*

ns*««« is* imsfi
TStfwe Fsnrwar Tew w( UsVt
tr'.st

thesnA

Yea;n.g EeIg-an and

sup's

:

Lttt

ta*

"U-A

«.

Attantot

:te

-.:*

f/t

-

v

^ *

„.

with

mty rejert
«

^et

I

ri

^

rpcrs is denoted to
ticfe was net ass; gr<d *r? /■
report.
is piimah »v
..
-

*

»

-

.

"

^

• ra

*

"t

't.

.

tcisij, the Baodail

A

f^wrssafe
•C

us.

.

'*.

V

v

tiptk>s3

Tn«s.

Siiiraa ef pr-Xriencx

t"e m.

t

tcurrencies

ire,; «e"

•

-

■■;•*?

ijoiitj.

t

mi

;

-

,

*

„

*

■ 0

.

dollar gap

me

;?tK

.

#

*

:

*

,

tp1*.

.<

'

-

e*i-t

cr^titoted the hard

;

""
'

tu At

...•s-

'

^

ITsd.sshterij. they e-..
,
rift cf thiohLsg is *te A**

be

policy, in particular, is subjected
to a scorching criticism
(there was

Economics «f Doable-Talk

few

a

manutoc-

era

■

to.

turmg.

Ce-'fivfrtilOity

ti

The

tragedy of Britain,

is srxmsdaiizsed

one.

wages.

;eocf«tSb!e.'>'the"

trol wisatsocver over
the funds
threugii the ■ re-cpemrg of,.gold thus engaged.
and
dollar
treasures
fceM
pri¬
Aid. Y«t Trade
vately. They are bearded today

-

did/ not
topedimenti to

such

comparative
IU xdabt

feme

.

;

currerxses

as

aid-capitalistic polkies.

their fcr

•- *

-

naturally in the shape, cf
cc-mmercial capital .inflow as well
©ocae

go mart1

prodnctivity is
Europeans only one-half of
Europe's dollar
JLiUit; why

t*e
f.

■•)

■

*

In part

Evading" the

The Cc.nm.is-

ai;■

'i..fit
m

.

tat ;t is Arer-

a#

if:

r'.

.,;

^

asslating the rosi-rf, r,
o-jatxrs
into leg'^ a"
fcej are cf pcfitkai ftp'.

*

ket.

conchc-

The mere exirt-

1.

.

••'

sue

*-■*'

1

rs.4

a

*

a

.4

r at.-,-'

qui

cf

i

gat-'

■

deep-^e»>"t

than-,

< ■

*

some

m order to
If some $43 tillioo to direct aid,
This if, of not cczmttog the ^indirect* sub¬
of Irving to sidies. since the last war

strps

t-.«

,v

adjustmei-fs,

c&nstml and .sellers' mar¬

ernment

.utry fas to take

st

1

r.e't:.«<'▼

r....

\r'»j

iJtort, the Ccsmisfisr'
)

>■

r--

t

■

pure

tie

tn

:••.**

a

rie' m» r, r ■*
colj a !♦.

repccS

.

ui

*

■

tic

because of the irconverti'.b.3ity ©f
deeper the respective currencies, the istwice as —down to the whole pMIosophy sensibility of the tax systmns, the
ihanc.'suts cf security wh.rch has bees taMng inflexibility' cf price structures,
tor many
>
The rocf.
years.*"' (italics and, gen-sally, the stupidity cf

eti

■r

■•■■+■

!oet

;*a?t

To

cf 15 tit- the long" period of ccKabtoesi gov¬

t.uc unsung

as*

t

retotlos^isp l?e-

risk w%& reward.

cxtehl.;toou defensive .and passive
is atone attitudes have teen Postered by

a.

a

A J

*:■»

Wajfaod i&ass C
3—ctalieoied m a

d related

whole

toe

t45rts

tireen

cur

iuhir gsp cf 12 to
P.-:. -z ft the ether

g

A?

-

rf-j'l

tl»v

:.

the tarifl Esp-fto'to**

is

i

part t i
'*■
die fee >*

OS-

two

toe

annua!

tw-*otu while

.-g at tie rate

/

'■*

wurli is gatrc-

c-ter

«r

..

'

A to

ere

cmua;

pmjtJkrs

-vi.ars at tie

a

*..

trie bnairnsm to fto ri-

i

Witbsst making tie domes¬

134T.

fe) if Esrope wishes ts
ssk<

in

dissipated,

was

d x.T.ep.

'■*

,:

<-

sferetogmext

rvtofi-ertedf b«eca.use the figii-

loan

nadian

Fisi

tre

k"'

■

tm,

ity -of the economy has obscured ■would boomerang in the form of
toe real basis on which valid ac©- gold and debar withdrawals. But
It c;es so- nociie iudgmcnto shotod be .made. if the- adjustment5 are made, little
,* ■ s *t
g a, "better hustlfi— These, weaknesses, axe due to part if
any
ccsts.ne
aii
f.» ttii atht-de than the to crippling toxstto*!^ whMs dir- needed. In fact, tie ^aM

rrs%rity aid pciri uT

V-s$

.

Oftsrm

"Be1 pred-

uj

'»■ n

I

U

emd

re-ejaipmexi

4rtep

■U xes it up ex-

si

j

.,

1 *

3

to

tn_j

invcivei

tempt

f

&•

li„

.-r

y 4*

Mi

'*•*

a

■

■

o-sttoy

convertibility

t

■

.»

f

1

grarfc",

oadright

.

l5,

r.'.v
f 1

to 'f£ad -that- riirri.to

?*

f. exreptuuc is the

a ;; are4

.

the

*

this se?-i>i ft if -jC

ires

jig
'

'gold arj dol¬

*

talBJoa:

cf SI

dL liuSw

"r'Mwi'i

-

■

I r"'

«•

11.11.^%,

i,

bh&t their

.

«

so1

AH?
£l*Xl i

-A"; >"M|"""r--iVtr'^'y

wBA-in.

tonnstrtol

to

*.

r

-

the

of

cere,

cnS-to rules.

trate

increase

ana

*

*«'

iteinc* hlx rival is'-r-e C*

Even

,

,

McD&raii

terefx'ULrxs.

xt
a

" 7

.1

^

aa»ocifta2feg ' c r*. ri* i
prpeHaerit in adJwart-.jf ■*- »
r
cscnxry zpp&arth? re5'
t
.15 BriSalk^asd the dzLti *.* t. e
wcAe-n wes:t.es r*nf
At
i to
be expects!. 'risrtri * s
y ere. else' is'. T£ffts>' £. •? *' *•
:ed gererielty at the ct;e
•"
£e Arnaricss taxpa re.r
C•2,

Mr,

;

f/'e

i

•*.

m'-rn

jurt. Joans, are
capital devetopenent and re-€cni.p- lar lessrres have to he •"adequate*
reco^^pp^
X1*'
that tue "Buy A-merhai'"" mffrf... is Ihnited to many ptoses —gaesziing that, a hugs American -where^sappor: is
tsm
t* c »; 1 b* ft-azel Itr the bemeSZszjf-.rws
or
by attotnfes lis industry Itself eremt must be made available—
1+
•r f
4
*
j bt«»>se si .1 f.*;es which .rather than by a lack cf savtogs. implies that th^y refuse to make DSiSaiT operaSira...
ievotd
ecomxmc csmam.tr cf
luid E-t Euri-peai Tto often ze-eetogrresf is
a e^tL
"ie necessary adfustments Irs '.Bs¬
"t
v -1 * Ave r» ' B.y Domestx"" ited
which" makes
by the rsfmctsxce cf crprx- cs! monetary ami trade po-iMss- snstafn,every
1
*
V'4.,. *.. trey wali scrip -de itei toner to
country,
frso
permit ccewwties cf li S3, a muhs-hillksn stabilization
Korp.^
; 4•«
rft■ -t ft*tnuw«its .;ust do ryrxp©?r«T t@ be realized ami by credit socks «eM he wasted just Norway, eligible for
t
;..
a' : .ac. Ct ;-uuuu az they the relmm&ee
handouts;
lastly,.
of csrpitol to rtok as the S3 hilBcei Americsn-Ca-

€to'*

So

eopascrir. ort + to

©cc

esttolishef

or.

tS

*

,

efforts

rnatched|
—

parti

.on.^rV

free

•

j.

report announc

^

that

emnly. But this is not folio
by concrete rvmoosals. 1

pol-

lying

philosophy

may

fiUm-|

Number 5306

179

olume

The Commercial

...

and Financial Chronicle

(1133)
and

ire scarcely significant; instead,

increase the efforts for their
armed security — which
is
primarily at stake, not ours

tinued

landouts are to flow in indefinite

when America has

to

uarized briefly by saying that the
commercial concessions proposed

vith no

;;

—

coherent

unlimited time,
control over their use^no
for

amounts

an

adopted the in¬

theory that they have

be supported with

liiid pro quo asked from the'ben¬
eficiaries, and no other consider-

ing their

ition

was

to

without do¬

or

share?
The balance sheet of that

for guidance but our alleged

own

sharply

drawn

Fallacy of Military Aid

The

the

for

excuse,

or

Randall

ap-

fairs":

War's
idea

Plan

Iarshall

end

of

self-supporting

:urope

to

last aid to end all aid. What

ous

presently is military aid,

..atters

ombined with such economic
istance

"needed"

as

to

riends

do

to

allies

their

and

share.

own

[Which is tantamount to the economist's
self-effacement,
surren¬
dering his function to the generals
admirals

;and

to

or

—

the

the

But

and research.

"Tradm* Places With the Customer"
Years

Whether this is due

Ohio,

alien

by

gifts
distribution

by wide
printed or spoken

of
of

word,

by

the sharing of technical
knowl¬
edge.
From the earliest times
.

.

.

nations

their
and

have

allies
their

given

and

assistance

bribed

enemies.

gency
measures
have utility, but

As

self-defeating.
gency

become

an

such

turns

emer¬

methods

soon

Once

measure,

recipient

an

him

emer¬

methods

against

the

the

Italian

E.D.C.,

reluctance

is

immaterial.

military aid
disregarding

to

Western

Europe,

special situations of limited scope,
on
the way to losing the last
thread

of

rational

has

lost

Commission's

vocacy of both—the one in

inhibited, the other in
fashion—is
ward:

an

definite

a

to the age of

ad¬

how

added

interest

ward

back¬

definition.

a

is worth

anything,

about

value, if only
the "potential"
country.
tary aid

by

strengthening

of

the

respective

Vice versa, every mili¬
serves economic

purposes,

votion

to

free

competitive

whose

prop,

ex¬

istence

ol

large-scale troop expenditures.

expenditures.

arms

In

fact, it

is

largely military aid to France,
totaling in the current year about
"$2.5

billion,

that

her

balance

of

covers

most

payments

of

deficit

while the counterpart funds of the
same
handouts take care of her

accompanying

vulnerability, is contained
major

contribution

to

in

the

our

troop expenditures, of which
$210 million flows from personney

and

pay

the

balance

from

more

good than does

off-shore procurement which
up

The

sinews
of
war
we
furnish abroad are an
unbearable

burden

the

on

recipients,

or

'an

annual $1

to $2 billion

the

already,

Randall

resources, and is to be
contrasted with the 12% or so of
armament

economy's

product wasted

in

Should
with

defense.

self-armament

EDC, inflation

sibly

break

here,
the existing slack and
Bearish

Included

in

in

come

pos¬

taking

up

objective bal¬

sheet must be included

ance

liabilities.

Foremost

of

we can

"show

Europe

—

still 'and

not

tions bv.

aside

if

as

they would

match

our

prepara¬

adding to theirs.

the

propping

waste

and

stand

Leaving

corruption

in our world-wide
'infrastructure" projects: how far

'can

we

some

up

this

carry

of

be

or

tremendous

wasted.

amount

What

"Allies" refuse to

our

along further
The

race?

The

turn

go

"neutral"?

build-uo
risk

if

that

would
a

huge

of

equipment stored
might
fall
into
enemy
hands is not
negligible either.
abroad

window

of

If

-

stopped,

it

of

turn

may

colossal
n

friends. In
out

actually
is

six

to

have

a

of

in¬

war,

been

a

military
iEfarope that by

time should be
perfectly

taking

care

of itself.

can¬

The

nations of the
(still-born) Eu-

opean

Defense Community
alone,

a^T^kout
the
na Dutch
bined

French, Belgian
colonies, have a com¬

population

of

158

America's;
capacity
penor
m

0f

to

40

million

Russia's, to

a

tons,

say

steel
su-

nothing

their superior
skill and knoww.

With
,

Britain

should be

X,™, for the
rnn!i
-

millions,

and

they

mtortable

and

the

more

rest,
than a

Soviets. But why
break down their

domestic

rigidities




they

were

emer¬

with

the

and

politically

unpopular

And midst the

is

that

by

prosperity there

relatively

ahead,

little

U.

S.

Whereas

used

to

the

be

the
of

source

expan¬

the

of

all-out

an

subsidy here, on an ability to pay
criterion; the burden has now
been

largely shifted to the shoul¬

ders
the

the

of

Federal
of

extent

Republic—to
billion

1.2

marks

the

from

for

reason

as

of boom.

and

I

had

customer

heard.

Without

went

refunded

said, "I am
displeased
but

Leslie Securities

at

industrial, public util¬
ity and railroad stocks and bonds,

bank

and

Harry

insurance

fund shares.

mutual

B.

Frederick

stocks

and

Officers

are

Leslie, President, and
M. Riekert, Secretary

register
Then

money.

sorry

or

your

you

were

back.

money

customer

turned

to

father, whom he knew quite
well, and asked, "Why did you
give that woman her money back
argument?" My father
"Once in a while I find

an

replied,
that

people

some

able

and

she

unreason-

That

was.

snagged

was

are

she

and

it.

for¬

But rather than have anyone dis-

satisfied and go around town tell-

and
year versus

problem

Treasurer.

Both

were

$37

is

in

(Special to The Financial Chronicle)

LOS

absence of

a

shortage of

Highly-taxed

bonds and stocks Hutton & Company, 623 South
compete with a government Spring Street.
Miss Brown was
bond yielding 5% tax-free.
Sie¬ previously with Merrill Lynch,
mens
just had to pay 8% on a Pierce, Fenner & Beane.
must

the
operation
funding.

was

largely

so

re¬

-

Gap

Three With Sam. Franklin

>

(

i

Along with her embarrassing sur¬

she is piling up
huge trade surpluses of unus¬
able
g o o d s — a
real problem
which may be costly to a nation
which
has
not
yet learned
to
in

function

a

creditor.

sell
in

bad

deal they
those

even

unfair make the, best
I

can

i

Sometimes

get for my
things
I

defective; that happens
line of business. I can't

are

every
rery

help it and usually the manufacturer can't either.
-because

fund

I

I make the
know

re-

the

that

firms from whom I buy will back
me

That's why

up.

(Special to The

LOS
A.

of

has been

I

sell

I

mation

selling 1,000?"
The 1,000

the

called

him

the

that

was

He

thanked

be

should

to

me

the

customer

informa-

encouraging,

and

me

this*

of

.

latest

more

hold

change

temporarily;,

future

I

company.

£0id

received infor-"

I

least

at

concerning
and

2,700"

agreed.

cayused

that

ni'ind>

Bon

t

as

agreed

thfefe

the

remaining"
x 700 shares pending further developments. I passed a commission on lj700 share{5 of stock but.

the

customer's

most

welfare

1>700 who do
the

order?

business

me

And

how

about other

develop as a*
taking the advice given

in

you<n
the

ag0?

years

your

customer's place,

never

have to look for

customers";
1list

win gcfc

think

will

many

V0Urself
and

the-

to sen thafc

comes

you

that

reSult of
to

is

important consideration,,

when the time

and 'it

same

works

it

as

iittle country store

did

today

in

years

that.

ago

in.

best sales talk I

^hen

I

told

made,

ever

prospect not
buy lf you think the timing if*
wrong—the investment is wrong;
a

to

anything

—or

don>t

be

or

is wrong—
diSCourage a

else

afraid

customer

to

prospect from making-

unwjse decision.

an

sions

you
earn

kind

of

don't

The commis-

make

today you.

tomorrow—the*-

double

integrity

that we build
jnt0 0Ur relationships with eachother
today
will
become
the.
foundations

of

of tomorrow.

like

ple

a

America

better

In fact, it was peo-

father

and
many
businessmen both
]arge and small who built this*
country into a nation of moral
and
intellectual
integrity.
The*
other

my

unsung

opportunity

same

wm

and

]ong

freedom

as

jand

0£

continue

exists
to

do

reigns

today
am

so

in

this*

ours<

good

Hemphill.

Noyes

&

me

pays

of

form

do."

can

of

small

town

when

years

wide

about

40

years

there

a

Even

in

was

was

pe-

a

running

business.

panic he

a

he

living

the

more

Co.,

i

and

failed

to

sometimes
He

for his family.

the

old

time

valued

his

good

of

510 West Sixth Street.

never

(Special to The

keep

earn

Calif.—A^elyn S.

Jensei) has joined the staff of
John M. Barbour & Co., Citizens?
Bank Building,

a

a

little

With Hannaford Talbot
(Special to The Financial Chronicle)

SAN FRANCISCO,

Bayliss and

was one

merchants
name

^

Financial. Chronicle)

nation¬

able to

his doors open and during all that
time

John M. Barbour Adds
PASADENA,

My father went through
riod

f

to

It

other

any

Goodwill Must Be1 Earned

Chronicle)

added

received.

than

advertising I

ANGELES, Calif.—Josenh

Dalton

staff

Financial

value

ple

Hemphill, Noyes Adds

EPU,

as

business.

better

Chronicle)

LOS ANGELES,: Calif.^-Russell
Ironically, Germany's great' ex¬ W. Gerst, Robert L. Mullins and
port, success, combined with her Minnie -Stober have become asso¬
import austerity—creating a mark ciated with Samuel B. -Franklin
"gap" relative to the soft cur¬ & Company, 215 West Seventh
rency countries—must be included Street.
with
the
negative potentialities.

pluses

that

find

I
are

that

the-

merchandise and try to give peo¬

(Special to The Financial

Mark

A

a

got here,
few who

advertisement

ANGELES, Calif.—Lucille

E. Brown, George H. MacGregor
capital market, with and Clarence L. Warren have
a long-term capital.
been added to the staff of E. F.

long-term bond issue, and even

ing people what

completely
said, "I have

The next dav

,

told

sold.

were

my

I

whole story

How about

said

sweater

knew

iViillion given by the U. S. Par¬ merly with Bonner & Bonner, Inc.
ticularly in view of the continued
Three With E. F. Hutton
refugee influx, no solution of this

($300 million) last

and

He

I

things didn't

Qhio

my

without

the phone and

Some

could.

was

other

of

client oifc

new

a

on

promising.

straight

.

The

day
me

it.

too

SLThe
store, her mission aixo pli

Wall

in

the

remember-anybuy here must be sat-

thing you
isfactory

52

and

word

a

the

to

her

he

offices

first

woman

her

father

my

|

with

him-

excused

complaint.
She
heatedly told him the same story

war,

Leslie Securities Corp. has been

My father
walked

standing with

was

He

his

was

and

rumpus

quietly asked the

country will settle at a healthy
normal economic growth, in lieu

Formed in New York

and

refund to which

a

to where I

self

snagged

entitled.

customer.

he

checked

shares.

as

the

that this customer
not

was

over

soon

other jagged prohad caught in
the

trying to obtain
she

ready showing some tapering off,
it would be our guess that, barring

dealers

j

that

or

that

foundation

asked my opinion of a speculative
stock.
To the best of my ability

a

that

seen

solid

The other

Anyone could

been

nail

and

yarn

as

loyal to him and.

were

a

mine called

the

large tear had been made

a

lection

activity apparently still
and with production al¬

holocaust

it.

wear

had

some

built

customer the

me

one

else

I

con-

into

that

anything

An>r Business or Profession Must
Serve Wel1 to Grow and Prosper

improperly knitted

unravelled

believe

than

got;

never

telling all

am

goodwill,

watching

to

Dad
I

my father al~
"Put yourself in the
place."
He did thatr.

said,

People

he

a

customer

a

condi-»

because

was

too.

bought lor her

readily

heard

a

permanent heavy

it

sweater

unemployed, with
particular incidence among the
white collar contingent.

Street, New York City, to act as
underwriters, distributors and

a

and

have

still 223,000

With

is

it

came

complained
was

he tried to

on?

on

woman

husband
that

more

it

customer's

Advertising

sweater she had

a

necessary

employed, is

a

discourages
in

that

irate

thing

Mook

father wait

my

Behind this

freedom"

burden.

I

are

exerting effort

was

if

I

the

that

store,

business

reason

that

made

ways

there

between

retail

business by

very

though they were, enacted under
the aegis of those forces.
How
long will that honeymoon carry

are

town

store

of

Distressed Area, with 220,000 un¬

financial

If

policies

One day while I

were

virtue

by

formed

to

mal-investment. In peace,

preparations
ape

major

a

economy

Another continuing minus is the
re¬

duced,
stead

fact

measures,

sight.

or appreciably
foreign aid is bound
boomerang—to make enemies

free

a

facilitated

country;

costly economic institution.
strategic political necessity, this

political-economic

Perpetual Spending?

the

most

A

nature."

It's Good

is

the still awesomely rubble-ridden

City of West Berlin.

As

structively.

some

these

Another fallacy of the
military
aid is its
implied assumption that
build up a Maginot line in
that would match Russia's

a

gency steps enacted in an occupied

the

more.

Items

our

education.

and

even

The

is

that

to-

matter of degree only. The fundamentals are the same.
You build

the

report.

The more
weapons
we
provide,
the higher will
go the costs which
do not even
account for the ob¬
solescence of weapons.

out

of

sionary

then

may

took

step

de-

a

per

must realize that the

we

greatly

gross

so

they complain, unless we shoulder
the high cost of
maintaining, stor¬
ing, servicing and renewing — at

according to

uses

real

an

forms

This does the recipient

country far

the first

ating.

A

coun¬

The concept of
volves more than

military aid in¬
one
fallacy. In
place, it is self-perpetu¬

our

try's surplus in the dollar area is
the
$250 million received from

P-X sales.

budget.

Again

mar¬

directly or by indirection, if only
by relieving the subsidized nation

harbors

He

first

or

possible for that little
country store to go on and prosfor a good many years, and

job of that,

items.

my

difference

any

institution of urgently needed re¬
recovery

in

merchandising

kets.

One

learned

a

successful in selling securities and
those which can be
applied in a

Boomland Germany—
For How Long?

it

other

"human

small

is of military

after

I

rich.

ap-

with

neat

a

business

a

wearing

started

customer

always ate regularly in

we

house

this

things

Marshall Plans.

be¬

-called economic aid, provided

tions
our

grew older I worked in that store
and I learned quite a few

self-defeating

Continued, from page 5

In reality, every so¬

of

and

make

he

step

competition

which

on

good

a

serving member of the community needed credit. Regardless o#

about

was

counter

he

shirt,

to

an

tween

.

First

un¬

is

military aid and economic
aid is a fallacy. The Randall re¬
port, for one, makes no attempt at

the

equivocal

an

unless

the

first recol-

m,y
when I

assortment

parel.
man's

Randall

in

up

credit standing.
He had a one
price store and he sold for casht

a

of age my father took

behind

an

it

long ago.
The

as

wrapped
packages and patiently showed me how to tie up

justification.

assistance

was

grew

of

in

what

known

he

is

Economic

I

One

five years

operated

was

store.

lections

little town

a

father
days

business.

me

in

ago,

ipy

those

general

to

What matters is that

neutrals

such

they

to

join

and

in

com¬

distinction

very

the

money,

manding politicians,
i

charm

the

as-

(by military

enable

tandards)

to

the

making
the fa-

—

By JOHN DUTTON

emphasis, if cautiously
only, from manpower, bricks and
ships to planes, super-weapons

French

"Governmental programs, much
emphasized in recent years, seek

bargain. That is where official
hinking stands now, having run
he gamut from the charity apthe

Eisenhower's

Foreign Relations (in the Janu¬ to a new
strategic outlook ("peri¬
ary, 1954, issue of
"Foreign Af¬ pheric defense"), forced on us by

be

at

President

armament

an

Securities Salesman "s Corner

Fortunately, American military
thinking is not likely to be stag¬

on

oroach, leaving aside other argu¬
ments
occasionally thrown into

roach

level of poverty."

same

by

not suspected of
being
isolationist: by W. G.
Mallory,
Executive Director of the
Council

National security is the reason,

mark of

a

indeed, if con¬
bring the giver

long may

the

nant.

up

and,

budget for fiscal 1955 shifted the

an

I

The subsidy is

inferiority;

theory

American

real national security interests.

jr

donor.

own

33

and

who .now

,

otto C.

Calif.-^Jack
Dockter are*

,

with Hannafo d & Talbot

his 519 California Street,

„

34

(1124)

The Commercial and Financial
Chronicle

fered in Canada, with assets
$48,482,000 on that date.

Crossman, chairman of the board
of

directors

firm,

Mutual Funds

The

nomination

Colonial

Fund, Inc. into
open-end investment company,

an

or

mutual

anniversary this year, ii the old¬
est leverage investment company

the net asset value of its

holders.

stock

James H.

Orr, President, in his
stockholders, states that

letter to

the directors have the matter
der active consideration and

plans

are now

un¬

that

being formulated.
that problems of

He points out
a

technical nature exist and that

there

is

Fund

wil

no

that

the

"open-ended,"

but

assurance

be

that he is keeping the stockhold¬
ers informed "since such a
change
would
and

be

fundamental

would

require

in

nature

stockholders'

action."
The

Colonial

known

Fund, formerly
Railway and Light Se¬

as

curities
1904

Company, was founded in
and, in celebrating its 50th

$13,994,000

Feb.

of

Fund

in

the

vestment

adviser

Colonial

He

of

The

the

the

firm

which

in

acts

is

50%

Hosiery

in¬

started in the first two months of

1954,

added

with

compared
last

method

on

similar

This plan

year.

of

the

Plans

is

Dividend

periodic

purchase

a

publicity
of

stimulated

investors

not

just

on

versified

in

a

the

of

on

SECURITIES &

CORPORATION

Established 1930

120 Broadway, New York 5, New York

a

ton

di¬

man¬

ing

approximately

on

BALANCED FUND

idends

Quarterly llitiiileml
b

ers

of record at 4:30

24 Federal

&

Co.

In

by
the

record of

paid

by

computation

of

quarterly div¬
the fund and a
current

Amarillo rancher.

return

"It is

Quarterly IJinitlentl
sharehold¬

P.M., March 15, 1954.

Street, Boston, Massachusetts

are

balanced by a

in

bonds,

currently
stockholdings
30% weighting

preferred

stock

and

cash.
In

our

listing the investment hold¬

ings, the

sent

the

Crossman, "to

broadest

possible

repre¬
cross-

section of

business and industry in
our
advisory group. Mr. Bomar
brings to us a wide knowledge of
general business as well as de¬
tailed understanding of the
speci¬
fic industries with which he
is

common stocks are clas¬
sified according to the
number of affiliated."
years
in which they have

paid

continuous

dividends.

More

TOTAL

than

******
mmmm
***m

NET

assets

of

the

six

of investments are in com¬
panies that have paid dividends
without interruption for 15 to 50

investment
companies
in
this
country and in Canada under the

years.

exceeded

40%
"•■■■■■■■a

management
of

WILLIAM

P.

BOMAR,

Fort

Worth,
President
and
General
Manager of Bewley Mills, has
been
the

nominated
board

western

of

as

member

a

advisors

of

of

South¬

Investors, Inc., Jerome K.

of

Calvin

Bullock

$250,000,000 at the
February, according to an

nouncement

made

largest fund

under

today.
this

end
an¬

The

manage¬

has
and

investment

the

of

PHILADELPHIA

in

1930

Ltd., of¬

whose

with

in

crease

the
lion

$8

assets since

less

The Fund
of

$17.23

per

shares

afraid

he

common

closed

share

jumping

stocks.

concluded, "more

medium

dividend

of

of

Eaton

Fund
of

88th

cents

is

of

with net

equal

15, 1954
dividend

attributed

Fidelity
people

funds

to

TRUSTEES
Stock

of

Fund

Eaton

the

as

through which they
their

investment

ceive

the

and

vestment
that

and

provided

accounts.

the

share.

Thisj;

quarterly

divi--

15,

1954.

In

1953

quarter

re¬

cents

fund

of

income

-.x.

care

during

the

year's

each

first

quarter.

believes

the

growing popularity of
companies is in its
early stages and
that
much
greater popular acceptance lies

THE

investments

ahead.

He thinks

becoming used
medium

like

nies which
are

that

to

people

fluctuate in

entirely

at

the

paid

in

share

year's

sets

$300 mil¬

1953

from

end,1

63

with

10%

stores;

ported

nearly

$20

when

Walter

5.7%

million
of

resources

climaxes

mark

increase
of

the

last

3.9%

year

Fund

at

resources

complete

1929,

was

an

end

of

year

$194,769.

were

the Fund

the

of

to¬

of

in

ord

Fund's

the

and

7.9%
mining

in

parts;

4.6%

in

depart-'

and

metal¬

in machinery;

4.5%.,

in sugar;

in milling and baking;

supplies;

3.8%

agri¬

in

manufacturing fields. 8.5%
was
invested
in
bonds, and

in

preferreds.
H.

Fund

President

Watson,

Distributors,

record,

At that time,

sales

of

Value

of

reported rec¬

Inc.,

$1,535,279

in

all-Philadelohia
THE

enterprise, organized by Mr. Mor¬

VALUE

Fund

LINE

ported total net assets of $7,130,-

ment

415

accounts

friends

could

collectively

of

be

his

family and

managed
individually.

than

with

list

a

of

shareholders

bering

approximately

the

states

48

countries.

tribution

the

the

of

This

of

the

be

Fund's

ownership, according
prospectus, is in ex¬

assets

story of

a

ent

today
Mr.

Standard

as

well

added

and

more

than

20,-

the

12

than

it

Morgan

was

no

Com¬
5.7% drop

a

Average

Poor's

and

in the

drop

10.6%

Composite Average or
1953. In addition to

in

cents

capital gain

share

a

18

cents

divi¬
share

a

during tne

income

earned

112-month period.

differ¬

25

and

totaling

from

stated conservative in¬

policy that is

share value at

reflecting steady
com oared
with a

distribution, the Fund paid

impressive

growth
$34.7 mil¬

per

a

as

stocks

dends

Fund—it

in

in

100

share, net

1952

r^ n ° °

Value Line

$1,000,000.
the

$6.11

of

a

$6.11, unchanged

posite Average

Wellington
to

cents

was

6.8% drop in the Dow

foreign

continue

holders

latest

of

in

a

12

of

the

end

vr o

r»

120,000
23

from

the

num¬

31, 1953.
After
capital gain dis¬

Dec.

for

value

asset

Moreover, members of

substantial

shares.

in

and

of

as

adjusting

better

Today this multi-million dollar
company is nationally-known

ago.

years

summarized

At

U.

S.

year's

the

end

Fund

and

Governments

34.7

held

other

cash

9.7'% secondary bonds,
preferreds and 43.1% commons, yepr
ing 19. industries with its heaviest s
commitment
in
National
Homes
serve

bonds;

Portfolio

in

changes

the

fourth

EATON & HOWARD

EATON &

BALANCED FUND

HOWARD

STOCK FUND

PROSPECTUSES OF THESE TWO INVESTMENT FUNDS
RE

pany

and

its

shares,

available

upon

request.

39

Broadway

INC.

New York City




YOUR

ON

THESE

LOCAL

MUTUAL

INVESTMENT

FUNDS

FROM

EATON

DEALER, OR

YOUR

INVESTMENT

DEALER

MAY
OR

& HOWARD

Incorporated
Cleveland

BOSTON

Chicago
Los Angeles

F. EBERSTADT &
CO.

AVAILABLE
FROM

including

the price and
terms of offer¬

ing, is

PROSPECTUSES

OBTAINED

San Francisco

Hugh W. long and Company
Incorporated

Westminster

at

Par\er, Elizabeth 3, New Jersey

24 Federal Street

BOSTON

333

Montgomery

SAN

r
•

Quar

Diversified Investment Fund

Prospectus describing the Com¬

re¬

gan with the idea that the invest¬

vestment

A

rep¬

industries

the month of
January, 1954, bringing the Fund's total
net
assets
to
$7,400,362
with
1,593,996
shares outstanding at Jan. 31, 1954.

its

000 shareholders last year—is the

Manhattan Bond Fund, Inc.

a

as¬

stocks

28

steels; 6%

in

cents

other

Gavin

Line

of

common

aircrafts;
6.9%

building

capital

4.3%

45

equipment and the balance spread

in

out

$280,894,213.
By way o f
striking contrast, Wellington's
first

in

auto

cultural

in

taled
total

in

in

value

income.

79.7%

machine tools; 4.2%

high

new

the

Dividends

totaled

companies

ment

President,

of

Asset

$4.55.

earned

invested

was

resenting

lurgical; 6.1%

The

1952.

was

lion mark in assets by the
25-year
old
Wellington
Fund
was
re¬

by its
L. Morgan.

of

end

share

per

At

THE CROSSING of the

REPORT

compa¬

price, yet
long run

in

sound

are

investment

an

investment

ANNUAL

15-month-old Value Line Income
Fund showed net assets of
$5,865,083 as of Dec. 31, 1953, com¬
pared to net assets of $553,141

value.

a

cents per

dividend was
per
share.
Both divi¬
dends approximate the per share

large in¬

He

first

21

combine

can

funds

Howard
declared divi¬

have

business March

to

medium

professional

same

attention

fact

turning

are

22

&

dend is payable March 25,
1954, to
stockholders of record at close of

the

the

,

to

5,326,261

consecutive

of

of record at

1953 the first
quarter
was 29 cents per share.

