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I
niKKHMCAL Rirun
mar 14
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•HK8KAL LlBKAm
mar. w aica.
Final Edition
ESTABLISHED1839
in 2 Sections
-
Section 1
Reg. U. S. Pat. Office
Number1 4576
Volume'165
New York, N. Y.,
h
Thursday, March 13, 1947
i
v
ranted.
•
analyst
President tells Congress help is > v«tional situation
essential to curb terrorist activi¬
ties led ^ by Communists. Says *
$400,000,000 is essential to sup-!
port
free people who
a
are
or by outside pressures.!
Holds collapse or loss of inde-T;
r
pendence would be disastrous
X
as
we
'r.
tic .worries,
t,
fallacy. Consumer purchasing
profit points
'■+
President Harry.^S^Trurpanapr'
speared on March 12 before a joint
sessionof ^ the House and Senate
y
pessimism
is
not
war-}
unduly from interna- *
!;
power
j
Fr°m ;biTth to date this
young
blazoned ail unparalleled record of
world's most (-
and
r e e c e
cultural
able
m e n
the goy:-v >v
e^nments of
these
coun-
trjes to
,
5I
.
m;
i
of
A
1-
The
of
the
stressed
4 importance of
supporting
President Truman
*
free peoples to maintain their in-
dependence and to avoid subjuga¬
tion by outside powers, though he
made no direct mention of Russian
activities.
The
tained
of the
President
main-
primary objec■*; fives of U. S; foreign policy is the
one
creation
we
.
which
conditions .in
of
and other nations will be able
(Continued
i
of
extant.
"
He
pressures.
of
overdraft arrangement with Federal Reserve.•
Should Congress make permanent the
temporary authority of the
Reserve Banks to purchase
up to five billion dollars of government
1
—
# securities
di¬
i
Interest Rates
on page
1417)
coun-
Arthur J. Neumark
!
v
/
fx ;
try's growth is not a saga of tran¬
quillity.
The records are filled
with all the pangs of growing
pains and the major shocks of
interest rates.
under
specifically insulates
peace
a
Eccles
banking and
in
Wolcott
Bill, H.R. 2233,
illustrates
;That issue is this: Shall the bor¬
rowings of the U. S. Treasury
(Continued
j
Pictures
Dinner
* •
•
Chicago
i
.
Teletype NY WW
Cleveland
,
-
;
Troy
York 5
,
Baltimore
•
DallasHarrieburg
y
Se¬
State and
'
J
THE CHASE
:
Members
'
OF NEW YORK
New
*.r
t
.
52
York
Scranton
Security Dealers
WILLIAM ST., N. Y.
Assn.
HAnover 2-4980
Bond
NATIONAL BANK
.BeU Teletype NY. 1-399
Dept. Teletype: N Y1-708
NeW York 1 > Montreal'"
OF
THE
Conv. Preferred
of INDIA, LIMITED
Gearhart & Company
in
Office:
;
26, Bishopsgate, ;
London, E. C. J
r
•
Subscribed1. Capital-
Paid-Up
The
•
f
•J
£4,000,000
Capital——-£2,000,000 V
Reserve-Fund
90c Conv. Preferred
45 Nassau
Telephone
REctor 2-3600
—£2,200,000
Ass'n
y\
-
Teletype
NY 1-576
*Prospectus
on
Bank
description
exchange business
conducts 'every
shanking
and
Trusteeships and Executorships
■, hi % <alsp
undertaken
oft
/
Philadelphia Telephone—Enterprise 6015
Members
Telephone:
REctqp 2-8600
Bell Teletype:
NY 1-635
New
Members
New
York
Stock Exchange
upon
i
request
ira haupt&co.
Members New
-
;
Broadway, New-York 5, N. Y.
:
•
Analysis
Hardy & Co.
Reynolds & Co.
v120
•PREFERREDS
request
Members New York Stock Exchange
-
.
;
and Dealers
Conv. Preferred
Street, New York 5
^
England
Public Service Co.
i
for Banks, Brokers
♦Twin Coach Company
.
y. Y. Security Dealers
Branches hr India* Burma, Ceylon. Kenya
t
.
Colony and Aden and Zanzibar
v ■.
"I
Members
■;
New
Brokerage
Solar Aircraft Company
incorporated
Kenya Colony and Uganda
.
Bond
♦Detroit Harvester Co. Com.
I
CITY OF NEW YORK
Toronto
Acme Aluminum Alloys, Inc.
Head
■
Municipal
THE NATIONAL CITY BANK HART SMITH & CO.
NATIONAL BANK
I
f
pear in Pictorial Section.
A. G. Lanston
'"
Wilkes^Barre
SprlBgfield---W oonsocket
Pittsburgh
Londou.
the Government
Annual
ap¬
MUNICIPA
tun
,
iVi lli am sport
to
the
York
address by Mr. Lanston at the Mid-Winter Dinner of
the
State Bankers Group V,
Albany, N. Y., March 8, 1947.
-A
;
Geneva (Representative)
Bankers
at
New
y
! :r y PHILADELPHIA
Albany • Buffalo•;
Syracuse
BOSTON
?5 Broad St., New York 4, N. Y.
t
the
curity Dealers Association
BONDS
'/Of
■
64 Wall Street, New
and, other Exchanges i
HAnover 2-0600
taken
of
!,-Vv
1393)
Bond Department
Hirsch & Co,
.
on page
R. H. Johnson & Co,
INVESTMENT SECURITIES
„
3:
(with the, exception of "one-day"
York
STATE
request
Members New York Stock Exchange
Spahr
E.
"t
Established 1927
': t i-y
Walter
ra¬
ther well the basic issue involved.
;
■
Havana Utho. Co.4
on
;
March 3, 1947,
r Aerovox Corp.
Prospectus
Re-
System
support of
the
Federal
<
*An
the
Federal
serve
living costs and
promoted debt monetization by leading banks to
bay long-term bonds. Sees elasticity of currency
destroyed and favors a discount and U. S. certifi¬
cate rate of 1% or higher. Denies
higher rate will
increase Treasury costs and points to taxability
New
the
of
ernors
conditions there is
Holds Federal
credit from national politics and asserts
Reserve policy has induced higher
of
1
Board of Gov¬
wartime usurpa¬
and
.
i,
Act
peg
was
depressions.
Time
again our system has been of interest payments.
shaken to its foundations and
In order to successfully prosecute World War
psychology has! plumbed the
II the Government of the United States
operated
depths of despair. In each de¬
under unprecedented powers.
Not all of these
pression
there existed -circum¬
via the legislative
process.
Some
stances which gripped the timid originated
were seized
out of thin air because of the ex¬
with exaggerated fears and whet¬
ted the appetites of the prophets pedient needs of War. In the course of estabof gloom. Many times our capac¬
(Continued on pajge 1410)
ity to produce far exceeded what
soul-searing
we
could possibly consume and
technological
developments y bid
: ;
(Continued on page 1406)
4
Vacuum Concrete
authority to
Reserve
.
"No." The tes¬
timony given
by
Chairman
Boston Corporation
nowf
no
living!
this
Vice-President, First
Mr. Lanston points out
pegging of interest rales
tion of Federal Reserve Act
and,
c a n-1
history.
from
^
Treasury?-
The answer, in
the opinion of,
this author, is
By AUBREY G, LANSTON*
•y.;
v
the
-
f
30 Broad St.
,
,
4
.
;
York
Tel. DIgby 4-7800 '
Curb
Exchange
York Stock Exchange
Principal Exchanges
other
111
New York 4
T*Ie. NY 1-733
and
Broadway, N. Y. •
REctor 2-3100
■i
*
*
••
Telety^ NY 1-2708
v
"
-
'
■
i
I
f-;r
4,4
•
t
m e r
and
r
'
.
Holds bill would foster managed economy and destroy
political democracy. Does not object to Treasury
the
p e o p
i t y
n o r
and outside
;
Congress to make permanent the
up to $5 billions
securities directly from the Treasury. Contends
rectly
1 e the!
highest stand-5
i
groups led by
Communists
*■
market.
1
<§>
country h a s
brought to the )
f
V"
resistVv
terrorism
seg-
.
temporary authority of Reserve Banks to purchase
I
growing country has em¬
well-being for its citizens. The
strong .agri- >
a
J:
Turkey to eri-
J
1 economic and
.
and
created, which's
together with'
...
G
Monetary Policy--
a
v4nee rup to
$4oo;ooo,o0oto^:
■
*
-•.«
on
j this would deprive people of control over government" borrowing,
| and holds Federal Reserve should acquire bonds only in the open
t
powerful-and;
twenty ^minute message prosperous ip^;
requested au-V I
v ' "' v , i •' dustrialma-;'
chine has been 4
thority to ad-:
arid in
'4
j of government
spiral is tapering
wage
/
Dr. Spahr opposes measure in
^
will not decline, break-even
unduly high, cost and
.
-VV.'.:1
aired. Regarding domes- ;:;£
>Mr. Neumark holds overproduction-fear is time worn.
are not
•
Professor of Economics, New York University
yy Executive Vice-President, Economists' National Committee
for; world rehabilitation,'
source
off, and there is no danger of farm commodity collapse. Concludes
stock market, with present low price-earnings
ratios, is refusing to
recognize excellent business prospects. •;. X,
^
4
'y
V;>
By WALTER E. SPAHR
^
not suffer
supply
are
-j-
norities
the world.
prevailing
and British weakness is healthier for being
^
re-';
sisting subjugation by armed mi¬
-
maintains
Believes United States will
<
''■■J
Partoer, H. Hentz & Co.
'
t
Security
::
Copy
a
to
By ARTHUR J. NEUMARK
C
Price 30 Cents
,j
V ■,»'>
.,V
*V
-/ -
VJll J
•;.
/
-
-r
THE COMMERCIAL & FINANCIAL CHRONICLE
1374
Thursday, March 13, 1947
gg,
Trading Mdrkets in:
National Debt,
Standard G & E, Com.
Amer.
Barge Lines
t
?
;,/.... v ./■>.
>
1
Commons
Soya Corp.
Lear, Inc.
>
KING & KING
'
■'
-
Members N. Y. Security Dealers Assn.
Nat'l Ass'n of Securities Dealers, Inc.
Exchange PI., N, Y. 5
40
HA 2-2772
NY
TELETYPE
BELL
that
then
and
it.
n
Members Baltimore Stock Exchange
;//■•/' //;:///.
NY 1-1227
form of
national
tion's
,
clause
1933/
year
fact
its
that
tures
be
point
'•
Street, New York 5
Telephone COrtlandt 7-1070
of
-some-
.
.
maturity
close up;
the
- /
the
.
■:
-
>
the
ma¬
market-
groat
-
-
cd-
by Dr. Burgess be¬
Savings and
w-
think I
is
—
that
at
New
York Stock
120
York
tferm
large
which
BROADWAY, NEW
4'-Tel. REctor
YORK 5
'•-..V,
Y/,-i;/;/
1
Detroit & Canada Tunnel
>>'
>:
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Colonial Sand & Stone
""'/-y
it
rather
view.,
than
Fraiak C.
-
LT"; ■Established 1923
a "shorh-
make
We
contracts
Members
that
iohg period
supply
ber
of
WALL
64
to run for long periods
are
tr-f"
em¬
large
a
dollars;
New
York Curb Exchange
ST.
>
NEW YORK 5
Teletype NY 1-1140 1
HAndver a-84^0
./t/, .ik v;,n}
specified num¬
and we have
consideration
of
T.
impor¬
1.
Parkinson
all ;/
citizens of this
of
this
of
us
country; and
of
who have responsibilities in
the life insurance world.'
to
of
proposal
to
return
Standard.
it*\
of' business
fields
a
likewise
-
fr-
calls
;
our
a
HEANEY, Mgr.
*,■
,
r7;.: /
Joseph McManus &Co.
Members
"<
/ V
39
^Vv/■'/!•/// //v',;//.
/ We have, I said
MICHAEL
v
/WALTER ,KANE^ Asst„Mgn;::X'■
long-term /view rather than
short-term consideration of
.1;
are
today is that the good of
the country and the liquidation of
your
responsibilities
in' other
for
<
X'*'
Securities
you
problems.
1 D'-cu--'—•<
a
j What I would like to emphasize
•
a
*■/
Gold
the payment of
obliged to look to the long-term.
.
2-7815
for
the period of the contract. We
to
W:
Curb (irid Unlis led
specified number of dollars, either
mmCdiately or annually,/through
Our
as
that obligation
'
ac¬
cepted.
country/' of
peculiar importance to tha busi¬
•
NY. 1 -1919
of years; .and we obligate our¬
selves td pay at sometime during
the
'
Exchange
Exchange I
Curb
ExchangS
Exchange
Broadway WHitehall14-8120
New- York 4, N.
moment, and that
necessarily I involves a
long-term
this
be permitted to
social Impli¬
cations, which
Quoted
York Stock
Bell System -Teletype
thing about the
business that /I
one
may
coun<
this
extraordinary importance to those
*New
Member-S' New
v
5O
financial,
political
and;
'i.w.
,
Teletype NY 1 -955
e
is
insurance
/
have
we
nessmen
.'•
Airlines
^Members Newt-York Cttrb
money sup-;;
ply, and that,
York Stock Exchange '
4-7060
f
has
Members
Dlgby
t
s
There
i
a.
GUDE, WlNMILL & CO.
York 5, N. Y.
-
Consolidate^ Elec. & Gas Pfd.
phasize at this
a
are
Solit
Mid Continent
•
Jess indefinitely in mind when I
more definite by
more or
1
tance
—
Southwest Natural Ga&y
has
time tod
-
Bought
branch offices
our
■^iHys Overland' Pfd; /'/
fl2^pit#Tr■
life
try
American Overseas
Missing
1
;
that
.A ■:
.
into the room,-which has been made much
money
1 Wall .St., New
supply
•
tran spired;,
in i the I
in
•J'\:
New
•;* i
here
that
on
Members
money
family; •;//; paper money -or bank credit) or
debt is
i( Continued on page 1411) ' / V
the
<
?
u
moments,1,
K?1
BIDS MADE
1
of
4 The theme that I had
what
-
ns
the
control
President, Equitable Life As^siiranfee Society of 'America ;
came
pay
Mortgage Conference, New York
City, March 6, 1947.
BONDS
threat
Exchange
HY 4-K57
;
La.-Birmingham, Ala.
Direct wire* to
r
A-
Stock
in¬
an
deposits, money supply is still iitcreas- y
ing and is an inflationary threats jSays banks are making heavy;/
government bond purchases, and points out there is no# too gold
standard to check credit expansion.' Attacks low interest polity and
advocates government budgetary surplus as means of reducing 4
money supply. Calls on Federal Rfeserve to curb credit expansion.
gold
in
r
New Orleans,
tions and reduction in bank
yv,j*:-T/.^ ///;
some
■.r,''
*| *An address
of
York
St., New York 4, N. Y.
HAnover 24700
::
source
a
/Prominen 1 insurance exeiciltivfe;maintains
Whether
or
bond
^
these fears of
-ij
debt
New
25 Broad
family,- The main dif¬
ference lies ih the fact that na4
about
real
-
they refer to the
fore Eastern Regional
WITH
Members
-
Edward A/Purcell ACo.
.
System Teletype NY 1-1548
Bell
on
at
Exchange
Curb
York
•
•
'•
un¬
able to sell new bonds to
will
I
or
By thomas i. parkinson*
a
this debt
Vanderhoef & Robinson
31 Nassau
bankruptcy
$60 billion of debt
within
personal
dividual
debt is not only
the neck,^ but iiens
a
the
from
least
at
w
year, < and
they
Wonder whether the Treasury Wilt
Class "A"
Analysis 611 Jte^uhst
the
at
obligations
Or
own-
.
■-
repudiation
in
our
from
of the typical
The
(
der which the national debt
might
be repudiated.' Those Who have
this fear often refer to the na¬
'
3/6s, 1956
New
income
cata¬
They
and feel some¬
how that it is i
likely, to topple
over and crush
them.; To be more
specific, they worry about some
WOrth 2-4230
] Members
be
towering debt
of $260 billion
W. R. Burgess
Broadway, N. Y. 5
1 ■'
Y-;
Steiner, Rouse & Co.
of catastrophe; and make the laws. So when na¬
We know today that the national, tions get into a jam, instead of de¬
debt is $7,000 for each family, not faulting' on their obligations they
far from twice the whole annuaL print;; some more money (either
vast but
gaze
millstone
may
about
g
clysm.
MitclielUCompuj
'
•
Many peo¬
ple are worry-
vague
■
^
about
know
about
& Kaiser
some
I
We
a
Com. & Pfd.
Bell Teletype
debts.
have
experience that
i
;
dividuals
do
subtle and mote far-
more
tastrophe in connection wiih the
debt
are
probably
groundless. reaching than the danger of some
They are based on a /perfectly suuaeJ:'ca,.astrophe. for national
I is difierent/in one respect
understandable feeling we as in¬ u
something
Wilbur Suchard Chocolate
v
the
right things^
Florida dairies
•.
we
worrying
about
fact
in
make
need to
Oklahoma Natural Gas Pfd.
120
;v
•
'i ./
effective.
are
Elk Horn Coal
..
Bought—Sold—Quoted
v
..
1-423
sure
McEwen
.
One of the
377.
May,
>
^
encouraging facts in the present situation is that tile"ArilCfican people
are
worrying about the national debt/tFne eagerness of. the Congress to do something
about it is one indication, forThat means that Congress is hearing from homa.^/-;■//:/;
We do well to worry about so huge a debt, but the problem is to make our worry
Established 1920
•
//
Burgess classifies the, dangers of the debt as: (1) dilution of the dollar; and (2)„s.rangulatioii
.of the economy through the tax drain, interest rale distortion, and excessive government controls.
Scores managed freezing of interest rates. Concludes we must teduce budget, tepay debt and ditribute it to investors, and ttoka all steps to increase dynamic energy of Mr eccnomic life: /v'/;/ •/";
*
SECURITIES CORP.
1
a
Dr.
Preferreds
&
.
.■■■
■■
Rockwell
///■
Vice-Chairman of the Board, National City Bank of New York
Old Reorg. Rails
i
Interest Rates and the Saver
By w. Randolph burgess*
-
-r'w't.rv;-..-
T-J
•*
;
New' York Curb Exchange
Broadway
/
;; ^'
New York 6
'
Digby 4-3122
moment ago.
■
Chicagq Stock Exchange^., 7
Teletype NY 1-1610
too
large a money supply; That
money supply, you all realize/ is
American Overseas Airlines
I r
New England Public Service
PriOr
!
1
Pfds.
CANADIAN-INDUSTRIALS
Newmarket Mfg.
-•:
CANADIAN BANKS
Northern New England Co.
United Piece
Dye Works
:
.
87 Wall
Bell
Y. Security Dealers Assn.
St., N. Y. 5
1-1126
&
1127
that,
; /
money
CANADIAN UTILITIES.
115 broadway
■\7
•
./■
cf
Col.', Proffitt
1387—Editor.
'i
page
/
(/.; (Contfnuetl
on page
;
f
-//v/
i
<•
appear
U'n
1412)
.
v
Broker%
In
y
A Dealers,
Investment
62 William St.
'
Teletype NY 1-672
Consolidated' Industries
bank
2 Remarks
//
Ironrite Ironer Co/ '
;
deposits, which
which some¬
has the right to draw, to pay
one
i
new york 6, n. y.:
■4 4/..;.
Artkraft Mfg. Co.
in additionvto
about 140 billion
Members N. Y. Stock Exchange and Other
Principal Exchanges
Telephone BArclay 7-0100
American Time Corp.-
/
pass as money, upon
'
'iCj;''
';
of
■iS
^
\
and
have
we
dollars
Goodbody & Co.f
%
Hanover 2-4850
Teletypes—NY
'/
Canadian Securities Dept.
aMLompam^
N.
paper
CANADIAN MINES
Com. & Pfd.
Members
the result of the matters to which
Colonel Proffitt has just referred.2
Ik consists of a little more than
28 billion dollars of
coins
and
eMaintain Active Markets in U.
'>j;;::An address by Mr./ Parkinson
at' a
meeting of "the Chamber of
Commerce, State of NewV York.
New York City, March 6, 1947.
«kr.Jel,ep^ane
WHitehall
".v/.--
'4&
Securities ■'r:*'
New York 5, N. V.
„
teletype
/•
4-2422
NY
1-2613
/
Branch. Office
;> f
i
113 Hudson St^
Jersey City, N. J.' • t'
^
'!■
Punta
Alegre Sugar
/
.
INDIANA
W. L. Maxson Common
*
Haytian Corp.
.•••■;■"■< ; //.
Por Banks, Brokers & Dealers
*Maxson Food Systems Preferred
;
4
\
•;
*Prospectus
on
Common
I
•
•
Common St .Preierrfed
'
v
I.
FARR
New
New
New
York
York
Curb
&
York
Coffee
&
CO.
Stock
Exch.
Exchange
Assoc.
Sugar
Member
w
,
Troster, Currie & Summers.1
Member New
Exchange
>-
120
WALL
ST., NEW YORK
TEL. HANOVER 2-9612
74 Trinity
York
Security Dehlers Association
Private Wires
to
BOUGHT—SOLD—QUOTED
.
V.
}i
:■//
h
•
Ra]ftheoii Macrafactorhig Co.
;
/
INCORPORATED
37 WALL STREET
Teletype 1-376-377-378
Buffalo—Cleveland—Detroit—Pittsburgh—St.
•
32.40 Conv. Preferred
'.'
Louis
■.-
■"'
.
-V-
■
•
Prospectus
on
■:
■
request
:.
,
/
-
-
■"■.
'
;
;;
•
</*
J-G White 8 Company
j
Place, New York 6, N, Y.
Telephone HAntovet 2-2400
"A;'|
;
v
*
•
I Members
&
t
Request
Quotations Upon Request
Trading Market
./'////p/'/i
Products, Inc. Com.
*Emery Air Freight Corp.
/
;
.
f
/ WATER COMPANY
"
S
*Air
GAS &
'L,
NEW YORK 5
Reynolds & Co.
Members New
120
ESTABLISHED 1890
York
Telephone:
Tel. HAnover 2-9300
Tele. NY 1-1815
Stockv Exchange
Broadway, New
Ben
York 5, N. Y.
REctor 2-8600
Teletype: NY 1-635
•
"
.J:
■
tM»l«HWTMIHlWUHlll
wwtiitin'HifihiftimMw
165Number 4576
.Volutes
MteM
THE COMMERCIAL & FINANCIAL CHRONICLE
I N D EX
Articles and
Permanent authority
By HERBERT M. BRATTER
Page
Reserve
to
Buv
Mr. Bratter reports that among amendments to the
SEC Acts now under consideration are
Bonds from Treasury Dangerous—Walter E.
Spahr___ Cover
A Challenge to Pessimism—Arthur J. Neumark-______
Cover
Truman Asks Aid for Both Greece and
Turkey
I'H'Cover
No Authority
£
the
of
;
municipal bond transactions from anti-fraud pro¬
visions; (2) extension of reporting and proxy re¬
quirements to large unregistered companies, and (3)
—Cover
Saver
-^-W. Randolph Burgess
i
1374
the
~~IZIIZZl374
Bratter"~1375
"Too Much Money"—Thomas I. Parkinson
SEC Disclosure Rule Again to Fore—Herbert M.
of inspection of books and records of in¬
vestment advisers. Calls, attention to Hinskaw's Bill
]
and locks for early return of SEC to,
Washington.
Postwar Prospects in Latin American Market
—Herman Burstein
for
1376
Tucker_____I
A"*^ob?le Industry—Pufus
137G
-L'-iox.
xxVixlg
Aftermath of Japanese
—Francisco
writer that
__1377
£ laixcl'
power
WASHINGTON, MARCH 12—It is the belief
Inflations and Deflations of My Eighty Years
-
as
Jr.__
i___
1378
Also
Strikes Against the
Mean
1330
Conditions of Employment Stabilization—Bertil Oh in___^_1331
1384
______
The *>d»ral Budget—The Turnings Point
the
'
—Arthur A. Ballantine
Put
Money in
Aour
1335
Bank—Edward C. Randolph._______1385
a
Management's Responsibility for Construction Legislation
v
—R. Elmo Thompson
„_1387
Building Material Outlook Good—Tyler Stewart Rogers
1387
N. Y. Lawyers Wondering What Effect Recent Court Ru'ing
.May Have on Stock Transfer Tax-»->—
Herbert
JU28-
Mora
on
Bill Reveals Details
State
Y.
-
Official Witch Hunt
an
Amended
N.
';V" *
*
v:
■•■■■■
Daniel
(Continued
1378
...
(N.
Reed
to
Y.)
for
Repeal
More
of
Peru's Foreign Debt Decision
1380
Taft, Ruml and Blough Discuss Budget and Taxes
1381 '
reasserted
_1383 j
....
>^->-...-^.1383;t
Snyder Denies Change in Treasury Interest Rate Policy
1384 i
Policy Issues at Export-Import Bank
_„_1384 ;
Agricultural Commodity Exchanges..
■Col. Proffitt Proposes Return to Gold Standard
Mexico
to Hold
of IBA
*
;
A
j
in
Bank Director
Bank arid Insurance Stocks
Business Man's Bookshelf
•
—.1394
Our Reporter's Report . s
Prospective Security Offerings.
.1382
Real Estate Securities'
•
<
Corner—1392
1379
Fail
Mutual
1388
1382
Funds
NSTA Notes....
.1377
Governments.. .1396
Observations—A. Wilfred May.,.
Our Reporter on
'
U. S. Patent Office
WILLIAM B. DANA COMPANY, Publishers
26 Park Place, New York 8, N. Y.
WILLIAM
D.
March
Publisher
President
13,
1947
Every Thursday (general news and ad¬
vertising issue) and every Monday (com¬
plete statistical issue — market ouotation
corporation news, bank clearings,
and city news, etc.).
^
records,
state
Other
Offices:
135
La
S.
(Walter
' /
i::
....1415
Whyte Says)..
Washington and -You.....*......1377
Y.,
N.
the
under
Act
of
March
'
.
v
i
Salle
,,
Subscriptions in
United States. U.
Territories and Members
Pan-American Union, $35.00 per year;
Possessions,
Dominion
Other
9576
RIGGS, Business Manager
Thursday,
..1390 i
Registration... 1421 t
Markets
Tomorrow's
of
25,
ary
1942,
Canada,
and
the
165
Broadway, New York
Hunt,"
we
as
compared with SEC
questionnaire again urged
TRADING MARKETS
27, 1947, under the heading "An
Thiokol Corp.
took the Attorney General of the
Miller Mfg. Co.
$38.00
per
on page
National Company
Billings & Spencer
JtiRials & to. m
Members New York Security Dealers Assn.
170
Bell
j
WOrth 2-0300 j
Teletype NY 1-84
3
Broadwpy
System
Haytian Corporation
Punta
1390)
Alegre Sugar
Eastern Sugar
year.
Assoc.
Lea Fabrics
We
are
interested in offerings of
Sugar
■;:■
Commodore Hotel
High Grade Public Utility and Industrial
^Fidelity
Electric Co.
Class A Common Stock
PREFERRED STOCKS
Susquehanna Mills
1
•Prospectus on request
York funds.
<■
i
Spencer Trask & Co.
St.,
Members
at New
New
York Stock
Exchange
Members New
DUNNE & CO.
York Curb Exchange
25
Broad
Street, New York 4
Tel.:
Albany
-
HAnovjer 2-4300,
Boston
-
135 S. La Salle St., Chicago 3
Tel.: Andover 4690
Glens Falls
-
25 Broad St., New York 4, N. Y.
WHitehall 3-0272—Teletype NY 1-956
v
Teletype—NY 1-5
,
Wire
Private
Schenectady
-
to
Boston
Worcester
Macfadden Pubs.
TITLE
COMPANY
Philip Carey Mfg.
Mtge. Guar. Co.
32
N. Y. Title & Mtge. Co.
N.
Y.
Broadway
NEW YORK 4
Pan American Bank
i j;
New York
Stock
Exchange
I
15 Bnwl St.'N.Y.3
lj v
^
* V
^
.•' t^v.
* WHHeh.II 4-C330
Bdl Teletrp. NY 1-2033
■New
•
I
i
"
~
l 'j^ ■
*.
«.•)»•«
*
Year-end
analysis
request
on
—.
NEW YORK STOCK EXCHANGE
YORK CURB EXCHANGE
49 Wall Street, New
telephone HAnover 2-9500
(Associate)
York 5, New York
Teletype NY 1-344
C. E.
Unterberg & Co.
Members
N.
Y.
Security Deaters Asfn
61 Broadway, New
York 6,N.Y. I
Telephone BOwling Green 9-3565
Teletype NY 1-1666
*
V
S ■ i ■_ A
*•*>* * ■* *-»
NEW
^
■
ii.'
MEMBERS
f
,
York-T-CKicago-^-St/ Loui*
City-—Los Aegeie* - 'i
Kansas
I
Laurence M. Marks & Co.
V
t
Teletype MM W
Service
•
Prospectus on request.
AU Issues
Bldg., Miami 32
Direct Wire
request
Macfadden Publications
Harrison 207b
" Teletype CO 129 •,
Telephone: 3-2137
Newburger, Loeb & Co.
Dealers Assn.
Board of Trade Bldg.
CHICAGO 4
DIgby 4-8640
Teletype NY 1-832 . 834
Prudence Co.
y
Security
on
♦Public National Bank
& Trust Co.
INC.
■
Members
Circular
♦♦Offering
STRAUSS BROS.
Lawyers Title & Guar.*Co.
Members
Textile, Inc.
PRODUCTS, INC.
AIR
Common and Class A
Lawyers Mortgage Co.
:
N
**Stern & Stern
CERTIFICATES
Bond &
i;
!
Members New York Security Dealers Assn.
Collyer Instil. Wire;
Whiting Corp. ;
V
post office
Inc.
Quotation
be made in New
second-class matter Febru¬
at
limited
(Continued
,
(
Record—Monthly,
$25 00 per year.
(Foreign postage extra.)
Monthly
Earnings
Record — Monthly,
$25.00 per year.
(Foreign postage extra.)
Note—On account of the fluctuations in
the rate of exchange, remittances for for
eign subscriptions ar>d advertisements must
iCopyright 1947 by William B. Dana
as
powers
issue of Feb.
our
8.
of
In
Other Publications
Bank
Chicago 3, 111.
(Telephone: State 0613):
Drapers' Gardens, London, E. C., Eng¬
land, c/o Edwards & Smith.
Reentered
HODSON& COMPANY,
Federal Securities Acts and
non-Exchange members.
'
^
We there characterized this high-handed action as a
"sheer rapacious disregard of the right to privacy-and tc
be safeguarded in the freedom of doing business."
This questionnaire has appended to it the statement that
the failure to comply by answering is subject to criminal
penalties.
.
7
/
Our position has been and is that the failure to specify
the subject of the inquiry in which the Attorney General is
engaged renders the entire proceeding illegal and that this
fishing -expedition, which the New York State Attorney
1
Company
Dealers Assn.
Inc.
Ass'n of Securities Dealers,
Nat'l
Countries, $42.00 per year.
BERBERT D. SEIBERT, Editor &
WILLIAM DANA SEIBERT,
.1380j
Subscription Rates
Reg.
REctor 2-9570 to
Securities Now in
3, *1879.
COMMERCIAL and
FINANCIAL CHRONICLE
\->t; ' "
Securities
York.
Published Twice Weekly
v
^fhe
142?
.1425
.
Utility Securities..
Railroad Securities..
Recommendations
Einzig—Sterling Balance Talks
Teletype NY 1-1203
Member of
New York Security
Official Witch Hunt
unfounded.
as
Official Witch
1384
Salesman's
Bealer-Broker Investment
Public
Broadway, New York, N. Y.
HAnover 2-8970
^issued by him to several hundred upstate dealers who are
1386
<1418
1394
Canadian Securities..
GOLDWATER & FRANK
39
State of New York to task for the "general questionnaire"
•11page'i:
•
p*&e
~
Mortgage Certificates
and
General's
In
Regular Features
.'
'
an
.1389
—
Left $16 Million Gross, $4>/£ Million Net
1389 f
Dresser Industries to Benefit from Natural Gas Crisis.^... 1392 ;
MacKenzie to Address Brodklyn Unit of NACA.
....1392 ■]
•
and
Title Company
1418)
on page
and NASD. Withdrawal of
J. P. Morgan
tGraham Towers Canadian World
All
New York State Martin Act contrasted. N. Y. Attor¬
ney
—————1388 f
12th Annual Meeting
—
Offerings Wanted
emphasized. Claimed powers and
responsibilities similar to those of SEC and NASD, ]
shown
—1386 I
..1387
The Future of
Group
now.
WHitehall 4-6551
j tion of questionnaire assailed. Our original position
Making Good On GI Exchange
Texas
Interstate
on
N. Y. State Attorney General's attempted justifica-
>
British Loan Made to French Industry by Lazard Bros &
Taft Introduces New Housing Bill
on
;
1379
Co., Not by Hambros Bank.
list
your
,
».1Z79
Press
securities.
SEC for
Proposed
Act
Silver
a
Committee
Foreign
Commerce. Its text is reproduced in today's
: "Chronicle" on page 1379.
'
/
The SEC's proposed
rule, which last
Congress was examined in House hearings
as reported in the "Chronicle" at the
tifne,
section of the Securities and
Exchange Act
___1375
Rep. Carl Hinsliaw Revives Boren Bill
Rep.
on
w..
(Editorial)
on
M. Bratter
based
was
'
*
will this year so construe its
powers
to remove the threatened
application of
introduced in the present Congress by Rep.
Carl Hinshaw of California, a member of
America Has State in Austrian Reconstruction
—Ernest Weinwurm
us
for
place
Wall street, new york
Telephone:
Rep, Boren of Oklahoma in the
last Congress pressed,
although unsuccess¬
fully, for enactment of his bill on the sub¬
ject. A similar bill, H. R. 1881, has been
Exchanges
Germain
—Edmour
v
99
send
or
to 99 Wall
way
market
inactive
and
in
Drop
short
a
famous
obsolete
threat that
___1380
Threatened UFE Strike Against A. M. Kidder Co. Could
;
just
Street
disclosure rule it may promulgate to
municipal bonds. It was to eliminate this
Strength and Vitality of Unlisted Market
—Clarence E. Unterberg
the
TIPPERARY"
—but
any
Babson__^__"l378
Budget—Roger W.
"of
"IT'S A LONG WAY TO
the SEC
Currency in Philippines
Ortigas,
The Extravagent Truman
and company
(1) removal
for Pegging Interest Rites
—Aubrey G. Lanston
National Debt, Interest Rates and
1375
SEC Disclosure Rule Again To Fore
News
Federal
for
■team
•v'T-!. *
^
•
*■'
•
'
,■+
■
I
w-
i:l
'.I
THE COMMERCIAL
1376
FINANCIAL CHRONICLE
&
Postwar Prospects
WakikHo.
Thursday, March 13, 1947
business buzz
in
Latin American Market
fst.
By DR. HERMAN BURSTEIN
Economist, Management Engineering Division,
S. D. Leidesdorf & Co., New York
Dr. Burstein holds import
demand by Latin American nations should
Nevertheless,
result from industrialization and lowered trade barriers.
ability to import depending
sees
Abitibi Power
portion supplied by United States dependent on:
(1)
Armstrong Rubber
wartime
Chicago R. I. & Pac.
Pfd.
Diebold Inc.*
Gen'l Dry Batteryt
General Machinery
■
Higgins Inc.
Hoover Co.
:
Hoving Corp.f
Hydraulic Press
r-
io
,
1
1942
t
During
the
American market
Cniri. Ptd.
Mexican Gulf Sulphur
Michigan Chemical
Minn. & Ontario Paper
Missouri Pac. /•
Pfd
the
portance as
south.
It
is
achieved
i ; /
\
dollar level
-
\
,
'
•
of
trade
Latin
with
America
Germany and Italy.
i
^
i
1
This competition is far
' (Continued
\
r
United
States
cash
Pfd.
Pathe Industries
Philip Carey
PuroIaNir Prod.*
Taylor-Wharton*
Textron
"
:
>
,
exports
Pfd.
Towmotort "•
.
in
wartime.
in
of
of
of
determining than
.
(excluding Lend-Lease) /to .Latin
America during 1939-44 and the percentage that these formed to total
cash exports of the United States and to total cash imports of Latin
America
were as
■•••■/
follows:
I-:'
/,////
Exports to
Ratio to
Latin America
Total U. S.
(Millions of $)
Exports
U
./
/
549
Ratio to
Amer.
17.3%
902
1
/ 683
.u
21.7
1943
721
•//
r.
mM
l
Outlook fa Automobile Industry
;
J
52.1
By RUFUS TUCKER*
52.9
■p-r-
,
://.■/
32.9
'
50.5-
-
:'// 27.6
,
973 /
—/
f
■"///r 60.0
~
.
Imports
40.0%
52.7 /.
;
20.5
interesting Figures, Aren't They, P. J.?"
1
Total Latin
.
i7.o:
1944
Economist, General Motors Corporation
:•/■/
will be
?*''"}
:.•
*Hungerford Plastics
if-JV,/-v•••:'•
'
*Metal Forming Corp.
f/
•
*-
;
•
••
-
.'.
:k
:
at
passenger
*Dumont Electric
^Prospectus Available.
tions
means
in
cars
of material
for several years.
versed after four
'
and
costs
New
Tel. HAnover 2-8080
York 5,
Teletype NY 1-2425
is, of
ness.
try
ditions
Derby Gas & Elec.
EASTERN
COMPANY
to
In
the
PENNSYLVANIA POWER & LIGHT COMMON
Puget S'nd P. & L. Com.
years,;
when replacement
to
insure
maintenance
course, part of the general outlook for busi¬
It is impossible for the automobile indus¬
to
the
or
Federal
nine
narrow
sense
by eight
or
nine points.
Take, for example, tires, which
Corporation
:
:
.
'
r.
;
(Continued
t
on
are
y
obviously closely connected.
page
;-l: ■-■y' -'/j//'/•//:-•
1414)
ESTABLISHED 1927
Tide Water Pwr. Com.
22 East 40th
*An address by Dr. Tucker before
the Association of Customers
New York City, March 11, 1947/The views
Street, New York 16, N. Y.
Brokers,
t Prospectus
•
Bulletin
or
Upon Reqaett
of large
be
than represented
Central National
five
Reserve Index, for
example, something like
points is represented by the automobile
industry in
and, of course, if you will take its effect on other
industries, the effect on the general over-all-index would be more
CORPORATION
eight
•/.
or
off, and points out need for lower
itself, it is impossible for
general business con¬
really active and prosperous unless the automobile
industry is doing pretty well. {./'■■•
Bought—Sold—Quoted at Net Prices
NATIONAL
use, which, considering limita¬
supplies, cannot be turned out
Predicts conditions will be re¬
be wholly prosperous if business is not
good in general, and similarly, although perhaps
not so generally realized outside of
the industry
/ Rufus s. Tucker
Amer. Gas & Power
Cent. States Elec. Com.
prices
of maintaining general business
Sees need for six million more
The outlook" for the automobile
industry,
which is the announced
subject of my talk today,
N. Y.
Vacuum Concrete*
Elec. Bond & Sh. Rts.
Pub. Ser. of Ind.
'
demand.
FIRST COLONY CORPORATION
52 Wall Street
United Drill & Tool "B"
Southwest Natural Gas
Standard Gas Elec.
one
present level.
demand will fall
United Artists*
■-*
Dr. Tucker expresses personal view automobile
industry in 1947 will
operate at highest rate permitted by supply and labor conditions and
^District Theatres
Upson''Corp.*
U. S. Air Conditioning
U. S. Fidelity & Guar.
•
'
achieved
more
1401)
on page
1940.
&
*
•
States cannot maintain
dollar drop is attributed in part to an eventual drop
the prices of goods in trade. But actual y it is expected because
the increasing strength of foreign competition, particularly that
England and France in the immediate future and ultimately that
1939
N.Y. Nev Hav. & Hart.
Wts.
a
a
roundly expected that the United
Year—
Moxie
Old
War the Latin
new degree of im¬
World
second
The expected
Long Bell Lumber
Majestic Radio & Tel.
Maryland Casualty i
Old
•
the
Lanova*
v
(3) other
market
positions; (4) Latin American tariff reductions,
exchange practices, and quota .increases vis-a-vis
U. S.; (5) international commercial cooperation;
and (6) political and military policies.
commercial outlet for United States
production. More impressive yet was the role ac¬
quired by the United States as a supplier of
Herman Burstein'
goods needed by Latin America.1 Now that the
war in its major violent aspects is over, and with
European countries, even the hardest pressed, preparing to recover
export markets, the United State exporter is beginning to find him¬
self occupying a less commanding position in trade with the republics
Gt. Amer. Industries
,
of Latin American dealers with their
experience with U. S. goods;
nations1 tactics in reacquiring their prewar
Cinecolor
Old
skill in merchandising and promotion; (2)
our
satisfaction
Aspinook Corp.*
Bates Mfg.
=
exports and
on
Telephone: LExington 2-7300
Teletype: NY 1-2948
expressed
represent Dr. Tucker's personal
opinions,
those of the General Motors
Corp.
Circular upon
requeet
which
are
not necessarily
/
ACTIVE MARKETS
OSGOOD COMPANY
ward & co.
EST
:
„
Established
•v.
Approximate
1926
Net
current
earnings,
assets,
Company
120
manufactures
quarrying
BROADWAY, N.Y. 5
and
field
looks
lumber
good
REctor 2-8700
N. Y.
.
■
American Overseas Airlines
'
for
industries.
next
10
Di-Noc Co.
for
Outlook
for
heavy
Wire# To
industry
U. S.
upon
Buff. 6024
41
New
Broad Street, New
York
1
*
.1
Bought—Sold—-Quoted
J.K.Rice,Jr.&Co.
Established
1908
SIEGEL & CO.
•
Members
Security Dealers Association
York 4
*
Public Service
Incorporated
Members
•
request
''
Bos. 2100
-
Northern Indiana
Finishing Com. & Pfd.
years.
circular
;
Soya Corp.!}
Kingan & Company
Seligman, Lubetkin & Co.
ENTERPRISE PHONES
Hartf'd 6111
;
;
:
mining,
■
.
;»
$12.60
construction,
*
-
"
1-1286-1^87-1238
phiia
-
share
1945—approximately
equipment
Detailed
Folia., Chicago &
-
per
Approximate selling price—$8.50 per share
Members N.Y. Security Dealers Assn.
'
Sterling Steel
1840
1946—$2.85
Dec. 31,
Firth
;•
HAnover
N.
Y.
Security Dealers
REctor 2-450O—120
2-2100
v
Assn.
Broadway
Bell System Teletype N. T. 1-714
39
;• r
Broadway, N. Y. 6
•..
.
...
Dlgby 4-2370
Teletype NY 1-1942
....,
,,
.
Volume
165
•«
.
Number 4576
'
•
*
±
*
-
A. C. Purkiss [o Be
Partner in ^aEs'on,
Behind-the-Scene Interpretations
from the Nation's
A
][ OU
last
voted
fidence
November?
the token of public
away
con¬
The
Washington answer is fairly
(1) too little party teamwork, (2) too many
presidential
candidates, (3) too few Republican
strongmen, (4) too much public
impatience.
'
^
-''r.♦ ■
obviou::
in
let
review
us
realized
•
Will
this
trend
be
sponsibilities.
reversed?
end-product
so
months
It's possible because
(1) even the most obdurate of
Republicans now see they are
on
the wane,
(2)
is acquiring
House
of
and
it,
means
of
(3)
*
Ray
Connecticut
the
Baldwin
| through playing a second and
very
inaudible second fiddle.
volt
won't
submit
team- harness,
helpfully
and
(2)
bid fcr recognition by
termers
may
*
V,v'.
White
the
,
the first'-
itself sprout: new;?'
would be Presidents.
*
*
the
>
rather
means
the
than
newcomers
into
He
knows
right
House
Cabinet,
or
A. Wilfred
the self-
as
>
fel¬
public
over
Let
Baldwin had tired of
ernor
(Continued
;
J
1395)
on page
by varying supply when required. Holds deflation following 1929
by maintaining volume of currency, and
advocates a new unit of value based upon "the market basket."
Wants government to use "open market operations" to stabilize
money supply and calls for end of dependence on "bank check"
money which arises from volume of debts. See deflation ahead.
could have been avoided
.-
ft
V\
that I should speak to
i.
•
Inflations
m
half
J
■
189
-
'"
•
and
has
accurate
troubles
bursting
\ Prof. Irving Fisher
'1
,,
physics.
All
other
sciences have units in which they
Fisher
at
New
Street,
City. Mr. Wattles was for¬
merly a partner in White, Weld
& Co.
:
PAPER
STOCKS & BONDS
Abitibi
Brown
V
Company
Consolidated
Paper
Donnacona
to the
S. "Relief
U.
Although
Russians'
commitments
financial
Russians"^
by
\
^
draining-off of reparations from current production in oc¬
may technically not be definable as a relitf activity,
importantly
to
add
our
other
Ontario
the
Price
cupied countries,
they
&
Minnesota
to counterbalance
us
Brothers I
St. Lawrence
X-
outpayments.
uncompensated
(Continued
on pa^e
1392i
COi
HART SMITH &
TRADING
WILLIAM
IN
MARKETS
HAnover 2-0980
ST., N. Y. 5
'
Bel)
"OLD"
Teletype
1-395
NY
Toronto
Montreal
New York
Preferreds & Commons
The
Chi., Milw., St. Paul & Pac.
Old Colony
Chi., Rock Island & Pacific
Rutland Railroad
the
address by Dr.
dinner
a
from
business
Wall
40
at
scene.
of elec¬
of space,
an
securities
the
offices
their
transcript % for
"Chronicle" of
econorpics from math¬
and
time,
*Special
■
.
subject.
I entered
ematics
Gurdon W. Wattles will engage >
$650 million, the first of which
exact.
become
tricity and so forth, are fixed. But
(Continued on page 1403)
this
the world
on
Science
Brym campaign of 1896, I
have been
interest-
have created
we
because
exact
become
have
units.
units
of
\V
toB^l unavoidable relief outlays one and one-half
our
stable, fix¬
ed, carefully guarded. They have
gradually developed from rough
to
Court
Gross, ^Van
in
Gordon W. Wattles to
•'
All the units of commerce, of
units
ed ;n
partner
& Co.
well
under the illusion that it
ever
most
ness.
a
'
are
units
in the investment busi¬
Mr. Van Court was formerly
capital
the things we buy, are
of
Avenue
Grand
to engage
assuredly not shirking its responsibilities, underwriting 35%
of the former, and 39% of the latter—institutions
which presumably will soorfer or later be struck with the dollarshortages of other countries.
;* t
'
' X'X
Even in our activities which can be classified frankly as relief
there is no discernible let-up.
As attested to by former President
Hoover, our relief costs in Germany will amount almost to a halfthe
business¬
most
Al¬
For
\
■-
since h the
7,
fices at 650 South
62
since
ever
has
has.
lifetime,
y
given
—
is opening of¬
Court
Van
The petering-out. of Export-Import operations is being com¬
pensated for fully and uninterruptedly by the Bretton Woods insti¬
-
Throughat
least
have
CALIF.
ANGELES,
E.
billions, by the end Of our coming fiscal year. But these relief items
represent mere odds-and-ends compared to the cataclysmic major
men
my Eighty
Y ear s.
we
expenses
billion; but in the last half of 1946 petered
$54 million. France has received two credit authorizations,
—
Unfortunately,
f
LOS
bert
in the Bank's credit authorizations.
since this
you,
applied economics,
not.
and
o
is
(of
whose
agencies we
"banking" devices
of $550 million and then of
one
billion,
] all
their .1 magnitudes.
Economics
has V not.
; Business,
j dress is 'The
Deflations
—rr—
which
Opening Own Offices
States is
measure
title of my ad-
Albert E. Van Court Is
completely used up, as well as $120 million of the second.
Latin-American, 20 European, and 8 Asiatic nations, are included
.
;years] So, the
& Co.
York
dinner is in my honor, in regard to my chief interest during the major
life,tvof eighty
was
Vice-President of Franklin Wulff
in
of
J
..
he
thereto
Prior
the borrowing queues need merely shift their stations
Washington addresses where the Monetary Fund and the
World Bank are about to hold forth.
And here again the United
"too much money," and deflation as "too little money" and
problem is to] maintain steady purchasing power of dollar
—i
Southern California
as
to the other
as
• -
time
manager.
Spring Street.
the firm for
Be Individual Dealer
tutions.
myiv^i
the
with
been
war-devastated countries, authorized credits in the amount of $2y4
billion between July 1, 1945 and the end of the
year 1946.
During
20
Fisher, in reviewing monetary developments in his lifetime,
attacks both gold standard and "bank check" money. Defines infla¬
part-,of all
at
Angeles of¬
she has
Dr.
me
UNRRA
other private
extending subsidy—past, present, and future. The Export-Import
Bank, initially operating for reconstruction purposes in liberated and
first
; By IRVING FISHER*
appropriate to
puppet state
to $33
$411 million of goods since V-J Day.
To
look
South
550
at
has
some
million
$174
Our Banking Machinery
*
a
his headquar¬
ters at the firm's Los
He
Mr.
1st.
April
on'
will make
Purkiss
the last half of 1945 such credits amounted to
$1 billion, and in the
first half of 1946 to $iy4
play-
f PlSwl Eighty yearsSillSSi
seems
and
Exchanges,
for
Real fact is that last year Gov¬
Inflations and Deflations oi My
It
;./■/\,:v
take
us
out to but
say3
; •
72%)
$3y4 billion.
am¬
bitions and bring forth Repub¬
lican unity.
;
her
s
on
end-products.
Normally and historically no new
Congress has ground out much
tion
May
shouldered
appointed Moses who hopes to
the rock of personal
extensions to
To the
sorely-pressed Chinese k has gone $1V2
billion, of which half has been shipped post-War.
and
is silhouetted against
now
Lend-Lease
have sent
Walston, Hoffman &
members of the New
San
Francisco Stock
V-J
Czechoslovakia
the
and
billion
after
million; to
(post-war); and to
Poland over $20 million.
To France, which is
daily sinking further into political chaos, we
re¬
week.
repaid?
$11.3
of Yugoslavia have amounted
16
,
*
Republican
failed
have
lows
Our
was
the
the political horizon
smite
jy*-1'-* &
% Actually,
It
elbowed
be
in
Goodwin,
York
fice
Russia, to whom we lendduring the War and $22C
day, has not even deigned to
make any reply whatsoever to our three sepa¬
rate requests to discuss the matter of repayment.
million
former;.
Governor.
ever
leased
tricks of major league politics,
has notions on how to crash the
so probable be(1) the presidentially am-
bilious
to
last
will
Republican
Baldwin,
who
GOP Senate
| It's maybe not
cause
••
have extended
billion w6rth oi
we
other countries over
$50
Lend-Lease, and our various kinds of loan out¬
pourings total $66 billion. How much of this
two
:Salmost
*
freshman
Senator
Republican oldsters they're
first
But
legislative output.
*
.
Watch
Senate youngsters have notified
.
'r •■■■''
Y'v
'iXwXXi During the War and since,
precedent, as the public
is the current confusion
sees
/•
the
session.
over
Speaker Mar¬
-
in
of
without
the know how
leadership,
past outlays, and then examine the littleof our imminent further post-War re¬
scope
to
probable.
tin
our
enormous
<£—
That's possible but maybe not
political merits, let
or
"quantitatively" assay just how deeply we are becoming involved
"protecting our equity" in extending help to the stricken world.
First
C.
partner
^Without exploring the moral, economic,
•
us
Republicans chucking
are
ANGELES, CALIF. — Al¬
Purkiss .will become :a
LOS
bert
THE COST OF BECOMING CHIEF WORLD POWER
~
Why
Hoffman & Goodwin
By A. WILFRED MAY:
„
jf±. fid
^
Capital
given in
honor at the Yale Club,
his
New York
Railroad
*
Specialists
]
•
St.
Louis-San Francisco
Duluth, So. Shore & Atlantic
St.
Louis Southwestern
Denver & Rio Grande West.
Missouri
INACTIVE SECURITIES
We
Seaboard Air Line
Pacific
Y., New Haven & Hartford
Western
N.
Y., Ontario & Western
City, Feb. 27, 1947.
■
■
■.
f
,
Natl.
Y.
Assn.
52 Wall
Teletype NY 1-609
Members'.
1
•
N.
New York 5, N. Y.
WHitehall 4-4970
x"
*■'
David Morris & Co.
G. A. Saxton & Co., Inc.
Getchell Mine, Inc.
v''
•
-*
70 Pine Street,
account
own
Wisconsin Central
-?
bids for
make firm
our
,
Pacific
N.
Security D-aiers Assn.
of Securities Dealers, Inc.
Street, New York City 5
Tele. NY 1-544
Tel. HAnover 2-3537
Corporation
A. S.
;
Campbell Co. Inc.
^
Anchorage Homes, Inc. A & B
♦
American Overseas Airlines,
Maxson Food
New
Systems $0.50
When Delivered
Inc.
conv.
.
:
Pld.
Central Ohio Light
—
SOLD
—
•
-
QUOTED
u
"
'
■"
■"
"
,
'
COPPER CANYON
MININO
DICTOGRAPH
PRODUCTS
GREATER N. Y. INDUST.
i! MUSICRAFT RECORDING
!
REITER FOSTER OIL_
STANDARD GAS & ELEC.
VULCAN IRON
Bought—Sold—-Quoted
-
.
.
,
.
Mining & Oil Stocks
.New York Hanseatic Corporation
120
v
FREDERIC H. HATCH A CO., INC.
Established
BROADWAY,- NEW YORK 5. N. Y.
Telephone: BArclay 7-568B
Teletype: NY 1-583
MEMBERS N. Y. SECURITY
63 Wall Street, New
York S, N. Y.
—!—
1888
f
'
•
BRITISH TYPE INVESTORS?
& Power
Tide Water Power
\
*
*
for
'
Tennessee Gas & Transmission
England Gas& Elec. Assn. $5.50 Pfd.
BOUGHT
MARKET PLACE
Electric Bond & Share "Stubs"
-
DEALERS ASSOCIATION
Bell Teletype NY
GOULET
Members Nst'l Ass'n sf
:-\-f
'■>, '•/
HAnever
«.»
27
&
STEIN
Securities Dealers, Inc..
William 81.,. Nv *. 5 ■
'
Tele: NY
2-7708
£*
.
i U'.:1-1058
• +'« *
»'•
V
i»
■
■■
BALTIMORE
Issues
All
Coburn
'
Bayway Terminal
bers
&
the
of
Middlebrook,
New
York
has
been
appointed
the firm's bond
dent
5s, 1950
STEIN BROS. & BOYCE
V
Members New York & Baltimore Stock
Exchanges and other leading exchanges
BALTIMORE 2
Bell Teletype BA 35)3
New York Telephone REctor
of
manager
department, resi¬
in the Hartford
office at 37
Lewis Street.
CALVERT ST.,
Ex¬
■
By FRANCISCO ORTIGAS, Jr.
By ROGER W. BABSON
■
Louisville Railway
S.
mem¬
Curb
that Frank W, Beckwith
announce,
I'
:,
;! John O. Rogers, is also
the
firm.
Mr.
Rogers
pre¬
was
our
viously with Goodwin Beach & Co.
and Easland & Co.
Budget regarded as wasteful ex¬
Denounces subsidies :
as
leading to financial suicide. i
2-3327
>
people have
unconcern
it passes into
LYNCHBURG
Too
a.
like
trust
Trading Markets
the
y .--
Outlook
cates
a
transmission
for
of
Industries
substantial
hydraulics.
served
indi¬
prospective earning
power.
less
approximately 40%
original offering price in
than
1940,
at
despite
in
ment
tremendous
at less
—
Circular
,*■.
net
upon
Lynchburg, Va.
""
con-'
v
i v'
improve¬
should
MONTGOMERY, ALA.
lars
Bought—
where
going
are
they
Lime Cola
know
tax
our
how
and
being
are
or
e
dol¬
wisely
spent.
Although
low as they have
are
as
department
Pont, Homsey Co.
31 MILK STREET
BOSTON
j f-IANcock 8200
jl
MASS.
9,
Copy of Prospectus
^
CAnal 6-8100
&
Teletype
L. D. 53
MG
84
Wm.
Tide Water Power Company
Colorado Milling & Elevator Co.
International Detrola Corp.
Maine RR.
Preferred
Memos
on
to
The
Financial
Request
York
Roney
changes.
A.
P.
Members
New
York, Philadelphia
Los ■Angeles Stock
Exchanges
Walter J.
24
Also
Connolly & Co., Inc.
Federal
Street, Boston 10
Tel. Hubbard 3790
New
1420 Walnut
Tele. BS 128
Curb
out
;
Japanese
soldiers by the
>
regiments
had
he
once
landed
in
adoption
the
worthless
Philippines,^
but
the
for
duration
/•
of.
M
L.c
k
e-,y
For considera-•
of
Exchange
Los Angeles
Pittsburgh, Pa.
in
Hagerstown, Md.
(Special
to
The
v- 7.:,
be
now
defi¬
main
MINNEAPOLIS, MIN N.
seph
' D.
Auel
has
staff
of
Kalman
&
Jo¬
—
rejoined
the
Co., Inc., Mc-
Knight Building.
Private
Wire System
had
been
Pacific J
to-Hhe
tion
in
lies
in
the
arid
is
it
Philippine
hands
the
tives- of- the
fact
problem
of .representa¬
Filipino people itself,
admitted
that
invalida¬
payments, advantageous to
creditors
Civil
the
after
Wair, wilP hardly be to the Fili¬
pino people's-interest. In 1945, the
Some
v
lies
difference
post helium situation, ^the resolu-t
designed*
area.
The
also
Congress of the Philippines voted
(Continued
on page
1406)
Amended Bill Reveals Details
on
j Proposed SEC for N. Y. Slate
j Assemblyman William E.
Clancy submits
new
in
measure
New
j
York Legislature to replace skeleton bill he formerly introduced,
i Bill would set
up a
live-man Stale Securities Control Board which
would license and regulate
i
,vv'A;;-"-
,
March
; :
buying, selling and dealings in unlisted
v
10,
Assemblyman William E. Clancy, DemocraticLabor Party member of the New York Legislature, introduced a new
bill in the State Assembly as a substitute measure for a similar but
skeleton bill which he introduced
published
on
on Feb. 26, the text' of which was
1255 of last week's issue.of the "Chronicle." The
page
bill, entitled "Securities Transaction Law" is limited in some
applications to securities that are not registered on a securities
exchange, but, in effect it would set up in New York State a "Little
new
N. Y. Telephone—WHitehall 3-7253
DES MOINES
prob¬
the. Civil War.
that, in contrast to the American
believe that small Ameri¬
On
;
,
issued its
own
currency,, and; ante
helium
debts had been paid with it. The
Yankee
past
& Co.
Chronicle)
the
Mickey
current/problem
confederacy;.'had
vance,
and undoubtedly^, formed
part of the pattern for Japanese
expansionist plans in Asia and the
Pontiac, Mich.
Financial
after
tion of
invest¬
own
a.
less-than-a-year old rfepub-^
prepared and printed long in ad¬
the
Hastings
his
Ex¬
should
prewar
It is in a way the same
States
nitely
Southern
with
made
lem which confronted, the .United
lions which cannot
notes
as
the other.
as
Mouse'is how
lie.
real
was
one
legal effect which
given to payments of
of the
• •
For
name.
value
The
be
credits
the ^islands. <Franqiscp Qrtigas, Jr;
Those
/
the
of
monetary
securities.
Street, Philadelphia 2
New York
Buhl
New
Rejoins Kalman Co.
and
Member
York
Co.,
the
Stock;
Gray
conducted
BUCKLEY BROTHERS
Request
of
Detroit
Mr.
with
and
&
members
and-
was
:
•«-
C.
Building,
ment business in
on
Chronicle)
DETROIT,
MICH.--Alan ? S.
Gray has become associated with
PHILADELPHIA
Circular
back
wiping
Alan S. Gray Now With
Wm. C. Roney in Detroit
(Special
Prior
the Pacific during the war, with a sub¬
^
—
—'
"
~~
^rr'can-made cards, bearing prints of
Walt Disney's world-famous char¬
acter, with which Filipino chil¬
dren were wont to play before the
war,
were
responsible
for the
across
gun
his
on
sources
Montgomery, Alabama
3-6696
&
fiscal
We enter the third year- of
with a proposed budget of
around
$37,500,000,000,' now.f in
(Continued on page 1397) ;/•
& COMPANY
Telephone
Boston
coming
peace
Teletype BS 424
N. Y. Telephone
spent in any pre-war
the
year.
request
on
THORNTON, MOHR
w
1
■
in
year as was
j
swimming
machine
,
Sold—Quoted
du
Walt Disney did not draw a series of cartoons depicting Mickey
Mouse
explained,
the - Filipinos
been in many years, do you'real¬ adopted the term Mickey Mouse
ize how extravagant is the new to-the Military Peso Notes which
Truman Budget? It calls for two the Japanese Army placed in cir¬
to thirteen times as much moneys culation during their temporary
the
Philippines.
to4 be spent by each government occupation/, of
savings
;
^
hajidle;.;1 their Mouse, never---i
funds;':-''"V'hAv tfieless,.. w a s
W e ^a: 11 certainlyin,;-
RoferW. Babson
PRICED ABOUT 8
the
r e c e
LD 11
request
withheld.
.
cernsor groups .Japanese, ^oc-;.,
c u p a t i o n /
which - either
working capital
available
study
investig¬
ate
share.
than
All
.
should
illllililllllllllllllllllllllliillllililllllii
position, at approxi¬
of Indicated book value
mately 40%
and
—★
Tele. LY 83
basic
per
.-v"'.;-
and
r
available
-
Scott, Horner
■Mason, Inc.
At current quotations, common stock
is
ernment
r e a u s
leading manufacturer
of tube couplings, fittings and valves
for
com¬
panies to gov¬
\bu-
Dan River Mills
.
is
despite disapproval of Ambassador McNutt,
banks;would benefit unjustly if validation is
r o m
surance
cur-
currency,
and-
f
banks and in¬
Bassett Furniture Ind.
Appliance Company
of
institu¬
all
tions,
Co.
child¬
of this
use
and holds foreign;
Japanese
i
many
have
of .local foreign banks through
Holds Filipino people desire validation of payment with
rency.
Government hands.
iiiimiiiiiiiiiiiiiimiiiiiiiiiiiiiiiiim
American Furniture
forced liquidation
.
child¬
a
to what is done
as
with their hard-earned cash after
The Parker
Ortigas explains origin of so-called "Mickey Mouse" currency
introduced by invading Japanese in Philippines, and describes
,
Too many,
like
r
Mr.
ing typical items in the Federal
travagance.
Seguros, Manila
Director, Filipinos Compania de
dollars, Mr. Babson analyz¬
tax
Cia; Manila* P. I.
President, Ortigas, Madrigal &
'
v
Urging study of spending of.
:—
now con¬
nected with the Hartford office of
BOSTON
Company
■
■■
Extravagant Aftermath of Japanese Currency
In Philippines
Tinman Budget *
"S
change, Hartford and New York,
Davis Coal & Coke
Maryland Trust of Bait.
•
-■
Beckwith, Rogers With The
Coburn, Middlebrook
Co.
Transit
Baltimore
6
Thursday, March 13/1947
THE COMMERCIAL & FINANCIAL CHRONICLE
1378
of its
between
Philadelphia, New York and Lot Angeles
ST. LOUIS
SEC."
WHEELOCK & CUMMINS
INCORPORATED
; The text of the new-bill
A
Iowa Power & Light Co.
Stock
Common
Assembly bill, Int. No. 2631, Print No. 2869, by Mr. Clancy / i
establishing a Securities Control Division ijh. Executive Department,
Stix & Co.
INVESTMENT
DES
BUILDING
MOINES
9,
•
"Bag & Paper Co.
amended and
1606 Walnut St., Philadelphia 3
IOWA
Bell Tele. DM 184
•'.
V.-
«;
509
"•
•
-•v ':
• .v
.V
•'
•.
*"•
CHAPTER
STREET
OLIVE
PEnnypacker
5-8200
Phone
to
2.
Members St. Louis Stock
Exchange
"
.
PH 30
-1
American Turf Ass'n
New
Memo
PITTSBURGH
Murphy Chair Company
of
Quotes call TWX Sp-43
Exchange
A.M.,
RAILWAYS
Co.
or
of
Pmc,
from
Std.
10:45
Time:
on
Floor
11:30
Incorporated
let
Floor, Kentucky Home
H. M.
Sp-82
at
Bide
18fi
Stock Exchange
Bldg. Phila. 2
T®l®phone
Teletype
RIttenhouse 6-3717
2. Definitions.
Members Standard Stock Exchange
of
PH 73
Brokers
-
Peyton
Spokane
Dealers
-
Underwriters
Building,
C
(§§3-11)
dealing in stocks, bonds
securi-
or
'
TITLE;
DEFINITIONS\
's''-'
*
i-'
^
',.
\
as
-.
" ^
/.
v
the "securities transaction law "
:
may
iT;!:
§2. Definitions. As used in this chapter:
^:;
(1) "Person"; shall; include a natural
'^
|
,: '
person,
corporation, copartnership, association, society, joint stock company
syndicate. ;
;vv''
;;
v',':r
(2) "Bond" shall mean any instrument or inter¬
est-bearing certificate issued by a person, government or corporation
by which such person* government or corporation binds itself to pay
a
■■■•
certain
sum
on
or
CORPORATION
PHILADELPHIA OFFICE
Life
LOUISVILLE 2, KENTUCKY
Long Distance 238-9
Bell Tele. LS
.
,
/SI- Short Title. This chapter "shall 'be - known, and
i
other hours.
Byllesby & Company
'
^
"
or-
STANDARD SECURITIES
™I BANKERS BOND "j
v
^
Orders
to
or
-
-'ARTICLE I>
SHORT
be cited and referred to
/
SECURITIES
on
For Immediate Execution
Girdler Corporation
Varnish
\
LAWS
LAW
(§§ 1-2)
Section1, 1. Short title.
NORTHWEST MINING
Willett
definitions.
v
\
a
TRANSACTION
': ties. (§§,12-22); '
/
CONSOLIDATED
State securities control board.
N. Y. C.
~
Reliance
fellows:
as
^ "
,
THE
Buying, selling
v.
Send for
OF
V : Article 1. Short title;
;
SPOKANE. WASH.
American Air Filter
3-C
SECURITIES
St.Louis 1,Mo.
LOUISVILLE
'
Assembly, today,
.
COrtlandt 7-1202
H.
recommitted in
Strike out entire bill and insert:
SECURITIES
v;
Private
Consider
''
i
.
was
Southern Advance
BOENNING & CO.
Phone 4-7159
\
v
Stock
EQUITABLE
'
*
Meredith Publishing Co.
■*;
introduced in the State
AMENDMENT IN ASSEMBLY
.
•
as
"
Talon Inc.
Continuing Interest in
Preferred
(No. 2631),
follows:
as
Trading Interest in
r
3.30%
Assembly, is
Continuing Retail and
Spokane
Branches at
Kellogg, Idaho and Yakima, Wn.
before
(3)
a
corporation
certificates of
an
commercial
or
ownership.
appointed doy/.:;';.-;;';:>r- V^V
"Stock" shall
company
-
the share of capital of
attested bv^a certificate or
mean
^
y*'
(4) "Security" shall mean an evidence of debt
property represented by a bond, stock certificate or any other
instrument.
J
-V'/
! V::/' f
;
(Continued on page 1418) v .' ' -r
or
of
.
•
..
wmmM-'ifflgw Bingfijyn
Volume 165 ' Number 4576
the
commercial > FINANCIAL CHRONICLE
Rep. Reed to Press for
.WASHINGTON. (Special to the
failed to reach
price-supporting silver legislation
tne books is
.
inflationary and
should be repealed. I intend to in¬
troduce legislation to take care of
the situation," Representative Dan¬
iel A.
into^he^oii«2nfRpP' Carl Hinshaw bill
(R.)..of
HKQ the House
Representatives
of
:v
'
?nange Act of existing circumstances,': the SEC
1934
-.'so as to.| has the power to, label any "acts!'
gress doesn't do its duty in this
regard, the necessary cnanges n
our laws are not likely to be made
after inflation has got beyond con¬
trol" Mr; R$ed: added.
.»
• •
V "The time has come,vi he con¬
tinued, "w^en every inflationary
piece qf legislation should be re-5pealed, whether the powers it con¬
is
the
any
or
hot.
> rule
or
>; The text of
the Securities
is
to
t i oh
;
Egyjpt and Iraq will
negotiations with
continues to be of
amend
without
is
.
..
.
.
the Securities Act of 1933,
special
,
Securi¬
ties Exchange Act of 1934 and the
,
at the end of such paragraph
sentence
a
follows: "No rule
as
regulation adopted pursuant to
or
to all
obvipusly unbearable.
Nor is India inclined even to
an-
the
scaling down of the claims-1
Official and unofficial statements
In¬
not
It is be-5*
binding for India.
dian
vWasli~
Agreement which-';
such reductions .is*?
Loan
provides for
that
new
; |
dls-1
cuss a
ington
,
Govern-; lieved In London that this attitude;!
m.e n t
would: will
provide full justification
not
be
pre¬ a postponement of the time limit ?
pared to make for the
funding of sterling bal¬
Eiiuig
Paul
the
-!
Dr.
s
-
*
.
conces-
ions
ances.
that-;
v
It
seems
would pave the way for an agree-;
tiations
ment.
nego-)|
unlikely that the
with
Egypt
which:
have;^
Indeed, the terms put for-, just been initiated in Cairo would !;
were-even stiffer than ex¬
prove any more successful than1!
ward
this paragraph shall apply to any pected.
transaction with respect to an ex¬
become
accord¬
evident
of the
gi-ess assembled, that Paragraph
(fi) of Section 10 of the SecuriH
ties
Exchange Act ofs 1934, as
amended, is amended by adding
new
This
with
be granted
to
were
creditors, the total burden would
nego¬
ticipations.
.
Representatives
-
terms
similar^
From .the very
alike emphasized that the
outset it was
United States of America in Conj-
,
,
of
in
ance
Be it enacted by the Senate and
House
basis
common
Ex¬
i
British
ing succeeded' siderable burden on the
in
finding a balance of payments. If
the
|
hav-<£
tiations.
.
British Government in view
exports and imports.
on
for
Securities
successful and matter
not be
to
concern
|
The British delegation
engaged in exploratory discussions in New
Delhi for the funding, of the Indian sterling balances has left India
: i '
the
grave
of effect of fuel crisis
.
.
ifavoring
To
■T
little likelihood British Commission to India will
succeed in getting Indian Government to scale down or fund its
sterling balances when negotiations are resumed. Contends also
Rep. Hinshaw's bill
follows:
>
■
.
.
sees
.
of 'inflationary: legislation on the
similar to. the
Carl Hitishaw
B p r e n B ill
hooks is, the Silver Purchase Act
pf 1934. But there are others, in¬
,, ^ht c h< w a s
cluding the Act of July 6, 1939, as onginally introduced by former
amended. Moreover, a law which Congressman Lyle H. Boren of
ties the Treasury's hands as to the
Oklahoma on Jan. 23, 1943, but
price at which it may sell public which failed to reach the floor of
property, as does, the Green Act S?.e.
be*or6v.-Congress; adrelating tp silver sales to industry, journed. It was of particular in¬
is also inflationary.
terest to dealers in .municipal se¬
1 '
"I hope to make a careful in¬ curities as, contrary to the1 will of
vestigation and get rid of these Congress as expressly stated in
laws
Einzig
change Act of 1934, so as to limit
respect to ah Jhe poAwer. of the Securities and
exempted se¬ Exchange Commission to regulate
transactions in exempted securi¬
curity."
^
' '
'V :
I
This bill is ties*'"•
.
obnoxious
Dr.
A BILL
transwith
any
a c
r
There
as
and Exchange
Commission
--
leaving explosives
around the house which is, on
fire. Perhaps the outstahding pioca
interests."-
with its own rules
arid regulations as fraudulent in
character and criminal in nature.
regulatiori/ of
sense
no
not consonant
application of
.
fers have been used
California introduced
(H.R. 1881) to amend the
a
"If this Con¬
.
•
Securities Ex- >
,
,
'
By PAUL FJNZIG
.
JE^ped of New York informs
this correspondent.
* **• P|a«
flocfr in la^t session and which would
?ny P'SfLhty of control of transactions in state and
municipal securities by SEC. 1
"Chronicle"). —""Price- falsing,
now on
Staling Balance Talks Fail
#
Repeal of Silver Act
137$
A
large
proportion
was
those
attempted
in
Delhi.;!
New
demanded to be released immedi¬
Egyptian opinion is fully as un-Jj
ately for the requirements of the bending as Indian opinion.
empted security," '
\
Nords;]
Reserve Bank's foreign exchange,
the outlook of the discussions
Sec. 2.
Paragraph (l)of Sub¬
(with;j
section (C) of Section 15 of the reserve, and the rest was to be Iraq, which will follow those withf
repaid in a brief space of time.Securities Exchange Act of 1934,
Egypt, any more promising. *
||
Even if India were Britain's only
as amended, is amended by adding
/The British attitude stiffened!
.
<
In connection with the foregoing
statement of Rep. Reed, it should
f
be
noted
that
consumers
the
leading industrial
of silver have formed
Maloney Bill of 1938, the SEC at¬
tempted through the medium of
it? proposed, and long dormant,
Bid
the purpose of pressing Tor the
repeal- of the transaction tax on
silver trading. The tax was enacted^ part pf the Silver Pur¬
chase Act of
1934, when the largepurchase of silver by the
Treasury was launched.
Set at
scale
50%, its purpose
jvas to eliminate
speculative buying in; competition
restored
see
/The
new
fice y at
a
-
'
v
association has its of-
551- Fifth
include
,
,
Kingdom 4%, 1960-90
.
Act of: 1934 to' define by. ruWand i
LOS
ANGELES,
New
Avenue,
own . choice
"suchVdevices-orcontrivancesas,
Allan Box,
are?- manipulative,
hope
market where
v
to
Rule
at the end of such paragraph a creditor, the acceptance of such
considerably during recent weeksj
transac¬ new sentence as follows: "No rule
terms would impose a very con-.
; (Continued on page 1416)
y J
tions in local governmental ob¬
regulation adopted, pursuant to
ligations within: tbev scope ofits- this
paragraph shall apply to any
regulatory powers.
Aside ' from
thi3 point, however^ ^passage^ of transaction with respect:; to ap
the bill will have greater signifi¬
exempted security."
United
(r:\ij;
mmrnttUttKurnm
i] -v "f'
cance as it will deprive the SEC
v'v»,
v.?
of
its
present/ authority under
? T. Allan Box, Jr. Opens
Rliodesian Selection Trust
j;
SecfiQhv(C)i (^);of}th#/E^changi
to
fyitb the Treasury. By the repeal
regulations ; of
of the tax. the silver users
they can hedge.
Disclosure
Asked
and
Silyer Users Association with X-15-C1-10,
621
its
;
CALIF.
—
T.
Gaumont-gritish
Jr., is engaging in the
; or
South
Hope
otherwise fraudulent" incident 'Jo
past he
transactions;: in securities. A Under
Street.
Richards & Co.
was an
In
the
officer of Bennett,
-
York City. Its executive secretary
is Mr. L. Kenyon Loomis.
f
■'
? •
•
■
»'..
•
r
...
s
-yt :* i. -
;
•
•
,
v
;*
..
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•«-
;.1-.V.
.
■; .• •,
'j
•:
.
•.
-v j
.»■-
t;'.-;/'.V:?
; ; •
British Securities Dept.
.
' - -
.
d.' -"
;
:
•
■- ■
f;. y
'
''
■
'
•' ;<•
•- •; •
lill! Goodbody SlCo. .if®;
Exchanges
Members N.
Smith, Barney & Go,;
Adds
Scophony, Ltd,
.
deceptive
■;
securities husiness from offices at
Y.
Stock
Exchange and Other Principal
115 BROADWAY
Royce N. Flippin
^/|FORTLANP
Smith, Barney & Co., 14 Wall
Street, New York City, 'members
NEW YORK 6, N. Y.
;
-M
Telephone BArclay 7-0100
ELECTRIC
•
'
.
Teletype NY 1-672
-
lit
POWER COMPANY
of the New York S ock Exchange,
that Royce N. Flippi".
associated with them in the
institutional department.
announce
is now
firm's
SECURITYHOLDERS
Wm. S. Beeken Co, Opens
/1
WEST PALM BEACH, FLA.—
William S. Beeken Co. has been
formed with offices in the Citi¬
zens
bution of cash and
business.
Officers
common
resulting in
a
A Producing
distri¬
Company
stock in the Portland
PROSPECTUS ON REQUEST
General Electric Company is now
Building to engage in the se¬
curities
Plan of Reorganization
SEMINOLE OIL & GAS CORP.
are
ted to
William S. Beeken,
President and
Treasurer; M. L. Beeken, VicePresident; and James L; Waugh,
Secretary. Mr. Beeken was for¬
being submit¬
security holders.
-
Ballots and
must be
merly with Edward E. Matthews
Co, pf Boston,
i '■
proofs of claim
F. H. KOLLER & CO.,
Members N. Y. Security
received in Port¬
111
land, Oregon, on or be¬
fore
V-
April 19, 1947.
Inc.
Dealers Ass'n
,
BROADWAY. NEW YORK 6, N. Y.,
!
BArclay 7-0570
■
NY 1-1026
■,
...
'
■—'
v.-;-i ';
,
>
\
r
a
o
;
' /•
?* "I'.-i-'
iV;:'
We have
prepared
Jnst O'f the Press—A New
*
Campbell Railroad Report
booklet descriptive }
Southern Pacific R. R.
f Portland General
Electric
? Copy
upon
Company.
may
-
vs.
be had
request. ;
:
Pennsylvania R. R.
'
A
complete
readily understandable 20-year survey—a
striking com¬
past, present and future 1947 pro¬
compared with 1940—a complete income- statement.
parison of these two companies,
jection
The
Blyth & Co., Inc.
14
WALL
Checks
STREET, NEW YORK 5, N. Y.
.
Telephone REctor 2-1 SCO
price of this new report is
are
to
accompany
$10•
all orders.
THOMAS G. CAMPBELL
67 Wall St., New
Phone: WHitehall
York
3-6898
:
I<
J
1380
THE COMMERCIAL & FINANCIAL CHRONICLE
•
'
►"
the common stock equity
the balance sheet exceeds 20%.
less
the
end
ratios
23 %
21%
,
_
expected to be fairly numerous in
1947 if market conditions permit.
Some of these will represent sale of holding company
interests, either the entire common
stock or a majority interest
therein; others will be "new money"
issues, to raise construction funds; in a few cases there will be new
are
cbmmon stock issues by holding
companies or operating companies,
recapitalization programs; and*
in
few "rem¬
a
of
is high *(2,233 kwh.), although this is a general charac-
holdings. There'll also be
several ways in which these issues
teristic of this area, with its subs antial
supply of hydro-electric
nant
left
sales"—odds
and
over
blocks of stock
or
ends
will
reach the
b0nds
-
future date to refund
usage
and
Unlisted Market
President, New
dividend
preferred stock.
The
restriction provision is
while
\
"the"
to
or
issue
new
a
counter
well is not entirely clear. At any
rate it seems rather unlikely that
on
Points
all
fulfillment of their
been
bids
awarded
via
competitive
Monday. Both stocks were
already traded in, Mountain States
on
having
a
oh
Curb,-while Northern In¬
the
diana Public Service has for
some
fairly active
a
over-
counter market.
Mountain States
614
shares)
is,
Power
being
(140,-
sold
by
Standard Gas & Electric
Co., their
holding constituting 56% of the
outstanding 249,000
has
been
shares.
selling
The
recently
aroiind
34V2-353/4, the. range this
being 37-30, and last year
32% -22%. Earnings in 1946 were
$3.65 per share, making the priceearnings ratio under 10. Dividend
ydar
payments
stepped
have
been'" gradually
from last year's $1.50
present
indicated
$2.50
rate, which would afford a yield
to
of
up
the
over
joyed
7%. The company has
a
year's
en¬
rapid
very
growth, last
being $7,179,000
revenues
compared with the
1940
figure of
$4,510,000. With the exception of
the'
1944
figure
of
earnings in 1940-45
narrow
big gain in
tax
$1.91,
were
1946
due
appears
savings combined with
increase
The
50%
and
in
share
within
a
of $2.16-$2.26. The
range
a
to
rapid
sales.
capital structure is about
debt, 13% preferred s ock
37%
stock
common
Plant
account
tially
written
has
been
down
equity.
substan¬
to
...
plant account has
depre-
been written down and the
residential -and
are
only
26%
being
count
determinable
from
balance
sheet fig&resV. Residential rates
are
kwh.
l^w
very
in
(about
1946)
and
2.17c
per
residential
Bausch "&
Lomb
Co.
Buckeye Steel Castings Co.
"Crowell-Collier
panies. The present offering of
383,434 shares (out of a total of
2 182
000)
Middle
West
Realization
Co.,
their
of
formal speeches—was
in answer to what,
any
ranged
■and
want of
business
asso¬
a
ting
i
u
h
s
guests
id
e
-who
grace
our
7
7 ; resentatives of
Secu
Debt Decision
1
panies
LP^"^le J
o^ Febraa^ ^S rllaUng
wilL
still
«
,
that
to
11m g»m^hinlr
^"con^nTioker
Midland
Utilities Co. The two latter
C.
E.
Unterberg
and
i t i
r
e
s
Exchange
com¬
retain
about
for
way
credit.
Export-Import
%\
4
The
cretely
and
serious
a
and
ner
subtly, the members
they wanted to hear-
asked if
were
discussion
the
at
answer
relax
I
am
in
Bank
houses
result
Street
other interests
or
of
Wall
last
(as the
year's distribution)
which might come on to the
ket at
The
future time.
some
stock
has
been
quoted
cently around 18-18V2
times
the
share.
per
mar¬
1946
The
over
or
earnings
current
re¬
of
1C
$1.89
indicated
dividend rate is $1.20, making the
yield
about 6.5%; 1946 earnings
showed a substantial gain due to
tax savings.
Substituting present
preferred dividend requirements
(but not placing fixed charges or
be
deposited
Peruvian
soles
amount
an
eign exchange by the central bank.
chronically short of
foreign exchange the question is,
on
a
r;'
testing the patience of
previous year's available
earnings
common
in dividends,
un-
cancelling
Y0
r
k
serve
"
interest'
to
speak
Jackson & Cm
1878
31, 1946
(or for
Bank
of
Peru
for
its
We
ap¬
coming and hope
will enjoy yourselves.
year
full
it is
in part:
a
made
Common
to
to
upon
precipitate in taking
anything like what might seem as
extreme action against the firm
suggests to the outsider that it is
not getting
very far in its bargain
ing with the company and is
tangible evidence it does
|
to
to
,
A
bonds
Council
will
the
on
of
Feb.
not
basis
28,
slowly and
dispute.;
very
:
slowly
£
£
strike
Co.,
as
would
against A. M. Kidder
visualized by the union,
also
very
likely
mean
a
aga^n^^eJ^ew
of
.
move
in the
Peru
service
BROADWAY. NEW YORK 6,
'
Direct Wire to
Chiemgm
&
Co.
N. Y.
f.
Pk
more,
nearer
contract
.
objection
any one of the Exchanges han¬
dling the business of struck firms
but it certainly would not
permit
union members to do so. Refusal
of the union members to handle
might
the
.union
would
In
a
versation
the
It
would
possibly be somea strike would
quarrel. Simultaneously with the
strike call, the union would prob¬
recognition!
obligations."
on
members
unon
ployed
who
L-nas
r
C.
*
Q
*C
.
r\
I
J
beirert Dead
i
J
February 26.
|
New
Exchange,
for
instance,' like the;
contract
they have with the Ex¬
cancel
doubt
no
make.
the
Its
has
not like to see
it without Just
The union
cause.
a
choree1 to
hard
life may;hang in
either way it' goes.
very
balance,
The fact that it is affiliated
the AFL of
it
may
choice of
aided
action
in
by
ficers of the AFL. The union feels
the ' intervention
with them in 30 days. This the
a
union
and
to
.with;
tooy that
making '.this
national -of¬
course means.
be
officials,
cease
Stock
York
that
riod, the contracts would
em¬
the
state
30-day; pe-
.
are
at
ably notify the various Exchanges
would do so as not to
put
Charles C. Seifert of
Vermilye itself in the embarrassing position
Brothers, New York City, died of of
crossing its own picket! lines
a
heart attack at his home on
Thus,, at the end of the
.
is
reasonable
^ke Jtiis: Firet
.
the subject is drift¬
anyone's guess as to
what will happen. It is known that
ing.
union
events
1
all this sounds fan¬
tastic but yet this is the way con¬
way,
the
of
undoubtedly
strike against them.
and
sequence
some
by the Exchanges.
If the
Exchanges took this kind of action,
change and would
Exchange.: The
might not
or
disciplinary action of
kind
ton
of
1947,
recommend
a
that
now
would be raised by the officers of
of its desire to cancel its contracts
Gilbert J. Postley
or
1394)
effect that
^ork^t°ck
Exchange, the New York Curb
Exchange and the New York Cot-
.
nn„onfnnnn
.
acceptance of the plan proposed. '.*>e; declared, say, against A.- M.
Kidder & Co. and maybe also
Peru, in our judgment, can and
against some other houses in the
should resume service on terms Street with which
the union has a
considerably
the
to
this business
&
of
talk
lead to
bondholders
resume
legislation
its
1,000
are
indirectly ; reliant
the security business for a
if possible. The fact
that the union
has not been
formal offer has
the
peaceful settlement of the
a
really intend
attention
government
undertakes
of
tonight
dispute with A. M. Kidder & Co.
legislation.
the
dollar
calls
no
place, the union it¬
keeps saying it does not want
strike, that it would like to ob¬
tain
"The legislation empowers also
Provincial
Council > of
the
City of Lima to resume service
on its
foreign debt in the manner
Council
slowly in that direc¬
J
Northern Indiana Public Service
Here
directly.; and
develop
In the first
*
fact that
loose
self
to the holders of the dollar bonds
Plain Pfds.
/
our
tion.
the
the
England Public Service
*
sway
will act
very
op¬
1953
the
"
a contract.
as so many say between the UFE
and A. M.
The union does talk^ "JrvJ,
'J.
'<
&r ;»
s'rike once in a
while, but it would be in force. The union's attitude
be a safe
bet, nevertheless, that it apparently is that no
1948, 1%% for 1949 and 1950,
1951 and 1952, and 2%%
"If
re¬
Dealers' Community of Interest
the
your
A strike
may
Kidder & Co.
arrears
for
the
the
house with which it is at
loggerheads in negotiations for
that it may deem convenient.
.fjj/
of
-
Employees, AFL, was victorious in a strike
against the New York Cotton
Exchange which lasted only one day,
it will throw its
strength against A. M,. Kidder &
Co., a brokerage
and thereafter, and for
annual, accumulative amortization
at %%. The Council further
says
/
because
Naders Associa-
honored
am
There has been a lot of
United Financial
the
portune conversion into
dollars
for annual interest at 1% for 1947
and
However,
fellow
Against the Exchanges
than 16 years), and
(2) de¬
positing funds in the Central Re¬
"The
Request
all
earned until Dec.
its
'
my
/,'
7.
By EDMOUR GERMAIN
more
for
Rockwell Manufacturing Co.
ESTABLISHED
,
'■
members.
soon.
given to
Threatened UFE Strike Against A. M. Kidder Co.
Could Also Mean Strikes
Foreign Bondholders Protective
a
vision which
apparently prohibits
payment of more than 50% of the
on
n,
page
Council, Inc. made available on
March 12 the text (in
translation)
been
29
that
not
man
J:
steady growth* servlce on the dollar bonds of the
during the period 1942-46, along 7% and 6% issues of Peru, and
on the 7y2% issue of
With gross revenues.
Cal'ao, under
a
plan which would call for (1)
The present dividend rate
stock
New
;
-
o
vprt
pro
taxes has shown
re¬
"
oppor¬
™V"
^ OQ 1ft/ll7
forma basis) share °
i°n' passf
'
?
earnings in 1942-45 ranged be- ^ both houses of the Peruvian
tween $1.05-$1.35.
However, op-1 Congress, empowering the Execuerating
income
before > Federal ! 'lve authority of Peru to resume
taxes
din¬
a
livelihood
(not to mention the
purpose to many absent thousands
employed
to that guiding' by and associated with
us).,"We
spirit of these dinners. I would are
underwriters,
brokers -and
dealers, trading and retailing or¬
*Speech of Mr. Unterberg, of
ganizations,
Stock
Exchange
C. E.
Unterberg & Co., New York members and non-members.
We
City, at the 21st Annual Dinner of belong to local
organizations of
the New York
Security Dealers our business and to national orAssociation, March 7, 1947.»
...
(Continued on
give
Since Peru is
be
;
Security
This
equivalent to the
conversion
*
„
that you
in
Peruvian currency to be held for
"opportune conversion" into for¬
will
■
i\r*w
ity Dealers Association.
foreign exchange requirements of
foreign debt, such sums in
when
•
,
preciate
the
tune?
™
...
welcome of the New York Secur¬
K
law
shall
by
this
was
earnest—and
cautious
a
•
of
held
for
better word, I shall call
command.
To put Nit more* dis¬
a
Stock Exchange, New York Curb sponsibility you have entrusted to
5xchange, National Association of me, I. want to seize this oppor¬
Securities Dealers, National Se- tunity to briefly strike one seri¬
'
» traders Association, New ous note.
7
tion, I
provides that at the
beginning of each fiscal year there
stock
Commiss i
-
York
gesture to clear the
a
shares ;(estimated)
and
there may be some small blocks
134,000
ar¬
„
friends
ciates and dis-
-—-
completely frank with you
if I did not
say that our program
this evening—devoid as it is
to be
,
under this
New
mem¬
—
not be
•
'
,
'vJJ;
table.
sounding: "Hell, no!" * }, 7 ;< J
So when I am through
£.7 To thejrep4
you may
holdings 01*
Corp.,
Midland 1"*
mainly as
and
volume
;
represents
u. S. Potash
7'' * Prospectus
in
to cooperate in
-
^Tennessee Gas & Transmission
', ;.j;
bers,
tial amounts last year in connec..v.
r
,
WASHINGTON (Special to the,
tion with the liquidation of some 1
«rhrnnirle"Y—There is some auesof
the old Insull holding com-
Liberty Aircraft Products
Optical Co.
the
on
part of
Northern Indiana Public Service
Tradinor Markets in
Common Stocks
Manufacturing
f
o
fellow¬
ship
T
2%
Bates
demo n-<$-—
good
in¬
into the market in substan¬
exceeds
i
Security Dealers Associa¬
twenty-first—have always been occasions
strations
dustrial*
came
unlisted markets
out
exchanges, and urges all dealers
duty to protect public interest.
for
,
original
Adding 5% to net nlant acrep¬
to allow for
working capi¬ resents about 69% of last
year's
tal 1946 ne^
onerating income was share earnings. There
is, however,
about 7% of the rate base
(so Jar a rather complicated charter
pro¬
as
cost.
,
revenues
commercial,
rather inactive market
months had
stock
of
■
?
Security Dealers Association
The Annual Dinners of
the New York
tion—and this is our
the dividend restriction will come
int0 effect since
market.
transactions
as
1V
d ciation reserve appears reasonably
market—through regular underThe company's operations are
ample.
<
• .<
>
writings, with competitive bid¬
unusually spread out for an opIn 1946 the ratio o£ net operatding, through rights to stockhold¬
erating company—it serves
ers
(underwritten or not as the communities and rural areas 109|jng income to net plant account
in
case may be), by secondaries and
(plus estimated working capital
five northwestern states (princi¬
sp'etial offerings, etc.
approximated
8%,
!
pally in Oregon) with an estimat¬ allowance)
There was a rate reduction of
This week witnessed
offerings ed population of 240,000. It buys a
about $485,000 last May. Average
on
behalf
of
Mountain •* States substantial amount of i s power,
residential revenues per kwh.; in
Ppwer Co. and Northern Indiana producing only 17% itself last
1946 were 3.910.
V.V
'
•
Pftblic Service Co., each having year. An unusually large amount
power.
York
Asserting it is the public interest and not selfish impulses of
security
dealers that "weigh them in the
balance/' Mr. Unterberg £alls for
official recognition of the
strength and vitality of the over-the-
preferred
stock is outstanding but whether
this refers only to the present preferred stock
1
1
By CLARENCE E. UNTERBERG*
;
.
^
effective
7J
7—
finally, there will be
Strength and Vitality of
common
at some
^
offerings
in
At
year the capital
approximately 56%
preferred stock and
last
stock, so that ap¬
parently the restriction was not
I applicable. The company expects
N*viv
Ksiips.
INew otock issues
common stock
of
were
debt,
Utility
Thursday, March 13; 1947
'C'-#i I
man
so
as
of
certain
for instance even
like Gov. Dewey, may
may
help
consequently seek that
kind of intervention.
Since strike
action against A. M. Kidder & Cowould
surely
£ (Continued
affect
the
on page
whole
1428) ;
j,
oNumber 4576
yolume 165
the commercial & financial
chronicle
Taft, Ruml and Blough
On Budget and Taxes
v
v
•
Republican leader, in round table, discusses need for government
tax reduction, with originator of "pay-as-you-go" tax plan and
with former Treasury tax expert. Though all favor tax
reduction,
they differ as to amount and method. Ruml proposes a 20% income
reduction, and additional exemption of $100 for dependents
together with a cut in corporation tax from 38% to 34%. Opposes
mandatory reduction of national debt from budget surplus. Taft
tax
fears
renewed
urges
delaying tax cuts until 1948.
A
the
serious
demands if taxes
wage
are
not
cut, but
Blougb
Conditions of Employment Stabilization
'f-g;g:
g'..,"--"
By BERTIL OHL1N*..
.
.Stresses importance of coordinating private and
public investment
price levels create favorable employment conditions. Attacks
national
''
tries should Fe
kept
prosperous.
cooperation
and
concludes
viously,
ured
in
terms
earnings of
of
the
wages
distribution
of
income
the
of
labor
the
or
volume of
/
*
-
V-
zJ
re¬
the
to
ings
J'f
gard
due
the
to
Roy Blough
Beardsley Ruml
t h
network
NBC
March
on
9.
The
between
and
other
ployment, then it is
the
in precise proporaggregate
expenditure,
e
earnings
become
•
^■ ■
0
interest and profit. I
notice that quite frequently peo¬
ple seem to discuss volume > of
as
aggregate
expenditure
without
mentioning that it must be meas-
are
are
♦Transcript by the "Chronicle"
of fifth lecture by Dr. Bertil Ohlin
the 1947 series of the Julius
in
not very
important.
usual
in
the
last
investment.
-
Congress has dif¬
(Continued
on page
1396)
:V
PLEASED
TO
i;
j
ANNOUNCE
THAT
.
that therefore the
I r % By MARK MERIT ■■■>: %[;
In the February 22nd, 1947 issue
r
sum
of
of
The; Publishers'
weekly
with
private
pardonable
reaches the
States,
we
quoting
for
,n
~ •
.
NOW
',
'
'
.1
' V
\
ASSOCIATED
US IN
WITH
'
t
r
1
•,#V'.'V*
k
'"Vi
'*;;■{
A":
\
-
|||||Havel^u||:|R
Told Your Customers
J
about
V'
a
applies
the most
'
Members New York Stock
Exchange
14 WALL STREET, NEW YORK 5
PHILADELPHIA
*
,
As
>g
CHICAGO
,
a
certificates
excerpts,
The
article.
(Pa.) Herald, to
maturity-conscious institutional investor*
part of our
regular cooperative service in foster¬
ing mutually profitable business, we shall be glad to
discuss
fully the attractiveness of this type of security :
in relation to your own
customers' needs.
a
announce
the installation of
the basia
respected
3
mem¬
who has three times voiced his ob¬
policy. And
now we
a
quote:
"Our paper accepts
advertising for
financially im¬
possible to operate without it. If you
would deprive us of our living you
It would be
also-deprive this community of
...
If we deprived you of
its paper
collections we would, no doubtr
your church of its pastor.
just that simple—a problem of
your
deprive
It's
economies. We feel there is a need in
this
community for both of us. We
feel that the vast majority of our
paid subscribers in no manner find
our advertising
objectionable".
also
"You
attempting to exhume
are
:■
I-
•
an
issue that's dead and buried. The in¬
famous Eighteenth Amendment nur¬
tured an era of sin and crime to be
abhorred
and
by
every
clear thinking man i
in America.
woman
This act
repudiated by the people of this
state. Today there are other problems
was
that need all of our energy. These
problems could keep both of us busy
for many weeks". And Mr. Brown
continues:
We
as
"guest edi¬
jections to the Herald's advertising
are
generally available security adapted to the
needs of the
g and other leading exchanges
g
particular field. This situ¬
Government, railroad equipment trust
Smith, Barney & Co. g
'
a
with regard to railroad equipment
the obligations of the United States
now
*
'
just can't resist
ber of the cloth in his community,
Equipment Trusts?
IN OUR underwritingposition to offer information
and research capacities, we
frequently in
ation
,*
news¬
United
an "open
reply'' on tfie part of William
J. Brown, publisher of the Chicora
trusts. Next to
**
of
the
torial" is in the form of
stimulating to business in
INSTITUTIONAL DEPARTMENT
group
letter
are
OUR
a
"guest editorial'*;
a
we
some
this
would
J
find
which
from
certain
largest
publishers in
paper
and net
Auxiliary,
which claims,;
pride, that it
newspaper
and
save a
■/
Guest Editorial
' '
&
MR. ROYCE N. FLIPPIN
practically
1398)
appear an advertisement which
hope wilt be of interest to our fellow
revenue.
ARE
will,
on page
SCHENLEY DISTILLERS CORP J
generally accepted that
stability in employment depends
on
stability im investment, and
institutions want to
Stabilization," New
City, Feb. 17, 1947.
to
Americans.Thisis number 160 of a series.
is
Employment
"The Problem of
willingness
years.
York
on
this
SCHENLEY DISTILLERS CORPORATION
public j investment at home
foreign investment is the
strategic quantity. If people and
Beer lectures
that
NOTE—From time to time, in this space,
there will
constant, the
First, purchases for private con¬
sumption; second, public expendi¬
ture on
current account; third,
private investment; fourth, public
investment; and fifth, net foreign
It
necessary
If that is done, the demand
by 'consumers
(Continued
we
of
with
agree
.
-
i
volume of investment should
save.
expendi-;
ture can conveniently be classed
in five groups—a practice that has
income that is
participants were
Senator Robert A. Taft, Republican leader, Beardsley Ruml, Chair¬
man of the Board of R. H. Macy
Co., Inc. and originator of pay-as- fered somewhat about a cut, but
is
general> agreement on
you-go income taxation, and Dr. there
Roy Blough, Professor of Eco¬ both House and Senate sides, and
I may say with great Democratic
nomics, Chicago University, and
President5 is
formerly tax planning expert of support, that the
the Treasury.
wrong in saying that the budget
'
cannot be cut, and that no tax
Senator Taft opened the dis¬
cussion
on
"Should
Taxes
Be reduction can be given. The pro¬
Reduced Now?" with the follow¬ gram of Congress probably will
appear in a conference report cut¬
ing statement:
• \
ting about 5 billion dollars off the
{ "The President submitted
a
President's
budget.
That
will
toudget which calls for receipts of
leave a total excess of receipts
$39,100,000,000 and expenditures
over
expenditures of about 6%
©f 37% billion dollars with a defi¬
billion dollars. My own proposal
cit of about a billion—I mean
is that 3% billion dollars of that
a surplus of
about a IV2 billion
dollars. That budget is now be¬ be applied to tax reduction on
'•
t
proportion of the national income,
that is compatible with full em¬
The different kinds of
national
paid out
:
\
average
vary
to
if
deviations
re¬
proportion
Robert A. Taft v
even
level,
;
income
does not
tion
wage or earn¬
with
making the qualification
possible variations in the
However, although employment
height of the
t#
to the
types of income.
ex¬
lative
/
as
or
unit of labor,' and
one
without
p
penditure
;
1
nections.
mand
IS
i■
i shall not
attempt to compete with the writers who have recently published books
employment policy in presenting a relatively complete list of all the various
policies
that are relevant. I shall
try, rather, to give a bird's eye view of certain important con-
aggregate de¬
.
stable
T
'
economic
as
the volume of
-
?v'
'
,
yearly budget balancing, and sees interstabilizing factor, but denies all counStresses importance of stability in rich nations. * v
investment and economic
loyment
depends on
WE
'
;
'
e m
fore Congress.
3 *
;V
•
O b
the
«'
1
on
and
timely discussion of the Federal Budget, under
auspices of the University of Chicago Round Table, was' broad-
over
...
"'
Maintaining employment stability depends on investment stability, Dr. Ohlin outlines ^schemes for
promoting investment stability. Says cost-price relationship should make
profit expectations neither very
pessimistic nor optimistic, and holds free wage movements are
incompatible with controlled prices.
the volume of
cast
'
\
: >/;.i"'.■ ■Professor of Economics, University of Stockholm
I
,
"7/ your plan for the elimination of
much of our advertising were effec¬
tive, it would seriously hurt this
a
When you hurt one business
small community you hurt all
paper.
TRANSATLANTIC TELETYPE
in
R.W.
Pressprich & Co. f
a
businesses, for each is dependent
his neighbor.
much
providing direct, instantaneous, written communication j
with
our
Telephone HAnover 2-1700
68 William Street
'
NEW YORK 5
correspondents in London
201
Teletype NY 1-993
Devonshire Street, BOSTON 10
Members New York Stock
Exchange V;
revenue
from
the
returned
Members New York
Security Dealers Association
GOVERNMENT,
PUBLIC
that, would have to be borne by the
taxpayers and we're almost certain
the citizens are not crusading for
higher taxes
.
.
."
.
New York 5, N. Y.
BOwling Green 9-4623
Teletype NY 1-2525
...
BONDS
FREE
INVESTMENT
•
.
v
Period.
RAILROAD,
UTILITY, INDUSTRIAL
AND
76 Beaver Street
MUNICIPAL,
•!
beverage tax, each year. Any drop in
End quote.
MODEL, ROLAND & STONE
on
The borough receives
STOCKS
—
postcard
96-PAGE
or
BOOK-Sentf
letter to
mark
schenley distillers
merit
corp.,
a
op
Dept.
18A, 350 Fifth Ave., N. Y. 1, and you will
receive
of
a
96-page book containing reprints
earlier
articles
on
various
subjects.
THE COMMERCIAL
1382
'
V
*
1
'&FINANCIAL CHRONICLE
/>
*'
Currie .f .&:< Summers; < 74 , Trinity. ■v Rockwell
"Manufacturing Co.—
Place, New York 6, N. Y.
;
Analysis — Steiner, Rouse~& Co
it
CARTER H. CORBREY & CO.
Member,
Association
National
,
•
'
*.■<'"
'
(•4j*
>\.
•
.
V
•
which appear
'
.
Recommendations and Literature
It is understood that the firms mentioned will be pleased
to send interested parties the following literature:
:
Pacific Coast
—
1.
.
.Wholesale Distributors
Mlddl* West
-1
Also available is
Dealer-Broker
,
,
0/ Securities Dealers
'<
: For
SECONDARY
Containing
news, earnings, prices, comment
and general market opinion—John
H. Lewis & Co., 14 Wall Street,
New York 5, N. Y. '.'I
;'•<
MARKET
DISTRIBUTION
CHICAGO 3
LOS ANGELES 14
135 S. La Salle St
650 S. Spring St.
Stat* 6502
earnings and brief data
surance
circulars
are
Engineering;
Co.
interesting situations —
Geyer & Co., Inc., 67 Wall Street,
New York 5, N. Y.
analysis of
3
.
,
Counter—Latest
issue
it "Geared to the News" Bulletin
Service
emphasizes ,the relative
:heapness of over-the-counter se¬
Brothers Co.
curities
"
■
COMMON
;
Copies
recent
as; a
Write to
sharp
rise
request
in
Bros.
Inc.,
3roadway, New York 4, N. Y.
'
32
} ;V
Co.,
120
CHICAGO
Companies—Mackubin, Legg,
& Co., 22 Light
Street, Baltimore
3, Md.
ILL.
3,
■
Tele. CG
1122
Phone Central 5690
'ord
I: !•
)f
Copper
«:■
ft
TRADING MARKETS
-
Nutrine
—
Candy Co.
available
dian
V
Lear Inc.
y
-
,
Common
*_
,
.
Provinces—Handbook show¬
funded
debts
outstanding
January, 1947 — Wood, Gundy &
Co., Inc., 14 Wall Street, New
York 5, N. Y. ,v
ing
Co.; Hart-
Empire; Lanova Corp.; Mo¬
Iron & Steel; Purolator Prod¬
ucts; Upson Corp.; Alabama Mills;
Diebold,
Inc.;
Pfaudler; Corp;;
United Artists, Vacuum Concrete.
1947
Tel. Dearborn 5600
Tele. CG 146
Louis—G.
H. Walker
&
Co., Inc.,
Broadway & Locust, St. Louis, Mo.
1
Boston
2 Southern pacific:; Railroad; Sys«:
Milk tern vvs.
Pennsylvania
Raalroad
—du
Pont; Homsey Co.,'31
Street, Boston 9, Mass;; <
Pittsburgh
Railways
memorandum—H,
System—Research report—Thomas
G. Campbell and William T.
Camp¬
--
-New
bell—$10.00 per copy.y !
M.
Byllesby- &
Company, Stock Exchange Builds
ing, Philadelphia 2, Pa..'; •-*»
&
Maine
Railroad
Polaroid Co^Analyais ahd:
—
_
Circular
Walter J. Connolly &
—
Co., 24 Federal Street, Boston 10,
Mass.
': V
>.?t;" "i'.t;
cent
20
:'V■.
v
Central
of
'52
and
Public
and
Gas
developments^-Ward
.Tide
1420
re^:
2,
& Co..
1947 Appraisal of Railroad Se
I
curities
Reprints of address by
Patrick B. McGinnis to the Maine
—
i-,. &
Investment
Cent. Pub. Utility Corp.
Income 5y2s,
v
.
1952
i
Chgo. No. Sh. & Milw.
Petroleum Industry
and outlook—in the
Market
'
Association—
;
Ry. Co/Common Stock
.
Dealers
McGinnis, Bampton & Sellger, 61
Broadway, New York 5, N. Y.
■■■■■■■■■
and
Summary
"Fortnightly
—
Business
Survey";
-
study
Electrh
W.
La
Fairman
Salle
&
Street,
Co., 61 Broadway,
6, N. Y.
Railroad
CHICAGO 4
9868
-
of
'i
-
y ■
•"*'v"
,
4.'
v
CG
-
Review of Railroads in the Pro¬
95
cess of Reorganization—Detailed
study
—
Carreau & Co., 63 Wall
Street, New York 5, N. Y.
:
Colorado Milling & Elev., Com.
Co.,
.
-
tion and its effect
y
.
"Seismograph Service Corp.,Com.
*Prospectus
Available
on
Request.
Established 1916
10 So. La Salle
St.,
Chicago 3
Teletype CG
trie
Co.—Analysis and
D. L. & W.
of
III.
Argo Oil
tive
Corporation—Descrip¬
circular—Seligman, Lubetkin
&
Co., Inc., 41 Broad Street, New
York 4, N. Y.
SINCE 1908
Fred. W. Fairman Co.
L
'r-;~
-
-
Lackawanna RR.
—
of
'52
Write for
our
analyzing
these
5
Company-
Electric
company
Power
booklet
for which
Houston
Oil
Co.
of
M.
Co.,-1 Wall Street, New York 5;
N. Y.
•
-
Also available is an
analysis of
the prospects for Wilson &
Co.,
Inc.
,C:'
f"'
memoranda
re-,
a
& Mohawk Cotton
Mills,
Circular —Mohawk Val¬
Investing Co., Inc., 238 Gen¬
Street, Utica 2, N. Y.\<^.v
common
<v .Warner
Co.
outlook—H.
distri¬
Stock
stock,
Memorandum
—
M. Byllesby and
on
Co.r
Exchange Building, Phila¬
'■ .;•>' •' ""''-'-T
delphia 2, Pa.
being submitted to security
holders—Blyth & Co. Inc., 14 Wall
Street, New York 5, N. Y.
Public
—•
on
plan of
S.
-
D. .Warren
Co.—Analysis-
May & Gannon, Inc., 161 Devon¬
National
Co.—Year-end
Bank
&
Tru^
analysis—C.
shire Street, Boston 10, Mass.
E.
-
& Co., 61 Broadway,
New York 6, N. Y^
^y Also" available
is
'an
Also available is
port
:;v'
'offering
a
Hytron Radio and
on
circular on SJern '& Stfern Textiles
Inc. ■: ^ v'
.:f;v
?■
West
Square. Boston 9. Mass;"
Chicago 3, 111,
South
%
Gas < Company.
!; Ohio
Analysis—J. J.
-
re¬
Elec-»
Vr
Ralston Steel Car Co. — Circu¬
lar — Lerner & Co., 10 Post Offic«
135
*
detailed
tronics Corp.
Texas—
Kidder'&
.-
are
—
available
a
organization, resulting in
bution of cash "and
Co.!
Unterberg
R. Hoe & Company—New anal¬
ysis—Adams & Co., 231 South La
Salle Street, Chicago 4, 111. <;
.V
O'Connor
La
;
—
Co.,
^
.v
Hydraulic Press Manufacturing
Co.—Detailed Analysis—Comstock
& Co., 231 South La Salle
Street
Chicago 4, 111.
Also
available
NSTA Notes
analyses of
are
Long
Bell
Manufacturing Co.'
Lumber
Co.,', and
Lime
" Cola
(3o.—-Late
dataThornton, Mohr & Co., First Na
tional Bank
Building, Montgom-r
ery
4, Ala.,
:
'
-
Line Material C0.7—New
analysis
showing how
company will benefi
expansion in Utility service
demands—Loewi & Co.,. 225 Eas
Mason
Street, Milwaukee 2,vJWis
Also available is the current is-*
of the firm's "Business and
sue
Financial Digest."
\
NSTA
MUNICIPAL
.
COMMITTEE
|f
"
M. Ergood, Jr., Stroud &
Co;„Philadelphia;
McDonald-Moore & Co., Detroit; H. Frank Burkholder, Equitable Securities Corp./New
Orleans; J. Creighton Riepe,
Alex. Brown &
Sons, Baltimore,'-.l-.•••/•■ '*;V';:r';
.j"Mr. " Strader-states that the purpose of this committee will be
to collect,
evaluate, 'and disseminate information in the municipal
field"which will be of value to members of
the NSTA.
DALLAS BOND CLUB
'*
>
The
■fNew
for
1947
'
SECURITY TRADERS ASSOCIATION
Pine
York 5,
„.
Chapel,
Annual dinner
Forming Corporation
Memorandum—First Colony Cor¬
poration,; 52 Wall Street, - New
•'-s! "
Vice-Chairman; Russell
Harold
Marmon-Herrington Co., IncMemorandum
discussing(possibili
ties—G. A. Saxton &
Metal
";
Security Traders Association announces the
following members: yi:
I ^ Stanley G. McKie,< The Weil, Roth &
Irving Co., Cincinnati,
CLEVELAND
Co., Inc., 7C
Street, New York ; 5, N. Y'
'
•
Ludwe'l A. Strader of
Scott, Horner & Mason, Inc., Lynchburg,
Virgina, Chairman of the Municipal Committee of the National
tlevelan^
on
officers
are
Security Traders Association vwill
Friday, March 28th." 7V ^ ^
and
^
^
<
„
hold
q
their
i:
''J
:;V;;
•
directors of the Dallas' Bond;
Club;"to
serve
follows:
as
N. Y.
National
Paper &
Type
Analysis of prospects
,Wc Maintain-Active Markets
in
r
—
Co.
Troster
'
y ■
"
Com.
NORTHERN STATES POWER CO.
6% & 7% Pfds.
Bonds.
208 SOUTH LA SALLE
ST.
CHICAGO 4. ILLINOIS
Telephone Randolph 4068
Direct Private Wire
to New York
Bell System CG
537
H. M.
Judson S. James
Byllesby and Company
Incorporated
135 So. La Salle
Telephone State 8711
New York
Philadelphia
-
V Street,#
Salle
'
&
Brochure
•'
I
ley
esee
Portland
is now
Jersey—Analysis—B, W.
Pizzini &;Co., 25 Broad
Street,
New York 4, N. Y.
;
CHICAGO SO. SHORE & SO. BEND RR
5%'s
!
Street,; Philadelphia
available
Utica
Inc.
New
DEEP ROCK OIL CORP. Common
Central Public
61
-
outlook-
Jacques Coe & Co., 39 Broadway,
New York 6, N. Y.
405
Ind.
Rockford,
Cleveland, Ohio
Indianapolis,
/
evaluation of
American Water Works & Elec
,<
Members Principal Stock
Exchanges
Chicago Board of Trade
on
securities •— Address Department
T-92, Merrill Lynch, Pierce, Fenner & Be&ne, 70 Pine
Street, New
York 5, N. Y.
;V V- •->,
ymi H.Davis & Co.
Tel. Franklin 8622
;
Securities Are Perishable!—Dis¬
cussion of changing market situa¬
"National Tank Co., Com.
Central Steel & Wire
V
on
Colorado Milling- &; Elevator
Co. and International Detrola
Corp.
Memo
Place, J^ew York; 6, N.- Y,
Descriptive
Wiesenberger & Co;
Broadway, New York 6, N.-Y.
Walnut
Also
current developments discus¬
sing growth possibilities—Troster
Currie; & Summers, 74 Trinity
111.
4,
by
-
Common
Co.
the
Week—Summary—Vilas &Hickev,
49 Wall Street, New York
5, N.Y.
208 S. La Salle Street
State
Developments
Power
' *
on
Chi
Chicago Railways Co.—Analysis
and possiblities for speculation-
Miller
Brailsford & Go.
TeL
^ 5y2'
Utility
—Comprehensiv*
analysis in brochure
South
cago
,
Pfd.
and
form—Fred
E. F. Hutton &
New York
Water
,Pa^,;,
Broadway, New York 5, N. Y.
-Polaroid ^Corporation
Consolidated
Memorandum—A.
W >
t-b
■
on
principal banks in and around St.
Members of Chicago Stock Exchange
209 S. La Salle Street * Chicago 4
"
Edition, facts and figures
Co.—Analysis
&
Memorandum—Buckley ! Brothers,
.
Manual of St. Louis Bank Stocks—
WilliamA.Fuller&Co.
1,
Parker Appliance Co.r-Circular
memoranda
are
Arthur
Dominion of Canada and Cana¬
Prospectus on request
" y
—
;
Common
*•..
Industry
Analysis of
situation which appears favorable
H. Hentz & Co., 60 Beaver
Street,
New York 4, N. Y.
' "
J:
York
Co., 120 S. La Salle
Street, Chicago 3, 111.';:;
hawk Rubber; and Taylor Whart¬
208
it
New
"Showers Brothers
—Caswell
Broadway
W. L. Douglas Shoe
y
ance
Fifth; Avenue,
care'of
Corporation,
t Osgood Company-JDetailed cir-;
&
Also
>n
Comparative Statement of 19451946 for Fire and Casualty Insur¬
120 South La Salle Street
$ (■
Merit, in
Distillers
N.
•
CASWELL & CO.
Mark
Schenley
350
New York 5, N.
consequence
nark et—Strauss
on
of the
the listed
4
been
:ul$r^-SeligTriati.: Lubetkin & Co.;
nc441Broad Street,^ New -York 4,
on
Bargain
Showers
;
^
on
-
Ward
York
—Brochure
—Analysis—Ira Haupt & Co ..111
Fashion Broadway, New York 6, N.:YV :
'
-Street", " New
Schenley Distillers Corporation
of articles
they have
running in the Chronicle.
t
Co., 231South
Park, Inc.; Upson Co.; and Osgood
on
several
an
available
Wellman;
Bank and Insurance Stock Digest
—Contains disscussion of fire in¬
We have
&
La; Salle Street,; Chicago 4, 111.
Aspinook Corporation—Circulai
Michigan 4181
LA 255
CG 99
Also
—
Broad
&*,'•'?%
report-—Adams
^
25
-
New England Public Service Co.
Aviation Bulletin
V
list of stocks
a
interesting.
•••?<> «'*•• ;*••••>
'.l: 7
National Terminals Corp.—New
'1
UNDERWRITERS
1 /
Thursday, March ,13/1947
,
-
.v;
V..
:
^
Teletype CG 273
Pittsburgh
..
W.
C.
.President; Judson
dent;:^. C. Jackson,
Street, Chicago 3
,
•.
■
Jackson, Jr.
S.
James, James
Jr., First
Waggener.yWalker, Austin
A. Underwood &
^.Minneapolis
&
S°
'
Co.
Joe W. Ellis
&
&
Southwest
Waggener.
William
Stayart
Co.
Co.
Secretary:
Treasurer:
Directors; Charles B,
y* ^ecil' H,S.;Hudson
Wa'ggener
Vice-Presi¬
Joe
William
W.
Ellis,
Carothers, Carothers
•
& Co.; C. Alfred Bailey,^Dittmajjr
■mi
Number 4i76
Volume 16S
:
"
■ *
;'THE COMMERCIAL & FINANCIAL
CHRONICLE
.
,
...
.