90th

Johnson

share

quarterly

payable March 25

$3,500.

more

Howard
declared

business March

average

Mr.

result"

per

consecutive

1954, to stockholders
close

then

growth

&

have

30

amounts to

that

a

and more in¬

finding a happy
Wellington's balanced

in

of

r

but

straight

As

In

the

on

people

bonds

vestors have been

TRUSTEES

$50 mil¬

1953

$91,793,299,

that

with

of

dend

of

Diversified Growth Stock Fund

are

Balanced

in¬

the first
a

find

dissatisfied

outstanding.
The
individual investment

lion

3, PA.

We

are

into

continued,

on

than

growth since 1950.

assets

changing

mutual funds
balanced funds in'

general and

particular.

as¬

million

and climaxes

year

meet

still bullish

m

in

This

than

more

Behind

Fundamental Investors, Inc.

I

that

distribution

a

to

5

lows

management

nadian Investment
Fund,

all times"

by the Well

from

time

$50,000
now
amount
to
$100,625,715 owned by close to 30,000
shareholders
throughout
the
country. The new high mark fol¬

their families

Prospectus from

or

back

ness

to

,Fund, which started busi¬ program."

and

Shares, Inc. with
high of $128,next largest is Ca¬

new

The

into

companies

the

a

at

defined

as

"Today," Mr Morgan

of mutual

by Fidelity was reported by
President, Edward C. John¬
son, 2nd, who said that resources

19281

investment dealer

tnne

Fidelity

moved

its

cess

your

with

sets top the $100 million mark.
The crossing of the $100 million

to

FOUNDED

just

select group

assets

at

investments

ington

conditions.

ment is Dividend

429,000.

Corp.

assets since the close

effort," said Chairman

of the Board

The folder shows that
the fund's common

22 CENTS A SHARE

to

a

Long

completed

F.

Joseph N. Fisher, real estate oper¬
ator; Dean P. Guerin, investment
banker; Ralph B. Rogers, Presi¬
dent, Texas Industries, Inc., all of
Dallas, and William I. Clifford,

folder

new

and

investments

which is 5%.

STOCK FUND

Dividends payable March 25

W.

a

outstanding

Directors include Mr. Crossman,
expert and attorney;

gain by invest¬
Investment

fund, just

folder is

EATON & HOWARD

90tfi Housecutioe

that

Hugh

30 CENTS A SHARE

-i

can

Diversified

Fund" is the title of

EATON & HOWARD

88lh Qonsecutine

in

most

Co.; J. L. Latimer,
President,
Magnolia
Petroleum
Co.;
H.
N.
Mallon,
President,
Dresser Industries, Inc.;
Stanley
Marcus, President, Neiman - Mar¬
cus Co., all of
Dallas, and Robert
McWhirter, President, First Na¬
tional Bank of Paris, Texas.

proximately $500, twice the re¬
quired sum, and subsequent pur¬

"WHAT YOU

Texas'

include

Lone Star Gas

$100.

Dividend Announcement

of

advisors

Brown, President, Mercan¬
tile National Bank; Fred F. Flor¬
ence, President, Republic National
Bank; D.
A.
Hulcy,
President,

Initial
purchases
under
the
Dividend Thrift Plan average
ap¬

average

demand.

investment experts. They are Mil¬

agement.

chases

on

industrialists, 1 businessmen

this

stocks

under constant, professional

RESEARCH

Investment

based

common

Fund

mutual

interest

program

stock but

one

list

that

Investors

The trust firm's offices are located
in the Fidelity Union Life
Bldg.,
in Dallas.

some

states

company

being

are

of

plan.

The

General

24-YEAR-OLD

small

stocks

continually, currently at the rate
$10.81 per share, and invest¬
ments in the pool may be con¬

a

purchasing

in

Southwestern

to

verted back into cash

chase

NATIONAL

the

New funds

Thrift

Worth

Bomar, together with other

participants

WRITE FOR

PROSPECTUS

Fort

bonds.

Dividend

licity generated by the New York
Stock Exchange's instalment
pur¬

FOLDER AND

the

Whaley Co.

and

in

Rail¬

Co., Airmaid

firm's

The company gives much of the
for this gain to the pub¬

FREE INFORMATION

Federation,

investments firm,
will help plan the investments of

credit

SERIES

Mills,

advisors of

plan.

SECURITIES

National

Club and of the

of

&

mark

Exchange,
Freight Bureau,

the

crease

THE

Fort

& Cotton

Worth

Life Insurance

Mr.

a

the

of

Missouri-Kansas-Texas

serve

ment Trust of America.

sponsor

director

a

Co., Texas Electric Service
Co., Texas Utilities Co., State Re¬

the

manage¬

$11,418,000.

Em¬

way

capacity for Gas Industries
Fund, Inc. and The Bond Invest¬

BULLOCK,
mutual funds, reports

is

Millers'

The

same

CALVIN

Associated

in

ance

Balance,

Lloyds Insurance

Fort

of

in¬

Fund

Carriers

Worth, is chairman
of

Worth Grain

Management Associates,

Boston

a

portfolio.

board

1954

of

companies

Bullock

11

executive, means invest"
are
Canadian -Fund, Inc., ment not
in. just one
type of.*/
$25,303,000; Nation-Wide Se^- curity, but in
different types sunh
curities Co., Inc. $20,462,000; Bul¬ as
bonds, preferred and
lock Fund, Ltd.
common
$16,284,000 and stocks, and these are
varied

Children.

18% in bonds.
Electric utilities,
oils, gas utilities and chemical and
drug
stocks
form
the
largest
groups

the

Calvin

Thursday, March

.

ment

business and civic

a

investment

.

with

Co., of
the General Insurance Co., of the
Houston Fire & Casualty Insur¬
ance
Co., and of the W. I. Cook
Memorial
Hospital
Center
for

common

the

Bomar,

ployers

and

share.

per

investments

28.

diversified with,about 81,% of
net assets in common stocks and

Shares

NATIONAL

of

are

period

A MUTUAL INVESTMENT FUND

of

$22.76

was

The

under

Mr.

Bomar,
of directors of the

leader of Fort

in the United States, Its net assets

fund, is referred to in the
quarterly report mailed to stock¬

were

of

approval by the full directorship. I
Mr.

The

Other

investments trust, is scheduled for

By ROBERT R. RICH

converting

investments

announces;

by the board

TIIE POSSIBILITY of

the

of

.

Street

FRANCISCO

6
•
t

Number 5306 ...The Commercial and Financial

179

Volume

Chronicle
(1135)

I

[included
FrU,tf
Sard

*

American
Colortype;
Muller Brass; Douglas

of

sales

,

n

Philip Morris;
Brands. Purchases were Canada
Inrv
Loew's: National Theatres; Universal
ISires- Warner Bros. Pictures.
Arnold Bernhard, President, reported to
^Ihniriers that common stock commitS have ranged from 40» to 60% of
Invested assets slnee April, 1951. He stated
|.hat it was management's belief that adI antaaeous opportunities would be found
[;!! fll,i empioyment of capital in common
I locks in 1954 and 1955 if (1) stocks fell
i. enough below their Value Line Rat-1
s
to
indicate that stocks have again
I reached a buying juncture as in 1949, and
I 2) if the Ratings, which now point downlard in reflection of declining dividend
havment estimates, should level out and
begin pointing upward,
as they did in
Air Brake;

Y

n

present

clude,

INCREASE of $3.6 million in
of Television-Electronlics Fund in its first fiscal quarter
ended Jan. 31, last, boosted its
total to an all-time high of $31,|509,881, it was reported.

Company,

Canadian
pany,

American

announcing Mr. Fuller's elec¬

tion to the fund's

Mr.

Vance

Canada's

for

progress

"There

will

for

adjustment
split.

in the invest¬

three months ended
Jan. 31 last, included 5,000 shares
of American Natural Gas Co., 900
the

during

of

shares

Atlas

Powder,

4,100

of

Lorillard, 1,300 shares
of Mead Johnson, and 3,000 Rey¬
shares

nolds

Tobacco.

purchases
companies already

I of

cluded

2.500 shares of

Steel,

1.000

the

shares

will

manufacture

be

completed
shipments of iron

first
be

the

made

'Labrador

this

Trough'

newly-constructed

of

stocks

held

from

year

the

over

railroad

to

tidewater."

RR..

ada's

figures

economic

also

are

for

situation

extremely

estimated
increase

to

have

1953

"The Ca¬

product is

shown

1952,

over

in

encouraging,

national

gross

Can¬

4%

a

of the trend in effect since
Mr.

Vance

income

said,

rose

1945,"
personal

"and
than

more

5%

last

year."
HUGH

H.

FOSS,

President

of

National

Research

leave

New

Assistant ViceSecurities

Corporation,

York

will

the

over

week-

of

Ludlum

N.

| Y.f Lily-Tulip, Ohio Edison, Port¬

land General Electric, Texas Util¬

ities, Wayne Knitting Mills,
Wheeling Steel.

and

[THE

selected

Investors'

Funda¬

shares

is

the

[subject, of an eight page folder
|just completed by Hugh W. Long
|&Co.0
The

fund's

plishment

is

record
set

of

forth

accom¬

in

ten-

a

year

chart, and in a 21-year table
covering the entire period of the

I fund's existence.
Another

chart

dividends paid

jnuch

how

the

by the fund have

more than kept pace with

|he rise in the

cost of

1!Jg the past ten
also
in the

cent

shows

living dur-

Included

years.

folder is the most

ings

in the oil and
gas, public

are

Li. and chemical

and drug in¬

dustries.

end for

1th

of

joined in Los Angeles by Rufus
Carter, Resident
Vice-President
the

company.

A.

President and director of
| e ohawinigan Water and Power
| ftpany of Canada, as a mem¬
eu

of

HOLCOMBE, Jr., has

J.

FRANK

The

with

become

associated

Crosby

Corporation of Boston,
distributor of Fidelity

general

Fund and Pur¬

the

will

office

a

d

General

a

Fund

was

nounced

an¬

at

dent

of

the

Fund.
Mr.

who

was

born

Montreal,

attended

Hotchkiss
,

School

.

,

.

Ifrom
m

n A< fuller
p„;„

.

Pll»ceton,

companies

in
Connecticut

and graduated
class of 1924. His




as

The

strands,

list

con-

yarns

sold to other

are

material

raw

a

manufacture

versified

of

a

for

highly di-

of

end-products,
principal demand comes from

manufacturers

lation;

of

rubber;

paper;

fabricseC°
tt-k

strands are
in conjunction with
or

Fiberglas mat products for the reinforcement of plastics Fiberglas
continuous filament strand's and
for the reinforce¬

yarns

are

used

ment

of

papers,

binding

tapes,
hose, high

high pressure steam
temperature belting and other in¬
dustrial goods.
the

fabrics

field,
into

made

are

dust

and

Fiberglas

marquisette

chemical

yarns are

base

coated

for

uate

grad¬

of

Rut¬

the

for

the past 25
He has been

a

mutual fund

capacity will represent the Crosby
Corporation in the East. Fidelity
Fund,

whose
the

crossed

five

recently

assets

$100

million

of

weeks

mark,

million in the

gained nearly $10
first

WILLIS

I.

Counsel

for

Services,
years,

1954.

NORTON,

company's
the newly

In

the

for

been

General

,

board

of

20

past

elevated

the

by

directors

to

created office of "Vice-

I.D.S.

versity

political

A

of

graduate

of

Minnesota,

portant part of the Company's re¬
search program has been to dis¬
cover

ties

how to make these proper-

available

in

forms

that

economical

and

in

are

more

more

low cost and

for effec¬

and for many years

he

Chair¬

of its House Rules Committee.

is

use

obligcategory

this

plane structures housing

are

an-

tennae.

Highly

(2)
fural

parts

stressed
for

doors

bulkfe^

which require

a combination
weight and high rigidity.

low

have

amounted

to

around

$5

similar expenditure

a

anticipated

considered

line

with

rate

of rapid

The

the

for

1954.

normal

and

in

Company's present
growth.

potential growth
is in the field of Fiberglas rein¬
forced
plastics
(FRP), a field
pioneered by the Company. In
1942, it was first recognized that
fibrous glass was especially suited
for use as a reinforcing material
in connection with the polyester
resins, which had been developed
greatest

just prior to World

War II. The

first

practical
application
was
during World War II, when glass
fibers

were

material for

used as reinforcing
plastic fuel cell sup-

port linings in self-sealing tanks
for military

other

airplanes. Next

wartime

came

applications, such

r>r,nw«„

of

4.-

Ballistic applications, an
!!lipartantcellinstance
of which is
lining. Another baU
\

the fuel

listic application is flak and shell

fragment

for

armor

airplane

cockpits.
(4)

Parts

structural

having

contours

with

complicated
because of

—

which

Corporation;
American
Company of San Francisco;
R.
H. Moulton & Company; SecurityNational

First

of

Bank

An-

Los

First National Bank of Portland,
Oregon; J. Barth & Co.; A. G.
Becker & Co. Incorporated; Wertheim & Co.; Lawson, Levy &
Williams; Stone & Youngberg;
Gross. Rogers, Barbour, Smith &
Co.; Wagenseller & Durst, Inc.; H.
E- Work & Co.; Irving Lundberg

fabricated out of FRP.

cars

tively

are

low

turned out in rela-

volume;

and

bodies in limited volume

FRP

& Co.; Brush, Slocumb & Co., Inc.;

cur-

Hooker & Fay; Kalman & Corn-

can

The

further

of

use

FRP

expansion

in

hulls

boat

of

the

is

an¬

other

growth potential. Industry
finding
an
ever_ increasing

is

number ot

is

for FRP

uses

both

for

and

growing

as

raw

a

goods.

consumers

rapidly.

presently

suited for

use

a

as

from

the

standpoints of both substance and
it has many
as

fabrica¬
tion permits an almost unlimited
variety of decorative and func¬
tional
design at non-prohibitive
molding

process

type of

conservative

A

appraisal

of

expectancies suggests that
will be moderately above

sales

of

those

1953;

widen

should

profit

Joins Slayton

& Co.

QUINCY, 111.—Donald E. Pontius is now with Slayton & Co.,
Illinois State Bank Building.

With Investors Planning

IK

Chronicle)

(Special to The Financial

BOSTON, Mass.—H. Elliot Ful¬
and

ler

Joseph

Maloney

O.

are

Investors

with

associated

now

PIanning Corp, of New England,
Inc., 68 Devonshire Street.

McCoy & Willard Add
(Special

to The

Financial Chronicle)

With Gage-Wiley Co.
(Special

that

under

conditions

these

Owens-

which will reduce earnings by
about 17 cents a share. In other
' words, using normal accounting
procedure, the estimate of $3.00
a share for 1954 would be raised
to $3.17. On such an earnings
basis, the stock at 54 would be
selling at 17 times earnings.
Owens

-

Corning

listed on the New York
Exchange, is over-valued

common,

Financial Chronicle)

William

—

C. McCorkindale has become con¬

with

Co.,

&

Gage-Wiley

Inc., Third National Bank

Corning should be able to show
1954 earnings of $2.75 to $3.00 a

share. This estimate is based on
accelerated amortization charges

to The

SPRINGFIEL, Mass.
nected

estimate

favorable

McCoy & Willard,

raglia is with

30 Federal Street.

and

increase.

Stock

Jens & Rowe,

Negley,

(Special to The Financial Chronicle)

margins

somewhat;

earnings, aided by the absence of
the
Excess
Profits Tax,
should
I

Chronicle)

Financial

BOSTON, Mass.—Albert J. Mi-

costs.
1954

to The

with

now

material

raw

goods

consumers

Negley, Jens, Rowe

Jefferson Buifding.

The

chairs, fishing' rods, bathtubs, lamp shades,
luggage and toys, to mention just
a
few.
FRP
is
especially well

.

PEORIA, 111.-—Ned O. Haney is

goods items

It

i

.

(Special

consumers

industrial

includes file drawers,

for

an<^ Stern, Frank, Meyer &

Pany>

Fox.

With

dies.

on

earnings. But when viewed in
the light of the normally prevailing price-earnings ratios for equities of the highest grade companies in other rapidly growing industries, I do not believe that its

the

Boston

Trust

The automobile industry is becoming increasingly interested in
Fiberglas reinforced plastics. Socalled "sport" cars represent the
most likely present field for expanding use of FRP bodies. The
primary reason for this is that

can

new material, FRP. And
production of this new industry was soon flowing as a raw
material into a large variety of
manufacturing operations.
At the present, FRP is used in

from this

were

tn

maturity.
Other members of the offering
gr0up include The Chase National
Bank; Blyth & Co., Inc.; The First

geles; Merrill Lynch, Pierce, Fenner & Beane; Weeden & Co.; The

they

marketwise in relation to current

items

1955 to 1994. inclusive.

Apr!! 1

from .75% to 2.60%, accoiding to

be

ease

made

other

Colorado River Waterworks
Boncls> Election 1931, maturing

Tpe Northern Trust Company;

Admittedly,

radomes and small boats.

Bank of America N. T. & S. A.
and associates are offering $10,000,000 Metropolitan Water District of Southern California 2M>%

non-struc-

e^mDle

special^and
umque^qualities;^and
to form, it may be said that its

spent for property addi¬
capital equipment. In

and

various

was

materials, that its
atory. Included in

the
was

Wafer District Bonds

much better than those of other

so

Group

Offers So. California

are

performance.

period 1946-52, $53,977,-

Bank of America

the
of

purposes>

form. As to substance,

join

legislature,

its purchase by

the stock market's appraisal of a
comPany's potentialities. This is
not to sa^ that substantially better than Present market opportunities for buyinS the stock are
ruled out* Rather d° 1 feel that
the Lkelihod of such opportunities is not strong enough to offset
the chances that postponement
may mean PayinS higher than
current prices.

to

(non-conductivity

list of FRP

out¬

Uni¬

to

the

FRP

electricity) properties of FRP

im¬

to

served

industry

certajn

goods

an

the

(1) For
dielectric

material

Day, furniture, fishing rods, translucent sheeting and

he

aircraft

principal applications of
date are as follows:

and

After V-J

career

in the Minnesota state

man

the

Fiberglas has many rare
valuable properties and an

as

1934, Mr. Norton left

standing

that

in their modern form in the years

Diversified

Investors

Inc.,

has

resembles

except

tems.

are

Jr.

years.

the

sport

Aerocor

Capital
expenditures at that annual rate

F. J. Holcombe,

In

aluminum, because of the savings

is

securities

business

automobile

1953, such outlays are understood

in

beep

a

as

of much smaller diam-

million and

Holcombe,

has

as

industry for acoustical and ther-i
mal insulating purposes.
Fiberglas filters are replace¬
ment-type filters developed by
the Company for warm air fur¬
naces
and air conditioning sys¬

to

Banks

of

ner

past six

almost exclusively for the aircraft

tions

sity and for¬
merly a part¬

value and provides cost savings in
certain applications Sales of FRP
by
20
manufacturing
concerns
have expanded some 1000% in the

rently be made more economically than can those of steel or

000

Univer¬

gers

and cold, reduces replacement and
maintenance costs has decorative

lightest Aerocor is made

In

a

are

filters.

also used

fabrics,1 such

wool,

The

tive

II ol-

Mr.

combe,

sheeting It transmits diffused light, insulates against heat

the

Fiberglas

Citv.

York

flat

or

industrial

•

i

Fiberglas yarns,
used alone or

the building and construction industry in the form of corrugated

electrical insu-

plastics;

terials at

New

,

President-Law."

Fuller,

aircraft).

products and how to
fabricate or apply Fiberglas ma¬

Broad¬

111

way

b y

Henry T.
Vance, Presi¬

in

and cords which

and

be

advisory
board of Can-

Fiberglas

usable

itan Fund. His

wholesaler since 1948 and in this

John

ber

week's tour of the com¬

a

pany's mutual fund dealer organ¬
ization in California.
He will be

years.

Personal Progress
SECTION

H. fross

Hugh

and

portfolio which
snows that the
fund's largest hold-

of

eter.

re¬

investment

and

Jnberglas textile products
sist

fibers

of

REASONS why more than
150,000 investors and investing in¬

(marine, railroad,

truck, automobile

Fiberglas

Corp.,

Radio, Consolidated Edison of

ranges,
similar
ap-

and

insulation

fiberglas

1,065

AlleghenyChrysler, Collins

stitutions
have
mental

tion

refrigerators,

heaters

convertible
tops and tarpaulins.

were

Steel,

quieting;

(commercial

awnings,

Oil Co.

Eliminated

water

and

of

jand 2,000 shares of Socony-Vacuum

for

tapes for pipe and duct insulation,

Sales included 2,500 shares of
IAssociated Dry Goods Corp., 3,800
I shares of Consolidated Mining &

Canada,

products

curtains and draperies, cloths and

[Western Leaseholds, Ltd.

of

acoustical

and domestic

yarns

Murphy

shares of Lockheed Aircraft

and

sound control and sound

Bethlehem

of

of

products, demand for
which comes
principally from the
following fields: building insula-

In

2,000 shares of Union

Co.

number

continuation

a

in¬

Oil of California, 5,000 shares
U. S. Steel, and 1,300 shares

Smelting

the

the

Preliminary

Co., 1,500 shares of Sea¬

(G. C.)
board

the
will

ore

&

Additional

of

development

power

for

two-for- Mr. Vance
pointed out.

a

the Bullock Fund

ment holdings of

great

nadian

NEW ADDITIONS

dearth

no

Niagara Falls is scheduled to
into operation. The first phase

and

year

stock

primary raw material,
Company
manufactures
a

tion

be

deterrent

a

are primarily
interested in long range appreci¬
ation
and
who
are
willing to
ignore the interim fluctuations of

Security I Like Best

the

as

pliances);
industrial
insulation
(roof, pipes, ducts,
tanks
and
process
equipment); transporta-

aluminum

after

wool

at

of

one

The

appliance insulation

Kittimat

outstanding in its five-

as

developments in Canada this
year," Mr. Vance said. "This year
the huge new hydro-electric
plant

at

history. They totaled 4,384,527 on Jan. 31, last, as compared
with 4,019.842 on Oct. 31, 1953,

optimism
economic

1954.

the

of shares

advisory board,

expressed

concerning

of

closed its first fiscal

present price should be construed
those investors who

Oil

rector.
In

Continued from
page 2

British

Co., Ltd., director
Montreal Trust
Company di¬

and

go

with the largest number

the

35

in¬

Quebec

President; The

President;

net assets

The Fund

the

Light and Power Com¬

an

Iquarter

affiliations

others

among

Power

.

11949.

business

Bldg.

Waldron Adds to Staff
(Special to The Financial Chronicle)

SAN

Galatz

FRANCISCO, Calif.—Mat
is

now

with

&

Waldron

Company, Russ Building. He was
previously with Capital Securities Co.
j
_

Indianapolis tSranCIl
Jackson

Webber

opened

'a

Building
^

'

,

Paine,
Curtis has

INDIANAPOLIS, Ind.
&

—

branch in the Guaranty
under

William

G.

the

management

Curry,

With Goodbody & Co.
(Special to The Financial

Chronicle)

TAMPA, Fla.—Charles A.
__

.

Kor-

bly has been added to 1tnie s a
Goodbody & Co., 506 Fran

36

The Commercial and Financial Chronicle

(1136)

.

.

Thursday, March

.

11

195^

*'
,

•

,

|

Continued

from

vantage

12

page

used

are

only

In

two

lost

iiave

$60

to

Realizable Goals in Expansion
The Report does

There has been
$5 billion per annum foreign aid program.
Yet a good many people
appear not to be too much concerned about a $60 billion loss in
Why do

do it?

we

much complaint about our

foreign

for

boom

debating this issue here. 1
assuming that the reductions
in military expenditures will in
fact take place, though I fear that
they ma.y not be justified from
the standpoint of our national se-

Currently the
public construction, Federal
State
and local,

curity.

pected

the next two years.
In Chapter 1, the Economic! Re-

port does indeed quote the

man-

date set forth by the

Congress "to

promote

employment,

maximum

Tirndnption

nnrrhasinff

contained

guage
not

and

to

seem

effectively
Instead, in
insieaa,
in mis
this
of

measure

all

of

Report,

Chapter
tnapier

1,
i,

reasonable

a

stability, in
Mduuiiyiin

ui.

level

the

same

made to

is

Act does

incorporated

into

very

reference

the

in

to be

me

now-

the
uie

overuvei

employment and

in-

"employment at
a
high
level"
I!(p. 8). This language discloses, I
ieel, here as elsewhere in the Report, a considerable ' toning down"
of the mandate laid

down

by the
Congress with respect to "maxiemployment, production and
purchasing power."

mum

mandate

know

how

>

1'

far

fall

wp

stimulus

short

of

years

privilege of accelerated depreciation should be limited to depressed
years

such

a
rapidly growing volume
unemployment and with total
output far below our potential. I

have
nave

here
nere

illustrative

an
an

table

showing considerable growth from
1954

I960
iyou,

to
to

falling
iaiiing

vet
yet

short
snort

of
oi

the 3V2% output potential referred

great

society

States

we

growth

like

and

the

show

can

few

very

by

years

United

considerable

short

fall

yet

in

a

hundreds

of

and

able,

we are

eager

ready to produce.

Tax

.

nrnnn<,„r)

that

the

tion"
for

the fact that

—

—

problem,

46

436

385

51

1959

451

385

66

395 '

72

467

37

look

at

the pros-

few

next

years,

"

the

the

of

program

laid down in the Economic
Report,

£rsi°f
that

toward

i<?

,

imnnrtnnt

—

the

completely
transition

1922-1927—years in which
laws were highly favor-

tions.

In these six

is

economy

from

the

in 1945-47-a
referred to by way

peace

often

In 1945-47, there was a
large
backlog of demand for plant, ma¬
chinery, housing and for durable
and

semi-durable

reached

ore

it v

consumers

.

gen-

econ-

»my cannot be relied upon to gen-

^equate^aggregte demand.
steam

own

,

.

years.

unaided

by

deficiencies

of

busi-

plant and equipment, of hous-

ing,

automobiles,
appliances, etc.
Consumer

n

,

0!utlays.°,n

pr0 uc.ers, pl,ant and

.

.

equipment has remained at

a

very

in

electrical

then

was

very

substantial

a

in-

expenditures financed by

-k'lnnsnmpr rrpdit
rioht
v^onsumer
credit. Pnnsnmpr
Consumer debt

now

ic
is

at record levels in relation to

^rtner expansion

.much

and

we

look

cannot

..

1928 and
,

.

.

boom

1929,

,

,

o

,

,

in

ate

tie

la

e

WUU1U

but

xavur

«

surely

leiuni

of stimulus to

,u

no

Warld War ended, consumers

were

Heaving

nearly 25% of their dis¬
posable incomes.
A return to a

^normal

saving

ratio

permitted

much,

,

get

small

some

propensity to

increase

m

the

equipment

«u»

People hold
the

end

of

opening
ties.

investment opportuni¬

up

But

now, as

I

-can

and

would

act

ahnvp

tho

find

in

the

elsewhere

or

rn,rm(

to

hioh

u®

a

a

i
+1

y

't

t

wider
vvivt*-A

margin

be
"kj

the''last

^ despTte Ihe hea?y
1

^rations

,

prospective

stockholders

compared

to

15

I

am

in the
to

vears

Thus

everything considered, the

retrenchment

°
in

military expendi¬

of

aware

Accelerated

proposals

Economic Report

stimulate

capital

to

peace

is

more

dif-

used

as

an

are

re-

the

the propensity to raise capital by
borrowing looks like bad practice,
r

what

is

forgotten

is that

a

very

ings.

0f

For this

reason,

the practice

financing

75% of capital isby borrowing does not mean

sues

that

fs

the

corporate

getting

worse

debt

and

position

worse.

In-

could

not
have
happened
had
corporate
profits not been highly
—r
"

'•

satisfactory.

S° mUCh f°r what may

ably be expected from
in

outlays

on

plant

reaS°n"

increase

an

and

equip-

.

today.

would
-

,

trenchment
•aitures

are

in

J-

government expen-

not

easily




offset

by

cannot

double

J
!

and

be

ex

their

current
works.
This
We shall

public

on

make

not in

good

the

on

urgent

so

eloquently referred to in
President's Report
unless"the
Federal
Government makes
financial provision in some
form

or

other

for

two-thirds

the'total.

No

realistic.

And

or

other
as

more of

proposals

military expenwhy should we

ditures decline
increase Federal

not

outlays

nn

.on

zu

yeais

a&0-

have

made

designed
on

in

With

the

true

studies,

are

to

thatjJ'Our approach to

is

it

J—
preparedness
possible to turn the

ductive potentialities of the

This is

an

other nuhlie works

jn

the

device,

connection

fare
any.

mention

for

Federal

is

There

tain

to

education.

children

our

education

in

relation

the

now

0n

total income of their citizens than

pur-

excellent state-

do

the

no

to

For this

wealthier states.

situation there is

solution

ex¬

cept Federal aid.

Why not implement it by
making a major attack on our
slums, our substandard houses and

deteriorating

|jie

urkan communities.

built

1,100,000

in

areas

Consumption

our

Last year we

units.

new

We Should Have More Private

The

sVgges* n° target bey°n.d

Finally,

and should in¬

we can

private consumption. This
certainly important, but pos-

crease

j

sibly not quite

as

important as the

fnrwarrt"tnlnvpublic
construction needs outto any

ture. On this basis

T "? helP
One

final

I

point

look

we can

the

jn

giyeri

to

our

I

Report.

Economic

that

SLlSpect

priority should be
community needs.

CT Still, though our productive re¬
Federal m,h- ^turce., are certainly not pnUnut;

tary retrenchment.
nance.

]jne(j

in the visible fu-

program

they

ed>

housing fi-

on

welcome

the

dis-

new

SOme

adequate to permit
all fronts—busi-

are

progress on

and equipment, hous-

plant

ness

should

powers

recommended

suggest,
mittee

be

close

a

and

agency,

ously

and

for

at

as

Report.

I

With

the

fairly drastic shift toregressive
regressive tax
tax struc
strucventure to say that thesi
these

suggest

a

more

t

lure

frend

down

on

amortization

low-income

pro-

toward

run,
and
the creation
slums in the future.

of

new

it

now
verse

Another

area
for expansion is
public construction
schools,
—

is

this

survey

a

expenditures.

con"
Let us

look at these possible off-

sets to retrenchment in Federal

military expenditures-offsets and
net

additions in order to provide
full

our

growth potential of
and

production.

mnrh afraid that, thesp
veiT much
afraid that these
verv

posals
Quate.

are

far

from

being

_

and, needs

~I wonder
added

are

1

up

how
the

these

in

many of you

figures

that

presented in the Report. They
very
we

above

iin

They show
urgently need, over and
current

levels

of

of

01

mass

most to

«

doubling of the current volume of
construction.

^

;nt=

xi

want

to

n0

say emphatically that
conclusion
reached, I regret to
standpoint Of economics,'say, is Very1 disappointing?' The

to

of

amount

an

^total

dividend

from

income

I *»*
people realize that m1

j.

liability.

ncrSOO

„

Federal

■

^«riiint

indeed

tax

hou. niany

Report
XvcpUL L sets
bt-'lb
Willie
while

vividly the problem and
magnitudes involved. But the

not

fPr0^

come

do

from the

one.

Economic
HiLUIlUimC

al-

Jr's sales tax.

'}S^irrteiHiP)

earners

justified. I

the
Hie

This

manufacturer's^sales^ ^

?to^l5%
but

goods.
amounts

a^^PF^nrfomi^Report)

the

are

Now
l\OVV

consumed
.

a

number

large

a

^ZosTl

ex-

penditures, additional outlays per
annum of $10 billion for a
period
of up to 10 years.
This means a
nnhlir

"ver

infi exrlses

impressive.

the

spread-

urgent accumulated

have

are

-

our

areas:

that

ade

of

shortages

The

pro

-

_

em-

nrn-

•

-

proposed, I fear, to redevelopment. This is

surely the meaning o
e
gestion, emanating fiom
ludedi
flble
s<?u^cf
(
/hP CiCunw*
T
flad to sav. Ill me Fconomic
Slad to say, int u,xReport) to reduce
and make

sumption

housing,
(public

recently a

We had

notable
report by
the National
displaced
as
a
result
of
slum Bureau of Economic Research on
clearance and urban renewal ac- this subject. This report and ib
tivities. There is a danger here, favorable conclusion was widely
I suggest, of cheap construction, acclaimed as a sign that our econof heavy defaults over the long omv is
healthy and strong. &

™j!

remains

equitable distfibu-

more

a

tion of income.

families

works?' and final'y Private

There

construction

tax

market Dr0nosals will tend to reverse the
suspiciover
the last two decades

the

terms

at

the
proposals

the latter,

to

rPSDect

Administration's

the'com- wa^a

look

mortgage

also

generous

payments
posed

the

however, that
take

proposed

new

broadened

in

tary expenditures

firms

even

no

nearly half of

rerd $10 billion

business

aid

not

urgent need

fall far short of decent education-

out very

because

the

of

these wel-

is

has studied state and local finance,
that the poorer states which con-

these proposed reductions in mili-

will, of .'course, wish to take ad-

m

recognition of the
fact> weR known to everyone who

effect of intensi-

it

with

there

needs,

security I have no competence
vv Iidtcvxt
tu
whatever
to
JUU^C whether
judge
Wlicmu Uf
or ilUl
not

Iiuiv

enverpd

pro-

econ-

increasingly to peaceful

omy

<\!
otner puonc works covered in the
Economic Report, and indeed

a position ai standards; yet they spend more

military

makes it

so serious as the current deficiencies in schools, hospitals, and the

Report.

housing,

interesting to note that the proposals made in the Economic ReP°H faii far short of the housing
and urban redevelopment programs supported by the late Senator Taft- The proposals fall far
short of the 1949 Housing Act.
The Economic Report states (p. 3)
of

the deficiencies anything

aeti

Economic

respect

n 0 w

even

are

here proposed it

as
UJ

fying booms and depressions. This
is

plans

were

studies

^eseaicn

and

pi.ide

covered

we

Research

in private
consumption,
like

nor

hospitals, streets and roads, water
k
facilities, sewage and industrial
waste disposal systems.
The Economic Report makes an excellent "O'excise

ment.