Federal Judge Igoe last week in
Chicago signed
for the Chicago Surface Lines,
setting
April 22
v.
the date
of the
actual sale to the Chicago Transit
Authority and giving the publicownership group.until June 30 to raise the
initial expenses.
some
the elevated lines
The
ing
proposed
a
of
issue
^une,
bonds
because it will give
full
month
linois
to
state
issue..•
The
the
veterans'
-v.'\
unattractive to many mort¬
gagees if interest rates were to bh
reduced from 4 to %}/%%, ^ J
-I,
Il¬
$75,000,000
-price' of
Mr. Smith said it would "tend
to inflate prices further
has
and
been
that
since,
additional credit alone does not
increase the supply of housing";
the
set
at
of
if the
the
out
that
there
Commitment"
writing
bond
was
from
group
revenue
issue, but said such
mitment
could
not
until the actual
be
a
machinery of the
sale in set in motion.
v
Two
'X-
were
big
enough to hold the public as well
as .the; trading
eye
in Chicago.
One, of course, was the spectacu¬
;
-
lar rise to
futures,
<
because
absorption
boxcar
the
*
p
high prices of grain
new
of
of
surplus
shortage.
disclosure
$300,000,000
government
that
and
the
other
The
❖
The
the
record
of
veterans'
bonus payment serial bonds will
■
:
be put up for award
1.
A survey
by the Chicago Association of Commerce and Industry
||
|| showed that the boxcar shortage
1
!
getting
was
serious.
Members
of
the association report daily short-
ranging from
ages
,
|.:| needs and
to
60%
of
serious production
say
'
10
cuts may result in two months.
R.
Wells,
Assistant
of ; the
American
National
Bank
Chicago,
told
Associated
tors that
the
Trust
Co.
.
convention
v
Equipment
'
1
&
instalment
'
>
Reserve
Bank
it
said
of
of
Distribu-
credit
terms
has
"If
4
today
25%
...-
down ..and
pay, the
s
be
can
offer
we
only
18
months
they
selectivity
scrutinizing
were
new
tions
for
and
renewal
commercial
trial loans.
•;
,
3v,
#
-
services
is
loss
care¬
applica¬
and
indus¬
...
*| X.* XX ■ X?fX, Ml
in
community exchange
to
WASHINGTON
the
called
in
(Special to t'he
and civilian personnel and substi
dollar scrip of different
The move which General
new
colors.
McNarney stated may be repeated
from time to
time, had; as its
prices plus Phila¬
delphia to New York parcel post
charges, and express or air ship¬
troduced
icle"—to
will
be
"
customer.
•'XX;*- 'XX '•
V
paid
"
*
.
for
by
th6
'.
*
-'X.
on
troubles of the airlines
the violation of basic economic
principles
in
their
expansion.
$nd the govern¬
to blame for
are
and
permitting
de4
the
home
racket
GI
at
Uncle
in
Sam's
A illegal
win4
nings from dealings with the Rus-?
sians and Germans, The scrip is¬
sued in September was advertised
expense? their
C. R. Smith, Board Chairman of
American Airlines, blamed
the
financial
September—as
end
remitting
*
r-
last
scribed at the time in the "Chron¬
asking for
"illogical
in
"Stars
and
at
home,
American
Stripes" as being
counterfeit-proof. However,4evep
counterfeited
The >
from
Army's
currency
time
dollar
to
is
\
|
he
said.
He
told
the
proved
air routes deceived and.continues
that
to deceive manv."
at
no
the
others
Moffatt
C.
has
.
;; i
;
been
re¬
States
$50,000,000
as
systems
Clearing Corp.
United
least
a
had
'result
of
lost
GI's
to
the
terms
,
and
v*
still
have
.
a
the board of directors of the
ago the British
•*
*
X',XX'XrXXX
an¬
nounced its withdrawal from iron
ore
mining operations when it
sold the plant and equipment of
the Wisconsin Steel Ore Mines to
the Cleveland-Cliffs Iron Co. The
a
had
by
year
been idled
strike.
a
*
more
than
in
scale,
Armour & Co. since 1939 and with
the meat-packing company for 59
.years, was elected Chairman of
the board and Chief Executive.
F.
WvSpecht becomes President.
;J Chester C. Davis, President of
is? the Federal Reserve Bank of St.
Xouis,;urged that a new organiza¬
.•
ii
V
tion be formed to. push a soil coniservation
program
on
Illinois
ifarms.
Mr.
Davis
ommendation
jankers
this
made
at
.
the
Association's
rec-
Illinois
Midwinter
Conference.
*
X
J?
t
:
'U
'*
•
•
*
•*
mortgage
time,
tion
of
In
Home
Chicago
Federal
the
National
Builders
by
John
Home
Loan
Associa¬
was
H.
Bank
told
Fahey,
Com-
tnissioner. He said such a decrease
might result in actually decreas¬
ing
the
able.
amount
Howard
of
B.
money
Smith
avail¬
of
the
the
Mr.
executive
committee
who
Moffatt,
Chairman.
AA
i'
Stocks
The
oldest
paper and
in
the
manufacturer
magazine
country.
for more
turning out
of
printing
Now
than
in
presses
news¬
presses
booked
two
to
ca¬
and
years
record volume.
Recapitalization plan formally rati¬
fied; new securities now ready.
acts
as
and
William Will
directors
of
the
were
re-elected
Curb
Clearing
until March,
1950.
Philio F. Hartung. Harris,
Upham & Co., has been elected a
director of the corporation to serve
Corporation to
until
meht.
Germany
officers.
a
has
denied,
the
officers
to
serve
Even the GI's
has
War
now
♦
want
Mfg. Co. Com.
*
Industries, Inc.
Ben
Coal
1948.
principal organizers
of the Curb Clearing Corporation
*
Miller
Manufacturing Co.
ih
Exploration Co. Com.
small
Trailmobile Company
♦Detailed
analysis available
on
*
request
indication
no
COMSTOCK & CO.
complete
a
CHICAGO 4
231
So. La Salle St.
-
'
.
•
Dearborn
1501
Teletype CG 955
;3
'
'
Trading Markets
Servini Investment Dealers
Abitibi P. & P. Co. Com. & Pfdl.
Brown Co. Com. & Pfd.
•
We
specialize
exclusively
tractive issues
Cinema Television
|
taining
own,
Fresnillo Co.
under¬
for their clients. Main¬
retail
no
department
compete
we
dealers,
Gaumont British Pictures
in
writing and distribution of securities,
providing investment dealers with at¬
but
serve
Correspondence
in
no
of
our
with
way
them
exclusively.
invited.
ll'V- ;Z-t
Oroville
Rhodesian Anglo American
is
San Francisco Mines
(Mexico)
Scophony, Ltd.
Chicago
J
Recent
Analyses
Merchants
Steep Rock Iron Mines
Vicana Sugar Co. 6/55
few
a
#120 South La Salle Street
Rhodesian Selection Trust
counted
quite
FLOYD D. CERF CO.
Rhodesia Broken Hills
Army fi¬
be
Dredging
Vicana Sugar Co., Common
Request1
on
Distilling Corp.
Common
Stock
|
Standard Silica Corp.
Common
Stock
^
ofy dollars
acquired
to
GI's
for
ZIPPIN & COMPANY
by the latter il¬
now
can
Specialists in Foreign Securities
be covered
208
by the sale for dollars in Army
PXs of goods the
for marks.
'
Army has bought
In this way,
S. La Salle
FAROLL & COMPANY
Member
New
208
So.
Chicago-4, Illinois
Randolph 4696
CG 451
\
York
Stock
Exchange
and other Principal Exchanges
Street
La
Salle
St.
CHICAGO 4
Phone
Andover
1430
Tele.
CO
156
the GI's
of the
in
1931, Mr. Moffatt became its
first president in that year and
has
held
the
post continuously
period of four years
through 1938, when he
President of the New York
except for
a
1935
Curb
he
was
Wisconsin Bankshares
CAPITAL
Listed
on
the
STOCK
director
a
of
Nu
Enamel
Common
Chicago Stock Exchange
Your Inquiries Invited!
Mr.
Moffatt
Chairman
ernors
of
of the
Com.
Industrial Brownhoist
I.
*
;
During this pe¬
Exchange.
riod
Greiss Fleger Com.
r
!
.
Hearst Class A
Long Bell Lumber Co.
the
Common
.Clearing Corporation.
served
as
board of gov¬
also
the
STRAUS & BLOSSER
Curb Exchange from
through 1944 and as its Pres¬
pro
tem, from July, 1942
through 1945. when Edwin Posner
became Chairman and President.
ident
Corporation
Long-Bell Lumber Ccmpan)
''winnings" of
been
t
Corp.
March,
One
1941
STATE OlOt
Hydraulic Press Mfg. Co.
Old
Oil
Department
'
the
cover up
can
discover
legitimately
up
ILLINOIS
PHONE
instance, past losses through
payment
marks
establish¬
only dollar scrip is
sometimes
ject. '
methods.
For
out¬
use
1
op¬
it
and
losses in various ways.
upon
Decker
Howard
accounting of this mysterious sub¬
Rather, the Army
be expected to
nance
36!
Burgess Battery Co. Com.
and
In this case, the present
There
military secret. The
likely to be.
may
SALLE STREET
Minn. & Ontario Paper, Com.
been
not
LA
Chgo. Auro. & Elgin Ry. Units
that the Congress has sought from
in Parliament.
up
for
Army
GI makes good the
figure reported by the "Chronicle!'
not
SOJTH
Aeronca Aircraft
Army
his predecessor of previous
years.
plan has been brought
the American Govern-
as
'
Baltimore Transit Co. Pfd.
quantities of marks from finance
Instead ihe whole matter
is buried
231
Germany and want¬
currency
acceptable.
areas.
by
Analysis Available
past
correspondents
ments where
'
-
At the annual meeting of stock¬
holders, Mr.v Corcoran, Mr. Page
was
home
of
interest rates would be unwise at
this
of
from
-
IjjviReduction
U.
'
ident; William B. Steinhardt, Sec¬
retary and Treasurer; C. E. Sheri¬
dan, Assistant Secretary; and Beriram
R.
Lowenfels,
Assistant
Treasurer.
Mr.
Corcoran,
Mr.
Lowenfels,
Mr.
Page
and
Mr.
Steinhardt were reappointed mem¬
with
*
*
George Eastwood, President of
(|
"
Class A, Class B and Common
CHICAGO 4,
American
Gl-currency prob¬
came
No such
forth
Page, Vice-President;
James A. Corcoran, 2nd Vice-Pres¬
bers
-
■i
R. Hoe & Co., Inc.
TELETYPE CO
extent, by sale to busi¬
some
side
lem, similar in nature but smaller
cor¬
.
Other officers re-elected include
David
*
mines
poration.
sound
International Harvester Co.
S
ing
eration employed by the Army in
that theatre.
About a fortnight
_
transaction."
5?
V'
■
\
■
loose
of foreign-exchange
but all
ance payable in not to exceed
12 months, we can later reduce
•
some
and
that post, at a regular meeting of
■
•
ADAMS (r CO.
gradually worked off,
to
Clearing
Corporation for the ensuing year, getary appropriation of £20,000,to serve his
thirteenth term
in 000, covering not only Germany,
and make the bal-
•
.
11
Excess marks held by the
also may be
time.1
scrip
had
exception.
In
the
Executives' Club of Chicago that ..^Chronicle" of .Oct. 3, 1946, the
the "relative ease of starting new writer
reported
from
Germany
grouping,"
an
Curb Exchange Securities
and extend payment periods to
two
or
three
years.
On * the
jjf
.
s
illegal marks later acquired by
the Army are now worked off on
the German
economy.
others visiting
listed
down today
f
]t
^
:
Active Trading Markets in
pacity
approved
estimated $50 million
sors
at
to squeeze out counter-*
and black-market posses¬
of these notes, which were in¬
purpose
other hand, if we get one-third
'
was
Army scrip in Europe
sold
elected President of the New York
10%,
or
New
Army in Europe and Japan without warning
outstanding dollar £>-
all
The British Government proposes
to make good the losses by a bud¬
■down-payments to 20,
...
"Chronicle").—During the
American
scrip held by authorized military
tuted
old
cover
nessmen,
-Fred
reduce
{
'
foreign-exchange operations of Army.
on
week
of
to
feiters
Re-elects Moffat!
to
Broadway,
York City,
Bank
of
England, the
Treasury and the .French
stores in the American occupation
in Germany. Goods will be
zone
of
-
25
authorities.
Correspondent reveals wiihdrawal
and J^pan. No plan has been set
oil
At the request of the War De¬
partment, Sears, Roebuck & Co.
has
installed
catalog
shopping
Curb
those terms
way
liberalized
terms
the
British
at
New
of
should be tightened now, if only
to. provide a cushion against lib¬
eralization later. He explained:
by
..
as trustees.
transaction
offices
Banking
industry was
|| |? Making Good on Gl Exchange Loss
observed
Both the airlines
Vice-President
.
•
'
part of commercial banks, and
me
■i
[
Si
greater caution and
ment
Kenneth
exchange risk is covered by
ments
by the state
*
of Illinois about May
❖
*
Federal
Chicago:
was
issue
bills..^^.;.;;.;;;;:/;;:
,
fully
dramatic events
was
NY
in
Theodore Blanchard is resuming his investment business from
proposed?
housing
said
■
The
The
com¬
expected
Co., of Paris,
ex¬
portation of French wool products.
in
under¬
the
on
terminating in the mid¬
dle of 1948 is linked with the
the
of down payment and extension
of mortgage term as
"firm
no
any
of
power
the period
public is enhanced by reduction;
at
$12,162,000.
Judge
Igoe, in signing the order, pointed
r.
purchasing
745, it
Theodore Blanchard
as a
..
;r
bonus
X:X-X:£
lines
elevated
come
the market
absorb
purchase
street-car
Bankers
Association
said long-term FHA
mortgages oh
owner-occupied homes would be¬
thus
on page
a London banking group headed
by Hambros Bank. This
credit amounting to
£12,500,000 was arranged by Lazard Brothers &
Co of London and not
Hambros Bank, with various London
banking
institutions. The loan was
granted <$s-—r*r*——i
—
Ilu—
"■■■■' < *
to the Groupement
d'lmportation forward exchange contracts of the
et, de Repartition de la Laine," a Bank of France in
favor of Lazard
French company under
govern¬ Brothers & Co., to meet drafts
and
mental auspicies which
advances at maturity.
comprises
i
the entire wool textile
All
industry of
arrangements
in
France
France.
relative to the credit
guarantee
Reinbursement of the loan for will" be made by Lazard Freres &
'
American
offer¬
time selected
a
■"
■
$90,000,000
reverence
looms for
a
iQ
February 6,
article by Dr. Paul
Einzig, entitled "London
that a banking credit to the French woolen
an
Center,
made by
A similar order will be
brought into court for
March
transit authority's
of
needed to buy
Transit Co. and pay
Chicago Rapid
In the issue of the "Chronicle"
of
-
stated in
$90,000,000
the street-car companies and the
Industry by
Co., Not by Hantbros Bank
Lazard Brothers &
order of sale
an
as
Loan Made to French
t\
-
v
1383
,
^
Members:
Chicago
Members
Stock
Exchange
V
| MILWAUKEE (2)
New
York
Stock
Members
225 EAST
MASON ST.
PHONES—Daly 5392
Chicago:
,
State 0933
Teletype MI 488
Chicago
Stock
Associate
Member
New
Exchange
Exchange
York
135 South La Salle St., Chicago
Tel. ANDover 5700
Curb
3, 111.
Tele. CG 650-651
i
1384
THE COMMERCIAL & FINANCIAL CHRONICLE
Rental
income
in the
last
.
fiscal
America Has Stake in Austrian
ending Jan. 31, 1947, was
$1,148,960 which was nearly a half
year,
million
our
years
over-the-counter specialty is the lesser-known
the market believes that some investors
anyhow could with
issues
on
profit
pay more
attention to the "sleepers," that is, the seemingly least
usually the most inactive securities, in the real
estate field.
"Sleepers" have been known to produce astonishing
yields to speculators at various times in the past and the possibilities
attractive
for
and
so
spectacular
gains
which
this®"-
whole class of securities continues I various
properties will most likely
to hold for many investors in real reflect this
happy condition.
estate
securities should not
be
After all, too, water has been
overlooked, he argues.
pretty generally shaken out of
To
who can see the re&1 estate issues wherever it was
picture, it certainly isn't discovered to exist.
The burden
surprising that interest in "sleep- of debt which many properties
ers" among the real estate securi- had to carry has been eased conanyone
should
be
it
With the
ago.
::ive years at
is good that
was
stock
and
mortgage
to
charges.
Two
stand
in
the
the
one,
he
the
save
fact
that
conversion
stock
into
o
fact
he
that
under
mistic
,
,
It
about real estate in-
now
types of real estate securities.
is likely now that
many prop-
of
all' these
rader
stock
r
In the light
considerations,
thinks
that
the
the
common
selling for
was
$17
said, think
erties will take advantage of their ast July and which fell to $12 in
improved financial status to ease September and to $7% at a later
prosperity will last further without delay the burden
date
that
forever,
but
greatness
good times
once
of remaining debt through refihas stemmed nancing their obligations at lower
American
probably
from this kind of enthusism.
m
rates
should be possible to sound a
ribte
of
sober
caution
in
any
period of exuberant spirits, however, without in any way dampen-
ing legitimate enthusiasm.
There
of
interest
wherever
doubt
that
certain
funda-
excellently
,
.
Business
£lass- No one with limited funds
increasingly I
attractive features in the eyes of
many of the market-wise. For the
,1
the next five years or more, it is
.
believed
all
around,
real
parnings should remain
estate
very
high
and the prices of securities of the
calculations
ings
discarded in wholesale fashion by
disgusted investors are now un-lto
on
ast June another
tiis
foJ*. an^ Possible other shocks
which they may suffer from deglased incomes at any time in
?Pend should
even take a look
th.e, "sleepers." Certainly no one
W
<1 pe justified in borrowing
who
invest
"sleepers'
in
mUst or should be able
well
as
analyst,
were
stock
share:-
.
office
of
the
Corporation
in
which
had
a r
has
by
of
one
the
In response
the
at
that
no
to inquiries received
Treasury
Dept., Secretary
announced
on: March
•
V''
*
-
long
* "'•••
*
conspicuous
stock
The
policy of the
Government
at
is
lative preferred
a
Dlgby 4-4950
preference
stock
of
$100
share
per
which is to be retired at
Toktypo NY 1-953
a
year
$150,000
commencing April f unti
the aggregate of the
sinking fund
amounts to the sum of
66%%
the
greatest number of shares
Firm Trading Markets:
California & New York
large insurance company holds
first mortgage on' the
property
which
bears
interest
at
the
rate
of 4% a year and
which, after the
annual instalment of
$100,000 to
ward
principal this year, wi
amount to $3,925,000.
Real Estate Issues
:
outstanding multiplied by $100. A
All 345,000 square feet of
floor
space in the building, located on
choice
J. S. Strauss & Co.
155
Montgomery St., San Francisco
Tele. SF 61 & 62
4
EXbrook 8515
site
corner
Park, is
facing Centra
100%
occupied and has
time and long-term
leases have been drawn
up with
been for
the
some
tenants,'numbering
eluding
the
5s
...
'52
W.S.—New
Streets
York
Bankers Bldg.,
Inc.—Chicago
l
3-5#
»
t
W.S.
Wacker Wells Bldg.
Roosevelt
IT-
'60
Hotel,
St.
Common
Louis
Broadway-Barclay
Broadway-Trinity
2s, 1956
I
;
& CO.
135 So. La Salle
f..\
A, CG-81
St.
Gov. Clinton 2s, 1952 WS
Hilton Hotels Preferred
Europe in
general while
during
on
1946
areas
to finance relief in occupied coun¬
tries.
'%
•
> .r.
connection
with the prep-
aration
peace
Hotel St. George
4s,
Lincoln Bldg.
with
Austrian
of
Madison-52nd St. 5s,
1952
These
Ernest H. Weinwuri®
The United
■
both
field
warrant more attention to
Austrian problems than has been
States has stressed
interest : in
its
heavy commitments in
political and economic
the
the
given them
far by the Ameri¬
and particularly by
American business. It will be seen
country
stake
can
and " large ' amounts
developments in that
country than is generally
realized. Following a brief
gen¬
eral
surplus
material
review
conditions
will
be
pf present economic
in
Austria,
called
tributions
which
/' /
attention
possible con¬
American business
on
could make toward
$10,000,000 credit for the purchase
army
much greater
a
in
distant
partly through UNRRA, the latter
amounting to some $84,000,000.
/ Austria
has
been
granted
a
of
so
people
that the latter has
of
American money have been spent
already for Austrian rehabilita¬
tion partly from Army funds and
(Continued
solution of
a
1408)
on page
Chairman Martin explains changed
policy of lending for
in lieu of emergency reconstruction
purposes.
;
said
that
now going to World Bank. Holds loans should be used
improving foreigners' balance-of-payments position. Urges us ta
live up to growing creditor status
jbyJ. promoting useful' and !.-r
'.it
economically desirable imports. In his report to Congress he points
for
a
al
a favorable
foreign trade outlook and
foreign loans portend increased exports.
to
phases of debt
management
John W. Snyder
are
under
con
WASHINGTON (Special to
study by the "Chronicle's" correspondent
Treasury and Federal Reserve, the
Exportand that there has been
no
change Import Bank's
in the
policy announced by the Third Semi¬
President in his
Budget Message annual Report
that "interest rates will
be kept at t o
Congress,
present low levels
through con¬ the Bank's
stant
the
tinued
cooperation
of
the
Treas¬
Department and the Federal
ury
Reserve Svstem."
The technical methods
the
Government's
by which
interest
rate
policy will be carried out
under constant
tion
with
Open
are
also
study in collabora¬
the
Federal
Market
Reserve
-Committee
others interested
in
the
and
subject.
The
Secretary stated that the
Treasury is alert to the Govern¬
ment bond
market and the effect
of its financing on bank
reserves
and the needs of different
classes
of
investors.
'
~\yv
Chairman,
William
Mc-
cial
policy
faced
sues
ing
by
the
1946.
These, accord¬
ing to Mr.
Martin, were
W. McC. Martin, Jr.
ex¬
(3) the question of the rates of in¬
on
the Bank's
Pittsburgh Hotels VTC
loans, and (4)
the policy of the Bank with re¬
spect to imports.
■;
;;
Roosevelt Hotel 5s, 1964
Roosevelt Hotel Common
said
/
2s, 1960 WS
61
//
>
,
& Beaver St.
5s, 1966 WS
Broadway Corp. Stock
,
"As pointed out in the
report,"
Mr. Martin, "the increase of
$2,800,000,000 in its lending au¬
thority granted by the Congress in
July 1945, was intended chiefly to
enable the Bank to extend
Vis, 1957 WS
•H
•
;
Teletype NY
emer¬
gency reconstruction credits to lib¬
erated and war-devasted
countries
during the period until the World
■
New York 7, N. Y.
1-S8S
Bank
The
should
"Chronicle")—Interviewed
of
the
issuance
by
of
<$-
ly at long term and for a wide
variety of specified purposes. '■
,
Z;
"As of the
end of
May 1946, au¬
thorizations of this type aggre¬
gated approximately $2,100,000,000
and an aditional $500,000,000 had
$200,000,000 of the Bank's in¬
was
open
ready to receive
applications from its members for
(1) the position of the Bank re¬
garding
further
reconstruction
credits, (2) current proposals for
terest
S.
/'-/.V
Bank announced that it
for business and
last
of
-
creased lending
authority had been
committed or earmarked at that
time. In June, the International
is¬
the Bank dur¬
half
'•'>
the occasion
on
but
attention
to
the
contends unused U.
been earmarked for
possible
further credits to China.
Thus, all
Chesney Mar¬
tin, drew spe¬
guaranties,
New York Towers
long-range,
Reconstruction help
applications
indi
that
rise in rates is
Incorporated
BArclay 7-4580
'
settlement; Americans
participating in the Control
Council
for
Austria,^ American
troops are occupying part of the
imminent.- He
Amott, Baker & C o.
I5? ®r°adway
Tel.
Need
America^
By
; • V;; Business ■/..;: 'v,
•;•//,
Satellite
countries.
newspaper
articles
eating
40 Wall St.
1
7th Ave. 4
Problems
Consideration
treaties
Italy and
the
interpret¬
4Vis, WS
Westinghouse Bldg. Par. Ctfs. CBI
1950
ma¬
chinery. Moreover, the country ia
slated to get a share of a
$300,000,000 appropriation included in
the War Department
budget 1943
the Balkan
ranean
materials and industrial
raw
had
focused
and Mediter¬
ation of recent
Wall
CHICAGO
Central 4402
Cen¬
tral
been
turn
;
be increased to $25,000,000.
Application has been made for a
$50,000,000 loan from the Export
Import Bank for the purchase of
may
c a u
Manqueen Corp. 5s, 1952 WS
PI. 4 Vis, 1963 WS
Broadway & 41st St. 4I/2s, 1954
Gramercy Park Bldg. 6s, 1949 WS
870
iVALIQUET
try and
Moscow
<s>——
con¬
OFFERINGS WANTED
5%», 1963 WS
Myles Standish Co. Boston
way- at
'
'
coun¬
the extension by the Bank of
port credit and transfer
Real Estate Securities
j Prince & Lafayette
111, in
stockholder,
chief
under
any
o:!
cumu
1
Concludes
tioned against
and
entitled to
limits.:
templation.
• o
all
spotlight
that
on
time
/•./ He
almost non-existent
owns
this
are
Trading in
corporation also
nearly 17,000 shares of $4
Mimbtri Now York Slock
Exchange
Mombort Now York Curb Ex chango
Boll
of
this
SHASKAN & CO.
40 EXCHANGE fI., N .Y.
record
profitable enterprise.
.7
changes in the interest rate
manufacturing. corporation with, a
g SECURITIES
reasonable
Negotiations for an Austrian'
treaty awaiting attention of the
Foreign Ministers' Conference now under
the
repeatedly
Snyder Denies Change
In Treasury Int. Policy
large
a
within
are
helc
are
tenants,
held
Austrian
are
which roughly two-thirds
$23
•
Jones
taken
180,000
build¬
of
value
he
a position. There
shares of this stock
Estate
that
rental income, thcfught
as
stock
common
basiijg
fact
being appraised at nine
times their
the
located
By way of illustrating his gen¬
eral thesis, this trader mentions
REAL ESTATE
the
on
willing to put the various securities they buy in a strong box and
f°rget them for a few years.
the
around
be
•
to Purchase "sleepers." The Synder
folks,
selling
now
$9% to $10% is worth $25 easily,
°r ad1vis'
able and 80 prepare themselves
mental factors underlying the real
doubtedly taking
is
can
American free enterprise has
opportunity to prove its superiority
a part of the world where
totalitarianism seeks
to assert itself.
in
this
a^on Ty be P°ssible
foreseeable future.
:
:
men
who are .not
estate market today are healthy a .r.?
speculate* as it were,
sihd strong where once they were
wlJb some of their money are the
anemic and weak, to say the least. ?
^ people who should fhink of
$ome securities which were once kuyin& securities in the sleeper
is/no
but
economic
and
ore
risks
attention
which
vestments. Americans, it has been
Have arrived
-
all
company for each year of
he unexpired term.
water-
as
through deeds in
the terms of
existing mortgage agreement,
surance
in
army
such
resources
help service Austrian investments.. Con-
tends
defaultable security and, two,
a
the
of the
owners
natural
upon
lumber.v Says expansion of Austrian exports
and tourist traffic with American
assistance would improve Aus¬
tria's dollar position and
would, so far
preferred are
concerned, change their holdings
the
iron
power,
of
new
a
"■
which would be protected by the American
near-by Bavaria and based
rate mortgage
siderably.
Throughout the field, a sum equal to % of 1% on the
there has been a conspicuous im- unpaid balance of the
principal
provement in financial structures,
would have to be paid to the in¬
This improvement, better business
and the resulting heavy liquida-
in Austria
obstacles
of refinancing,
way
'
;
Holding government grants and loans cannot Solve the Austrian
problem, Mr. Weinwurm advocates American direct investments
pre¬
interest
on
M
;
By ERNEST H. WEINWURM
existing
possible
preferred
ower
as
Reconstruction
least, the possibility
refinancing may be
stirring in some
quarters, among traders, such as
the trader noted above, and others,
particularly at this time when
earnings on many properties are
at their highest levels in years. Of
eourse, just as it is easy to be pesgimistic about Europe at the moment, it is just as easy to be opti¬
tion of debt naturally have also
tended to enhance equity values,
in fact, to enhance the values of
:
earn¬
attempted to retire both the
ferred
Whole
ties
than
more
prospects bright for another
ings
A trader whose
dollars
Thursday, March 13, 1947
open
for
business.
Export-Import Bank proceed¬
ed to authorize such
credits, main¬
loans.
'
//
.v
"Under these
circumstances^ the
Export-Import Bank has decided
that
it
must
bring to
end
an
its
program of emergency reconstruct
tion credits and that this decision
should apply especially to
count
tries which have
access; to. the
facilities of the World
Bank,'V Mr,
Martin continued. "The
,
ExportImport Bank continues to consider,
however, in, accordance with:.its
general powers and
policies, credr
its to finance trade with
countries
undergoing reconstruction
as
with other countries.
as
well
It is the
policy of this Bank that the credits
which
it authorizes shall be for
specific purposes, shall contribute
in the most direct manner to a
balanced long-range
expansion of
foreign trade, and shall be on
teTms appropriate to the circum^
(Continued
on
page
1416)
•%.
Number 4576
[Volume 165
THE COMMERCIAL & FINANCIAL CHRONICLE
rise
in
sold
time
bonds
accounts. -And
to
the
match
The
\
needs is difficult
Points
life
out
a
sound
and says
courageous
budget,
depends, is itself
Holds debt should be reduced not
there is need for income
ttle
stop
to
policy of
spend¬
ing
and
tax
-
the
the outset. ;
One
i.j;
s
t
u
expenditures,
Federal
j
;
To
on
not
-
be
the
(Special
sure,
pace¬
to say that
banks
LOS
A.
Carter
this
of
was
nia
dry
building
which
Co.,
&
Corbrey
:
to
purposes,
manufacturing
to
short-term loans
pay
obtained
were
to
finance
increased inventories and accounts
Mr. Hart
receivable,
formerly with First Califor¬
be
Company.
added
balance-will
the
and
working capital.
to
This advertisement appears as a matter
V
A. A.
Ballantine
amounts
sum
to
amount
about
'iXl
-
c
beginning July 1.
Federal
the
'
is
(expenditures for
of
of record only and is under no circumstances to be construed
offering of these Shares for sale, or as an offer to buy, or as a solicitation of an offer
'.v
to buy, any of such Shares. The offering is made only by the Prospectus,
r ff, -
as an
,
more
than the
whole amount spent by the Gov¬
ernment in World War I; more
than four times average annual
the whole
iisiiiiii383'434 Shares iiiiiiiat;
Northern Indiana Public Service Company
cosi
Government dur¬
address
b^Mr. Ballantine,
Common Stock
Estimated
revenues
forecast in
in estimated revenues over
crease
Price $18.75 per
estimates
March 6,
j
Root,
Bushby
Ballantine,
Palmer, at a
&
luncheon of the New York Young
1947.
:
*
,
surplus of $200,000,000. Even this
slender surplus depends upon in¬
Republican Club, New York City,
in
:
.
,1
*:
the President's budget indicate a
of a year earlier by a
figure approaching $7,000,000,000.
The large upward revision results
of course from unexpectedly f a-
partner
Without Par Value
>
t
Handling the debt involves the
safety of the people's savings, the
Harlan,
H.
Spring Street.
recently incurred to con¬
the company's former foun¬
vert
associated
become
the sale of
from
Net proceeds
penses
Chronicle)
Financial
(Continued
on
1426)
page
share
Copies of the Prospectus may be obtainedfrom the undersigned only by persons to whajn
lly
undersigned may legally offer these securities under applicable securities laws.
.
the
Put Your Money in a
A;-;-*
By EDWARD C. RANDOLPH
Bank
■;
Assistant Vice-President, The Trenton Banking
Company
^Commenting on decline in the yields of government and high grade
long-term securities, as contrasted 'with increasing volume of bank
commercial loans, bank official points out most beneficent use of
1' public's money now is placing it in a , bank.
v;; :v':/
March 12,1947
>
■;
*;•
■
■
23
"-v
,
■
':i\ '■ t
■*'
"
The conditions and events of August, 1945, are
<
common
'
a
A'-';;V"
in the library of
The 14th was V-J Day and with it came the
'dawn l ofa$
"'V'
a
/
v a, '.-.a
knowledge.
'}■
'2
The high grade bonds of every de¬
has scription. The Union Pacific Rail¬
new era.
_
new
5 era
marked
been
by rising loans
in
the
banks
of
this
coun¬
try."'j;
Loans of the
bank
average
risen
have
road
with 45 years
float
to
able
was
This advertisement appears as a matter
to run at prices to
yield 2.4%. Yields on high grade
preferred
stock
declined from
about 4 to less than 31/£%.
The
extent to which yields declined
was
scourge
a
was
Randolph
C:
lower
than it
1945.'
was
in
;
With respect to
investments, it
has been marked by an
of
the
extension
yields that
in
decline
started, jn the Fall of 1944.
(>
In: the
average
vestments
were
bank,
such in¬
increased
more
6%,'at the expense of sec¬
ondary reserves. It sold Treasury
bills and certificates in the face
of
rising loans to purchase longerterfri bonds. Consequently, yields
short, medium and long-term
Treasury bonds declined. Between
V-J r Day and April 6, 1946, they
declined
more
than
.
declined
VA:.
'' .v\ V-- ■; I''-:-
a.
'
.
!
'
'
*
•
•
'
:
i/
Common Stock
.
(Without Par Value)
On
.
f
April 7, 1946, Government
bond
prices went into a decline.
downward trend continued
■
Price $34.50 per
During that
period
the price of long-term
Treasury bonds declined almost
5 points with a rise in yield V\ of
1%.
Medium-term
bonds
lost
more than 4 points with a rise in
yield %s of 1%.
Nevertheless,
prices and yields are not so at¬
tractive as they were in the Fall
until
Dec.
2,
of 1944.
j
.
\
i
|
: v
:,L
.
Yv- '•
undersigned
about
two
months,
j'-'s'Ai
/.'■
'-v.«;»•
may
;•••.•."
.
••.
1
'•
/.i
•.
.
v
-
v
< #.■
.V::-
v
PV/-;'0 'vi?.v!
.
■
.-
-y
| Elworthy &
Lester & Co.
Co.
'■
.'
.
/y-
f-f:.
'
"
/:->*
'• *
V :V
v.': ^
'.'X
1«
^
First California Company
Dean Witter & Co.
from
'V
'
'
-rrv
Blyth & Co., Inc.
•"
Current Developments r
For
undersigned only by persons to whom
legally offer these securities under applicable securities laws.
Copies of the Prospectus may be obtainedfrom the
the
,a a;
v \
>
share
1946.
than
more
-
funds.
Vz of Nov. 6, 1946 to Jan. 8, 1947,'it
bonds seems as though the Weekly Re¬
rose more than 9 points. The price
porting Member Banks operated
of medium-term bonds rose more with
their position on
Nov. 6,
than 6 points, with a drop in yield 1946 as NORMAL. This means
almost %s of 1%. ' aa"*" ;
that
primary
and
secondary
1%.
<
;
Mountain States Power Company
e:l<
squeezed " many
widows^ and
orphans whose sole support *comes
from insurance
and small trust
*4 of 1%.
j:; Between Oct. 31, 1944 and April
$,1946, the average yield on such
bonds
bank investors,
The
than
oh
i
140,614 Shares
to bank and non-
especially trustees
Who had to invest and reinvest
40% since V-J during that period at progressive¬
Day. In 1946 ly lower rates. It was instrumen¬
the
average tal
in
raising the cost
of life
rate on com¬
insurance.- With
prices for the
mercial loans necessities of life
going up, it
offer)
than
more
Edward
of record only and is under no circumstances to be construed
offering of these Shares for sale, or as an offer to buy, or as a Solicitation of an
to buy, any of such Shares. The offering is made only by the Prospectus.
as an
issue
an
Schwabacher & Co.
-•
'•••' Shuman,
Agnew & Co.
The price of long-term
That
decline... in
bonds set
;
yields
on
the pace for
reserves
deposits,
declined
no
excluding
more
the
than
interim
Graham, Parsons & Co.
4Dick & Merle-Smith'
-
.-I
*
K-~:P-.
March 12,
1947
•[
'
^
Co.
this stock will be used to pay ex 7
r
fiscal year
Thdt
$5,000,000,000.
♦An
has
650 South
in the country or
ing the lavish spending days of
about $7,000 a family. The debt
the thirties; it amounts to more
now calls for annual
interest of
than $900 a year for each family,
a
to
-
ANGELES, CALIF.—Lynn
Hart
with
The
&
person
a
about
to
Hall
Harris,
The
offering price was
per share plus accrued div¬
idends from March 1, 1947,
,
great.
very
seems
commercial
The budget presented by Presi¬
the
$2 60.000,000,-
$2,000
any
Congress calls for
expenditures of $37,500,000,000 for
debt,
©00. That
meeting
dent Truman to
about
now
yield
was
The Truman Budget
dous
p e n
in
;
headed by Reynolds
including G: H. Walker
and
(Inc.)
$16.50
With Carter H. Corbrey
Treasury
much.
as
in
•;
the
is
nation
pleasing
are
>
value $15^
an under¬
emergency.
The other great consideration 's
the stupendous burden of national
nt at
r o
rise
makers
national
than profit and loss
that
Co.
by
group
& Co. and
&
7
•
great
considerations
f
that
the
Two
c o n
the
-
Nevertheless, it
the
more
writing
of
par
March
made
was
convertible
90-cent
of
stock,
new
amount
of reduction.
of
term
bonds
rose about 1/10 of 1%.
The yield
on short and long-term bonds rose
can
instead
public offering of 100
shares
preferred
(4) The welfare
concerned,
nothing
when on balance they
only $108 million Treasury
bonds,
the
average
yield
on
icap
re¬
issue, not
we
business life
all
Formal
000
1946,
defense. A huge debt would hand¬
duction is the
exact
the
country and, ultimately,
pro¬
ceed with debt
end
of
of
stockholders.
about half
basis
Bank,
sold
Se¬
lavish
A
statements
4,
*
national
Whether
In
trust funds in general.
Between Nov. 6, 1946 and Dec.
medium
is essential to
depend.
Money
tary policy, and
insurance and the beneficiaries of
reductions.
tax
in federal finance
course
Your
bank, where it will not be
used against-the owners of life
which produc¬
upon
part of national defense.
a
Put
this
by fixed figures but by available
defense and to production
upon which all
put a
Reynolds & Go. Offers f
Univer. Winding Stock
Reserve
.
to whom it may concern:
Holding end of lavish spending is more important objective than
amou.it of budget reduction, former
Republican Treasury official
scores Truman
budget as excessive, but admits task of
reduction,
without sacrificing essential
government functions and defense
A
country can.do something about
raising the wages of capital. A
„
Turning Point
Formerly Under-Secretary of the
Treasury
revenue
in
Policy based upon the
Whether or not they will con¬ following considerations is in¬
tinue
to
dicated by the facts of record: (1)
operate
accordingly
remains to be seen. If they do, it The nature of deposit liabilities.
would seem appropriate for each
(2) The liquidity of loans and
to extend the following invitation
investments. (3) National mone¬
By ARTHUR A. BALLANTINE *
tive economic
they
rise
loans during that period.
Pacific Northwest Company vSutro & Co,
" '"
•
t
11
t\
1W ^
THE COMMERCIAL & FINANCIAL CHRONICLE
Thursday, March 13, 1947
ful selection of risks to make cer-
Bank and Insurance Stocks
By
E.
A.
VAN
classes Which
—
of
Insurance Stocks
to
interest
are
introduced
which
it
while
worth
seems
mium
income
expands.
phenomenon
plains -the
set
aside
earned
when
in
a
reserve
premiums.
Only
for
un¬
the
pro
fully
earning the premiums, particu¬
larly on three and five-year pol¬
icies. The result is that when the
increases as compared to
•volume
previous
periods / the
amount
necessary to be transferred to the
-unearned premium reserve
-on
great¬
premiums earned
policies. But all of
the
expiring
the expense of
putting this busi¬
ness
on
our
books, agency com¬
missions,
taxes,
salaries,
etc.,
must be paid for in cash at the
inception of the policy and is a
direct charge to earnings and sur¬
plus. The outcome
that
experienced
trial
and
is
contrary to
by most indus¬
commercial
enterprises
which normally expect to show
greater immediate profits on an
•expanding volume of business."
With
which
regard to
the
situation
has resulted from the Su¬
Court's decision in
that insurance is "interstate
preme
follows:
"As
told
we
of the Aetna
com¬
in
you
last year's report, through Public
iiaw
15
the insurance
Rates
ing down
ula
years ago a
the
nite
run
five
preceding
■■••/'".■ "7:7; '■'/
policy-holders and the
is
"The
insurance
companies. in
the country, with particular^
em¬
phasis on those in the fire ihsur-
are primarily interested in
solvency in periods of stress
depression/ Whether * a com¬
makes
profit which may
good years is not so
a
high in
important 7. to
wants
his
the
assured.
promptly.
pay
a
swamped with
He
and
occurs
to
eral
:.'///7'/7/7/-,;
flationary conditions the
it
need
"The
conditions
flected
by
but
not
are
averages
over
re¬
the
by immediate "emer¬
and
inflationary
insurance
to
be
interstate
managements,
agents' organizations, State legis¬
lators,
and
insurance
commis¬
sioners
have
gether in
a
recommend
legislative
been
working
to¬
conscientious effort to
a
model rating bill for
action
by
the
several
States which Will accomplish the
desired results. While it is thought
in some quarters that the
pro¬
posed bills and other regulations
too rigid in the control of the
are
insurance industry, our companies
are
supporting them."
continue
I believe that it wil
to
do
good
a
high-grade honorable
fulfill
was
the
needs
organized
,
and
to
job
BANK
and
written,, the
"The
of
STOCKS
fire underwriters
1946
was
sult
of
Laird, Bissell & Meeds
;
Members
York
Stock
Exchange
Bell
Teletype—NY
re¬
the
was
fires, sharp increase in
repairs, and the increase
will
fare
during
tne
present year. From the fire stand¬
point,.the factors, such .as over¬
crowding of dwellings, high cost
of/replacing damaged property,
inadequate fire fighting equip¬
ment
and
trained personnel, plus
inadequate rates in certain classes/
all of which reacted
to
the business last year- are still
in evidence. If sufficient
progress
is made to
remedy at least par¬
these
have
1-1248-49
conditions,
it should
favorable influence on the
a
company's operation.
;'///
"The automobile business made
major contribution to the un¬
underwriting
fact, greatly
production will-{result
increased
which
will
new cars on
mean
the
the road
placing of
replacing the
your
$561,487,000 in 1946.
This loss trend necessitated
care-
have
out
worn
ones.
beneficial
a
This should
effect; upon
company;"
Many other excerpts from the
reports could be
presented, but
the general tenor would be sim¬
ilar;
the
selections
given ; are
fairly representative,
We offer
result
manufac¬
turers and labor will
try to settle
their differences without strikes
and if this becomes a
old and
000 in 1945 to
r/
BANK
New York St6ck
Exchange
Weekly Firm Changes
j
Service
STOCKS
The New York Stock
INSURANCE STOCKS
has
a*
announced
the
Exchange
following
v
/
Transfer of the Exchange
mem¬
bership of Milton R. Katzenberg
i
111 "fItf
SHEET
10$ mELES 14, CU1F0SIU
Primary Trading
Telephone trinity
titi
'
Markets
—
Analytical and
Sales Service
,
teletype: la jh. la 7r0
.
ioston
•
new york
•
chicago
dallas
•
•
san
u
philadelphia
•
•
detroit
st. louis
francisco
to Philip H.
Steckler, Jr. will be
considered by the
March
c-mhicuhj
Luke
Exchange
20th.
H.
dissolved
as
'
/
Rose
of
^ /
& Co.. will
on
!
be
March
15th.;/
Henry E. Butler, limited part¬
ner in
Smith, Barney & Co., died
.,
•
seattle
central
"The
markets and
trading
and have
an
on
March 4th.
7
7 "Now
world
crops are
and marketed will
witness another
period
of
transition
confusion
and
prices in
U.
false crop
information, will be
market
or
spot-lighted and dealt with
fullest #extent
Mehl added,■
to the
possible under
Comodity/ Exchange
7
/
Act,"
v
v
the
Mr.
/
Although engaged;, mainly
special investigational and
;
forcement
Act
work
Mehl
voked
stated
the
in
en¬
are
the
that
"against
Secretary
in
changes—by growers' organiza¬
tions; merchants, and processors.
"Proper functioning of the mar¬
kets in registering prices
fairly
and
an
1
accurately, and in providing
adequate
hedging medium,
should
mean
economies
to
ducers and processors and
to the efficient
pro¬
an
aid
marketing of farm
products."
/ / 1%
v
.
'
7
•
Sulzberger i
Opens Municipal Dept. |
,
j.
PHILADELPHIA, PA. - Hallo- 1
well, Sulzberger & Co., Ill South f
Broad
Street, members of the
New York and
Exchanges,*
ing of
a
Philadelphia Stock
the'
announce
open- ;
municipal bond depart¬
ment under the direction
of Don- I
aid W.
previously
Mr.
C.
Co. /'7 :/7 /.- / / /
&
Darby
with
C.'
•■■
/
was
Collings l
;-V
'
he
a
group
Australia and New Zealand
o
investiga
of
Agricul¬
BANK OF
! NEW SOUTH WALES
S ;•
(ESTABLISHED 1817)
.
1
>
/ Paid-Up Capital
___.^__^.£8,780,000
| Reserve Fund
.1^. 6,150,000
I Reserve Liability of
Prop.- 8,780,000
■
■
•'?
r
/■
£23,710,000
on
Commodity
Exchange '.Commis¬
sion.,} "}/.»"/
77; /:'■
///,/
7 Mr. Mehl also took the
unprece
dented step of
publishing each
month the aggregate market
posi¬
tions of all large traders in cotton
score
hedged
war,
had in¬
speculation by indir
vidual traders are now
before the
,
being
>
during the
ture declared that excessive
specr
ulation in futures
precipitated the
boom-and-bust in cotton prices
last fall. Proposed
reductions in
futures.
vast
war,
cotton
and
commodities in commercial
Chicago speculators charged with
cornering the rye market." // ;
reader
the
grains,
Darby.
in
Commodity Exchange
1945
the limits
/
possible
S./markets, through
manipulative trading
Mr.
I
in
f
or
of
channels
supplies of
harvested
food
|
the futures markets
against price
1947 crops
a time of
commodity
markets,
important bearing on
prices, ' 7
new
before
as
quantities
other
domestic agricultural
"This fall when
domestic :
situation in -
demand
sumers.
reflected in
are
immediate
and
will
help to prevent excessive
Speculation and resultant* erratic
prices to producers and to con-
war,
conditions
American/
',
com-
modity Exchange Act, supported /
by a constructive public interest,7
food and fiber
scarcity in most of
the world. Now, as before
the
world
.:
.
postwar
is/attended
/;
"Strict enforcement of the Com-
we still have a
long way
to reacfy stable/peace-time
pricing and marketing conditions,
harvested, will be
'
basic agricultural commodities.
price
com¬
agricultural
jt "This spring, before
/
the
supply
go ;
are
; *
;
Some of these extend far
beyond
"But
to
;
com*
of
course
factors.
yganized,
in-
-
modity prices
by a
great many complicated economic/7
-
petitive
open 7
of central
purpose
make prices,.
picture, freely arrived at, for all
to see. 7 Only in America have
tions,
weekly firm changes:
v>"
a
into
are
qnd selling orders, and other sup-1
ply-^and-demand forces which do
supply-and-de-
forces
act
prices, but to register freely and ;
and
openly the various buying:
some exceptions Amer¬
commodity
exchanges
arc
mand
the
„
"The
said./// 7,7,J77,7.7>7/ ///
again registering
under
competitive prices, arrived at
py a fair and* free play of supply
and demand forces.
•
"With
ican
*
in violation
Commodity Exchange Act.}
markets
and
war," 7 Mr.
7 On the basis'of CEA
„,
Comprehensive Dealer
the
agricultural pricing
conditions," Mr. Mehl predicted.
"Any attempt by American or
caused by old and worn out cars
foreign / speculative; interests to
and
the high
cost of replacing take
advantage of these situations
damaged parts. There is evidence to
produce artificially high or low
that
the
automobile;
a
satisfactory
shows that fire losses in this
country increased from $455,329,-
Gibbs, Manager Trading Dept.)
t
unfavorably
general expenses. The National
Board of Fire Underwriters' sur¬
vey
Telephone: BArclay 7-3500
A.
the
great increase ,in
in
,
BROADWAY, NEW YORK 5, N. Y.
|
(L.
New
of
cost
message
experience
generally in
This
poor.
the
number of
120
loss
'
industry
necessity for higher rates is
stressed in many of the
reports to
continues:
Mehl
the
;
stated, "is not to bring about 'high >
prices' or Tow prices' hut to pro¬
vide
assurance
that the prices 7
registered in the cash and futures
.
The
premiums
INSURANCE
in¬
of,
objective i of Commodity >
Exchange Act enforcement," Mehl
generally
replaced
/•>■ 7//H/.;
"It is difficult to prophesy how governmental price-fixing, rationing-/-ahd resultant black markets.
the fire and casualty insurance
tially
Colony
.
reserve."
demands i';
Insurance Company. After
calling
attention to a 53% increase in
net
the
total
a
"The
Commodities
meet."
report to the stockholders of Bos
ton Insurance Co. and Old
of
resulting /from
open
in
stockholders. Another
example is
found in Donald' C. Bowersock
and
merchandise,
was not earned in
1946, but
placed in the unearned premium
and to
way
Mercantile Exchange
: "So: far, .trading ip commodity
come
optimistic note into the following
paragraph: "The insurance indus¬
try is sound. It has given
history.
level
and,, as. a result* a sub¬
stantial part of the premium in¬
Mr.
its
business
gen¬
policies
condi¬
splendid account of itself for hun¬
dreds of years. No business has
cleaner and a finer record over
-
reflecting/two
buildings and their contents. This
heavy increase "of business/was
largely three and five-year term
Toward the close of his
message
McCain introduced a more
com¬
Insurance
an
business
fined
were
$29,000 for manipulating the price
of spot butter on the New York
markets has shifted from wartime
7 literally
increased vol-
creased values of all
is
They should have
now.7•;'*;.■// .} //■./'•/
•//
emergency.
-,
the
pricing and rationing controls to
competitive pricing conditions in
a generally
orderly manners-con/
sjdering/the unprecedented dis¬
ruption of normal trade channels
were
conditions; namely, the high
"The insurance
companies need
rate increase and because of in¬
an
of
ume
to be able to
company
pay when the loss
industry,
ance
Stipreme Court decision declaring tions." /':// <■ /:7.■';
merce.
j
public
and
be
u r e
drawing to a close. The subject operating un¬
is being given careful study by
J. M. Mehl
der the Com-,
Company's management." j
m o dity Ex,//,.. ' ^7.7/';/;.
The following paragraphs,
Change Act, which Mr. Mehl's or¬
taken from the report by Peter J;
ganization enforces, had a busiBerry, president of Security - In¬ iriess
of; about $25,000,000,000 an¬
surance Company of New
Haven, nually after World War*
I,-Recently
give a very good picture of gen-,
jthe markets have approached that
eral conditions which faced
the level
again.
7; / /7 7; ' „!/ 7,
industry in 1946, and of general
/////;
officers
its
t
'exchanges
prospects for the current year.
pany
1
u
c
Informs
your
four million dollars for the Aetna
1
en¬
indications that this cycle- is now
more
"Expenses > are up materially,
having increased in one year over
"What
commitments have been
dustry has been passing through '"Chronicle".
;
cycle of unfavorable experience f ; The boards
which has continued for a period of
trade
and;
of six to seven years. There are
commod ity *
enough with these inflated values
to run off the
largely increased
liabilities with a profit?
v
alone.
7
excessive
a
50% of present-day values
rebuild. Are premiums large
to
-1' vVt'*7
••
.
tered into. The fire insurance in¬
go¬
result of the form¬
a
building cost not
than
gency
of
consequences
billion
a
experience
to
determine
increases or decreases/Five
rate
self
the
over
years'
years
to
as
requiring
industry
given a moratorium until Jan.
.1/1948 during which to adapt it¬
was
alone
•
,
in¬
liability must be
have been steadily
from the trend of losses
the recent years that the fire
,
case
dollars. This
1944
merce," Mr. Tomlinson comments
-as
Outstanding
liability
has
enormously, in the
creased
off.
"Chronicle," Administrator J. M. Mehl of the
Commodity Exchange Authority of Department of Agriculture, emphasizes objective of Exchange Act's enforcement will be to assure
that cash and futures
prices are open and competitive, irrespective
qf their highness or lowness. States strict enforcement will curtail
is ap¬
,
"The insurance industry
with a serious problem.
faced
is
it
„
gard to the need for higher rates.
He
Tata share is taken into income as
it is earned. Hence it is obvious
that there is a long
delay in
ly exceeds
McCain, president "of
the
you
In interview with the
•
ex¬
a
prove
speculation and erratic prices to producers and consumers.
interesting point is \ to ' be
brought nut in the report of Rob¬
WASHINGTON. (Special to "Chronicle")—The next few months
ert C. Ream, president of Ameri/
will provide crucial tests of the
efficiency of major agricultural comcan
Re-Insurance 7 Company 7 as moaity ex¬
<$>follows:
"On
July, 1, ;!1946,; an changes, J. M.
country are predominantly "long"
amendment to the insurance "law
Mehl, Admin¬
or
"short" in the market, .and
of New York permitting casualty
istrator of the
what part of such trading is speccompanies to write fire reinsur
C o mm 0 dity
ulative, hedging or straddling/ /
ance became effective. Considera¬
Exchange Au¬
In January this year the largest
tion is being given to your Com¬ thority of the
farmers' milk producers' associat¬
pany's participation in/this class U. S. Depart¬
ion in the Northeast and four
of business but thus far no defi¬
of;
ment of Agri- /
the Aetna Insurance Group sound¬
ed a Word of
warning,;with re¬
said:
Commodity Exchanges
the
not
or
An
in
all
premium is
written the law requires it to be
that
Ross
Whether
prophesy. However,
rates."
He
following words: "I think
realize
W.
ac¬
counting which results in report¬
ing underwriting losses when pre¬
profitable 7 in
come.
insurance business needs increased
to
along to readers of this column.
/ •
:
"V • : ■
" '
example, Mr. H. W. Tomlinson of Agricultural Insurance,
makes clear in few words a matter
that has puzzled many followers
of fire insurance
stocks, viz: the^
peculiarities of fire insurance
type that
frequency in 1947 will
over
For
.
a
parent
pass
•
to
of
to be less than in 1946 is difficult
In reading over the annual
reports to stockholders submitted
by the presidents of various fire insurance companies, a number of
matters
were
should ' prove
years
DEUSENi
oss
This Week
The Fntue of
ain that in expanding our opera¬
we
assumed
business
in
tions
Now
can
see
any,
Aggregate
7
V
largest cotton traders in the
.
George Street, SYDNEY
LONDON
-29
•
'
£223,163,623
THOMAS BAKER HEFFER,
General Manager
././•./•
Head Office:
l
30th
Sept., 1945
4
newspaper
whether the few
Assets
OFFICES:
Threadneedle Street, E. C. 2
47
Berkeley Square, W.
I
.
Agency arrangements with Banks
/-
throughout
the
U.
S.
A.
...
..
;
>
Volume :165
-Number 4576
:
'THE COMMERCIAL & FINANCIAL CHRONICLE
Edward Jones Is Now
Material Outlook Good
With Weil and Arnold
By
R.
ELMO THOMSON
Vice-President, First National Bank
and
NEW ORLEANS, LA.—Weil &
Arnold, Canal Building, announce
/>/"
Trust Co., Tulsa, Okla;
P Barter
that Edward Jones has becortie
>
warns of piece-meal threat to free enterprise arising from
legislation, court decisions, and. propaganda which
leads Govern-/
-
v
f
ment into business and
>
,i:M ^
handicaps
management,
i Urges
-
i
manage-
and engineering profession,
sociated
with
their
firm
~
sissippi representative, with head¬
quarters
in
Jackson.
formerly conducted
Mr
his
Jones
in¬
own
President, Producers
Council
'
Head of building materials
producers declares shortages are dis¬
appearing and that prices are not likely to rise. Denies
prices have
advanced to point of
discouraging building and predicts, barring
major work stoppages, a million new
buildings will be started in '
as-i
Mis-t
as
By TYLER STEWART ROGERS*
1947 and there should be
vestment business in Jackson and
J}
J
;
downward trend in all housing prices.
a
1
as only makers of jobs, to take/ 1 prior, thereto was with Scharff &
•^?10fia?es
essen^al building materials are disappearing si
Jones, Inc. and the Whitney Trust
reconstructing industrial legislation which will
rapidly that 1947 may well become a record
permit >
home building year witli
and Savings Bank
them to exercise their functions
of New Or¬
along democratic lines. Says laws
approximately
leans. •• A, • A/-''..
one
"million
>•'.* cannot make jrt» and management is being misled by new eco-:/
t-r vy--.-f.vi"''
building materials is dependent
houses
under
nomic theories.
Y'V;-.-;W •
upon
good labor relations antl
active part m
-
*
during the great depression
In
in which there
,
tress
tnan
were more
en-
**
gine e r 1 n g.
T h e
number
*Q———■■
»
our
'
~
nition
1
of
Prior 46 1933, economics
study taught in colleges as
yy univer--
to
a
•
■,
materials
being
^W. Harman Brown, Jr. has be¬
come
was
an
associated with Marx &
of
the institutional
and
in
fession
courses
£s ^economists.
carry
pro¬
through '
or
rials
exceed for¬
mer
duction
'rec-
syndicate
tions
Fiscal Agent for the Federal Land
-to
and
ings.
peak pro¬
in
most
finished
build¬
{.
.
Following the removal of price
;
,
ceilings: on building materials, tho
necessary adjustments have been
made in the prices of those low ;
margin or loss items which coulcl
this
not be produced in 1946 due to
until the present, Banks and Federal Intermedate general state¬
Tyler Stewart Rogers
our economy/has been directed
unsound price controls.
On th^
by. Credit Banks. He also was for¬ ment, notably
in cast iron pipe and hardwood whole the price increases in build¬
lawyers"who are"very largely our
merly
syndicate
manager
for
law makers
andy ecpnomists—riei-! Brown/ • Harriman & Co.,, (now; flooring, but sufficient of- < these ing materials have been surpris¬
engineer i ng"
discon-
;
known.
•.