Economic Report makes proposals
with respect to all three, but I am

outlays

anti-cyclical

Unfortunately,
,

licult

to

State

the

suggest,

in fact

as

aeo

programs

and

sets

to

Depreciation

they did at

these matters

nnn-milit.arv

transition

$20 billion.

e

need

^. corporate behavmr mth cretionary powers granted to the ingT pubUc wnstoction. and private consumption.
changed Ikv
very hkJ'LStkuw
little. Superficially, and terms of

ployment

cushion

I

Happily, through research by
governmental and other agencies,
we are not hopelessly at sea on

larger
Despite

take

{f^vid^ fnkskkntiakoffset
a
Zr™bs}?
Effects

a

not

'"a„tTnd eau?Dment
r.sp

War

as

do

Report

tures.

II, large
accumulated liquid savings. These

government

to

We

„llK1 •

deuce that it looks lorwaid

tations.

public

Economy

World

primarily,

come

uanejnd

ivxuu

ir-

^h^ues ak'kkekcSualW

government

Savings and the Transition to
Peace

in

transpor-

kpu ilc utilities, agriculture

!

the

consume.

re-

ul.
nnhl,n

<nfmn

consumers

_

must

stock flo-

common

a

Economic

are saving only
is, however, perhaps
3% above normal and we might

when

mining,

.

a

This

especially

manufacturing,

large growth in consumption. To7.5%.

increase

the expansion needed for growth

one

T*ei]£ menJ ls.g£!llg on_ elsewhere, deed the ratio of corporate debt
rJ S4A1?.11.yea.rs we have to corporate assets is considerably
jn.v.es!
f ?
n \n new pro- lower than in the 'Twenties. This
uce s plant ana

for

help here. When the Second

certainly

is

possible but it will not be easy
to ralse these very high figures

,

income,

1951, 1952, and 1953.

years,

very

debt

low, permitting
crease

and

shall

we

annum.

local

maturity, and these

government.

major

war-created

repeat,

(non-military) \s

per

ment.

Ipods. There is no such large high level, rising slowly in pro- iarge part 0f new capital outlays
|>acklog
now. For eight years we P°ltl0n to
?Qc\sentbe is financed out of retained earnhave been making good the
Jiess

To

well

very

poses."

by the higily

respectively,

symuch &

its

,

market

er£)l agreement, and there is much
in the i Economic Report which

supports this view, that the

of

to total issues rose to 45 and 62%

And it will

-

--

finallv

erate

26.1%.

only

("Survey

'Twenties, the ratio of stock issues

automatically happen without
strong government program. We

of comparison with the
present.

issues,
issues

that quoted by the Sec¬

as

stock

not

have

of total

years,

Business," January, 1951,
15)—almost precisely the same

,

viwava

a

statement

tax

It is true that in

_

transition

different
to

fn

disclose

to

Secretary's

Simulated

$330

=

task will not be easy.

^

current

peacetime

a

period

it

suffice

retary for recent

adequate increases elsewhere. The
-

terms

do

per-

..

Total loss of GNP

mote

will

historical

greatiy oversimplifies the matter..
Consider, for example, the six

p.

ill

little

a

spective

figure

-

.

Current

$0

1958___

f

f

difficult and complicated

a

stock

375

T

•

...

30

nf

tt

ine mattei is, l ieai, iai

t

sion of

28

Fircf

Th

capital

421

raise

.

lowing,

new

1957

in recent years,

-»

to

were

365

in

■

(I)—(3)

370

viewed

—

taxa-

responsible

able to stockholders and corpora-

(3)

393

is

moustrynasDeenioicea 10 raise
75% of its outside funds from bor-

years

GNP

"double

so-called

(billions)

a

re-

rpijpf for

iav

dividends

of

Loss of GNP

the

Relief

other tax incentive devices
.

our

407

take

and

late to tne pioposeci lax leiiei io.i

(2)

1956

us

stability

promote

a

expansion.

350

over

as

serve

0l

government
total
volume nf

it

needs

a'S

can

is mainly

local

everyone knows.

these

current very

indeed

and

raise

fact

offset

our

$367

Let

reductions?

to

high, outlays on new plant and
equipment. The offset to the Federal military retrenchment plus

380

pect

needed

only moderately

to

growth pattern
(billions)

1960

is

needed

1954

1

What

stimulus to investment when most

"k

/

Offsets to Low

as

State

billion

Military Outlays

can

$367

'

Public Works

Government

the problem

outlays

we

that

U1li10ns of dollars of goods and
services which

(billions)

*■

am

if

Assumed moderate

,

I

not

of

could

measure

production potential

1955

But

programs.

am

specify

employment or
production indices. So applied, the

1953

-

terms

in

X

•

law could

The

trend

the

below

years

or

average.

Maximum employment and

r

in

investment

to

aid

Federal

with

GNP

f

The

above.

of

(i)

»;

to

referred

fails, I think, to
set
forth
the
realizable
goals
which the American economy is
capable of achieving. Until these
targets are set forth, as indeed is
explicitly required in the Employment Act, we are in no position
in

periods, adding inflationary
On the other hand, acwould offer

when profits are relatively small. To be effective, the

Economic Report

vjhii

investment would be stimulated in

bad

frequently refer to growth and to
an expanding level of output. But
that is surely something very different
from
the
Congressional

conclusion reached is that
some,

little

indeed not in-

carry

1

lays for national security and for

depreciation. Thus,

celerated depreciation

Policy

the economy is quite able to

1

>

the

pressures.

years

illustrate my
we
would
billion of output,

boom

>

the current and even larger out-

accelerated

to

point.

profitable

of the lower taxes incident

years

Fiscal Policy Important
In Anti-Depiession

during

1

,

income

salaried

ScUcUJLCTU
--

V'H

people and
..

1,01

with much sma
will be paying su

income taxes. I suggest
Cohgress will certainly

jp111

tantial

,

_

•

Number 5306

179

Volume

.

. .

The Commercial and Financial

Chronicle

(1137)

take

achieve

good look at this remark¬

a

duction

Conclusion

two

have

I

conclusion

In

of

of

of
pro¬

there

were

tion such

large

production
when

that in

as

was

backlogs

1951-53, when

going at full blast,
were
full, when

shelves

equally reassuring state¬ backlogs had been worked
and
inventories
ment that the Federal Govern¬ through,
were
well replenished/ Nor is
ment will employ all its powers
the Ko¬
rean panic
buying period relevant
to
promote maximum employ¬
to peacetime conditions.
ment, production and purchasingShould
not mistaken,

am

such

The Economic Report, if

power.

maintain
chasing

a

employment and pur¬
power" so that a minor

an

concludes

significantly

with
but

not on growth,
economic instability.
chapter,

it

Now

A second

reason

such

epi¬

for fear of ade¬

public

debt.

This

is

about which there is
amount

a

subject
immense

an

of

indeed

is

the Federal Govern¬
to assume responsibility for

rities

are

rich.

The

not

owned

by the few

public debt provides a
investment outlet for social

security

prevention of a slump. Until
Recently such a declaration by

trust

funds,

for

small

vides

gerous
and illusory, and fears
were often expressed that such a

neuverability for private

declaration

is

tions

could

only give rise
could not be ful¬

hopes that

filled.

and

savings

corpora¬

business firms.

important basis for

an

And

it

our

cur¬

rently sound banking system.

The

distribution

of

I welcome the declaration of pol¬

ownership of the
public debt is an important ele¬
ment of strength in the American

which is
something of

statements

The point

I wish to stress is this:

aims

gap

a

forth

set

but I find
between the

made,

icy

in

the

I

economy.

Economic

am
happy to find
along this line in the
Report.
I have often

Economic

Report and the declaration of the

said that

Federal Government's responsibil¬

publish each day

ity

a

set forth in the Employment

as

is

It

notable fact

a

that

the

vention of

slump.

a

if all

on

the front page

showing the ownership of
Government securities, the

S.

people would have
the

It is not cast

would

newspapers

table

U.

policy section of that Act (Section
:2) does not even refer to the pre¬

view of

a saner

public debt.

following table shows the
ownership of the public debt:

in those terms. "The Congress de-

Government to

tical

means

use

'Billions

Commercial

all prac¬

Savings

to promote maxi¬

...

employment, production and
purchasing power."
That is the
policy declaration of the Employ¬
Act.

The

we

Reserve

public

$88.0

and

of

savings bonds
Corporations and individuals
t!This includes social

Economic

Can

us:

Fed.

institutions,•

Holders

Report
is excellent as far as it goes, but
it is, I feel, not
adequate with re¬
spect to the major problem that
•confronts

&

private

mum

ment

banks

funds),

corporate

tions,

maintain the

savings and loan associations,

pension

funds, nonprofit institu¬

etc.

many

1954,

uary,

con¬

scientious and thoughtful citizens,
while at long last
prepared to ac¬

lation to

cept Federal responsibilty for the

growth

prevention of

•dangerous

a

slump, regard it

policy

to

assume

Reserve

Bulletin," Jan¬

64.

p.

as

inflation.

stability, the

say which is very germane to the
problem I am

raising. The Report
wisely counsels that the govern¬
ment mu£t be
prepared to reverse
•tself if it finds it has
gone too far.
we are

shall

ly and

never

prepared to do this
dare to act prompt¬

effectively. This

answer

to

Positive

those

is the first

who

fear

governmental

that

action,

looking toward our full growth
Potential, will lead to inflation. *
The second

answer

nar T0/ !n^a-i°n, in
Lnited

a

is

that

the

country like

States, under peaceconditions, is grossly exUntil recently, econ-

rvTuj generally

doubted that

■?£emP

stability
°yment fell below 6%

the

or

t

American

DlnJif maximum
fcnfL

Offering
1

economy

r!1 ln^ati°n-sensitive econr.Ur exPeriences in recent
sh°w. that we can push on
potential of

em-

-anc* Production without
inflation.

suggest

that

we

can

never




as

public debt would
ratio

same

to

in

rather

in

Canada

than

have

we

the

lieve

in

fear,

that

tests

ahead;

our

long-term

if

enough to keep betting
I

convinced

am

to

will

come

that

on

the

hold

GNP

as

stage in the growth

As

far
to

nation

a

in

the

that
,

the

which
the

to

recent

that

beyond

past

authorities

deal

leeway

be

al-

within

as

must

with

contingencies

time, and

a

has

condition

many

econo¬

market

analysts that
stocks are still fundamentally
cheap, is the wide spread between bond yields and the
yields
available

sound

on

stocks

with

well protected dividends. An out-

standing

in point in the rail-

case

not

even

at

mon

months

been

process.

daring
ven¬

seemed

That

is

the

bonds

many

those

stock,

on

The

the other hand, has

level.

regular

The stock

is

on

a

$5

will

to

try,

the

and

the

so-called

was

was

the

cultures

cradle

the site

There, in
crescent,"

"fertile

western

of

civil¬

There, great and wealthy
have waxed, and
then

waned.

Beneath

history,

most

posits of

it,

throughout
the largest
accessible de¬

lay

readily
crude

discovered.

petroleum
the

And

so

stuff

far
was

recognized from the earliest times.
The
pitch was mined to build
the walls of Babylon.
What was
available

this

until

century

the

present,

and

recession

earnings

continued

most

in

traffic

analysts

are

in

1954.

For

one

War II the company

has reduced
non-equipment debt by more

its

than

third. The balance of

a

$198,-

405,000 outstanding at the end of
1952

was

represented

non-callable

interest

the

at

retirement
these

by

two

rate

a

straight¬

which

in

developing and market¬

ing oil resources.
fortunate

are

we

in Can¬

1776,

Nations"

was

published

the

year

that some unpleas¬

same

antness arose

in

the

fund

bonds

of

to

take

that

so

4%

over

Boston

said, and I
his

tion

was

secondary

stock

offerings

and

39,000 shares"
of 7% cumulative preferred stock
International Harvester Co.
The

stock

common

$28These

not

receive

cents
stock

the

payable

dividend

April

of record

$166%

offered-,

was

shares

15,

March

The preferred stock
at

will
of

50

1954

to-

15.

was

offered

share to yield approxi-

a

mately 4.20%.
Amounting
to
approximately
$35,000,000 in the aggregate this
was one of the largest secondary
offerings in recent years. The
stock is being sold in connection
with the settlement of the estate
of Mrs. Anita McCormick Blaine,
recently deceased.
She was the
daughter of Cyrus Hall McCormick, inventor of the reaping machine,

and

care

the

of

amount
year

almost

certainly less than a
earlier.
Huge sums have
been spent in the past 10 years or

year

many

a

in

cargo

of tea

But

Harbor.

A

past.

years

tional

sales

older

few

condi¬

have

contracts

been

running out rapidly and will be
completely eliminated by early
1955.
Thus, depreciation and re¬
tirement accruals, which ran to
nearly $30 million last year, are
practically all available for gen¬
eral

corporate purposes.
Aside from the strong finances,

highly conservative debt struc¬
ture, and the physical improve¬
ment in the plant in recent years,
Santa
tus

Fe's

basic

has been

cellent
much

growth
the

of

investment

Joins Dempsey-Tegeler
(Special to The Financial Chronicle)

ST.

LOUIS, Mo.—Marco S. Vafniko is n°w affiliated with Demp-

f^.y^Tegeler
Eighth

&

Co.,

Street,

407

members

North
of

the

New York and Midwest Stock Ex¬

changes.

characteristics
service

of

The

area.

has one of the most fa¬
vorable long-term traffic and rev¬
enue
trends
in
the
industry.
Moreover, this improvement has
company

been

to

ways

am sure you

words

apply

well to

"which

indeed,

very

seems

in the world."

,

Readey
with

Santa Fe went through the

depression

without

in

any

of

year

its full fixed and

the

entire

New

Reinholdt
York

ULM,

Sundahl
&

is

fic

were

started

a

Min¬

(Special

to The Financial

Chronicle)

DETROIT, Mich. — Rene F.
Campeau has become associated
with B. C. Morton & Co., Penob¬
scot Building.

With

Highland Park Inv.

(Special to The Financial Chronicle)

ST.

PAUL,

Townsend

is

Minn. — George II.
Highland Park

with

Investment Co., Pioneer

failing to
contingent

in the
As

Bond

North

Building.

1930s

Moreover, these
achieved without

down

months.

State

28

With B. C. Morton & Co,

With Bache & Co.
(Special to The

fall

R.

of

Toomey

is

National

—

Thomas

with Bache &

now

City

East

Joins L. A. Caunter
(Special to The Financial

and

matter

Financial Chronicle)

CLEVELAND, Ohio

effort to retrench when traf¬

winter

with

Co.,

nesota Street.

Building.

earnings

Stock

Minn.—Bernard J.

now

Mortgage

c0>,

any

40O
the

of

Midwest

and

(Special to The Financial Chronicle)

NEW

selling less than seven times the
results.

Gardner,

members

Joins State Bond & Mtge,

Last year earnings on the stock
to $14.62 a share—the stock

1953

&

Street,

Exchanges.

charges (then considerably higher
than now).

is

Financial) Chronicle)
LOUIS,
Mo. — John
V.
has
become
connected

Locust

property that has al¬
been considered one of the

severe

he

will agree
as

(Special to The

ST.

a

prime properties in the industry.

cover

With Reinholdt & Gardner

sta¬

bolstered by the ex¬

came

that

made

March 9 of 1,000,000 shares o£

common

Moreover, the
up a voluntary

outstanding at the end of last
was

of two underwriting groups

agers

course,

arise. An essential part
likely to become one of the great¬
preparedness under present
est and most formidable that ever
circumstances is a higher Federal
That is

,

issues, both bearing

maturing in 1995.
company has set

the need for international cooper¬
ation

-

,

on

more 6n capital improvements to
the
scientific
•the property and on new equip¬
knowledge to make the greatest
ment,
including a large diesel
use
of petroleum.
What has not fleet.
This program has been fi¬
yet been achieved, there, is stable
nanced out of earnings—not even
government. And what is not, ap¬
the equipment has been financed
preciated there, even today, is on the usual serial
basis for

of

was,

-

.

Certainly the regular rate ap¬
pears perfectly safe, and despite

willingness to learn, there will conservative that the management
follow, as the third of my three could well afford to pay out a
title words suggest, a period of considerably larger proportion of
"expansion" that could dwarf1 reported earnings than it has been
doing in past years.
As of the
anything we have yet known.
As I thought about Canada, and end of last year the road had cash
or
equivalent of roundly
its oil, and its future, my mind
$127
kept turning back to those lands million and a net working capital
of
some
that lie immediately east of the
$87.5 million.
Since the beginning of World
Mediterranean
Sea.
There,
ac¬
cording to tradition,

traffic

same

Morgan Stanley & Co. and TheFirst Boston Corp. were the man¬

extras.

Given

the

This

basis, and in recent
has consistently paid yearLast year the extra
was
$2 which,
if repeated
in
1954, would afford a yield of 7%.
end

thing, the company's finances are
so strong and its debt structure so

perhaps less propitious cir¬
cumstances, in the months ahead.

high standards;

unfavorable

years

at

more,

is

Large Secondaries
1
Made by Bankers

fluctuating narrowly around
100

be

gain

It

com¬

under

shall

we

were

policy hay
been
continued
in
the
opening*
month of the current year, with,
total maintenance slightly above
1953 levels on a drop of 17.3% in

of

and

process

under

conditions.

confident that the recent practice
of paying a year-end extra will

that may

"

its properties up to
even

outlays
million,

with Santa Fe to keep

available, dividend.

levels.

of this

debt limit

traditional

$8.3

a policy earnings this year should
again afford good coverage of the

with

a

by

gross revenues.
Basically this is
favorable to the long-term status
of the stock and even with such

future

but

maintenance

group is Atchison, Topeka &
Santa Fe.
Its long-term General

it; then

neces¬

capabilities.

our

increased

Mortgage 4s have been selling to
yield only nominally above 3%,

bold

have

convinced

and

total

at

be¬

I quote from
Canada as to the United States,
follows: "The gov¬
and will be ready that the colonies constituted a'na¬
any

the present

of

can

by

and

new

might

itself rec¬

operate.

Report

ernment
to

fiscal

sufficient

lowed

markets

road

have progressed

we

undertake

tures

How

that

securities

we

be

to

prove

strange features

we

period of consolidation—a
sary

to

will

face,
competition; if

confidence

meet

the

to

rose

maneuverability, in
pursuit of an expansionist and
stabilizing fiscal policy, demands

iu

Psodes,

should

to

it

ognizes

if

e have Earned that this is
,h f tae
case. Experience shows
pnio' ?part from quite exceptional

GNP

The Economic Report

we

^maintain price

.m

adding further
productivity.
|

figure of
$375 or $400 billion. I do not say ada, by comparison, in possessing
scientific knowledge, in enjoying
that it will or should reach that
mature
and
stable
institutions,
figure. But I do say that the goal
and
in
having a friendly and
of a rational fiscal and economic
helpful next-door neighbor—all
policy is not a balanced budget; it
at a time when we are just be¬
is
a
balanced
full
employment
ginning to unearth vast stores of
economy.
If we; pursue this goal
oil
and'-natural
gas.
It
is a
successfully
in
peacetime,
the
debt is indeed likely to rise more thought which in my mind does
not
induce
complacency, but
or
less.
The
guiding principle
rather presents a challenge.
should be to balance loan financ¬
One other historical allusion, if
ing with tax financing so as to
I may be permitted. Adam Smith,
prevent both inflation and defla¬
who had the first word and often
tion and to promote our full pro¬
the last word to say on matters
ductive potential.
In pursuit of
economic, had somethng to say
this principle,
some increase in
about "the colonies,"
which I
the debt may well be necessary.
think
is
worth
remembering.
And there are sound financial and
When he talked about "the colo¬
monetary reasons why the debt,
nies," he referred, of course, to
thpn as now, can contribute to the the North American settlements
financial security and stability of
as
a
whole, for his "Wealth of
our
growing economy.
now

Economic Report has something to

Unless

if

Gross National Prod¬

rise,

the

about

re¬

requirements demand,
$470 or $500 billion

1960, the

re¬

production.
And one
reason is that
they are very sin¬
cerely afraid that such a program
In its discussion of

our

our

around

and

cause

If

uct.

sponsibility for maximum employ¬
ment

in

we

not
"Federal

Source:

The debt is not excessive in

that

role

and

mutual savings banks, insurance companies,
state and local governments
(largely pen¬
sion

growth, expansion and momentum
aware

Experiment,
Experience and Growth

the

overall

that

Canadian

49.2

security trust funds,

of

mists

human

•of the past few
years?
am

Continued from page 15

99.0

37.1

-

Atchison, Topeka & Santa Fe

expan¬

the

ization.

icy and responsibility of the Fed¬
eral

in

room

policy
One

of the Garden of Eden.

The

dares that it is the continuing pol¬

vpo

continuous

institutions, and for the essence of the word "ex¬
personal savings.
It pro¬ periment" in my title. We have
liquidity and financial ma¬ gained much "experience" in the

government was regarded as dan¬

nmv

ratio to GNP. This

a

and insurance

the

rinf'

as

sion.

security.

for¬

great

a

really means in terms of financial
U. S. Government secu¬

a
on

ment

me

expanding

maneuvering a fiscal
dedicated to stability and

If

secure

"we

an

for

Canadian

of

recurrence

ward step for

"will

all respect.

can

provide

sumed

double talk.
Only in
to help keep the economy the financial press does one get a
even keel." And the Report rational appraisal of what the debt

power

I

but rather
would

its

we

quate expansionist policies is the
perennial
obsession
about
the

Government is pledged "to use its

Act.

we

suggest that in

economy the debt limit ought not
to be fixed at
any obsolute level,

sodes.

adjustment "may not be convert*
ed into a spiralling contraction"
(p. 7). Moreover, it expressly in¬
terprets the Employment Act of
1946 to mean that the Federal

to

I

complete surprise shock us
shall, of course again be
in trouble.
But it is folly to base
our
peacetime plans on the as¬

again,

stresses pri¬

marily the aim of the government
"to use its vast powers to
help

on

think

1

an

ever

f

forward statement, cmd one which

ourselves

demand and serious
shortages,
not relevant at all to
a
situa¬

is

prevent severe slumps in the fu¬
ture" (PP. 108-9).
I miss, how¬

and

rid

we

We must remember
experience of 1946-47,

the

when

final comments. The Econ¬
Report declares the "deter¬
mination of the Federal Govern¬
ment to employ all its powers to
three

omic

potential

employment

unless

(his fear.

that-

or

full

our

maximum

proposal.

able

3?

Sixth

Co.

Chronicle)

— Mrs. E.,
joined the staff

CLEVELAND, Ohio
Lucine Mudri has

fact, with gross revenues of about

of

$16.6 million in the final quarter

Building.

L.

A.

Caunter

&

Co.,

Park
^

i

38

The Commercial and Financial Chronicle

(1138)

Continued

from

pared with 275.76

4

page

sponding date

The State of Trade and
this

preceding
trade weekly.

,,

j

ingot production there

in

improvements

of

reports

scattered

are

.

the current declines in

contrast to

In

and Chicago, states

week in Pittsburgh

the

for

rates

Industry
ordering.

new

One

feature is the increasing number of rush orders at
both warehouse and mill levels. This, says "Steel," indicates that
at least some consumers have worked their stocks to a low pioint.
stimulating

increasing in num¬
ber they are generally small.
No longer do consumers feel it
necessary to carry larger stocks; they're confident they can buy
what they need when they need it, continues this trade journal.
Although orders received by warehouses are

sector

A

noted

which

an

has been

improvement in demand

agricultural implement producers, substantial users
Some steelmakers report gains in farm implement pro¬
the

is

bars.

of

from

by 10% over a month ago. This
is not as much seasonal improvement as has been experienced
from these consumers before, and mill order books for bars are
far from filled for either the near-term or the future, adds this
duction have raised sales of bars

trade magazine.
clined

to

market, consumers are increasingly in¬
prices and new freight rates in another

month will further reduce steel costs to users.

ended

March

prices

the

On

4.

of

steel

remain

"Steel's"

hand

other

however.

firm,

composite

price

steelmaking scrap continues to drop in response to the weak¬
ened rate of steel output.
The composite in the week ended
on

March 4
The

$24.50

was

a gross

American

ton, down $1 from the preceding week.
Steel Institute announced that the

and

Iron

'

steelmaking
capacity for the entire industry will be at an average of 68.9% of
capacity for the week beginning March 8, 1954, equivalent to
1,642,000 tons of ingots and steel for castings, as against 1,686,000
operating rate of steel companies having 96.1% of the

tons and

70.7% (actual) a week ago.
1
production rate for the weeks 111 1954, is
now based on annual capacity of 124,330,410 tons as of Jan. 1, 1954.
For the like week a month ago the rate was 74.4% and pro¬
.

1,774,000 tons.

A

year ago

was

the actual weekly production

lower than capacity in 1954. The

percentage figures for last year are based on annual capacity of

117,547,470 tons

as

of Jan. 1, 1953.

figure represents

increase of 190,000,000 kwh.
increase of 413,000,000 kwh., or
an

the comparable 1953 week and 1,089,000,000 kwh. over
(

Loadings Continue Lower Trend in Holiday Week

Loadings of
which

freight for the week ended Feo. 27, 1954,
the Washington's Birthday holiday, decreased
3.8% below the preceding week, according to the

or

totaled 595,031 cars, a decrease of 73,623 cars or
11% below the corresponding 1953 week, and a decrease of 160,813
cars or 21.3%
below the corresponding 1952 week, which was a
non-holiday week.

Output Drops 5% Under Previous Week

but

previous week due to
and minor

a light work week at many plants, heavy
cutbacks, according to "Ward's Automotive Re¬

ports."
The industry,

"Ward's" states, turned out an estimated 106,812 cars last week, compared with 113,041 (revised) in the
pre¬
vious week.
A year ago the weekly production was 120,900.
Last week, the agency reported, there were 20,880 trucks
made in this country, as against 21,574 (revised) in the previous
week and 27,927 in the like 1953 week.
"Ward's" estimated Canadian plants turned out 8,671 cars and

2,084 trucks last week, against 9,181 cars and 2,184 trucks in the
preceding week and 7,611 cars and 2,387 trucks in the compar¬
able 1953 week.

Business Failures Rise
Commercial and industrial failures
ended

March

4

from

Bradstreet, Inc., states.
numerous

204

in

Slightly
mildly to 223 in the
preceding week, Dun &

rose

the

While casualties

than in the similar weeks

and 170 occurred

of

were

1953

considerably

and

1952

more

when

180

respectively, they remained slightly, 12%, below

the prewar toll of 254 in the comparable week of 1939.
Failures involving liabilities of $5,000 or more increased
194 from

182

Following several weeks

week ago

week.

Mild Rise Lifts Food Price Index to New 3-Year

of Feb. 19.

last week.

index, which
a

rose
new

High

only 1 cent to stand at $7.21 on March 2.
three-year high and compared with $6.28

year ago, or an increase of 14.8%.
The index represents the sum total
of 31 foods in general use and

of the price per pound
its chief function is to show the

general trend of food prices at the wholesale level.
1

1

Wholesale Commodity Price Index Advanced
Irregularly
In Past Week

marine, inland marine,
casualty
and fidelity and
surety insurance
and allied classes.

1
.

The companies
business through 17,000
agents
in all of the states
and territories
do

of

the

in

Canada

The daily wholesale
commodity price index, compiled by Dun
Bradstreet, Inc., moved irregularly higher during the past week
tox?lose at 277.20 on March
2, a new high for the year. This com¬

United

countr ies.
the

Ago

net

Last

1

Retailers

scored

wear.

by

estimated

2%

by

dollar

Dun

comparable

1

&

over

the

of

retail

trade

in

the

Bradstreet, Inc., to be from

1953

a

levels

year-ago

week

2%

was

below

to

Regional estimates varied from

year ago.

levels

by the following percentages: New
England and East —1 to +3; Midwest —4 to 0; South —2 to
+2;
Northwest —3 to +1; Southwest and Pacific Coast 0 to
+4.
interest

consumer

in

steadily

875.

shoppers.

uncertainty

in

were

the coming of color

over

group

and the

apparently diminished.
The buying of cars gained
steadily with the approach
Spring; substantial discounts continued to be quite common.

of

the

two

groups re¬

allowing for the equity

increase in unearned pre¬
reserves
and
after de¬

Federal
net

Dividends

■

the

have

been

paid

on

shares of the company every

since

year

of

is

1868, with the excep¬
years 1872 and 1907.

the

the

present intention of

the

board of directors of the company
to

quarterly and
quarterly dividend of
per
share on the new
$2.50 par value shares (including
the
shares issued in connection
pay

dividends

to declare

45

a

cents

with

Television sets, especially moderately priced models,
consumer

.as

foreign

combined basis

income taxes,
operating earnings
of the two groups
equalled $12,677,177, or $4.23 per share on the
3,000,000 shares of capital stock
to
be outstanding after this fi¬
nancing.

It

The recent recovery in the demand for household
goods con¬
the past week as aggressive
promotions attracted many

as

a

Fund

After

mium

tion

some

tinued

rising demand

On

year

the

in

weakened

was

.well

as

in certain

ported aggregate statutory under¬
writing profits of $10,317,506 and
net investment income of
$9,437,-

Spring

clothing which had been
parts by the return of
Wintry weather. However, in the South, Southwest, and Pacific
Coast States shopping for
Spring rose and was at least equal to
the level of a, year ago, thus
auguring well for the entire Spring
shopping season.
fZi.,

rising

States,

and

premiums written by the

combined

were

■

volume

above the level of

the

gains

food retailers.

total

the

share distribution

20%

to shareholders of record Feb.

26,

under
the present offering) payable on
or about April
15, 1954 to share¬
holders of record on March 31,
1954,

and

all

shares sold

1954.

Trading activity in many wholesale centers quickened slightly
on Wednesday of last week as
many buyers
placed re-orders for seasonal merchandise.
However, the total
dollar volume of wholesale trade remained
down moderately
from the high level of a year ago.
Buyers were chary of in¬
creasing their commitments beyond the needs of the immediate
in the period ended

future.

Department store sales
the

White Adds to Staff
(Special to The Financial

Federal

Reserve

on

Board's

a

country-wide basis

index

for

the

as

taken from

ended Feb.

week

27,

Chronicle)

LOUIS, Mo.—Coyle T. At¬
chison has been added to the sta
ST.

White

&

reported

was

four

weeks
the

from

ended

that

period *Jan.
a

decrease

the

of

Feb.

27,

1

to

Feb.

1%

of

similar

1954,

a

week

decline

27, 1954,

below

the

of

in

1953.

1%

was

For

department store sales

corresponding period

of

1953.

Retail trade in New York last week

rainy

weather

and

as

decline of about 4 to

a

consequence,

was

affected by cold and

sales

5% below the like week

volume
a

year

suffered

a

ported.
1%

was

For the period *Jan.

registered
k
period

over

1954,

1

an

to Feb.

that of the 1953

increase of/1% was re¬
27, 1954,

an

period.

'■

.

♦Comparison
Jan.

5-10

week

in

.

begins

1953.

increase of

'

:

with

the

Jan.

4-9

week

in

"

-

" "

with

the

Blaine

Chronicle)
Ohio—George S

(Special to The Financial

ASHTABULA,

Kaler has become

associated wi

Perry T. Blaine & Co.,
Avenue.

S.

He

was

Green

&

4519 Mai

formerly wi
Co. of

Cleve

land.

Joins Westerner

& C0,

Chronicle)
CINCINNATI Ohio—Eugene
Kidwell
is now affiliated wi
Westheimer and Co., 322 Wan
(Special to The Financial

Street, member®
and

1954
,

-

John

ago.

According to the Federal Reserve Board's index department
store sales in New York City for the
weekly period ended Feb. 27,
1954, registered 110 change from the like period of last year.
In the preceding week, Feb.
20, 1954, an increase of 1% (revised)
Was reported from that of the similar week of 1953, while for
the four weeks ended Feb. 27,

Now With Perry

the

reported.

val¬
the Mid¬

Co., Mississippi

ley Building, members of
west i Stock Exchange.

1954, decreased 3% below the level of the preceding week. In
the previous week, Feb. 20, 1954, an increase of
1% ; (revised)

&




Week

many

consistent

Z

Surety group exceeded
$181,000,000 in 1953.

par

most

he

consisted

ducting

The

prog

company to

Fireman's Fund
Insurance To
of
California, Home Fire
ami
Marine
Insurance Co. of
Cali¬
fornia
and
Fireman's Fund In"
demnity Co. The Fireman's
Fund
group is engaged
primarily in the
writing of fire, automobile,

in

Spring

$10,000000
genera!

part of the

Surety Corporation
Fireman's Fund group

in

a

a

the acquisition
of Na

tional

generally reported their sales volume as
with the level of a year before. Heavy snows in
the Midwest hampered sales
noticeably and dampened the interest
on

sub

excess of

National

Year

a

reduced-price promotions and the ap¬
proach of Spring, many shoppers boosted their
spending slightly
in many parts of the nation in the
period ended on Wednesday

of

to

Fireman's

Trade Volume Holds Close to Level of

registered

The rise in wholesale food costs
appeared to falter the past
week. This was reflected in the Dun &
Bradstreet wholesale food

a

10 spot markets declined in

In Latest

,h" £

in

ocean

the preceding
110,000 bales, from 148,500 the week before and 124.800
Loan entries in the week ended Feb. 19 fell to 37,500
bales, as against repayments of 46,700 bales during the same
period. About 6,432,500 bales of 1953-crop cotton remained under
as

»?

subsidiary

Marine I,islin„™
balance of
estimated to be

the

Prior

announcement

year ago.