From that year
specialized
were
a
conditions
.
the year, it is reasonable to antici¬
pate lower costs in many mate¬
duced at rates
Exchange, in the firm's New York
office, 37 Wall Street, as manager
aid
ducing
which equal
Co.,!
members of the New York Stock
at
Assuming that these good
are
pro¬
ords/ "; A :,
eareer;ih busihess.' Since thet
departments. Mr. Brown was for¬
There are;
knowledge of that sub-'
merly associated with Lewisohn &
ject has created a vast new
prO-; Co., and prior to that was Deputy some excep¬
low
th at
A many
',
■
employment in many
contributing industries. ,i, i
other
year some
such
j;figure
;
,*
dependable: import
;
to
-
«.
the
sities declined
•
was no profession
larger number in dis-i
tance Of your. profession
Jn the
economic -future of our nation.- '
A/, ; they engineer-;'•
ing schools of
*
there
a
.
t
continuous
Substantially
all
building
■
,
■
'*
*
'
of enrollees in
»
:
unemployed and
construction.
W. Harman Brown, Jr. ;
Now With Marx S Go.
.
tinued.
Large'
numbers
ther
1 of
young
I
R,. Elmo Thompson
men
d
;
A
^
career
1
A/
-
.
engineering schools of this
tyy try; and that is
than
all
coun-
larger number
a
are",studying .engineering in
the
other countries of the
world combined. Still, T am con-;
fident* there are no managers of
i
or
business or; members/of your, pro-;
i; -4 fession that believe this increased
payrolls.
professions have been jointly
en-;
deavoring to create prosperity and
by regulating business!
through the legal control of hu-';
man
;AA/ profession. | believe it is
a recog-i
A
Opens Bond Dept.
(Continued
on
page
NY Bank
1420) *
At
?
of
the
,Co.
•
;
Yr
New
York
and
office
of
the
Traders Trust
"An address by Mr.
Thompson
atj.the Spring .'Meeting ' of
-
New.York City Bank Comptrol-
n
ythe: lers and ^Auditors Conference will
American i Society
ofj Mechanical- hold their regular meeting on Mar.
Engineers, Tulsa, Okla., March 5, 18 at the Whyte's Restaurant, 145
m
Fulton Street,
a
,
member of the
Finance
on
yi aod Industry, stated that the matter was
already under considera-
-tion by his Committee, but
added*;
y "Now is not the time to' return
1 to
the gold standard."
In pre-i
appear
;
15
New York City. The
be Dr. ^Robert
-
sought
of
has
/ r.
-
-
that
;
-
••
about
to
na-i
^inquiry
was
introduced
same
month
a
At my
request,
it
or so
ago.;
referred to
was
Committee which
I
am
asking to consider this Resolution^
Tl^at Committee comprises a num-i
-
banking
X known
:V-
vv
•
am
present, concerns a matter of
tional
importance.
An
ber' of
-
outstanding ; leaders
,and
finance:
member
Kuhn,]Loeb
relinquished
of
the
>
in
well-
our
firm
of
& Co., who recently
his
rank
Com-
of
^ mander in the Navy and has re1
turned
to
Wall
outstanding
m
A.
-
any
volumes
record
driven
partment
On
fabrication
of
cost
their
cost
V<-i
of
the
top of this the low productiv¬
ity
of
resulting
workers,
(Continued
v
on page
new
financing by the Company
an
offer to sell, nor a solicitation
'■
v'
■'?
s-l
•'
'•
.
1
•
•
•,
of offers to huyt
the Prospectus.
A
/
'
<
■
Chairman
-
'!
^
•
'
/
3
*
; J
-
;
'
-
*
•/
•*'*.
:
■
/
J Rothmoor Corporation
with ' the'
and
„
of
Common Stock
*'
'
.
*
\
,
($«40 Par Value)
careful attention of the
Committee, and may result later;
a presentation to the Chamber
Street,
of
after
service
an
recommendations
?
"The
founders
builded
it
Perhaps
now
our,v
upon
thrift
*; action
Price $9 per
problem./."!
of
the strong
integrity.
and
some¬
The Prospectus may
the
straight and nar-i
path during the past dozen
years or so.
fident
you
neither
other
our
However, I am cony
agree with me that
own
people, nor the
must deal
as
;
closely1
in the- trying
days ahead, long
will have faith in a government
who are lacking in those funda-;
we
to
mental
"The
concepts.
/.
American
Bank;
the
Bankers
Vice-President
Trust
Co.,
Superintendent
; of:
the
of
the
former
and
Banks
President of the Brooklyn Trust
Co.; the senior Vice-President of
* the
Manufacturers Trust Co.) and
2,the Chairman of CIT. That Com¬
mittee graciously permitted me to
has
in
our
Dollar
—the
dollar,
of
our
and
was
•
;
Loewi&Co.
Company of Chicago
But
shall
our
be
on page
"Y
.
,;Y *.
'
Scherck, Richter Company
•.
A
•
Incorporated
•
*
March //,
1947
V »'N ti'
Straus & Blosser
Y
v
;
Ay;-A
Holley, Dayton & Gernon
Woodard-EIwood & Company
that
restored
1409)
/
Mason, Moran & Co.
A
Sills, Minton & Company
Piper Jaflray & Hopwood
faith
and, in
'
a
safety of the investments
banks, our insurance com-
(Continued
/ V
Ames, Emerich & Co., Inc.
deteriorating,
Government,
can
F. S. Moseley & Co.
Corporation
The Illinois Company
.>depreciating ; in
power.
of the undersigned and other dealers
lawfully offer these securities in such State.
Lee Higginson
First Securities
r.'v-r.
;y
been
course,
purchasing
may
more
symbol of that faith in Govern¬
ment/-J Since '1932, I regret/to
state, it
and, / of
be obtained in any State in which this announcement 19
circulated from only such
peoples of the world, with
whom
share
nation
have wandered
we
from
country; the Chairman of the
Chemical Bank & Trust Co.; the
President of the First National
record
well
structureAof
what
J for
this truly vital
upon
v
into deepest confusion. ^ i
125,000 Shares
.V
M
ha3.fi
accounting de-
of
of these shares. The offering is made only by
/r■■•■V,.y:
.
1
and
These shares do not represent
Cqmmitteby Ii^l^n taking the
ceive the
our
2
the
and
/
from A
1419)
1
r
■U,*An address by Mr. Rogers be- A
raw materials to keep pace with
fore -the-rMortgage Clinic spon¬
the high demand, vv
sored by the Mortgage Bankers
•'These
qualifying conditions, Association of America, March 31, ;
mean, in fact, that the supply of 1947.'
This announcement is neither
liberty of offering a definite pro¬
posal, which I am hopeful will re¬
of
the
vf
and have thus faced abnormally
high overhead expenses. The un¬
certainty of wage levels affecting
both the prices paid for materials
in
-''The Resolution I
r
manufacturers A
cases
4
Also, I am told,
information from
President
our
knowledge
senting his resolution, Col. Prof-t
/
.1
,
(2)
facilities
Rosa, Economist, Research Department,. Federal Reserve Bank
of New York. The topic will be
"War Time Banking Developments
and the Aftermath."
,v
before it.
it
fitt said:'
:
:
will
.
Freedom- from work stop•pages either in their own plants or
in the plants of suppliers.
v A ?
(3) Increased efficiency vof fac¬
tory workers which may be ex¬
pected to result from improved
materials supply, better job train¬
ing and1 harmonious labor-man¬
agement relations.
;
Some building materials pro-;
ducers will need additional plant
V
Comptrollers
March 18
Buffalo, offered a resolu- the Treasury Department, Federal
advocating erasing the mone- Reserve Bank, and other sources.
tary legislation of the Roosevelt
"My first effort in this matter
Administration and restoring the was in the nature of an
inquiry.
country to the gold standard. Fred However, today, with permission
Chamber's Committee
>
many
of
11- Kent, who is
,
-
ment.
tion
-
actual market-place values,
in
favorable '•./In
a
Manufacturers
-
Compared to for- ;
black market prices often ex¬
mer
,
To Hold Meeting
meeting of the Chamber of Commerce of New York
State^
in New York
City on March 6, in which monetary matters were "discassed, Col. Edward J. W. Proffitt £
>/,' «. V/.AAA;^-.*'-' <;;,// vA 1 1
■>
industry requires
conditions including: .
.
deteriorating and the erosion of last
A?
should be ended. 4
years
ingly moderate.
to
ex¬
perienced by most builders in 194-3.; ceeding 100% of ceiling;4 limita-£
Nevertheless, to A achieve these tions, • present costs show a drop
ing
the' thousands
Commerce, offers a resolution advocating repeal of laws abolish- yi
ing the gold standard passed under the Roosevelt regime. "Says
American dollar has been
AaV.
delays
..
of
-
Col. Edward J. W. Proffitt, at
meeting of New York State Chamber
v
available
be
protracted
remarkable goals the manufactur¬
department > to deal in State and
Vf laws Municipal securities.
passed during this period by our
l^y^rv^law^ake^v, inspired by
basis
of
-
should
the
.
Proposes Return to Gold Standard
•
;
Phila. Nat'l Bank
speaker
-
avoid,
have
beenforced
to
increas-3 •.
relations, such as wages,?
.V (1) A steady supply of raw ma¬
prices, hours of work, recreation
prices only because of unpredict- :
PHILADELPHIA, PA. — The
and social security* but;
actually Philadelphia National Bank an¬ terials and component parts to: able production costs. They havs
creating no greater productivity nounces
provide continuous . employment experienced interrupted " supplies .>
vthe> formation of a bond and full use of
or
any new things of value.
productive equip¬ of component materials and parts Al¬
The
.
M popularity^in' engineering;is any
; ^ indication
of overcrowding your
materials
creators ' of
Harriman, Ripley & Co., Inc.).
These two,
are,
;>"
in engineer¬ security
(
ing and turned to law and.busi¬
ness
administration. Today it is
s
interesting to observe there are
V 114,000 students enrolled* in the
■
whom
wealth
intell i g e n t
y:|f;aban d o n e
this planned
of
Thursday,-March 13, 1947
CHRONICLE
THE COMMERCIAL & FINANCIAL
1388
,
ag£ group are shown as being in
a
sharp as excess of those of last year and
the year before last. Manufactur¬
Joseph A. Thomas; a partner of
that of new corporate offerings,
particularly in the equity field. ing plants, need new machinery Lehman Brothers, has been elected
a
director of
In the early days of the Mutual and railroad cars have worn out,
the decline in the sale of Mutual
Funds
Mutual Funds
is
not
nearly
Director
Thomas
as
,
Fund
over-the-counter
dealers, principally outside of the
New York area, were responsible
for
a
large majority of sales.
By HENRY HUNT
Mutual Fund Sales Up
600% in Six Years
While such dealers still
Despite the substantial increase in the sales of Mutual Fund
during the past six years, the annual volume is still rela¬
tively small. However, there is reason to believe that the business,
although no longer in its infancy, will experience substantial further growth.
account for
shares
...
'—
♦
—
The
Fund
business,
apd
Mutual
It
1.
BOND
Fund
has
business:
shown
growth in recent
field of
2.
It is
certainty and
such
business.
underwriting
Mutual Funds
to Corp.
Stocks & Bonds
—In Millions—-
946—$370
Offerings
.
$6,737
;5.5%
945,_
6,224
3,177
5.3%
116
1,063
10.9%
942—
73
1,039
7.0%
941-
53
2,620
.2.0%
from your investment dealer or
,
Distributors Group, Incorporated
that: would ,r
did—on the down side!
4V\
f-v
V*
:
.V
National
Corporation in addressing
to dealers enclosed
His
is
interesting
pointed out. For these reasons
the Keystone Investor goes on to
is
such
in
the
over
business
a
reprint of
Portfolio,"
Walter
J.
written
article is
they have increased nearly
It will
contribution toward
a
in 1942, when corporate of-;
ferings fell off 60%, Mutual Fund pressed by the author
a
man
who has spent
sales showed an increase.
:
even
as
years
;
The
upon
request from
investment dealer,
your
NATIONAL
RESEARCH
or
from
SECURITIES
&
CORPORATION
120 broadway,
new york 5, n. y.
table
inasmuch
cance
"Prospectus
above
as
is
of
new
cumulating
signifi¬
corporate
while
the
shares
of
and
sale
of
Mutual
Fund
capital in similar types of
tent
:rom
tual
a
Furthermore, to the
that
it
withdraws
with
more
well
managed
diversified
vestment
fund, • especially
geared to individual needs.
V"-'
*
*
*
represents the investment
curities.
securities
vantages to doctors and others of
stocks,
common
various
ac¬
invest
study than he employs
when purchasing a hat." Then the
article goes on to tell of the ad¬
no
offerings, excluding refunding oprations, represent new capital
raised through the sale of bonds,
preferred
"in
them
will
savings,
se¬
in¬
The
securities
by the
Paul H. Davis & Co., headed a
which on March 7 made a
public offering of .100,000 shares
of common stock at $12 per share.
Proceeds
from
the
financing
will be partially used for com¬
pany's present building add ex¬
pansion program y and for addi¬
tional equipment. The remainder
wili be used for general corpor¬
Keystone
Investor,
issued
sponsors
the
Funds
are
of
17 months ago corporate prof¬
rj,.
Currently,
rate
market
was
capital.
sales
of
Mutual
back
to
where
it
its have been improving. Estimated
running below the peak
early
is
per
share
the
1946.However,
Dow-Jones
earnings
on
stocks
Industrial
Partner in Jacobson & Co.
Robert J. Jacobson, member of
.
the
Stock Exchange,
partner in the Ex¬
York
New
.
.
'
,;v ."••■4
will become
change firm of Benjamin Jacob& Co., 61
Broadway, New
York City, on March 17th.; Mr.
Jacobson was formerly a partner
in Luke H. Rose & Co. and prior
With Timmons-Polk
;
»
;
with Benjamin Jacob-
was
Co.
&
son
(Special to The Financial Chronicle)
a
son
thereto
f
'
-
'
■
ZANESVILLE, OHIO ^- William
Mayor O'Dwyer to Address
Fee With CG. McDonald
""(Special
;
to The Financial
,
Fee
has
associated
become
formerly with Smith, Hague
:.;v 44'
was
William O'Dwyer, Mayor
City of New York, will, be
guest speaker at a luncheon meet¬
ing of the. Municipal Bond Club
of New York to be held March 24
12:15
at
George
p.... m. at the Hotel
in Brooklyn.. •
4 ;
St.
Joins Fairman Co. Staff |
(Special to
Tax
Financial
ANGELES, CALIF.—Fairman
& Co., 210
West Seventh
Street,; members of the Los An¬
geles Stock Exchange, have added
Arthur A. Gleason to their staff,
With
Witherspoon Co.
(Special
LOS
ney
to
The
s" "
CALIF.—Syd¬ With Marshall Adrian Co.
ANGELES,
(Special to
C. Krams has become affili¬
with
ated
Witherspoon
Inc.,
was
Street.
&
The
Financial
Wood has been added to the staff
of the
Marshall Adrian Company,
in
Aver-
Taft Introduces New Housing Dill
Revised
Taft-EIIender-Wagner measure follows lines' of original f4
bill, but Sen. Taft points out some significant changes.
March
that
bill
new
Senator
10
Robert
A.
Taft
of
with
Ohio,
Senators
(S. 866)4 In
"S. 866 continues public housing
counterpart V of
a
will
introduced
be
at the
consider,
New
York.
The
bill
contains
changes from last
bill, which
was
ses¬
known
the W-E-T bill after its three
NEW
YORK
I
NK
au¬
thors, Senators Wagner, Ellender
and Taft.
-4
■
"The
SHARES OF CAPITAL STOCK OF
as
bill, S. 866," Senator
Taft explained to the "Chronicle,"
"is substantially the W-E-T bill,
but with some definite changes. It
sets up an overall housing author¬
ity, a National Rousing Commis¬
new
sion
consisting of representatives
FHA, the Federal Home Loan
Banks, the Federal Public Hous¬
ing * Authority,
the
Veterans
Administration, the RFC, and the
Secretary of the Treasury—and
Of
Keystone
Custodian
.
the
President
The
national
may
add
others.
for
four
however,
not exceed
struction
Prospectus
from
^
your
may
he obtained
local investment dealer
or
The Keystone Company
of Boston
50
;
— ■
Con*rea« Street, Boston 9, Mass.
Prospectus
your
be obtained from
may
local investment dealer,
,
*
or
plans, such as those in
the Department of Commerce.
;
-
'
*
„
"The
present bill," Mr. Taft
continued, "changes slightly the
FHA
THE
PARKER
CORPORATION
ONE COURT STREET. BOSTON 8, MASS.
provisions, in particular in¬
creasing the lowest interest rate to
4%—as
contrasted
to
the
other
v
full's
provision
some cases
of
for
interest
only. 3%%.:
.
in
residential
construc¬
tion .during a
preceding
like the preceding year,
average
of
the
■■■"4;'
years.
the
preceding
three
44
•
period
or
'4.. 44""'' V"*#
■'Additional subsidies under the
bill
would be $26,400,000 -a
for the four years. This-is
an increase of 20%
over the pro¬
vision in the W-E-T bill, to take
new
year
care
of increases in costs.
"The
-
,
'
^1
again
the urban developments plans* but
very much
simplifiedSenator
Taft
new
bill
contains
>
44
observed.
S.
866; the Senator further ibbserved, again contains the yield•
insurance
research
a
10% of total con¬
say
of
practicable
activities, in view of other
in
writing
on a
percentage basis,
namely that public housing should
search
J
125,000 units a
We would
years.
limitation
housing authority's
job will be chiefly that of coor¬
dinating the several agencies con¬
cerned, giving them more author¬
ity than previously contemplated
and cutting down the
scope of re-^
unas
rate of
same
year
sion's
ST'<KT
"
F.
Colorado National Bank Building.
Hope & Co.
numerous
WALL
Chronicle)
COLO. —Albert
DENVER,
Com¬
West
Seventh
formerly with
215
He
pany,
'.I"
Chronicle)
Financial
of
48
Chronicle)
LOS
by Representative Jacob K. Javits
Los Angeles
with
Company,
Guardian Building, members of
the Detroit Stock Exchange.
He
Hon.
this
\
::£f..
McDonald; &
G.
C.
Chronicle)
MICH.—Edward H.
DETROIT,
of the
expected
-—
^
& Co.
Municipal Bond Club
On
Chicago
•
"
With
H
incorporated
Lines,
Inc., The Flintkote Company and
National Airlines, Incorporated.^
Ellender and Wagner, introduced the new housing bill
the House of Representatives it is<£-
HUGH W. LONG & CO.
of
American Ex-
Joseph A. Thomas
,
V
& Co.
di-
a
group
:
of Keystone Cus¬
todian Funds, shows how although
the market, the sale of Mu¬
Funds also represents new
also
rector
p,o r t
Wrisley Co. Stock
one
ex¬
.
Mr. Thomas
a
to how
New
York.
by their W. Harper has become associated
understanding of mutual
be noted that i better
investment funds. Wonder is ex¬
also
cy
Jack¬
of
son,
outlook.
Timmons-Polk,- Inc., First
ing the past six years have risen peared in the Jan. 4 issue of the National Bank Building. Mr: Har¬
:!rom 2% of new corporate offer-' "Journal of the American Medical per was formerly with the First
They believe this National Bank of Zanesville.
ngs to 5V2%, while on a dollar Association."
basis
a c a n
chibald
Paul H. Davis Go. Offer
an
J.f Smith /which (ap¬
di¬
created by the
death of Ar¬
is
letter
a
v
a
goods
demand.
In
great
of
rectors, to fill
when capital and consumer
ate purposes.,
article called "The Doctor Reviews
to
note that their annual sales dur¬
600%:
board
that it is hard to visualize a
severe
depression
in
business
say
Research
Securities &
With approximately $1,300,000,000 in Mutual Fund shares now
it
:•
t
Mutual Fund Notes,
i
outstanding,
63 Wall Street, New York 5, N. Y.
beat >: the
market, only to discover that they
'4
*Standard & Poor's Index.
stocks
ual
4.7%
169
943-
a prospectus on request
292
944_-
higher
a
'
Corporate Fund Sales
Offerings*
speculative apathy
present is the- fact
commission than
they do on listed securities.
Last, but not least, the relative¬
ly good market performance of
Mutual Funds during the
1946
decline in stock prices has proved
to
be
an
object lesson to in¬
vestors who tried to pick individ¬
of Mutual
New
Sales of
the
as
ceive
■
of
Group Securities,.inc.
• St.
Louis, Mis¬
souri, by the
housing shortages, too, it
besides
Light
Company,
that salesmen of these shares re¬
gaining added momentum
in relation-to the
small size.
edly helps to further the sales of
Mutual Funds in a period of un¬
than the
Gas
to be satisfied,
farmers
are
particularly those of
Another factor which undoubt¬
underwritings.
new
adaptability of Mu¬
of
needs
the La clede
spite of present problems, which
they allow, they abserve there are
many
reasons
to be optimistic
medium to
■'\N
years
more
says
of accounts,
consistent
more
in recent years more
member firms have rec¬
equipment of utilities,
the Invest*, r. There are the
the
has
as
tual Fund shares to certain types
com¬
annual sales
of
Mutual
shares with new corporate
offerings, including stocks and
bonds, reveals two facts about the
RAILROAD
probably
than half of new
more
ognized the
.
following tabulation,
paring
business,
insurance
bilTs
provisions, althoughithe
authors
whether
had
some-1
doubt
<
the
provisionsi are; in ;a
form to be -used Hbry
"We: hope
companies.
insurance companies may
improvements to
make
suggest
likely
it
that they will avail themselves of
the bill's terms.
44'
;
"Also, the bill contains provi¬
sions for farm
housing, which are
in the* nature of proposals for
ther studies by the Banking
Currency
Committee,
.
and
Which
to
S. 866 has been referred."
fur¬
-
-
[Volume 165
Texas
Number 4576
THE COMMERCIAL & FINANCIAL CHRONICLE
Leave Laredo
Group of Investment Bankers Ass'n
p.m.
April 13th—Arrive San Antonio—
7:00
To Hold 12th Annual Meeting in Mexico
,
12:00
*'•
The 1947 Annual Meeting of the Texas Group, Investment Bank¬
Association of America will be held in Monterrey, N, L. Mexico
from April 10 to April 12. The Casino de Monterrey, within a few
blocks of all the leading hotels, will be convention headquarters.
Attendance is by invitation only and is limited to the available hotel
accommodations.
-YYY
Y '\AY.Y.Y ••Y:;,:v..
Tentative plans are for the pro-3>—
ers
to open with a cocktail and a fee of $15 will be charged
party in the lounge car of the for each registrant's wife.
"
special train at 6 p.m., April 9.
One-hundred forty-seven rooms
Business meetings will be held in have been reserved at the follow¬
the mornings of April 10 and 11 ing hotels: Gran Hotel "
Ancira,
only. Afternoons will be free for Hotel Monterrey, Hotel Colonial,
gram
Round
trip
fares
man
are
J. P. Morgan Left $16 Million
a.m.
railroad
and
pull-
Gross, m Million Net
listed below:
Lower berth
(for one) $31.11
Section
—(for two)
71.52
Drawing Room —(for two)
Large security holdings shown in
proceedings.
59.68
Compartment —..(for two)
84.23
optional trips to scenic
Horse Tail Falls and Villa de
Santiago, a quaint Mexican vilfor
?
courts,
.
which provide excellent accom¬
modations, will be available for
any overflow, and are within 20
lage, Huasteca Canyon and Chip- blocks of the downtown .* area:
inque Mesa.
California
Courts, a and
Regina
<Mr. Ramon Beteta, Minister of
Finance of the Republic of Mex¬
has been invited to be the
principal speaker at the lunch*
eon April 10.
A special cocktail
ico,
The appraisal for New York Estate Tax
purposes of the estate bf
the late J. P. Morgan is to be filed
shortly. The tax proceedings will:
show that Mr. Morgan left a nei®
—
—,
riving from St. Louis by Sunshine
Special (Missouri Pacific), from
and expenses,
Dallas
by
Texas
Special
souri-Kansas-Texas),
estate, after deducting taxes, debts,
of $4,642,791.
The
(Mis¬
from
and
of
driving
through
in
their automobiles will be asked to
accept reservations at the
above
the
8:45
Sunshine
Special for
special
a
from
car
St,
for
out-of-
all British
on
available.'
City radio and stage stars as parlors
entertainers.
Y:;Y'Y AAY^^YYaY'V questing single
Members have been invited by
Cuauhtemoc
the
Brewery
be
to
rooms
sarily be assigned
and
roommate.
a
Friday, April ,11, therefore, that
Mexican luncheon every effort to
a
which
dens.
typical
will be
in the world
best known
the famous
of
maker
the
held in their gar¬
This Brewery is one of the
and is
Carta
Blanca and Bohemia Beer.
*
.
•
Saturday,, April
12,
will be
available for a trip to Saltillo, 65
miles from Monterrey,
Country
Monterrey,
golf at the
Club
and
i
other entertainment.
-
reservations
the
they
room
for their
All of the above
obtained
understanding
vacated
be
neces¬
It is important,
were
distinct
will
double
arrange
roommates.
own
a
re¬
members -make
their guests on
for
Members
by
3:00
with
that
p.m.
Saturday, April 12th because of
their usual heavy week-end busi¬
special train will be operated
San Antonio to Monterrey
from
follows:
guests
out-of-industry
is
necessary
blanks be sent
that
the
Going
are
eligible to attend, and out-of-state
guests will be limited to the res¬
ervations available. Therefore, it
that
apolication
in immediately so
April 9th—Leave San Antonio
v
channelled through the
fee
10:30 p.m.
(Customs Inspection)
Leave Nuevo Laredo 12:00 p.m.
•
,
of
„
,
.
Returning
\YY-Y:Y'
$35 will be charged
registrant,
convention
each
YY;
.
AAAYHY"
$9,000,000.;;
New
form,
and
IBA be forwarded
sible
can
as
soon
as
be completed.
be
by your
Committee.;
train
reservations
handled
of
Art,
Memorial
Morgan
& Telegraph
(formerly
Houston
D.
Park,
Glen
26,845
Hartford,
Conn., $1,000,000.
Harvard College,
will
American
,
Galveston;
ment
cessor
of
* ■;
Natural
'
.
of
f Academy
San Antonio; B. F. Pitman,
name
Pitman
Jr.,
Arrive Nuevo Laredo 10:00 p.m.
(Customs Inspection)
Company,
&
San
they
at
Matinicock
FUNK,
Funk
National
San Antonio 5,
&
White,
907
in
his
taxable
the
Morgan's interest
mainderman of
Building,
Bank
Mr"
a
Estate
as
| Shakespeare & Strasburger, Inc.,;
has been fearned with offices at 1
Wall 'Street,
conduct
a
This announcement is neither
an
offer to sell,
nor a
New York- City,
securities business.
Frank
are
J.
Strasburger,
All were for¬
associated
with
Strasburger & Co.
Leroy
Y
solicitation of offers to buy, any of these securities.
YY; The offering is made only by the ProspectusY Y '
YYY;
r 100,000 Shares
:
j;v "vY
■
Y*Y:■Y
Universal Winding Company
A
good stock last year may be
investment
mon
only a mediocre
Change is the com*
all markets. Thats why eternal
today. And vice versa.
denominator of
vigilance is the price of investment success.
we
maintain
a
and unlisted,
,($15 Par Value)
It s why
with ft
large Research Department
full staff of trained
tive values of all
90/ Convertible Preferred Stock
>
Price $16.50
analysts who weigh the compara¬
kinds of security
investments-—listed
big and little. Why not
keep abreast of the changing
-
-
Copies of the Prospectus
Fenner & Beane
of Investment Securities
and Commodities
Underwriters and Distributors
Brokers in Securities
may
be obtained from the undersigned.
Reynolds & Co.
Harris, Hall & Company
G. H. Walker & Co.
(Incorporated)
,
70 PINE
STREET
Y
NEW YORK 5, N.
Uptown Office; 730 fifth avenue
•,
"T-92"
i
Merrill Lynch, Pierce,
1» 1947 to date of delivery?
let us help you
opportunities?
Address Department
Per Share
(Flos dividends accrued from March
Y.
March
7,
1947
*
,
'
'
to
Of¬
Shakespeare,
Leroy A.
ringer, Secretary.
merly
benefit of Mr.
Morgan's sister, Miss Anne Mor¬
Texas.
Point, Glen Cove,
Treasurer, and Thomas J. Moeh-
re¬
trust created by
father for the
pl^ce
Shakespeare and
Strasburger Formed
President;
Included
sold
was
for $113,000.
ficers
was
Frost,
British Government
and 37th Street
Morgan's will of $439,939.
reservations
;
'
for $234,000 and his country
include charitable bequest in Mr.
for
requests
should be addressed to CRESTON
H.
the
same
fo war service in 1940. Nor do
Antonio.
All
to
the
bearing
If
Morgans town house at Madison
Avenue
Rome,
in 1929, nor the sale for a
yacht
Manu¬
The return also shows that Mr.^
nominal consideration of the sue-*
Com¬
Raytheon
Corp., $77,994.12,
$540,000.
Museum
shares
1,441 shares United States Steel
Y:'
V
;
History, $450,000.;
&
Co., $141,125.00.
facturing Co., $171,136.88. V
Wadsworth Atheneum,
Entertain¬
Muir, Russ &
*
17,500 City & Suburban Homes
Co., $111,562.50.»
• •
,
;
Funk,"Chairman, Funk & $375,000. :YVv
Y^^lY"'
White, San Antonio; H. H. Dewar,
Trinity College, Hartford Conn.,
Dewar, Robertson & Pancoast, $190,000.
:..;:^YY.. YVA^Y/San Antonio; Elmer A. Dittmar,
To many other similar institu¬
Dittmar & Company, San Antonio;
tions, $3,700,000.
Judson S. James, Jr., James &
The foregoing figures do not in¬
Stayart, Inc., Dallas; J. Marvin
clude his gift of the yacht "Cor¬
Moreland, Rotan, Mosle & Moresair" to the United States Govern¬
land, 1
:
Y
Cove, L. I., $1,650,000.
pos¬
Entertainment Committee: Cres- Y American
Edward
Y
1,000 shares American Telphone
v yYc'AY'"
Hospital
Insurance
"
.
All invitations,
and
Museum
,
York
3,840 shares Aetna
Co., $210,000.00. YYYY
Y,■ YY;Y.:
Lying-in Hospital), $4,000,000.
;
that all necessary details
so
ment
73,514 shares Dwight Manufac¬
turing Co., $1,121,088.50.
V;
Pierpont Morgan Library,
Metropolitan
completed registra¬
tourist permit form,
requested train accommoda¬
tions together with check made
payable to the TEXAS GROUP,
tion
pany,
6:00 p.m.
t
quested that
.
Entertain¬ April 12—Leave Monterrey
ment Committee.
A
—
p.m
approximate number of April 10—Arrive Monterrey
to
7:00 a.m.
a
"mV
guests may be deter¬
mined. These invitations are to be
for
6:30
»
Arrive Laredo
invitations that may be issued
out-of-state
$14,750,000. K,
at $81,225.
Other large security
holdings consisted of: ;yvYY'Y
' :
a
The
;
of New; York
stock valued at
$241,605 and 285 shares of Guar*"
anty Trust Company stock valued
ton H.
Due to limited accommodations
no
large attendance is ex¬
pected, and since it is necessary
to guarantee a minimum number
for the special train, it is re¬
The train schedule is
and return.
as
Since
hotel
ness.
A
:
employees and others.
177 shares of First National Bank
state guests if sufficient applica¬ assets
aggregated
the
sterling
courts.
party and luncheon is being ar¬
tions are received promptly. Y
equivalent of about $515,000.
Due to the shortage of accom¬
ranged for the ladies on the 10 th
It is necessary to have tourist
in the patio of one of the hotels. modations no room will be as¬
;
The information filed with the
permits issued by the Mexican tax appraisal will show that dur¬
A cocktail party and dinner-dance signed for single occupancy, and
Consulate to make this trip. There
is" scheduled
at the Casino ;de all reservations for rooms will
ing his lifetime Mr. Morgan gave
is a fee of $2.10 .for each tourist
f Monterrey for Thursday evening, necessarily be ; assigned before
away to charitable and public in¬
permit issued..*,Y'v; YYyYYYYA
stitutions $35,655,000, as follows:
the 10th, with outstanding Mex¬ departure.
There - will
be
no
ico
trust
Among other properties includ-'
ed were tangible personal prop¬
erty valued at $2,566,893, most of
which consisted of paintings, ail*
verware and other objects of art.
:
Security holdings valued at $6,436,757.11 included 18,750 shares
of J. P.i Morgan & Co. Incorpor*
ated capital stock valued at $3,*'
656,250. Mrvi Morgan also owned
figures are exclusive
property valued at about $1,-
British death duties
$3,255,880. Also
of approxi*
at
a
benefit of various super*
annuated
100,000 owned by Mr. Morgan in
England consisting primarily of
his estate "Wall Hall," which was
acquired by the public authorities
of
Hertfordshire
County.
The
joined to the special
train in San Antonio
for the
The above
of
is
mately $1,100,0000 established by
Mr. Morgan during his lifetime
$7,384,309 and the
was
appraisal
included
Federal
$1,929,968. The gross estate
before these deductions, as shown
by the return, was $16,021,482.
The Missouri Pacific will make
Louis to be
tax
were
Houston.
available
the
His interest is valued in the
gan.
New York Estate Tax was $2,064,414 and the debts and expenses
the North, the 8:45 Texas Special
for Dallas, and the 3:30 departure
of
the
Southern
Pacific
for
'
of
amount
Estate Tax
Houston by Southern Pacific, may
Courts.
Members
appraisal
estate tax
The above schedule is arranged
so that
members and guests ar¬
pleasure trips and sightseeing Bermuda Hotel, Hotel Interna- make connections. On the return
trips to points of interest and cional, and El Paso Autel.
trip the train will arrive in San
golf. Transportation will be avail¬
Antonio in time for the departure
The
following
auto
able
1389
A.
THE COMMERCIAL & FINANCIAL CHRONICLE "
.1390
Thursday, March 13, 1947
v«.
Franklin T. McClintock
[
Harriman
Franklin
President
•Although Illinois Central's efforts last
structure
and
lessen
the
of
burden
to simplify its debt
year
maturities
in
Co.,
the
early 1950s
through a bond exchange offer failed, the management continued
its program of debt retirement.
There was a reduction in debt,
including the leased line stock certificates, of just under $15,000,000
bringing the total outstanding with the public to less than $242,000,000 by the 1940 year-end. The <♦>
^
reduction represented the payment job in the last six years it has by
of some $5,131,000
of maturing no-means been finished as yet.
equipment trust obligations, and Non-equipment d e b t* including
the
purchase
retirement
and
roundly/ $9,000,000 of mortgage are
exchangeable
into
bonds and $830,000 of leased line, afriounted to $238,130,000
certificates.
»
About half of the mortgage bond, or
*
purchases and retirements
$50,319,000.
which
to
These
an
the bonds
were
exchange offer had.
been made around the middle of
the year. The balance of the mort¬
gage bond retirements was in the
1953-1955
maturity
group,
the
largest item being $3,466,000 of
the Refunding 4s, 1955. Outstand¬
ing bonds maturing in the years
1953-1956, inclusive, were reduced
to $65,025,000.
Last year's debt
program
brought to a total of
of
bonds,
in
than $97,006,000 the reduc¬
tion in non-equipment debt since
the beginning of 1941.
While
done
a
the
■^
management
has
amounted
who
are
to
the, vast
fixed
He
cash
Brown
earnings
Ripley In 1943.
.
\
\
tions in
Walt
is equivalent to
Disney
share
than $70 a
more
stock
common
each
indicated down to around
are now
Common
$11,000/000, compared with
000,000 a decade ago. H
Hoe & Co., Inc.
Old Class "A"
New Class "B"
~
'
Earnings
Co.
$17,-
its
V.,;
of
through the
expedient
of
tax
credits.
As
the Federal income tax debit
$7,000,000.-
over
month
of
company
the
In
reported
20% in gross
the
current
a
i
MEMBERS
120
Broadway,New York5, N. Y.
1
So.
LaSalle
St., Chicago 4, 111.
the
vision
opening
American Optical Co.
Talon, Inc.
H Missouri Pacific RR.
5i/4s
H. H. Robertson Co.
Van Tuyl & Abbe
72 WALL STREET
;:
:
new york 5 h
Telephone
Teletype
HA 2-6622
ny 1-1499
was
RR n J
1st Mtg "A" 4s 1993
,
First
Mortgage Bond on Main Line
Properties of Strategic Nature
^Priced
to yield
Analysis
better than 6 '/i %
on
Expenses
from
the
Farm
war.
indication of
.
;
Teletype NY 1-1063
high level
through the Gulf ports.
All in
all, it seems reasonable to
earnings around $7
to $9 this year and over the vis¬
look
for
It
is
the opinion of
many analysts that such potential
earnings should justify materially
higher prices for the company's
stock.
,
The
has
Financial
ILL. —Charles
become
O'Gara
Salle
Chronicle)
&
affiliated
in
the
Cruttenden
r
monwealth
tion.
.
was
Expands
the
across
-
it
and
are
*
,
you
1
of
volition? H
is it oral?
your own
or
•
'HI'
.
v
/
;
Cruttenden
&
Exchanges,
of
offices
Street, Santa Paula, Calif., and at
Hills, Calif.;
S.
dell.
All
nected
were
Trues-
previously
with .First
con¬
California
Co
The Beverly Hillso office! be
directed by Gordon Buckhout who
was
&
-
;r:
Is the statement that the Attorney General of the State!
iof New York is
charged with a similar responsibility as that /
;
;which characterizes the Securities and
Drive, Beverly
;siori
.;
Walden and Donald C.
Attorney General attempt- I
Is he trying to enforce the Federal Investment
really behind this questionnaire?
the opening
at
854. Main
announces
branch
What is the New York State
,
Will he please
point out whe^ in the New H
York State Martin Act, he has the
authority to ask this type J|
of question?J Whom does he think
he is fooling? Who is
Co., members of
441 North Camden
i
previously with Livingstone
and
the
forthright
;
If by that- statement
A
Exchange Commis-;-
National Association of Securities
and true statement?
the
Attorney General
Dealers
Acts
of
1933
Attorney General of the
and
the
NASD
the
same
and
r
r.
Federal
1934, in effect, give to the
State of New York and the SEC
functions
or
functions
that
;
ark
H.
place, the Securities and Exchange Act set?
7:
comprehensive plan of securities regulation which it
directs may be in part
accomplished through the promulga¬
up
WASH.-R.
&
Co.,
Robert
l..
Martha
Fox
Com¬
Inc.,
:
L
a
tion of rules
by the Securities and Exchange Commission.
[
Maguire,
has
-Officers
Emacio,
and Pauline G.
are
President
Vice-President
Emacio, Secretary-
Corpora¬ Treasurer. Mr. Emacio was for¬
..."
merly with d. j. MacGiUivray Co.
change Commission
The
provisions
as an
administrative body.
of the- Martin Act
are
quite
limited to circumstances wherein either
a
committed,
'
;l
limited,
reason
or
the Attorney General has
fraud has been
to believe
that it will be committed and
is, therefore, in contemplation^
The comprehensive scheme of
regulation
contemplated
r '*■
X
(
reasonably comparable, he, the Attorney
General, in our.f
opinion, doesn't know what he is talking about.
;? ?! ■
In the first
Co..
•
to H
means
assert that the New York State
Martin Act and the
Securities
a
/
been :-H : The Attorney General of the State of New York does
formed with offices in the Radio not have the power to make
any such rules nor is he vested
Central Building to engage in the with the authority; that resides in the
Securities and Ex¬
Investment
*
the/east,
say
Advisors' Act?
the New York and Chicago Stock
Co., 134 South securities business.
with
:
(b) Is it offered by
ing to do?
Pacific Coast Offices
j
Emacio
•
Street* members of the
past
implications
/h (c) Is it in written form
^
SPOKANE,
with
Chicago Board of Trade. Mr.
honey—tricky, to
1
financing,./together
r. l. Emacio & Co.
(Special to
.
somewhat obvious, we"
"
r
£'
' '' V' I
'
V"V/V'"''1:
'A"'"V:'V/it
Do you furnish financial advice to
your clients?
Xt:
Is this furnished at the
request of the client?
•'6.
proceeds
;
Now With Alfred O'Gara
Alfred
Broad Street
New York 4, N. Y.
5 Telephone BOwling Green
9-6400
a
a
think the
we
UO
Paula office will be
territory have improved maunder the management of Walter
materially over a period of years
A. Anderson. Associated with him
reflecting educational programs
sponsored by the road itself. There will be Tim McLaughlin, Eduard
is every
of trade
Where, how, and from whom;
—
the
La
IB
in
/ y
,;
7;
.
.
subdivisions in order -to put that:one
:
The Santa
CHICAGO,
stocks-bowds
conditions
.
properties."
on a
considerable industrial growth in
parts of the service area and this
jtrend has continued since the end
:
repeat th^t question here:
,
stand¬
long-term basis the
traffic outlook for Illinois Central
appears favorable. There has been
'
,
•
^
Request
guaranteed railroad
near-term
a
i
l{d) What - statistical staff do -you
employ? What
vide funds for additions and Im¬
;
|\ : services do you subscribe to?
! V
!
//
provements
to
the
company's
(e) How are you compensated for this service? V
January, 1846.
Both
point and
Fox
i
because
of
than double the
more
ible future.
DL&W—Lackawanna
subscription
share.- The
from the recent
$3,500,000 of 2%% .first
mortgage bonds to institutional
investors, are to be used to pro¬
sale
beginning of the year/ Even with
this distortion net income for the
of
6
'
with
the
1946 report made no pro¬
for wage increases which
net for
:
.stock
:
Question 6:; is
later made retroactive to the
were
month
Armstrong Rubber Co.
<
per
existing complaint or in the
to believe that fraud has been orf/
l
:Question 4 goes into tiie sqbject of margin trading, loans,
against security, and.clearances/^-r
each V10
for
of any
reason
i::
Proceeds of preferred and com¬
naturally considerably
heavier than they were a
year ago
as
V The
$34.50
is
mon
were
$ew York Stock Exchange and other
leading Security and Commodity Exchs.
of
Feb¬
rights expire March 7, 1947.
rise of almost
revenues.
record
share
held.
price
was
year
new
one
a
after taxes amounted to $7,463,000
Plomb Tool
of
Service
holders
25,
shares
fact, whlie net income
of
stock
to
1947, warrants to sub¬
scribe for 64,438 additional shares
of common stock, or at the rate
last year amounted to $4.67 a share
and the road was not one of those
that realized profits
matter
Public
forwarded
common
ruary
the common stock
on
has
absence
for a description of the
recipient's business.; The question is in 4 subdivisions. If
we are correct in our
contention, the proper answer to that"
question would be "None of your business."
with accrued dividends.
case
«
.
/// Question 3, for example, lasks
January"1 31,
1957, "and
$103.5^ per snare, in
Southwestern
.....
"
-
'
;
y/' One look at the comprehensive questionnaire brands this
argument as being untrue, to be charitable.
:
/ / V //
thereafter at
out-4
standing. Moreover, fixed charges
Productions
i.
the
on
before
:
any
did he get it?
preferred, stock is re¬
$105 per share on or
new
the
tion which he seeks upstate.
share and accrued dividends.
The
1
-
challenge the statement that Mr. Goldstein already ?
connection with New York City
dealers, the informa¬
has in
deemable at
beginning of 1941
•
V We
-
by Dillon, Read & Co. Inc. on
February 26 offered to the public
a
new
issue of 20,000 shares of
3.90% preferred stock, of South¬
per
since the
*
will be committed?
A group of underwriters headed
plications
The
/
in the Martin Act, upon which Mr. -Goldstein/
any authority to conduct routine investiga¬
absence of
western Public Service Co. at $102
debt
'/.
/■•
relies* is .there
has very favorable long-term im¬
Bullocks, Inc.
facts."
same
Southwestern Preferred
the equity holders.
reduction in non-equipment
-
already known to us about our
City dealers/Much of the questions deal with
facts periodically gathered in similar fashion by your
organ-f
Ization a$ well as by the Securities and
Exchange Commis¬
sion;; I am charged ,wiih a similar
responsibility and you J/
can- readily understand;
my need to be familiar with the*;
Dillon, Read Offers
to
parts of that letter.
New York
//Where
being put
are
some
•from these dealers which is
Co. in 1928 and con¬
named Vice-President of
was
Harriman
of resumption of dividends
at this time, there can be little
question but that the use to which
the
analyze
us
./We
cipally in the buying department.
stock.
common
♦
"
joined Harriman
Ripley & Co., Inc. where his ac¬
tivities have been centered prin¬
not
completely
quote: /"The circulation of the questionnaire is but a/
He entered the invest¬ jroutine affair with the
purpose of furnishing us with data:,
im¬
have
charges
Let
;•
til 1934 when he
hood
Cons. "A" 5s, 1927
„
.....
tinued with that organization un¬
/Granting
that the debt problems that still
remain militate against the likeli¬
Chicago Railways
F. T.._ McClintock
graduating from Princeton Uni¬
Brothers &
highly commendable debt found adequate reflection in the
road's
aft-
versity. 1
ment banking field, with
Illinois
Central's
debt status and the sharp reduc¬
in
Uni-;,
far....
er
com-
an
of the''general questionnaire."
Attorney General is wrong and that his
ommunication does not support his thesis.
-
two years
The
use
After going over the letter carefully, we are
.
pub-/
/' ' yJiMX'x
attempt to bolster his posi* J
onviheed that the
in
provement
tion
"
verities
$41,667,000.
that
believe
.../..Mr. Goldstein's letter is
and
:
were
full.;/:■'/H r' 4.-.
jticn and justify the
Co¬
at
issue of March 6, 1947, these letters
our
lished in
graduate
Harvard
railroad analysts
many
•/ In
native
a
lumbia
working capital at the end of last
There
Committee/National Association of Securities Dealers//
Goldstein, Attorney General for the State ;
pf New York.
/
"
///] /h-«' •■/.:
Spokane,
work
nany' has ample funds with which
to continue these retirements. Net
year
13
Washing
" ls
be worked out.
can
the
on
and Nathaniel L.
ton, engaged-,
management will continue with its policy
of open market purchases until
such time as some new plan look¬
ing towards solution of the prob¬
lem
we refer,/
subject of this questionnaire have been ex-/:'
phanged between Francis K:rnan; Chairman of District No,;
letters
com¬
Mr. McClin¬
tock,
expected then, that the
,
more
due dates.
Prlor
/'/Since the publication of the editorial to which
.
announced.
/al1ls .^ue Z1 ,.the
in';
Ripley &
* /
1
yearf 19o0-1955, inclusive. Unforthe 1950-1952 maturity group, re-1 tunately, the road s earliest maducing the amount outstanding to {turities are not, subject; to call
were
the
from page 1375) ; J; . / /
is
pursuing, is an unwarranted and indefensible
inquisition and a calumny against the securities industry.
ley, Chairman,
at the
Of this,.$115,319,000,
lend of 1946.
\
Harriman
has*"
on an
,;v,///'{Continued
beneral
Vice-
pany's Board
0 f
Directors,'
Joseph P. Rip¬
the leased line certificates which
of
McClintock,
elected
been
to
Ripley Dir.
T.
of
Inc.,
Moie
,
'
Volume
465f Number- 4576
THE COMMERCIAL & FINANCIAL
CHRONICLE
1391
by the Federal Securities Laws is in nowise embodied in thje alL our vigilance no such alarming
shenanigans have come
New York State Martin Act and despite the fact that such to our attention as
those now indulged in by the
Attorney
great powers of regulation exist in the Securities and Ex¬ General of the State of New York.
y
• ;
change Commission and, therefore, that such marked respon-*
;
sibility rests upon it, this Commission has never had<the ^-■ Plainly, he needs immediate curbing. - ;
Itemerity to broadcast generally a Questionnaire as compre¬ fe|^^Codayrs problem of the upstate dealers in the State of
New York
may tomorrow become the problem of the entire
hensive in scope as is the general, questionnaire of the -New
State, and if not nipped in the bud, in course of time, become
York State Attorney General.
the problem of the securities field in
every State in the
/J,;' Those engaged in the securities industry at large would Union. ;
V..
— ■;••• /stand for no such nonsense, we are convinced.
r,
Against this invasion of the freedom of doing busi¬
We wonder whether the upstate dealers were tackled- ness,against this
usurpation of power without warrant in
by the Attorney General's office in the belief that they are law, against this treatment of those in the securities field
as if
not united in an organization and that, therefore, he
they were a crew of knaves and thieves, immediate
might
^
get by default what otherwise would be hotly contested.
} steps of intervention should be taken. " V
//
As to the powers, duties add
We can understand such
privileges characterizing
practices in a totalitarian gov¬
the activities of the NASD, an Amendment to the Securities ernment. In a
democracy, however, based upon a constitu¬
Act of 1934 accomplished this. That Amendment is known tional form of
government, these have absolutely no place.
as The Maloney Act and is Section 15A
WE AGAIN POINT OUT TO THE ATTORNEY GEN¬
It provides for the creation of a national securities assoy
ERAL OF THE STATE OF NEW
Blair (Co. Adds
,
Meyer to Staff
Blair & Co., Inc., 44 Wall
Street,
York City, announces that
New
Philip R. Meyer has become
asso¬
ciated with the firm in the
department.
He
trading manager
& Co.
trading
formerlyL. Stone
was
for
•
.
■
Joins Curb 25-Year Club
Raymond C. Bailey has com¬
pleted 25 years of service on the
staff
of the New York Curb
change and has become
the
of
Quarter
a
Century
Ex¬
member
Club
of
the
Exchange, Charles E. McGow-
an,
Secretary of the Exchange and
,
ciation
or
associations
and
YORK
defines
duties, privileges and obligations.
their
rights,
The NASD
was
powers,
OF WITHDRAWING THIS
THE
President of the club, announced.
WISDOM
Mr.
Bailey is in the Curb securi¬
ties
QUESTIONNAIRE.
department.
formed
pursuant thereto. •
■•vv
; :.y The NASD may amend its existing rules and make new
rules after submitting the same to a vote of its
membership.
~
-
This advertisement
Both the SEC and the NASD
regard the latter as a vol¬
untary : organization and contend that upon application for
membership in the NASD the prospective member, by sign¬
and is under
is not,
securities
for sale
ing the application blank has bound himself to abide by the
Constitution, By-laws, Rules and Regulations and the Rules
of Fair Practice established
or
no
as
securities. The
!
by the NASD..; *
/v^;y
) y -Therefore, when the NASD; issues any questionnaire,
the contention is that it does so pursuant to its
By-laws and
Rules of Fair Practice, its Regulations and Constitution or
Charter, and upon consent of the membership. „■
If that be true, so
long as the activity is not illegal, the
members may consent, if they so wish, to stand on their
heads. That's their prerogative.;;; J,.;M
Where, in the Martin Act, does the New York Attorney
General find any:" comparable or; similar "provisions or
authority?.
i;>.
construed
circumstances to he
as, an
offering of the following
offer to buy any of such
offering is made only by the Prospectus,
a
solicitation of
an
•
*
.
100,000 Shares
..
Allen B. Wrisley Company
How, in view of this picture as it exists, can the Attor'r
ney General factually represent that he has "similar respond
sibility'* to that of the Securities and Exchange Commission
Corporation)
:
Common Stock
;
(Par Value, $1
m Price $12
■St.
■
-l
•:•••
■.
'yt 7;
-.>•
•...
Share)
per
Share
per
*
V
l
^
(an Illinois
>
Li
^
"•■
■:
^.,4. - u />v- •
> --
.
v,
■;
; :.,>;■■■
,
;
v!'
■.
■
■.
,■
V
,
...v
•
-
Copies of the Prospectus may be obtained only from such of the undersigned
;;;; as are registered dealers in securities in this State. 7 '7^
v.
•
and of the National Association of Securities Dealers? X
vgy;;Despite,the extensive powers of the NASD, it has never
submitted to its membership a -general questionnaire so
: extensive in scope as the one circulated
by the New York
; State Attorney General. hX; ^,;X
'XX:
;
Goldstein contends that this type of questionnaire
is* \vell- establishedt and' was used, during the re'ginie. of •
th!^
-Hon. Albert Ottinger in connection.with a survey of
invest-;
nient trusts and, also;; in a survey subsequently continued
} by,the. Hon. John J. Bennett. *
/
"
^
;
'
!
.
Paul H. Davis & Co.
;
?
Bacon, Whipple;& Co..
.»
^
-
Kebbon, McCormick & Co.
£ :
'
"7^
Match 7, 1947
t
-
'
This advertisement is not, and is under
t ; We first call attention to the fact that in those surveys
there was a definite matter under investigation,To wit, inves-
'.merit
trusts. What is, Mr. Goldsteiri
hasn't told
-
us as
yet.; Secondly,
we
v-
yL;
investigating how? ; He
point out that the
mere
the. Court's decision that
says this can be done on the scale
and under the circumstances that Mr. Goldstein is doing it? >
-
>;■
-•
,
v-
>.
.->f
addressed, and. in the absence of
frauds have been committed
any reason
offer to buy
an
offering offlhe
as, an
any
of such
;
; ♦
•
.
;'V
:' ";v'';
•«•••.'•
••
..
..
'
/V,
•
-.v
...
-
,
;
"
-
■
,
•
/
«
*
•
■.
.
.
,.
1
.600,000
5% Cumulative Preferred Stock
(Par Value $100
:/L'y
to believe that
per
Share)
Price $100 per
are.about to be committed.
,,
v
'
\
:■
Share
We quote again from Mr,.Goldstein's letter: "I believe
'I;,
-
or
solicitation of
Moore-Handley Hardware Company, Inc.
I
Where is the Court's decision that says a fishing expedi¬
"
circumstances to be construed
securities. The offering is made only by the Prospectus.
:.V:^
.n>r''
tion may be conducted by the Attorney General, addressed
to a particular
segment of the securities industry, in - the
absence of any existing complaint against those who are so
:
no
or as a
"
v
•
fact that questionnaires were used before, does not constitute
cither primary preceded
-
following securities for sale
.it to be in the
public interest that the Attorney General be
aware of the financial condition of the
security dealers who
come under his
jurisdiction by virtue of the Martin Act...It
is also in the
85,000 Shares
public interest that the Attorney General be
fully aware of the type of business conducted by: the indivi$qal dealers, their trade practices and the type of literature
They use in soliciting the public to buy securities."
y v
Now, that's all very interesting and we do not wish to
disturb Mr, Goldstein in the comfort that he may find in
bis beliefs. :
•.
;
■ X
: Xv' ;X;;V';:
-
•
Common Stock
(Par Value $1
;
'-'7.
'
y
•
"
'»
•
per
Share)
,
;
Price $7.50 per
;
7* '
.
'
0
Share
'
However, where in the Martin Act does he find author¬
ity to probe these beliefs?
;
^
X,
Copies of the Prospectus may be obtained in any state in which this
announcement is circulated
such state.
only from such of the several Underwriters as are registered, dealers in
v
the absence of the legislative mandate, it seems to
height of brazenness for the Attorney General to
to be the
compel dealers and brokers
;
to file
an earnings statement and
gall!
-J
other states were i to. adopt the same high-handed
methods, where would that land the securities industry, already badly hamstrung?
i,; *
a
list of their customers.
v
t; We have watched closely the burden of over-regulation
-Mrhich has been placed upon dealers in
securities, but during.
r;
};
Equitable Securities Corporation
That is
Paul Hi Davis & Co.
March
12, 1947
Johnston, Lemon & Co.
*
^
*
1
>
S
4. ti
J.:
1392
THE COMMERCIAL & FINANCIAL
Bovenizer 50 Years
Securities Salesman's Corner
By
There
JOHN
times when
are
it is
DUTTON
celebrated
only advisable to mix pleasure
with business but often you cannot avoid certain
obligations. If you
handle such opportunities with care they can be very beneficial in
creating good will but if you overplay the social end of it you may
">•
.
,
*■
■
is
a
difference
between
salesman of securities and
almost any other
commodity or service. People must have confidence
in you before they invest. If there is
any indication that you are the
type that is a playboy or an over-spender it may be that your pros-;
pective customer, or your client, will have doub|s about your ability
to advise them concerning their investments.
^
\
When
it
comes
to
entertaining
clients special
women
must
care
be taken to stick to business.
It is sometimes advisable tp invite your
wife providing she is a good mixer.
Many a man has discovered that
his wife can be a very great asset in
creating good will and con¬
fidence, especially
I've discovered that my lunches
actually cost me nothing since I
practice of taking out customers once or twice a week.
So many salesmen go to lunch with other salesmen ill their office.
have made
a
Lunch time is valuable business time if
you use
I
As far-as gifts are concerned
it.
(The SEC doesn't
with this
agree
viewpoint I am sure) we believe in them. But if you do send some¬
thing to a customer always have a reason. If someone invites you
to dinner send them
something that the wife will like. Mrs. Cus¬
tomer when she is on your
side, is your best advertisement. Christ¬
gifts are also in order. Some salesmen don't believe in them
and they are entitled to their
opinion. We've tried both giving and
abstaining at this season of the year and have found that people do
mas
appreciate
ment.
,
If
'
gift.
your
someone
that
and
give it to
give
never
as
sort
a
of
pay¬
for business.
did
once
tidy profit out of
a
valuable and he
was
But
was
a
me
a
good turn that resulted in
a
certain stock.
He had
He
of
and net
cover¬
the
just made public.
and
in
be¬
1911
of
he
egraph Company, Pennroad Cor¬
poration
and
Seaboard
Surety
Company.He
President
was
i;he
Investment Bankers
tion of America in 1935.
Bovenizer
Ministers
good
hat and suggested that I needed a new one as the one
wearing was rather shabby. He took me to his store and as the
salesman came up I asked him to show me the best hat in
the store.
a
was
cer¬
tainly entitled to it considering the valuable information he
gave to me.
is
Associa¬
;
man
have
can
is
his
ability
judgment indicate the time
will
building is
will
come
M. A.
your
to
create
and the
best form of
The best asset any sales¬
good
will.
Tact
and
advertising.
Do it
right and
back to you multiplied
many times over.
Manley & Co. In
}
good
place—money invested in good
Frank W< Bennett & Co.
New & Larger Quarters
;
it
\
Being Formed in NYC
DETROIT, MICH —M. A. Manley & Company, investment brok¬
being
ers,
are
now
occupying
new
and
larger quarters at 648 Buhl Build¬
ing, according to announcement of
Milton
A.
of the firm.
Frank W. Bennett & Co.,
Inc., is
formed with offices at 30
Broad Street, New York
City, tc
engage in the
Officers
are
securities business.
Frank W. Bennett,
Manley, senior officer President;, Edward
A substantial increase
in office space was necessita'ed
by
|additions to the staff in the past
G.
Ringrose.
Treasurer;
Committee
and
of
Missionary
Committee
of
the
the
activities and customer service.
I
4
1
N.
va n
d
Ji.
His clubs
are
;
the Union
Club and Scarsdale
y"
;V
League,
request
Atlantic
wage
;
&
incentives.
•
Brooklyn Chapter of the
National Association of Cost Ac¬
countants will conduct another in
its
series
of
technical
sessions
scheduled for the 1946-1947 sea¬
son.
•
j.ne
.,»*•
-V: v
y
meeting which will > be
preceded by a-dinner*will be held
at the Park-Vanderbilt Restaurant
,
in Brooklyn
19, 1947 at 8
The
on
.
principal
Mr. Richard S.
-
>
.
speaker
will
be
MacKenzie, Chief
Industrial
antic
Academy
of
and Social Science.
man
He
the Production
of
of
Trade
Man¬
the
Political
is
Chair¬
destined
time
the
to
to
be
heavy
;
construction
and
functions, he has had an
opportunity to pioneer in
the application of industrial
and
management
engineering
tech¬
niques.
Greeny & Stockly
Los
Angeles Stock Exchange
SPRING
LOS
ST.
ANGELES
Teletype:
Market Quotations
and
TRINITY
LA
Information
5761
all California
;
""'f\
^Britain's Intrinsic
••
Weakness
us
..
Securities
New York Stock
Exchange
membership of William W. Goldsborough, Jr., as of- that date. -Mr.
Greene
was in the
past a partner
in .Bliss & Co......
.
,
,
".Y.7
is the threatened economic
outpost of civilization.as'we know it.
commentary of the prospects for the
-
credits-^-unfortunately
a
already becoming
uncomfortably possible.
as
'V
-
~
contingency which is
At that time we will have
decide once-and-for-all
whether we "accept our own
destiny as
the chief world
power
no matter what it
costs"—in the words of
Chairman Eaton of the
House Foreign Affairs
Committee.
to
Stockly will acquire
the
68
on
NY
Phillipse E. Greene and George
Stockly will form Greene &
Stockly with offices at 120 Broad¬
way,
New, York City, effective
J.
March 20. Mr.
14
in
'
-
.
of
shop
warehousing,
packaging,
•
•
SO.
/§
great natural resources,
England must depend more and
more on a favorable
export trade balance.
But, whereas the pre¬
war deficits were
largely met from shipping income, she lost in the
War 6 million
dead-weight tons of that shipping. She had to sell
$4%':
billion of overseas
investments^ At home she has an acute
manpower
and work-desire
shortage. But the crucial problem continues to
center about her balance
of payments situation
with the rest of the
world. The present
nettlesome difficulty in
regard thereto iStliat
too high a
percentage of her imports is
coming from Jiard currency
nations, (44% of the total from the Western
Hemisphere),;and those
countries are in turn
accepting only 13% of her exports; Hence
England has been
accumulating a favorable balance in soft currencies,
while running a deficit in
the hard currencies of
the United States*
Switzerland, the Argentine, Canada, and Sweden.
o
Hence our real
"Big League" world responsibilities and
deciffUms
will begin in five
months when under the
terms of the Anglo-Amer¬
ican
Loan, Britain is called on to make
sterling receipts from cur¬
rent transactions in
any currency area without
discrimination; and
in any event when
she has exhaused her
quite-recently given U; S*
and Canadian dollar
,
Refining Company
where, in addition to a broad ex¬
areas
1377)
liberty* when we must pin our faith on an institution
authoritarian, however inept, as the British Labor
Government. '
Without
1931, Mr. MacKenzie has
the
page
-.v^y
Sad, but all too true,1 is
Fuller ton Oil Co., Com.
Members
3
case
world's
unusual
626
some
'
•
But the real crucial
sore-spot .for
collapse of Britain herself, our
service
Wagenseller 6 Durst, Ina
for
come."
•
Chairman of the
Annual
National
Time
in
(Continued from
y
yy'-" ..y.yy
7
Managers
Philadelphia
and
transportation,
Co., Pfd. & Com.
to
of Turkey,.whom
Egon Kaskeline in last
"Chronicle" termed, -"the vital
road-bloc against Soviet ex¬
pansion," the British
"receivership" will cost the United States more
cold cash. In addition to our
post-war "deposit" of $40 millions, the
Turks are asking for a full
half-billion to keep their heads above
water.'
;"yt .
:.y .v y :yy;.:yy ■/ y-.y •
Chamber of Commerce and Board
of
work,
Arden Farms
our
gas appliances and
station equipment is
week's
Pennsylvania,
and1
;
.
And again in the
:
graduate of
a
Association
perience
American Fruit Growers
Inc., Com.
to
plants,
compressor
was
inexorably forced on the government by its
yy 7y-y -yy/y^-v-y/vy-^.vy<< 7^yy
vy-yy3
While England's aid to
Greece has thus far amounted to the
equivalent of $225 million, and we are now
called on to give at least
$300 million in addition tq the
$479 million we have given to them
since V-E Day to prevent a
Communist accession, the worst
part of
the situation is-Ihe evidence
of "complete,
inability iri financial ad¬
ministration repeatedly given
by the .Greek Government in
coimecy
tion with, the circumstances
surrounding our ; Export-Import credit
negotiations.. ■ y yy
Wednesday, Mar.
p.m.
;
weakness.y
been Chief Industrial
Engineer for
the Atlantic
'
attention
butane
why
the India decision
the
Co., Inc.
LIBERTY STREET, NEW YORK
5, N. Y.
reasons
Germany they have
been operating 200
important industries in their zone as Soviet-owned
trusts, confiscating property by way of
making themselves sole owner.
Actually the Soviet's allies are footing the
reparations bill to her by
furnishing the necessary imports to
Germany,,; including food and
other indispensable
supplies! the payment for which is not-going to
them but to Moscow.
yi.y
vyyyy y;:";7iVy ':y
..y-3;,
.77;
The British Emergency
vVy.-;yyijj
England, of course, represents the major
emergency; highlighted !
by her throwing of the Greek mess
intq our lap; the announcement
of her grant of
self-government to India, her discussions with
Egypt
and Burma, and her
giving to UN trusteeship of
Tanganyika, Togoland, and -the Cameroons.
The'vigorous denial here by Hector
McNeil, British Minister of State, that these withdrawals
were forced
by economic, financial, or commercial
weakness, was almost simulitaheously emasculated by Stafford Cripps' plea to Parliament
that
Co. official
job evaluations and
j
55
and
demand.
Moscow's attempt to institute this
technique in the Italian
situation was largely thwarted
by the Council of Ministers, the issue
is about to be
fought out again and more importantly now at Moscow.
For the Russians have
stretched ad absurdum the definition of
"rep¬
arations," as practiced from Berlin to Korea. In
The
Since
Herrick, Waddell
called
and
the
•
Refining
will discuss
Study and Methods Conference of
Society for the Advancement
cf Management.
1
<
;
have
of
Inch pipe line for the
transports-^
tion of natural gas is a
pertinent
While
Brooklyi Uiit (NACA)
Second
on
our
one
propane
MacKmzie to Address;
Committee
*Prospectus
It appears that the de¬
preference
is
Fi¬
Country Club.
American
*DenmanTire & Rubber Co.—Common
facil¬
field
,
Baptist
member of the American
Airline Foods Corporation—Common
distribution
this
example.
we
Bankers, Bond, Recess, Downtown
Athletic, Sleepy Hollow Country
agement
-
and
existing trans¬
in
programs
might otherwise have been
delayed.
The
recent
purchase
from the Government of
the Big
Church Extension Society, and a
director of the Caledonian Hos¬
Mr. MacKenzie is
the University of
-
the
which
mand for
That
*
The Federal Corporation.
that
bilitation
of
by
Board
Greater New
of
fact
•
■
aware
public
the
Northern Baptist Conven-
Protestant Fund of
in report: ;
long been
have
portation
of
Engineer for the Atl¬
Refining
Company, who
Schlemmer, Secretary; will discuss the
question, "Are
France E. Dreyer, Assistant Secre¬ Job Evaluations
and
year of GI's in training and a gen¬
Wage in¬
eral expansion of
AJ1 were previouslyywith centives Profitable?" '
: s
organizational tary.
Vice-President
John
clamoring
long-term effect of the
ities of natural gas would be un¬
able to carry the postwar load that
Would be imposed upon them
,
Chairman
York, Inc.; Chairman
IF YOU GIVE IT IS ALWAYS
ACCEPTABLE AND PROPER PRO¬
VIDING THERE IS A REASON FOR IT.
year, according to the
Total sales for 1946 Were
states
"We
That
me.
situation
for it. The
the
I was
When he asked my size I said it was for
my friend not for
$25 which I spent for his hat was well spent—besides he
consuming districts.
the open, and make
ap¬
parent the need for taking
drastic
steps, to improve and increase the
nation's gas supply and
provide
greater facilities for
getting :£as
to the markets that are
ser,
of
ion; Campaign Chairman of the
me
me.
to
approximately $67,000,000.
present gas shortage will, there¬
Discussing the recent gas crisis, fore, in our
opinion, be that of
H. N. Mallon, President of Dres¬
speeding up expansion and reha¬
.
of the
well
at
Finance
emphasis
speed the transportation of
gas
while backlog has remained
steady
George W. Bovenizer
He is a di.r*.>. -. i;
rector of the Western Union Tel¬
he
for
That is why
$54,783,188, equivalent to a quar¬
terly average of $13,695,797. Mean¬
partner.
Mr.
facilities
plants.
Dresser equipment
designed
upon
to
gas
have placed so much
out into
previous
a
as
we
"The current gas crisis has
serv¬
ed to bring this whole
report.
was
firm
stand-by
as
from
.
rate established at the end of the
admitted! to
he
serve
municipal
669,845, continuing the accelerated
the
Syndicate De¬
partment.
In
929
$516,574
year ago.
Sales for the first quarter of the
current fiscal year totaled
$16,-
Man¬
came
ager
company's previous year,
earnings of $1,037,235 for
1946, according to the company's
Quarterly Letter to Shareholders
firm's
business
corresponding period
its entire fiscal year ended Oct. 31,
all phases
ing
of the
er
va¬
depart¬
ments
in
-v. Dresser
Industries, Inc., showed net earnings after taxes for
the
three months ended Jan. 31, 1947, of
$728,581,: as compared to a net
loss of $516,574 for the first quarts
<
information, pital^ Brooklyn.
thoughtful enough to telephone to
Several months later I called him and asked him
if he wou'd take lunch with me. When he
assented I met him in his
office. On the way to the restaurant I asked him if he
knew a
place to buy
boy.
nance
has done you a favor let them know about it with
One of my customers
making
my
thoughtfulness.
You should never
pay
/
of¬
an
worked in
rious
it pays dividends.
(If she reads the "Chronicle" better cut this item
out unless you've had an extra
good month's business.) '■■■.
as
fice
among women clients.
Sometimes when you spend
money on a new wardrobe for the Mrs. yoif may discover that
some
897
,
the
Net earnings for first quarter $728,581 against loss of
association
years'
started in
zer
■
,
There
50
Expects to Benefit From
Natural Gas Crisis
;
Mar. 7
on
with the investment banking firm
of Kuhn, Loeb & Co. Mr. Boven-
not
do yourself more harm than
good.
Dresser Industries
U Kuhn, Loeb & Go.
George W. Bovenizer
Thursday, March 13, 1947
CHRONICLE
.
" *
'
on
f^?ie. Stassen's
missions of
cisely
as clear
.
.
and others may tour all of the countries of ^Europe
elaborate economic
inquiry, but the problem is pre¬
and un-economic as
that I "
.
...
y
~r."to, caHssigs iwri*irtTt;
r.^u
Number 4576
yolume 165
-'TJl. rjrrr W£T7
„
THE COMMERCIAL
& FINANCIAL
CHRONICLE
He says further:
"Nothing con¬
structive Would be
1393
I
'
ernment .securities.
enable the
accomplished
by the proviso that the Reserve
System must purchase government
open
by
Banks
was
not
to
in
its
bor¬
a
me
as
using
the
mended another tnree^year exten- '*
of> this authority, was con-
sion
Reserve
shelter from the peo¬
ple, and as a means of
monetizing
is that in making such
pur¬
means
It
markets
money
rowings,
securities exclusively in the
open
market. About all that such a ban
(Continued from first page)
,;
Treasury to escape the
Federal debt.
fused,, peinaps "tue senate and
Congress may cio .oetter and will
,
separate
the
ot /'one-
puncipu
day" overdrafts from
a
of
means
mentioned below) be indicate clearly that he does not chases a commission has to be
escaping the open mimey markets
paia
and of opening a aoor to direct
tested in the open money markets trust free open markets for
to government bond dealers."
Overdraft Procedure
gov¬
ernment
monetization oi the Feueral debt.
or shall the Reserve Banks mone¬
borrowing. He does not
That
statement seems to ap¬
There
was
no
objection, ap¬
Nor
does
Mr.
Eccles
remind
tize tne Federal debt up to five like the prospect of the
controls proach the demagogic.
It suggests parently, among the close students
billion dollars from time to time at that the lenders might exercise. that
Congress tiiat the Treasury and
perhaps these bond dealers do of the Federal Reserve System and
Reserve
rates to
be determined by the He wants government
authorities, under Sec¬
"manage¬ not perform services that warrant the money markets to a use Oi.
tion 43 of the Act of May 12, 1933,
Treasury and Reserve Authorities? ment."
commissions. Furthermore, such a these so-called
"one-day" antici¬ have the
; Stated in other words: Shall the
authority, witn the ap¬
notion is not "about all that such pation certificates.
Not Economic or Political
On the con¬
proval of the President, to make
people of the United States be
a ban means."
What is involved trary, that practice
appeared tc direct
purchases from the Treas¬
deprived of the power to exercise ???'??? :K'' Democracy
is that the Treasury should
receive almost
overdrafts
'
.
the direct
purse
in the
them?
control
which, Treasury borrowing
open
markets. would give
the
pursues
a
government,
litical
Eccles' Philosophy
Eccles
Mr.
doctrine that is hardly
a country
desiring
republican form of
appropriate in
accompanied by economic
.
..
y
That is
the public
over
philos¬
democracy,
recognized
in
and po¬
which
principle
the
should
be
that the
go into
the open money
markets, use the
mechanism which these markets
universal approval.
provide, and subject its borrowing
policies to the tests of the money
markets Just as other borrowers
have
to
meet
these
tests,
Banking Act of 1935,
paying
public purse is the peo¬ commissions and
all other regular
managed currency
ple's purse and that they should
expenses.
Otherwise
the
school of thought which takes it
tests
Keep control of it,
cease to be made, and the
for granted that it ist unwise and
govern¬
It is not too much to
say that, ment officials are
freed from the
undesirable for the -'people to be
in
principle,; the Eccles doctrme restraints to which they should be
able to exercise an effective direct
is
that;' ofDictator governments, subjected.
control over the public purse. The
^V?;;
fhere is 'nothing in
any of his
f Mr.
Eccles says still further: That statement
money of the nation, in the opin¬
arguments that would not
, ;
:
.
ion
of
the advocates of
a
"man¬
aged" currency, is not really the
people's money in the sense that
they may properly have something
to say
in
a
direct
how
to
dividuals
as
officials
in¬
government
administer
purse.
purse
mont'c
and
way
the
as
public
fit like
tailor-made glove the iron fist
of any totalitarian Dictator.
a
^
Control through their represen¬
tatives in Congress is not
enough
for the
people of this country in
monetary and fiscal matters. These
representatives may
cease
at all.
The public
responsible to the desires
mean to them the govern- constituents. The
Not
1
nrtf
rrnrco
ment's* purse,
tho
'
to
be
of their
people need and
npnnl o'c
"What is involved in the proposed
bill is not a question of
monetary
wish to be free from effective di¬
controls which people
rect
might
exercise in the open money mar¬
monetary standard and the
tunity to
say
"yes"
oppor¬
and "no" in
the open money markets.
Other-
vise, an Administration and the
They wish to manage the
people's representatives in Con¬
public purse as they see fit. They
gress may run away with the.peowish to borrow at low interest
ple's purse and endanger oy ruin
rates so that they can borrow more
the nation financially. ' \ 1\
than probably would be the case
The contrary view is well pre¬
if the interest rates in the open
sented by Mr. Eccles in ms testimarkets were permitted to control.
money
of March 3 before the
House Committee on Banking and
Concept of Managed Currency
Currency. He says that "it is un¬
These concepts of a managed
realistic to presume, as this theory
currency are a part of the basic
does (the theory that government
concepts
of
a
governmentallymanaged economy. The Eccles no¬ oorrowing should be subjected to
the test of the market), that if
tions
as
to
why the Treasury
should not go to the open money Congress votes for expenditures
but does not vote for sufficient
markets for its funds are in prin¬
taxes to cover the expenditures,
ciple the same as those involved
the money market should erect
when a government deprives the
barriers to discourage the prac¬
people of a gold-coin monetary
tice."
standard.
Such a standard gives
Fallacies of Eccles' Airuineiifa ^
every individual some direct con¬
trol over his government's man¬
■■.The answer, to;•]th"a,t js;very sim¬
agement of the public purse. The
ple, in the opinion of this author?
gokUcOin standard ; places great If
Congress ignores its responsi¬
limits on what the government
bilities to the taxpayers and pro¬
managers of the people's public ceeds to scatter their money in a
purse may do without receiving
profligate
manner,
the people
sharp and effective warnings. It is should erect barriers to discour¬
for these reasons that every Dic¬
age the practice!
That is precisely
kets.
.
tator and every government pur¬
suing the program of a governmentally-managed economy must
deprive the people of a gold-coin
standard.
" •
,
,
.
Depriving them of
ercise direct controls
..
power
over
to ex¬
govern¬
ment
borrowing is merely' one,
and a similar, aspect of the man¬
aged-economy, managed-currency
concept.
The issue
is
basic.
Purse either
is
or
ple's
It either is
-\:
.
purse.
is
The
public
not the peo¬
or
is not
something to be managed and
manipulated by government of¬
ficials according to any principles
that jthey may choose; to employ.
The people; either have a right to
exercise. direct controls
over
the
use, of (their
purse or
they do not.
The Eccles, position is that the
Pepplh) should not have this right,
,
at:least in; this five-billion-dollar
case.} His position in this instance
is that the
public purse is the gov¬
ernment's, purse, not the purse of
the American
people—the taxpay¬
ers
aptd the lenders.
wnat they
should do.
the Secretary the
Just about the reverse seems to authority to
require these banks to
be the case: A basic question "of purchase these certificates
directly.
monetary theory or policy" is in¬ Actually, the Federal Reserve Act
to
ple's purse.
Mr. Eccles'-
and it has
It is not
a
already
was
been
management
of
Businesslike
the
public deb|.
because
operation.
Mr. Eccles says that "the direct
purchase authority is in effect
merely an overdraft privilege with
Reserve
Banks—a
available credit for
use
line
during World War I
was
them
r«,
ran
seems
of
4.u>
•
money
market
Mr. Eccles is
All that
saying is that should
to stabilize the
during taxpaying
be
which is
reported to have recom-
the
an
give the Treasury
at the
an^/advantages
Reserve banks beyond the ;
His other statements in the
V;
Such very-short-time overdrafts
j
desirable
seem
as
means
a
disturbances
markets.
But
a
in
the
ing from the often money markets*
for monetizing the Federal, j
debt free from such Restraints as
and
.
the
upon
might; place
gerieral; public
'Federal
which
are
borrowing—all
people's
provided ior in H. R. *
purse.
;
offering is made only by the Prospectus.
constitute financing by the Company.
11,
1947
Gory Corporation
securities.
"There could be no such
market ["an entirely unregulated
market"] except at the risk of
chaotic condition in the bond mar¬
ket and incalculable added costs
Common Stock
the
($1 Par Value) 1
government in managing
debt." Mr. Eccles over¬
his case when he speaks
Price $10 Per
the public
states
ket."
The
Share
unregulated mar¬
important point, how¬
Copies of the Prospectus may]
^
be-obtained in any state in -which this
.only from such of the several Underwriters as are
announcement is circulated
registered dealers in such state.
1
Glore, Forgair & Co.
principle what Mr. Eccles recom-
■
r,
:
of
2233—cannot be defended as sound
177,000 Shares
He says:
to
money
device for escap¬
amplify his opposition to an open
market for government
,
of
avoiding unnecessary and undesir¬
able
March
main
over¬
"
drafts.
I
practice"!
That is the
position.
;;
i
should
convenience involved in the
offer to sell nor a solicitation of an offer to buy any of these securities.
The sale of this stock does not
nub of the Eccles
*
theory of it, should not be conXX
X?
procedure in central banking or iriprovisions of H. R.
If the House Committee, the Treasury's management of the
.
.
.
age
engage
testimony seems to
'M,,
advances
these
on
fused with the
The
in an orgy of
spending the people should not
have the power to exercise direct
controls, in the open money mar¬
ket, over this spending. In his
words, "it is unrealistic to pre¬
sume
the
money
market
should erect barriers to discour¬
Congress
neither
an¬
arranged that th&y will not;
so
2233.
periods and the flotation of gov¬
This advertisement is
over ¬
ticipation of tax receipts or re¬
ceipts from securities in the process 'of sale to the general public,
banks,
or
same
bill authorizing Treasury
drafts at the Reserve Banks in
bonds, notes,
con¬
not longer than one day.
Their purpose was
a
banks from the
if needed."
to have
;
/
,
It should not be difficult to draft
not
Treasury of "any
other obligations
which are direct obligations of the
fused the provisions in this bill
United States or which are fully
with the matter of Treasury over¬
drafts which were utilized up to guaranteed by the United States
1935 chiefly in anticipation of tax as to principal and interest." This
bill provides the Treasury with
receipts but also irr anticipation of
the means of escaping from the
receipts from government securi¬
ties \ in the process of flotation. pressures of the open money mar¬
The Eccles testimony also
Those overdrafts were for one, kets.
two or three days, seldom more, reveals that purpose clearly. And
and were represented by special it is a purpose that is very differ¬
ent from utilizing on tax payment
Treasury
"one-day"x.» certificates
dates "one-day" tax anticipation
which were reduced quickly as tax
certificates as overdrafts, running
or other receipts
came in.
Few
of these tax (arid other) antici¬ generally from one to three days.
pation
certificates * ran
beyond V The overdraft procedure prior to
hree days; a large proportion of 1935,
the basis for it, and the
Eccles
; Mr.
Advocated
,
1
.
of and demand for loanable funds
the
it
v
specifically these overdrafts not to exceed, say,
prohibited.y
1.5 billion dollars on any day and
;/;•.;. :
Arrangements for tax and debt- to be retired from the receipts
flotation : anticipation certificates
against which they were issued as
can and perhaps should be written
anticipatiort-certificates.
A very
into the Federal Reserve Act. But short maximum maturity should
be specified for these certificates
that is not the same question as
those involved in H. R. 2233. This —a maturity not to exceed the
bill provides for the direct pur¬ date of arrival of the receipts. The
chase at any time by the Reserve rates
charged
by
the
Reserve
certainly involve the use of the
open competitive markets where
the forces relating to the supply
v
assumed
specific provision for such
purchases. Apparently the power
managementV woul
would be in
no
»
Short-Term Overdraft Certificates
gave
had
"businesslike"
clear why Mrv Eccles should
request authority to buy up to $5,000,000,000 besides the $3,000,000,000 provided for in the law of
May 12, 1933, ?:;?•
The Treasury belongs
the American people.
course,
cordance with the
stated.
amount alone, not principle, it is *
not
oarrassed is hardly the major con¬
sideration.
ever, is that he does not want the
but' im,ac¬ Treasury to come up against the
principle; costs of borrowing in the open
and in the end
Yet it is rising costs
they have been markets.
overthrown Rafter the people have •which the people use as a brake
concluded that, they could not and on their government's borrowing. I
'Would 'not endure any longer the If they are deprived of this power'
i«f. hi.
government's handling of the peo¬ fK*i>
treme * fdrhfi,: of
misleading
Reserve banks fiscal agents of the
Treasury,
r
fact that the Treasury may
of "an entirely
Governments have taken that
position' in the past, in a more ex¬
It is their
that is being wasted. The
be em-
money
seems
to this author. The Reserve Banks
Advantages of Open Market
States
,
began to buy Treasury certificates
theory or policy, but simply a in 1917, at the request of the Sec¬
question of efficient, economical retary .of the Treasury, on the
and businesslike management of theory that Section 15 of the Fed¬
the public debt."
eral Reserve Act, which made the
not the people's must
keep direct controls such as
Government officials * who those
provided : by a gold-coin
volved;
belong to this school of thought
purse.
ury
Mr.
as
Eccles points out, was so worded
that it prevented their
subsequent
the
of
ophy
of
$3,000,000,000 of United
obligations "in addition to
those they may then hold."
Mr. ;
Eccles was therefore asking for
use
until authority was
granted authority
to
purchase
United
temporarily under the Second Wai States securities
directly from the
Powers Act of March
27, 1942. *
Treasury in an amount not just
j Mr. Eccles says that the pro¬ up to $5,000,000,000 but up to $8,- posal in H. R. 2233 "would restore 000,000,000.
i,
to a limited
degree an authority j At no time during World War II
which the Federal Reserve
System did the Reserve Banks hold over *
had from its
inception in 1914 $1,302,000,000 of short-term Treas-*
until the Banking Act of 1935.'
ury certificates.
C o n s i d e ri n g »
The
!
;^.v
/
1394
March 13*1947 i
THE COMMERCIAL & FINANCIAL. CHRONICLE r.
■
Graham Towers Canadian World Bank Director
| Replaces R. Ef. Bryce, but will retain position as Governor of
:
John Schiff Trustee
Vf
John M.:
investment
I
Ottawa has taken the first practical step to refute the persistent
emanating principally from the Canadian gold mining
interests which challenges the wisdom of the Dominion's action in
propaganda
restoring the Canadian dollar to its normal parity.
From the point of. view of the gold
.suffered a severe blow as a result of
V
,
:
diminished price
of
its
product, the most efficacious cure^
for their
malady would be
valuation
ingly
of
the
strong
exerted
in
complish
have
this
Accord¬
dollar.
to
endeavor
end.
been
has
pressure
an
de¬
a
Such
ac¬
efforts
recently been redoubled
as
the gold mining industry's dream
•of an internationally higher price
of gold has been shattered
by the
obvious
determination
of
the
monetary
authorities
here
and
elsewhere
to
avoid
any
action
,
that
would
the current
either
inflationary
disturb
or
contribute
to
pressures,
the
comparative sta¬
bility created by the maintenance
of the parties of the world's key
currencies.
:
.
.
When'Canada
;
...;;
took
the
•
deci¬
chosen alternative to
currency de¬
valuation.
This is only the first
to the
answer
that
constructive
be
can
further
steps
becoming
monious
ties
between
closer.
ever
The
are
har¬
relationship between the
two countries has progressed even
beyond
the
stage
"the
4,000
miles of unfortified border."
Can¬
is
ada
not
buffer
to
only
this
of
vital
a
country
military
but
it is
also the country that is the closeest in common idea! s and
way of
living. It is natural therefore that
academic
international
tend
border
should
increasingly to have only
importance*
Thus
an
a
common
currency, if not a neces¬
sity, is at least fitting in the gen¬
eral scheme. 'A
open to criticism
generally considered
During the week the revived
to be an inevitable postwar de¬
doubts concerning the
ability of
velopment.
A motivating factor the Dominion to
maintain its cur¬
was the sharp price-rise that took
rency at par led to weakness in
place here with the removal1 of all sections of the
market.
The
controls, and today this consider¬
undigested* balance of ! the new
ation is certainly no less pressing.
Montreal issue and offerings be¬
but
it
was
crisis has added fuel
ents of devaluation, but this situa¬
,
to
appears
have
point.
passed its
■■ 'I * '■>
; In any case the Dominion can
step aside from the deliberate
not
course
it has taken and recent
ports from Ottawa
of
this
oratory
are
more
and
tax
gold-mining
re¬
indicative
determination.
however, is
the
The Honorable
Development,
March
to
announced
that
6
elected
he
,
Action,
powerful than
relief given 'to
industry is
the
CANADIAN BONDS
low
on
the
issue price
the
also weighed
situation.
These
general
developments can only serve' to
bring home to the competent au¬
thorities the necessity to imple¬
ment
official denials of any con¬
templated
currency change.
The
stock markets also reacted
disap¬
pointingly to the announcement of
tax relief
to the
dustry but
be
found
gold-mining in¬
reflection it might
on
that
such
concessions
beneficial than the
ual reaction would suggest.
are
more
cas¬
shares
GOVERNMENT
Public
PROVINCIAL
offering
of
common
value
par
,
12,
Blyth
by
MUNICIPAL
383,434
Co.
felt that Mr. Towers
the
at
com¬
petitive bidding on March 10. Of
the stock being offered,
182,094
and 54,417 shares are
being sold
by Midland Realization Co., and
CORPORATION
subsidiary, Midland
respectively
and
shares
are
being sold
Co.
Middle
•
shares
are
Minister
make
it
possible for Mr:' Towers
to
serve
the Bank in this capacity
at
this
important period
operations. ; ;•/ ":S'y- ;■*/
commenting
Mr.
Abbott
that
its
action
the
now completed its first
stage
organization and is at the point
of commencing its operations in
lending
for
the
and; in
securities
ap¬
markets
funds which it will neCd
\
v
.
«v
pointed; out
sibilities
the
at
Bank
of
Mr.;- Bryce
INCORPORATED
..yf
•
,
for that purpose. Mr, Abbott
,v
em¬
phasized the importance to Canada
rector of the Bank
the
Bank
in
ago and has devoted a
his
time
sold
by
com¬
panies in compliance with a plan
cf reorganization under which the
two companies-will be
liquidated
NY-1-I045
ing paid
on
the
on
a
stock
common
Indiana
are
be¬
now
quarterly basis at
the rate of $1.20 a
year..
"Capitalization
of
the
-s,
assisting in1 the
consists
&
of
$51,000,000 of longdebt, 211,380 shares of 5%
preferred stock, $100. par value,
and 2,181,550 shares of common
64 Wall
COMPANY
Street, New York
stock.
•
at
/
the; Canadian
Embassy
:
SAN
V
Ede, Jr.
CANADIAN
SECURITIES
Government
Provincial
Municipal
Corporate
CALIF,
retirement of William
from the firm of Holt
Collins & Ede, a new
partnership
Holt & Collins has been
formed.
Offices will
be
Russ Building.
son
A.
continued
Partners
Holt, member
in
are
the
Edi¬
the Los
Angeles and San Francisco Stock
Exchanges,
of
the
New
directory of the New York
or
Loan
Service
of
the- Visiting
York.
•
New
•V;
Mountain State Stock
.
.
«
Placed
Market
; (Continued from page 1380)
yon
ganizationsJln addition, gathered ",ev£r! broadening!;
coverage, is a
Blyth;;&! Co';/Inc.,,and associates
with us are representatives of the
subject that exemplifies the dy¬
made /.£^puhliq ;pff ej1hg;March^2
bodies' i administering
legislation) namic' modern character of our
of 140,614 .shares of commop stock
regulating our business. ; We have business,/ The billions of cor¬
of Mountain States Power Co. at
also the officials of our own Asso¬
porate : securities - annually - dis¬
$34.50 per share. The shares, rep¬
ciation', a number of othCr asso^ tributed^ through ourfacilities,
ciations, local and national, and the markets established'and main¬ resenting 56.42%,of the, company's
issued and >-! outstanding common
officials of;thAStock Exbhah^es: tained for
these, lithe - local and
stock, are being sold by Standard
Imagine, if you will, as I have national
,
.
characteristics of
often, what could be accomplished
if
the
community - of
interest,
demonstrated by our attendance
here tonight, could be put into
practical effectiveness in the wel¬
of
business
our
our
and
I
know
experience in'business
that no problem is
beyond
solution if it is approached fob¬
jectively by men with a/sincere
own
interest in Arriving at a fair solu¬
tion.
Riding
rough-shod !■' over
opponents,
unwilling¬
to consider the other fellow's
ness
Viewpoint—these
they
are
not the best
of
means
our
intolerance f of
or
are
resolving problems if
to remain resolved/ And
business should be the last to
be guided by the jungle
technique
Pf
the
getting ahead by stepping I
on
y
commonplace knowl¬
but sadly unknown to
own
customers, let alone
multitudes
public."-
en¬
the
of
general
M
\
^
-
;
And it is time, too, for those
re¬
sponsible in an official capacity
for protecting the public's interest
to widen their vision
and expand
their understanding" of this mar¬
ketThey :shpuld; at
notice
on
that
least be put
are! not
we
in
,
a
quiescent mood and that we ex¬
pect to be heard when and if any
undertakings affecting
might add—are
'
Mountain
States
to be
cease
a
Power
took
/
I
the
of
sale,
will
Co.
subsidiary of either
Standard Power & Light Corp. or
Standard
Gas ; &/. Electric
Co.
Mountain
States; is an operating
public' utility company engaged
chiefly in >the- generation, pur¬
chase, transmission, distribution
and sale of
electricity. Retail sales
ipade in 109 communities and
adjacent rural areas in Oregon,
are
Wyoming,.:! Montana, = Idaho and
Washington.^: Wholesale distribu¬
tion
is
made
to
communi¬
three
ects.
Duty to Protect Public
I
completion
interest, I ties) to another
private utility and
to five, rural electrification proj¬
1
When
our
J Upon
the agenda for
on
action. "
and
us
market—and the public
]
Gas & Electric Co.
are
us
even our
in-'
the
You and
terprise
edge to
our
office
two
;j
!
the other fellow's
carcass, for the
very simple reason that it is the
years
r-
)JrotaL operating Revenues of the
companyc'for
1946
to
amounted
and had the pleasant task of
ago
Speaking more directly to and
for
those
Counter
would
one,
of
us
in
business:
seem
to
be
the
Over-the-
.the!
a
present
challenging
1
of
at
like. to
here
that
no
one
co-
<
has
member that
remember,; discharge
industry,:; com¬
and
passage
us
lose
of
sight of
in
us
assumed
our
had
or.
If
always re
ultimate. success
our
we
will be measured
by how well
Ours is the market,
which
supplies
merce
would
delegated to us—protection of the
public interest.
Importance of Unlisted Market
I
follows:
of
one
to what
and
single
a
as
duty each
own/>field
friendly>;
time
repeat
tonight,
"Lei
calling for recognition of our;
the
strength and vitality and a
operativeness.
to refer back
reason
said
government,
with
the
that
think
one,
obligation,
that
tervenes is
but
a!l
else
we
I,
for
that
in
a
passing matter.
with
which
plants j are
More than that, I
believe, ? that if
equipment purchased, em¬
in our relations we
keep that ob¬
ployment;: provided,
stree ts/
jective in mind, some of our dii>
schools and
built,
hospitals constructed
and
maintained.
It
is
a
.
market
vastly larger in numbers of
peo¬
ferences will be simpler of solu¬
tion.;;. There should not! at this
date
be
for
room
disputes
of
and Daniel J. Collins.
tween
only in the heat of selfish contro¬
versy.;
exchanges
and
without which the.
themselves, could
not
grow and
develop. We in the se-;
curities business know and
appre¬
ciate this/ Isn't it about time the
general public
the facts?
was made aware of
The
strengthening and
broadening of quotations of Over;
the-Counter securities
during
cent
years,-and
efforts
to
re¬
gain
us
/which
/can
be
•
will
be
declared
of
There
is
settled
opportunity
we
keep
;
,
as
our
v-Vw
are
my
men, as I am sure
us
long
us
the; future .is
'assured."
Let
so
alwaysbefore
,,common/objective
-These
for
business, competition is
the health of trade and
beliefs,
they
common
record
March
dividend of 45 cents
was
A
31.
paid on
Jan. 20 of this year and
that dividends-were paid
prior to
quarter¬
1940, at the
ly
since September,
$1.50 per year/
rate of
]
;
On Sept, 30, 1946, the company
had
debt of
funded
a
(Outstanding
$9,700,000.
at that time also was
$2,649,650 priricipal amount of 5 %
cumulative; preferred
par
value, r and
common
$50
stock,
249,233! shares of
stock,- without
par ; value.
i:\yi
March 19 Dinner
^|
La Salle Street Women j
,'y La Salle Street
Women
.
all in the
the
on
stock)-payable April 21 to stock¬
holders
be¬
acted, than of all the exchanges
y
FRANCISCO,
the
member
A,
combined
Holt & Collins
With
i
,
Zoological
in
ple
participating,
merchandise
dealt in, volume of business
trans-;
5
WHitehall 3-1871,
.
Boy Scouts >• of America and trus¬
tee
Parkinson;'Financial; Counsellor
Nurse
capital
company
term
Taylor, deale
,
York Curb Exchange/. He is Vice-.
and. Chairman;,- of
militantspirit
of Northern
;
Schiff
.
own
Dividends
RECTOR 2-7231
associate
Mr. J. F.
.
;
President of the National Council
,
,
i1
^oIin
(Mr. Schiff is a member of the
New York Stock Exchange and
the duties of his position in .the
Department of Finance.
J,
sity, England, in 1927.
year
part of
as
1925
n
ford' Univer-
portion of
Bank
to the
a
i
general program of economic re.-, Weshingfqn, v will s continue, .as .^al-j
ing sold by The Middle West
Corp. pursuant to the reorganiza¬
tion plan.
NEW YORK 5, N. Y.
sity
by the votes of
Canada at Savannah about
from
Univer-V
ahd from Ox-
Di¬
a
•
S o c i e t y * Provident
Society,
NationalJewish1*
Welfare /Board,' New York, Pubconstruction, and he stated,.that ternate ^ Executive v. Director & for lie Library, New York University,
Newj York Chapter American Red
the Government is
keenly inter¬ Canada on the Board of the Bank.
ross, Greater ' New -York Fund
of
and dissolved. The shares are be¬
TWO WALL STREET
uated
Yale
Canada.
was~ elected
in
Roslyn, New
York, in 1904.
He was grad¬
Mr.
..
born
was -/
The
•
that
.
Bank
of
international
this time.
at
Bank
ToWer^is expected, to
devoje only
a
reasonable portion of'his time
to
his
new
duty ,/and will,!; of
has
proaching the
the
high¬
a
course," carry on with his respon¬
this
on
stated
in
of
had
being
the Realization and Utilities
A.E.AMES&CO,
^
Savings Barik.;
-
West Corp.
The
,
$7,178,531 and; net profit for the
addressing the Annual Dinner, I periods was $1,043,186. It is exUtilities
burdened you with a few obser¬
^hat,^at/ar^mpeting /pf the
146,923 public interest and not our selfish vations that
board of> directors .this. month, a
possibly sounded like
by The impulses which will weigh-us in* unadulterated
<fiviclerid of 62^ cents • per share
the balance. - •
sentimentality. T
*<• * '
its
CANADIAN STOCKS
trustee
a
tive1 Director*, could' make
Indiana
issue
.
of The Bowery
Execu¬
an
as
Navy,
ly useful contribution to the work //Mr/ Schiff !
their vital interest
made
ted
organization.He
international
Towers
States
has been eleC- '
of this great
success
in place of Mr. R. B. Bryce, who
pne's
was
ther United-
~
ested in the
.
Canada of the International 'Bank
without
at $19.75 per share
&: Co.,
Inc.,
which
awarded
was
of
stock
of. Northern
Setrvice
March
-
"
Co."
&
former;
has resigned from that position at
his own suggestion inorder to
fare
Blyth & Co., Inc. Offers
Northern Indian? Com.
Public
;
Graham
Executive Director-for
serve as
vesting public.
I
nominated
had
Mr.
on"
Schiff, member of the
banking firm of KuKn
commander in
for Canada of the International Bank for Reconstruction and
ernor
from
j
Y,
D. C. Abbott, Minister of Finance, who is "Gov¬
^
to the propaganda of the propon¬
tion
L
^
~
was;
The British
low
and
In
the
this country and the Dominion
given to all rits implications
possible repercussions. It is
perhaps true that the timing of
the decision
now
anticipated.
the
was
action
Furthermore
sive step to restore the dollar to
its old parity full consideration
and
challenge and
the ; Canadian
authorities
turned
their
attention
to
have
Loeb
portance of World Bank to Canada.
and
industry, which undoubtedly
the
Bank of Canada/ Canadian Minister of Finance emphasizes v im- ; \
|
By WILLIAM J. McKAY
runa
i
hold
its; March
6:15 p.m.
South
19th
dinner
;
Security:
Will
What
Mean to You?" will be the
the
at
^t the Cordon Club, 410
Michigan Avenue, Chicago,
/'Social
of
j
will
It
subject
guest speaker, Thomas M.
gentle¬
Galbreath, Manager, Chicago of¬
are yours.
fice of - the Social Security Ad¬
hope they will be realized
ministration.
.
•
>
„
V-.
•-./
/ /
;
^Volume 165 ' Number 4576
THE COMMERCIAL & FINANCIAL CHRONICLE
looks
:
•
';i?:, /' t;
*0 ~ ~
(Continued from
*
' ,;
fv
X
-
|,v\.
1377)
page
remote
4 but
//will \ be
bank
from short to long-term
money
gets out of hand.
.
Min¬
1^
White
Republicantotem
the
on
'man
•'/*'
'
■
») *'• '•
•.♦.*f
The
Republican; calliope
along
into
discord.
budgetary
is
House
Re -
publicans will chop big, per¬
haps arbitrary hunks from the
budget, tell the bureaucrats to
expenditures
ac-
has
ever,
resign. The Senate
or
that
bills back
across
r
operate
before
exasperated
Uncle
are
get-
banks
big
office
brother vetoes of their economy
X/*
Herewith-
1946,
on em¬
as
corpulent
so
increase
in
the
These
V
the
of
cost
load
House Appropria¬
tions
economy
the
the
the
gents
could
be
ticular
retorts
withheld
not
from
his
as
par¬
without damage to
agency
"ternate
.
;as they
<
the
ta
budgeteeirs
l"y r,
s<
fit.
see
$
<r
$
•
'
$
•.
•
1
#
That
,
the
t
i
a
single
messengertls^ the 1
t ^American public would suffer; : x
•
:
❖ *' ■'
:f r
M
/
-
■a.
r
;•
tem
to
///:
redeem
bonds
the
I
?
job
r
;
policy
,
makers
_
promoting
of
a
say
X
sales but claim banker cooperation
has -been
f\>
appropriate
National
>
Director
the
.
?
Treas¬
,*'■ appropriates that some bankers;
" ''do an excellent job because they
.
very much sold on the idea,":
while others "give us lip service-
are
j /
.
ASSETS
T/..J ',rryu^.
•*-r
V
'
*
North-South feud
rates
^climax
%
f
over
banging
,
-
v
<
-\i
v-
at
Secur-»
cost
v/V"
\
a 1
but
legislative and.judi- |
-
-
t
*
•
:';5
r-181^41,587.77
.1 nil - -
.
1
,
the ICC
In
the
them
order
a
hiking manufac¬
freight
goods
Northeast
rates
and
10% :
be
reducing :
like amount in the South
*
p
and
as
far
west
as
r
of
;
ICC
carriers in
*
-
and
complaint
conference
thereby
now
before
preme Court that
Federal
with the
nullify
the
Su-v
violation
of
antitrust
laws.
Chances
are
:•-•
:/!i
302,819,963.37
;*
•
■
'
$12,006,440.00
101,037,235.00
Surplus
^.118,720,404.80
Surplus.
Capital StbcK and
Total
■X.
V--':
Jr,
.-''■■■■
2,401,288 XX ' ;
X ;
X-
Surplus
a
_-._$231,1764,079.80
Treasury Stock.
25,837,300.48
Deduct
205,926,779.32
.$540,038,244.59
Total
U. S.
consisting
Securities include Treasury Savings Notes with principal value of $12,000,000: other
a
market value at December 31, 1946 of $40,973,119.
Marketable Securities
stock df the United States Eteel Cdrporation and 270,000 shares of capital stock
listed on the New York Stock Exchange, had
Stock consists of 187,189 shares of common stock
Inc.,
Treasury
|t
year ended December 31,
Income:
Dividends
than
(other
Income
•
-
-
■
'
-
-
r
~
.X
.
.Q
$ 41,092,310.48
2,000,000.00
/■
*
*
—
before
Income
Federal
i
^
'••Sterest
Gross
"V
1940
for depreciataxes
Income
provision
Taxes
for Federal
J-
Income Taxes
__Q
Q_Q
$39,092,310.48
__
33)079,939.77
;734,o22.98
3,813,962.75
—-.a———
——
.
16>1
$26,706,690.93
Income
Net
SURPLUS ACCOUNT
$237,470,431.80
*
^
'J
'
LessX'l?ividen'dseon0Tr^a^|lry "soick/ndt
X Surplus
any
on
early in-
■
on
?
securities. Average in-
I
the interest rates
at December 31,
Gross
ot
rate
received
1,497,512.00
included in Income
1946____J—i——
*
—
Ii^ome includes $461,204 representing credit resulting from increase by
of-the Canadian dollar to parity with ,.U. S. dollar.,Other
exchange
refund
on
Federal
of
taxes
for
prior
17,712,792.00
$219,757,639.80
Canadian Gowmment^^
Income-Interest includes $323,325
years.
.V._.X . X* -X-... X
-/-• :
,
X .[ • <: • • .
" ' *
; ';X ) ,X,,X:
'
V/5 : c'
V,
We have examined the consolidated general balance sheet of-the Allied Chemical & Dye Corporation and itsjsubj" sidiary companies as of December 31, 1946, and the statements of consolidated ncome and surplus for
year then ended, have reviewed
the system of internal control and the accounting procedures of the wmpany
/its subsidiary companies and, without making a detailed audit of the transactions, have examined or tested
records of the companies and other supporting evidence, by methods and to the exten; we ■^®e^ed.1 nce3
examination was made in accordance with
generally accepted auditing standards applicable in the circumstances
and included all procedures which we considered necessary.
< t . . .*
,
'
*
.
t '
v"Allied Chemical & Dye Corporation,
New
-'.X'
••(>.,
I''
York, N. Y.
•
the calendar
and
accounting
i
"
national debt |
Secre¬
today is 2.06%. Treasury
'
In
tary Snyder views
that as gen-
>
erally fair to both
Government
f
bill
;
investors.
and -certificate
Hiking
of
interest
opinion
the
fairlv'the
'principles applied on a
•
.
,
rates.
our
nresent
^31
-
good that Congress
plan
terest rate on the
and
v..
•
had
,i
nln-;
high southern
f- rates have been established in
>'
■;*.
*
the
i,.
common
Company,
$19,840,575.
Other
product of small;
*
in
'■■■
phono¬
before
petition becomes keener.
Don't
Stock,,-? without
$5.
value,. vbasis
Share
Issued
.
dividends and interest) after provision
•"-•'
tion, obsolescence, repairs and' renewals, all state .and local
Provision for General Contingencies--.
severely handicapped as com?;
crease
..
of the
a market value at December 31, 1946
carried at cost.
/XX."Further Surplus consists of $97,098,560 earned surplus accrued to the Company since Its organization and
$21,621,845 accrued to its subsidiary companies prior to the'Company's organization^•
.
.
•
•
shares
Reduction
Air
-
\yith
wagers
» Congress
will
legalize the fixing of rates by
par •»
per
Further
1,631,716.69
?
S.' Government
U.
144 900
Gross
>
Mountains. Northerners counter
)
..
little
the Rocky
"
'•
X Capital
etC.i-k»L—•
•';X-'X-XX ■'. -X XiX
Government Securities
of
industry, thus ener?:
.
;
;
•.
CONSOLIDATED INCOME ACCOUNT
fellows. JCom-.
merce Department oracles have afeeling that the small firms will
the
vating
v
;Xr:;
i
Insurance,
-
CAPITAL STOCK AND SURPLUS
28,588,124.64
-
buyers' market is ex¬
firms in the
Southerners bet I
the Supreme Court will uphold ?
X..-''
-
-
40,000,000.00
20,656,776.82
2,015,548.50
X-i ,X 1,479,482.04
'■ «•'1
■•Mr —
shun the
to
Sundry
,
:•
—
Com-mon
is
Secur*-'
and
.
Govern-;-
pected to purchase • more
rail-I
graph records than ever
into
$31,291,501.90
/-X/ ,X
:
Contingencies—
Insurance
.
or
-
•
•
ities
:X Total: PX^^>XXXXXXXX,-^^XX».1^$54Q,038,244.59
^
The 1947
Investments-
General
-
'
^
Depreciation,
Obsolescence," etc'.-l-l—.—X— $238,668,156.01
^
'
•
'•■ y
.
"
•
•
at
-
Prepaid Taxes,
of
l
cial decisions.
tured
<1:1
of
is
'
,: *
■ f
* ."•->
* <
.X.
road
"
X. '
««•*»
31,1946
20,676,132.54
Accrued™"
RESERVES X
28,136,994.74
'
cost..—52,072,083.25';.'*
lower
<
$9,336,770.69
* 1,278,598.6-7
Payable
X Wages Accrued
$64,226,20f 90 ;
P■'
OTHER ASSETS
obligations
,
Accounts
I '
!
.
market / whichever
-
.
CURRENT LIABILITIES
"
only,"
\
LIABILITIES
>
P.Patents, Processes. Trade Marks,, Good-* ;PX * X
P
will; etc.
—
21^05,942.61
declined 19%,
from Dec. 31, 1945 to Dec. 31,
1946.
Other bonds, stocks and
securities held by the banks in-) ?
creased 16% in the same period.
ury's Savings Bond Division has
word to congressional
'■/<•
;
.
may
F. J. EMMERICH, President
'>
;; •
.
$307,7Z2,022.78
DEFERRED CHARGES
-
'
banks in United States
ment
passed the
-
ASSETS
*
actions.
-
Plants, Equipment, Mines,
vX .'I'V .X.-v
"
by latest
bank trans¬
Investments
by > the
•
it to
Respectfully submitted,
Shares
figures on national
more
of
i
system is emphasized
and; want Con-
funds
"educating" bankers. Associate
to
gress
for
spotty
share on
„
-
.
4
'
XX' X-'Xf /
to^ which the Treasury has succeeded in extracting the
Federal debt from the banking
bonds
savings
-
the Company's financial strength,. as reflected by the balance sheet, will enable
activity of the country during the years ahead and to meet such new conditions as
.
Inventories
X V
•
government,for
' r",
■
.
•
-
that
believe
•
Jttes at
X 'v-
Extent
bang up
'
1946 income and
V.
..
..
the
to
Marketable- Securities
year's hearings on 1949 appropria¬
typewriter ceilings
-
Treasury
;
r,
■
most banks have done
'
P X ';
•'? - ✓
n
''
''14,809,378.00
'. p. X ,* 1
V- Accounts and Notes Re-?!
'
;X';>'ceivable*--less Reserves 20,643,770.98 X : ?X
1 -V
redeem Federal sav-X; will remain? iri 1948; appropriations
bonds.
"
-
years ago.
the Company paid a special dividend- of $2.00 per
$6.00 per share,
of
At the end of 1946,
1945.
provided out of
was
nitrogen
Cash*
*
X
rejected an industry plea that, the
practice of fixing maximum prices-
authorizations.
$2,000,000
confronting, industry,
Contingencies.
etc/ at' cost
i"
now
ings
uncertainties
\
D.'S> Government
typewriters be abolished,? but has
as
Sales of chemical products In 1946 were the largest in
such as alkalis, acids, dyestuffs, roofings,* coke, deter¬
output which the Company's plants were able to produce.
CONSOLIDATED GENERAL BALANCE SHEET—DECEMBER
v,
tion bills. The
^^ they
maximum
expansion
Directors
CURRENf
Appropriations Commit?
shortly start a study
by. the
$284^759,225
greater than in 1945.
principal products
for
Sundry Investments at cost or less_
tee staff will
pay able
5$
dividends
.
3,813,963
~
Treasury Department in
ordered its research men to- in?
exchanging the terminal leave '
vestigate and rhake recommendar
securities for cash.
The Treastions on this issue) before
next
ury will ask the banking sys-
with
r
f
cooperation
./I about avsystem of
.,
to ' think j
begin
can
regular
large
a
Real; Estate,
>'• V-
^..
to
,
22,892,728
3.
Demand
General
Reserve for
INVESTMENTS
>
/Xj. v Banks
22,263,377
...
i
was
,
$153,823,200
71,755,308*
10,210,649
.....
Taxes
,
;
.
PROPERTY; ACCOUNT
v
fore;;the 1948 presidential cam- j tovC deterfriiriey whether C theC type¬
paign. House /Republicans will writer: industry should be; freed
; /requelch the. bill now being pressed; fronv: congressional;^ice,"ceilings
on typewriters purchased
by the
7/ by Democrats,/will later bring but1
V similar
legislation; oftheir^b wn:\ Government. The Committee has
?
.
.......
exceeded, the
continued
/ •;;:
extend
sit
-
House
five-year terminal leave bonds is;
St6 be 'authorized by: Congress ;be- \
service.;
haviej bank assessments deposited;
: in the- genergl fufl4 and exkhi- /
iners likewise paid therefrom.'
Immediate cash-payment of ;the1
$280,945,262
-
were
Dated, March 12, 1947.
civil service examinitidiii would;
year
fully in the industrial
<^se*
the
•
<
of
The
Comptroller's
Office, • w o u 1 d
have - examiners ' sc*eehfed; by;
i
Chief Clefk, testified; hq could
not dispense with the service of
i
Treasury
even
,
receipts.:
1946.
included
share
routiue ^ ttf r; the;
Govet*nment'
that
;
•
the average were only slightly higher than those prevailing during
15% higher ithan in 1945 and more than double the average ten
on
additions
Gross
1946
ernment
changed.' Some
be
may
27,
December 31,
Of business
close
property account amounted to $30,337,273 and retirements totaled $4,738,346.
Projects In
of.existing .facilities for all the Company's basic products* and the purchase from the Gov¬
plant at: South Point, Ohio, and a sulfuric, acid plant at Front Royal, Va. .The Company
is., continuing as rapidly as possible with its broad construction program which includes plant and equipment for com¬
mercial manufacture of products recently developed by research.
The new central research laboratory at Morrlstown,
N. J. is nearing completion.
- f .
.
♦ P '..'v
P
P.,3%
P-
:
apart
of
Congressmen " would
J1 3 The situation has become so ;
absurd
fund
without regardCtd civil
..
•.'
energy
products,
the
the
the
at
customers...
services bought from others
(wages and salaries)....
(depreciation) and contingencies
and
Company.
rates
of
to
December
(•
the
addition
In
agent,
assessments
general
Company
wearing out
the
for
prices
wage
credited
Treasury, hires bank examiners
than
from
for:
Total Receipts
nitrogen
Because
'
bank
the
from
:to; prescribe such arbitrary ;,ctits \
goods
human
tools
dividend
.;
of
and
Selling
operateif
sort of independent
a
keeps
the taxpayer. That leaves no al;i
shunted to the banks.
was
The; Comptrollef
:
dime
a
of
business
history
hourly
against the
has., contributed
(
recommendations.
stoutly
expended
were
of
and
r
Total
operating
Congress
subcommittees, each is asked
for
Each
Interest
Comptroller .of
the
the
..The
balking logical budget reductions. operating expenses. First day of
As the Government spokesmen' the current fiscal year, the entire
-parade before
cost
of
The cost of payments ordered by Government (taxes)
cost of using the tools
^compensation to owners)
.
.
$250,000 annually for Washington
are
cost
The
sheet
balance
the year wag $26,706,691.
The cost of
-v
Sam has decided he will
of
banks.
collectively
in fiscal
account for the year. ••'.«"•-
Company received
receipts
The
,
during
necessary
the
1946
is
tax
income Jor
In
consolidated
the
presented
are
the consolidated income
and
Net
costs have been levied
*'',X
Bureaucrats
fiscal year to 88,000,000
the
Congress
To the Stockholders:
.
Currency in Washington. Hither¬
to, only actual bank examination
T% ideas and can be expected to
f; say so shortly.
XVX:/-/
from
currency
87,000,000 sheets in the current
longer angel for the national
no
the
by
told
up
em-v
on
2^%
grown
seen
breaking
but House Republicans
*
of
to
bid
3.
down is a matter of conjecture,
\X* ting
printing
Snyder has
World Bank
will act upon some five or six
pending loan applications "before
very long." He says the Bank
is
getting ready to move along now.
Treasury Secretary
expects
frozen
this shuttle business
; How long
J can
1%
the next five years.
/ the Capitol for upward revision.
•
no
now
will refuse to concur, will send
appropriation
for
be
ployer and employee alike next,
January 1. Reserve fund, how-^,
~
cordingly
to
would advance to
'
their
t«x
is
present level of
a
similar levy onl
employee. In the absence of
freezing
legislation, the rate j
4
tailor
Treasury
with
ployer, and
more
•
security
assistance
age
.
^at
•Xx steaming
The
amendments.
Social
,
'-.v:
.*>
opposition
j
«>
v-:
t'
*
the
024,000,000 pieees.
'iv,
pole, or (2) he was to be PresiStassen's Attorney General.
'
dent
Hi*-; >
.'S|
bonds.
.
1,983,427,000
(3) * large sale of savings
trusts;
.
;
.
House
nesota Governor Stassen as top limiting
'
"
with
nominee
"Presidential
u
from
product
to 2,-
and to boost coin
higher rate issues to Government
if the shifting of
:|ng chickenfeed politics, had ac- will enact legislation
-*v:; k *
*
* /
•,,
-—
enabling
Xcepted a Hartford insurance job stockholders to institute voluntary
" ' *
^Today's average interest rate of
'with six figure pay, had' an¬ reorganization plans for defunct 2.06% compares with a similar
nounced his .retirement. For two railroads under certain circum¬ rate of 4.19% on a comparative
-major reasons he renounced his stances. Such a bill was passed date; following first World War.
"vow and took the senatorial nom¬ last year, encountered a pocket- Three factors raised the rate from
ination: (1) he was to be Vice- veto. Sponsors > hope to efface a 1.96% level a year ago—(1) re¬
1
1948
tion
tirement of low-rate issues held
mainly by the banks; "(2) sale of
ordered
".paper
1395
March 11. 1947
and' surDecember
accepted accountmg
accompanying consolidated general balance sheet and. related statements of Income
of the Allied Chemical & Dye Corporation and its subsidiary companies at
position
the calendar year, in
basis consistent with that of the preceding year,
X-
' V/
'
'X
"
conformity with generally
WEST, FLINT & CO.
THE COMMERCIAL & FINANCIAL
1396
Reporter
Governments"
on
By JOHN T. CHIPPENDALE, JR.
Last week the money markets were under
barrages in
many a moon,
of the heaviest
one
the Chairman of the Federal Reserve
as
Board sought extension of the authority to purchase directly from the
Treasury,
of
to $5 billions of government securities.... The campaign
up
inconsistency, confusion and uncertainty
a
In
well
the longest
"JITTERY" MARKET'
.•/
-
i"'-
;•
v/';:.v:
short-term rates, prices of government
worked yet and the
Vr
.