For

This represented

the

week to
a

'rom the

continuing growth of
company and its
subsidiaries

-

of further cotton grants by the Foreign
Operations Administration
and late reports of dryness in southwestern
portions of the belt.

Reported sales in the

The

for

advancing prices, the trend last

stimulus from

some

Surety

Corp.

funds of the

Feb. 19 topped entries for the first time this season.

received

tional

will become

in rather
■

n's

at

outstanding shared'w
Surety Corp
2"

stantially

was
mostly lower, due largely to the gradual increase
reported in withdrawals from the loan, which in the week ended

market

the

proceeds,

all-time

week

The

ml!

?Lt^lroe^d?
Se

wholly-owned

re¬

of

of this size last year.

price

of

com

of
course

ns~

Fh/!"16

l^rryth

tional

heavy receipts.

on

„f

e

of

on

Spot cotton prices developed an irregular
quiet trading during the past week.

to

and were notably higher than the 152
Small casualties, those with liabilities under
$5,000 edged up to 29 from 22, but were only one above their 1953
total for the corresponding week.
Twenty of the failing concerns
had liabilities of $100,000 or
more, as against 23 in the previous
a

an

I

C

new

cattle prices weakened

The

Automobile output for the latest week declined 5% under the

week

sharp set-back

a

The

Loadings

snows

sa

highs for all-time last Friday but
Monday of last week. The decline
following the recent upswing,
coupled with profit-taking and hedge selling prompted by weak¬
ness in the London market.
Lard displayed a firm undertone with
several lard deliveries scoring new seasonal
highs. Demand for
live hogs was dull and prices worked lower. Lambs were firmer

Association of American Railroads.

U. S. Auto

outlets reached

deN
n"

i

Blyth

share! P1"' VSlUe) Pricecl

attributed to technical reasons

was

revenue

included

23,592 cars,

wholesale and retail

Cocoa values soared to

about

the like week in 1952.

Car

Fund Insurance
Co

monthly high during January, according to the Tea Council.

Encouraged by

tric Institute.

over

a

0f

iointiv

terday (March 10) offered J
public 601,453 shares
ot

sweet

by

group

Inc. and Dean
Witter & c„

low ebb.

a

nationwide

Corp!,

newal of Brazilian and trade demand.

distributed by the electric light
and power industry for the week ended Saturday, March 6, 1954,
was estimated at 8,586,000,000 kwh., according to the Edison Elec¬

5.1%

other

and

Higher in Latest Week

above the preceding week, and an

A

writers managed
First Boston

goods. Export flour inquiries and sales
Green coffee prices developed some
irreg¬
ularity a week ago, but turned upward late in the week to reach
new record
highs.
The upturn was largely influenced

The amount of electric energy

The current

in

con¬

wheat

Bookings of hard wheat bakery flours were small the past
following the fairly good volume negotiated in the preced¬
ing week.. Shipping directions were rather slow, reflecting con¬
tinued complaints of lagging sales of bakery products,
especially
remained at

I954

con¬

Firmness

week

loan

Electric Output Turns

developed

period.

#

placed at 2,284,000 tons or 101.3%. The operating rate is not

was

comparable because capacity

lb©

ago.

The industry's ingot

duction

but

week

purchases of grain and soybean futures on the Chicago Board of
Trade last week showed a drop to 46,100,000 bushels, from 50,500,000 the previous week and compared with 43,800,000 a year

suffered

This
is reflected by "Steel's" price composite on finished steel.
For
the 11th consecutive week it was $113.91 a net ton in the week
base

last

close ot

belt, expectations of sizable export
business, and indications of tightening in cash markets.
Feed
grains generally followed the trend in wheat and soybeans and
finished with moderate net gains for the week. All soybean futures
contracts rose to new high levels for the season.
Daily average

cakes

Thursday March

.

corre¬

buying influenced by unfavorable weather

Winter

Tea sales to

haggle over

Standard

the

in

.

buyers'

the

Riding

irregular

wprp

strength toward the

wheat reflected
ditions

.

year ago.

a

Grain m&rkote

siderable

week earlier, and with 281.16 on the

a

.

t^e New

1

Number 5306

Volume 179

..

The Commercial and Financial Chronicle

.

The following statistical tabulations

Indications of Current

latest week

Business Activity

week

STEEL INSTITUTE:

AND

IRON

AMERICAN

Indicated steel operations

(percent of capacity)

Equivalent to—
Steel ingots and castings

(1139)

Mar. 14

or

or

month ended

Latest

Previous

Month

Year

Week

Week

Ago

Ago

§68.9

*70.7

74.4

that date,

on

101.3

BUILDING

(net tons)

Mar. 14

§1,642,000

*1,686,000

2,284,000

1,774,000

Total

Crude

gallons each)
runs to stills—daily
Gasoline output (bbls.)
Kerosene output (bbls.)

(bbls.

average

(bbls.)

average

(bbls.)
Residual fuel oil output (bbls.)
fuel oil

Distillate

output

Feb. 27

6,303,050

*6,314,750

6,257,200

6.521.000

Feb. 27

117,123,000

7,156,000

6,948,000

7,090.000

Feb. 27

24,511,000

24,585,000

23,731,000

23,360,000

Feb. 27

2,994,000

3,120,000

2,682,000

2,935,000

10,818,000

10,982,000

10,289,000

10,796.000

—Feb. 27

8,928,000

.8,573,000

8,312,000

9,017,000

Stocks at refineries, bulk terminals, in transit, in pipe linesFinished and unfinished gasoline (bbls.) at
Feb. 27

(bbls.) at
Distillate fuel oil1 (bbls.)
oil

fuel

Residual

Feb. 27

(bbls.)

179,170,000

177,364,000

170,421,000

157,612,000

19,506,000

19,421.000

22,093,000

20,550,000

at

Feb. 27

69,137,000

69,728,000

83,936,000

68,025.000

at

Feb. 27

45,941,000

46,215,000

46,433,000

44,432.000

Revenue

freight loaded

(number

Revenue

ireight received from connections

Industrial

.j.

of cars)

CONSTRUCTION

ENGINEERING
U.

Feb. 27

595,031

618,623

628.190

668,654

of cars)__Feb. 27

590,002

602,299

609,667

654,946

$225,724,000

$194,300,000

$273,663,000

Mar.

4

100,956,000

115,113,000

115,989,000

127,203.000

Mar.

4

107,192,000

110,611,000

78,311,000

146,460,000

—Mar.

4

89,237,000

78.683,000

63,029,000

132,430,000

17,955,000

31,928,000

15,282,000

14,030,000

construction

Private

construction

Public

State and

municipal

Federal

Mar.

_

OUTPUT

COAL

$208,148,000

Bituminous coal

and

lignite

Pennsylvania anthracite
STORE

DEPARTMENT

4

(tons)

Social

and institutional—

Miscellaneous
Farm

SALES

SYSTEM—1947-49

INDEX—FEDERAL

AVERAGE

=

Feb. 27

6,755,000

*7,245,000

8,405,000

8,611.000

530,000

583,000

695,000

554,000

100

90

*86

85

93

output

FAILURES

(in

kwh.)

000

(COMMERCIAL

Mar.

AND

INDUSTRIAL)

—

DUN

6

8,586,000

8,396,000

8,674,000

8,173,000

BRADSTREET, INC

223

204

238

Finished

steel

Pig iron

(per gross

Scrap steel
METAL

(per gross ton)

PRICES

(E.

__

M. J.

&

;

_

.

Lead

(New York)

Lead

Zinc

f

.

at

Louis)

(St.

;

^

(East St. Louis)

at

U. S.

BOND PRICES

:

DAILY

Average

corporate

100

275

30

27

45

46

43

228

231

205

7

7

8

674

711

713

34

35

48

339

341

323

126

130

131

156

155

131

......

23

21

—_

34

35

28

62

76

106

110

125

110

62

61

——

—.

...

J.

....

...

...

water

33

54

$14,836,020

69,966,639

105,141,783

43,519,600

29,452,475

$14,599,976
49,495,805
35,213,438

68,571,605

67,301,733
60,940,461
21,306,200

--Mar.

23.83

24.33

27.33

44.25

29.650c

development
public—...
—....—..
—

PERMIT

VALUATION

DUN

—

&

CITIES—Month

INC,—>15

January:

England

s..

Middle Atlantic

Central

30.375c

South
West

Mar.

29.200c

28.700c

29.375c

34.750c

Mar.

86.750c

85.000c

85.000c

121.500c

13.000c

13.500c

12.300c

12.800c

12.300c

—Mar.

9.250c

9.250c

9.500c

11.250c

98.81'

Mar.

99.88

99.47

Mai'-

110.34

109.60

108.70

107.80

Mar.

115.82

115.04

114.27

111.25

Mar.

112.37

111.81

110.88

110.15

Mar.

110.15

109.24

108.34

106.74

III II—1_—_II—HIIIII "Mar.

103.47

103.13

102.13

103.30

Mar.
Mar.

108.16

107.27

106.74

105.52

110.52

109.97

108.70

107.44

Mar.

112.19

111.62

110.70

110.52

_

I

87

307

$12,487,613

of
New

12.500c

:

17

89
300

....

—

.

Central

Mountain

—_

13,239,446

.

......

United

York

69,480,585
13,826,189
9,579,475

——68,425,052

67,584,064

$343,938,229

$372,858,042

$306,568,308

32,068,684

55,856,712

28,765,075

311,869,545

317,001,330

277,803,233

States—.

-

...

City

46,788,776

12,676,656
61,202,714

11,039,465

——

....

Pacific

Total

56,688,809

——

Cential

—-

AVERAGES:

A

II

19

5

4.376c

12.300c

:

-

26

20

11

$55.25

12.500c

-

L

26

9

$56.59

Aa

Baa

10

26

10

4.634c

_Mar.

Government Bonds

Aaa

31

16

...—

other

New

MOODY'S

39

16

56

4.634c

—Mar.

—

at

34

38

50

13

East

at

111

51

$56.59

■

Export refinery at
Straits tin (New York)

164

12

4.634c

29.675c

158

45

$56.59'

29.700c

204

Miscellaneous public service enterprises

Mar.

Mar.

179

....

South Atlantic

.

177

64

Conservation and

Mar.

QUOTATIONS):

Electrolytic copper—
Domestic refinery at

433

61

...

BRAD STREET,

ton)

486

180

PRICES:

(per lb.)

19

476

27

Highways

BUILDING
IRON AGE COMPOSITE

23

43

...

....

All

Mar.

22

41

telegraph—..t

Hospital and institutional
Other nonresidential building

&

67

.....

...

and

675

69

118

——

construction

Sewer

Electric

740

143

—._w

building
Nonresidential building

ELECTRIC INSTITUTE:

EDISON

758

680

141

Military and naval facilities
Feb. 27

1,574

830

75

Residential

RESERVE

$2,287

1,717

771

89

.........

Other public utilities.
All other private.:
Public

$2,428

1,643

73

•.

construction

$2,317

85

recreational—

and

Educational

—Feb. 27

4

*

Educational

Industrial

(tons)

i—

nonresidential building
Religious

S. BUREAU OF MINES):

(U.

(nonfarm)

-

Telephone and
4

—

Other

Railroad

—Mar.

...

Warehouses, office and loit buildingsStores, restaurants, and garages

ENGINEERING

—

construction-—

S.

Ago

•

....

Commercial

NEWS-RECORD:
Total

Month

*

Public utilities

CIVll

Year

Month

(in millions):

—

Nonresidential bunding

of that date:

OF

building (nonfarm)dwelling units—

Nonhousekeeping

are as

Previous

construction.

Hospital
(no.

DEPT.

Additions and alterations

AMERICAN RAILROADS:

ASSOCIATION OF

February

construction

New

Feb. 27

Kerosene

S.

either for the

are

Latest

Residential

of

42

Crude

of

of quotations,

cases

CONSTRUCTION—U.

new

Private

PETROLEUM INSTITUTE:
oil and condensate output—daily

in

or,

LABOR—Month

AMERICAN

production and other figures for the

cover

Dates shown in first column

month available.

39

_

94.82

Outside

City.,

GOVERNORS

SERVE
mated

FEDERAL

THE

OF

and

RE¬

SERIES—Esti¬

REVISED

SYSTEM

short

—

OUTSTANDING—BOARD

CREDIT

CONSUMER
OF

York

New

intermediate

credit

term

'

Railroad
Public

Group

_

Utilities

Group
Group

Industrials

—

S.

Government Bonds

Average

Mar.

2;87

Other

Mar.

3.15

3.19

3.24

3.29

Repair and modernization

Mar.

2.86

2 90

2.94

3.10

Personal loans

Mar.

3.04

3.07

3.12

3.16

,-__Mar.

.

A
.

:

Public

Group

Utilities

Industrials
MOODY'S

COMMODITY

NATIONAL
Orders

INDEX

PAPERBOARD

received

...

(tons)

Percentage

of

3.35

Single payment loans..

3.62

3.55

Charge accounts ...—_.1

Mar.

3.32

3.35

3.42

Service

3.17

3.24

3.31

3.13

3.14

——Mar.

427.6

426.1

421.2

418.3

(tons)

at end

of

AVERAGE

—

100

212,753

217,650

232,351

220,319

Feb. 27

228,258

239,388

240,413

251,149

—Feb. 27

88

89

92

95

period

Feb. 27

320,960

340,049

330,839

437,345

DEALERS

EXCHANGE

—

AND

SPECIALISTS

SECURITIES

Odd-lot sales by dealers

5

107.78

107.25

106.95

107.84

ON

EXCHANGE

N.

Y.

')

COMMISSION:

871,712

1,035,184

925,853

806,963

$39,583,535

$39,984,135

$42,297,268

$36,697,015

848.192

987,704

828,804

697,299

9,757

6.894

8,552

5,405

(customers' sales) t—

sales

Customers'

other

sales

Dollar

value

__

_

_

838,435

980,810

820,252

691,894

$35,777,843

$36,894,623

$35,578,856

$28,364,497

Round-lot sales by dealers—
Number of shares—Total sales

Short sales
Other

_

_

_

294,440

240,540

294,440

240,540

193,220
-

—

sales

Round-lot purchases by

278,950
278,950

—

_

Number of shares

_

_

297,640

__

280,820

319,570

334,810

TOTAL ROUND-LOT STOCK SALES ON THE N. Y. STOCK
EXCHANGE AND ROUND-LOT STOCK TRANSACTIONS
FOR ACCOUNT OF MEMBERS (SHARES):

sales

;

TRANSACTIONS

ACCOUNT

FOR

OF

sales

the

439,640

439,640

326,320

206,000

Feb. 13

8,591,410

9,491,410

7,624,580

5,753,150

Feb. 13

9,031,050

9,931,050

7,950,900

5,959,150

Other

913,620

924,720

836,380

628,560

Feb. 13

178,420

180.620

147,840

107,890

Feb.13

750,830

757,930

678,130

Feb.13

929,250

938,550

825,970

484,930
592,820

floor—

>eb. 13

initiated

off the

LABOR

—

PRICES,
(1947-49

NEW
==

U.

SERIES

282,500

Stocks

(tons)

Shipped

S.

DEPT.

,1

J
and

Stocks

^

......

—

6,681

7,089

6.823

2,083

5,288

2,127

2,143

2,893

3,249

2,975

1,705

1,713

1,705

foods..

*809,972
717,999

221,907

*2,864,727

1,827,497

183,105,000
234,465,000
198,827,000

148,742,000
232,230,000

•178,757,000
211,136,000

*224,117,000

♦199,608,000

1,152,554,000*1,109,455,000

133,650

232,930

(tons)

200,423,000

131,421,000

>135,286,000

627,573,000
185,476,000
104,450,000

109,229

109,700

•194,047

334,973

340,919

310,755

394,241

•272,011

—

....

(tons)

...

31—

Jan.

Produced

:

Shipped
Hull

...

—

Fiber

31

Jan.

—

.....

216,728

190,376

289,672

221,962

221,348

207,425

195,610

225,040

194,907

1,062

964

1,630

2,010

1,642
1,637
2,067

1,877

—

.

Shipped

—

*

8,807

7,777

3,439

3,088

12,620
4,031

2,409

2,537

2,399

$70.92

*$71.96

$71.34

76.59

♦77.52

76.91

63.53

*64.06

62.88

HOURS—WEEKLY

ESTIMATE —U.

S.

DEPT.

OF

LABOR—Month of January:

Weekly earningsAll manufacturing

—

Durable

goods
Nondurable goods

—

—

Hours—

12,503

Durable

277,010

277,010

217,700

135,430

Nondurable

482,268

482,368

375,896

225,621

56,420

56,420

49,020

32,300

367,310

367,310

326,276

231,015

All

manufacturing

All

goods
goods

manufacturing

Durable

goods

Nondurable

423,730

423,730

375,296

263,315

1,689,588

1,445,206

987,831

258,440

260,640

207,060

152.690

Industrial

1,371.550

1,378.650

1,211,906

838,905

Railroad

1,629,990

1,639,290

1,418,966

991,595

Utilities

MOODY'S
2(H)

Banks

•40.2
*40.8

41.8

38.5

*39.3

39'.8

$1.80

$1.79

$1.74

1.91

*1.90

1.84

1.65

*1.63

1.58

5.29

5.28

6.92

6.98

5.69

5.09

5.11

5.08

4.72

4.23

3.08

3.20

3.17

5.32

5.33

5.22

—

—„

goods

41.0

39.4
40.1

—

AVERAGE YIELD OF
STOCKS—Month of Feb.:

WEIGHTED

COMMON

(125)

—

(25)

.

(not inch

Amer. Tel. & Tel.)

(24)--

4.77

(15)
(10)

(200)

,

5.26

109.9

110.6

__Mar.

99.0

98.1

97.3

99.1

Mar.

105.2

105.2

105.2

105.5

Mar.

93.2

93.3

93.1

96.7

Mar.

114.3

114.3

114.5

113.2

lilncludes 691,000 barrels of foreign crude runs.
§Based on new annual capacity of
l, 1954, as against the Jan. 1, 1953 basis of 117,547,470 tons.
(Number of orders not reported since introduction of Monthly Investment Plan.

140,780

—

Produced

1,678,388

♦Revised figure,

53,247
145,158

162,467

(1,000 pounds >-

Stocks Jan. 31

122,960

110.5

51,678
161,318

146.022

(1,000-lb. bales) —

10,200

110.6

64,737
159,081

Lintcrs (running bales)—

207,500

OF

655,312

183,279,000

31-

Jan.

Jan. 31--

(tons)

Produced

Shipped

?eb. 13

of Jan.




3,887

Hulls-

Average

farm

4,307

237,261
711,743

(tons >

Insurance

Meats
other than

1,403

4,278

(tons)

Feb.13

Mar.

products
Processed foods

1,606

Cake and Meal-

23,600

100):

Farm

...

Hourly earnings-

commodities

All commodities

Produced (pounds)
Consumption (pounds)

253,410

Commodity Group—
All

:—
..J—
.....

(pounds) Jan. 31—.

23,600

floor-

sales

WHOLESALE

1.587

Oil—

253,410

Total round-lot transactions for account of members-

Other

31

(pounds)

AVERAGE
Feb.13

sales

transactions

Jan.

(poundsi

Produced

FACTORY EARNINGS AND

282,500
Other

5,605

—

MEM¬

.

on

8,273

5,495

2,390,245

—

...

Shipped
Feb. 13

BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS:
Transactions of specialists in stocks in which registered

Other transactions Initiated

18,851

10,289

of

—

.

~-

31

Produced

Total sales

Other

(tons)

Jan.

Motes, Grabbots, etc.

Short sales

ROUND-LOT

Oil

Stocks

Total Round-lot sales—

Other

Crude

mills

at

(tons)

(tons)

Stocks

193,220

1

dealers—

Stocks

Produced

Number of shares—Total salesshort

Received

Stocks

value

Customers'

$25,674

21,807

10,084

^

Crushed

Refined

STOCK

Number of shares
Dollar

$28,896

21,444

PROD-

COMMERCE--Month

OF

Shipped (poundsi

(customers'1 purchases) t-

Odd-lot purchases by dealers

SEED

COTTON

AND

UCTS—DEPT.

Stocks
—Mar.

...

STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODDLOT

SEED

COTTON

...u_

—.—

.

$28,125

Cotton Seed—
—Feb:27

OIL, PAINT AND DRUG REPORTER PRICE INDEX—
1949

credit

January:

ASSOCIATION:

activity

Unfilled orders

3.26

3.56

3.08

loans

——

3.21

3.14

(tons)—.

Production

Noninstalment credit

3.54

3.05

•

....

3.27

Mar.
;

,

3.16

_Mar.

Group

goods

consumer

Mar.
*

Group

—

2.58

•

.

Railroad

——...

2.54

Aaa

Baa

31:

credit

credit

2.51

corporate—

Aa

of Jan.

as

Instalment

Automobile

MOODY'S BOND YIELD DAILY AVERAGES:
U.

in millions

Total consumer

124,330,410 tons as

STATES GROSS DEBT DIRECT
GUARANTEED—(000's omitted):

UNITED

As of

Feb

28

General fund

Net

-

balance

debt

.

Computed annual! rate
I

v

AND
,

.

$274,858,550
4,988,045

$274,923,609
4,044,002

$267,633,740
6.023J767

t269.870,505
2Aib/o

$270,879 607

$261,609,977
2.378 £

40

The Commercial and Financial Chronicle

(1140)

Continued

from

ditional

13

page

SEC Rules and Foim Revisions

securities

always been consid¬
event.

been

These changes in

sides

an

items for these purposes

ous

dealt with
ter

the

in

respects

some

The

other.

each
10-K

of

scope

differed

report

which

subject mat¬

same

differed

but

from

the

some¬

what from that of the proxy state¬

These differences caused

ment.

a

the part
of the reporting companies and an
unnecessary
and expensive ad¬
ministrative problem for the Com¬
duplication of effort

on

mission in handling and reviewing
similar but different material.
In

study of the problem, it
developed that it might be

our

also

possible to dispense entirely with
the requirements for the registra¬
tion of additional shares of

listed

a

security on Form 8-A by properly
integrating the various require¬
ments

the

of

r
*

Not

forms.

profit

loss

and

and

which meet

statements

re¬

sheets
surplus

development

a

the Com¬

benefit

mutual

and

alike.

obtain

will

of

be

shareholders

to

management

holders

will

the

Share¬
informa¬

considered

tion

in¬

necessary for
investment analysis,

formed

corporate ^managements

and

will

be

the prepa¬
set of financial state¬

able to concentrate on

ration of

one

ments where

formerly

than

more

Heretofore, the Commission has
companies which
under the

required

never

do

solicit

not

rules

proxy

proxies

transmit to the
copies of reports to
to

Commission

shareholders.
been

which

Companies

proxies have for
required

many years

their

transmit

to

rules and in the internal handling

to
shareholders
to
the
Commission subject to the proviso

of material received by the Com-

that they would not be considered

some

that

the

revision in the

reports

would

as

be of real assistance to the public.

or

changes

"filed"

the

with

Commission

subject to the liabilities of Sec¬

tion 18 of the Securities Exchange

We, therefore, reviewed the re¬
quirements of the various rules

Act

and forms as part of a single dis¬
closure problem. There appeared

misstatements contained in reports

to be

filed with

no good reason why a com¬
which solicits proxies should

pany

be

required to

duplicate

the

in¬

formation contained in the proxy

.statement

in

which,

practice,

the

in

the

or

report

determined that the informa¬
tion required by the rules would
be entirely adequate for purposes
of an annual report with respect
to the subject matters covered by
those rules.

The additional non-financial in¬

required

for

10-K annual report

purposes

which

are

not contained in
ment

the proxy state¬
limited to three or four

was

the

civil

the

section

liability

for

Commission under

1934 Act.

items of information which could

In

revising our reporting re¬
quirements, we have provided that
all companies subject to Sections

Commission

and

we

i

to

propose

include such reports in our public
files with the 10-K reports/ This

requirement for the first time will
make

these

annual

shareholders

of

reports

listed

to

companies

which do not solicit proxies

gen¬

erally available to the public and
should

contribute

to

under¬

an

standing of the financial and other
information
required under the
Commission's regulations. We con¬
tinue for the soliciting
companies,
and

extend

the

to

be prepared very easily by every

non-soliciting
companies, the exclusion of these

reporting company.

reports to shareholders from lia¬

The

Commission's

experience

under the rules which permit in¬

corporation by

reference

has

in¬

dicated that many people will du¬
plicate information rather than

incorporate it.

In

order

to

make

bility under Section 18.
The changes in procedures re¬
garding the registration of securi¬
ties

on

national

a

securities

ex¬

change will also effect substantial
savings. Under the previous prac¬

our
plan effective, we made it tice, registration of a security on
an exchange under Section
h of
mandatory that companies solicit¬
ing proxies shall not respond to the Securities Exchange Act of

those
-

items

in

the

Form

10-K

.■

1934 became effective
only as to a

which have their equivalent in the

specified

number

statement, and that a com¬
pany which solicits proxies shall
file a Form 10-K consisting only

specified

amount

security,

so

of those items

class

proxy

called

We

for

rules.

proxy

hopeful that these

are

visions

of information not

by the

of

the

Commission's

re¬

shares

of

that

were

or

a

class

a

if

amounts

or

shares

of

of

additional

of

the

same

subsequently issued,

new application on Form 8-A
required for registration of

a

was

the

additional amounts.

re¬

requirements will give
further impetus and incentive for

Registration Rules
the

revised

of

sent

to

share¬

holders may be incorporated by
reference in the proxy statement
provided they comply with the
Commission's accounting rules.

the

Under the revised Form 10-K, fi¬
nancial statements
contained in
the proxy statements or in the an¬

This

or

becomes

effective

when

eliminates

applications be filed for
registration of additional amounts
a

listed

class

result will

be

of

a

security.

The

considerable

sav¬

ing of time and

issuing companies and the Com¬

where

mission.

they substantially meet the

tor

At the

expense

both to

time, inves¬

same

protection will in

requirements of Form 10-K. Thus
shareholder reports which contain

diminished because the
necessary

the

information

necessary information, par¬
ticularly as to financial statements,
can

be

used

shareholders
requirements
and also to

as

to

annual

reports to

satisfy part of the

for

proxy

filings,

satisfy part of the

re¬

quirements for annual reports to
the

Commissiqn.




the periodic

with

the

will

available

Commission

This form,
also been revised

requirements
holders

be
in

to

so

as

Form

to limit its

events

require

current basis.

on

incidentally, has

irpportance
as

way

reports currently filed

8-K.

material

be

no

a

to

of

report

on

a

The issuance of ad¬

hearings in June 0f 194? u
a
Subcommittee of the rw

The

Commis¬

sion

believes, under the Acts of
Congress it is sworn to support,
that the proxy rules, indeed all of
its rules, should be promulgated
and

administered

to

on

thl Commi»

of Ron

"n'de ene¬
bill
enacted 5

no

was

public interest and the protection
of investors.

We believe the

rules meet that test.

proxy

new

Commission

/

argued

Section 14 of the Securities Ex¬

the mails

use

mentalities

of

of securities

sleep

in

after

the

com¬

tional

securities

contravention

regulations

exchange

~

of

such

the

as

prescribe

on any na¬

"in

rules

and

Commission

as necessary or ap¬

propriate in the public interest
for

the

protection

Although

of

or

irlvestors."

abuses

earlier

Congr™^

the

promulgating

the
adjournpri

session

1942, but it

bill

a

powe

subsequent

election of'w
Congresses without
amendment If
Section 14 of the
Act, shouldb
considered
assured

this

m

event

any

the

Commission

CongreSa!

the

see

submission

gress

Transamerica case.14

of

of

one

with

the

three

Subcommittee

no

for

others

the

struck

two

down

lack of authority

block

simply
by-law

corporate

a

which would have
dural

and

in

placed

the

a proce¬

their

of

way

consideration by the shareholders.
The new proxy rule is in entire
accord with the legal basis of that

decision

and

consistent

the

with

court's statement that "a corpora¬
is

tion

the

for

run

and

benefit
for

not

of

its

that

of

its managers."
The

Associate

General

and

the

attempts

statutes

it

to

adminis¬

ters

by looking first to the stat¬
guidance. Let
Section
6(b) of the Public Utility Holding
utes themselves for

give you an example.

me

Company
that

"the

and

of

Act

1935

provides

Commission

regulations

rules

by

order, subject

or

to such terms and conditions
deems

appropriate
for

or

investors

or

the

in

the

as

protection

shall

consumers,

it

public

that
to

it

Commission in

that

they

its

would

were

not

abused.

The changes
the

m

we have just made
rules should be re.

proxy

garded

as

further

a

step

in

an

evolutionary

process
begun in
The changes have not
beep
made for the
purpose of

1936.

satisfy,

ing any particular group.

In the

considered judgment of the Com¬

mission, concurred in by its

ex.

perienced staff, the revised rules
will

better

the

serve

public in-

terest and the interest of

investors

generally.

of

Incidentally,

ex¬

not altered the

the

revision

has

long-standing

pro.

now

vision

Harvard

section (a) the issue or sale of any

School, Louis Loss, has writ¬

security by any subsidiary com¬
pany of a registered holding com¬
pany, if the issue and sale of such

X-14A-7, which enables a share,
holder to communicate with other

Commission,

in

his

the

at

authoritative

treatise:

"Where the State law is clear that

particular matter is for the di¬

a

the

construe

thi

that

beneficial to
shareholders and [Z
shareholders generally

empt from the provisions of sub¬

the

of

Professor of Law
ten

Commission

interest

former

Counsel
Law

The

1943

minority
deed, to

had in mind that the Com¬

mission should adopt in this field.

in

proxy rules would be

.

proposals and

£

connection
then

the

cisely determining what kind of
rules
and
regulations the Con¬

the

lim

J3

iting the Commission's

cision, the court found affirmative
authority under Delaware law for

consistent

in

of the proxy

rl

C tha^e

seems

to
failure of
enactment of
the

l/ S
Am ^

Dec

the

lulled

un¬

interstate

registered

had

instru¬

to-solicit proxies in respect

merce

may

or

sion

on

that

administration of the rules

is

I

possible.

re

tatives, testified
mies and

the Commission little help in pre¬

it

is

">

ForS®^
House

of the

merce

the

serve

i
•

Interstate and

In that de¬

that

decision

rectors alone, that would

to

seem

be

decisive; if Congress had in¬
tended to
give the Commission

security

are

solely for the

purpose

of

financing the business of such
subsidiary
company
and
have
been expressly authorized by the

of

the

shareholders

rules, Rule

proxy

when

the

manage,

ment is

soliciting proxies. Under
provision, the management

this

solicit proxies unless it
willing to transmit proxy
soliciting material submitted by
not

may

is

also

power

to reallocate functions be¬

State Commission of the State in

shareholders

tween

the

which such

is

This provision eliminates the pos-

business."

sibility that shareholders may be
deprived of the right to obtain a

so

two

corporate

revolutionary

vention

a

organs,

Federal inter¬

would

presumably have
clearly expressed. This
would
approach Federal incor¬
poration in all but name. As we
been

more

have

seen,

proposals

Federal incorporation
have recurrently ap¬

peared in Congress."

Let

me

add,

organized
The

subsidiary
and

for

Commission

company

doing

subsection

provides

(a)

the
of

referred

to

list

re¬

to communicate with them before

of other shareholders

a financing plan and the
taking of action by the Commis¬

the meeting. In such proxy

sion to make such declaration ef¬

mitted

fective.

solicit proxies to vote at

Declarations relating to a

only become

may

ing

material

by

a

in the proxy

ment

istered

omit

may

material

from

its

proxy

security holder's

a

pro¬

posal which relates to the conduct
of

the

ordinary

tions of

business

the issuer.

opera¬

,

Also, a new provision has been
adopted to relieve management of
the

necessity of continuously
peating in its proxy material
curity holder proposals which
previous
ceived

submissions

little

port.

Under

security

the

amended

holder's

omitted

have

security holder

from

within

the

on
re¬

sup¬

rules,

when

management's

sions?

though, because
terms, less than all

standing for election. 15

These

revisions

considerable

have

public

authorized
We

comment.

Commission

State

have this

commis¬

very

day in

will listen to and study the com¬

companies,

commissions, util¬
investment bank¬

others

and

the

on

difficult

questions of statutory interpreta¬
tion

involved.

prives

Many of the responsibilities of
Commission, including those
imposed by Section 14 of the Se¬

Exchange

represent
of

the

a

Act

venture

Federal

considered

ago as

on

of

1934,

the

Government

part
in

a

long

as

Com¬

mission, indeed, cannot claim a
copyright on the idea of the pro¬
gressive percentage increases em¬
bodied in the new proxy

Democracy

is

rule.

inconsistent

not

government in
through
chosen representatives. The his¬
tory of governmental organiza¬

with

form

a

which the

tions

of

majority speaks

indeed the
of co organizations, hears 0'

in America,

and

history of the development
porate
this

thesis.

In American

poht1

people spe
through their representatives i
the State Legislatures and in me
Congress. But the "initiative
legislative proposal initiated
y
the people directly rather than y
the
Legislature, thought by
the

undermining
corporate democracy and impair¬
ing the position of minority stock¬

field

holders. Others urge that the rules
should be further modified to re¬

in political de
methods, has proved vi
1936. Not until December of 1942 ally useless in the States w
did the Commission first adopt have tried it. In corporate den

Some

lieve

say

we

are

management

provisions

from

alleged to

be

various

burden¬

I

should

14 SEC

(2d)
15

v.

like

to

make

clear

Transamerica Corp.,

163

a

F.

511.

Securities Exchange Act Release No.

4979.

of

which, even after 18 years
administration,
is
relatively

proponents in
20th

the

cratic

first

approach

was

made

in

shareholder

proposal
rule.
adoption, it was feared
that the Commission was attempt¬

After

ing

its

to

minimize

the

rights

of

minority shareholders. Bills were
introduced in Congress to limit

the last decade _
and early in ^
be the
;

the 19th Century

The proxy rules have been
amended half a dozen times since
new.

the

some.

de¬

the

of

one

no

democracy,

the

curities

caused

by

ments of State

ers

even

the

said

Washington commenced a public
hearing on the proposal and we

less than 10% upon a third

during
five-year period. Also, the
rule requires data about all

it

"shall" exempt securities express¬

ity

staggered

are

expressly
authorized by the State Commis¬
sion. What did the Congress mean

submis¬

the directors
of

material.

progression

was

subsequent submission

or

10%

3, 6,

right of
advocacy. It merely places a
We have recently put out for limitation
on
that right which
comment
a
proposed new rule serves the interest of sharehold¬
which
would
ers
exempt from the
generally. As a matter of fact,
competitive bidding requirements a proposal for a 5 to 10% step-up
of the Commission securities of initiated within the Commission

ly

second

The

November of 1951. The new

submission, less

a

and

soliciting

subsidary companies the issue and

years

or

companies
their subsidiaries may issue.

proposals stated'

sions in favor of

sale of which have been

in the

upon

holding

the meet¬

seek expres¬

as

se¬

and received less than 3%
of a single

6%

to

well

as

re¬

five

than

as

the types of securities which reg¬

proposal may

previous

lays down standards

solicitand sub¬
shareholder, he may
prepared

ing for condidates for election as

which

proxy

in time

garding

rules now
specifically provide that manage¬

Proxy Rules

revised

expense,

declaration

directors

Revised

their

the

effective if they meet the require¬
ments of Section 7 of that Act,

The

at

with

filing

a

financing plan

not enacted.

such

security

both

so-called

that

Act,

submit

the

new

nual reports to shareholders
may
also be incorporated

by reference

security holders'
This reference to State

entirely consistent with the

change

the

require¬

Chairman of

on

by corporations
soliciting mechanism
were
specifically referred to, the
Committee
Reports
and
other
guides to legislative intent give

such

ment that

of

con¬

previous proxy rules and, indeed,
is* the only frame of reference, in

automatically
they are issued.
old

in

ac¬

proxy material if it was submitted

rules,

original

amounts

subject for

with

proposals.
law is

incorporation
determining

for

security holders

nection

sion

report

of

proper

a

by

registration of unissued shares

annual

state

standard

is

tion

the

proxy

the

the

is

what

case

the

ap¬

been

lawful to

application for registra¬
tion is deemed to
apply for regis¬
tration of the entire
class, and the

Under

500

11,193J

have

vocal

issue.

Thursday, March

.

who

change Act of 1934 makes it

be

Under

will

and

the

•

have

many

It has been made clear that the

rules,
financial statements contained in

holders.

Commission

approximately

by

extremely
of

to

seems

overlooked

clarifying nature.

law

a

porting

the publication of
reasonably de¬
tailed
annual
reports to shares

the

of

stockholders

reports to security holders to the

we

a

provides

is

three months after

most

material. By making
minor changes in the proxy rules,

of

the

That

13 or 15(d), whether or not they
solicit proxies, shall transmit their

is filed with

in

proxy

formation

that

1934.

cases

Commission

within two

annual

an

of

our

the absence of any direction from
Section 14 of the Securities Ex¬

might have been used.

one

with

complying

plications annually on Form 8-A.
Now, as to the revised proxy
rules, many of the changes are of
a

Such

in

eliminate

mission's accounting requirements.

simplified but it also became

mission

/

and

solicit

ap¬

shareholder

more

ports will include balance

only did it appear that the whole
reporting machinery could be
parent with

c

other

and

more

that

expected and hoped

the aggregate

requirements, will reduce sub¬
stantially the administrative bur¬
den

is

It

point which

amounts has

will simplify materially the work

Under the New Administration
required by vari¬

material

ered such

involved

the information

in

•

Century to

improvement

racy,

the people act

directors

holders,

whom

elect.

as

sn

ultimate
recourse °*

The

truly democratic
shareholder
against
ment

through t

they,

a

unsatisfactory to

mai &
him -

Number 5306

179

Volume

of

Board

the

nseat

Directors,
successful

have been many

here

The Commercial and Financial Chronkle

.. .

that have been
yaged by dissatisfied shareholdrs under the proxy rules adminstered by the Commission.
In political organizations, candi¬
dates for public office are often
equired to supply a specified
fights

roxy

which

have

had to go into the
raise equity capital or
which, because of the need to re¬

market

tain
for

earnings in their businesses
as
equity capital, have

"It

of your city—New York—
ineligible to run for.reelec-

is

duced

insufficient numer of citizens
validly signed his
nominating petition.
President
"isenhower expressed in his State

the views of the vast

fraternity

the

American

below

of the

the

Administration's

be doubled.

government'

are

sion,
the

after New Year's this year
hat this Administration's program
-g "inspired by
zeal for the com¬
mon good."
Applying that to the
securities law standard we are
-worn
to
support — namely the

mine.

deficit

of

name

this

even

should
situation

interest

in

mensurate

One

ad¬

row

to bor¬

als

so

The National Association of Se¬

preponderance have been
down
by
overwhelming

curities Dealers has announced the

voted

vote of the shareholders

Commission

The

its

and

staff

posals since 1943.

gener¬

entitled, in the true sense
corporate democracy, to require

ally

are

minimal

conditions of continued

as

ress

re¬

Edward

C.

Chairman,
Harriman Ripley & Co., Inc., Chi¬

Auchincloss,

perfectly clear,

Washington,
Potter
Jr.,

chance to say

the

this

directly to

chapter of the
American
Society of Corporate
Secretaries, that the revision is
intended

not

some

a

be

to

responsive

to

the

of

arguments presented
by representatives of the Society
of certain

or

peared

corporations who

before

the

at

us

ap¬

rolls
of

I

on.

the

that

data

together

as

the coming

question

had

could

been

year

whether
be

all

gotten

presented

to

The argument was made that

you.

shareholders submitting proposals
should defray the cost of their
submission in certain cases, but in
to

response

Chairman
'o

the

question

a

of

cost

the
to

shareholders'
stated that
such

costs

your

corporations

standpoint,

cost of

as

of

proposals,
it was
attempt to compile

no

to

Management

this

Redpath,
D. C.; William H.
Chairman
Finance
First Boston

ment

seriously

would

your

organization back the argu¬
ment that a
corporation should
not
pay whatever cost there is in

&

Co.,

Denver,

Colo.; G. Price Crane, Arnold &
Crane, New Orleans, La.; Frank
H. Hunter, McKelvy & Co., Pitts¬
burgh,

Pa.;

H.

Wilson,

Warren

Union Securities

Corp., New York,

N. Y.

Frank

B.

Committee

dependence Which
the most ideal

Possess,
his

the citizens of

democracy do not

namely,

disapproval

he
of

can
a

Policy by severing his
kith

it."

in

shareholder
a

other

doesn't

express

company's
connection

words,
like

the

if

a

way

COrnpany is being managed, he

^n, sell his shares.
unancial

officers

of

&

a

The

This

Co., Detroit, Mich.; Wallace H.

Fulton, NASD, Washington, D. C.

J.

of

under

one

Potter

H.

Jr.,

Chair¬

man,

The First Boston Corp., Bos¬

ton,

Mass.;

Ripley

&

Claude

George,

C.

Edward
of

Chairman

Board,

Harriman

Chicago, 111.;
Crockett, Crockett &
Inc.,

Co.,

T.

Houston, Texas; Harold C.
Patterson, Treasurer, Auchincloss,
Parker &
Redpath, Washington,
D. C.; Walter I. Cole, Beecroft,
Co.,

J.

Y.;

Chairman,

Troster,

Badenberger,

H.

Henry

Stein

Armstrong,

cago,

Curtis,

&

Jackson

Webber,

George F. Noyes, Chairman, The
Company,
Chicago, 111.;

Co., Portland, Ore.; Frank

1954 Investment Companies

Joseph

Funds

Chairman,

Welch,

E.

Philadel¬

Inc.,

Fund,

Inc., Los

Distributors,

Calif.;

Hugh

Hugh W. Long & Co., Inc., Eliza¬

beth,
Broad

N.

Woodford

J.;

Sales

Street

Corp.,

York, N. Y.; William
Vance,

Sanders

&

Matlock,
New

Murdoch

affiliated

Committee
pany,

E.

Harold

E.

Minn.;

Arnold

Wood,
&

Wood

Barth & Co., San
Howard

Weeks,

E.

Chairman,

Boston,

Jr.,

with

Williams Inv.

&

the

the

corporate

new

Alabama

experienced a respite
heavy outpour¬

that

market would

the

profit by this period of slack as
affording time for full digestion of
recent offerings.

of

The

bonds

with

day,

has

$17,-

for

up

Pennsylvania

slated to sell $12,000,000

Electric
bonds on

Wednesday.
The

the

Co.

Power

bids on
Tuesday and El Paso Electric Cot
is
offering $5,000,000 the samch
000,000

recent

bring

is

also

week

scheduled

to

goodly sprinkling of stock,
issues topped by Texas Gas Trans¬
mission's block of 200,000 share*
due on Wednesday.

rousing reception accorded
stock emis¬
whetted the

foregoing large
sions evidently has

a

George

A.

the

staff

i

Co.

JACKSONVILLE,Fla.

Whipple,

companies Bacon, Whipple & Co., Chicago.

Annual Report to the Investment

of

Houses
them

the

Investors

Country.

information

for

on

look

to

your

company,

our

Addresso-

Addressograph Service
We

have

a

metal stencil

Department

graph

for

in

investment

every

banking and brokerage firm in the country,

alphabetically

arranged

States

by

This list is revised daily and
most

up-to-the-yiinute

Our charge

and

firm names.

Cities, and within the Cities by

offers you th©

service

available.

for addressing envelopes for the

complete list (United States or

Canada) is

$5.00 per thousand.

Com¬

Adds

(Special to The Financial Chronicle)

Girardeau

N.

Meanwhile
debt market

We

can

also supply the list on

labels at

bel

Jay

Fabian

become

d500 Santa Monica Boule¬

Newton, G. H. Walker & Co., St.

Mo.;

has

Rogers

vard.

Buhse, Hornblower &

111.;

putting uj*

for sale.

a

gummed roll

small additional charge.

J.

Francisco, Calif.;

Chicago,

H.

Co., St. Paul,

Grunigen

Ohio bonds which it is

general demand.

F. Shelley,

Co.,

Warren

Minn.

Harold

and

Long,

W.

Hunter, McKelvy & Co., Pitts¬

Information

Coast,

report brisk

Mail your

Committee

Union Securities Corp., New

St. Paul,

promises a relatively
active period
in the new issu©
field, particularly if the Recon¬
struction Finance Corp., on Mon¬
day,1 receives a suitable bid for
the
$65,000,000 of Baltimore &

naturally

West

to

Ahead

Next week

Pennsylvania.

Angeles,

Illinois

H.

able

Week

Busy

is*

Glendinning & Co., Philadelphia,

can

Conduct

Committee

Pa.;

were

the

Chi¬

Wellington

burgh,

dealers

the current

"standby"
privilege
tentatively set for April 21.

pen¬

underwriters

again

of the financing is

111.; Ralph W. Welsh, Robt.

phia, Pa.; Ward L. Bishop, Ameri¬

H.

here

any

pert, Blyth & Co., Inc., San Fran¬
cisco, Calif.; Thomas B. MacDonald. Blyth & Co.. Inc., New York,
N. Y.: Guenther M. Philipp, Paine,

NASD, Washington, D. C.

lins &

but

the

on

with,

take

to

dealers

but

stock

fund

by

&

Bros.

Topeka, Kansas; Allen
C. Du Bois, Wertheim & Co., New
York;
and
Wallace
H.
Fulton,

Business

popular

underwritten

issues later in the year.
operation bidding

separate

good general investor in¬

Fireman's

be

standing

balance

The

terest around the country.

was

their

sizable buyers of

stock

common

Co., New York. N. Y.; Edward

Cole & Co.,

National

and

offered
stockholders*
pre-emptive righta
be

expected to take the form of two-

for

companies

financing

the

of

unsubscribed portion.

the last

over

to

bankers

On

a

System

contemplated

its

necessity,

it will

But

apparently whs ig¬

as

time

Boyce, Baltimore, Md.; B. S. Kam-

Finance Committee

William

found

part
of

initially

the

market

reported

Gas

of

part

would,

definitely good re¬
hesitant attitude of

more

same

bentures.

par¬

company's
reported to have

was

the

at

Vice-Chairman, Francis 1 du Pont
&

Would the Louis,




Co.,

in that

Getting Stock-Minded

Mass.; S. L. Sholley, Keystone
Wilson, Company of Boston, Boston, Mass.
York,
including shareholder proposals N. Y.; Arnold Grunigen Jr., J.
m the
management proxy solicit- Barth & Co., San Francisco, Calif.;
With Fabian & Co.
Mg material?
George A. Newton, G. H. Walker
(Special to The Financial Chronicle)
The argument was made before
& Co., St. Louis, Mo.; Harold E.
BEVERLY
HILLS, 1 Calif.—
ns that
"the security holder has
Wood, Harold E. Wood & Co.,
a
basic weapon to defend his in¬

of

Corp.

largest under¬

for the

Harvester

Committee

Oliver

than

through the*

financing of $110,000,000isr
readying a starter in the form of
$50,000,000
of
convertible
de¬

Practice

National Uniform

tend

interest

more

this year, Columbia Gas System

stock of

Insurance

estate

consensus

Reid, Chairman, Ful¬

ton, Reid & Co., Cleveland, Ohio.
1954

stock. Nego¬

over-all

in his¬

embracing

ings. And by and large, it was the
National Quotation

pre¬

debt issue.

As

the larg¬

as

common

the

heirs

or

from

N.

Chicago, ' 111.;
Wm. C. Roney

Company,

William C. Roney,

the suggestion that

How

Scanlan,

Earl M.

linois

Allen C. Du Bois, Vice-Chairman,
by which manage¬ Wertheim & Co., New York, N. Y.;
elected to office year William J. Collins, William J. Col¬

gets

year.

Y.;

Troster, Singer & Co., New York,

From

defray the
management proxy solicit¬

Scanlan

M.

Boston,

argument

should

N.

&

Parker

material

ing

by

Commission

had been made.

Might lead

the

from

Buffalo,

Treasurer,

Patterson,

hearing

want to do some further

Chairman, Bee¬

Mass.; George F.
Noyes. Chairman National Busi¬
ness Conduct
Committee, The Il¬
Corp.,

Dec. 16, 1953. These represen¬
tatives made some arguments that

thinking about

C.

York;

Committee, The

on

you may

Geyer &

Murray
Ward, Hill Richards & Co., L(j>s
Angeles,
Calif.,
Vice-Chairmen;
New

Inc.,

solicting

welcome

George,

cago, 111.; George Geyer,

Harold

I

Committee

Executive

1954

als in management proxy
material.
I want to make it

the

Roy W. Doolittle. Doolittle & Co.,
•Pari

is

naturally

Columbia

Co.,

sold

general

were

Committee

I. Cole,

Corp.

220,000 shares*

of

which must go

shares

Harvester

company

Insurance

croft, Cole & Co., Topeka, Kanas;

1954:

submission of shareholder propos¬

and

a

sion funds, in a position to do so,

As¬

showing of shareholder Co.,

acceptability and continued prog¬

market

Harvester

ception.

sociation's various committees for

We have con¬

shareholders

that

cluded

of

complete membership of the

familiar with shareholder pro¬

are

a

voting.

the

International

the

week

Legislation
Walter

nex£

common

much

look

of

also register for flotation of
$18,000,000 of new debentures, if
it is considered advisable, at the
time, to raise new. capital through

equity

to

second,

as

encountered

certainly would not make sense!

submitted have carried and

the vast

to

large

1,000,000

Fund

a

founder,

NASD Announces Committees for 1954

propos¬

no

York

block

to

part

early

deals

York

nored.

proposals were submitted by three
groups,

by

block,
of

large proportion of all shareholder
or

the

tabbed

The

companies submitted proposals, a

individuals

the

may

ticular line of business.

the

It

registered

and

taken

out of the millions of Ameri¬

of

involving

600,000 shares of

generations, to finance temporary
-Senator Harry F. Byrd.

reduction.'

tax

proposal rule, only 181 sharehold¬

turned

two

brought

Fireman's

be

which must be paid

money

week

of

"secondary" operation

tory,

back, after paying interest for

Harry F. Byrd

of the shareholder

shareholders

a

for

investor

walk,

a

International

est

are com¬

sense

financing

went into the records

expenditure reductions.

"It does not make

lion 14 of the Act.

can

when

paring

yesterday.

was

unless there

worse,

of

this

marketing
offerings

the

occur,

would

debt

new

much

pretty

reces¬

estimated

as

With

corporate account slowed down to

except your credit and

deficit-debt

mittedly broad power under Sec-

ers

month

underwriting"

the

disposed

competitive bidding route.

the

resources

of

If

tion.

public interest and the
protection of investors generally

years

re¬

for the government has no

general

In ten

to

those

"Meanwhile, there is great ag¬
itation for still further tax reduc¬

public interest and protection of
investors—I think that means the

our

are

estimates

used in the

resources

just

administration of

is

ahead

arouse

budget might easily be tre¬

bled,

bankers*

same.

rate

any

tiated

And if the 'full

the

Union message a year ago
•dedication to the well being of
all our citizens" and emphasized
'n his radio speech to the nation
1 the

the

investment

of the

more

At

majority of

management.

possible that unless expenditures

deficit will

ion because an

in

of

for

of additional

ay or
was

appetites

preserved, feel very happy
this argument?
I 'am sure
this viewpoint does not represent

Unpleasant Facts

signatures in order to
the ballot.
The former

on

were

well

41

about

use

umber of
et

market values of the shares

to

been interested in seeing that

(1141)

of

—

Rosa¬

has been, added

Williams

Co., Barnett Building.

to

Investment

Herbert D. Seibert & Co., Inc.
Publishers

of "Security Dealers of North

25 Park Place

REctor 2-9570

America"

New York T

42

The Commercial and Financial Chronicle

(1142)

Securities
pating preferred stock.

Price—At

($10 per share).

par

Proceeds—For

equipment and working capital. Office
San Francisco, Calif. Underwriter
—William E. Schlink, Vice-President, Stockton, Calif.
—690 Market Street,

if Aerco Corp.

(N. J.)
March 4 (letter of notification) 544 shares of 5% cumu¬
lative participating preferred stock (par $100) and 544
shares of class A common stock (no par) to be offered
in units of one share of each class of stock. Price—$101
per unit. Proceeds—For acquisition of land and erection
thereon of manufacturing facilities and
for working
capital. Office—214 Lafayette Place, Englewood, N. J.
Underwriter—None.

•

Alabama Power Co.
Feb.

17

March

filed

1,

of

first

mortgage

bonds

ing expenses and working capital. Underwriter—Tellier
& Co., New York. Offering—Not expected until
April.

if Allied Artists Pictures Corp. (3/30-31)
March 8 filed 150,000 shares of
5..%% cumulative

writer—Dixon

preferred

stock

by amendment.

vote March 23

California

(par $10).

Proceeds

—

Price—To

To

be

be

used

on

authorizing the

the

sale of

common

Armstrong Rubber Co.

Uranium Corp., Salt Lake
City, Utah
(letter of notification) 1,500,000 shares of com¬
Price—At par (10 cents
per share). Proceeds

stock.

-—For

mining expenses.
Office —Judge
Building, Salt
Lake City, Utah. Underwriter—Coombs &
Co., Salt Lake
City, Utah.
Audio

Devices, Inc., N. Y.
(letter of notification) 10,000 shares of common
stock (par 10 cents).
Price—At market (about $3.75
per share).
Proceeds —To selling stockholder. Under¬
19

Morgan

Co.,

New

York.

No

March 12

Natural

Gas

(Offering
Webber,

•

■

„■

Santa

Fe,

—

on

or

Price
$3.75
Proceeds—For working
capital and general
corporate purposes.
Office—727 West Seventh Street
Los Angeles, Calif.
Underwriter—None.
per

.

aats

of

Proceeds—For^?

pansion. Office—528 Monroe St.,
Alexandria, La
writer—None, stock to be sold by employees.
March 9 filed

Undtr

$4,431,250 participations in the
Emplovpl*

Thrift Plan of this
company and

participating

subsidiary

companies, and 50,000 shares of common stock
(par
purchasable under the plan.
'

Co., Oakland, Calif.
March 2 (letter of
notification) 6.500 shares
stock (par $3.33y3 per
share). Price—To be

—

share.

&

First

Barney & Co.)

of

'

canitni

Lunt)

'

&

Blair

Ohio
(Bids

&

Co.)

316,867

Co.

—_____

L.

March 29
Pacific

(Monday)

Power

be

to

H.

invited)

$65,000,000

Common

_

Rothchild &

Corp.

Co.)

Co.,

San

Power

Inc.)

11

16

Bonds
EST)

$17,000,000

Armstrong Rubber Co

(Bids

&

Co.)

EST)

a.m.

$6,500,000

Goebel Brewing Co
Alstyne,

Noel

&

Co.

and

Magnolia Park, Inc
and

&

T,

March

Pennsylvania

11

(The

Gas

First

(Dillon,

Inc.)

Common

200,000

March 19

.

(Bids

Inc.;-and

$2,000,000

EST)

noon

EST)

Acceptance
(G.

Utah Power

H.

&

&

11

a.m.

&

24

11

Debentures

Tully

&

200,000

Laclede Gas Co
(Bids

shares

Boston

to

company)

EST)

Gordon

&

$10,000,000

Co.,

Inc.)

Texas Eastern Transmission

Corp.

and

Kidder,

Peabody & c0.1

11

a.m.

Preferred

$7,000,000

EST)

to

Bonds

be

invited)

$12,000,000

to

be

invited)

Jersey

Bell

(Tuesday)

Telephone

to

be

invited)

May 14

Bonds

Co
$25,000,000

(Friday)

First Nat'l Bank of Toms River, N.
(Offering

to

Debentures

$50,000,000

stockholders)

J

Common

$150,000

Utah

Power

May 19 (Wednesday)
& Light Co...
—

(Bids

noon

EDT)

..Bonds

$15,000,000

Common
$5,000,000

Mallinckrodt Chemical Works
(Newhard, Cook & Co.)

$5,000,000

$1,500,000

Debentures

a.m.

Preferred
(EST)

April 21 (Wednesday)
System, Inc..

Preferred

adviser

$20,000,000

Gas

(Bids

Light Metals Refining Corp..
(Philip

a.m.

May 4
New

$7,000,000

i

11

11

EST)

:

(Bids

Co
EST)

a.m.

Co.,

Columbia

$1,300,000

General Telephone Co. of the Southwest
Preferred
(Mitchum,

a.m.

West Penn Power Co

(Wednesday)

Light

(Bids

(Wednesday)

11

April 20 (Tuesday)
Arkansas Power & Light Co

Common

EST)

shares

250,000

Debentures & Common

First

$7,000,000

Co.)

EST)

a.m.

Bonds

(Bids

(Bids

Corp

Walker

.Bonds

To

$8,000,000

Preferred

Light Co

(Bids

Power

$40,000,000

Light Co.___

Eleotri"

EST)

Common

11

(Bids

noon

(Tuesday)

&

a.m.

York Corp.

Bonds

&

(Bids

Merchants

11

!

$15,000,000

Ohio Power Co..

(The

Detroit Edison Co...
Power

13

Ohio Power Co

Common

—

Bonds

.Debentures >
EST)

a.m.

Gas

(Bids

17,526 shares

_

$18,000,000

Texas Utilities Co

(Tuesday)

Co.)

Bonds
$11,000,000

Co

11

(Bids

,

Common

&

.Bonds

$3,000,000

invited)

April 14

Co

Herrick

be

Gas

(Bids

Common

Co.; Gearhart & Otis,

Common

(Monday)
Light Co

Indiana

(Friday)

March 23
American Tidelands, Inc
Barrett

Southern
lV

..

(Offering to stockholders—underwritten by The First
Boston Corp.) $6,000,000 >

&

National Fuel

15,000 shares

(Offering to minority stockholders)

EST)

EST)

a.m.

(April

Common

Co.)

Corp

4

to

(Bids

Preferred

National Union Fire Insurance Co

Gas

,,

$1,500,000

j
Common
(Offering to stockholders—no underwriting) 5,000 shares

(Thursday)

Hammill &

Common

Gulf Insurance Co

shares

Douglas Oil Co. of California..

(Crerie

Co.)

a.m.

11

Central Power &

$3,601,250

(Shearson, Hammill & Co.) $1,250,000

Pennsylvania

&

11

(Bids

Preferred

Corp).

Douglas Oil Co. of California-^--

(Shearson,

$10,000,000

(Monday)

Co

(Bids

Corp.____

Co.

&

Power

$12,000,000
...

Bonston

Read

(Bids

Georgia

Bonds

EST)

Transmission

Beane)

April 12

Co.

a.m.

Stromberg-Carlson Co.
Texas

&

April 6 (Tuesday)
Public Service Co

(Wednesday)

Electric
(Bids

(Israel

Community

Inc.;

17

;

-Debentures

Fenner

April 5
r

-

Nauman, McFawn & Co.)

Hunter Securities Corp.;
Feibleman & Co.) $2,750,000

J.

Pierce,

North American Uranium & Oil

^...Debentures & Common

Otis,

Bonds

$17,000,000

Grocery Co

Lynch,

Preferred
$2,000,000

(Gearhart

EST)

a.m.

Offering to stockholders—may be underwritten by Drexel
& Co.
and The First Boston
Corp.) 705,000 shares

,

(Van

-.Preferred
$1,500,000

$4,000,000

Bonds & Preferred

11

11

■

(Tuesday)

Deetjen & Co.)

April 1 (Thursday)
Pannsylvania Power & Light Co

Debentures

El Paso Electric Co
(Bids

—Common
$8,000,000

(Tuesday)

a.m.

(Reynolds

30

Winn & Lovett

$299,000

Co

(Bids

March

Co
EST)

Diego Gas & Electric Co._

(Merrill

March

?i.m.

(Emanuel,

Common

&

Light
11

)

(Monday)

Allied Artists Pictures Corp

$300,000

__

(Teden

&

(Bids

Bonds

Spa-King MounUClemens Water

Alabama

Common

(Offering to stockholders—no underwriting)
487,248 shares

shares

RR

Commodity Holding Corp

I

(Friday)
Telephone & Telegraph

Mountain States

Common

.

Baltimore

'

March 26
.

Service Corp

Common
Smith

114,166 shares

Boston

William

and

Gas & Electric Co
stockholders—underwritten by

to

Paine,

by

Hamlin

Indiana

(Offering

Corp.; Merrill Lynch, Pierce,
Fenner & Beane; Robert W. Baird &
Co., Inc.; 5

Dallas

about March 4.

and

$3,300,000

(The

March

77,624 shares of capital
(par $1) to be offered for
subscription by stock¬

holders of record

Curtis

;V

Underwriter—Hunter Securities

Bolsa Chica Oil
Corp.
Feb. 16 (letter of
notification)
stock

Jackson &

N. M.

Dec. 23 (letter of notification)
748,000 shares of common
stock (par five cents). Price—40
cents per share. Pro¬
ceeds—To acquire properties and
leases. Office
Blatt

Bldg., Santa Fe, N. M.
Corp., New York.

if Central Louisiana Electric Co., Inc.
(letter of notification) 12,729 shares
Price—$22 per share.

Debentures

stockholders—underwritten

to

Wisconsin Public

Louisiana

Corp.,

s^ant,

'

March 8

Southern

(Friday)

Sheraton Corp. of America

general

offer planned.
Basin

William R

—

NEW ISSUE CALENDAR

March 18

Proceeds—For working cap¬
Underwriter—Reynolds & Co., New York.

writer—Peter

E

REVISED

stock (par $5).

if Clorox Chemical

(3/16-17)

March 31, 1953, filed $4,000,000 of
5V2 %/ convertible sub¬
ordinated debentures due 1974
(as amended). Price—To
be supplied by amendment.

•

Underwriter
Calif.

Angeles,

$1,500,000 4%% debentures, to be used primarily to
purchase from California Electric Power Co. all of the
capital stock of Interstate Telegraph Co. Office—San

stock

(par 10
Price—$1 per share. Proceeds—For construction
purchase of drilling machinery and equip¬
ment from Alexander
Shipyard, Inc.; for operating ex¬
penses; and payment of indebtedness.
Underwriters—
Crerie & Co., Houston,
Texas; and Gearhart & Otis, Inc.
and Barrett Herrick &
Co., both of New York.

Feb.

Los

to be

and

if Atlas

Co.,

ITEMS

ic Cities Service Co.

Telephone Co.

stock, together with net proceeds to be received

issue.

new

cents).

mon

111.

Bernardino, Calif.

from private sale of $4,200,000 first
mortgage bonds and

(3/23)
March 3 filed 2,000,000 shares of

March 5

Springfield,

5 filed 300,000 shares of common stock
(par $5).
Price—To be supplied by amendment. Proceeds—From

sup¬

in

Underwriter—The Ohio
Company, Columbus, Ohio.

ital.

Inc.,

Feb.

if American Tidelands, Inc., New Orleans, La.

•

Noonan

Interstate

Products

if American-Marietta Co., Chicago, III.
March 6 (letter of
notification) 8,040 shares of common
stock (par $2). Price—At market
(but not to exceed $25
per share).
Office—101 East Ontario Street, Chicago,

work

Bretscher

con¬

production, distribution and exploitation of motion pic¬
tures and for working capital.
Underwriter—Emanuel,
Deetjen & Co., New York. Meeting—Stockholders will

111.

(par $1).
Price—Of bonds, at 100% of principal
amount; and of stock, $1.50 per share.
Proceeds—For
construction
and
operation of racing plant.
Under¬

March 15

(letter of notification) $270,000 face amount of
6% 10-year convertible debentures, series B.
Price—
70% of principal amount. Proceeds—For general operat¬

vertible

stock

Telephone Corp., Seattle, Wash.

10

plied

Cahokia Downs, Inc., East St. Louis, III.
15 filed $1,400,000 of 10-year 6% first mortgage
bonds due Jan. 1, 1964, and 140,000 shares of common
Feb.

ADDITION*
PREVIOUS ISSUE

SINCE
•

due

To be received up to 11 a.m. (EST) on March 16 at the
office of Southern Services, Inc., 20 Pine
Street, New
York 5, N. Y.

Feb.

Registration

Proceeds—For

(jointly); Blyth & Co., Inc. and Kidder, Peabody & Co.
(jointly); Morgan Stanley & Co.; Lehman Brothers; The
First Boston Corp.; Harriman Ripley & Co., Inc. Bids—

Alaska

11

supplied by

property additions and
improvements and to repay bank loans. Underwriters—
To be determined by competitive
bidding. Probable
bidders: Halsey, Stuart & Co. Inc.; Union Securities
Corp., Equitable Securities Corp. and Drexel & Co.

•

Thursday, March

.

(3/16)

$17,000,000

1984.

.

* INDICATES

Now in

if Acala Fabrics Co., San Francisco, Calif.
March 4 (letter of notification) 4,950 shares of partici¬

.

Common
75,000 shares'-.

7

7,

Corp. ill .^Debentures

(Dillon, Read & Co. Inc.) $17,000,000^

,VT.\

Texas & Pacific Ry.
Equip. Trust Ctfs.
(Bids noon' EST) $1,240,000
March 25
Illinois Central RR
(Bids

noon

(Thursday)

*
Equip. Trust Ctfs.

EST)

$6,300,000

Rochester Gas & Electric
Corp
(The

First

Boston

Corp.)

.Preferred
$5,000,000

Signature Loan Co., Inc
New York.

Preferred

(Simon,

Boston

Philadelphia

San Francisco

Private IVires




Pittsburgh

to

all

offices

Chicago

Cleveland

and

Strauss & Himme; William N.
Pope, Inc.;
Chace, Whiteside, West & Winslow. Inc.)
$648,076

Signature Loan Co., Inc
(Simon,- Strauss
Chace,

& Himme;
Whiteside, West &

Kidder

&

Co.;

Draper.

Preferred & Common
William

Winslow,
Sears

Chilson, Newbery & Co.)

&

N.

Pope,

Inc.;
Co.

$456,599

A.

and

Inc.;
M.

Your.advertising dollars do double duty-in the midwest
advertise in the Chicago Tribune,
the Tribune, at one cost,
you reach both major iiive^trn
markets—professional buyers and the general investing P" ."
For facts that show how
you can get more from your a v
ing, call your agency or a Tribune representative.
ment market when you

CHICAGO TRIBUNE
The World's Greatest Newspaper

The Tribune gives to

each day's market tables and reports

Inrnact rirrulfitian

niven them in

America.

,

i

Number 5306

179

Volume

...

The Commercial

and Finar

ial Chronicle

(H43)

,

43
S

'

'

v

%

Proceeds—To Annie I. Murray, the selling
Underwriter—J .Barth & Co., San Fran¬

amendment.
stockholder.

Calif.

cisco,
•

(3/15)

25

Commonwealth Investment Co.,

-

2,500,000 shares of capital stock.
Proceeds—For investment.

March 8 filed
At market.

Community Public Service Co.

3

bonds. Price—At par
(in units of $25, $100 and $500).

sales.

Office—10 Hills Ave.,

Price—

★

Federal

Feb.

Electric

17 filed

I rice

To

Products

175,000 shares of

be

supplied

by

Co.
common

stock

(par $1).

amendment.