;
'
It seemed
7
} :f V'.;':-
though the question of changes in short rates
was so hot that some expected changes to take place so fast and
furiously, that there might even be several alterations before a
as
.
the
immediate defrosting
of the bill and certificate rates, in
order to prevent long-term interest rates, or
yields, from going too
low.7;
:".v,
high for the
new
a
move
issue have been firm to better
being made recently by the "Vic"
The attempt to put the market into a state of jitters has not
minor recession from the tops of last week is
attributed much more to the foreign situation and a weak and un¬
certain stock market, than to the great and concentrated "Open
7^7/
'
The Federal Reserve Board Chairman appears to be scared stiff
that there is going to be another runaway market, on the
up side for
,
Taft, RumI and Blough
On Budget and Taxes
eligible issues.
.
.
The
.
restricted
tax rates to yield 8 billion dollars
personal income tax, and that the
and
than
less
they otherwise would,
still the budget would be bal¬
bonds
,s
,
....
-
.
,
is
,,
attractive if the return
more
higher?
was
otherwise
.'s
Certainly not to insurance companies, savings banks and other in¬ case.
vestors, since they would not be attracted by even higher short-term must
/
through
purchases
by
the
commercial
long-term Treasury obligations?
j
j
ference of greater risk
i
3
the longer issue.
.
banks
of
There
may
of price fluctuation in
.
.
.
short-term
v
acquisition
; soever;
,
v
f rates would
prevent; as some think, the switch from bills and certifihigher yielding long-term obligations.
Neither is
it likely that it would deter the
selling of short securities to get funds
cates into still
•
.
:
that would be
Joans.
.
put into larger yielding business borrowings
r
,
.
r
7V 7'7
•:
OTHER INVESTMENT SOURCES
term
or
V
*
: T
,
There had been considerable discussion about
the trend of longterm interest rates well before Mr. Eccles
brought it out in the open
j last week. . . . While there is a feeling that prices of the
Treasuries
;
might
longer
move
somewhat,
up,
from
recent
trading
areas,
I which would carry certain issues to new yearly
tops, there appear to
be very few with the belief or
opinion that the market will duplicate
-last spring's performance.
It has been pointed out
quite frei quently that the commercial banks are
now finding outlets other than
; government securities for
assets, that have been decreasing and will
.
I continue to decline
1
These
new
need for larger
■
i
.
through debt redemption.
.
.
of investment have made
less acute the
so that there has not
sources
income,
likely to be, the
.
been,
same
.
.
.
.
.
t
.
.Aside from a few of the
5 savings banks, the shifting
y
importance
now.
#
,
It appears as though the new channels of
investment for the commercial
banks have written at least a tem». porary ending to the much
feared scramble for the long-terms. ;
;
WELL BOUGHT/-':•.v
;
,•
77,/.7' "•; 7.'7" •>7*; 777
7'}
7 hj:
has been and still is
shorts into the somewhat
going on is switching from the
longer short-term issues.
.That is
/
very
from
.
is^ the range in which the bulk of the changes
where the greatest
pressure is
are
made
being put on interest rates.
not extend maturities beyond that of
.
ever^s shifting does
which is
still considered
short-term.
"
dpe 1956/59
}
one
_®f the few
small
positions.
.
How-
.
note
being well bought, because this is
in which the commercial
banks have only
This security is an
intermediate-term
issues
issue,
-
demand
au"oa i^ s?ppIy that should
without
forcing rates too low.
be sufficient to
...
some
large this budget
Now the Presi¬
The
Army and Navy originally
figured that for a million men
in
the
stantial cut and still maintain the
might
for
overall
an
be
increase
reasonable
a
of
considering
5%
So in
policy in setting
can
properly take
high level of employment to mean
tax
rates
our
we
national income
000,000,000.
some
decline
day's
level.
about
in
$170,-
some
prices
Now
from
when
balancing
should
of
The figure allows for
the
to¬
talk
we
budget
realize that there
are
we
two
budgets. One is the conventional
budget. The other is a consoli¬
dated budget on a cash basis."
"The
consolidated budget on a
cash basis is referred to by Pres¬
ident Truman in his economic re¬
cash
basis
the
Federal
and
outgo,
that
means
financial
we
on
take
transactions
of
Government, income
cash basis, the in¬
on a
taken away from the people
and the income back to
come
in taxes
the
people in expenditures. And
by consolidated we mean that we
eliminate
all
tjie
inter-office
meet the
sized Army and Navy. I'm
proper
little
objective
maximum production.
a
food
we
may
you
Truman
nomic
points
President
in
out
his
report that it is the
solidated
budget
on
a
cash
eco¬
con¬
basis,
re¬
need for
Greece, and all
it
doesn't affect the basic possi¬
bility of reducing this budget by
$5,000,000,000. 37^ billion dollars
is
tremendous
than
was
budget,
three
a
times
four
or
before the war."
more
what
it
one
on
day in
heavy that in the end it will
V
the
development of va
enterprise economy at alL"
this
To
Sen.
Taft
business
added:
;
of
keeping the
up
is
inflationary.
The
burden is so heavy on these peo¬
ple, 44,000,000 of them, whose in¬
comes
are under
$5,000, that the
general tendency has been to in¬
to
the
extent
of
expenditure re¬
ductions, but stated that "four bil¬
lions
ought to be a reasonable
goal for reduction of expense." To
this
"We
estimate, Dr. Blough replied:
aren't going to know about
it for
until June
sure
then
even
we
aren't
or July and
going to be
about it because of
sure
the
de¬
ficiency appropriations which al¬
ways
come
where
the
so
in
late
cuts
in
have
that it will be
we
can
cuts.'.'
the
year
been
some
too
time
count these} budget
}}':>,}\ /v '7-}V
-
Forecast
of
Tax
Wages to take care of it—•
the
wage
level some
The result "> of
increasing
crease
increase
more.
level is that then you
prices. It is when taxes
wage
increase
have reached the point they have
reached, they are an infla¬
tionary element.
People' won't
now
that much of their income in
pay
taxes,
the
consequently
cushion
And
to
Reductions.
inflation is
they turn.
which
the
general result of main¬
taining taxes this high, is to keep
or increasing
prices and wages ito
take
care of them.
So that I say
to retain—to go on at this rate of
taxation—is itself
inflationary
far
as/raising prices nnd
are
as
concerned."
Mr.
was
Ruml's
wages
theory of taxation
setting tax rates that would
in
*
"balance the budget at high Jevels
of employment.
If tax rates are
set
higher
than
this, the effect
bring about a
greater
of taxes will be to
lower national income and
unemployment
than
would have been the
"To
apply
this
otherwise
case.
,,
.
principle,"
he
maintained, "we must first agree
a
figure for national income
high Jevels of employment;
next we must decide which budg¬
et we want to balance, and we
on
at.
must
have
some
idea
to
as
how
large this budget is likely to be."
On the bases of his estimate of
eight billion dollars surplus; he
thought this would make it pos¬
sible to: "(1) reduce individual in¬
taxes by 20% in the ag¬
come,
gregate but not necessarily equal¬
across the board; (2) increase
ly
exemptions for
dependents by
$100;
(3) eliminate all excises,
war
and pre-war
except those on
tobacco alcohol and gasoline, and
(4) reduce the corporation income
tax from 38 to 34%." He thought
alternative
.
Mr. Ruml, on being questioned,
said he had no particular views as
before
public.
this
surplus materials that we
sell Greece,} I think even if
have to add $100,000,000 or so,
not
the
about
of» the
deep,
affect
concerned
cent development in Greece. But
in the budget already is all the
transactions in the budget that do
well
be
possibilities
might
suggested.^;
"Tax reduction of the magnitude
that is both possible and desira¬
ble," ;Mr^ Ruml added, "is botli
unnecessary and undesirable if we,
will move promptly toward mak¬
ing the products of American in¬
dustry
and
agriculture
more
available for world relief and re¬
construction.
taxes
same
We
can
substantially
still reduce
the
at
and
time make substantial addi¬
tional
loans and gifts abroad. In
own
interest a greater, con¬
our
tribution
to
world
rehabilitation,
by taking less than this 8 billion
dollars of possible tax reduction
to
appears
be
the- humane
and
*
realistic program for the coming
Discussing the extent of pos¬
year."*
'
•
v
pact of Government transactions sible tax reductions, both Senator
on the
economy. ~ So it seems to Taft and Mr. Ruml were for it.
V
Debt Reduction Policy
me obvious that it is the consoli¬
Senator Taft stated bluntly: 7
; Regarding national debt -reduc¬
dated budget on a cash basis that
"I think that taxes ought to be
tion, all agreed it was desirable Ito
we should balance at
high levels cut. They ought to be cut because take
immediate steps toward; that
of employment."
—--;v
they're too high. They're too high end, but Dr. Blough would t make
> Mr. Ruml continued by stating
on the
ordinary man and woman no commitment "until the. situa¬
"The consolidated budget on a in the United States
today. You tion clarifies more definitely as to
the
measures
economic
im¬
take
about four billion
school
a
surplus of
dollars for the
current fiscal year.
Suppose Con
gress cuts the President's
askings
as
billion
are
have
for next year
a
budget.
all
are
cash basis will show
anc
...
is working
7|l'|
.
certificates and short bonds into the
issues due in 1951 and 1952.
This
want to
we
must
$164,000,000,000 and that for
1947
that
smaller institutfons, which are largely
from shorts to longs is of declining
of the
about
the
® much increased demand for short governments to insure
liquidity
and limit the risk of wide
price movements that could take place in
longer-term obligations.
It seems as though the shift into
longer
Treasuries from the shorter maturities is
not likely to be anywhere
near the threat to
.longer-term interest rates that it was believed it
would.be
.777 '■?■}
V.. JrC1;: ■;-;y;7/
t
budget
we
likely to be.
all
cLikewise with the increase in the risk factor which
is taking
.place every day, as funds aretbeing put to
work, outside of govern¬
ment
securities, there is a very noticeable trend toward greater con¬
servatism in investing the
remaining assets.
This has resulted in
out
dent's economic report tells us the
income
in
1946
was
a
switching out of shorts into longs in order
maintain earnings..
.J'."-,';'
7\>7 7//
;7;: *7..7}
to
and
to how
as
port. The consolidated budget
nor is there
dollars
first agree
national
a
j
;f
aillion
Army and 500,000 in the
Navy they needed $6,000,000,000.
Now
they want $11,000,000,000.
Certainly we can make a sub¬
^
government securities there is no difference whatAlso there is considerable doubt that
higher short-term
the
There
decide which
;.s
of
.
been
sorts of—of extra
apply this principle, we
on a figure for i expenditures
departments ; that
tiaven't cut down, a tremendous
nationajl income at high levels of
employment. 7 Next
in
the
Government.
we :
must personnel
dea
However, from the standpoint of deposits being created by the
have
To
Dalance
purchase of
}
.,
or.
be that minor difthe
would
.
|rates. .7-V-V:7} 7777~77}777777777}7777;>7777}77777
|
ct Is there any great difference whether the debt is monetized
;
wo¬
or
so
free
-
the short-term issues be
man,
country
prevent
he
personal income tax, that's about
20% of the total receipts of the
Dalance, estimated at about three anced at high levels of- employ¬
billion dollars, be applied to debt ment."
;■
'
'
/
would probably rise in sympathy with the climb in
prices of bank
reduction. Of course,! agree fully
obligations.
•
' •
'
he budget must be balanced. But
7 Expenditure Reduction 7 \
77
At the same time he is against the issuance of long-term re- ^ if this program is carried out, it
Regarding / the extent of ex¬
will be balanced by more than
j stricted obligations to lion-bank investors, until there is some
penditure reduction/the < partici¬
hi way to prevent the sale of eligible securities to the commercial
"
:
7 jour billion dollars"
pants were not in full agreement.
f. j
banks by the life insurance companies, savings banks and other
Mr. Ruml stated his views more Prof.
Blough held that Senator
V; investors. . 7.^ 7'77/777\^ 7} 77^-a /'77
? extensively by saying;
/
;
Taft, who urged the importance
V;
; .No.
increase in supply of ineligibles could move outstanding
"The- basic principle of setting; of reduction, was "pretty opti¬
issues up, irrespective of what the bank bonds do.
;ax rates seems
to me should be mistic" and > expressed doubt • that
\
,*
to
balance the
proposed
expenditure
cuts
budget at high all
WHAT'S THE DIFFERENCE ?
evels
of
employment.
If
tax could be made.} To this Senator
rates are set any higher than this, Taft replied:/;
fr
Mr. Eccles is likewise very much against monetization of the
hp■v";he effect of taxes will be to bring
idebt, which he claims would come through purchases of longer-term
I've been through this budget
eKgibles by the commercial banks, so he wants to increase short-term about a lower
national
income pretty carefully myself, and I feel
rates to make the earlier issues more attractive.... To whom would and greater unemployment than
jonfident you can cut four to five
longer maturities of
every
four for the Government.
I think that kind of an economy
three
"This
Operations"....:71/!'VS' ±1'-
(Continued from page 1381)
FEARFUL
the
the average
taxes
Editorials were written about the ending of an era of low interest
rates, because of the imminent changes that were scheduled in shortterm rates.;.
V Mr. Eccles' testimony was the reason for all the stories
about
with
2V2s
words,
and child in the
man
statements about the possibility of higher
Despite Mr. Eccles'
Mouth
day's trading sessions would be over, particularly if one put any
stock in reports that were flying around. ...
■;
other
the last
as
going full blast as
Mr. Eccles testified before the House Banking and Currency Com¬
mittee, as to what would have to be $one to interest rates if the right
to buy government issues directly'from the Treasury were with¬
drawn.
;;; •'• •'•
was
that the
burden
people of this
eligible, the.-2%s, due September IS, 1967/72,
country can't stand and it seems
parti ally-exempts, the 2 /4s due 1958/63 a.nd Ik
due 1960/65 should be available in amounts that would not exactly to me that we must set our tax
spell ruin for long-term rates. >
.
It should be remembered tnJt system at a figure which the coun¬
try can stand. Not only is it hard
since the demand for long Treasuries seems to have abated con¬
siderably and this trend is likely to continue for a while, one of the 012 individuals but if we're going
greatest threats to stability of long-term interest rates has been to p«:y 37-39 billion in taxes, plus
11 bifbupn for state and local, we're
removed.. :. Demand for the long issues would probably be revived,
with a slump in business, since a lower trend 'of interest rates then, paying
somewhere \ between ; 25
and 30% Ox our income for taxes.
would most likely result in large purchases of those securities.
Also
,
as
"Our
Thursday, March 13, 194J>
CHRONICLE
by
dollars.
as
much
Then
for
four
1948
present tax rates at high employ¬
ment would yield a total of 8 bil¬
lion dollars
ingly,
we
as a
are
surplus.
Accord¬
able to cut present
single man or woman—a just where we are going to be ao
teacher, :for example, re¬ far as the budget is concerned."
ceiving $1,000 a year. She has to Mr. Ruml was opposed to a def¬
pay
a
$495
a year
know how she
in taxes.
lives
on
I don't
$1,000.
A
married couple with an income of
$2,000 pays $190 in taxes. A mar¬
ried
couple with an income o
*
$4,000,
pays
couple with
$589, and
a
married
income of $5,
000 must pay $800 in taxes. That's
a gross
inite
commitment
of debt reduction
reduction
a
or
to
a
program
"except
as
debt
automatically as
result of levels of employment
of
terms
comes
prices that
of
outlook.".
agreed.
..
are too high in
long-term national
To this, Senator Taft
the
.;
.
rtewww
'
Volume 165;
The
Number 4576
THE COMMERCIAL & FINANCIAL,
CHRONICLE
1397
Extravagant
Traman Budget
t
(Continued from
process of
first'page)
being whittled down
by
;Congress.
Nine
billion
■J peak in "huge"
was
pre-war
our
budgets.
Typical Budget Items
Why should it cost
taxpayers
almost $700,000,000
more in
1947
<•
"
than
in
1946
government
ments?
of
cost
mansion
to
operate
bureaus
regular
and
.v' '■<:• •■ v v -
depart-
have
to
be
more
than
three times the
amount spent before the war? Do we
need over a
million more civilian
?
'
Paper f
St. Regis
Why does operation and
unkeep of the executive
1946
rar<nrf<; on
personnel in
?
war
agencies
today than we did
before Pearl Harbor?
All our deapartments
of
Government are
slated to get what we
used to call
:
Earnings at n<
Sales and
-
-
'The Department. of
/
; for example, is to have
^
difficult
to
at
Properties
'
"relief"
(Cantonment)
Pensacola, Fla.
paperboard
depression periods.
.The veterans, the
farmers, the old
people among us are adding to the
-
ying the Government
to
Washington.
solve all
tion
wilr be
over
$13,000,000,000.
.
'
initiative.
Formerly,
only .as a last resort, did
'!■
our peo-
pie take their problems to the
Federal' Government.
Subsidies
given to any individual or
-
.cause
a
men
and
;
East
•
r:
shift
of
Government.
healthy for
Handing
try's
some
bureaus
in
group
control to
the
This control is
our
.
Federal
country.
states r spent $80,000,000 in price
supports to .the farmers Oh potatoes alone in 1946. More and more
farm products are asking for
price
*. supports. Farmers will
probably
be paid well over
$320,000,000 for
cutting down production this year.
The program for export subsidies
:
means
the
$6,000,000 program at
DeferietV-N. Y.1 mill
New
Looking
...HES
plant
'
(completed)
'
30,000 tons of printing and publication
10,000,000 lbs. of
Panelyte plastic
v •
Development of
,
St.
,
sulphite and groundwood
patented procedure
Bleaching of
' ^
and
Regis
pulps by
Forward
of origi¬
acquired properties is
expected to increase the sales volume
for 1947 to more than $110,000,000.
Completion of plans for plant moderni¬
zation and installation of mechanized
high-speed equipment will increase
newly
manufacturing
efficiency
with resulting
The unity of interest between
labor and management was furthered
tJUYmg 1946, and the personnel of re¬
economies.
cently acquired mills is being rapidly
merged into the St. Regis organization.
The
Company's products
continue to
of paper as
coating
it is being
material to the surface
manufactured on paper
supply the needs of the customers en¬
gaged in twenty-one basic American
machines
Financial Suicide?
.
Products, Markets
Production
Methods of
'
/
equipment
twelve-month operation
nal and
-
with the
;taxpayers' mbheyi Onr
job training for. veterans is to re; suit in a billion dollar subsidy s to
5
4
mechanized bag-making
A full
papers
completed)
$2,000,000 program at
Trenton, N. J. plastics
products overseas at a loss, after
buying them here at high prices
expansion within exist¬
markets
ing
Quebec vg/
(largely
400 commodities now
Multiwall paper bags...
Madeliene (Three:Rivers),
Government sells farm
businessmen.
adapted for new fields
being packed)
(over
-
>
table tops, bars, furniture
50,650 tons
Florida
(Under construction)
New and enlarged bag 20,000 tons
Jplant facilities at Vancouver, B.,C.; Dryden,
Opt^'.-dfKi Cap de la
,
to
attached,
Panelyte for
Decorative
Pensacola,
not
and breaker
fastening devices
Multiwall paper bags
:
plant at
Multiwall bag
with hidden
refrigeration
for
Additional Annual
Capa(ifies
..
M
strips,
,.
Plant Expansion
support
certain
democratic and is
financially dangerous. The United
is
interest.
un-
over much of the coun¬
cash
groups
;
has an
Panelyte door frames
One-piece
35,000 tons of kraft
paper and kraft spe*/•••••
cialties
195,000 acres of Southern timberland
400,000 acres of timberland in Maine
*Under construction by company in which St. Regis
mill at
\
Pepperell, Mass.
Paper
■
sources and
7
V
and 12,000 tons
Minnesota
' '
' ■
Little Falls,
.
-
of pulp
of
printing and publica¬
tion papers
mill at 10,000 tons
P.ulp and paper
To¬
day many individuals who desire
something for themselves or for
;V&: particular group first endeavor
r to
obtain it through
Washington
rather than through their own re-
•
papers
year
:
*
papers
80,000 tons of printing and publication
milU
at
Kalpmazoo, Michigan
Paper
Subsidies
-
mill at 112,000 tons of pulp
and 100,000 tons of
printing and publico*
Pulp and paper
Bucksport, Me.
-
The cost of subsidies this
;
of kraft paper
:
problems. Individual self-reliance
; and economical
planning are being
^ discarded as everyone turns to
;
mill at 90,000 tons of kraft
pulp and 86,000 tons
Pulp and paper
Pensacola, Fla.*
unreasonably high budget by ask"
Capacity
mil).at 42,000 tons of kraft
pulp and 59,000 tons
of kraft paper and
Pulp and paper
in
as
Additional Annual
Acquired
in 1946
is
understand
why in
1 times of good
employment almost
as
much money is
delegated to
'
$ 5,563,604
"
than
times the
$20,000,000
disposal before the war. It
its
7l
Commerce,
thirteen
"
\
$82,782,186
Sales
more
1946
.
"wartime appropriations."
-
'
...
industries.
Application of
-.By recent estimates each work-
labors almost ;a' full day - every
week just for the Government. If
<er
Panelyte drip
baffle plates for
refrigerators
over-grown arid wasteful Govern¬
ment
continues how much of the
-/Let .us realize that
ask
we
our
.are
*
h.
j, O.
T
Allen
Bulkley
H.
Cosford
W. Delong
our
W. K.
^children: for perhaps generations
W. J.
those
and
come.
jers,
of
R. K.
?
a
I
pity if
businessmen,
we as
job
;
-
|
holders,
generations
a
kill
at
the roots
future opportunities for the high
standard
have been
of
living
so
learning to
;
of
we
"Turix-iriver ^thebox
and look at the
price" when buy¬
ing merchandise; let
same
which
proud. We.are at last
us
follow the
principle When paying our
taxes.; Surely, let us
In the box!
seejwhat is.
/
|
^|
h. r.
Lamb
H. S.
Dixon
Ferguson
regis
Lewis
Machold
Mahaney
Maltby
b. Martin
A. Quinlan
h. e.
230 PARK
c. r.
Dick
c.
AVENUE, NEW
NEW YORK
r. b.
j.
M. F. i v.~
m. r. Ford
W. H.
'■
Machines...Printing,
heritage of debt and
can
st.
e. r. gay
•
YORK 17, N. Y.
CHICAGO
. BALTIMORE • SAN FRANCISCO
IN CANADA: St. Regis Paper Co. (Can.) Ltd., Montreal
products: St. Regis "Tacoma" bleached and unbleached sulphate pulp . . . Multiwall Bags and Bag-fil ing
r "
farm-
and veterans hhnd down to future
.1 greed. Both
/
j
money
digging into
really
It Will be
•
time we
our
-I: to
: • •
every
Government for
own;»pockets
:;,
.
directors:-
worker's pay will be 'Hake-home?"
-
Versfelt
■ - '■ '
■
Publication and
Specialty Papers...Panelyte-The St. Regis Structural
I
'
I
Laminated Plastic.
1398
THE COMMERCIAL & FINANCIAL CHRONICLE
;he" depression.
On the whole,
therefore, I think that relatively
(Continued from page 1381)
mand
for
houses
new
to
iaKe care
add,
willingness
ferent
One
though,
to
that
the
quite a dif¬
is
save
from
concept
propensity to
willingness to
not
of itself.
Keynes'
because
consume,
save
as
I
it is
use
individual propensity only
—-it depends also on business
poli¬
cies of corporations and on
public
financial policy.
an
Stabilizing Investment
I
do
not
veniently
under
function.
sume
to
think
one
can
propensity-to-conIf the willingness
change then an
adaptation of the volume
ment will be
willingness
as
con¬
should
save
of invest¬
necessary, unless the
to save has
changed
a
result of deliberate
policy by
public bodies so as to
bring about
an
adaptation to
an existing volinvestment activity. However, as a first
approximation, I
of
ume
■j
i
think one can say that if
to stabilize the
aggregate
.
ture, then the
the
volume
i; relatively
Let
*;
want
we
expendi¬
first thing is to
keep
of investment on a
stable
me
in-
There are two kinds of
private
investment; the profes¬
sional
investment by
business
i people and the investment
by
who
buy
durable
con¬
con¬
sumer. goods.
Houses may be
classified under the one or the
t other, but I
prefer to place it in
the former one.
I should like to
v:
{
words
sional
about
the
private
profes-
>
costs and
>
'?
get
out
sales prices should not
of
line
with
each
other.
J Hor must expectations as to the
I quantities that one can sell be
| subject to violent fluctuations if
VWe are to get the desired
stability.
>
j
-
v
•
the time; but for
the economy
whole, it is desirable that
^ expectations do
^ pessimistic
1
as a
the
not become
or very
very
optimistic.
Wage-Price Relationship
_
i
The relation between
costs and
sales prices and, on the other hand
also the
expected volume of busi-
>
ness, is
.
particularly important in
industries where real
investment
—production of capital
goods—is
large, for instance in the house
building industry.
■l-f Let .us h>ok at that first. The
most important item
in cost is
;
wage
:
the economy
payment
unit.
per
Taking
as
a
whole, it is
Hence the relation of
wage rates per unit of
output to
the price per unit of output in the
investment
industries, is partic¬
obvious.
...
J
I
le
2
j.
4-U~
,.
.
ularly
important.
mention any one before the others
costs in the building in¬
investment
industries
costs
and reduce the volume of invest¬
ment in such a way as to curtail
the
total volume
of
employment.
depends
the
on
development
the acceleration
ment
principle: Invest¬
depends
change
in
that
the
on
rate
consumption.
with
rate
Observe
of
this
attitude
it
is
the
wage
rapidly increased, it is im-
portant
:
themselves
cost.
v
that
prices should adapt
to these conditions of
have free wage move-
To
ments
and
controlled prices
is, I
the long run com¬
patible with full
employment, un¬
less such an
adaptation is permitted. ' /■>
fhink, not in
Profits depend also
of
ume
business.
??ionly
u
the vol-
For this
reason,
necessary that prices
should bear some
normal relation¬
ship to
cost; it is also necessary
investment
i
prices
should bear some
normal relation¬
ship to
the
the
1;
goods
purchasing
power
of
people who are to
buy these
investment goods or to
buy the
consumers' goods which
they help
to produce.
case
of
houses and many
the average in¬
other things, it is
come
is
level of the
the
prices
source
of
consumers
the
demand.
of
that
So
investment goods must
bear some
sort of practicable
rela¬
tion to
the average
income level.
it the
costs of new
houses and
tneir prices
should go up, relative
to
the
average income level, it is
natural to
expect
■
.
7 -•*.
a
fall in the dei,
■■
vestment
people
They may vary
mater of fact, they
suddenly.
often do,
vary their
demand, retailers are apt to re¬
duce their stocks; Therefore the
investors do the same, that means
by
by
the
extent,
rate
of
consumers' incomes.
to
is
change
But it
of
seems
to be almost inconceivable
that the development of consum¬
ers', incomes should vary in the
me
very specific manner which would
be necessary in order to make for
a
relatively stable volume
vestment.
Public
is
work
Improvements
the
consumption
rate
the factor
as
effect in
can
the whole system
Besides, the
factories
the
impossible
of change
order
and
of
which
to
make
relatively stable.
investment in
new
machines,
consumers'
to
etc.,
industries
for
is
cer¬
tainly
not one-half of the total
volume of investment in countries
like the Western democracies. The
cities is, in most
cases, by far
largest item of investment,
and more than
fifty per cent of
public build¬
ings, in new streets
city communications
and
in
and
new
so
on,
stocks
time
down.
Therefore,
of
ways
reg¬
in' dif¬
ferent
countries, under more or
less public control, if that coulc
be kept on a
relatively stable level
retailers
to
vestment
limits
lines
and
within
reasonable
offset
so
in¬
some
them
by
Changes in others.
So far, when
Cehtral Banking
let
us
say, the next decade or
efficiency.
banks
central
varying the
want to
do
in
have
the
level > if
o_
we
volume of in
large
government
tries
favor
It may be difficult to
countries with a
in
so
interest
affect the
in
debt,
as
most
coun¬
because changes
now,
Interest
level
do
cause
fluctuations in the capital values
of
long-term bonds and other
things too, and that may affect the
position
the
of
and
the
considerable
level
bonds
banks
banking
insurance
rise
would
so
reduce
much
that
system
companies. /
in the interes.
are
as
'the
value
to make
o:i
some
otherwise
quite
shaky.
It
is
therefore an important
problem in
some
countries, where the banks
own
large quantities of bonds
stable
somewhat
whether
one
could
construct
;
system whereby the market
long
term rate in interest
could be
ried while the
va
repercussions on
e banks of
these fluctuations in
interest rates and
capital values
made
powerful
that
create
central
before
1914
they had the
interest
levels, reduce
cause
ment; if prices
thereby it could
unemploy¬
tended
even
to
creases
for
of
idea
ployment
certain
a
years
or
a
period—:
But
so.
the
the policy o
high level of em
that
depressions
power
Anyway
wage in
behind
is
from
rise;
bring about
some
wage reductions.
it could prevent
further
then
price
depressions. The
investment and
away
much
bank could restrict credit
raise
the
argument
have
that
commodity
what
fact
to
think
not
will
the
so
the
sumer
goods industries, but in the
investment trades, including house
building.
Therefore there is, <
some
almost
certainly
that
central
unless
interference,
will
be
should
we
and
if
we
not
take
the
banking system
to create depressions
they cannot do
Therefore, if
very
we want to
much
maintain
relatively stable commodity price
levels, it would seem to be neces¬
sary
a
to obtain in
some
reasonably stable
other way
wage
level,
or
wage levels that rise at about the
same rate that
productivity goes
up.
:;v
v;
Stable Wages and Prices Most
Favorable to Employment
It is, in my
opinion, not advis
able
to
reduce
depression,
rates ; in L
when Certain
wage
except
wages are out of line with others
Perhaps one might also temporalily reduce wages to some extent in
certain investment industries
if
be done
can
quickly and
for all.
once anc
You could
investment,
of
am
the
that
it
durable
more
not
talking about in¬
ventories now—and if, in
plan¬
ning this part of their
investment,
business
firms
could
tively little attention to
rela¬
the fact
whether
a
there
recession
or
will
not six
pay
be
or
slight
nine months
hence. It is not at all certain that
this would be a bad
policy from
their
own
I have
point of view.
actually met
some busi¬
who say that they
always
plan to invest when business con¬
ditions are bad, because
nessmen
conditions two
hence.
years
Private Investment by Consumers
turn
now
to
the
question of
private investment by consumers
If
the
wage
level
relatively stable
prices
ted
were
and if
kept
monopoly
the whole prohibi¬
government regulations,
were on
by
then expectations of sudden
price
changes with regard to the dur¬
able
consumer
goods need not
arise. And if serious
unemploy¬
ment
were
not
factors, then I
would go on
sumer
rate.
caused
by
other
suppose consumers
buying durable
goods at
a
relatively
Consumers'
con
even
purchases
durable consumer goods
fore, it seems to
me,
of
are
there
rather
a sec
ondary element in the process. It
true, of course, that there might
be
a
reinvestment cycle
with
is
regard to the
consumer
goods, jus';
as
there is, for
instance, with
regard to ships in some countries.
In one period
people buy lots of
ships and buy a lot of motor cars
and
then, after
they have
body of ships and
seven
years,
I
do
not
know
to
or
eigh;
this
renew
But
cars.
th&t
it
has
so
far
been
proved that there is a very
strong
reinvestment
cycle, in
durable
consumer goods.
There might be
after this
war, because the war
perhaps stimu¬
late building by
cutting building did prevent people from
buying
wages quickly and once and for
durable consumer
goods, and they
all, but I think it is a risky
policy. will buy a lot of them during the
If
have that system you set
up
expectations that when a reces
you
sion
has
begun,
"wages will go
down, and before they have done
so,
not
I'd better sit back and wait
build." That would
anc
intensify
first three
war.
less
and
slight recession
appears
by increases
or
reductions in pub¬
lic
investments, financed through
borrowing. One difficulty is how
shall be able to reduce these
one
public investments quickly enough
when the recovery is well under
It is hard, I think, Usually,
way.
to convince the general
public and
the political assemblies that while
still
have
considerable
a
of
amount
time
unemployment, it is
prepare for the cutting
to
down of
public investment.
But
if you do not "start
cutting it down
then, and wait until there is already full employment,: then the
public investment may do some
harm in intensifying the boom,
The aim of the public invest¬
-
ment
policy should not be,
I
as
indicated in the beginning of the
lecture, only to offset changes in
private investment, because the
total aggregate volume of invest¬
ment should be adapted to
changes
in willingness to
save, or, if you
want
to
put
it
another
way,
to
changes
in consumers' purchases
for current
consumption. It is quite
they think possible—and this is a part of a
they will be ready for better problem that has been relatively
then
I
a
Secondly, everybody agrees that
it would be natural to try to offset
variations in private investment
you
vestments
influencing the devel¬
of
for
have
an
of
level,
was
do
banks
opment
interest rates are, of
course, also
an important cost
item, not in con¬
priori,
I
whole
;
in,
two,
depend chiefly on the devel¬
opment of wage rates relative to
maintaining
Bu
technological change
will
on,
kind—I
Controls
will
couple
analyzing costs,
vary
In my opinion the
development
of the
commodity price level
and
difficult to keep the
trades at one
stimulate it at other
professional
their stocks so
they have been doing in
much as
stability in the economic system
If we have that in
order, then it
so
or not.
It goes without saying; when we
talking here about the private
the last decades.
power
inevitable variations in
whether
inevitable.
for
ment and with investment in goveminent
business
enterprises.
Therefore I think it is
very im¬
portant " that municipalities and
government V enterprises
make
in
would be useful if business firms
learned to plan some of their in¬
incentive
has
excesses
would
an
This
is
are
be
level.
municipal invest¬
to
would have. The risk of individual
fluctuations in commodity prices
not
should wish with regard to
public
investment is that it is kept on a
gains
considerable fluctuations
stable, then retailers will not have
so strong an inducem ent to
vary
their stocks as they otherwise
Investment
action
considerable
so
Public
The next type of investment is
public investment. The least one
one
another and
be
I indicated in my review of the
as
Swedish program.
long period programs for their in¬
They at least should be
in a position to be able to do
this,
.
there is
people
buy durable goods, like furniture,
vestments.
tende'ncy to
and
so
period of amortization.
One can, of course, also use sub¬
sidies in depression to help
not been so with
construction
and
the
duce
relatively stable
periods is almost certainly neces¬
sary,
because the influence of
changes, say, in marriage rates
one important
anti-depression
any
if the de¬
goods tends to
expand too rapidly, one could in¬
crease the initial payment
and re¬
government
some
the
go
is obvious that if the
commodity
price
level
is
kept
relatively
and that is not quite so
difficult,
then it would form a nucleus
oJ:
will not be
sales
This would be very difficult and
to some extent
impossible, but it
chance
different
own
hand,
goes
policy would seem to be to re¬
duce, if p 0 s s i b 1 e, capricious and age composition of popula¬
tion,movement from drib part to
changes in inventories.
house
in
their
other
consumer
time
impression
check the
central
construction, which is
The
that
the
mand for
very
the
recession.
a
serious recession is this re¬
action by professional buyers and
their tendency to reduce their
plus the volume of investment in
ulated
ity,
re-
cession develops into a somewhat
the
the total. So if the volume
of in¬
vestment that is handled
by, say,
the municipalities in
one
more
when
pur¬
tendency to vary—
investment
at
planned
Then you get a lack of balance
and you get a tendency towards
the contraction of economic activ¬
fl.
1
to the conclusion—
..
aspect
probably
on
of in¬
of Construction and
:
one
'
1
.
come
very tentative one—that
important reason why a small
*
Importance
It
"
I have
increased
are
down.
It is not very useful to
have people try to increase
saving
at a time when investment falls.
rapidly than the consumers' de¬
influ¬
savings
consumers
when
t
some
a
month.
that planned
consumers
mand.
to
speculate in
happen to prices next
Now, if consumers reduce their
purchases when prices are ex¬
pected to fall, and the professional
stocks.
if
con¬
would
year or next
A special sort
of professional
investment consists of commodity
a
erratic, because
also
will
what
Inventory Fluctuations
because
reduce their investment
more
On
inevitable, for
expect
higher or
and they will in¬
accordingly.
Furthermore, con¬
sumers' purchases would also be
increase investment.
vestment in manufacturing
in¬
dustries, for example, and every¬
where
or
of in¬
be
will
prices
crease
sumers
As
will
lower
retailers' demand from producers
or wholesalers will
go down more
vestment.
on
fluctuations in the volume
made
change in consumers' in¬
come
that is really the
strategic
factor. I agree, of course, that in¬
only mentioned labor costs.
•5
•
of
Effect of Interest Rates
not be
[
of
We all know about
policy
own
much lower rate of interest could
Some economists stress the fact
the volume
of
investment
consumption.
its
having
that
>; are determined by bargaining and
} the efficiency of production can¬
,
like
raise
may
interest
into
again
almost disappeared
::or ten years, as evidenced by the
act that many people talk about
a permanent
tendency to oversav¬
ing and underinvestment, without
mentioning the possibility that a
Monop¬
policies in
wage
perhaps
come
after
the general income level:
the
u„—
Then
might
dustry do not get out of line with
olistic, price and
mnonc
mi
—that
rates
If
n
if consumers'
up,
ployment.
uWiC,
volume of investment.
.1
.
k Of course, in individual cases
for certain commodities or a investment in house-building and
in the construction and
certain
expansion
industry, that happens all of
( cost and price relationship and
| development be such that profit
:
1
that this is
say first a few
investment.
This investment depends on profit
expecta¬
tions. Hence it is desirable that
,
personally think
perhaps the most im¬
portant relation of all, if I should
J.
enced
level.
begin with private
vestment.
sumers,
ly important—I
sum
a tendency to
vary a great dealthink one could
■''•:;,r
.(''J
change credit
Should wage rates and whole¬ conditions. One
might reduce the
sale price levels vary quickly, the initial payments and
lengthen the
influence on all kinds of invest¬ period of amortization
when sell¬
ment will
be considerable, and ing on instalment.
x
■ *
If that could
done, then it would be easier
^
.
to use a change in the interest
1
t71
evel as a means r\$ offapfind inP
of affecting the
be
should have
To
most favorable conditions for em¬
could be prevented.
de-
a
cline in investment... So it is high-
house-building
all that together
group
some
and
"*
'
has
chases of durable consumer
goods
stable wage levels will create the
Conditions of Employment Stabilization
speaKing,
Thursday, March 13, 1947
or
four years after the
It may be that
they will buy
during the next three years
then buy» more again to re
place the former.
remains to be seen.
That, however
£\
I
#
Ui
*
^
little discussed in the literature—
that when a boom has
developed
and-lasted for
some
time, consum¬
optimistic and
tend to get more
therefore spend a larger part of
their expected income for current
ers
consumption—in other words, save
less.
If that should
happen, then
it will be desirable to cut down the
volume of investment in this sec¬
ond
phase of the recovery. I think
that it is quite likely that this has
been the case in Sweden in
1946,
when consumers
seem
to have
started to consume
relatively more
than they did in
is
actually
1945, and that it
why it has
one reason
been found
necessary to cut down
the
volume £ of investment
in
Sweden in 1947.,
Unfortunately,
little
statistical
.
there
evidence
is
You
can see
much
so
bank
as
vei;y
of
changes in the willingness to
the
save.
that people do not put
money
they
in
the
savings
used
to, and, that
kind of thing; but that is
only 3m
indication
and not a measure of
change.
However, it shoujd
impossible to make selec¬
the
not be
tive,
detailed
investigations vnc*
Gallup Polls and such methods
something more about
possible changes in the willing¬
use
to find out
ness
to save.
that quickly
for
You
can
get to know
enough to be useful
policy.
It is obvious,
though, that policy
has. not necessarily to take the
willingness to save as a given
factor in the problem.
One im&ht,
through
policy,
deliberately
change the willingness to feve,
because
ings
one
part of it is the
or the negative
sav¬
savings done
^
Number 4576
yolume 165
THE COMMERCIAL & FINANCIAL CHRONICLE
v
by
municipalities and govern¬
ments and so on. For instance, the
only when
get below
you
90
get the benefit of taking cer¬
tain amounts net
out of the fund,
bo unless we can
make
and the municipalities can
have surpluses during booms and
base the unem¬
deficits < during
depressions.
A ployment insurance contributions
tendency in this direction is nor¬ on the. assumption that we are
state
surplus on current ac¬
count in a boom because the Min¬
ister of Finance has been cautious
and a deficit in a depression be¬
cause
he
was:.' not
pessimistic
enough. But it would seem to be
a
cyclical balancing of the budget
example of such a policy.
From
this point of View, one
reaches the conclusion that the
one
Many
fact
consumers'
that
demand
stability of employment
relatively high level. It does
expenditure
than
penditure.
the
the
the
and
that
true, that
should
one
OF
Volume
Unless, while you decide to
government debt, you
deside to invest what you
debt.
also
in
save
some
enterprise
new
or
investment.
Deficit and Surpluses
will get a
the
how
balancing of the budget
It depends on
chooses the volume of
long run.
one
If
is balanced.
choose
we
Dividends The 29,200 preferred and
ditions.
holders received
•
rates
introduce
or
and
booms
new
taxes
reduce
in
taxes
in
de¬
pressions. I did suggest, in 1931, as
a quick way of increasing expendi¬
ture, that the; Swedish Govern¬
ment should not ask people to pay
the amount
mon
stock of
a
ly slow rate of expansion,
fers
then
the
have,
risks
if
or
of
(Continued
a
on page
as you,
one
pre¬
somewhat
1400)
somehow people
did not take this very excellent
proposal seriously.
Anyhow, the suggestion of low¬
ering taxes in depressions and in¬
creasing them in booms should
not be excluded, especially to re¬
duce
the
for
rates
tax
Employees An
men
the
this very
ical
period
not
from
of
mean
it
is
astronomical
an
Cash with Banks and
U.
of
3% Debentures due
quite
First
-.per
I
(including
$1,217,203.49).....
interest
Federal Taxes
on
debentures
on
1,429,425.93
........................i.......
Net Income before Federal Taxes
4,544,328.97
Income.
....
Income.,
on
»,»'>
27,636,416.47
>...
11,577.000.00
,v
1....................
t*>'
r ''
:o
$16,059,416.47
Net Income for Year
n.
.1-1'
■75-,
P-V-.
85,655,772.59
53,061,869.46
Statement of Earned
6,159,290.37
2,484,753.16
'
,
„
v
Surplus
for the Year ended December 31, 1916
.
of Year. .,
...........,....
$ 16,066,123.65
Earned Surplus of Tubize Kayon Corporation as of date of
mercer, February 8, 1946.
"...
5,348,732.88,
Earned Surplus at Beginning
1.00
.
• i
•
37,474,27^00
Common Stock..."
8,305,667.82
7% Second Preferred—$7.00 per share
40,000,000.00
".
December 1, 1966
■
1
-
3,737,363f49.
First
25,000,000.00
4,407,820.85
<
>
1,037,253.00
;
f.
•
>
.
;
t
1,995,091.21
7,988,685.47
Surplus at December 31, 1946..
$29,485,587.53
$4.75
Earned
'
$4,956,341.26
Preferred Stock, $4.75 Series—
'!>
16,059,416.47
.......
<...
Deduct Cash Dividetuls:
:-v
.
.
$ 4,568,304.33
,
IT
32,195.94
Net Income for Year..
shares,
Preferred—500,000
without par
per
value.
share
Statement of
Preferred—148,179 shares, par value $100.00
share.
-
Capital Surplus
for the Year ended December 31, 1946
4
Preferred—148,179 shares
7% Second
Capital Surplus at December 31, 1945................... $ 22,332,693.59
Add—Capital Surplus of Tubize Kayon Corporation as of
date of merger, February 8, 1946. ..... ... v .....
par
value $100.00 per share.
. . . . . .
par
value
2,205,643.00
* *
Capital.
.
,
■
-
4,869,330.58
from exchange of 702,856
Corporation Common Stock
for 468,571
shares of Celanese Corporation of
America Common Stock on February 8, 1946.
57,448,543.00
,
234,285.28
,
27,436,309.45
Surplus:
' ■ * •
.,...«..•••••••
Earned (since
Surplus arising
shares of Tubize Kayon
14,817,900.00
Common—5,514,107 Vs shares without
r.r
Capital
^
December 31, 1931)
Less—Expenses in connection with merger of Tubize Rayon
27,297,716.97
29,485,587.53
Corporation into Celanese Girporation of America.
56,783,304.50
138,592.48
.
Capital Surplus at December 31, 1946..,,
$191,945,336.17
$27,297,716.97
is
sheet and statements are
The foregoing balance
dated February 19,
copy
,•
1947 to stockholders
of the report to
;
ry-.'
t
and notes thereto appearing in the annual report,
of Feat, Marwick, Mitchell & Co., Independent Public Accountants. A
condensed from, and should be read in conjunction with, the financial statements
of Celanese Corporation of America, which contains the certificate
the Corporation. The balance sheet, statements, and report do not constitute an offer, solicitation
any form of a prospectus in respect of any security of Celanese Corporation of America.
stockholders may be had upon application to
;
tation, notice, advertisement, or
-Executive and Main Sales
Offices: 180 MADISON AVENUE, /Veto
of offer, represen.
^
t
York 16, /V. Y,~
*Tt'g U. S. Pat.
i
t'
728,681.12
Yjg.
Deductions
Income
93,068,994.14
...............»«»,»
puniping' money into
the
unemployment
insurance
fund, while the employment goes
down from 96 to 94 and 92; and
f
28,337,161.28
Profit.
29,065,842.40
LIABILITIES
on
: t ■.)
5,913,781.86
.
above that level
recession tendency starts.
i
12,061,311.14
•
-
^
88,889,957.34
106,365,050.34
Common—7,500,000 shares without par value.
Xssued and Outstanding:
First Preferred, $4.75 Series, Cumula¬
tive, without
par
value, 420,000
shares. i
r;. . T;.
v. .
$40,425,000.00
If you have an employment level
of 96% and a recession starts, you
'go
I..
13,744,965.98
t. *
7% Second
that
whqt they can count on.
!Tne volume of employment
$135,202,211.62
yjjV.iI..... .•/.;..
Authorized:
an
""
1
Net Operating
Capital Stock:
basefl—e.g. 90%
td' make the assumption
a
...........
Reserves.
average of 90 % employment is
when
;
.'.v.,
Sold.
Other Income
*
October 1, 1965
2.85% Debentures due
Juhshtisfactory state. But the so¬
cial'policy workers have found it
riec'^ssdry owing to past experi¬
well
1946
....,
Goois
421,809.80
Total Current Liabilities..........,.,.,
employment which is the average
dne' and orv which unemployment
usually
will be sent on'request.
10,418,977.09
and Interest Receivable..;.
Accrued Liabilities.,.......
exercise a
dampening influence, but may, on
the contrary, strengthen the re¬
cession tendencies. The degree of
be
report
Sellings General arid Administrative Expenses....,,..,
value
Current Liabilities:
Trade and Other Accounts Payable
•;
jempibyment—may
market
$191,945,336.17
This will not always
are
mud
Net Sales
'Cost of
cost
V
nevertheless relatively
Contributions
(quoted
Prepaid Expenses arid Deferred Charges. .,... .;,.........
Federal Tax Claims. > .. . i,
Motes and Accounts Receivable Deferred, less reserve......
Patents and Trademarks ,
........
them in
policies of this
only mitigate-fluctuations
.
,
25,559,713.45
Amortization....,..,.
unemployment
But
•,
an
beetf/j^iiblished.
just
Condensed Consolidated Statement of Profit and Loss
'♦'•fit:-
(including foreign subsidiaries—
$1,913,493.74)......... ..........
...»•
Land, Buildings, Machinery and Equip¬
ment,
Plant under construction and
$138,717,642.05
mechanical and other supplies—-at cost..
Less Reserves for Depreciation and
money
serious. ^1"'
the
in
Depreciation............
Total Current Assets
in good times and reduce
are
with
operations for 1946 are
has
A copy
$42,923,527.82
market...........................................
you should raise the contributions
whi6h
which
(Raw Materials, Work in Process, Finished
Goods and Supplies)—at cost or less, not in excess of
is taken out of
the fund when employment is low.
This, of course, would be even
more so, if, as has been suggested,
sort can
Celanese
Inventories
insurance sys¬
tems with fixed payments have a
tendency in the right direction,
because money is piled up during
depressions.
ii'im
......
Trade Accounts Receivable, less reserves
Unemployment
low, and
Hand
Obligations
on
Other Accounts and Advances
artificial,
point
Government
S.
Investments—at
when
Corporation and its subsidiaries
for the Year ended Deeember 31,
$25,557,000.00).'.
view.
times
average of 20,982
in the employ of
women were
revietved
Current Assets:
"Vi^w, but from an economic point
good
•«
during 1946. Total wages and sal
aries paid in
1946 amounted to
Additional working capital in
program was provided by the
ASSETS
artificial astronom¬
twelve months. I
that
and
December 31, 1946
got rid of the idea
must balance the budget
over
a new
S. C., on
which work has already been started. With demand for the
Company's products considerably in excess of supply, in¬
creased production is essential to meet the reauiremcnts of
industry and will he progressively obtained through plant
changes and construction now in progress.
Condensed Consolidated Balance Sheet,
we once
we
of
range program of expansion includes construction
cellulose acetate fdament yarn plant at Rock Ilill,
poorer
groups in society during a depres¬
sion would seem to be quite na¬
tural if
on
exas;
private sale to ten insurance companies of $25,000,000 twentyyear 2.85% debentures, due December 1, 1966. Working
capital at the end of 1946 amounted to $84,763,326, compared
.But
treasury.
1946 totalled
included com-
Belvidcre, N. J., and Bridgewater, Va., and additional facilities
at Cumberland, Md., and Newark, N. J. The Company's long-
$51,399,065
compared
$38,183,945 for 1945.
expansion
over current
?letion of additional units plant facilities plant near Bishop,
of the chemical at Narrows, Va.,
construction
V/i shares for 1.
connection with the
the end of 1945. Current
at
ratio of II to 1
a
Additions to plant for
$20,476,451. The major items of expenditures
the tax forms but
on
showed
Expansion
common
Working Capital
I
wants
one
the Company specializes—cellulosic chemistry and petroleum
chemistry—offer broad opportunities for future achievement.
total of $7,988,685 in dividends
should allow everybody to collect
that amount of money from the
still
cur-
relatively
are
whether
for
Rosoarch Continuing its policy of inten¬
sive research, Celanese expended in 1946
$2,284,571. The two research fields in which
stock¬
during 1946,
the largest amount in the Company's history. Earnings re¬
tained in the business will help to finance the expansion pro¬
gram now under way. The amount paid in dividends to holders
of common stock during 1946 amounted to $2.25 per share
before giving effect to the common stock split. This amount
includes the dividend of 25jf per share declared for the fourth
quarter on the common stock following the split of the com¬
One could, if one wanted a
policy of this type, increase tax
ah'
But
would
economic
$59,736,169
assets
somewhat smaller than
be
the deficits in the depressed con¬
ence
consumption
where
lit¬
very
liabilities.
the surpluses
atively high level,
would
with
Sales of
comparable basis for the shares outstanding at the end of 1945,
after adjustment for the common stock
split in 1946 of 2^
shares to 1, the earnings per share for 1945 were $1.13.
rel¬
a
Business
of
net income also set a new high
record—$16,059,416, compared with $7,613,489 for 1945. The
earnings for 1946 were equivalent to $2.36 per share on
5,514,107 common shares outstanding at the year-end. On a
employment at which the budget
is
rent
country
invest
purchases
OPERATIONS
1040
Earnings Consolidated
It is not at all certain that one
k
because
a
this development with a relative¬
will get somewhat
to
save
stable.
I think it is
tendencies
weaker
products—chemicals, textiles, plas¬
tics—were the highest in the Corporation's
history^ totaling $135,202,211, compared with
$104,197,237 in 1945. The increase came prin¬
cipally through additional production achieved
through new and improved equipment and
processes, and from plants acquired through the merger with
Tubize Rayon Corporation early in February, 1946.
the' government
reduce
should
of
you
Celanese*
reduce the
do
*
fequal
more
consumption.
ex¬
They, therefore, draw
conclusion
of income
and
tle,
That would reduce saving and in¬
crease
investment
more
system. For in¬
might make the dis¬
one
tribution
more
are
a
in
people
economic
stance,
stress
for
make
fluctuations
investment.
^
CHEMICALS
whole, but not for any other
reason, not because you think you
that
would
and
a
a
in
That
saving
AND DOMESTIC SUBSIDIARY COMPANIES
surplus when it is con¬
sidered desirable to exercise re¬
strictive influence on the economy
as
reduce
Savings
economists
consumers'
stable
vs.
state finances, for instance, should
have
increase consumption and
try to
Celanese Corporation of America
of a cyclical balanc¬
or rather the
ing of the budget,
is
that
unem¬
HIGHLIGHTS
quite natural to use a deliberate
policy to have a relatively: large
surplus in booms and relatively
large deficits in depressions. That
is the policy
forces
serious
very
stable
desired
on
a
Consumption
of the attitude of going to succeed in having a very
level of employment this
finance ministers and the sticki¬ high
ness of public expenditure.
You policy does not contribute to the
often get a
weaken, the
for
ployment but that is about all.
because
mal
to
tend
do
you
1399
". >.
'i.? I >
i
t' :
f i> y,
i.
1
iy
mi
1
I
:
;
c
j
i
'a
1
•; i <t
"V
•
j
j
r
fJti-:
t,i kIt--
i
A
i
t"
'
I-
i
M
y t-i
-
■;
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t, 1 '.
*■
Off.S
"
*
(1400
THE COMMERCIAL & FINANCIAL CHRONICLE
world
on
Conditions of Employment Stabilization
(Continued from page 1399)
greater
fluctuation
in
Not Essential T>
ment, that is of course a subjec¬
tive matter about which scientists
can
It
is
sometimes
in
argument
said,
favor
as.
the
of
one
policy
nothing. It is for the pol- of - placing capital abroad, that
or rather for the people, one country
cannot be prosper¬
decide whether one thing is ous if all countries are not
pros¬
say
iticians,
to
desirable
In
not.
or
good
reasons
perous—we
... v,,
my opinion there
are
world, and
many
not
distribution
could
can
that
be
at
all.
society
to
reduce
the
by
progress
a
were
weighty argument for
as a
means
of
measures
relatively
rate
could
of
as
bringing
even distribution of
I should rather say that
fact that employment stabil-
more
little
trade
with
airi
I P°or.
policy that will nevertheless
maintain
reasonable degree
a
of
that
If that
not, so, I do not see how we
ever have been
prosperous,
stability.
of
I shall not go into the
question
the influence of wage
policy
on
corporate savings, which in the
future
probably will be an im¬
portant problem. Neither shall I
high
geographical
learn
me,
tasks;
new
willingness
trades and
so
tOi
Let l
on.
however, stress in passing the
fact that
there
is
certain
a
dan¬
if you do get structural and
local islands ; of unemployment,
.and if you do not
get sufficient
labor mobility, that governments
will start public
works, as a sub
ger
stitute
for
labor
transfers.
of
course, would
nomic loss.
mean
That,
an
eco¬
impor¬
tance of overtime to
prevent mal¬
adjustments, or the question of
seasonal
unemployment, which is
important
very
portant
in
—
extremely
certain
im¬
countries.
International Aspects of
Unemployment
T shall turn instead to
some re¬
marks about the international
pects
of
the
problem
ployment stabilization.
I
can
ohly touch
aspects, because
of
as
unem¬
Of course,
upon a very few
almost' every¬
thing in international policy has
a repercussion on national
income
and
employment, so almost every¬
thing could be included.
country were willing to ac¬
the one, art increase, arid
every
cept,
he other a reduction in foreign
exchange
reserves.
But
if
a
country wants a relatively, high
volume of employment without
But it
is true that if investment in back¬
ward countries, or in countries
rade restrictions and yet does not
or cannot afford to lose
want to
and speeded up in depression
peri¬
gold
ods, that might help both the bor-
Bich countries
a
set
every-
If
in
goods
it
is
a
that
country..
country, it will
small
If governments take a part of
the risk-for certain types of
then be very difficult to
vent a rise in the wage and
ital exports, for
instance, through
the use of a credit insurance
sys¬
levels; if we consider what would
happen in Iceland, for instance,'
cap¬
the
question
more
the
to
favorable
recession:
started.
But
make
to
out
that
of
are
Unless
wage
controlled by the gov¬
or
other
some
kind
of
control, it would be almost im¬
to prevent inflation in
have
elsewhere, it possible
is very difficult for governments
to be quick enough.
The effect
such
a
country.
Hence
it
would
not be feasible to
keep a relative¬
ly high degree of employment, if
be
to stimulate export and
credit when the
recovery has al¬
may
pre¬
price
obvious.
ernment
business when
as
is
levels
conditions
tendencies
here,
do
you
ready come.
If capital movements will
prob¬
ably not play a large role in help¬
ing to find suitable fields for in¬
not
want
either
trade restrictions.
or
tent, that will be
countries,
same
To
true
although
extent
inflation
some
of
ex¬
many
to
not
the
for the small na¬
as
tions.
vestment, at least it should not be
asking too much if one hopes that
they will not develop in so ca¬
pricious a ,manner as to make
/
■
\
V""
■
\
Obligations
on
-
Financially
well
possible-
to- prevent. - The new
international institutions Can no
a
valuable
raw
erations
in
their
stocks
«r
,
countries is likely. not to be
quite satisfactory when a depresaion in the creditor countries has
begun to reduce the latter's pur¬
chases
of
the; former's
products.
Many
of
the: borrowing coun¬
do' not have a
very stable
-economic situation
anyhow, and it
is apt to be weakened if a
tries
'
depres¬
sion
should
country.
"world
start
;
in;
a
Furthermore,-
this
known,
seem
to
it
will: be very difficult for' the
others to do so, and there will be
a temptation for the
others to in¬
assistance
employment,
creditor,
choice.
in
have
the
For
a
not.
that
will
of
Many
maintain
instance, if
real
it looks
as
problem
stabilization.
countriesdo
be
we
depression
in
create
a
any
length
the
time
maintain
a
con¬
ment than the rest of the world
the
nega
of
siderably higher level of employ¬
should
1
in
son
ful
today, political United States; it would be' true
jrisks are obviously
considerable. of,almost the entire rest of the
Hence it is impossible to
say what world that we; would all
have to
iiope for a policy of speeding up choose
between" -'either*
accepting
capital investments i abroad one a
reduction: in* our volume of em
can have.
Chances would be in¬
ployment- or use import restric
creased
if
one
of
two
things tions.
Otherwise our balance
should happen:
Either one can
payments would turn
>
troduce import restrictions^
Should the
financially. strong
countries use a recession as a rea¬
another aspec
international
the^yartt>f th#world
or
with Which
they trade most.
If
a
policy to maintain employ¬
ment is accepted in a
country, i
is more than likely - that;
they
would
use import restrictionsdur¬
period of international re¬
cession, for hi the short run this
ing
a
would increase* their national in¬
come,
It .is not certain" that
Would' increase their income in
international organizathe suitable institutions
to take care of this
problem.