Proceeds—To

reduce short-term bank
loans incurred to
ing capital.

provide work¬

Underwriters—H. M.

Byllesby & Co. (Inc.), Chicago, 111., and
Hayden, Stone
Co., New York. Offering—Expected
today (March 11).

Fidelity Acceptance Corp., Minneapolis, Minn.
(letter of notification) 2,800 shares of 6%

cumu¬

lative preferred
of first mortgage bonds, series
stock, class E. Price—At par ($25 per
share). Proceeds—To be available to subsidiaries and
D, due March 1, 1984. Proceeds—To repay bank loans
and for new construction.
Underwriter — To be deter- ' reduce outstanding bank loans. Office—820 Plymouth
Bldg., Minneapolis, Minn. Underwriters—M. H.
mined
by
competitive bidding.
Probable
bidders:
Bishop
& Co.,
Minneapolis, Minn.; and B. I. Barnes, Boulder,
Halsey, Stuart & Co. Inc.; Equitable Securities Corp.;
Colo.
Blyth & Co., Inc. Bids—To be received up to 11 a.m.
(EST on April 6 at 90 Broad Street, New York, N. Y.
Financial Credit Corp., New York

March 1 filed $3,000,000

* Dakamont Exploration Corp., N. Y. City
March 3 (letter of notification) 85,000 shares of

Jan.
common

Price—$3.50 per share. Proceeds — To
bank loans and for expenses incident to oil and
gas exploration and development. Office—One William
St., New York. Underwriter — Lehman Brothers, New
(par $1).

stock

repay

York.

^ Dakota Television Network, Inc., Minot, N. D.
March
1
(letter
of
notification)
$300,000
principal
amount of 6% notes due Sept. 1, 1960, and 30,000 shares
stock

of common

(par 50 cents)

Proceeds—For

unit.

to be offered in units

of notes and 50 sliares of stock.

of $500

construction

per

&

Power

Light Co. (3/24)
70,000 shares of cumulative

filed

25

Proceeds—For

(no par).

derwriter— To

determined

be

bidders:

Probable

Union

new

preferred

construction.

Un¬

by competitive

bidding.
The Firs*

Securities

Corp.;
Corp.; White, Weld & Co.; Lehman Brothers;
Co., Inc.; Harriman Ripley & Co. Inc. and
Kidder. Peabody & Co. (jointly). Bids—To be received

j

&

up to 11 a.m.

New

ceeds—For

(EST) on March 24 at Two Rector Street,

York, N. Y.

* Deep Rock Oil Corp., Tulsa, Okla.
Feb.

25

(letter

shares of

j

of

stock

common

ployees under
Price—At

share).

.notification)

the

a

(par $1)

Employees'

market

(estimated

maximum

of

to be offered

Stock

to

be

to

Purchase

about

6,000
em-

Plan.

$44.25

per

Underwriter—None.

Underwriter—E.

J.

Foun¬

each four shares

For

expansion.

lulu, T.

H.

held.

Price—$7

Office—864

Underwriter

—

S.

per

Robert

Underwriting Co., President

share.

Proceeds—

Beretania

Street, Hono¬
Brilliamde, Hawaii

and directors of

bonds, series N, due March 15, 1984. Proceeds—To
redeen) 3%% series M bonds due May 1, 1988. Under¬
gage

★ Fundamental
9

filed

Investors, Inc., Elizabeth, N. J.
1,000,000 shares of capital stock. Price—

Proceeds—For investment.

Gamma Corp.,
Feb. 2

140,000 shares of

common

Proceeds—
working capi¬
tal. Office—100 West 10th
Street, Wilmington, Del. Un¬
derwriter—Sheehan & Co., Boston, Mass.

★ General
March 2

Oudoor Advertising Co., Inc.
(letter of notification) 6,000 shares of

to

be

preferred

[doctors
in units of
I

ceeds—None—issue

stock

(par

$1)

to

25 shares. Price—$25
being

offered

as

be

of

per unit.
device

a

6%
to

Pro-

to

aid

I sales of products.
Business—Packaging, distribution and
I sales of vitamins and vitamin
cqmpounds. Office—1601
East Charleston
Boulevard, Las Vegas, Nev.
I "—None.

Douglas Oil Co.

of California

Underwriter

(3/18)

Feb.

23 filed
50,000 shares of cumulative convertible
preferred stock. Price —At
par ($25 per share).
Pro¬
ceeds—To repay bank loans and for
expansion and

working

capital.

Underwriter—Shearson,

I Co., Los Angeles and New York.

Hammill

&

offered

to

certain

employees

under

Em¬

ployees' Stock Purchase Plan at closing price on New
York Stock Exchange on March 26, 1954. Proceeds—For
general corporate purposes. Office—Harris and Loomis
Sts., Chicago, 111.

★ General Stores Corp., New York
shares of common stock (par $1).
Price—$1.37V2 per share. Proceeds—To pay part of cost

of acquisition of Ford

Hopkins Co., Chicago, 111.
writer—A. C. Allyn & Co., Inc., Chicago, 111.

Under¬

(4/6)
$11,000,000 first

March

10

filed

Proceeds—To

1984.

bonds

due

tion program.

Underwriters—To be determined by com¬
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; Blyth & Co., Salomon Bros. & Hutzler and Shields
& Co. (jointly); Harriman Ripley & Co., Inc.; Union
Securities Corp. and Equitable Securities Corp. (joint¬
ly); The First Boston Corp.; Lehman Brothers; Morgan
Stanley & Co. Bids—Expected to be received up to 11
a.m. (EST) on April 6.
★ Gillette Co., Boston, Mass.
March 5 filed 196,300 shares of common stock (par $1)
to be offered from time to time by the company to its
officers

other

and

23

Oil

filed

Co.

of

California

15,000 shares of

(3/18)

common

stock

(par $1).

Price—To be related to the then current market
price
Ion the American Stock
Exchange. Proceeds—To WoodI mw
G.

Krieger, President.
Underwriter
hammill & Co., Los
Angeles and New York.

—

I

puggan's Distillers
I*eb. 19
(letter

I

I

of

joon stock (par 10
ric^ 25 cents
porate

key

executives

pursuant

to

"Em¬

JAIN- J.

hlk1
lira
lrrm+

notification)

Office—19101

200,000 shares of

com-

cents) to be offered to stockholders.
Proceeds—For general

Office—248

McWhorter

St.,

cor¬

Newark

Underwriter—None.

waso Electric Co.

(3/16)
of first mortgage

bonds due
*'•Proceeds—To repay bank loans and for
I hv ^ uctio.n. Program. Underwriter—To be determined
|/p0mTp
ve bidding. Probable bidders: Halsey, Stuart
I km*?'
Equitable Securities Corp.; Salomon Bros. &
I ana ck Kldder- Peabody & Co., White, Weld & Co.
IcnrrT. ifr
^°- (iointly); Stone & Webster Securities
■ Tn k"'
errdl Lynch, Pierce, Fenner & Beane. Bids—
Ireceived
up to 11 a.m. (EST) on March 16 at 90
I Broad
Street, New York City.
n

IFeh1 iq3?? 5lectnc
hopp

Co- (3/16)
t 15,000 shares of preferred stock (no par).

d

I be rw
IdercIshinia
I Corn
I To

construction

Underwriter—To
competitive bidding. Probable bid£ PeabodY & Co., White, Weld & Co. and
n/r
?0' (j°intly); Stone & Webster Securities
er.nh Lynch, Pierce, Fenner & Beane. Bids—
iBrnaa £lCeiYed UP to 11 a m- (EST) on March 16 at 90
|°road Street, New York City. 1
•

program.

Glasspar Co., Santa Ana, Calif.
(letter of notification) 250,000 shares of common
stock.
Price—At par ($1 per share).
Proceeds—For
working capital and expenses incident, to business of
manufacture Sand sale of laminated fiberglass products.
Feb. 17

Newport

Boulevard,

Santa

Ana, Calif.
Angeles,

Underwriter—Marache, Dofflemyre & Co., Los

Products Corp.

per share.

purposes.

Shearson,

Calif.

24 filed

preferred stock for each seven shares of common stock
held; rights to expire on March 31. Price—To be supplied

working
Co., New
McFawn & Co., Detroit, Mich.

by amendment. Proceeds—For expansion and
capital.
Underwriters—Van Alstyne, Noel &
York, and Nauman,
Growers

Container

Corp., Salinas, Calif.

shares of common stock, to be
individuals and firms in the Salinas
Valley, Imperial Valley. Yurria, Phoenix, and other dis¬
tricts in and outside of San Francisco and Arizona, who
are engaged
in or allied to the growing and shipping
industry. Price—At par ($1 per share). Proceeds—Con¬
struction of plants, acquisition of equipment, and for
working capital.
Business—Primarily manufacture of
cartons and bags used for shipment of various vegeta¬
Feb.

15

filed

1,450,000

offered primarily to

bles.

Underwriter—None.

*

•




★ Harlan-Franklin Oil Corp., Jersey City, N. J.
March 1 (letter of notification) 297,000 shares of com¬
mon

stock

(par

Business—Manu¬

agent. Proceeds—For
Office—35-10 Astoria Blvd., Long

City 3, N. Y. Underwriter—None.

'

Savings Life Insurance Co.
Feb. 26 (letter of notification) 125,000 shares of class A
non-voting" common stock (par $1). Price—$2 per share.
Proceeds
N.

—

To

be

invested

in

Central Avenue, Phoenix,
Israel

Feb.

24

offered

securities.

Ariz.

Office

—

4420

Underwriter—None.

(State of)

filed

$350,000,000 of development bonds

to

be

in

two types, viz:
15-year 4% dollar coupon
10-year dollar savings (capital appreciation)
Price—100% of principal amount. Proceeds—For

bonds and
bonds.

investment in The State of Israel for agriculture, indus¬
try and power, transportation and communication, and
low cost housing; and for general reserve. Underwriter
Financial

&

Development Corp. for Israel,

New York.

★ Johnston
Feb.

18

Adding

ing and dies.
Nev.

Co.

Machine

(letter of notification)

stock. Price—At par ($1 per

50,000 shares of common
share). Proceeds—For tool¬

Office—402 N. Carson Street, Carson City,

Underwriter—None.

Jupiter

Steamship Co., Wilmington, Del.
(letter of notification) 20,000 shares of common

16

(no par)

to

be

*

initially offered to stockholders.
Proceeds—To pay balance due on

Price—$10 per share.
two ships and for working capital.
Office—100
10th Street, Wilmington, Del. Underwriter—None.

West

Keystone Mining Corp.

(Pa.)
(letter of notification) 291,300 shares of class A
common stock.
Price—At par ($1 per share). Proceeds
—To purchase land and erect buildings, to purchase
mineral rights and leases and to develop and exploit
mining properties. Office—21 North Duke St., Lancaster,
Feb. 10

Underwriter—None.

Laclede

10

ceeds—For expenses

Price—$1 per share. Pro¬
incident to acquisition of property

cents).

Gas

Co., St. Louis, Mo. (3/24)
sinking fund debentures due
repayment of bank loans and for
construction/costs. Underwriter—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart

Feb.

26

filed

$10,000,000

Proceeds—For

1974.

& Co. Inc.; Lehman Brothers; The First Boston Corp.;
Blair, Rollins & Co. Inc.; Stone & Webster Securities
Corp. Bids—Tentatively scheduled to be received up to
11

(EST)

a.m.

Wall

on

March

24

at

Bankers Trust

Co., 46

Street, New York, N. Y.

★ Landa Oil Co., Dallas, Texas
Feb.

26 (letter of notification) $100,000 of 10-year 6%
sinking fund bonds, series B, dated April 1, 1954 and due
March

31, 1964 (callable at 103% and accrued interest).
(in denominations of $100, $500

Price—At face amount
and

Proceeds—For working capital. Office
Expressway, Landa Building, Dal¬
Underwriter — Lynch, Allen & Co., Inc.,

$1,000 each).

—5738 North Central

Texas.

Landa
★

Building, Dallas, Texas.

Light Metals Refining Corp., New York

(3/24)
stock (par $1).
Price
$4 per share.
Proceeds — For construction and
equipment of control plant, and main plant, working
capital, advance royalties and reserves.
Business — Tod*'
refine beryllium ore and market the products.
Under¬
writer—Philip Gordon & Co., Inc., New York.
Feb. 15 filed 1,250,000 shares of common
—

Los
Jan.

Angeles Drug Co.

28

—

filed

$178,000 of 15-year 5% sinking fund de¬
bentures, due Oct. 1, 1966, and 50,000 shares of capital
stock (no par), the latter to be first offered for sub¬
scription by stockholders. Price—For debentures, at par;
and for stock, $10 per share. Proceeds—To finance ex¬

panded merchandise inventory and operating equip¬
(new building), and for working capital. Under¬

ment

writer—None.
Louisiana

Power

Feb. 25 filed 70,000

&

Light Co.

(3/23)

shares of cumulative preferred stock

Proceeds—For construction program. Un¬
be determined by competitive bidding.
bidders: Blyth & Co., Inc.; W. C. Langley &
The First Boston
Corp. (jointly); Lehman

(par $100).

derwriters—To
Probable
Co.

Co. (3/16)
200,000 shares of 60-cent convertible pre¬
ferred stock (par $10) to be offered to common stock¬
holders of record March 12 on the basis of one share of
Goebel Brewing

Feb

share.

★ Insured

las,

mortgage

bank loans and for construc¬

repay

ployees' Stock Option Plan."

Douglas
I Feb.

Island

per

bactericidal

a

working capital, etc.

Pa.

★ Georgia Power Co.

issued

Price—$5

sells

common

Underwriter—None, but Mitchum, Tully & Co., San
Francisco, Calif., will assist and advise the company.

cumulative

and

Wilmington, Del.

(letter of notification)

stock (par 10 cents). Price—$1.50
per share.
For inventory, capital expenditures and

March 23.

★ Doctor's Vitamin Co., Las Vegas, Nev.
March 5
(letter of notification) 50,000 shares

rata basis.

pro

stock

★ General Telephone Co. of the Southwest (3/24)
March 4 filed 75,000 shares of 5V2% cumulative pre¬
ferred stock (par $20). Price—$21 per share. Proceeds
—To repay bank loans and for construction program.

Halsey, Stuart & Co. Inc.; The First Boston
Corp.; Coffin & Burr, Inc. and Spencer, Trask & Co.
Bids—Expected to be received up to noon (EST) on

a

factures

Feb.

able bidders:

writer—To be determined by competitive bidding. Prob¬

Jersey.

★ Heliogen Products, Inc. (Del.)
March 5 (letter of notification) 20,000 shares of common
stock (par $1) to be offered to common stockholders on

Insurance

company, same address.

March 8 filed 300,000

j • Detroit Edison Co. (3/23)
7
| Feb. 24 filed $40,000,000 of general and refunding mort¬

New

Office

City, N. J. Underwriter-4Co., 26 Journal Square, Jersey City,

Securities

—American

★ Financial Security Life Insurance Co., Ltd.
Feb. 24 (letter of
notification) 42,857 shares of common
stock (par $1) to be offered first
to stockholders under
preemptive rights on the basis of one new share for

stock

!

working capital.
Inc., New York.

tain & Co.,

At market.

Boston

Blyth

29 filed 250,000 shares of
7% cumulative sinking
fund preferred stock. Price—At
par ($2 per share). Pro¬

March

baifas
stock

Price—$500

microwave

relay
Underwriter—None.

system and for working capital.

Feb.

of

Luster

&

Jan. 26

(4/6)

and related activities with respect to oil business.
—15 Exchange Place, Jersey

Concord, N. H. Underwriter—None.

Office—Newark, N. J.

Francisco, Calif.

San

Inc., Concord, N. H.
(letter of notification) $25,000 of 6% deben¬

proceeds—To finance time

(letter of notification) 100,000 shares of com¬
mon stock
(par $1). Price—$3 per share.
Proceeds—
To trade in commodity futures or commodities.
Office
15 Exchange Place, Jersey City, N. Y.
Underwriter
—L. H. Rothchild & Co., New York.
*

March
ture

Commodity Holding Corp.

Feb

★ Evans Radio,

and

Brothers;

Kuhn,

Loeb

&

Co.;

Union

Securities

Corp.;

Equitable Securities Corp.; Kidder, Peabody & Co. and
Merrill Lynch, Pierce, Fenner & Beane (jointly).
Bids
—Expected to be received up to noon (EST) on March
23,

1954.

Magnetics, Inc.
Feb. 19 (letter of notification) 250,000 shares of common
stock.
Price—At par ($1 per share).
Proceeds—To pay
part of cost of plant and equipment facilities. Business
Produces
magnetic amplifiers, magnetometers and

—

tape wound

equipment.
Butler, Pa.

for use in electrical and electronics
Office—10th St. and Railroad Ave., East

cores

Underwriter—None.

Magnolia Park, Inc. (3/16-17)
Jan. 29 filed $2,500,000 of 6% subordinated convertible
debentures due 1969 and 250,000 shares of common stock
★

(par 10 cents) to be offered in units of $100
10 shares of stock. Price—$101 per

tures and

ceeds—For

construction

of

racing

plant

of deben¬

unit. Pro¬
and for ex¬

incident to racing activities. Underwriters—0^ar~
& Otis, Inc. and Hunter Securities Corp., both of
York; and T. J. Feibleman & Co., New Orleans, La.

penses

hart
New

Continued

on page

44

41

(1144)

The Commercial and Financial Chronicle

i

Continued from page

43

New England Gas &

benture

Electric Association

.March

filed

1

$10).

par

Chemical

75,000

Works

shares

of

class A

stock

common

Price—To be supplied by amendment.

<eeeds—For

expansion.

Underwriter—NeWhard,

Pro-

Cook

Mathescn

Feb.

19

Co.,

(letter of notification)

convertible debentures

$50,000 of 10-year 6%

New

Feb.

Valley Investing Co., Inc.,
Utica, N. Y., and Security & Bond Co., Lexington, Ky.

additions

New

9

Orlean, N. Y.

(letter of notification)

2,800 shares of common
per share).
Proceeds—To

offered

in

exchange

Steel

Corp.

stock

for

expire

rate

at

each

2.1

of

1,078,546.25

stock

share

one

Offer will
-

facilities.
company

borrowings,

Missouri

Offering—Expected during March.

Public

Service

Co.

Jan. 14 filed 527,865 shares of
•be offered for subscription

common

by

•a

share-for-share basis

*—To

be

supplied

by

(with

stock

common
a

(no par) to

stockholders

011

13-day standby).

Price
Proceeds—Together

amendment.

"

with other

funds, to acquire capital stock of Gas Service
(a subsidiary of Cities Service Co.)-. Underwriter—
•Kidder, Peabody & Co., New York.
On Feb. 25, the
Co.

sale of Gas Service Co.

was called off
by Cities Service
Formal hearing is still scheduled to be held

Company.

before Kansas

Corporation Commission, beginning March

15.

Mohawk Airlines, Inc.
JFeb.

11

.stock

(letter of notification) 72,500 shares of capital
Price — $4 per share.
Proceeds — To

■acquire flight equipment and for working capital. Office

Airport, Ithaca, N. Y. Underwriter

Feb. 2 filed 257,338 shares

of

common

(400 shares); partners of Lehman Brothers

Corp.

immediate families

(106,480).

(par $1).
the New

and members

(150,458); and The Lehman
No general offer

Underwriter—^one.

planned.

ft Mountain States Telephone & Telegraph Co.
(3/26)
March

5

filed

487,248

shares

of

capital stock to be of¬

fered to stockholders of record March 26
one

new

share

for

each

four

shares

on

held.

the basis of

About

87%

of the

presently outstanding stock is owned by Ameri¬
can
Telephone & Telegraph Co. Price—At par ($100 per
share).
Proceeds—To repay advances from parent com¬

1979.

9

filed

$15,000,000

Proceeds

incurred

for.

sinking fund debentures

due

purchase certain shares of sub¬
the proceeds to repay bank loans
construction.
Underwriters—For
use

any

bentures to be determined
by competitive
able bidders: Halsey, Stuart. & Co.

de¬

bidding. Prob¬
Inc.; The First Boston

Corp.; Kuhn, Loeb & Co. and Wertheim & Co.
(jointly);
White, Weld & Co.; Harriman Ripley & Co. Inc. Bids—

Tentatively expected
April

on

to be received up to

11

a.m.

12.

(EST)

National Union Fire Insurance
Co. (3/22)
26 filed 200,000 shares of
capital stock (par $5) to
be offered for
subscription by stockholders of record
March 19 on the basis of
one
new share
for each two
shares held; rights to
Feb.

expire on April 19.( Price—$30
per
Proceeds—To be added
initially to the company's
_funds to be invested in securities which are
qualified as legal investments.
Underwriter—The First
Boston Corp., New York.
shaie.

New Bristol
Oils,

to

bid

price of

• •;

$

20%

the

f




t '1

indebtedness.

Ore.

t-

(par $1).
shares

expire
San

&

due

of

shares

common

Office—805

N.

stock

common

1984.

W.

Union

non¬

(EST)

ex¬

Hutzler

&

be received up to

11

(jointly).

March 30.

—

and

Purchase

market).

working capital.
Office
Durango, Colo.
Underwriter

(such

•

on

purposes.

Scurry-Rainbow Oil

Feb.

in

shares

held;

$35.50
for

expansion

of

one

18

new

filed

purchased

in

Office—1320

the

Mer¬

Mile
•

share

new

for

Underwriter

—

1979

.

$12,000,000

of

(3/17)
first mortgage

par

holders

j._"

bidders:

29.

(jointly); The First Boston Corp.

Bids—Expected to be
March 17.

to 11

(EST)

a.m.

Pennsylvania Gas Co.
25

on

for

each

share.

per

capital.

for

shares

Fuel
an

Gas

4

Finance

Co.,

shares

of

Plan

common

for

of

Loan

March 5

58,916 shares of 7%

in

cumulative convert

(par $11) to be offered in
on

basis of two new

shares 0

Simon, Strauss & Himme, New V3' '
Pope, Inc., Syracuse, N. Y.; and ■ Ch
•
Whiteside, West & Winslow, Inc., Boston, Mass. Una
in Name
Company was formerly known as feci
—

N.

—

Loan

Co.

of

Pittsfield, Inc.

if Signature Loan Co.,

stock

for

stock

March

5

Inc.,

Fittsfield, Mass.

stpek

debenture notes due Oct.

subordi¬

1/ 1958 and $120,000 of
debenture -rtQtes due Oct.
1, 1962 (in¬
cludes rescission offerto
purchasers mf $113,750 of de'•
V •' *. }• /».
1.--5 •&!..*
'•*
v>.
..(5;
subordinated

'»

•

in

units

the basis of

on

shares

as

one

of

of

one

of

share

unit for each

of record

_each,5.

e-

participa""8 *
Compan.,

March 25.

Inc.
and w
^
Underwriters—Simon,
writers—onuuu, Strauss & Himme
Poue,
M. Kidder & Co., both of New York; William w. Jr f
Inc., Syracuse, N. Y.; Chace, Whiteside, West &
.
Inc. and Draper, Sears & Co., both of Boston,
and Chilson, Newbery & Co., Kingston, N. Y.
formerly

Federal Loan Co. of Pittsfield,
$15.50 per unit. Proceeds—For expansion
capital.

capital,

Hartford, Conn.,

if Protection Loan Co., Wyandotte, Mich.
23 (letter of
notification) $60,00(T of 5%

stock

29,458

ferred share held

obtaining subscriptions.

Feb.

fprred

convertible preteut
(par $11) and 29,458 shares of class A con
(par $1) to be offered to holders of Pai'tlC1P_ ^
filed

preferred

Plastic Wire & Cable
Corp., Jewett City, Conn.
Feb. 4 (letter of notification)
21,952 shares of common
stock (par $5)
being offered for subscription by common
stockholders on the basis of one new share for each five
shares held on Feb.
2; rights expire on March 12. Price
—$10.50 per share. Proceeds—For working capital. Un¬

>

"
,

William

company's
and 50,000

Employees,"
(par $1) to be offered

Co..

Pittsfield, Mass.

Inc.,

■' 1

(3/25)

participations

&

Co.,
.

filed

Underwriters

com¬

subscription pursuant thereto.

%

if Signature
(3/25)

nam^

Mich.

Salaried

stock

and

underwriters and reoffered to public. Price—$11-50 F
share. Proceeds—To retire
participating preferred stoc>

Pittsburgh Consolidation Coal Co.
$2,000,000

200,000 shares of com¬
Price—$1.50 per share. Pro¬

(par 10 cents).

participating preferred share he .
Subject to prior right of exchange, 47,806 shares iPi 1
new preferred are to be
purchased bty the below

Price—$2 per share. Proceeds—For
working capital. Office—1400 National Bank Building,
Detroit, Mich. Underwriters—Watling, Lerchen & Co.,
Detroit, Mich., and Mullaney, Wells & Co., Chicago, 111.
filed

Y.

7 % stock for each old

Underwriter—None.

135,160 shares of

—

Curtis, Boston, Mass.; and Hamlin & Lunt,

close of business March 25

stock (par $1).

26

held; rights to expire March
— Principally
to reduce
Underwriters
Paine, Webber,

exchange
participating preferred stock held a

28,554 shares. Price—
acquisition and working

Detroit,

$100

of

basis

Proceeds

par.

ible preferred stock
for outstanding

additional

(letter of notification)

the

expansion, research and development ex¬
working capital. Office — 251 Grove Ave.,
Verona, N. J. Underwriter — Daggett Securities, Inc.,
Newark, N. J.

held; rights to expire on
Co., majority "stockholder,

Proceeds—For

on

For

—

penses

(3/19)

Office—Warren, Pa.

if Pioneer
March

12V2

National

At

—

stock

ceeds

(letter of notification)

April 26.

6%

Price

mon

17,526 shares of capital
stock (no par) to be offered for
subscription by minor¬
ity stockholders of record March 19 on basis of one new
share

10

Shield Chemical Corp.
March 1 (letter of notification)

Halsey, Stuart

received

up

March

(with stock purchase warrants) for each

short-term bank loans.

Inc.; Equitable Securities Corp.; Kidder Peabody
Merrill Lynch, Pierce, Fenner & Beane, Union
Securities Corp. and White Weld & Co.
(jointly); Har¬
riman Ripley &
Co,, Inc.; Kuhn, Loeb & Co., Lehman
Brothers, .Drexel & Co. and Salomon Bros. & Hutzler

nated

record

N.

Probable

Boston, Mass.

100 shares of common stock

Buffalo,

Co.,

Feb.

of

of debentures

Lynch,

bonds

Underwriter—None.

Corp. of America,

filed $3,273,800 of 6% debentures due April 1,
(with warrants to purchase shares of common stock,
50 cents) to be offered for subscription by stock¬

&

Co.

expires April 5,

18

Jackson

&

The offer

(3/12)

five

each

Merrill

Beane, New York.

bidding.

shares of Scurry-Rainbow stock

Oil share.

Road, Van Dyke, Mich.

due

&

mon

basis of 3.8

a

Rainbow

Sheraton

Feb.

1, 1984.

competitive

Feb.

on

Proceeds—To repay bank loans and for
construction.
Underwriter—To be determined by

March

Ltd., Calgary, Alta., Canada
shares

if Seal-Peel, Inc., Van Dyke, Mich.
5 (letter of notification)
$300,000 of 7% 10-year
first mortgage
bonds, to be issued in exchange for out¬
standing debt and any balance used for working capital.
Company is in bankruptcy.
Office — 11400 East Nine

to expire on March 15.
Price—
Proceeds—To repay bank loans and

program.

Fierce, Fenner

4,700,416

March

rights

share.

per

filed

Underwriter—None.

Building, Dallas 1, Texas.

basis

W,

exchange for the 534,320 shares of Rainbow Oil Ltd,

stock

Cement Corp., New York
120,427 shares of capital stock (par $7) be¬
ing offered for subscription by stockholders of record
the

15

for each

Feb. 4 filed

on

Main

of capital stock (par 50
cents) being offered in exchange for the 2,670,000 shares
Scurry Oils Ltd. stock on a share-for-share basis, and

Penn-Dixie

26

1040

Matthew

of

Bids—Expected to

shares

Underwriter—None.

cantile Securities

—

(EST) March 29.

a.m.

Plan

for

Thomas.

if Panhandle Oil Corp., Dallas, Texas
5 (letter of notification) 3,000 shares of common
stock (par $1) to be offered pursuant to an
Employees
Stock

Brothers;

Corp.; Merrill Lynch, Pierce, Fenner
Bids—Expected to be received up to 11 am

on

track

March

open

E

repay bank loans and for
new
Underwriters—To be determined
by com¬

San Juan Horse Racing Association
Feb. 26 (letter of notification)
50,000 shares of common
stock.
Price
$1 per share. Proceeds —To construct

bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Kuhn, Loeb & Co.; Blyth & Co., Inc. and White, Weld
& Co. (jointly);
Kidder, Peabody & Co.; Union Secu¬
rities Corp.; Bear Stearns & Co., Lehman Brothers and
Bros.

(3/30)
$17,000,000 first mortgage bonds, series

Securities

6 Beane.

Proceeds—For construction program and to repay bank
loans.
Underwriters—To be determined by competitive

Salomon

Underwriter—None.

bidding. Probable bidders: Halsey, Stuart &
Co.; Blyth & Co., Inc.; The First Boston
Corp.; Kuhn
Loeb & Co.; Salomon Bros. &
Hutzler; White, Weld &
Co., and Shields & Co. (jointly); Lehman

Glisan

(par $10) to be offered in

12.

Proceeds—To

petitive

Price—At par

Light Co. (3/29)
filed $8,000,000 first mortgage bonds due 1984.

25

March

31

Offer

Diego Gas & Electric Co.

construction.

Underwriter—Noi^e.

will manage a
group to assist in

underwriting

Proceeds—For general corporate
named by amendment.

Underwriter—To be

\ }

the

of common stock

Toropto Stock Exchange, with

commission.

of

Portland,

in

shares of St. Regis stock for each
Superior share.
to

($1,Proceeds—To retire preferred stock and

share).

common stock
(par $5) |je,
exchange for 30,000 shares of
common
Superior Paper Products Co. on the basis of

offered

stock of

unit. Pro¬

Wainwright

C.

293

to stockholders.

derwriter—None, but Putnam

Ltd., Toronto, Ont., Canada

1,000,000 shares

Price—To be related
the

ing

March 3 filed

(letter of notification)

"Investment

•

JDec. 18 filed

Feb.

$15

To

—

sidiaries, who will

Underwriter—H.

be offered

will subscribe

pany and for new construction. Underwriter-—None.
'if Nat.onal Fuel Gas Co. (4/12)
March

2

to

Feb.

stock

Price—At the market price then
prevailing on
York Stock
Exchange, or through special offerings or
T) secondary distributions. Proceeds—To Lehman Borthers
of their

Feb. 3 filed 93,000 shares of

stock (par
amount of

common

principal

Pennsylvania Electric Co.

Monterey Oil Co., Los Angeles, Calif.
j

of

$400

Pacific Power &

Feb.

(par $1).

—Cornell University
—None.

of

change for the assignment to company of certain oil and
gas leases in the State of Wyoming.
The company will
receive an aggregate of 6,741 acres, more or less. Under¬

stock

are

ei"

Regis Paper Co., New York

Avenue,

to be used for expansion of
Underwriter—None. Sales will be handled by

employees.

shares

units

St.

writer—None.

(par
$75—limited dividend) and $1,500,000 of certificates of
participation (to be sold in multiples of $75—5% inter¬
est). Proceeds—From sale of these securities, together
■with bank

2,000

in

10 shares of stock. Price—$500 per

assessable

Merritt-Chapman

common

and

sold

if Pacific Butte Mines Co., Tonopah, Nev.
March 3 (letter of notification) 400,000 shares of

of

Mississippi Chemical Corp., Yazoo City, Miss.
Jan. 5 filed 26,666 shares of special

and

Street,

shares

of Newport stock.
Underwriter—None.

be

certificates

(par $1) of Newport
of

1974,

to

000 per

stock (par $12.50)

shares

March 27.

on

for

common

1,

$10)

stock

Merritt-Chapman & Scott Corp., New York
authorized and issued

•

(letter of notification) $80,000 of 5% notes due

Feb.

March

subordinated debt and for other corporate purposes. Un¬
derwriter—G. H. Walker & Co., New York.

being

Theater, Inc., Boston, Mass.

if Northern Wholesale Hardware Co.

Proceeds—To pay $306,000 of outstanding

common

3

St., Boston, Mass.
Co., Boston, Mass.

Corp., N. Y. (3/23)
March 1 filed $1,300,000 12-year
sinking fund subordina¬
ted debentures due March 1, 1966. Price—100% of
prin¬

Dec. 31 filed 513,594 shares of

Corp., New York.
Drug Stores, Phoenix, Ariz.
Feb. 26 (letter of notification)
10,800 shares of common
stock (par $10).
Price—$11 per share.
Proceeds-~Fn»>
expansion and working capital.
Address —P. 0 tw
5128, 1002 East McDowell Road, Phoenix, Ariz IJnrW

ceeds—For actors' equity bond, royalties, land, construc¬
tion of theater and related expenses.
Office—60 State

Merchants Acceptance

n

pL

if Ryan-Evans

750,000 shares of common

York.

notes

■stock.
Price—At par ($100
purchase drill rig, etc. Office — 10 East Corydon St.,
Bradford, Pa.
Underwriter — Winner & Myers, Lock
Haven, Pa.
*

cipal amount.

filed

North Shore Music

Feb.

Medina Oil Corp.,

1

(3/25)

filed 50,000 shares of preferred
stock senV-r
Price—To be supplied by
amendment
ceeds—To repay bank loans incurred
for construotimf
Underwriter—The First Boston
5

(par $100).

writer—None.