It
anay be possible if the Interna
"tional Bank got this
task, and if
tive direction at a time when
could not sell to the United
everybody wanted to collaborate
in this
policy, or, if we could get
a
great improvement in the in¬
Stability of Foreign Exchange'
The
stability of the foreign ex
change rates assumes that they restrictions.
are adapted not
only to relative
Hence it is obviously desirable
cost and price
levels, which is that all countries should fall in
an
lion and
ternational
political
situation.
Then I think even
without
much organization
very
a leading
pol¬
icy of the desired kind
might en-
uue,
-
Ut.'. u.
w
we
States,
but when it is easier to
get goods
delivered from the United States
the
long
run
it
is
run,-
but
better
in
the
shor
to
keep people
employed even if productivity is
somewhat reduced
through impor
"
conventional—as stated in all the
textbooks
but
—
the relative
ment,
the
adapted also to
degrees of employ
relative
intensity
I
think
it
would
to
be
,
just to forget about it. One
perhaps divide business cycletheory into two parts: The theory
on
disturbing
"inevitable turns"—the inevitable
and minima in-;the-in¬
the whole economy.
materials.
There¬
our
experience
last decades.
has
been
in
the
because the United States uses
such^a large' part of the world's
raw' materials.
Therefore a de¬
pression] in the
alone can cause
United
States
in world
fall
a
line with the
policy of maintain
ing
and
a
high level of employment,
that
should
in
itself
have
a
stabilizing influence, for instance,
curve.
The
theory of expansion and
contraction, is, I" think, used ira aying a foundation for any kind ''
of
stabilization
about the
fore, it is
very important that raw
material prices be kept, not stable,
but at least fluctuating less than
and production
come
Such price
particularly disturb
the economic position of raw maerial exporting countries. A large
raw
;;
contraction, and the theory of the
influence
part of international trade of the
{
maxima
fluctuations
world is in
]
of the processes of expansion
and
primary commodities and
a
cycle
superfluous pastime? ]
analyze stabilization, we a
seem
strengthen the price fluctuations
exercise
we
can
which
urns?:
policy, but whattheory of the inevitable"
If
do
we
adapt
pubfeng-
rim
expectations, and if we
adapt it in "non-economical"
ordinary
e.g.
lead
to
large
do
m
en-
public
that- the
in such a way,
principle of acceleration does
works,
•
invest¬
ment in private industry or
ic enterprise on the basis of
erprises;
'
not
fluctuations,
then
it need not differ from the? teach- *
ings of v business cycle theory tci *
say that the, points at which the "
curves
turn in a new direction *
may be controlled. One can, how.
-
,
market
prices for important
raw
materials.
This may set.up general
expectations of price falls and may
draw;
ever;
what
taqght
conclusion; from;
theory has
one
business
cycle
.
It will not be suffi- ;
keep relatively stable ;
wage conditions, relatively stable ;
levels and to have a great adap- *
tability of the system as such. ;
us;
help to spread; the depression to
other countries.; Stable wage lev¬
els cari perhaps bring
about
relative stability' in the prices of
cient
finished
There is
goods,
but-
it
will
not
eliminate, although it wiil prob¬
ably
raw
reduce,
fluctuations
the
material prices.
For that
in
rea¬
son, I am inclined to agree with
those who think that the "buffer
stock" policy with
regard to in¬
ternational raw materials is one of
the most important parts of a
poli¬
of employment stabilization.
This opinion has recently been
expressed by so many people and
institutions —the Committee on
Foreign
of
and
the
Economic
Twentieth
Relations
Economic
others.
It
controls
an inherent instability in
;
system, and therefore a de¬
liberate policy on the part of gov¬
ernments, municipalities, business
organizations, and ^ trade unions
may be necessary to offset these
that
export
to subsidize
and
inevitable tendencies of the cyclical type.
controls
it
production
quotas
tend
and
is.probably
no
direct production
use
export
quotas
as
a
means of
the1 store" in
mitigate
such
a
way
as
to
price fluctuations.
*
The League Committee has
sug¬
that
this
buffer
stock
agency, should buy -a certain raw
material ,at a certain declared
gested
minimum price, a price which is
declared in advance, and should
alsbvUiiddtthke'^ to- sell that com¬
-
modity at
a-
certaifl declared
max
iimim- price. Then trade would
know that the fluctuations will be
kept
within
somewhat
simple
those
limits. : I
uncertain
whether
am
so
formula would be suffi
cient, but time does not permit
a
to go into this further.
me
One
condition
of
a
an
inflationary boom, but I sftall
riot go into that, now. I dealt with
a part of it in
my first lecture.
statistics
we
have
about
commodity
countries, or mos
countries. There is no special rea
son why the raw material
stocks
stocks
in
the
in' all
world
.
International Cooperation]
[.Finally, it
seems
knowledge,
more
that
more
accurate data that
are
we
and
need
•»
more
made avail-: i
able early enough. We also need
international" arid of 'course also
should
very
vary
to
large extent with the busi
ness
cycle. So if the producers and
>
national
machinery
to
handle $
these problems.
It is important ;
that "some of the best people should;
be delegated for this work of in^ :
ternational collaboration. But I do 'f
not think that the
policy' will sue- "
ceed unless we' can educate pub* lie opinion, so that it will be pos-'.
sible for
the
governments to back up &
recommendations
made
that taref^
by experts.
The EconomicN
Report of the-President last month
in
this
country,
White Paper of
and
1935.
the
British *;
employe *
liaent policy are* excellent speci¬
mens
of
the kind
on
of -information^
that I think is of the greatest im~ >
portance for this latter purpose. •
The numerous penetrating studies
based on'factual material
thaLap*^
pear in this country provide^ th'»
basis both for analysis-and ion *
such
a
policy
of
educations and!'
is as neces*;
information, which
sary as any
depression
other part of ansariti--:'
if we are to i*
policy
in maintaining a reasonably stable employment—and by s
a
reasonably stable employment,
succeed
successfu
policy is, of course, that
more
„
Special attention has, of course, ■
to be given to the question of how >
to avoid over-full
employment or v
and
high cost production
therefore
advisable to
,
*
Century Fund
Fluctuations,
seems
and
to
the
the League of Nations Committee
on
stabilizing raw materia
for putting on import'restric¬
prices. We know what happened
countries have to choose between
tions, then other countries'WilF be to the
a high level of
price of rubber in the
employment plus forced to follow suit. Countries
1920's—about 1925 Of 1926. It does
import restrictions and* a some
With large, gold and
foreign ex
not invite us to'
what lower level oftry that policy
employmeh change reserves or very
large again. It is better to have an in¬
plus freer international trade. If countries with
a
relatively sticky ternational buffer stodk
they want to maintain the former
agency
wage level and a low externa
which*' can buy ahdlstore and sel
in a situation when some
large Value- of currency may for
of
difficult
trying, nevertheless.
When
ducers tend to make "vicious" al-
fortunately, the position
employment
extremely
The Business Cycle
Theory
I
shall; only raise one more
question, one which has beers
bothering me a great deal in the
mate¬
in this respect
Let me turn
of debt-
be
out.
heory just
might, when they
aee
a
recession
coming, grant
-credits to foreign countries.
Un¬
to
matter, although that is
why the whole thing
worth
rial prices usually fluctuate more
han prices of finished goods. Pro¬
cy
The
connections I have now
touched upon, which are of course
.
policy in general very
difficult. What happened in 19301931,-When erratic capital move¬
lend
or
reason
carry
Itaw Materials Fluctuations
It is well known that
Strong Countries
v
economic
doubt
reducing
agency that will
The stocks
wilt
reverse.
would
.
'avoral3^e influence
the
another
problem.
foreign exchange, then it
keep. the value of its cur¬
v
~
"Buffer Stock'* Policy
A
rency on a relatively low level.
A depression in* the
United
countries,- partly because sudden This means that the import and
States leads to a large drop in the
fluctuations in some p&rts of the export prices will be relatively
world demand for rhw
materials,
world—rich or poor—tend to have
ligh compared with home maror
■
employment is
give credit to foreign countries,
i.e.
make
investment" rabroad.
is too large
international
one
an
must
impose a
special obligation on financially
ments were one of the most im¬
strong countries. Should they riot
portant causes of the internation- succeed in
maintaining a rela¬
j One way to increase' invest¬ f al depression, would • seem to he
tively high level of employment]
ment and maintain
to
It
on
obviously have to vary with the1
vagaries of output, e.g. under the
influence of climate, but that
is
Before I
for the
To be sure, if all countries had
arge
reserves
of
foreign
ex¬
change, it would be useful if
where that wage standards should
tem, then it would not be
Time does not permit me to dis¬
cuss such questions as the
lower
evels.
with relatively scanty capital
sup¬
ply, could be planned In advance
mobility, of
labor and adaptability of labor to
■different
the
import surplus assuming that
he foreign exchange rates have
been adapted to the relative cost
■discuss the obvious importance of
a
volume,
an
possible anynor is it true that it is desirable from the point of view of
a
high national income every¬
everywhere.
lower
pluses, and one with a relatively
ligh level of employment will get
prosperity
same
an
do
international fund
international
monetary
an
)ank.
a
relatively low volume of
employment"' gets • export
sur¬
where;
be the
and
rela-
a
with
forever.^ There
m?ke
have
insist
increasing their stocks with the
business cycle, there is need
for
finish, I shall only add a
must be the external value of its few words. about the policy of
ast few years. I have asked
my»
in Self what has
currency to prevent-imports from mitigating price fluctuations
become of business
he world market through a buf¬
Deing too large and exports: too
cycle theory when we discuss
small.
For otherwise a country fer stock policy.
stabilization? Was business
are many
good reasons for an international
the
soclalpolicy and we do not need
ization is somewhat more difficult '° advance weak arguments in
■in a rapidly
progressing society I favor of it. It is not true either
should be a challenge to econo- that wage standards have to be
mists and politicians to work out reasonable everywhere in order to
the
others;
when
ively
China, for example, has been
income.
question of
The higher the percentage
employment and national in¬
come
a, country, wants to main-
have had time to adapt our¬
selves to this situation of
having
fourth part of the world.
seem
of
in
as we
poorer groups.
But I cannot regard the greater instability of em¬
ployment in a rapidly progressive
would
come.
think
I
prosperous
middlemen
raw
-V "u. v'!'
to be desirable,
•
short-term funds, that should help
also. I shall not say anything at
all about this latter question—the
country has to
employment national in¬
full
s
brought about, for in¬ three-fourths of the world even
by improvement in the if the fourth part is poor, as long
education of the children from the
about
very
prices for
sudden and violent movements of
al income in each
part ' of one
I personally do
be
stance,
.
believe
we
for wanting a more
of income.
It
equal
; It
cent which the * actual nation¬
per
all
are
so on.
market
materials.
employment in the different coun¬ however, that world market price
ties.
Or perhaps one should say fluctuations are mitigated through
lat the foreign exchange rates, if some sort of organized action. It
hey should be maintained ''with¬ international credit transactions
out use of artificial trade restric¬ could become a stabilizing factor
tions, must be adapted also to the and not a disturbing one through
"One World" Prosperity
employ¬
Thursday, March 13, 1947
I
mean one in which we can avoid "
serious depressions of the 1930-to* '
34
type,
and have to suffer no5'
depressions than, for in¬
stance, that of 1938. If this^could
worse
be
done,
mean
it would indeed
achievement.
be
no*
New
R. H.
York:;Security Dealers Association
Johnson, R. H. Johnson & Co.; Frank Dunne, Dunne &
Co.; Arthur Kaye, Monroe, Byrne & Kaye.
Emil
Corp.;
Pattberg,
Max
First
Boston
Pollock, William E.
Tracy Engle, Buckley Bros.; Bert Seligman, Ward & Co.; S. A.
Sandeen, S. A. Satodeen & Co., Rockford, 111.
,.
Pollock & Co.
•
David J. Garvin, C. J. Devine & Co., G. C. Bradley, First Boston Corp., Arthur
Schwartz, Bache & Co., P. Alliger, Public National Bank & Trust Co., all of New
all
York.
Bob Strauss, Strauss Bros., Chicago; Julian White, White & Co., St. Louis; Frank
Ginberg, Strauss Bros., New York; Abe Strauss, Strauss Bros., New York,
y
Joseph Connolly, Kaye, Scholle, Fierman &
Regional office, SEC, Herbert F. Boynton, H. F.
Geo. S. Earlin Attorney in charge of Securities
office, SEC.
'
'
A1
Hays; Charles J. Jordan, New Jork
Boynton & Co., chairman of NASD,
Interpretations, New York Regional
'
-
*
John Hansen, Hallgarten & Co., J. Bloom, Public National Bank & Trust Co.
Schmitt, Hay, Fales & Co., and Geo. Howatt, Public National Bank & Trust Co.
of New York.
< .'
Milloy, First Boston Corp.; Walter Nester, First Boston Corp.; M. Spray'
Eisele & King, Libaire, Stout & Co.; E. H. Ladd, First Boston Corp.
Albert
regen,
D.
J
St.
Warner & Co.
Mass.; Geo. Geyer,
Chas. A. Day & Co., Boston; Jack Germain, J. Arthur
Germain, D. J. St. Germain & Co.; Springfield,
Geyer & Co.; Wilfred N. Day,
i
,
v.
,
t.y
,
Pictorial Insert B
THE COMMERCIAL
Thursday, March 13, 1947
& FINANCIAL CHRONICLE
Twenty-first Annual Dinner
% Francis Truslow, President of New York Curb Exb
change; Wallace Fulton, NASD; Wm. D. Moran, SEC.
New York City.
Irving D. Fish, Smith Barney & Co.; Richard McEntire, SEC Commissioner; R. Parker Kuhn, First Boston
Corp.
John O'Kane, Jr., John J. OKane, Jr. &
Co.; Edward C. Werle, Chairman of
the Board of Governors of New York Curb
Exchange; Herman A. Feldmann, Geyer
& Co.; Edwin L. Beck, Financial Chronicle.
Fred Gearhart, Gearhart & Co.; Chet de
Willers, C. E. de Willers & Co.; Harry
Amott, Amott, Baker & Co., Inc.
R.
•/'John D. Freeman, R. H. Johnson
r
ti.
n'1 Johnson &
rltW York>
ti.
&
Co., Boston; Edward B. Breen, R. H. Johnson
& Co., Syracuse; T. Reid Rankin,
Pete Byrne, SEC; Edward Gray, New York Stock Exchange; Clarence E. Unterberg, C. E. Unterberg & Co.; Ephraim L. Brickhouse, Guaranty Trust Co.
Lou Walker, National Quotation
Bureau; Charles Jensen, Bank of the Manhattan
Co.; H. D. Knox, H. D. Knox & Co.; David
Morris, David Morris & Co.
Mike
Wesley M. Bishop, R. II. Johnson
Co., New York City.
Frank H. Koller, Jr., F. H. Roller & Co.; Herbert
Blizzard, Hess, Blizzard •& Co., Philadelphia
Buffalo
Heaney, Jos• McManus & Co.; Frank Scheffey, Executive
Secretary, NASD;
N
Y°Wd' Clarence Hodson & C°J Frank C. Trubee,
Trubee, Collins & Co.,
'
•
I March 7, f1947, at
>
x,
&
,
,
'
V
H
■*
j
' "
\
,
i
rn^^MMaeidl'mu0Thn^LtCx'r'
F" ReUly' J" F'
Mrs" Marguerite
ecutive
Co., David Magid, Hill, Thompson & Co.
Allen
MacDuffie, McLa.nahan,
*
Merritt & Ingraham; Col. Troster,
Troster,
Mort A. Cayne, Cayne, Robbins & Co., Cleveland; Jim Treanor, SEC; Jeff
J. Mericka & Co., New York; Charles Zingraff, Laurence M. Marks
Howard Allen, Albert
o.,
Hors& Co.
Frank-Guenther LaU),Inc.; Gentry Daggy, ff. M. ByUesby
Philadelphia; Amos Treat, Amos Treat
Waldorf-Astoria
"«•'
>
V
•
'
!
-
•'<
'
»'
L O'Keefe, Ex-
«,
■'
'
i
■?
(
\
I
\
1
i
<
<
'h
i
.
*
(
Stanley Graff. Foster & Adams; C. E. Stoltz, C E. Stoltz & Co.;
Reilly
Dick Abbe, Van Tnyl & Abbe.
.
curity Dealers Ass'n.
Currie & Summers; Wm. C. Orton, Gude, Winmill & Co.; M. R. Cary, guest.
field, Wm.
•
Secretary, New York Se-
'
E.
v
& Co.; M. W. Jams, M. W. Jams Co.
Bill Kumm, Dunne & Co.; Harry Fahrig, Jr., Reynolds & Co., Philadelphia;
Ted Plumridge, J. Arthur Warner & Co.; Ray Kenny, C. E. de Willers & Co.
Stanley Roggenburg, Roggenbnrg & Co.; C. D. Runyan, Trust Co. of North Amer¬
ica; Alfred L. Powell, C. E. de Willers & Co.; Duke Hunter, Hunter & Co.
Melville S. Wien, M. S. Wien & Co.: Samuel King, King & King Securities Corp.;
Dick
Montanye,
Bureau.
Laurence M. Marks & Co.; Graham
Walker,.. National Quotation
Pictorial Insert D
Record Attendance at Most Successful
Ken
Taylor, Journal of Commerce; Ben E. Lindsly, Chief of Oil & Gas Unit,
SEC Philadelphia; A. M. Metz, guest.
Max A.
& Co.; John
Mader, D. F. Bernheimer & .Co.; Harry D. Casper, D. F. Bernheimer
Reilly, Mallory, Adee & Co.
vK
F. Thompson,
Wolff, R. F. Lafferty & Co.
Maurice Hart, New York Hanseatic Corp.; George
Hunt, Starkweather & Co.
Soren Nielsen, Newburger, Loeb & Co.; Samuel A. Mehlman, guest; Otto H. Stein
decker, New York Hanseatic Corp.
Irv Stein, Goulet & Stein: Joe De
Lorme, B. G. Cantor & Co.; Lester Gannon,
Bonn & Co.; B. G. Cantor, B. G. Cantor &
Co.; Irving Ehrlich, B. G. Cantor
Co.; Jack J. Bernstein, B. G. Cantor & Co.
Gathering
Henry B. Spring, Greene & Co.; Julius Golden, Greene & Co.;
Greene & Co.; Bernard
Leo
W. T.
&
Thursday, March 13, 1947
THE COMMERCIAL & FINANCIAL CHRONICLE
J.
Goldwater, Goldwater & Frank; Lee
Sherman, L. D. Sherman & Co.
Arthur Warner & Co.; James H. Longshore, Continental Car
Corp., Brazil, Ind.
*
-
J. Arthur Warner, J.
.
na-var
Edward Russell
kin
&
Sehgman, Lubetkm & Co.; Lloyd E. Lubetkin, Seligman, Lubet'
Co., Harry 'L. Arnold, Paine,
Webber, Jackson & Curtis; Don Hungerforc!
Hartford; Albert E. Gorman, Walter Stokes &
Robert C. Buell &
Co.,
Co.,
Philadel-
Number 4576
165
Volume
Postwar
SHE COMMERCIAL;
of
volume
United
cies) is
States
a
to be
a
among
keep wartime gains in the
American market, United
past States concerns have increasingly
to
.
advertising
American
media
in
Latin
communica¬
of
tinue
shipping to carry them,, a
number of discouragements to ex¬
atin
exports to Latin America inas¬ experience indicates that forced
taken
much as the price decrease of currency appreciation is
consider¬
States firms
lack
of
To
com¬
curren¬
determining factor,
J401]
or good far export and the
Prospects in Latin American Market
ing gold continues
(Continued from page 1376)
the price level for the postwar mon denominator
dollar
& FINANCIAL CHRONICLE
Foremost
were
ly
the
price ceilings set by the Office of
Price
Administration.
Trade
protested
groups
that
improving
the
reluctant to
terms
old customers.
porting confronted United States
businessmen.
were
former
of
con¬
credit
to
Despite the rapid¬
credit aspects of
Latin American market after
1939,
credit
terms
granted by
United States exporters generally
exporters
grew
following the
goods traded will be compensated, ably less likely than
depreciation, tion. In late 1943 an American were unable to carry on business start of the war. Only after 1942
least, by a greater physical which of course would increase
businessman reported that "Many if they were not permitted to was there a definite liberalization
level of importation by Latin the buying power of gold and the
eading American firms are taking make up the extra expense of ex¬ of terms.
America than took place in war¬ amount mined.
Ravages to commercial relations
advantage of this opportunity to porting during wartime. In early
time, During the war the dollar
entrench themselves firmly in the 1942 exporters were refusing to and goodwill did not, however, go
Unequal Distribution of Gold
level of total Latin American im¬
minds of the people of Latirri fill Latin American orders, par¬ wholly unchecked. Through con¬
and Silver
Production
ports remained very close to the
America by institutional adver-x ticularly for iron and steel, de¬ stant advertising in Latin Ameri¬
The importance of
immediately preceding level of
gold and
ising."3
spite the grant of required prior¬ can publications United States ex¬
silver production as a
roughly
$1.4
billion
because
source of
Studious and persevering mer¬ ities for sale and shipping; ex¬ porters sought to explain the rea¬
foreign exchange to Latin Amer¬
stringencies in goods and ship¬
chandising attempts will help pro¬ porters pointed out that the sons for supply shortages, citing
ica is -tempered
by the unequal mote
ping forced a physical shrinkage
commerce
between
the smaller mills, with higher produc¬ the prior needs of the war effort.
manner in which
In imports.
production is United States and Latin America. tion costs than the large ones,1 A substantial effort was made
more
severe
at the
•;
.
t
distributed.
Imports from Eastern Hemishpere
to
Be
the
Not only aggressive salesmanship
are
is inevitable, for
products required by
Latin America which the United
States is not in a position to sup¬
ply, being a non-producer or not
sufficient for export
purposes. This is one factor oper¬
ating against the likehood thatitfre
producing
United States will retain its
time percentage importance
duction
and
last
among
silver
cating the
to goods that
consumer
producers of significance. While are
pleasingly different, that offer
Bolivia and Venezuela have about a
specific advantage, or that rep¬
equal populations (3.5 million), resent- an1 all-around
improve¬
war¬
as
.
ican
America
there
by
outstrips
ed for
outside
Western Hemisphere must regain
something of their prewar sales to
Latin
Mexico far
others, having in 1939 account¬
is necessary but also consideration
over 30% of Latin
Amer¬ of Latin consuming habits and
gold production and
nearly ways of commerce, as well - as
70% of silver production. A
coun¬
price lines that are most apt to go
try such as Argentina, with 13.5 over. It is often better
to pay atmillion
population, prduces less ention to the special desires;of
gold and silver than Honduras various
markets than to attempt
with 1.1 million.
Brazil, with a to froce fixed types of merchan¬
population thrice that of Argen¬ dise
upon them. At the same time
tina, ranks but forth in gold pro¬ here is
usually room for reedu¬
Revised
countries
That
all
the gold production of the latter
is
nineteen times that
of
the
a
supplier of Latin American im¬
ports. On the other hand, other
former.
ment.
•
Wartime Experience With United
United
the
able under the
price ceilings to give exporters a
lessen
commission in order to obtain the
upon
were
longer
no
export business.
obstacle
export
2. War
gether
an
licenses
proved
a
expense.
exigencies brought to¬
American
businessmen
of
Bureau, of Areas, recom¬
and implemented meas?
ures
for exportation of civilian
supplies. The United States Mari¬
time Commission took steps to
provide shipping space formerly
supplied by European merchant
Not always were these new con-
completely
the
mended
another.
casion to deal with one
imposed
countries.
a program was estab¬
allocating materials to
Latin America
under
a
system
providing for the
issuance
of
"certificates of necessity."
The
Foreign Economic Administration,
through its Pan American Branch
who had never before found oc¬
tacts
hardships
American
lished for
exporting was red
tape. The labor, delays, and irri¬
tation encountered in the effort to
obtain
government to
In late 1941
Another serious
to
burden and
the
Latin
States
satisfactory.
United States exporters or manu¬
facturers were often reluctant to
grant requisite credits to Latin marine. The Office of the Coor¬
importers, who on the whole were dinator of Inter-American Af¬
The opportunity which the war wont to expect liberal credit facil¬ fairs in July 1942 established an
Latin
America's total
import afforded United States exporters ities such as had previously been Inter-American Navigation Cor¬
demand will reflect secular econ¬ of
engaging a major portion of granted them by European sup¬ pora tiori to acquire and build
prewar
volume of those goods omic
changes which it experiences. the Latin American market has
pliers. Furthermore, many United
.{Continued on page 1402)
which .the United States also is in It
may be taken that industrializa¬ not been
entirely to the advantage
a position to
supply.
tion, which has been progressing of these exporters. Why so
may
Assuming for the moment that at varying rates of speed in the
be examined with view to (1) the
European suppliers can regain Latin
republics, signifies larger reaction of Latin Americans to the
their former
percentage shares of national incomes and greater
gen¬ failure of United States exporters
trade with Latih
America,: this eral demand for foreign goods to meet all demands; (2) their re¬
does not
necessarily signify that even though certain foreign
goods action to the tactics and
nations
cannot
at
will,
even
States Goods
though their physical production
capacity and internal needs per¬
mit, i pour into Latin America a
Secular Economic Changes
•
United -States
exports
measured
to
in
policies
Latin
be displaced by the
may
process of
physical industrialization.
Specific goods
termSj will drop to their prewar which are
displaced will be more
level. What will be of moment is
than replaced by greater demands
the total of Latin American im¬ for
capital machinery, semi-fin¬
ports. And of course this total is ished
goods, and consumer goods
governed by a complex of
factors, in general—some of which were
which are impossible to rank in
already imported and others no
order of importance/,
formerly imported.
Dependence
on
for}* level of economic activit
Latin
America is
dependent
more
upon
than
usua
exports
as
means of
obtaining necessary im¬
ports, lacking the source of for¬
eign
exchange
that
other
possess in the form of
®f
areas
equity and
portfolio investments and
States
traders
and
manufacturers.
1. World
United
States
because
on
products
needs
.was
War
in
the
on
a
one
placed the
predicament
hand its vital
required for
were
and
II
the
other
war
hand
it
pledged to fullest cooperation
with the Latin Americas in meet¬
ing their needs. The Latin repub¬
Enlarged Latin American de
mand for foreign goods may also lics depended
upon the
United
for machinery, prefabri¬
result from a lowering of its trade States
cated materials, and manufactured
barriers. Such a course need no
goods that prior to the war had
necessarily depend upon like ac
tion on a worldwide scale.
supplied
in considerable
In been
great part Latin American tariff quantity by Europe. But as early
as the fi^st part of 1941 the United
barriers have been imposed no
States was already'hard put to
so much" for protective purposes
allocate articles required by the
as to raise revenue through ctis
Exports
One determinant is the
general
iy
United
of
reserves
toms duties.
PreJious I metal. Furthermore^
It is to be expected
nations
the
to
south in
order to
help keep their economies going.
omies and improved organizations In addition, shipping space was
1
meet Payments - on its bor¬ for
limited by war priorities, further
levying taxes will reduce the
rowings and to return dividends
revenue motive as an obstacle to reducing exports to Latin Amer¬
to
Latin
that vitalization of domestic
America is constantly pr£ss-
econ
v-
investors, so that a sizable
the foreign exchange
acquired* through the export of
merchandise or precious metals is
tapped off in this wise. Thus the
elimination
porhom of
upon
a
substantial
volume of exports in order to ob¬
tain required
taken
Imports
Accordingly, world
conditions*?
Given
to. be
are
the
from
U.
schedule
products
and
United
of
total
' ^
,^®.have mentioned
menca finds- a'
States
will
depend upon
several factors: (1) United States
of Latin American abil¬
import/
A host of economic difficul¬
ica.
the
United
Resentment
S.
latin American demand' for im¬
as^ a gauge of demand for
port^ the'portion supplied by the
fht S American
nerefore
ity to
American
at
imports becomes al
greater.
econGmic
Latin
Furthermore, the ties, not least among them unem*
increased value of trade coming ployment, was created in Latin
by inability to obtain
in at lower tariff rates would pro¬ America
duce a customs revenue approach¬ required materials, with vigorous
resentment directed in large part
ing that formerly enjoyed.
dependence
the
of
skill in merchandising and promo¬
States
was
the
aggravated
by
the fact that even in the case -of
Latin
development projects' con¬
nected with the war the United
States
had
censes
for
to
refuse
machinery,
that Latin
export
tools,
li¬
and
materials.
The shortage
-
the
rW? ^
Latm
United States.
the,telephone company
result.
of consumer goods
tion;
(2)
satisfaction of Latin
current source
American importers and dealers helped bring about varying but
^lgn e5fchange through-the with their- wartime experience in always severe degrees of inflation
Precious metals, namely
in all parts of Latin America,
purchasing United States goods;
rUv?
silver.a-- Air incfease in (3) tactics employed by other na¬ causing some of the most violent
domestic production of these mettion's to reacquire their prewar expressions of resentment against
Inflation took
a significant factor market
positions;
(4)
Latin
America's general ability
American
tariff
reductions, ex- place partly because purchasing
•]»,j
® ^ for gold and silver can change' practices; artd quota in¬ power was increased by military
liSr Lmos^ r circumstances T be creases particularly favorable to and strategic projects that devel¬
dily .translated into purchasing
the United States; (5) commercial oped new industries and expanded
ar|d at more or less stable
old ones.
Blame was placed on
cooperation between the United
tin2fr' ?7^r:1 moderate periods of States and Latin America; (6) po¬ the United States for supplying
jft is: possible that progress litical and military considerations. neither consumer nor producer
goods. Thus in late 1941 the fail¬
12**}ln8 methods, discoveries of
W
e?osits' improved access to Merchandising and Promotion ure of the United States to send
building materials required for
£2"Wn;dePOsits, and the importaAdequate merchandising
and
iCaPltaf wil1 bring about promotion techniques have in the more than 500 individual con¬
struction
ffeatea? production. While the exprojects in Venezuela
past proved able to influence con¬
ratio! between gold and
brought on a violent Venezuelan
sumer
tastes arid tho choices of
in
HowjnncUoes
tariff barriers.
earn?
We asked
• •
a
number of
people this* question1
\ "How much would you say
the telephone
makes (after all expenses and taxes)
the money invested in the business?"
company
on
Twelve per cent
Eleven per cent
said "6%
or
less."
said "7% to 10%."
[Twelve per cent said "15%, 20%, or 25%.'*
Eight per cent said "30%
or
morfir."
JFifty-seven per cent had no opinion.
•
world currencies
(assum-
wholesalers,
tailers.
n»hrUI?n^ 1935-38 the Latin
lc®. Sold
j-espoctively
pm
-arii ^
and
silver
re-
exports
averaged $83.5 mila total value
*2 miiiion,
equivalent to
about
merchandise export
7%
of
their
average.
coin
On the
and
measures
the
help
middlemen, and re¬
wants
reverse
side of the
equally important are
to apprise producers of
of the
them' cater
these wants.
market and
to
adequately
to
press
fense and
United
against the de¬
economic policies of the
campaign
Even with
We thought you might like to know in case
'you have been wondering about telephone
/
insufficiency
3
"Improved
Latin Trade,"
many people
telephone calls at a record
peak, Bell System earnings on the money
invested in the business have averaged only
a shade over 5^2% for the last five years —
including the war years.*And that's not
enough to insure good telephone service. / " "
think.
earnings.
States.
In addition to the
fThe actual figure is far less than
Shipping Spur
"The New York
Times," Aug. 5, 1943, p. 22/
,
/BELL
TELEPHONE
SYSTEM
T
"tr^i'pw
1402
THE COMMERCIAL &
almost
were
'
In
^
.
September
States
v;
'v
United
program to
the
1942
send
inaugurated a
productive
machinery
Latin
American
to
in
nations
lieu
of
finished ; products.
The prob¬
lem of price ceilings that discour¬
aged exporters
at least
met
was
States
exporters to extend re¬
quired credits was offset to a
goodly extent by the Export-Im¬
port Bank of Washington, which
.supplied credits to United States
manufacturers and exporters, en¬
abling them thereby to meet the
demands
chasers.
Latin
of
Efforts
pur¬
to
simplify li¬
censing procedure, though not al¬
ways
successful,' were made by
the
Office
of
Export
Control.
Early in 1944 the Foreign Eco¬
nomic
Administration
established
outlets
kind*
*
German-made
for
goods
United States in recent years, par¬
terms
resold
by
order
in
to
We
#
Export
tain
commerce, cer¬
results have been
positive
attained,
chiefly owing to the
volume of trade which took place.
The war has caused United States
goods
to
to
be forcibly introduced
Latin American import¬
many
and
ers
consumers, although it is
true that the required
economy of
effort has
caused
trade
with the
Latin countries nearest the United
States to be emphasized.
Reac¬
tion to the
quality, style, packag¬
ing,
and other
United
States
uans
from
because
of
cellent
has
Thus,
the
price
factors
gain from
tage
of
been
"Nicarag-
United
mer¬
States
uniformity,
ex-
quality,
and
attractive
for
display." 4
These
promise some degree of
packing
net
goods
speak favorably of the
chandise
?■,
characteristics
favorable.
very
that
the
the
wartime
United
an
en¬
^
Other
tors
of
the
Latin
Nations
United
Germany
and
States
in
market
the
the
were
United
King¬
dom.
The former supplied 15%
of
Latin
American
imports in
1937, 17% in 1938, and 13% in
1939; the latter supplied 13% in
1937, 12% in 1938, and 10% in
1939.
*
,
The
it develops that Ger¬
more
many will not be deindustrialized
to an extreme
degree, the great¬
likelihood
er
many
is
there
again
can
that
loom
Ger
strong
among industrial nations compet¬
ing for the markets of a basically
agricultural
the
Latin
America.
At
present
writing it appears
except
perhaps
for
the
that,
Rhineland and the
Ruhr, the Ger¬
man
economy will ultimately be
conducted once more as a unit
rather
than
as
a
partitioned
may
be
omies
It is not
restore
the
reparations
be
for
own
Nicaragua,"
"The
be/ said to apply
nations. Thus France
international
thJ
nntPnfiof
potential,
cartels,
upon
But
ments.
to
businessmen in the Western Hem¬
isphere through three systems, an
inter-American
one,
a
United
States-Canadian
States
United
and
one,
a
system.
Tying the
systems together is the Western
Conference
Hemisphere
and
Trade
eign
pursuant
to
es¬
Created in 1933
resolution
a
For¬
on
Arbitration
tablished in 1943.
of
•
the
Seventh International Conference
American
of
Commission.
the
States,
Chambers
Associations Committee
measures
inter-
of
Com¬
multilateral,
agree¬
economic
such
was
form¬
supplying information or explan¬
Will in these relations.
ar¬
the condition that others also may
ations to the parties concerned.
Political and Military "
Considerations
At
fines; publicity of customs regu¬
lations; common nomenclature for
goods in trade; standardization of
industrial products and
their spe¬
cifications; uniformity and sim¬
plicity
in
bills
of.. exchange,
drafts, checks; equitable treat¬
ment for countries whose exports
imports must pass through in¬
countries; protection
of trade marks; formulation
of
standards for packaging goods in
or
termediate
collection
of
commerce
these preferences if they trade;
previously contracted with statistics; removal of rigors of ex¬
eitherof ; the two
nations for port control; curbs on smuggling,
mutual extension of preferences
enjoy
granted third
point in time not yet re¬
moved from
the major impacts
of Worlcl War II, it is quite obvi¬
ous
to say
that the American
nations feel strongly the pressure
of political and military impera¬
tives upon economic decisions. On
the one hand,
governments are
very apt to make decisions favor¬
able to the United States, such as
those affecting trade barriers, in
an
atmosphere still heavy with
fear of the consequences of war
in Europe.
On the other hand,
private parties, both in the United
States and Latin America, are al¬
so
apt to .make decisions favor¬
ing trade between these regions.
Thus United States exporters ,are
a
parties,''
the
At
in
if
h
well-knit
doubt
greater
achieve
market
ing
23,
^,
.vO i && ?.*
up
•
ana
and
states
i
United
i
•
•
exchange could be used, and com¬
pulsory sales of foreign .exchange
acquired by citizens-a portion or
all of this exchange—to the prop¬
er
government
authority.
Li¬
its
it
that
the
United
dedicate itself
could
"
"
of
*
be
severe.
be
measured
by
car¬
the
relative importance of the United
i
exchange
purchases
this
I
5in
discussion
reciprocal
trade
as
agreements
are
considered
embodying the most-favored-
them.
of
+unfe£e"?es of 1924-25 and
Jonl' 1936, Goffee Conferences the
of
1903,
and 1937. In 1913
was
created in part to harmonize
within
said
apart
have
;
6Such
practices
engaged
United
in
with
States
as
Argentina
to • the
greatly ' de¬
respect
would
teriorate United States opportun¬
ities of exporting.
To illustrate,
it
was
charged
Argentina
of the
from
in late
through
1941
manipulation
peso—dollar rate
Argentine
purchasing
that
was
dis¬
importers
quality
at the same time that is
leather
en¬
was
of;; political
amity retained or developed-rCan
bear a profound influence, ;hPon
isphere—the
that the
from
World
fact.
V
maneuvers.
H..
i
■
;■
t
.V;.: >. r.
:
v.-'Vt:
!
'
..W'i■»"'& i
rate
v'
V
■
:
f
t *•
'*.Uxb
r
-
■
fear
imperatives
will
War
States-Latin
within
depend
United
economic
closer than
happen/
will
cause
American
relations to be
| upon t^ie
^American
have/'suggested
Latin
possibility! oif anqtW
the
would
tiow. much
in good part
closeness of political
the Hemisphere.
V >»'
-L.',?
1 '-v'*'
-
We
commerce.
closer
to the United
degree
United < States
ucts to be exported
in
ip this Hem¬
of political relations
States by means of exchange
\
developments.
the
And the.cpurse
from
rest of the world.
this
true
.
Hemisphere : may;,!be
a
certain latitude
the
to
nation clause in,all cases, although
necessarily
events
Hemisphere,
otherwise
not
outside;. tfre
political
relations
political
couraging finished leather prod¬
is
independent
.While by no means
as
icSi
couraging
I
'
—
ability of-Webb-Pomerene As
would
for
censes
conse-
sociatioris to combat foreign
tels
in most of the
war
nature have been
the Standardiza-
specialized in
meetings such
However, the machin¬ Inter-American High Commission
operat¬
would not be
Should there de¬
of
the disadvantage to the
•
built
ery of
concerns
to
States
*
were
ex¬
restriction of purposes for which
should
snould
continue
Latin
strict
the
that
inroads
individually
during the
republics.
likely to obtain.
velop a ubiquitous burgeoning of
in.
York
change^ controls that
without
permitting
of
ex¬
the
to
than
parts,
years
war
control remains. Exchange
control, by way of. brief descrip¬
tion, has consisted of fixing offi¬
cial -rates (or a series of rates)
is
cartel
separate
thp
relaxed
America
in.
econ-
Gain
enabled
More
tomhouse legislation, etc.
Exchange Controls Relaxed
During
fi? t!1V6power which belongs to
selling Privileges there¬
The
na¬
money
...
able to shut out
M alt°gether from
markets by obtaining
J •*
Commer¬
is'V available
to commercial arbitration,
which fills an important role in tercession of the Inter-American
Business
Relations
Committee,
preserving commercial relations
which often settles difficulties by
by maintaining equity and good-
excusive preferential structure
an
based
?11.?fdu.cer+1of aimportant producer
§iven product, or a
sufficiently
Germany! against them heedless
New
Times," May 18, 1942,
arbitration
Fne1.ted States has thus
0fficial opP°siUntJ S6 mstances where the
The
Goods
sive, amicable manner.
cial
tfon'
mi
"American
between businessmen of different
nations in a just, quick, inexpen¬
m°arrkptS °-nthe Latin Amerit0
extent be
of
increasingly! quences,
compensation
a
differences
SpSk
_______
4
settling
■
unreason¬
on
will
for
expedite
Ia."Ce °f 0I"derIy *""0-
carieis
cartels
their
pressure
for
a
g ?nd
also to other
,
able to predict that as the
victor
nations
method
have
expected
from her to Reacquire former
port markets.
to
,
perhaps less wary of the future
major ;Pan American creditworthiness of Latin import¬
Logically, then, reciprocal trade meetings, as well as at a series ers than of European ones. Con¬
and
Italy, minor ranking sup- agreements do not guarantee per¬ of technical gatherings, the Amer¬ versely, Latin purchasers, remem¬
manent advantages to the parties ican nations have taken resolu¬
Pliers of Latin American imports
bering the disrupted flow of vital
will be keen after Latin American involved.
adopted
principles,
and goods from Europe, are perhaps
Obviously,
if
every tions,
action
toward £ solving
markets when their economies re- country had a most-favored-na¬ started
more
eager
to maintain trade
problems attending connections with United States
tion agreement with every 6ther, technical
finninV61? turn, restoration of no one nation would have an ex¬ commerce. Customs Congresses suppliers than with others.
turning.
In
their economies, will for sdme na¬ port advantage
over
any other were held in 1903 and 1929; a
It is inevitable that time will
tions he/contingent upon finding with respect to tariff rates. What
i!!iess on Consular Procedure draw a haze over memories and
in 1927.
Six Commercial Confer¬
markets for their exports.
reciprocal trade agreements do
that the political
and military
The ability of other nations to offer is a preliminary advantage ences, concerned with the whole
drives behind close economic ties
over nations who have not yet be¬
scope
of commercial problems,
will lose their urgency. Nonethe¬
come
can
party to- a most-favored- took place between 1911 and 1940.
less, there is reason to believe
Vu
an
nation contract.
Yet the country Two Congresses on Economic Ex¬
nafinnll • 7 + ? course against that initially acquires a concession pansion and Commercial Teach- that political and military con¬
intercartels>
siderations
will
cause
United
may have a residual advantage wig, held in 1919 and 1922, emStates-Latin American economic
fir rfopi
inasmuch as its head start may phasized the importance of in¬
relations to maintain some degree
enable it to get a lasting grip on struction in commercial subjects,
in th
-rn!
closer than the working of eco¬
United States is not the leading a market.
e.g. commercial geography, cus¬
nomic forces alone would have
Fn
and
as
Germany regains
autonomy in addition to unity a
effort
as
*nEertai\jPf< thei considerations
Ji
to t Germany and
tion;
growing
England
,
,
competi¬
prewar
American
that
industrial nation must seek
export.
Recovery of Prewar Markets by
principal
Americas
Latin
-
,
Commercial arbitration offers
the flow of com¬ ed to advance cooperation among
the Chambers on behalf of such
merce by guiding it in an orderly,
efficient manner; to conferences arbitration. A goodly number !bf
and organizations that aim at im¬ differences between businessmen
are shunted off before they reach
proved commercial intercourse;
the Commission through the in¬
rangements tend to foment
political tensions between
the
preferential system
and other
economic and political groupings.
The reciprocal trade agreements
tion
in
live on its
accustomed presents a compromise device en¬
plane.
And it is in great part to abling two nations to grant each
agricultural nations such as the other trade preferences subject to
ica.
The
by
the
the Latin
ar}d
Efforts
the war
While
immediately England
is
faced with the task of importing
goods to revitalize her economy
in
the near future England will
be looking to its export markets
as the means of enabling that na¬
joyed in trade with,Latin Amer¬
L
forced
Estment
van¬
States
republics.
between
vis-a-vis
United States
trade program if Congress sanc¬
A number of technical consid¬
England will not only be driven
tions a 50% duty reduction on erations call for cooperative ac¬
to win back its previous role as
goods which have already once tion
in
facilitating
commerce.
an
exporter—both of its own
undergone a reduction.
These include the establishment
goods and those in entrepot trade
ot
uniform and simplified
cus¬
:>v It has been suggested by various
but also to augment its former
toms procedures and reduction of
position in view of the decreased persons that the Americas of the
charges,
fees,
dues,
inflow of foreign exchange owing north and south should fabricate attendant
to the reduction in British foreign
„
American system operates through
the Inter - American Arbitration
technical
to
refer
that
*
American
U„_
Inter-governmental cooperation merce in the several American re¬
publics relay disputes to the Com¬
can do a good deal to implement
agreements commerce among the Americas. mission. In 1943 the Commercial
Germany at a The
reciprocal' trade
gain a desired
program of the United States has
foreign currency) and by block¬
and
procedures
calculated
to
been carried out preponderantly
lighten the load of exporters un¬ ing the resulting mark credits of vis-s-vis Latin America. The pro¬
Latin American republics, Ger¬
der export control.
gram was in part devised to meet
many was
able to force Latin the
competitive threat of direct
America
to
Positive Results
purchase
German
action by other nations vis-a-vis
manufactures, often at prices in
While various aspects of war¬ excess of those at which Latin the Latin Americas, for example
-time experience, as we have
Germany's barter arrangements
seen,
Shave been more or less negative America could have obtained the with them. In the period ahead,
same goods elsewhere.
from the point of view of
the United States can" more ef¬
aug¬
menting
future
United
Statesfectively than ever augment its
England's
were
loss
that
essentially
Cooperation
Commercial
nnnfimiivirf
r\
speak for a continuing line of
meetings devoted to expediting
commerce
among
the Americas,
fall of the Fund.
ticularly since inception of the
reciprocal trade agreements pro¬
gram, has tended to favor coun¬
(sometimes these surpluses tries of the Western Hemisphere.
-j
-Pnr>
'
need
By buying from Latin America
surpluses which could not be dis¬
posed of elsewhere at favorable
a
Procedures Advisory Commit¬
tee, consisting of leading export¬
ers,
to advise FEA of practices
Latin
i,'.
past are substantially reflected in
relationships of today. More, thev
re-
way
any
-
in. part by OPA action which after
May 1942 allowed exporters to
add an export premium to their
prices. The reluctance of United
credit
in
conditions
If
the commercial legislation of the
These activities of the
Americas.
■
for Germany
reestablish her old position in
the
augment
sailing vessels for inter-American
trade.
universal manifes¬
America. 7
sembling those of the prewar peThig would States as a supplier of the goods
in question. If the potential for¬ riod should reappear, a retreat to
eign demand for the given product full use of exchange control ma¬
to
chinery is very possible. And un¬
he world markets, not least of all could well be met without United
States production, and if United der such circumstances political
in Latin America.
States producers as a body were relationships can make a major
To what extent may a Germany
not strong
enough to engage a difference in the ability of nations
hat is once again free renew its
cartel in competitive battle based to export to Latin America.e The
former exploitative trading meth¬
upon price policies and quite pos- future course of exchange control
ods?
The answer depends upon
sbily
political
maneuvers,
the depends upon the. efficacy of the
(!) general world economic con¬ Webb
Pomerene
Associations International Monetary Fund. It
ditions, (2) the degree to which would be of no help.
is presumed that with the Fund
Germany is supervised by the vic¬
functioning
properly
exchange
tor
powers.
In
circumstances
Latin American Reduction of
control would be reduced to a
where world trade is depressed,
Trade Barriers
minimum in the adherent coun¬
Germany might again be able to
;
The ability of the United States tries. The Fund Agreement states
make the most of such exploita¬
to retain some portion of its war¬ that members are to avoid ex¬
tive measures as she employed in
time percentage increase as a sup¬ change control except to prevent
ner prewar
trade relations with
of1
plier of Latin imports will depend large or sustained outflows
Latin America—providing she is
in part upon special favors ac¬ capital. However, it also provides
not prevented this time by the
corded the United States by Latin that member countries during the
victor nations.
To a large ex¬
America with respect to tariffs, transitional period following the
tent German trade in the 30s was
war
may continue- exchange re¬
exchange controls, and quotas.
fashioned to meet its needs for
In an attempt to insure good strictions. A transitional period of
war materials, as well as to find
treatment for its own exports, the undue length might be the down¬
rather than in
(Continued from page. 1401)
a
tation in Latin
in Latin American Market
Postwar Prospects
Thursday, March 13, 1947
FINANCIAL CHRONICLE
mL /yyt UL;
i„". 1
Jv'l
!;V
ties
K\('
•
■
s'"r
'i-jjy -;v.
...JAv*
V-
'.
'
:'$rV
Number 4576
Volume 16S
/
'
i J.y'--
h:.
v-V't.
THE COMMERCIAL
& FINANCIAL
CHRONICLE
1403
Inflations and Deflations of
My Eightv Yeais
(Continued from
1377)
9
sorts of property- thpr«
page
in'business
value.
have
we
1B
/■
:•••
unit of
no
'■■
'
*
■
kinds
of
The dollar is not a
masquerades as such. It is
commonly regarded as a unit of pocketbook
value, but it varies, as I will show businesses.
+
.
f.
.
.
^
'•
.
it
8
but it
orTn
»nh
— J
yoS I wasC-V" W—me' that is when
** bo™> 1867, the dollar
iUU11
iu
■
"
KX^ared wial what
was
| -
th€?. ,there is w©rth
ho wi?lch'
in the It was
cheekhnnb
you tonight.
I was born in
«
a little bit
than
more
now.
1867, shortly after United State?
worth one basket, the same
the Civil War greenback inflation. more imnortant thn
°,m?u far market basket of representative
Between those Civil War days and money.
an p0c
ook
'
one-quarter of another
1897, through those thirty years,
necubar
money is a
In 1894 it was worth about what
prices fell by two-thirds, That is,
they fell to one-third of what they nw J tn ^ 5 money. It is sup- it is now, a trifle less. So roughly,
were at the peak in 18-34, which
the dollar is now worth,
it
sin™ Jr wU ^ave m the bank>
was wortk when I was born, and
was almost the same as 1867.
Between 1897 and 1920, prices vnn? S?- 1ue* 1 „on the stub of 1 am eighty years old today.
Wetw 4?
' if you add
In 1897' just after the Bryan
rose almost continuously—a three¬
rS tii L
balances on the stubs campaign of -1896, the dollar was
oi
fold gain—and from 1920 to
an
Plus
j^0
C^fkbp°°k
S^^/eprrnttP°^ketbook
1921,
prices fell 33%,
in a single year,
the
From, 1921 to 1929, prices were
almost stable, and that is the only
tne
total
period in
tion
had
a
we
stable unit of value*—in fact
the
only period of eight years in
the whole history of the United
States. It was also the greatest
,
prosperity period
we ever had.
Between 1929 and 1933, as you
will
half of
rgmember, prices fell to
what they had been.
Between
1933
and
the
United
worth three times
total
supply of money, the
quantity of money in circulathe
m
form
of
lncJ"®y*
it
bank,
WSt
truer
much
as you
all think of it and
Pjopl® innocently
They
"I
say,
That
as
have got
money in the bank."
funny
this
money,
ply and demand of those particular
commodities;
Most people have
the - idea that the
general price
level, of which
ing, is merely
the
effects
I have been speak¬
sort of average of
a
of
individual
supply
hogs an;
and demand of
sugar and
wheat,
and all the other hundreds
of commodities which
index
number
price level.
.But the price
into
go
representing
level and
an
the
indi¬
an
vidual price are two
entirely dis¬
tinct concepts and
should be dis¬
tinct as much as
are the sea leve
afid the
height of a Wave with
reference to that sea level. To
put
it a
different way, we have two
I
have
indicated,
It is
most people
merely a matter of
but if the monetary
.
think of it.
...
as
price
rise,
cause
is not there it is not infla¬
tion
or deflation.
There ought not to be
any in¬
flation or
deflation, and if the
quantity of money, the supply of
.
kept
money,
money now,
pace
—
1
and
book money and checkbook
money
put together—kept pace with the
business to be performed
by it, you
would
scarcely ever have any
change in the- price level. You
have inflation when money out¬
business,
paces
transactions
or
done with money.
You have de¬
flation wTien the opposite is true,
when business grows faster than
the
supply.
money
elements
So
inflation
in
prices, the price of means too much money and defla¬
individual commodities anc tion means too little money. When
the general
there is too much money and you
average of all prices
or scale of
have inflation, it is signalized by
prices.
the
I will use
an
rise
a
of
the
general level of
analogy that would
aply, for instance, to the
prices, and this effect of inflation
portrait.
If
is felt on all prices equally, by the
you should
photograph that
individual prices, by supply and
portrait and get a
miniature of it,
the nose
demand which vary with reference
would be
shorter, but the
to that price scale or price level.
bps would be shorter
in propor¬
tion. The
Likewise, deflation "is the op¬
height of the head would
»e
shorter, the breadth of the posite.
shoulder^ would be shorter —
Let us go trough this same pe¬
.
everything
would be
fp.a'e»'.The 'heroic
bincolft
memorial
iPBS°lulis
everything
jTnfe
rl1
Abraham
is exaggerated in size.
of the statue is an endifferent thing from the
*en yoii. take
P.
of
the
a good statue, although
of th,3 nose.
,
different
on a
statue in
,
*
,
account merely
vi J
ianc* demand
rl ^ uCOmmodities> V°u
of indi-
do
each the main factor in the
^hVwiGay® 0? the
which, • for the
suVVlV °f.
not
case.
money
scale of prices or
price level, is the
important
actor, and the reason I do not like
he
method that I have
just used,
he
ir?icommon method
of expressing
niiation and deflation in
terms of
tmCes'ls tba*
does not bring out
Jts monetary factor, and that is
wk
want to emphasize tonight,
irvi*
*s money? Money is any
°I
-
s
a
property in
means
common
of payment for
V
use
other
riod of my eighty years in terms
of what money will buy, to bring
out the money factor clearly so
a
will
I have here
chart which shows the history
you
never
forget.
of the dollar of these
First,
eighty
countries,
years.
unit
of
unit of weight,
a
"That
is
they
used
*n,?'ead of
of
really
in
general,
Brussels carpets!
You
would
would
in
all
I
think
know
a
representative
goods
recommend
worth
think,
much
so
silver."
ever
or
was a real unit of value,
|
How
can you do business without trouble with that sort of a
dollar? The so-called unit of value
changes.
You
unit
every
are
careful that
so
the
on
other
side
of
the counter, measuring the goods
you buy, shall not
vary, but the
dollar is allowed to
vary and has
this much, so that it has
varied
been
often,
creased
several
—because 80
years
this nation is
a
at
times,
in¬
in my own short lifetime
in the life of
very short time—
least three-fold
or
what
more
it is worth today, over 200%.
dollar is worth
One
today the least of
all the "dollars in my
lifetime, ex¬
cept for the slightly cheaper dollar of 1864, the least since 1876.
ing the f.rst World War in order
see wnat discussions had
taken
place regarding post-war inflation,
This reporter found
that
about
people
the
the
article
an
facts
I
by
then
was
me.
; :
which
was
crying in the
wilderness.
everything else. The last unit
of commodities
that was made
constant was the bushel basket.
portant facts in all my 80
years,
were
simply unrealized at the
for
Originally,
'n
every unit was rough,
Abraham
leight of
in
a
Lincoln's
horse
day,
many
hands—but whose
lands? It makes a difference.
It
is said that the
yard was originally
;he girth of the chieftain of a
tribe.
Suppose today
had
we
the
;;he girth of the President
United States!
Suppose
yard
of the
you
made
some contract for so
many yards
of cloth in the Taft administration
and
fulfilled the
contract
in
changes in the dollar.
For to allow our dollar to douDle is like allowing it to be cut
in two—to call half our
present
are
not
and
other
commodities
as
frequent, as big,
important in any other way
reason
is that any
change in
yardstick, pound, kilowatt,
etc., would be seen while the
change in the dollar is not recog¬
©ur
shown in
that the facts
the chart
are
Yet this
.
news
news
to
was
seldom, if ever, published at the
time.
I
read
recently that
porter hearing the word
tion"
so
President
the
often
today
Roosevelt)
a
re¬
"infla¬
(thanks
to
looked
up
im¬
most
The fact that 99 people out of
never realize that the dollar
is
not
constant
a
other
unit
used
now
like
every
in
commerce,
seems incredible. But it has been
established as a fact. Even when
its
changes are being most pain¬
fully experienced, the public are
that there is any
unaware
Roosevelt made
scious.
us
1
change.
inflation
;
~
con¬
\
Yet the dollar is still a stone-age
dollar, really a unit of weight of
a yellow stone, not a unit of value
or
power to purchase the neces¬
sities and conveniences of human
life.',
The
dollar,
me
is
reason
illusion that
a
because
dollar is
a
of
this
always
the same dollar.
long time to find
took
out
that
99% of the people have this money
It is only the economists,
practically, that do not, and it is
only
of the economists that
some
do not.
There
ignore
money,
in
their
all
the
are
even
some
neglecting
thinking.
general
regarding
public,
They, like
go
money as a
who
money
right
on
unit of value
and think of the scale of prices in
of
terms
supply and demand of
individual goods.
grief when they
to
come
try to predict.
For instance, that
should
have 8,000,000 un¬
we
now
employed
knows
Anyone
today.
the
effect
of
who
inflation
knows that this could not be true.
That
has
been
proved
by statis¬
tics in several monographs that I
have written and
corresponding period follow-
-
(Continued
some
on page
that have
1404) i
:;
THE
So that is the record that chart
INFLATIONS
you for the seven pivotal
dates, the dates of turning from
deflation, or from de¬
inflation to
of
these
include
to
from either
or
from
or
DEFLATIONS
stability, to
of eigh
the short period
the only period of real sta¬
years,
bility.
That is the record of
unstable
very
dollar.
our
How
80
can
this dancing dollar
true unit of value?
anyone regard
as a
YEARS
Yourhave probably often heard
said that the gold standard
that is, a dollar of constant weigh
it
and fineness of
best standard
has
exist
I know
as
and
slightest
the world
This is
known.
ever
far
so
gold—has been the
of value
there
never
did
evidence
myth
a
does
not
exist,
that
the
such
statement is true.. It is true that
gold is the best medium of ex
change in foreign trade; and this
use
of gold at least should be
1920
re
•
S
tained.
But
as
standard
a
of value,
the
so-called gold-standard is a disma
failure.
It does enable the dentist
the goldsmith to buy gold at
constant price. But few of us
1921
and
a
are
we
dentists
need is
goldsmiths.
or
a
What
standard in terms of
the dollar that
we
now have, the one most fa¬
miliar today.
The dollar today is
the ordinary budget of food, cloth¬
worth
other
take
we
a
certain
collection
of
goods—I call it a market basket,
although. in the. statistics of. this
chart the goods are priced by
wholesale
reason
for
and
not
this is
One
retail.
that
we
do
not
have
retail orice indexes that go
back to the Civil War, index num¬
housing,
amusements
and
things for which we, all
spend our dollars. Thomas Edison
ing,
1929
said; "Is it not ridiculous to have
a
commodity
for
value which has
standard
a
no
other
use
of
ex-
1933
cebAJ$,^d P^c^ure frames and f^l
I teeth.