Continental

Texas.

Dec.

March

Corp., N. Y. (4/5)
stock (par 10
cents). Price—$2 per share. Proceeds—For capital ex¬
penditures, including payment of balance due on cer¬
tain claims and properties.
Underwriter—Israel & Co.,

exploration and drilling expenses
properties, and for working capital.
Securities Corp., Houston,

to

—

if Rochester Gas & Electric Corp.

North American Uranium & Oil

March

for

notes,

repay

and

Underwriter

Yorker

23

New York.

McBride Oil & Gas Corp., San Antonio, Tex.
Jan. 26 filed 2,000,000 shares of common stock (par 10
cents). Price—To be supplied by amendment. Proceeds
To

Financial Advisor—The First Boston Corp.,

stock

Underwriters—Mohawk

and

Reynolds Uranium Corp., N. Y.
(letter of notification) 30,000 shares of
enmm
(par $1). Price — $10 per share.
Proceeds-.?0
mining operations. Office—27 William
St., New Yn?
N. Y. Underwriter—Luckhurst &
Co., Inc., New
York

Magazine, Inc.
(letter of notification) 2,400 shares of common
(par $1). Price—$20.25 per share. Proceeds—To a
selling stockholder. Underwriter — Silberberg & Co.,

dated Jan.

1, 1954 and due Jan.
1, 1964. Price—100% and,accrued interest. Proceeds—
To construct plant in Norwood, O., and for working capi¬
tal.

April 24.

on

19-,

stock

New York.

Inc.

11

Feb. 23

for each New Bedford share held. The offer will expire

& Co., St. Louis, Mo.

Thursday, March

.

notes).

capital

32,126 common shares of beneficial interest
(par $8) being offered in exchange for common stock
of New Bedford Gas & Edison Light Co. held by minor¬
ity stockholders on the basis of 4% New England shares

(3/24)

.

Price—At par.
Proceeds—For worK
redemption of notes.
Office
3nn=; w ®
Street, Wyandotte, Mich. Underwriter—None."
*

Dec. 10 filed

Mallinckrodt

.

i

uiiuci

Silver Buckle Mining Co.,

Wallace, Jda.
1,083,556 sh3ie^
mon stock
(par 10 cents). Price—12¥2
ProCeeds-^-To develop Vidicatot-claims. AdoreFeb.-lO

,

(letter of notififcation)

.

v

ym

•>

f

A-; -

•*

corn-

s^are.
f

Number 5306

179

Volume

The

. .

.

Qommerc/al

and Financial Chronicle
(1145)

Underwriter—To be filed
/

1088, Wallace, Ida.
amendment.

Box

by

Somerset Telephone Co.
Feb. 25 (letter of notification) 5,600 shares of preferred
stock
Price —At par ($5 per share). Proceeds —To
establish three dial exchanges. Office—Norridgewock,
Maine. Underwriters—E. H. Stanley & Co. and Clifford
j
Murphy Co., of Waterville, Maine.
*

Gas & Electric Co. (3/25)
March 5 filed 114,166 shares of common stock (no par)
to be offered for subscription by common stockholders
of record March 24 on the basis of one new share for
each seven shares held; rights to expire on April 8.
Price—To be fixed by company on March 23. Proceeds
To repay bank loans and for new construction.
Un¬
derwriter—Smith, Barney & Co., New York.
jl

southern Indiana

it Southern Indiana Gas & Electric Co. (4/13)
March 5 filed $8,000,000 first mortgage bonds due April

Proceeds—To repay bank loans and for con¬
struction program. Underwriters—To be determined by
competitive bidding. Probable bidders: Halsey,( Stuart
& Co. Inc.; Smith, Barney & Co.; Kidder, Peabody &
Co.; Carl M. Loeb, Rhoades & Co.; Salomon Bros. &
Hutzler; The First Boston Corp.; Equitable Securities
Corp.; White, Weld & Co. and Shields & Co. (jointly);
Bids—To be received up to
Flair, Rollins & Co. Inc.
II a.m. (EST) on April 13 at office of Commercial Serv¬
ices, Inc., 20 Pine Street, New York, N. Y.
1984,

I

Spa-King Mount Clemens Water Products Corp.
(3/15)
(letter of notification)

299,000 shares of com¬
mon stock (par 10 cents).
Price—$1 per share. Proceeds
—For working capital, etc.
Office—34-24 Vernon Blvd.,
March

1

City 1, N. Y.

Long Island

Utah Power &
Light Co.
Feb.

Underwriter—Teden & Co.,

16

filed 200,000

Proceeds—To

Peabody &

to 11

a.m.

principal amount.
for

Northern

and

Price—100%

of

Proceeds—To improve facilities and

capital.

working

Idaho.

Underwriter—None.

Finance Corp.
640,000 shares of common stock (par 50
cents) to be offered in exchange for the $300,000 par
value of
authorized, issued and outstanding capital
filed

19

Finance Co.

stock of Strevell-Paterson
of

13

shares

shares
the
for

of

(a)
Corporation stock for each of the 5,000
cumulative preferred stock (par $10) of

of

5%

Company
of

each

the basis

on

and

the

(b)

shares of

23

Corporation

25,000 shares of $10

of the company.

par

Underwriter—None.

common

petitive

bidding.

for each

shares

seven

Corp.
Smith, Barney & Co (jointly); Lehman Brothers and
Bear, Stearns & Co. (jointly); The First Boston
Corp.
and Blyth &
Co., Inc. (jointly); Kidder, Peabody & Co.;
Salomon
to

be

Bros.

cumulative

March 4

stock¬

one

on

new

share

March 31.

undetermined

an

num¬

common stock
(par $3) to be offered at
(aggregate not to exceed $300,000) to em¬
ployees pursuant to company's Employees' Stock Pur¬
chase Plan.
Proceeds—For drilling of wells.
Office—

market

2100 National Bank of Tulsa

Building, Tulsa, Okla.

$29,000,000

12-year

6%

debentures

one share of stock.
Price—To be supplied by
amendment. Proceeds—From sale of units and
1,125,000
additional shares of common stock and

private sales of
$55,000,000 first mortgage bonds to be used to build a
1,030 mile crude oil pipeline.
Underwriters
White,
Weld & Co. and Union Securities Corp., both of New
York.
Offering—Postponed indefinitely, i
West Coast Pipe Line Co.,

Dallas, Tex.
common

stock (par

supplied by amendment. Pro¬
ceeds—Together with other funds, to be used to build
pipeline. Underwriters—White, Weld & Co. and Union
Corp.,

both

of

New

York.

Offering—Post¬

indefinitely.
2

filed

to

certain

Electric

Corp.,

Pittsburgh, Pa.

officers

assessable capital stock. Price—25 cents per share. Pro¬
ceeds— For
mining expenses.
Office
305 Rookery

Underwriter—None.

Finance

At

—

working capital.

of

em¬

Co.

(Calif.)

2,000 shares of

($10 per share).
Underwriter—None.
par

common

Proceeds

—

For

thereto.

Feb.

★ Texas Eastern Transmission Corp. (3/24)
March 4 filed $17,000,000 of debentures due March 1,
1974. Price—To be
supplied by amendment. Proceeds—
To repay bank loans and for new construction;

Under¬

Wisconsin
19 filed

to

be

of

record

each

Up

March

to

not
be

to

Price—To be supplied by amendment. Proceeds—To two
selling stockholders, Underwriter—Dillon, Read & Co.,
Inc., New York.

Service

Corp.

subscription by
12

the

on

(3/12)

common

basis

common

of

one

(par $10)
stockholders
share

new

for

by

held; rights to expire on March 30.
exceeding 10,000 shares of unsubscribed
offered first to employees.
Price—To be
amendment.
Proceeds —For construction

Underwriters—The

First

Boston

Corp.

and

Merrill

Lynch, Pierce, Fenner & Beane, both of New
York; Robert W. Baird & Co., Inc., Milwaukee, Wis.;
and William Blair & Co., Chicago, 111.
•

1

t)f

common stock of American Woolen Co.

jtme-fifth

of

a

common stock

common

on

share of preferred and one-half share of
plus $5 in cash for each American Woolen

share.

The offer will expire March

extended. Dealer-Manager
New York.

—

22, unless

Blair, Rollins & Co. Inc.,

★ Trans Caribbean
Airways, Inc.
March 4 (letter of
notification) 20,000 shares of class A
common stock
(par 10 cents). Price—At market (about

C.25

who

Per share). Proceeds—To O. Roy Chalk, President,

is

the

Phillips

&

selling

stockholder.

Underwriter

—

B.

G.

Co., New York.

Union Uranium
Co., Denver, Colo.
feb. 16
(letter of notification) 29,910,000 shares of cornWon

stock, purchasers of

|lyen
the option
tor each

to

purchase

share purchased.

snare).
F. 19th

:*«
★

the first 9,970,000

two

shares to be

additional

Price—At par

shares

(one cent per

Proceeds—For

mining expenses.
Office—230
Avenue, Denver, Colo. Underwriter—J. W. Hicks

Co., Denver, Colo.
U. S.

*eb. 12

(letter of notification) 19,000 shares of common

about 10

cents).

cents par

Alabama
March
20

on

stock

it

1

Gas

Corp.

approving

an

stockholders will vote April

increase in the authorized common

(par $2) from 1,000,000 to 2,000,000 shares. South¬

Natural

Gas

American

Co.,

parent,

Louisiana Pipe

owns

about

Price—At market (estimated to

share).

^erty, Tampa,

Proceeds—To W. B. Hag-

Fla. Underwriter—Thomas & McKinnon,
York.-Offering subsequently withdrawn.




99%

of

Line Co.

subsidiary of American Natural Gas
Co., asked Federal Power Commission to authorize con¬
of
a
$130,000,000 pipe line, to be financed
through the issuance of $97,500,000 of first mortgage
bonds, $12,000,000 of interim notes convertible to pre¬
ferred stock at option of company, and $20,500,000 of
onmmon stock (par $100),. the latter to be sold to parent.
Hearings before the FPC will commence on March 8.
Nov. 10 company, a

Service Co.
March 8 directors approved the issuance of $15,000,000
3 V2 % first mortgage bonds to be placed privately with
—For

Public

companies, banks and trust funds.
expansion program. /

Arkansas
Feb. 22

Louisiana

Gas

Proceeds
,•

Co.

was

Co.

to

11

a.m.

Corp.; Lehman Brothers,
Corp. and White, Weld &
Co,, Inc., Equitable Securities

Lynch, Pierce, Fenner &
Corp. (jointly).
Baltimore & Ohio

Finance Corporation,

RR.

ington 25, D. C.,

811

Co.

Inc.

Beane

(jointly); Merril)

and

Union

Securities

(3/15)

Bids will be received by the

Secretary of Reconstruction
Ave., N. W., Wash¬

Vermont

March 15 for the purchase from the
part of $65,000,000 collateral trust 4%
bonds, series A, due Jan. 1, 1965 of this railroad. Under¬

RFC of all

or

on

any

writer—To be determined by
competitive
able bidders: Halsey, Stuart & Co.
fnc.,
ton

bidding. Prob¬
The First Bos¬

Corp., Merrill Lynch, Pierce, Fenner & Beane
(jointly); Bear, Stearns & Co.

and

Alex. Brown & Sons
Boston
15

it

Edison Co.
announced

was

plans

company

to

issue

and

$15,000,000 of first mortgage bonds due 1984.
Proceeds—For construction program.
Underwriters—To1
be determined by
competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; The First Boston
Corp.; Leh¬
man

Brothers; Kuhn, Loeb & Co. and A. C. Allyn & Co.
(jointly); White, Weld & Co.; Harriman
Ripley A

Inc.

Co. Inc.

Offering—Tentatively expected

in June.

Carrier Corp.

Feb.

23

stockholders approved a proposal to increase
authorized common stock
(par $10) from 1,600,000
shares to 5,000,000 shares and the
authorized preferred
stock (par $50) from
181,855 shares to 800,000 shares
to provide for further
possible financing.
Proceeds—
For expansion, etc.
Underwriters—Harriman
the

Co. Inc. and

it Central

Ripley &

Hemphill, Noyes & Co.

Hudson Gas

March 8 it

was

plans

&

Electric Corp.

announced issues of mortgage bonds and
are
now
under

consideration, but def¬

will

depend

largely

developments in
requirements
$17,300,000 for 1954-1955. Company is
reported to be considering the issuance of about
$9,000,-

the securities
are

estimated

000

bonds

1955.

markets.

upon

Construction

cash

at

this

fall

and

$3,500,000 of preferred stock in

Underwriter—Kidder, Peabody & Co., New York*

Illinois Electric & Gas Co.
Dec. 9 it was announced
company intends
sell around the middle of 1954 an issue of

reported Cities Service Co.

may

to offer and

$4,000,000 first

mortgage bonds.

Proceeds—To repay bank loans and for
Underwriters—To be determined bybidding. Probable bidders: Halsey, Stuart

construction.

competitive

& Co. Inc.; Stone & Webster Securities
Corp.; Kidder,
Peabody & Co. and White, Weld & Co. (jointly).

Central Maine Power Co.
7 it was reported company

Oct.

first quarter of

plans sale during the
1954 of $10,000,000 common stock after
New England Public Service Co. of its

by
Central

of

Maine

Power

Co.

common

stock.

Probable bidders:

Blyth & Co., Inc. and Kidder, Peabody
& Co. (jointly); Coffin &
Burr, Inc.; A. C. Allyn & Co.,
Inc. and Bear, Stearns & Co.
(jointly); Harriman Ripley
& Co., Inc.
•

Central

Power &

March 2 company
and

sell

Light Co.

(4/12-16)

applied

to SEC for authority to issue
$18,000,000 first mortgage bonds, series F, due

1984.

Proceeds—To refund

series

E

issue of $8,000,000 4Vfe%
bank loans and for new
Underwriters—To be determined by com¬
petitive bidding.
Probable bidders:
Halsey, Stuart &
bonds

and

to

an

repay

construction.

(jointly); Lehman Brothers; Union Se¬
(jointly). Bids

—Tentatively expected week of April 12.

Registration—

Scheduled for March 22.

it Central RR. of New Jersey
March 9 company sought ICC permission

to

issue

and

sell

$1,980,000 equipment trust certificates to be dated
April 1, 1954 and to mature in 15 annual installments to
April 1, 1969. Probable bidders: Halsey, Stuart & Co.
Inc.; Salomon Bros. & Hutzler; Kidder, Peabody & Co.;
Blair, Rollins & Co. Inc.
Columbia Gas System,

Inc.

(4/21)

March 2 company filed an application with SEC

ing

a

nated

the
on

gram.

cover¬

proposed offer of $50,000,000 convertible subordi¬
debentures

due

1964

to

common

stockholders

basis of $100 of debentures for each 36
or

on

shares held

about April

21. Proceeds — For construction pro¬
Underwriter — To be determined by competitive

Probable bidders: Halsey, Stuart & Co. Inc.;
Morgan Stanley & Co. Bids—Tentatively scheduled for
April 21.

bidding.

•★ Columbia Gas System, Inc.
March 5 it
June

sell its
holdings of 1,900,000 shares of this company's stock.
If
sold at competitive bidding, bidders may include Smith,
Barney & Co. and Blyth & Co., Inc. (jointly).
it

up

The First Boston

(jointly); Blyth &
Corp. and Central Republic

struction

it Arizona

Brothers^

Weld

received

curities Corp. and Kidder, Peabody & Co.

the
presently outstanding common stock. There are no plans
for immediate financing.
Underwriter—None.
ern

Lehman

White.

Webster Securities

Bros. & Hutzler

i

announced

was

15 insurance

Airlines, Inc., New York

j stock
(par five
e

Prospective Offerings

the basis of

and

Co. Inc.; The First Boston Corp., Eastman, Dillon &
Co.,
Goldman, Sachs & Co. and White, Weld & Co. (jointly);
Merrill Lynch, Pierce, Fenner & Beane and
Salomon

.-»—■■■

★

Textron Incorporated, Providence, R. I.
Feb. 8 filed 195,668.4 shares of 4% preferred
stock, series
TS (par
$100) and 489,171 shares of common stock (par
I 50 cents) to be offered to holders of the 978,342 shares

Inc.;
&

holdings

stock

shares

seven

program.

(par $5).

Public

316,867 shares of

offered for

supplied

(3/17)

Co.

distribution

shares

writer—Dillon, Read & Co. Inc., New York.

:

&

new

funded debt and for general corporate purposes. Under¬
writer — Merrill Lynch, Pierce, Fenner & Beane, New

York.

(jointly);

Corp.

Central

it Winn & Lovett Grocery Co. (3/30)
March 10 filed $10,000,000 sinking fund debentures to
mature April 1, 1974. Price—To be supplied by amend¬
ment.
Proceeds
To retire $4,400,000 of outstanding

New York
Feb. 25 filed $11,500,000
participations in company's
"Employees Savings Plan" and 178,295 shares of capital
stock (par $25) to be offered for subscription pursuant

stock

employees

plan to

(letter of notification)

Co.

—

—

Co.,

common

executive

&

on April 20.
Registration—Expected March 18.
Arkansas Power & Light Co.
Feb. 8 it was reported company
plans to sell, probablv
in August, an issue of about
$7,500,000 first mortgage
bonds due 1984.
Underwriters
To be determined by
competitive bidding. Probable bidders: Halsey, Stuart

ployees of company and six subsidiaries.

Price

★ Sunlight Mining Co., Spokane, Wash.
1 (letter of notification)
100,000 shares of non¬

other

company and its subsidiaries; and 200,000 shares of said
stock to be offered under employees' stock

stock.

March

and

and

preterred

(EST)

inite

shares

483,190

Penn

Langley

preferred stock

Westinghouse

(4/20)
plans to issue

company

sell about

15, 1964, and 580,000 shares of common stock
(par 50 cents) to be offered in units of one $50 deben¬

Nov. 20, 1952 filed 1,125.000 shares of
50 cents).
Price—To be

Light Co.

cumulative

Bids—Expected to be

Un¬

Dallas, Tex.

of

(jointly).

Feb.

West Coast Pipe Line
Co.,
Nov. 20, 1952 filed

shares

Securities

derwriter—None.

1

of

on

ber of shares of

the

it William

Underwriter—The First Boston Corp., New York.

C.

&

announced

Equitable

Bids—Tentatively expected
(EDT)

noon

(letter of notification)

March

200,000 shares

Hutzler.

May 19, at Room
2033, Two Rector St., New York, N. Y.
★r Warren Petroleum Corp., Tulsa, Okla.

poned

convertible

common

the basis of

Texas Gas Transmission Corp.

&

received up to

Securities

Proceeds—To re¬
$1,100,000 bank loans and for general corporate pur¬

Feb. 25 filed

&

W.

Power

was

stock
(par
$100). Proceeds—For construction program.
Underwriters
To be determined
by competitive bidding. Probable
bidders: Blyth & Co.,
Inc.; The First Boston Corp. and

curities

pay

Texas

Stuart

of commdm stock (par
$12.50) to be offered under restricted stock option plan

held; rights to expire

Building, Spokane, Wash.

Halsey,

70,000

Co.

Price—To be supplied by amendment.
poses.

bidders:

& Co. and Stone & Webster Se¬
(jointly); Union Securities Corp. and

stock

(3/17)

on

Probable

it

sell

Stone

Office—Salt Lake

preferred stock (par $50) to be offered to
holders of record March 15

March 23, at Room 2033, Two Rector

on

Arkansas

March 3

Co.. Inc.; White, Weld

March

of

(EST)

Utah Power &
Light Co. (5/19)
Feb. 16 filed
$15,000,000 of first mortgage bonds due
1984.
Proceeds—To repay bank loans and for new con¬
struction.
Underwriters—To be determined by com¬

stock

City, Utah.

Stromberg-Carlson Co.
Feb. 24 filed 72,025 shares

and

—

Strevell-Paterson

Feb.

(Ho.

St., New York, N. Y.

ture and

Washington

repay

(jointly);

due Dec.

ern

(no par).

Merrill Lynch, Pierce, Fenner &
Lehman Brothers; The First Boston
Corp.; Union Securities Corp. and Smith, Barney & Co.
(jointly). Bids—Tentatively expected to be received up

Beane

★ Spokane Seed Co., Spokane, Wash.
March 8 filed $600,000 of 5% convertible debentures due
15, 1964, to be sold to pea growers located in East¬

•

stock

common

bank loans and for construction
program.
Underwriter—To be determined by competi¬
tive bidding*. Probable
bidders: Blyth & Co., Inc.; Kidder,

Inc., New York.

June

(3/23)

shares of

45

and

to

an

in 1954,

was

issue

announced

and

sell

that company plans

early in

$40,000,000 of senior debentures

additional $40,000,000 of senior debentures later

Proceeds—For construction expenses and to re-

Continued

on

page

*

46

(1146)

The Commercial and Financial
Chronicle

Continued

25,000

jrom^age 45,

loan, of $25,000,000.
Underwriter—To be
determined by competitive bidding.
Probable bidders:

pay

bank

a

Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.
Connecticut
Dec.

7 it

Underwriters—For

stock.

stock:

common

Putnam

&

Co.; Chas. W. Scranton & Co., and Estabrook & Co.
Bonds may be placed privately.

Jan. 27 it

reported company plans to issue and sell

was

New

for

.

$25,00,000 of debentures due 1979.
Proceeds —To pur¬
chase stock of company's operating subsidiaries, who in
turn will

apply these proceeds for construction. Under¬
writers
To be determined by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; White,
Weld & Co. and Paine, Webber, Jackson & Curtis (joint¬

(3/25)

Fidelity Trust of America, Dallas, Tex.
Dec. 22 it was announced that company plans to in¬
crease
its capitalization to $3,000,000, following which
a registration statement will be filed with the SEC to
authorize a new offering.
There are presently author¬
ized 35,000 shares of no par value, of which 33,750 shares
will be outstanding following present offering and sale
of 30,000 shares of common stock at $10
per share.
Business—A discount and lending organization. OfficeFidelity Bldg., Dallas, Tex.
Underwriter—May be Boylen, Kasper & Co., Dallas, Tex.
First National
Feb.

23

Bank of Portland

stockholders

shares

the basis of

one

rights to expire
ceeds—To

of

increase

Unsubscribed

$12.50

new

on

par

26

value capital stock

on

share for each three shares held;

April 15. Price—$40
capital and surplus.

shares

issue and

total of 400,000

a

to

be

share. Pro¬
Underwriter-

per

purchased by Transamerica

to

mature

able
&

in

30

equal semi-annual installments.

Prob¬

bidders:

Bank of Toms

River, N. J.

(5/14)

Jan

12 it was announced bank plans to offer for sub¬
scription by its stockholders of record May 1, 1954, an
additional 3,000 shares of capital stock (par $10) on the

basis of

one new

share for each 26 shares

held; rights to
Price—$50 per share. Proceeds—To
increase capital and surplus. Underwriter—None.
expire

June 16.

on

Florida
Feb.
25

15

it

Power
was

Corp.
vote March

increasing authorized preferred stock from 250,2,500,000 to 5,000,000 shares. Underwriters — Kidder, Peabody
& Co., and Merrill Lynch, Pierce, Fenner & Beane, both
on

000 to 500,000 shares and the common stock from

of New York.

new

construction.

25

Power

it

was

& Light Co.

reported

company

later this

may

year

issue and sell about $15,000,000 of first mortgage bonds.
Underwriters—To be determined by competitive bidding.

Probable bidders: Halsey, Stuart & Co. Inc.; White, Weld

November, 1954,

.

an

preferred stock

(par $100).

Underwriter

be de¬

To

—

termined by competitive bidding.
Probable bidders: (1)
For bonds—Halsey, Stuart & Co. Inc.; Union Securities

Corp., Goldman, Sachs & Co. and White, Weld & Co.
(jointly); The First Boston Corp.; Harriman Ripley &
Co. Inc.; Kuhn, Loeb & Co.; (2) for preferred—The First
Boston Corp.; Smith, Barney & Co.; Lehman Brothers;
Union Securities Corp.

stock.

mon

22

it

was

Underwriter—Courts

&

bonds due 1984.

Proceeds

Underwriters

To

—

be

Merrill

Lynch,

announced

stockholders

will

vote

April

increasing the authorized common stock (par $2.50)
500,000 shares to 1,000,000 shares. There are pres¬
ently 276,088 shares outstanding and an additional 43,217

from

shares

reserved

are

for

conversion

the

remaining 180,695 shares
ployees' stock bonus plan.
|

are

of

debentures

and

available for the

em¬

The, proposed increase in

capitalization is necessary to provide additional shares
to finance the continued growth of the
company, or if it
seems advisable for stock dividends or a stock split. Un¬
derwriter—Estabrook & Co., New York and Boston.
Gas

Service Co.

(Mo.)

Feb. 25 Cities Service Co. announced the cancellation of
its contract to sell the Gas Service Co.'s

1,500,000 shares

of

stock to Missouri Public Service Co. for
$32,If these shares are again registered with the

common

000,000.

SEC, they may be offered for sale at competitive bidding.
Probable bidders include: Blyth & Co., Inc. and
Kidder,
Peabody & Co. (jointly); Stone & Webster Securities
Corp. and Stern Bros. & Co. (jointly); Unioh Securities
Corp.
★

General

March 8 it

606,576

Public

Utilities

Corp.

was

announced company plans to offer about
additional shares of common stock (par
$5) to

stockholders in
for each

15

May, 15)54

shares

held.

prior to the offering date.

on

the basis of

Price—To

one new

share

be determined

just

Proceeds—To be invested in

the domestic subsidiaries.
Underwriter—None, but Mer¬
rill Lynch, Pierce, Fenner & Beane
may act as clearing

agent.

★ General Telephone Co. of Indiana, Inc.
March 8 it

that

some

was

announced that the
company

I
anticipates

$3,200,000 of first mortgage bonds and capital

stock will be sold in 1954. The
bonds
sold privately.
All of the

are

expected to be

company's common stock is
owned by General
Telephone Corp., the parent company.
Gulf

Insurance Co., Dallas, Texas (4/12)
/'
Feb. 15, T. R.
Mansfield, President, announced that com¬
pany plans to offer to its stockholders of record
April 12
the right to subscribe for
5,000 additional shares of cap¬
ital stock (par
$10) on a pro rata basis. Price—Not ex¬
ceeding $55 per share.
Proceeds
To increase capital
and surplus.
Underwriters—None.
—

★

Hewitt-Robins,

March 3 it
23

on

was

Inc.

announced stockholders will vote March
an issue of 50,000 shares of cumulative

authorizing

preferred stock (par
$50), of which it is planned to sell




and

sell

in

be

For construction program
determined by competitive bid¬

(jointly);

spring $20 000 000

financing

was

done

of

nri

pu"

(Minn.)

was

determined

time this year.

some

by

Underwriterslfo

competitive

bidding. Probable bid
Halsey, Stuart & Co. Inc.; Lehman Brothers
and
Riter &
Co.
(jointly); Smith, Barney & Co.; Glore
Forgan & Co.; Merrill Lynch, Pierce, Fenner
& Beane'
Kidder, Peabody & Co. and White, Weld & Co.
(jointly)Equitable Securities Corp. and Union Securities
Corp
(jointly); Kuhn, Loeb & Co., A. C. Allyn & Co. Inc. and
Wertheim & Co. (jointly).
ders:

Northern States Power Co.

(Minn.)

Feb.

Pro¬

bidders:

Halsey, Stuart & Co. Inc.; Lehman
Bear, Stearns & Co. (jointly); Kuhn, Loeb
Co., Salomon Bros. & Hutzler and Union Securities
Corp. (jointly); Glore, Forgan & Co.; Blyth & Co., Inb.
Brothers and
&

_

8 it was reported
company plans to issue and sell
150,000 shares of cumulative preferred stock
(no par)
and 1,219,864 shares of common stock
(par $5), the latter
to be first offered for
subscription by common stock¬
holders on a l-for-10 basis
(with an oversubscription
privilege). Underwriters—To be determined by competitive bidding. Probable bidders: (1) For
preferred

stock—Lehman

Brothers, and

Smith, Barney & Co.

Corp. (jointly); White, Weld & Co.
and Shields & Co.
(jointly); Harriman Ripley & Co., Inc.,
Equitable Securities Corp. Meeting — Stockholders will
vote April 27 on approving new
financing.

Brothers

and

Riter

(2)

For

Riter

&

common

Co.

(jointly);

stock—Lehman

Co. (jointly); The First Boston
Corp., Kuhn, Loeb & Co. and Blyth & Co., Inc. (jointly);
Smith, Barney & Co.; White, Weld & Co. and Glore,

Forgan & Co.

^ Koppers Co., Pittsburgh, Pa.
announced stockholders will vote

aisJ

the

Previous

'

bonds due 1984

To repay bank loans and for new construction.
Underwriters—To be determined by competitive bidding.

&

(jointly).

Bids—Tentatively

expected to

be received in April.

March

Ohio

on
increasing the authorized common stock from 2,000,000 shares (1,867,125 shares outstanding) to 3,000,000 shares. There are no immediate
plans to issue any

of the additional stock.

issue

to

reported company is
planning the issuance
and, sale of approximately $20,000,000 of first
mortgage

—

was

s

comnet;

Electric & Gas
Corp.

Northern States Power Co.

Kansas City Power & Light Co.

March 3 it

,

sought authority irom tne
New Ynri,
Commission to sell an issue of
$5,000 000 n3r
of preferred stock
early this spring. It is

Feb. 8 it

March 8 it was announced that
company may issue and
sell later in 1954 $16,000,000 first

Probable

S.

com¬

—

mortgage bonds.

for

R?1 Se

company

vately.

maj

The First Boston Corp.: Lehman Brothers.

ceeds

3

planned

Co., Atlanta, Ga.

Pierce, Fenner & Beane

determined by

„

first mortgage bonds.

ding, Probable bidders: Halsey, Stuart & Co. Inc.; White.
Weld & Co.; Glore, Forgan & Co.; Kidder, Peabody &
Co.; Union Securities Corp., Salomon Bros. & Hutzlei
and

be

bidding.
Probable biddersco,—l
t>etitive
bidding. Probable
bidders: PTalco-ir
Halsey, Stuart & Cn f
Equitable Securities Corp.; Union
Securities Corn S
Harriman Ripley & Co. Inc.
(jointly); Lehman BrotW
Kidder, Peabody & Co. and Stone &
Webster Securit?
Corp. (jointly); The First Boston
Corp.; White, Weld
&

P.

Jersey Central Power & Light Co.
16 it was reported company tentatively plans tc
and sell in 1954 about $6,000,000 first mortgage

Jan.
sell

Power Co.

27

it

issue

an

(4/14)

announced

was

of

company

$20,000,000

plans to issue and

first

mortgage bonds due
1984. Proceeds—To repay bank loans and for new con¬
struction.
Underwriters—To be determined by com¬

Underwriter—The First Boston

Corp., New York.

petitive

to

issue

Island

about
For

bidding. Probable bidders: Halsey, Stuart &
Inc.; The First Boston Corp.; Blyth & Co., Inc.;
Kuhn, Loeb & Co., A. C. Allyn & Co., Inc. and Coffin
&
Burr, Inc.
(jointly); Union Securities Corp. and

Lighting Co.

Co.

announced company plans later this year
additional common stock and
was

to finance

on

Public Service Inc.
reported company plans to
offer
first mortgage, bonds due
1984

was

Underwriters—To

value

Dec.

March 4 it

Feb. 20

Orleans
it

New York State

Issue

^ Long

Co., Philadelphia, Pa.

8

Feb.

.

Inter-Mountain Telephone Co.
Dec. 23 it was reported company in
April, 1954,
offer to its common stockholders some additional

&

Foote Mineral

Co.

year.

issue of about $16,500,000 first mort¬
gage bonds due 1984 and 40,000 shares of cumulative

&

Co.; Lehman Brothers; Merrill Lynch, Pierce, Fenner
Beane; Glore, Forgan & Co. and Harriman Ripley &
Co. Inc. (jointly).

was

$6,000,000 of
Indiana & Michigan Electric Co.
Jan. 27 it was announced company plans to sell around

29

Florida
Jan.

it

reported this company
tentatively m
issue and sale in 1954 of about $3,000,000
first m
?ans
bonds due 1984. Proceeds—To
repay bank loans
nnl?e

New

and The First Boston

announced stockholders will

16

Feb.

Co.

,

First National

i9

Jersey Power & Light Co.

Dec.

&

Halsey, Stuart & Co. Inc.; Salomon Bros.
Hutzler; Blair, Rollins & Co. Inc.; Kidder, Peabody

•

Corp.

11

competitive

-

approved a proposal to

sell to stockholders of record Feb.
additional

(Ore.)

Thursday, March

.

Underwriters—To be deterrvi
,for
bidding. Probable bidders:
Halsev I? by
Inc.;-Kuhn, Loeb & Co. and
Lehman Em 1!^
(jointly); Equitable Securities
Corp.; Union Sec,
rs
Corp. and White, Weld & Co.
(jointly)- Merrilf r
es
Pierce, Fenner & Beane.
mli L»,

by the company up to noon (CST)
301, 135 East 11th Place, Chicago 5,
1114 for the purchase from it of $6,300,000 equipment
trust certificates, series 39, to be dated April 1, 1954 and
March 25 at Room

—

ly); Morgan Stanley & Co. and The First Boston Corp.
(jointly).
Offering—Tentatively expected in May.

.

-.

it Illinois Central RR.

&

Natural Gas Co.

Consolidated

stadt &

on

$10,000,000 and $20,000,000 in 1954 from sale of bonds
and

Proceeds—To acquire additional prop¬
working capital. Underwriter—F. EberCo., Inc., New York.
•

and

Bids will be received

Light & Power Co.

reported company plans to raise between

was

shares.

erties

.

its construction
program,

$70,000,000

bonds

to

be

additional

mortgage bonds
which will require

Salomon Bros. & Hutzler

financing.

determined

by

Underwriter—
competitive bidding.

Bids—Tentatively expected to be received

Probable bidders:

Halsey, Stuart & Co. Inc.; W. C. Langley & Co.; Blyth & Co., Inc. and The First Boston Corp.
(jointly); Smith, Barney & Co. Underwriters for com¬
stock

mon

(EST)

may

sell

Proceeds—To retire

rities

poses.

First

&

Underwriters—May be determined by competitive

Boston

April 14.

reported company may sell in 1954 about

Feb. 26 it
on

shares to

Proceeds—Foi
Underwriters—To be determined
by competitive bidding. Probable bidders:
Halsey, Stuart

White, Weld & Co.; Kidder*- Peabody & Co.
(jointly); Kuhn, Loeb & Co. and Salo¬

sell

$14,000,000

from banks in

March

announced

company plans to issue and
of common stock and borrow
$18,000,000
connection with proposed

1,500,000 shares of

common

stock of Gas

its

$2,500,000 of debentures and
preferred stock (par $100).
Proceeds
loans.
Underwriter—For common

stock

tration): Kidder, Peabody & Co.
New
Feb.

19

Jersey Bell Telephone Co.
the

—For

$25,000,000

(5/4)

of

Jersey P. U.
sell

in

May

mortgage bonds and $75,000,000 of
capital stock (the latter to American
Telephone & Tele¬
graph Co.). Proceeds—To finance
construction. Under¬
writers—To be determined
by competitive bidding.
Probable bidders:
Halsey, Stuart & Co.
Loeb

&

Co.;

White, Weld

Tentatively

Inc.;

Morgan
&

Stanley

Co.; The First
expected May 4.

&

Co.;

Shields

Boston

Corp.

Kuhn,

&

Co-

Bids—

was

&

Co.

announced

one

company

Inc.,

and ^mi

(4/1)

.

„

,

r

plans to one

stockholders of record about April 1 an

705,000 shares of

common

share for each

construction

seven

stock (no par) on
shares held.

_rr

.,

,

program.

Public Service Co. of Colorado

Oct. 13 it
"

was

reported company is

..

,

B

planning to fioa

issue of $15,000,000 first mortgage bonds, due
in 1954.
Proceeds *— For financing, in part.\ a $1 h>
000 electric generating plant to be constructed in Ve.

,

19°%n0n.

Colo.

first

j

York.

of

(now in regis¬

vote April

Underwriters—Drex
Co., Philadelphia, Pa. and The First Boston Corp.,

To retire bank

company petitioned the New
for permission to issue
and

Commission

shares

of

basis of

mortgage

65,000
—

it

1

common

sue

acquisition ol
Service Co. of

Kansas City,
Mo., at a total cost of $32,000,000. Follow¬
ing consummation of proposed
merger of the two com¬
panies, it is planned to sell $9,000,000 of first

bonds,

_

announced stockholders will

Pennsylvania Power & Light Co.

Missouri Public Service Co.
was

was

derwriters—Harriman Ripley
Barney & Co., New York.

Bros. & Hutzler (jointly).
it

v

increasing the authorized common stock from 740.UU
1,000,000 shares. No immediate plans to issu
any of the additional stock have been announced,
t •

and Drexel & Co.

28

Corp.;

ic Pennsylvania Glass Sand Corp.

construction program.

Dec.

repay

Burr, Inc. (jointly); Blyth & Co., Inc.; Union Secu¬
Corp. and Salomon Bros. & Hutzler (jointly); The

$3,500,0100 first mortgage bonds due 1984.

mon

plans to issue and
preferred stock (par
bank loans and for new

company

cumulative

Stone & Webster Securities Corp.

Metropolitan Edison Co.

& Co. Inc.;

(4/14)

announced

Harriman Ripley & Co., Inc. and
(jointly). Bids—Ten¬
tatively expected to be received up to 11 a.m. (EST) on'

bidding. Probable bidders: Halsey, Stuart & Co.
Inc.;
Morgan Stanley & Co.; White, Weld & Co. and Salomon
Bros. & Hutzler (jointly).
was

to 11 a.m.

construction. Underwriters—To be determined by com¬
petitive; bidding.
Probable bidders: Lehman Brothers;
Kuhn, Loeb & Co., A. C. Allyn & Co. Inc. and Coffin

$24,610,000 Atlanta. Knoxville & Cincinnati Division 4%
bonds due May 1, 1955, and for
general corporate pur¬

Dec. 16 it

was

50,000 shares of
$100).
Proceeds—To

reported that the company may issue and

issue of bonds late in 1954.

an

Power Co.
it

sell

Louisville & Nashville RR.
was

8

up

April 14.

on

Ohio
Feb.

be Blyth & Co., Inc., The First Boston
Corp. and W. C. Langley & Co. and associates.

Nov. 12 it

(jointly); Harriman Ripley &

Co. Inc. and Stone & Webster Securities Corp. (jointly).

»

(

>i

Underwriters—To be determined by competixiv

bidding.

Probable bidders:
Halsey, Stuart & Co.
•» j
Kuhn, Loeb & Co.; The First Boston Corp.; Harris, ■n
& Co. Inc.; Harriman
Ripley & Co., Inc. and Utiio
curities Corp. (jointly); Lehman Brothers; Kidder,
body & Co.; Blyth & Co., Inc. and Smith, Barney &
(jointly).
Public Service Electric & Gas Co.
Jan. 27, G. H. Blake, President, announced

000,000

financing

program

is

expected in

The type of securities to be issued is still

that aj>/ <
the oP
,

undeterrr.

\

Number 5306

179

Volume

.

The Commercial

. .

and Financial Chronicle

(1147)

form of debt financing is indicated. ' Under-

but some

Halsey, Stuart & Co. Inc.; Stone & Webster
Securities
Corp. and White, Weld & Co.
(jointly).
★ Texas Eastern Transmission
Corp.

writers—For any bonds will be determined by competi¬
tive bidding.
Probable bidders: Halsey, Stuart & Co
Inc • Morgan Stanley & Co. and Drexel & Co. (jointly),
Kuiin. Loeb & Co. and Lehman Brothers (jointly); The
First Boston Corp.
Previous public; offering of commor.
stock was handled by a group headed by Morgan Stanlej
& Co.. Drexel & Co. and Glore, Forgan & Co.

March 5 it
27

was

announced

common

to

10,000,000 shares.
Read & Co.
Inc., New York.

stock

from

bank loans and, to redeem convertible preferred
Underwriter — Merrill Lynch, Pierce, Fenner &
Beane, New York.
repay

stock.

Scott Paper Co.

West Coast

7,-

Feb.

Underwriter—Dillon,

stockholders will vote April
27 on increasing the authorized common stock from 5,000 OCO to 10,000,000 shares and the authorized indebted¬
ness of the company from $25,000,000 to $50,000,000.
The
company has no specific financing program.
Under¬
writers—Previous offering of $24,952,800 3% convertible
in September, 1953. was underwritten by
Drexel & Co., Smith, Barney & Co. and Merrill Lynch,

Pierce, Fenner & Beane.

Scudder Fund of Canada,

intends to

make

March 3 it

r

Southwestern

.

20

Corp. will

Norton

769,722 shares of Pioneer Natural Gas Co. stock
under plan of distribution of Southwestern's assets to
be voted upon Feb. 15.
Underwriter—Union Securities
Corp., New York, underwrote sale of Sinclair's holdings

the

it

was

Alstyne, Noel & Co., New York.

West
Feb.

Tennessee

Jan. 27 it

Gas

Jan. 20 it

Registration—Expected

competitive

Probable

Joins Adams Sloan
(Special

to The

Financial

SARASOTA, Fla.
Visscher'
Sloan &

is

C.

Adams,

March 8 it

bidders:

vote

on

was'-pf&Viously with Al¬

len & Co.

has

Two Join L. C. McClure

joined

the

staff

TAMPA, Fla.—Robert C. Bryan

♦

and

Richard

Burch

associated

come

McClure
Mr.

F.

&

with

Co.,

Burch

have

617

of

Arcade,

of the

was

Louis

C.

St.

formerly

COLUMBUS, Ohio —Henry R.
and Philip B. Drake are

MINES

The

Financial

with
ner

of.Seventeen
share

(in

able on

at

Jane

NO.

the

and

One-Half

Canadian

Funds)

has

been

stock

to

the

Pierce, Fen¬
Beane, 23 Pryor St., N. E.

(Special

to The

Financial

of

business

5,

Fahey, Clark
merce

&

day,

Cents

of
a dividend
(I7V2O per

declared

was

CLIFFORD

W.

President

and

Building, members

of

pay¬

8,

March

York

Ohio—Albert J.

building, members
Stock
Exchange.

of the Midwest

With First Southern Inv.
(Special

to The

BOYNTON

Financial

BE a

jrank J. Barna

uavis
ern

are

now

Investors

First Avenue.

to

The

Fla.

South¬

Southwest

W. E. Hutton

Financial

Chronicle)

S»n!?LU1V!BUS'
witv,

dire
OhV5-

liai?
nams

—

Joseph. W.
First

Corp.,

Sanders With
(Special

and

with

Chronicle)

CH,

Ohio—William H.
become associated
& Co. Mr. Sanwas formerly
Columbus,
"onager for Baxter Wil-

E* Hutton

&

coupon

Co.




day

per

the

on

payable

record

share

capital

Ap.ll

at

debentures.

Underwriters

the

close

the

the office of

New

York

of

No,

Directors

of

of

business
C.

on

Company

ended January 31,

1954.

a

DIVIDEND

cash

The Board of Directors has de¬

the close of business April 1, 1954.

clared

SIMON

OTTINGER, Secretary.

a
quarterly dividend of 35c
share on the Common Stoek,

per

payable April I, 1954

York, N. Y.. March 3, 1954

5,

N.

10,

1954,

WAGNER BAKING

18,

1954.

Treasurer.

CORPORATION
The

clared

Board

the

AND

DIVIDEND

Board

The

Directors

cents
of

yB

h

de¬

1954

n

per share on the Common
this
Corporation.
Both

payable April
of

record

to

1,' 1954,
March

19,

GENERAL

1954.

STEVENS,

V.

J

NO. 227

of Directors

has

quarterly divi¬
dend of $1.75 per share oh the 7%
Preferred Stock, also a dividend of

stockholders

LIGHTING COMPANY, INC.

of

regular

TIME

Secretary.

CORPORATION
has

de¬

clared

a dividend of 25i per share on the
outstanding Capital Stock of the Company
of the par value of $12.50 per share, pay¬
able April 1, 1954, to holders of record at
the close of business March 12, 1954.

Dividends
The Board of Directors has de¬

clared

J. H. MICHAELI,

the

following dividends:

AMERICAN

Treasurer

March 4, 1954

PREFERRED

ENKA
The Electric storage Battery

corporation

company

The

on

per

cent

cumulative

preferred stock,

pay¬

able

Consecutive

regular quarterly dividend

of $1.0614

ers

214th

Directors

have

declared

Surplus.;
of the Company a dividend of
fifty cents ($.50) per share on
the Common Stock, payable
March 31,1954, to stockholders
of record
ness on

at

The
the

of

following

mon

A

of

Board

Directors

dividend

has

April 1, 1954 to sharehold¬

of record March 15, 1954.

on

the

per

QUARTERLY

Checks

dividend

1954 to stockholders of record at the

John H. Schmidt
,

>

L

Secretary-Treasurer

close of business March 15, 1954.

March 3, 1954.

DAVIS,

Vice President and Treasurer

WESTCLOX

•

BIG BEN

SETH THOMAS

1954

STR0MBERG

H. C. ALLAN,

Philadelphia, March 5, 1954

per

15, 1954.

share, payable March 27,

GAYLORD

cents

payable April 1, 1954 to
shareholders of record March
share

will be mailed.

Secretin and Treasurer

STOCK

of 50

com¬
,

REGULAR

dividend

A

stock:

40c

COMMON

declared

the close of busi¬

March 15,1954.

the iVi

DIVIDEND
I

Quarterly Dividend

STOCK

'

RECORDERS

~

March 10,

011

Y.

March 5,

Spencer, President

to

stockholders of record

Rosario

LANGLEY,

from the Accumulated

P. C.

NO. 26

has been declared
payable April 12,1954, to stockholders of record at

Secretary•

March

such

SINCLAIR OIL CORPORATION

NOTICES

this

The

date.

Boston

Tennessee Gas

stock of this corporation

15,

406

no

charge to the holder for
exchange.
Since the temporary De¬
bentures provided coupons
for the
payment of interest to
January 15, 1954, only, it is
suggested that this exchange
be made before July 15,1954,

First

Transmission

close

THE SAFETY CAR HEATING
1

Deben¬

The

—

NOTICES

United Stales

New

STOUT,

Honduras

Broadway,

Board

15, N. Y. There is

next interest

of

Corp. and Kidder, Peabody & Co., of New York. Meeting
—Stockholders to vote April 8 on increasing authorized
common stock from
1,500,000 to 2,500,000 shares. Regis¬
tration—Expected on March 25.

DIVIDEND

mon

March

Guaranty Trust
Company of New York, Trust
Department, 140 Broadway,

the

(4/14)

was

Mining Company
120

the Trustee,

New York

Brothers.

Corp.

reported company may issue and sell
220,000 additional shares of common stock and $18,000,-

DIVIDEND

Stock

bearing interest cou¬
pons due July 15, 1954, and
following, and definitive fully
registered Debentures with¬
out
coupons are now ready
for
exchange for temporary
at

bid-

Corp.; Mer¬

March 12, 1954.

W.

January 15, 1983

Debentures

competitive

Boston

dividend of 35c per share on the outstanding com¬

Company, at
a
Meeting held this day, declared an interim
dividend
for
the
first
quarter
of
1954,
of
Seventy-five Cents ($.75) a share 011 the out¬
standing capital stock of this Company, payable
on
Marcn
27,
1954,
to stockholders of record

tures

Milnar has been
added to the staff
of
Green, Erb & Co., Inc., NBC

by

First

Corporation

If 5 4.

31,
S.

&

Subordinated Debentures
Due

(Special to The Financial
Chronicle)

of

(15c 1

Treasurer.

Temporary

V4 % Convertible

Definitive

York

000

from

15

i

The

Lynch,; Pierce, Fenner & Beane; Blyth & Co., Inc.;
Ripley & Co. Inc.; Union Securities Corp.;

March, 1 it

dividends

the

determined

1354.

SINCLAIR OIL

Midwest Stock
Exchange.

liTM^VELAND,

•

For the quarter

CORPORATION
3

be

bidders:

Secretary.
New

at

Green, Erb Co. Adds

rill

Probable

j. E. IVINS,

MICHEL,

FINANCIAL NOTICE

Co., Union Com¬

April 20.

1954

The

Chronicle)

dihg.

Directors

To the Holders of

CLEVELAND, Ohio—James "D.
Soucek and Thomas B. Summers
nave become
connected with

this

DIVIDEND

Two With Fahey Clark

on

Ex¬

NOTICES

Corporation

stockholders

Merrill Lynch,
&

Stock

Street, New York

declared

of

April 30. 1954, to shareholders of record
of business en March 30, 1954.

affiliated

$6

au¬

mem¬

previously

was

fifteen cents

of

close

C.

Scheduled

—

.i

5 company sought SEC permission to issue and
$6,000,000 of preferred stock. Proceeds—To redeem
preferred stock and to finance new construction.

146

meeting of the Board
Mines Limited, held this

a

Dome

Chronicle)

ATLANTA, Ga.—-Mrs.
Thompson has become

Wall

dividend

A

March

LIMITED
March

DIVIDEND
At

to

stock

shares corporation

JOSEPH

DOME

*

Plywood

of

NOTICE

Florida Securities Co.

(Special

York

DIVIDEND

1954

DIVIDEND

Registration

Bids—Tentatively expected

Underwriters—To

April 13 will

with Westheimer & Co.

14

Davies

with

With Merrill Lynch

New

change. Mr. Drake

of

members

be¬

Madison

on

Huntington Bank Building,

Two With Vercoe

Chronicle)

Inc.

associated with Vercoe & Co.,

now

Chronicle)

national

Financial

doubling present

announced stockholders

was

the Midwest Stock Exchange.

(Special to The

on

Edward N. Siegler & Co., Union
Commerce

Peabody & Co.
(jointly); Kuhn, Loeb & Co.;

Co.

March

sell

Lehman

increasing the authorized commori

CLEVELAND, Ohio —Merle R.
Kazdin

to

it West Texas Utilities Co.

is increasing its cap¬
underwriting. Proceeds
working capital. OfficeHamilton, Pittsburgh 6, Pa. Meeting-

bers

Leonard

with

plans

now

(4/20)

*

it Union Oil Co. of California

(Special to The Financial

Co., Inc,, 1286 Palm Ave¬

He

nue.

—

now

&

Ripley* & Co.

for March 26.

Collin,

to

Stockholders will vote Feb. 23
thorized capital stock.

With Edward N. Siegler

Chronicle)

Power Co.

White, Weld

announced company

was

Fifth Avenue at

Underwriters—To be de¬

bidding.

fields

Blyth &

—

was

Harriman

ital stock in contemplation of an
—For expansion program and

Transmission Co.

construction.

new

by

Penn

it

Co., Toledo, Ohio.

Alberta

Underwriter

Harriman

reported company plans issuance and sale
of $20,000,000 of debentures in April or
May and $25,000,000 of first mortgage pipe line bonds in July. Pro¬
termined

1

and

Trip-Charge, Inc., Pittsburgh, Pa.

was

ceeds—For

(par $25).

Proceeds—For construction program of West
Penn Power
Co. and its subsidiaries.
Underwriters—To be deter¬
mined by competitive bidding.
Probable bidders: Hal¬
sey, Stuart & Co. Inc.; The First Boston
Corp.; Lehman
Brothers; W. C. Langley & Co.; Kidder,

preferred

and

P. U. Commission
to issue 20,000 shares of com¬
Proceeds—To repay bank loans

company

reported company plans to issue and sell
$12,000,000 of first mortgage bonds, series
P, due 1984.

Underwrit¬

York,

1

California

long-term debentures and 4.100,000 shares of
stock to be sold to the
public.
Proceeds—To
finance construction of a natural
gas pipe line from the
Canadian Peace River field to western
Washington and
Oregon. Underwriter—Eastman. Dillon &
Co., New York.

Inc.

March.

in

New

Telephone Co.

announced

common

Toronto, Ottawa and Montreal.
Underwriters—Lehman Brothers;
Wood, Gundy & Co

Aircraft

Corp.
reported sale of about $5,000,000 of pre¬
ferred stock is planned, partly for account of
company
and part for selling stockholders.
Underwriters—Van
Feb. 9

&

cumulative

was

ordinated

stockholders will vote April

to 500,009 shares.

The company said
the additional

market

l-to-5%-year serial notes; $71,000,000
20-year, first mortgage bonds; and $24,440,000 in sub¬

in

Trans-Canada Pipe Lines, Ltd.
Jan. 11 it was reported this
company and Western Pipe
Lines, Ltd. will merge preliminary to the
financing and
construction of a 2,240 mile natural
gas pipe line from

Interstate Gas Co.

Colorado
Temco

announced

Corp.,

re¬

ceive

in

was

increasing the authorized

stock from 300,000 shares
ers—The First Boston

Development Co.

Jan. 18 it was announced that Sinclair Oil

on

to

West Coast Transmission Co.
Oct. 14 it was announced that
company
issue $29,000,000 in

^Toledo Edison Co.

an

initial public offering of its common shares in the United
States to realize at least $5,000,000.

plans

Co., Inc., San Francisco, Calif.

March 15.

Ltd.

it was announced company

29

15,000,000 shares.

and for construction
program.

—

Jan.

it

stock

mon

Underwriters—To be determined by
competitive bid¬
ding. Probable bidders: Kidder, Peabody &
Co., Merrill
Lynch, Pierce, Fenner & Beane and Union Securities
Corp. (jointly); Lehman Brothers and
Bear, Stearns &
Co. (jointly); The First Boston
Corp. and Blyth & Co.,
Inc. (jointly).
Bids—Expected to be received up to 11
a.m.
(EST) on April 13, 1954. Registration
Expected

debentures,

6

has authorized

Texas Utilities Co.
(4/13)
Feb. 19 the directors
authorized sale of 250,000 shares of
common stock. Proceeds—For
investment in subsidiaries.

it was announced

to

immediate

no

shares.

Texas & Pacific Ry.
(3/24)
Bids will be received
by the company up to noon
(EST)
on or about
March 24 for the purchase from
it of $1,240,000 equipment trust certificates due in
l-to-10 years.
Probable bidders:
Halsey, Stuart & Co. Inc.; Salomor
Bros. &
Hutzler; Kidder, Peabody & Co.; Blair, Rollins
& Co. Inc.

Inc.
Feb. 8 it was reported that company plans later this
year to
issue and sell new securities.
Proceeds—Tc

has

stockholders will vote April

increasing the authorized

500,000 shares

Safeway Stores,

Feb. 23

on

7,500,000 shares
it

47

TEXTILE and TIRE YARNS

HAYD0N MOTORS

\'!1

I

48

(1148)

The Commercial and Financial

Chronicle

.

.

Thursday March

.

11.

Itei

BUSINESS BUZZ
1 ^;

i

',}

I

Washington

■

b

<

t

*

Business

•

A

Behind-the-Scene Interpretations
from the Nation's

•

Capital

"%/Vvti

Man's

■

H HMs

A. 1/

with

thought pri¬

xJL

i

11

WASHINGTON, D. C.

!"!)'

of the

7t

tax

out

!!>

—

One

special provisions of the
the House Ways and

bill

Means

Committee

requires

has

all

worked

corporations

for each of the next five years
to pay 110% of their legal tax

ir

plan,"
v

m
M'i/
fil

•

but

definitely

very

paying

had

been

their

for

previous

in

four

equal

earning of the
will

be

by next
100% of

their liabilities in the first two

quarters.

as

get

scheme

was

leading Senator
help Mr. Truman

one

"to

surplus in at least

a

con¬

one

of

his years in office."
Now there is
eration plan.

a

by

Beginning in 1955

Sept

15

esti¬

their

tax

liabilities for the
.year, and pay
5.% thereof each in September
and December.

The next year it

their

months

By 1959,

cor¬

50%

will

be

paying

taxes

in

the

last

six

of

hand

to

over

the

to

amount

110%'
of their tax liabilities incurred

on

earnings from 1955 to
inclusive.

1959,

give consid¬
help to the
of the budget pic¬

doctoring up
ture, if it is enacted in the final
bill.

revision

bill

with

so

little notice.
In the first place,
Treasury
backing
was
dis¬
counted, until it appeared in
the

budget Jan. 2.

Even when

budget carried the proposal,
strong Administration backing
not

observed.

However, the Treasury vig¬
orously pleaded for this accel¬
erated
..t

payment

ecutive

Ways

scheme

sessions

and

in

ex¬

before

Means

the

Committee

only comparatively recently. A
majority of the committee only

t

few

a

weeks

ago

defi¬

was

nitely opposed to the plan. The
great majority of businessmen
were

off

their

guard

as

to

this

possibility.

and

Means

Committee

along and report it out

V ?

of the

Two

r.

revision

bill.

Houses

Plot

as

to
a

go

part

Separate

forced

were

for

they

themselves
House.

higher

to

against

House

escape

they

record vote

a

had

the

ex¬

question, they have
additional problem. They

an

wanted
bill.

to

the

secure

revision

So

they
revolutionized
strategy
of
not
voting

their

questions"
bill.

proposal

the

added

the

continue

52%

tax

part of

They

to

the

year

as

for

one

corporation

rate

to

the

in¬

revision

bill, figuring perhaps the Demo¬
of

the

revision

House

would

bill

the

as

skip

vehicle

which to offer the amend¬

upon

ment

to

(They

exemptions.

be

may

figuring

wrongly.)

kind

of

the

come

problem

a

however,

point of view,
House has only

news

the

the

show

taxes.

on

The

Senate may keep the excise tax
bill as a separate

bill, or it may
join it to the revision bill, or it
may make other changes.
No
bill

becomes

passed

signed

What has gone

mainly

law

until

fi¬

by both Houses
by the President.
before has been

House

of

Representa¬

tives strategy.
Labor

IF

when

labor

a

of

out

act
the

day when it becomes

social

ments take

trust

Labor

a

conservative

quite

likely

than

loosen

to

bill.

tighten

the

It

is

rather

strictures

on

the

secondary boycott.
It
is
likely to give the President
authority to deal more ade¬
quately with strikes involving
national emergencies.

It is most

likely to give states more
thority over labor relations.
other

words,

it

is

which many Democrats

au¬

(security

outpaymoney than is

more

legal

man

(D., Texas)

received

bill

a

to labor would vote against, and

searching questions from an
apparently well-informed citi¬

dissipated

fund

and

for

necessary

had

not

wouldn't

the

it

the

on

OASI

fund, to tax people, in¬
cluding those who had already
paid payroll taxes for the old

plied

them.

And

Mr.

into

Record just

the

understanding

not

the

to

the

a

that

of the

in

brief,

worth

of

that

As to what
comes

that

trust

"the

will

of

re¬

the

^

One of the fundamental

large




the

for.

House

But

it

is

if

So

the

chances

of

a

in

ex¬

tax bills is

Don't

who

albeit

taxation,

to

have

by
the

the

Federal

Old

Age

merly

for

&

trust

government

fund
will

raise it by additional
But the notion that pen¬

potential

affiliatec

Mr.

with

Davidson

t\G$ b

pensioners

\

Chronicle)

(Special to The Financial

Calif -Mar"

BEVERLY RILLS,

W. Kosterman has
of J.

A.

Camden Drive. He
with

joined the

previous!

was

Shearson, Hammill &

trust fund—must

be

dissipated.

[This column is intended to re¬
flect the "behind the scene" inter¬
pretation froin the nation's Capitol
and

may or may not coincide with
the "Chronicle's" own
uieius.j

WE WILL BUYAmerican Felt

Pfd.

Carl Marks

2nd Pfd.

Bros.

Pfds.

Pfds-

Shoe

Pfd.
Pfd*
Com.

Tejon Ranch

SECURITIES SPECIALISTS

50 BROAD STREET

HANOVER 2-00S0
i. u.c

Co. Inc.

Com.

Dejonge Com.

Robertson Electric

&

B

American Piano A &

John Irving

_

•*i*.

Co.

silly notion that—not the

Knothe

•

staf

Nort"

Hogle & Co., 428

Robertson Electric

TEL'.

fori

Ponj

du

I.

Francis

Collin;

was

Joins J. A. Hogle

spent

to

or

Sidney

—

become

Co.

mak¬
-

the

has

employees.

might thereby be paying in part

*.w•

.

NEW YORK
4,

N. Y.

TELETYPE NY 1-971

and

Survivors Insurance Fund need
have nary a worry about what

Avenue.

recov¬

money

by

Financial Chronicle)

EfiACH, Fla.

with H. Hentz & Co., 2809

spent for
for

comes

the

Davidson

representing*

been

another,

on

MIAMI

George E. Keith

FOREIGN

of

Co.

Louis

"contrib-.
force

Spring Street

previously with Hill Rich¬

&

Louis Dejonge

Worry About OASI

Persons

Staff

Chronicle)

Detroit & Mackinac Rwy.

Trust Fund

uted,"

to

with Walstor

now

South

(Special to The

the

Taftses¬

550

was

ards

Co.
•

ANGELES, Calif.—Alonzr

Co.,

He

dissipated.

bill

a

&

pre]

was

&

Financial

G. Foreman is

The

which the much

more pro-labor
Senate Labor Committee would
not take.

(Special to The

LOS

Co., Ill

Mr. Lewis

With H. Hentz Co.

clear.

is there

represented

a

associated

&

Walston Adds

Edwar<|

—

become

Walker

money

it

sion remain dim.

an
ever-present
background
factor which
always operates in
the consideration of tax
bills.
This is that, to a

on

passed

vote

con¬

siderations which may confuse
many about tax legislation is

tent, the strategy

to

has
H.

viously with Putnam

and

for their social
security twice is

course

pay

or

good

sioners

just

be

it

that has

war

taxes.

happens when the

government

bonds,

have

the

drawing on
for cash, Mrs.

G.

Pearl Street.

expenses

the

been

of

bonds,

of

not

all

bit

ing

every
dollar's
has been in¬

quired to levy taxes to

has

is

of

and

to start

fund

it

Every

pay

vested in Federal bonds.

time

for which

When the time

government," adding,
OASI

aftermath

foreign aid, for housing,
for veterans
benefits, or for the

fund have been converted to the
use

Lewis

with

(future)

ery, for

one

of

its

form

one

trust

no

is likely to challenge:
"None
of the
assets

and

now

money

dissipation of "as¬

correctness

B.

the

originally borrowed."

an¬

(she did not use the word,
"money") Mrs. Hobby replied
with

.Financial Chronicle)

government, that is, the

fund

Congressional

—

these

general operating

the

So

everybody's mis¬

so

The

1

the

was

Pat-

put the questions and

swers

clear,

war

that had been spent.

to

it

not for the purpose of

are

purposes

So Mr. Patman sent the ques¬
tions to Mrs. Hobby, who re¬

man

makes

the

of

insurance, to make good the

age

money

(Special to

paying social security benefits,"
Mrs.
Hobbfy explained. "Rather,
they are to pay for the costs of

be

government,

to draw

came

With G. H. Walker Co.

not

"However
taxes

been

Schuster]

(cloth), $6.

security twice.

He wanted to know if the
trust

New York

that social security
beneficiaries and contributors
will have to
pay for their social

of

zen.

she

is

Ickesj

Ickes—Simon &

HARTFORD, Conn.

Republicans afraid of or¬
ganized
labor
might
be
too
timid

$3.''

Book:

And she

taxes.

But,
idea

set

a

fund."

these

Culp
Hobby,
Welfare
Department
Secretary.
Rep.
Wright Pat-

Hobby explained that

friendly

Year

Diary of Harold L.
The" First Thousand
Days-HarJ

old L.

candidly
admits that all
taxpayers, in¬
cluding persons covered by so¬
cial
security, will have to bear

correctness by Mrs. Oveta

As

amendment
House

16
'

Secret

interest and redeem the princi¬
pal of the obligations of the

collected by OASI payroll taxes.
This is explained with

Doubtful

Committee, it is most likely to

In

arise

sets"

comes

be

will

fund—would be dissipated.

Bill

115

Quebec, Canada (cloth).

Island—uses it to

servers!"

process

necessary to draw on the fund—

when time

From the

idea at Coney

discourage

OASI

raise

boss got the

couldn't

on

Management
Street, New York

Quebec
1953—Department of Trade and
Commerce, Province of Quebec

leaders

emptions

Manage

Edition-American

of

York, N. Y. (cloth),

Statistical

"The

GOP

knew

Of

(paper),

(cloth).

New

White

they voted for lower
exemptions they risked offend¬
While

Re

Story, The—Alfred
Lief
—McGraw-Hill Book
Co, lnc

If

probably

j0jnt

Mennen

exemp¬

the

Y.

D. C.

Excellent

1954

Institute

recording

were

Hartley Act change at this

Strategy

of

ments:

many

Only the most vigorous urg¬
ing by the Treasury caused the
reluctant majority of the
Ways

Washington,

Manual

Republicans, however,

voted

tions

the

was

ex¬

themselves, they would
had
a
sorry choice.
If

have

and

is

amazing how this, in
fact, additional tax liability got

i!

record

nally

Treasury Pushed Plan

the

fice,

East 38th

tax

into

the

—

Economic
port—Government Printing

N.

half

It is expected to
erable short-term

It

vote

"get the

increasing

Republicans

the

year.

Practical effect of this is that
the actual sums which
will

Economic Report
Committee on the

have had the opposite objective.

crats

tions

Joint

wor¬

the

Bihi;

outstanding books

References

If

first six months of the succeed¬

Treasury will

1

House

come

ing

that

5
^

York

20c

vot¬

as

emptions.

the year in which
earned, and 50% in the

are

been

for

revision

oi

recorded

Senate would

credit"

the calendar year.

corpora¬

*

the

"rate

they

r

and

jumps to 20% of liabilities be¬
ing required in the last half of
porations

be

an

Industrial
Section, Princeton
University
Princeton, N. J. (paper),

They

They

might be escaped in the House

tax accel¬

new

corporations will have to
mate

exemptions.

New

Relations, 1953

ography of
Selected

ing taxpaying voters.

»S'
4r"

tax

has

they

older

Industrial

increasing the personal

income

instal¬

following the

money,

paying

on

they

get to

ries

cocted,
it,

i

to

ments.

put

V

chance

a

to

This

i \

might miss

wanted

year

k

crats have been afraid that

Avenue,
(paper).

Y.

Demo¬

ing for them. One of their

ments in the year

,n

N.

House

corporation income tax pay¬

bilities

XI"

whole.

instance,

Taxation

Investment—Beardslev Rum,
(reprints of an
address)-Th
Seventh
Company, lnc i
Fifth

considering them,
rather than from the viewpoint
of the Congressional slant as a

to vote for them.

which

Economic Outlook:

particular House which

wanted

year's Federal income tax lia¬

I

the

ship of the first "Mills plan," or
Rep. Wilbur Mills (D., Ark.). It
is a new plan for accelerating

years

'F

in

vote

porations,

1:

marily of how to handle them

without the blessing or author¬

Under the first Mills plan cor¬

:(F <,

the

at the time is

For

This is part of the new "Mills

n'V

schemed

liabilities to the Treasury.

M' 1)'/

♦

Bookshelf.

'I

Ux

t

y..->

LERNER & CO.
Investment

Telephone
HUbbard 2-1990
riuj....

a-.,..,

Securities

10 Post Office Square,

9,Ma
""bS

Boston

'