So far
one
as
I know I
am
the
pnly
who ever compared gold' as a
bers, that is, of the price scale or
price level. On the other hand,
standard of value with other in¬
for
1947
dividual commodities.
wholesale
prices
we
have
worked out index numbers that go
back to the Revolution.^
u; U
Through these eighty years, let
us
compare
worth.
what
a
This is value
..
dollar
was
I
are
now
that
several
a
least unstable
pets!
j-
we
find
modities had
...\
So if
••
tvn,
we
other
com¬
better record.
The
Brussels
car¬
was
•'
wish to be
so
foolish
a
It
illusion.
They
I venture to say
incredible
these
100
nized as^such.
most of you.
facts,
time. How is it possible that
they
should have escaped attention?
or as
as are
time contracts in dollars—in other
words debts, including bonds. The
other
these
seems
the
lundred times worse, these inces¬
wheat
It
.
administration of Wilson!
You
wouldn't stand for it, And
yet you
do stand for
something that is a
sant
that
the
measured
was
so
gives
flation to inflation
1
- ■
voice
a
reference
no
vvhatever except
one,
chart, act accordingly and
mend the situation as
they have
in
to
But neither of the two is
say
meaning both pocket-
so-called
our
single commodity for
a
Most people imagine today that if yard our yard, and, likewise, to
'lalve our pound, our quart, our
we have a dollar of
gold of constant weight and fineness, it is of bushel, our kilowatt, etc., etc.—
except that such a catastrophic
some value and that it is fixed,
In India, Mexico and China, and change would not be as bad as
doubling our dollar. One of these
other
silver-standard
countries, two reasons
is that time contracts
when they were silver-standard
so
checkbook
is
value. It is really
think is
simply
sup¬
bas^
^In 1933, the dollar's worth was
three market baskets,
pocketbook money,
tangible,
In 1947, the dollar is, by definivisible pocketbook
money in the tion, worth one ImaiNcH basket,
a
supply and demand of those par¬
ticular
commodities, but generally
it is almost entirely due to the
market
money, ac-
a change in prices.
It money, is merely the promise of
change in prices caused by the bank to furnish money. It is
monetary causes. When the price not money in the
tangible, visible
of sugar goes up or when the
price sense.
of hogs.goes up, it
may or may not
Also, people have false ideas
be due to anything else than the about inflation
and deflation. As
is
one-and-a-half
/■■■..'A
does not
represent
tual
these inflations fy everybody. What
they w$uld
and deflations—because
they were do would be to call in debts, call
inflations and deflations—in terms in
money in other words, to pay it
of prices because that is the
usual off, and there wouldn't be
enough
way in which business and econ¬ money in the
country in order to
omists are apt to think; of infla- do it..
tions and deflations.
What this money
really is, this
not
was
kets.
run, you would
find that the bank
could not satis-
But an inflation or deflation is
worth
basket, the same as
In 1929, the dollar's worth
today.
was
checkbook
the
*
much, three
,,
present, quite true, t{ie bank has
enough
prices have risen threefold, so that to satisfy any one person at
any
today prices are practically at the one time, but it
everybody.at once
same height that/
they were, not should demand their
money, as in
he case of a bank
only in 1920 but in 1867 when I
was born,
I have expressed
as
i
and
ancl
life during which
in
whit
3
for 130 million people, market baskets,
for thousands of
businesses
In 1920, a dollar's
corporations, the sum total is one market
j
the sharpest fall in one year that
has ever- been experienced.
my
checks
hgve
basket
in^ thL
^2 I falking about, purchasing power,
Mcfce/hnrfi-'wIJ
Uymg P°YuGr of the dollar> what
money'
'UUU;:i States. There is
unit of value
'
+
a.
to
as
DESIGNED BY JOHN
BAER
"THE CONGRESSMAN CARTOONIST"
j)
THE COMMERCIAL & FINANCIAL
Thursday, March 13, 1947
CHRONICLE
to peter out, and the scarcity
gold continued.
There was also another reason.
gan
Inflations and
of
;
J*
(Continued from page 1403)
been written by Henri Fuss of the
International Labor
Office,
asso¬
ciated with the League of Nations.
tory of the world that any nation
has had a great majority of 'its
people, or even a large majority
of its people, realize that inflation
word
once, and that was
of this city; and his
The
Money
Illusion
When this word inflation
,,
ing
called
"Stabilizing the Dollar,"
published in 1.920, and after it was
written I was disappointed in the
someone,
results.
came
and
The publisher was satisit had a moderate
sale,
but it didn't make the impression
I thought it was
going to,
and it took me a
year after that
it
as
reporter, looked up—
because people were talking about
the corresponding period after the
we had in¬
flation—looked
flation in
the
the
up
index
of
word in¬
the New
York
ference except one, and that was
in an article which I had written.
why. It
the money
was
I
illusion.
I got letters.
I got a
letter, for
instance, from the president
of
one
of the bxg companies in the
United
States.
I am not
mentioning his
He
name.
.'
-
don't
believe
it
is
true.
I
think
have
you
got it upside down.
change
but
the
dollar
change.
In
short, why
Prices
doesn't
I
said, "I have lived all
my life, I have been successful, I
have made
money, and I have
heard all kinds of
things about
money, but I never heard before
that the dollar wasn't stable. ' I
stabilize what is already stable?"
When finally I got it
through
head that the
my
> is
illusion
money
"Times"
then
was
found
and
no
re¬
most
them
of
have
'
Once, at a meeting of the First
World Bank, established after the
first World War, some one thought
he would play a practical joke on
the
directors
the
of
-knew, that the
mark
had
fallen,
because he assumed the dollar
-
was
stable and he knew the
terms
of
the
mark, in
dollar, had gone
he happened to be
down, and
right. The
mark
had
down
gone
greatly. He didn't know,
however,
>
.
;A-
third of
a
gram of gold. So, he
pointed out they weren't willing
a gram of gold be their
unit,
but they were willing to have a
third of a gram of gold be their
to let
unit!
The
third
of
a
reason
was
that
the
had been mas¬
unit of value.
gram
that the dollar had gone down
querading as a
too,Some of the reformers amongst
though not as much. Each counus on this subject have often
cited
try has the illusion that
its
" money is constant.
by
actual
the
count
economist,
Roman, that 19 out of
than
mark
in
been.
another
Professor
20
economists,
that the mark
That
it
as
people,
thought
just the
was
1922
I found
with
American
other
own
*
So, in that visit of 1922,
;
'--
a
same
had
always
incredible, but
it is absolutely
true, despite the
fact that it had
really fallen 98%.
seems
Constitution
of
the
United
States, which said, "Congress shall
have power to regulate the value
of money."
We have interpreted
been
level.
the
unem¬
that
promoted by
price of labor seeks
to the raised price
If labor is not alert it loses.
That has happened to our teaching
profession with the result, inci¬
dentally, of a great loss of good
teachers and
a great loss of morale
those left.
among
Another important matter may
be mentioned—investments. Dur¬
ing inflation bond holders lose
they
but
had
not
considerable
inflation,
great as in France.
I found it was true.
as
Everywhere
People
are subject to the money
illusion that a dollar is always a
dollar,
because
they
measure
,
everything in terms of the dollar,
but they take for granted that the
dollar is constant.
But it
isn't,
you can see from this chart.
very far from
if
•'.■■/A,
had
you
constant, and
20
market
as
It is
even
baskets
gone up
of
ness
Their cost of living rises
but their income from bonds does
not. Yet to them these two facts
have
connection.
no
think
They still
"safe" invest¬
they had a
No really safe investment
ment.
exist without
can
The
coins."
-
But
the
Why have
Causes
had these changes?
we
inflation
you
plethora
is
backs.
when
money
there is
there
is
shortage
In
the
much money,
Civil
a
deflation
and
a
too
had
we
is
of
when
money.,,
War
" of
times
green¬
They
were issued to help
the Civil War. We actually
printing press, printed ir¬
redeemable paper dollars and paid
.
pay for
used a
our
soldiers
in
them.
People do
know that greenbacks depreciated
because they measured them in
terms of
preciate
But
better
no
known
much.
as
had
index
was
numbers
in
device for measuring
prices or scale
prices, but they meant exactly
what they said—a unit of value.
We have never had a real unit of
value in this country, except dur¬
a
a
under Gov¬
that
it
had
nothing to do with money. I have
beem shouting
my
head off for
years trying to get people to understand this
wasn't loud
a
little, but
my
voice
enough to be under¬
stood.
During the fourteen
asked
me
things and
one
Some¬
came.
tonight if I
New Dealer and
think Roosevelt
I
was
said no,
did
sound
a
but I
some
good
to make this nation conscious
such a
thing
that everyone
States
uses
of them
use
this money
are
as
now
inflation,
in the
that word.
so
United
Very few
it rightly because of
illusion, but still they
inflation
conscious a little
bit,
and, it is the first-time in the his¬
bank notes.
I
might
other
'
was
while
years
thus stealthily creep¬
heard repeatedly
"Is inflation coming?"
And several writers have publish¬
ed
up on us, you
query
statements
that
it
would
not
going
although it has already been
on for years. They "proved"
their
case
come
by arguments not
even
was
bitter
a
the two together—bimetallism
gold and silver at sixteen of
on
causes,
chief
that first
for
reasons
mag¬
nification of the dollar in my life¬
time between 1869 and 1897.
That 'caused
distress
great
to
who were in debt,/'espe¬
cially the Western farmers * who
had mortgaged their farms to the
people
Easterners.
That
•
made
hard
a
between
content."
That
"■
East
those 30
years.
Then came A thec inflation
again, and the dollar shrank down
down
to
most
of
venture
to
say
you
present to¬
night, the facts shown
in the chart
the
take
it
that time.
at
longer take silver
mint
and
dollars;
have /it
you
could
gold, but not silver.
As soon
got back to the gold stand¬
ard, after we did get back, people
as
we
in
came
Cripple Creek,
Africa.
We had
gradual
a
and
in
South
method of
new
a
extracting ores more quickly, the
cyanide process.
All that gave
fresh impetus to rising prices, and
prices began to rise. Then came
the
importation
abroad, because
World
War
of
gold
from
when the first
broke
in
out
Europe
in
Europe, in the various countries
of Europe, had wartime inflation,
as
is always true
during such
in
the
1914
paper
.
situations. * So
from
money
got more
we
abroad, and had
inflation.''
Then
we
again to
What
;
rate,
the
were
to
get
us
the people that talked
trick, or the crime of
right to the extent that
it added to the deflation and the
of
our
in
the
came as news to you.
I may add here that most of
the
great economic problems today in¬
volve
never
inflation, though you would
suspect it by reading about
more
them. Take the Subway fare
prob¬
lem, I s examined
everything
>
prjntedj blithe New
York: "Times"
onj this question - and Jfound ;the
we
'
-
We had
-
wonderful prosperity
a
it is. It is
will get
caught in debt; and unless the
dollar is very stable and helps
them by reducing its value all the
time,- these people will naturally,
many of them, become insolvent.
But the general fall of prices that
or whatever
that
people
land,
new
inevitable
followed after 1920-1930 was
unnecessary.
quite
That was due to the
gold
after being very considerate
our
war our¬
wartime
own
market basket.
the explanation
of the
great change, when the dollar in¬
creased
50%
1920-1921?
in-
single year,
It stemmed from the
a
fact that the people
contended
with
the speculators after the crash, as,
in fact, they should have been,
were
so
dis-
the
size
of the
dollar.
value
a
year
or
stockthink,
general liquida¬
after
two
the
market crash they began to
"We want now a
tion." The word
passed around.
was
They thought it would clear the
air to have a general liquidation.
They were right as to liquidation;
but
unfortunately,
justv as
.
the
tied gov¬
ernment debt to bank notes, so by
our present system of banking we
have a perpetual tie-up between
the quantity of money and bank
loans.
If you look at any bank
statement, you will find that the
bank loans and investments will
bond-secured
currency
"high cost of
living/' as they called it, that they
demanded- that,there should
be
something done about it by Gov¬
ernor:
Harding-*- not
President
Harding. Governor Harding, head
be almost the same
debts
to
of
stable
in amount as
money
over
the Federal
Reserve
Board
at
will show them I
man."
So
enter
he
a
not
am
a
/a;;' ;.a
;/
persuaded
the
deposits, the checkbook mon¬
ey. As long as we have our sys¬
tem-of banking .: such that our
checkbook money is tied to these
up
the Board
to
period, consciously, of de¬
I know one official who
knew what that would
mean, who
over it.
He.was Comp¬
,
of the Currency
,;j;v/a'Aa...■_
Jv-A.
at
that
At any rate, it was
done, and
during that one year you had the
fall of prices, as I have
said, and
the rise in the-dollar of 50% in a
single year, and the sharpest, de¬
pression in one year we ever ex¬
perienced. A
R. That
is the great defect in our pres¬
ent system of
So when the
only reduced the debt, but
money.
flation.
time.
banks, you can't have
unless you have a
That tie-
stable volume of debts.
demand-deposits.
liquidation of the
weak banks occurred, all with the best
;?•.:>•;■/■ of intentions by the banks, it not
a.
.
checked by the great¬
That was 1873. The Resumption est banker this country has ever
Act was passed in
1874,-aneMve- seen,'-Benjamin Strong, head of
actually did resume on Jan: ,ly 1379, the Federal Reserve
so
1921.
bankers, not realizing what they
were
doing and thinking, /that
■
went into the
one
is
troller
Britain
on
the gold standard and get us
off the bimetallic standard of
gold
and silver at sixteen to one." • At
about
he did with the deflation of 1920-
gold
have mentioned, the dollar shrank
trick
any
Strong
with it just as
have coped
naturally, speculation during that
period, as there always is. Wou
always have speculation where
there is prosperity, whether it is
because of the growth of railroads,
there
1897
increase in the quantity of money.
We had discovered gold in Alaska,
shed tears
Great
could
during
those
eight i? years
of
Strong's management. There was,
looked back and said, "A law has
been put over on us.- It was a
of
management lasted as
he did. We stabilized for
the first time and the only time
in the history of the United States.
;When he died in 1928, it died
with him, and /the stock market
as
basket, the same as it is today.
*That was due to the fact that just
ing."nothing about it, that he was
a
"weak" man, and" he said, "I
made into silver
this money
long
in the next 13 years to one market
little attention
no
was needed.
It stopped it
almost overnight; it stopped that
deflation almost
overnight, and
what
need not have come at all.
■
the history of
was
that time, was stung to the
quick
by this criticism that he was do¬
to
and those who sold them
got the money. That money
went into circulation, and that is
to him
and West:
The farmers complained that the crash came the next year. I think
Eastern creditor was a Shylock, the stock market crash would have
and that with the lower and lower come anyway, to some extent, but
prices of wheat they couldn't pay the deflation that came after the
their debts. There was a great dis¬ crash was a separate matter and
feeling
1873, where silver was demon¬
etized, though people paid very
increase
even
gold by weight.
the so-called crime
of
left
that for
of
came
1873,
I
one
.
Then
It was a good
example of "Hamlet" with Hamlet
out.
cooperation of the
heads-:of the other, four big Fed¬
eral Reserve, Banks, "those of Bos¬
bonds
'
to one or two
but those are the
go
was
..
thing he did
was
of
ing
meaning.
mentioning money!
President Roosevelt
one
ed
So you could
presence or even its true
that with the
,
small
small \as it
who wanted silver and those who
wanted gold and those who want¬
of
years
,
our
very
other—gold or silver. There was
also disagreement between those
silver to
the
and
tied
.
selves,; and had
there
between the
of
ing those eight
ernor Strong.
stop this deflation, • and he
simply,-by injecting more
money into circulation., He found
did,
.
then
and
the general level of
and
v
about
those days,
Nothing
way<
could
,
.
that
So
gold and gold didn't de¬
we
Then
reason
yard by the girth of the chieftain
of a tribe., Our forefathers knew
inflation
forth,
help pay for the war, we allowed
the banks to issue what was called
bond-secured .notes.
a./; * V: v;;
A
their, business
after
safe dollar.
a
What is the explanation? What is
the causation behind all this infla¬
tion and deflation?
I have told
was
because of supply and demand of
those commodities, hogs and wheat
so
bank notes.
inflation, just as in the late war,
dollar, just about as
as you know, although little was
that in modern terms of market
today, in terms of greenbacks. said about it at the
time—nothing
baskets or
index numbers.
We Why did
the dollar expand'- in ■almost; President Wilson
spoke of
have been reproved for this. The those thirty years?
Simply be¬ it;, but nobody paid much attention
critics
say,1
"The
Constitution cause, for one reason, we got rid to
it; they.' didn't understand it,
didn't mean that.
They meant of the greenbacks and began to they didn't
try to understand it.
merely fixing the weight and fine¬ redeem them.
So, as a result of all the causes I
there, you would find that a great
Even today after Roosevelt has
majority of the people in the put the word inflation in
every¬
United States would still have the
body's mouth, few know its
illusion that it was
merely prices
of commodities that had
;;WaS* from
of bank notes,
* In. order to
it consisted largely
heavily.
that then such fixing was the
I
found
the
same
fight
greenbackers
thing in
France, where they had a great only kind of measure of value who were regarded
as,
"soft
known.
deal of inflation, but not as
money" men, not sound money
great
as in Germany, and I found
But it was like measuring the men, on the one
the
hand, and those
same
thing in England, where height of a horse by hands or the who wanted "hard money," on the
r?
currency
our
national
are
The
adjustment
—in fact, I would say
>
has
absorbs
These
inflation.
Even bankers who handle money
merchant does.
it
Another problem is
of strikes.
bizarre ideas of what inflation is
because of this money illusion.
a
For
inflation
ployed.
very
particularly
bankers — have it, because they
think in terms of money entirely;
they don't have a yardstick of
purchasing power to think of as
out."
shown, both in theory and practice,
that
wilderness, but today people
are
willing to learn a little bit
about inflation, despite the fact
bank, and
proposed that since they had so
tried to bring it out
many currencies to deal with they
clearly.
In 1922 I visited
should keep all their accounts in
Germany when
grams of gold. They said, "No, no,
prices were 50 times what
they
a
were before the
gram isn't a unit of value; a
first world war.
/I went there with another Amer¬ gram is a unit of weight. It would
be absurd to
ican
keep our books in
economist, ; particularly to
terms of grams of gold."
find out whether in
Germany they
"How about the Swiss franc?"
could possibly have this
money
"That is all right."
illusion. Every school
boy in the
United States knew, or
Now, the Swiss franc is about
thought he
important, I wrote a book
called, "The Money Illusion," and
so
Hamlet
the
that
unemployment after the war
8,000,000 must also have "left
at
voice crying out in
a
of
wartime and in the United States
ed at five cents because of the slot
a
to find out
-
take time to catch up.
administration,
that
.
inflation
When
;
Much
doing
thought -lor stabilization*
but Benjamin Strong saw that he
no
ton, Philadelphia, Cleveland, and
government Chicago, he could- regulate the
debt to money, and as our deb: quantity of money and therefore
the nickels go into are among the
was- paid
off,-'the banks had to regulate the value of the dollar and
last to catch up.
redeem the bank notes more and keep it in pace with business. He
Another great economic problem,
more1 until
they-finally disap¬ put. money in circulation by buy¬
in the public eye has been unem¬
bonds A; in the
peared, practically. That was fur¬ ing A government
ployment. Those who estimated
ther deflation, reduction in ;the open market. / That is, he got the
the
dur¬
was
by the Mayor
mention of it
prices lag behind and
Prices fix¬
occurs, some
first World War when
fied
-
to be bandied about
Roosevelt's
illusion.
money
I discovered this after I wrote
my first book.
I wrote a book
/
only
misuse due evidently to the
was a
and deflation exist.
:
mentioned
inflation
in
bankers
with
I
want
shrank
A
■
again
to
e^nnasize m®
fact that the crash of 1929 and
deflation
thereafter uwere
the
two
distinct things; the latter at;least
could have been prevented.
The
quantity of money shrank
the stock market
between
and
the
bank holiday of
when Roosevelt came in*
from $22,.-billion .to $14 billipp*
From $22 billion to $14 billion m
1933,
3
two-and-a-half years!
That is a
tremendous change. So, between
1929 and
in
its
1933 the dollar
value because
doubled
of this mis¬
Bankvof New* taken policy of liquidation. It r®?
finally got back to the .gold AYork City';" rHer4fi#6ffted "what is peated the folly of 1921. - A " .
.
standard and when
tween
the
Civil
we
War
did
time
e-Tealled • the "'"Open market opera¬
and tions, for the, purpose of stabiliza¬
If
two
eight
miles
out
of
1879, the dollar
of
our
every;
twenty-
railways
hajd /grown con¬ tion.'*
Open market operations destroyed, the newspapers wppd
siderably, and it didn't stop. Why?; jiarl been?authorized by the Fed¬
be, full of it. Yetvthe destruction
eral $ Reserve I Act when it was of eight out of twenty-two'dollars.
to \ in • our
I, >v
i
.v
;•
t
*£
\
'■
greates
highwayl
of com-
-T- -
•
Number14576
yolume 165
'
n
inimri .n.»i «.
urttttf.niiM;
THE COMMERCIAL &
FINANCIAL CHRONICLE
without /being
That is the
way of it in the first
Only what we now do is worse,
renown!
This is because of the place, but that isn't
all./ The net worse
for two reasons. In the first
omnipresent money illusion.
efiect is not
only the
:•
1933
between
:// Then
and
the
taking wealth from
present time, the chief reasons for ple
•:
inflation from which
now still suffering were
the
we
are
fol-
as
lows:
-/
The shrinkage of the dollar from
-
and
1 won t
injustice of
set of peo¬
one
transferring
it to others.
stop to specify, but
count of the
money
on ac¬
illusion,
peo¬
ple always attribute this to some¬
thing else. They don't attribute it
place, it; applies
to everything
whereas these others only apply
to some of the things. • In the sec¬
ond
place, people would see it and
understand it and take account of
it as far as they could, and
remedy
it. But, when the dollar
changes,
baskets to one mar¬ to the inanimate
object, the dollar, on account of the illusion,
they do
in only 14 years was they attribute it to some con¬
nothing about it.
chiefly due first to the policies of spiracy against
them, something
There is a third reason that is
iRoosevelt. He tried government mysterious,
something wrong even more important,
namely,
spending.
This* wasn't, as most somewhere, and they turn out the that
contracts for future delivery
people think, the fact of the gov¬ party in power, particularly. So are
made in terms of dollars far
three market
,
ket basket
ernment spending. When
you
have
<
have
you
discontent, and that
government spending money, it is makes radicalism, just as populism
from taxes, or money from people grew during that
first/period; in
,
invested pre-existing
in bonds. You then have
jno increase in the money supply
.and government spending doesn't
ihave any effect as to inflation or
have
who
v?
money
(deflation.
But, when new money is creatcdd, then you have' inflation, and
j:new money was created, not only
(during the depression but long
safter. So we have had this great
inflation
these
during
14
.Even after the war ceased
years.
we
had
iit, because bank loans increased;
another
,-also
.^prices
J
were
reason
was
because
held down somewhat.
The record hasn't been altogether
•right
because there were short
weights and measures, there was
v
the
chart
up-gradings of. goods,
-things, that deceived
people into thinking that we had
less inflation': than
we
actually
| did'have.. It was chiefly the other
^restrictions, such as rationing and
.I so forth, which had the effect of
holding back money, this money
snow being released. Another reawere;
and, many
/ /son
the
was
reduction
the
in
-weight of the gold dollar—41% in
-
1934.
Those
/
the chief
are
reasons
for
these different movements,
v
and
disappeared
years and more of deflation.
f
So, if
you
follow
•
overturn. Hoover
in with
came
When
Hoover
was
first .nomi¬
nated,
I made a beeline for his
office and I said, "Mr. Hoover, if
you
allow either great inflation
deflation to
or
occur
during your ad¬
are out/'
And
that is what happened.
/ '
Not only, was there great dis¬
content here, but also in other
ministration, you
countries. It
was
true in Germany.
in
Germany during this
sion by
.
...
you
checked
had
occurred
the/deflation
had
it was in the 20's under
as
a
When there is deflation the op- War* this second World War, and
/jposite occurs. ;■//// ;•■/'/// ://.///// the aftermath which is. with us
Then you rob the debtor, and yet.
■ :/-.
;/-/ •" //
are in debt,'and should be.
they don't realize what is
happening when you have deflaS^H^and thus they are apt to go
Sj^Ptj not because
I
•
of any fault
yf'their
orwn but because the dollarfihas• been changed in- such a
way that; they can't make money
0 snyrmoreu/;\//,/--vz --///"•-//••
^ That;/applies
.
-
stockholder;
mi
debt; to
~
*a
lariedi
'*'*■■■
to ' the- common
for his
the
man,
*
/company ' is
bondholder,
the
•
r
workman,
the
the
vJandlordi; perhaps — people 'who
have incomes
fixed, or nearly so,
;/ m-dollars/ "/• ••
i /•' "/"//•*•'/> //
/) -That
applies to the teachers toThey soon find they suffer
rthrough the
though only
"
cause.
/„,
That is,
/
2
n
inflation
a
period,
few know the real
.../
inflation helps one set
eo.p^e and hurts the other, and
"citation
does the
opposite.
/.
>
•
the others put
other in the country. I
r,
matter of bonds. They Benjamin Strong.
suffer losses whenever there is
That was / one of the biggest
inflation.
.v/
V/-/.<;v factors in bringing in the World
•
than all of the combined
won't men¬
great popularity in 1925, and was tion, his name because he wrote
turned out • in 1932. Thus came me confidentially his opinion. He
Roosevelt. ,/;/
,-rt /
,/
I thinks we are going to have a ter¬
if
nesses
J3ut;
worse
of
sities, hospitals, churches, foundaPons, salaried people.
That is
.includes - the busi¬
nessmen because* almost all busi¬
debt.
a
radicalism.
After the together. That is the
way of it.
period, that from 1894 to
What next? Nobody knows. I am
1920, you turned out the party in not going to try to be a prophet
power in 1920. People were claim¬
tonight./•'•///,/-///,/•:• •/•// /•/:/
ing that Wilson was to blame, so
There are three things that may
they wouldn't elect Cox, who was happen. We may have great in¬
a
Democrat, and they/ put in flation. I know one very intelli¬
Harding.
gent
banker who
studied
this
And in 1933 we had a big polit¬
problem, perhaps more than any
deflation here,
debtor"
futures
the instability of the dollar
instabilities of all
effects
deflation wouldn't have
the
wheat
second
Xa.le University, all other univer¬
•
So
is
quite serious, and the
were
.
primarily
sell
do
they
.
-
We
make
the political
caused a depres¬
deflating the value of the
mark, and caused great discontent.
%
A great deal of harm; more The deflation caused bankruptcies
■3 harm
than anything else, econom¬ of a
good many businessmen all
ically. This is the biggest economic over the world. Many shut up
% problem in the world
today, as it shop, causing unemployment, and
has almost always
been, the prob¬ the biggest factor in unemploy¬
lem of inflation and deflation. It ment is
deflation, always. /The
I? is also the most neglected.
biggest factor in absorbing the un¬
In the first
place, when you employed is inflation/ and one/have inflation it robs the
creditor; third of the working men in Ger¬
| /he gets less. The creditor includes many were out of work, and that
i the savings bank depositor. So a "made"/ Hitler politically.
That
savings bank depositor, usually a was one of the biggest factors, I
poor man, thinks he Is
mean..
•
getting 3%,
/
Of course, I a,m simplifying
/ *°r 2% now, on his money. He has
;
Teally been getting nothing—less now; I am just showing the one
/than nothing—because his
prin- thread of inflation and deflation
| «cipal has been shrinking faster all the Way through.
The personality of Hitler was of
] than the interest that he is getting,
hut he doesn't know that because course of a part of the whole his¬
he always thinks of the dollar as
tory, and a great many other
J
Estill the same dollar.
/ / '•••/'/''
things, but Hitler would probably
Bondholders are losing the same never have, come to power if it
"Way.
So are all institutions de- hadn't:, been for-the unemploy¬
| Pending largely upon bonds, like ment and the deflation; and the
•
that.
effects of this alone,
you find that
People
The Evil Consequences
terms of
they are made in
business futures, and all
over
So the Weimar republic went out.
| /What of it all? What harm does
■lift do? //; /V/.// I: /////\.V /•://:/*;•;;/
often than
more
and other futures, but every debt
night after the turning point in, is a
sale of future dollars, and we
18^6; just as Bryan was
nearly are gambling on the dollar every
elected in 1896 and the tide turn¬
time we make a debt, we are
gam¬
ed against him in 1897
because bling on what the value of the
then came inflation instead of the
dollar will be,
every
time we
30
Substitution;: of /lowerr-qualities* ical
there
1405
occurs
rnerce
What Next?
/
rific inflation after this*
is
son
this:
banks
The
bonds
held
by
may
have
a
So
ness,
pretty serious busi¬
gentlemen. 4 You see, when
this
is
a
intelligent
very
coun¬
try in
general, and particularly in
these matters. They sent a com¬
mittee
here
over
Governor Strong
to
study
what
doing. They
went back to Sweden and applied
t immediately, in 1933, and for
live
years
they
stabilized the
trona.
They had an actual mar¬
ket-basket
much
in
dollar
fish,
the
was
so
cost of
in
retail—so
much other things
living would con¬
stitute their krona. They kept the
constant in internal pur¬
krona
chasing
five years.
they gave it up. It was a
success, a great success in fact.
Sweden got out of the depression
for
power
Then
than
ternal
stabilization, of
but did
the
krona*
that it interfered with
see
his business in London because he
could
the
market
quotations
sterling1 to the
pound
krona,
and
the
pouna
krona to the pound sterling, and
of
see
the
pound
he didn't want
ness
have his
to
busi¬
doing in insisting
change.
Perhaps
Sweden is
on
it
making this
was
wise.
small country and is
a
dependent upon foreign trade.
Certainly it would not be wise
:
/
for the United States.
In
thinking of restoring it, they
recognized it
great
a
as
success,
-
as
much
as
1929,
was
year.
That would be terrific in¬
supposed to be a high
flation.
I
myself do not think that is
nearly as likely as a second pos¬
sibility, namely, that after a few
there will
years.
be
an
idea
of
liquidation similar to that of 1920,
which caused that sharp depres¬
sion for one year and was
checked
of
done, if we have depression, we
going to have Communism
growing inside this country, in¬
ternally, spread by the propa¬
ganda that Russia is having, and
everywhere else.
That isn't a very pleasant pros¬
pect, but I am trying to tell you
what is likely to happen.
The second important element
are
in
E&y proposed reform is to rais&
the
from
reserve
the
of
average
16%, not at the expense of the
banks, but through processes
prosperity would help the banks&
well as others, without depres¬
sions, but directly and immedi¬
ately it would be of benefit to the
banks.
Its greatest virtue is that
as
it would sever that fateful tie be¬
Strong and the other in Sweden
It was officially put out by the
government as the idea that they
should keep the krona, too.
supply and bank,
tween our money
loans.
Conclusion
interfered with in that way,
and he didn't realize what he was
half .of them nearly, but only as long as they could
are short-term bonds, turning into
keep both internal and external
cash very soon. That cash can be stabilization/ going,
which they
made reserve, and under our sys¬ did for five years. sThey were
tem/where only an average of trying to ride two horses, and
16% reserve is required, you can they jumped on the wrong horse
multiply the bonds by six and get from the standpoint of interna¬
six
times as
much
stabilization. ; So / they
checkbook tional
money. We have now got $85 bil¬ dropped it too.
/
lion checkbook money, and that is
So we have had two successful
four times as much as 1929, and
experiments in stabilization, one
we
could have six times that, in this country under Governor
which
will
cooperate to the ex¬
disarming. She has said
she wants to. But even if that is
tent
any
now,
which is 24 times
Russia
which I will not attempt to de¬
other country, scribe because I have already gone
; ust as our country, when it had
beyond my time considerably and
stabilization, had the greatest pe¬ should bring this talk to a close.
riod of prosperity that it ever had. But it has been worked out so it
They gave it up because of the would be advantageous to the
foreign trader, who didn't appre¬ banks, not only because it would
ciate the importance of this in¬ be eadvantageous to all of us, and
faster
The real
I
80 years old.
;
.
:
be
passing off the stage, and I want
very much to see this work con¬
tinued. During my lifetime I have
spent at least $100,000 of my own
money trying to help this causeI have now got the support of 1,am
I will
soon
200 economists and economic spe¬
cialists,
Young.
them Owen DI dedicated one of my
him, "The Money Illw-
among
to
books
sion."
He
then
said, "You dor*t
need to tell me about it.
perience
Germany
in
My
ex¬
makes m»
what you are talking
There are several impor¬
understand
about."
tant bankers,
almost
banker
it—
not many of them have—include
ing W. L. Gregory, President of a
bank in St. Louis, who is perhaps
who has made
a
every
real study of
the
greatest scholar on it in this
and a number of other
very
distinguished people.
We
have now got lined up behind this
/ I believe we have got in Con¬ project more mass force than we
gress some of the most intelligent ever had before, and if by any
men
we
had. I won't go into
ever
particulars, but I was down there
two weeks ago and I was amazed
to
see / how
several people in
this
prob¬
country,
chance
we
we
should succeed before
the
into
fall
trap
of
Com¬
munism, it would be the greatest
step
forward
that
applied
eco¬
had.
lem, and how terrifically impor¬
We have also had trouble with,
was./////,//v.;
/'//..'I; radicals, and these radicals often
As to /what is next, there are
know and understand this prob¬
three possibilities: Inflation, de¬ lem
better
than 1 most business
flation, stabilization.
/ ; /;//:/
men.
Marx and Engels even back
In my opinion, inflation is nol
in their days, knew that every
very likely, except the next few time we had inflation or deflation,
We have the third possibility, weeks, perhaps, a little, to com¬ it was just what they wanted, it
and that is what I have been plete the cycle we are now going was their opportunity, and they
'
Z'z V-:
will make good use of it when it
working for, the passage of a bill through//';
in Congress to stabilize the dol¬
Then, we are very apt to have comes again.
#
lar and give us a unit of value deflation.
The
Communists
will
coma
Stabilization seems to be very
that is a real measure of purchasing
along and say, "The system of
understood
Congress
nomics and businessjias ever
by Benjamin Strong and partly by
have a
deflation caused particularly by
liquidation, similar to that of 1929
to 1933, and the depression years.
If you do, you will have Com¬
munism as one of the results.
other
causes.
So you may
tant it
.
«
that were done, we
rid of inflation/ and
deflation practically both at once.
How can that be done? There
power.
If
would
get
are
two major
parts of the remedy.
One is to restore the open mar¬
operations as used by Gover¬
nor Strong. I pleaded with
Gov¬
ernor
Strong to get him to en¬
dorse the bill we then had before
ket
which was simply to
government take over
of using^open mar¬
ket operations and doing what he
was doing by doing it openly and
radicalism in this country. There efficiently and by law. He said,
will be Communism, and that will "Don't do that; for God's sake*
mean
a Russian ideal ruling in¬
don't do that. If you do that, I am
stead of the ideals of America, the going to resign." He said, "I am
free enterprise system/
doing pretty well, but it may be
repetition of
which
is I think, considerably more like¬
ly than the opposite. We will have
We
this in the next few years,
Sweden,
Congress,
have the
that
process
by good luck, but if I am out in
the limelight and
held respon¬
difficult
in
even
I
have
motives
every
that
because
so
few
people
America
understand it
trying to bring the
Congress,
been
to
bear.
I
have
written
Congressman, telling them
their party
was
put into
power
tion,
.
v
this last election by infla¬
because people were dis¬
contented with all the restrictions
which had to be
on
account of in¬
flation, and that they would be
swept
out
of
power
just * as
Hoover was when we had defla¬
tion, if
we
of
enterprise
free
is
a
failure, and produces depressions
and unemployment. Give us Com¬
munism
and
will
we
see
that
everybody works."
That is the
gospel they will be preaching.
If,
on
the other hand,
fortunate
as
we are sf>
to solve this problem
permanently, we will have the
greatest and the least interrupted
prosperity this world has ever
seen.
*
do have it very soon.
enough will study it seriously
and understand the history of the
Maxwell Roberts Willi:
thing, there is a fighting chance
that the bill which I am trying—
Otto Filers! & Co.
If
and
the
anti-inflation and defla¬
tion committee with me—to intro¬
do the trick.
duce
will really
feel,
after having
I
failed all my
Otto
Co.,
Fuerst &
-
57 William
Street, New York City, members
of the New York Stock Exchange,
announce
the
association
with
their firm of Maxwell B. Roberts.
Mr. Roberts was formerly with
sible for this, I can't stand it.
I life to succeed in this endeavor,
change the value of the dol¬
that there is
only, after all, t
don't want to take the responsi¬
lar, it is equivalent to changing all
Bendix, LuitWeiler & Co.
fighting chance.
/
;
////"• /■/.• /
the units at once. When you re¬ bility."
The real problem ahead^ of U£
I
said, "Governor Strong,
duce the quantity of money from
is deflation after a few years, de¬
trust you as long as you live, but
$22 billion to $14 billion, as hap¬
pression, unemployment, discon¬
pened between 1929 and 1933, it you won't live forever. It will die
tent, radicalism, which - in this
is
equivalent
to
the opposite with you, I am afraid."
That
is what happened.
His case means Communism, Russianchange, this doubling of the dol¬
didn't
understand i'< ism in this country.lar, it is equivalent to cutting in successors
Edward A. Pollard will engage
I was talking tonight with a
$
half- the
yardstick,- the pound enough. He hadn't succeeded in
in the securities business from of¬
man in regard to a war with Rus¬
avoirdupois, the kilowatt, and all doing what should be done to ge^
fices
at 30
Broad Street, New
sia. I
said "I think we should
the other units on the other side them to make it a policy.
York City.
Mr. Pollard was iortrust Hit: Uigdxii^atxvxi| txrc ^ A"vvu
There is one country that did trust the organization, the United i
of the counter." •/
'/ ». /
it"
Nations, and develop it." I hope|merly with Ernst & Co.
do
it
officially,
and * that
is
You - wouldn't stand for .that.
you
Edward A. Pollard to
Open Own Inv. Firm
^
.
p
1406
THE COMMERCIAL & FINANCIAL
CHRONICLE
time
A
Challenge to Pessimism
Text
7,\ (Continued from first page)
fair
to
swell
the
rolls
ployment, according to
of
for the
some econ¬
ing
position of this country.
The premise that we have excess
productive
capacity
is ; a
,
and shaking their heads
knowing¬
ly. Their theme songs are varied,
if
not
;;
;
and
new,
the
strains
time-worn
required
The world is in turmoil and the
v
Our
future
needs
been expanded to such an extent
and our "know how" to
produce
developed to such
we will
fine
a
be able to
art
satisfy
economy will go
that
a
power
has
buying
passed the peak and our
prosper¬
ity will be cut short by the in¬
ability of
of the
things that
duced
in
to
are
resistance
will
housing,
These
range from
dustry
have
to
un-
The steel
war.
for modern
year
„
for
in¬
raised
consumer
markets. .■
^'7/7 ;;v
The renewed sharp advance in
commodity prices will cause an¬
other sharp rise in
the cost of
i
accelerating the demands
bust
and
wages
enough? These
only the pattern of the
major
diseases,
but
there 7 are
those
are
will
^others,
7 riety.
give
of
the
you
y ; succumbed
view and
pressed.
ystory
to
and
let's
of
score
va-
too have
fearsome re¬
you
this
are<now
So
a
common-cold
But, maybe
thoroughly dego
subject
with
on
these
7. contentions to careful
the
various
scrutiny.
"7/v' Foreign Situation Can Be
v>" '
7>/ Repaired
^
^
r
Foreign
conditions
;■
;•
'
bad but
are
i;,.not beyond repair if America ful¬
fills
&
y
v
hush
role
with
destiny. The
weakness es no longer a
British
y
.
her
hush
affair.
plight is known
people
e truth
have
and
serious
the
been
now
to
as
Its
British
told
the
the
future.
They
::: should receive all
possible aid and
,
7'; assistance
sition
in
to
hearted
-
readjusting their
realities.
people
This
will
po
lion-
undoubtedly
respond
again as they have in
past and emerge a lesser but
solvent world power.
It is
the
.
/
also
reasonable
to
believe
that
this
country,-
emerging as the most
powerful force in the
world, wil
able to use its
'7 be
assuming,
sumer
,
position intelli¬
world recov¬
ery and maintain its dominant
eco¬
nomic position.
Europe and the
Far East are like
fighters that
have been floored for
long counts
and
are
emerging
from
their
coma,
groggy: but
capable
of
return to renewed
vigor with
proper care and guidance.
If
-
a
one
•//takes
.
a purely coldblooded view¬
point of our relation to
foreign
affairs then it seems to
the writer
one
might consider the fact thai;
there is only one real
source of
supply for world rehabilitation
and that is here.
What the world
cannot
pay for we
can
extend
credit for,
thereby assuring a con
ytinued large export business for
some
the
.
time to
come.
relationship
world to
our
In
evaluating
of the rest of the
economic
far
-
lowfg /prices
.
Power
do, that
Employment,
P°lltlcaltrend
power.
consumer
more confidence.
There
likely
is
I*® be much less domestic
Employment is
at
level
demand
is
moving
remain at
of
I
-
„
con-
cotton
and
a
to;validate
very
■
payments
neverthe-
,
.
of
that
highs of last
with
so
commodities.
point to
wellbeing
diametrically opposite
doubting ThornThere
is
and
the
As
otiiei
year,
major
—
the•^ttpply^mrr^'^6*0,:•"•;was"jJflu^€d'/byAver-:
^
J?
ow-grade
merchandise that still
commands high
prices.
That is
nealthy. The day is gone when a
public
will
* Retail
selling
what
slow
they
stores
have
sition for
moving items for
bring, ; thereby
lies
turn
will
the
ahead
better
quality
this
inventories, adopted a much
conservative buying
policy,
and this had made for a
healthier!
Profit
As to
Break-Even
break-even points,
they,
widely according
course,
to
efficiency of management
vary
and
the
degree of labor costs to the
total. Again, the best answer
to
the
exaggerated
theories
propounded on this matter is to be
found in an analysis of
corporate
statements.
Many leading corporations
amply demonstrated in
1946, during periods of production
between
capacity,
even
at
their
the
60%
and
ability
lower
75%
to
range
of
break
and
to
earn
substantial profits in the
higher range. Many of these com¬
panies
are
now
operating at or
capacity and man-hour
productivity is steadily increasing,
close
to
that it requires no
great stretch
of the
imagination to estimate inso
corn
and wheat
to
pressure
will
act
authority.»
based
was
1
-
on
cline to parity prices.
*
-
'
'Tc
g is isciieviiig
^
So the old adage goes, but
to
believe
what
presumably
ment
the
earnings.
attests to
its
Manage—
confidence
in
future
by many declarations
of higher dividends
and large cap-
ital
expenditures.
If
securities
were
booming and >yields were
subnormal there would be
ample
justification for real concern.
But
the stocks of
many .good
panies are selling at 3 to 6
times
of
instructions
head
is
of
of
the
generally
islands, but
pos-
sibly without basis, that President
Roxas
was
compelled to issue the
directive by Am-
corresponding
rh.e validatipn of
I with the Mickey
islands
war,
and
were
senator in
voted
for
payments made
Mouse. But the
impoverished by the
both from Japanese
looting
incendiarism and American
[bombing
and shelling, and President Roxas knows
that he cannot
run his country without
help, from
the United States,
The
prosperity
•
upon
as
party in power. /It
believed in the
isee
[
Filipinos
for being
weak;
cally
no
are
to
be
pitied
they have practi-
bargaining
power
When the Japanese took
1942
at all
over
from
to
early 1945, the invaders
bargained for political collaboration with the
physical security Of
the people.
The
had
Filipino leaders
to
capitulate, and they are
now
facing treason charges. After
com-1the Americans reconquered or lib-
1946
earnings
and are likely to
this year. Prime
heavy
stocks are selling at 6
to 10 times
indicated 1947 earnings. All of this after six
earn more
industry
of
flush
earnings
during
erated
(depending
the individual Filipino's
point of view) the
on
islands in 1945, Ambassador McNutt has tantalized the
Filipinos
with economic
rehabilitation,
one
ye^rs although the Philippine Rehabili| tation Act passed by the United
which
page
®
,
Currency
1378)
.
1946
'
effective,
has already
are:
(1) Filipino laborers were
allowed to be exported to Hawaii
0
work in the
territory's sugar
industry, although this may ulti¬
mately kill rehabilitation of the
Philippine sugar industry, itself;
(2) /Philippine scouts were aiowed to be. fecruited for the
pur¬
poses of /tiie
American
of
/occupation
Japan at less than half the cost
maintaining American troops;
and (3) American
Military bases,
of.
where American
nel
are
nite
Military person¬
Philippine
although no defi¬
immune from
agreement
has
as
been
yet
concluded.
These bases,, incidenally, are now proving a thorn in
Philippine-American relations be¬
of
cause
abuses
committed
by
American:/Military; pers^onhel
against the native population.
Historical Phase
of
Japanese
tanmiicy/;//// /.'
com-
objections
"1
security prices,
after corporation reports record earnings.
Heavy industries are
swinging into high
and give promise of
adding their
\yeight and power to
record
the
de-|^assador McNutt. As a
[ 1945,/ President Roxas
| Corporation
j with
unwarranted.
succeeded in securing concessions
Some of these
Philip-
Approved in
| President Roxas
it is
you
over
[measure
as
when you
weigh all of the factors
that
make
for
Points
of
his
over
selling
hard
seems
aws, continued
American and British
banks, the
was afterwards tabled,
a
great stabilizer on
commodity
prices when, as and if
they
more
inventory condition.
bill
Congress.
at 90% of
parity
prices and his cotton at 92^% of
parity there will be no necessity
for him to dump this produce on
the market and the absence of
goods. Production and
competition
will take care of
prices and good
merchandising will take care of
profits.
For many months
past
management, fearful / of
unbalanced
in
president Truman-s
disapproval
of ,the
mittee
the Government
po-
large demand that
for
com-
a
not fall below parity, it does mean
that so long as the
farmer can
been
strengthening their inventory
farm
on
;
as^a clijaUengeta the
war.
While this does not mean 1
presented last year to the
that commodities will not
or canpine
take
anything offered them and at any
price.
observations
]u-<
strong
representations made against it
by
the early '20s, it should be rePaijil Voriesr McNutt, then the
membered that the farmer is
pro- United States High
Commissioner
tected by a two-year guarantee of Ito the
Philippine Commonwealth,
90% of parity prices
following and now American Ambassador to
the
official termination of
the the Republic. A
similar bill was
prices but merchants will tell
you
that the resistance is
primarily in
good-natured
these
possible
imght -1^7. deemed
deduced from I assertion of its
danger of
proportions of
continue
resistance to high
be consumer
0
Lest it should be
v
[Washington
modities that there is
a
decline of the
will
qppraisal of security values.
We have the wherewithal
to make
our
prosperity last and sooner or
later our markets will
take cog¬
nizance of this fact.
Caution is
understandable
but
pessimisim
from the Filipinos.
legislation affect^
wasjpbject to fed-
upulbody thought that
ases.
con¬
ditions investment markets
do not
thrive.
It is this state of
mind
that largely accounts for
our cur¬
States Congress on am on
April 30
has not yet been made
—**
time
aPProvaL
jegai dount as to.:
And
currency
spending. Wages are still
the upgrade but
prices general-1 been
easing and the overall
are expected to decline
situ-,
m,*.
as pr6ation indicates that we are
close I
duction rises. The trend is
already to the peak of
living costs and
discernible of the intent of leadwages rather than that a new
ing manufacturers ta reduce prices I
ward spiral is^^
tlieI
despite capacity operations and
^ < v; ^ /LFuipinos
tuge backlogs of orders. The comFarmer Is Protected
y ;
ponents of buying power
sion of that of the
en¬
uncertainty
that prevails and under
such
0,
prewar
the: Philippines w^vstiH a Corn-
sell-
are
well under the
J
conclu-
We
affairs, primarily, that
its with the'Mckey Mouse,
the measure
vetoed by Ambassador McNutt
!nonwealUl' and
come.
;he
world
"(Continued from
m
at considerable discounts from
the current months and at
prices
a
considerable time to
This makes for
security of
employment, a major factor in
economy;
Philippines
«!
.
hng
for
own
steadly and effi¬
ciently and ; iron out many price
rent
rocking
toward
despite
high
a
our
Aftermath of Japanese
VJ
the distant cotton futures
domestic and foreign demand for
durable and semi-durable
goods
has
san¬
produce
that
so
smalrf£u^
peak
and, with continued large
mdicated, should
| for the disparity, it/is
for bumper winter
crops
the law of supply
are
short crop it is indicated that
the
cr0p carryover will be the
est in 30 years, but
buying
of
must
a
conservative approach to
business and
laboi^roblems 1£j a
development that qmould.inspire
will probably be larger next
and meanwhile the indica-
sumption
and
important
But the grain crops of Eu-
7. here
Lnd
an
con-
wages
,
writer
en-
year
power is on the
number of
genders the fear and
increasing needs for essential °* the boat
in thq; years ahead
from the Western
Hemis- than in the past decade. Government purchases
Although there pbviously are
were
resumed
on
a
substantial special considerations to account
tions
_
ture
are
i
toward
+
food
7/7/ be"er bfalance(. HI
/
Due to continued record
as many
purchasing
decline?
gently enough to aid
V;
substantially
and
was
the
to ^warrant curre# gppraisal S dislocations to ensure
of
continuing
values or justify fjjie view, that prosperity* It is the
complexity of
re-
oversold market
a
article
to
ognize it. Actuallj|business would
were
Subsequent
0f
minimize the seriousness of
world
conditions or the domestic
prob¬
lems that tend to
becloud the fu¬
rem
on
had
you
prices
as
guine- assumptions as. tofuture
developments in contrast with
the
more
prevalent
pessimistic as¬
sumptions. The intent is not
seldom
consumer
then y
'
*
Have
%
excessively high.
rope
equipment.
Consumer Purchasing
levels
higher
that
this
made
ma-
011f'
C0J™n£-
ports from Europe showed marked
deterioration in the 1947 crops
sued.
budgeted for expenditures of be$400 and $500 million this
prices can no longer be advanced
without seriously
disrupting the
'
and
cheaply
psychology
.
we
thifs
power
greatest
>
In
^word
hut
the
so
industries
jg^put^40% of
ho?tir
changing.
technically primed for what
tween
prices determine
who
shipment
con-
industry has, alone,
again, further curbing profits and
aggravating
conditions
because
7 living,
of
process
yield
fir
largely comine
its purchases for foreign m°re
pleted
Capital
„
be
the
scale and
cause
a
4 Wages will
7
striking
to
pSyl
yet confidently price its
equities
near peak levels.
«
»1
'
at
power
prices
ab-
^
illustrate, grains had been the
ned in all industries
despite the
expanded facilities created by the
risen
to
the
point
moderate decline in sales
■/would wipe out profits. •
v
requirements
a
I
target of considerable speculative
short selling on the
theory that
significance of
things, but fortunately the
foresight and courage of industrial leaders affords
an-
on
earning
^
the Government had
these
trast.
in
are
To
current
the
reputedly declining empire
that
is socializing its
major
securities.
ationof
tions of highly sensitive markets
sparked by special conditions that
to
one
forerunner ; of
a
optimistic viewpoint
an
Lcterized
related
has
where
justify
enough
spiral of a rising cost of
living and wages it might be charas
the tail-end gyrri-
three years of
operations.
The
timid
capacity
'
for
and
this
in the world with
future potentialities
a
would make today s
surdly low* Our ieoonomic
Harvester, fur- chino needs only tb function
and
note
compared with the
there. is
other
pro-
and
that
interesting to
equities of the greatest
be
phere.
/• balanced inventories and eventual sharp price
declines, thereby
: ■
creating serious corporate losses
7
sider
the
automobiles,
these
less
h/777h7/7e7/esent
dustry
Commodity prices have risen
sharply again but rather than con-
con-
be
'..and vanishing profits.
t • The'
break-even point
Ford
expenditures
of
large proportions are being plan-
digest all
quantity.
are
too high
Prices
sumer
.
to
consumers
of
ease
soul may doubt the
7.7 Consumer
7/
for
industries.
tail-
spin.
haul
has
quirements of
our ac¬
into
is
Thursday, March 13^1947 /
chology that appraises the
value
of
the' kindest
large margin for error and voluntary action to reduce prices
while demand is large, as in the
railroad equipment, all kinds of
household appliances and a
huge
demand for steel to meet the re-
cumulated needs in six months or
less and create such a
surplus that
our
equipment to
among its pillars of
strength tremendous accumulated
/f.-7 77''''•>
machinery has
industrial
prognostications
con-
traffic of the present and the foreseeable future.
The business of the
/ British
Empire is crumbling, leav¬
ing us in a most vulnerable posi¬
tion..
i.; v/
I
has
that
seem
U
this premise when we know that
the railroads are far short of the
,
.
fallacy that
would
sistently confounded its advocates, ther attests to this fact.
How can we
seriously consider
run
following.■■/ //////H///
Gloomy Prophecies
;
It
foreign politics in appraisthe' intermediate
economic
their/best
values /have
been
into /equities, and plants
modernized; at Gov-
been
I h™,/6/
observation one might make about
these
pessimistic ; break-even
range
to dissect the elements of danger
have
predic-land
long
share of the timid and the
proph¬
ets
of
gloom trying
large
;
plowed
it is.dustry's potential earning power
profit
margin
of - safety. I have to believe that the present
years,
necessary to project
tions of the longer term outlook
or to
weigh the hazards of
omists, but time has repeatedly
disproved these theories.
Today we have more than our
like the
several
not
unem¬
; r
The // historical * phase
Mickey Mouse may be
||
the
of
roughly
given
the
as /follows:
Shortly after
Japanese entered Manila on
Jan. 2, /1942, the Commander
Chief of tfee invading forces issued
a
proclamation ordering the cir¬
culation -'of;/ the Mickey Mouse,
then in denominations of lc, 5c,
10s, 50c, P£, P5 and P10, The order
specified/severe-penalty
persons
obstructing
tion of the notes.
pected, there
the
for all
circula¬
As could be
were
some
ex¬
who re¬
fused to accept the
Mickey Mouse
legal tender in the early days
the occupation.
These were
manhandled by the Japanese when
as
of
apprehended;*
some actually died
in prison./ In the
end, , the Japan¬
ese, aided by the
inadequacy or
"genuine" currency, were able to
universal acceptance for
the Mickey Mouse. •
'' ' l '"
•
/ By the end' of. 1942' arid the
secure
.
beginning of 1943, the Japanese
Military Administration required
all
banks, excepting the Philip¬
pine National Bank, to exchange
foF 'the
Mickey Mouse all' "genu¬
ine"
notes which
they ' held/ The
order
was carried out without the
public obtaining knowledge of it*
When it became evident that the
Japanese were gathering in Phil¬
ippine Treasury Notes, these be¬
gan to
value
latter
acquire
over
was
the
a
higher exchange
Mickey Mouse. The
bad
currency
which
y
i
y:y:_
.,////-;
16 5vf Nima&er^ 457 6 k ■)
Volume
•'
THE COMMERCIAL &
FINANCIAL CHRONICLE
i*'»
1407
:
forcing out the good. Ey midall " business -; transactions
I were .■) done ; with the / Mickey
-RincUy
was
note
Mousey;;:;'.
/
The
f
the cost
uppmg
was
war
the rising prices
forced the Japanese to spend large
sums of money for such supplies
as they wanted to secure from the
islands. A new issue of the Mickey
Mouse appeared, bearing the pic¬
ture of Rizal, in denominations of
PI,VP5, P10 and P100. In 1944,
when prices of iron and machin¬
ery in general went soaring up,
had to issue P500
notes. By that time, inflation was
a fact.
While, actual and depend¬
able figures are not available, it
may be assumed that the Japan-*
ese must
have dumped from P2
to P3 billions of the Mickey Mouse
into the Philippines.
To secure
Japanese
the
?
¥
needed war material and
foodstuffs, the Japanese were pre¬
much
pay ; fabulous prices.
they win the war, the
to
pared
Should
.
an
i. a"d therefore
r
.
regulations have to pay
damages;
but the -very
subtlety of the de¬
dated
from the fact that
no payment of
money damages can repair the
social and national
damage suf¬
r
was
with the
^caus.9
to accept pay-'
Not to be
wondered at, of
was their
ready aceptance
of an order
issued in 1945 by
President Osmena which
validated
Course,
the payment of
at the end of the
occupation
in such a case invalid
are
intrinsically
or
be declared
may
beyond
the
so
of
powers
it
as
the
was
occu¬
pant to create, the inflation either
order 4o win their
Filipinos Attitude
The Filipinos maintain
Mickey Mouse was not
.
eign
tiate
entirely
of
of
the
to
the
them did not know
rights
internees
latter
Friends
were.
who
could
through the
get
grape¬
would
not
domestic
subsequent inflation from the
and
their
Position Taken by the Foreign
).y
V.Banks
•;
i
sessed
of
the
necessary Mickey
the refusal could be inter¬
as
refuser
differen¬
establishment of currency
in occupied
territory.
could mean trouble. If a
request
from the Bank of Taiwan for
pay¬
ment were refused/ even if the
debtor were known to be
pos¬
preted
point, the for¬
initial
Upon the outbreak of the
1941, both
banks
that the
foreign banks in Manila deposited'
most
their
Mouse,
individual depas# directly or: by. means of the occu¬
maddby the liquidator bank* pant controlled bank of issue." In
illegal.
most of
validation
of
deposits,
estopped
the
withdrawal
of
the
from
foreign banks are
asserting the in¬
validity of the liquidation. But if
the liquidation was valid, the pay¬
ment of bank
credits should also
be held valid.
In other words,
Filipinos
that
argue
the
the
banks
should
not be allowed to claim
because it
vine contacted bank officials for
invalidity of payments of prewar
Mickey Mouse country during the occupation and guidance. The advice to
pay was credits and at the same time claim
Bank of Taiwan are still located in a third country promptly followed, for desistance
rmade
credits was void
war< in
and
what
fered. The bank notes themselves
which were carried to a third
had^o authority
rnent.
lts
bank
officials, interned at Sto.
Tomas
University,, had advised
struction, thus wrought is such as many bank debtors
to pay pre¬
in'Sec- to defy .ordinary attempts at as¬ war obligations.
Occupation was
offend- sessing damages, altogether apart
something new to the Filipinos,
infringe-
iTi?' 19?2as citecl
tion
' °
and
living,
of.
as
J"Whe Proclamation
J:'-;,
.
•
4
thisrallegation
%943,
hostile
a
act, and the
easily land in Fort
could
Santiago, the torture headquarters
of the Japanese
Military Police.
Those
officials
same
now
that
say
the Filipinos should not have
paid
and
that, if necessary, they should
have
died
for dear old
National
validity .of the withdrawal of de¬
posits.
Liquidation is
a
single act
involving collection of credits and
payment of debts and if it is valid
in
respect of one, it should also
valid in respect of the other.
foreign banks, some claim,
are
guilty of obvious unfairness
in seeking to benefit both ways.
be
The
It
be
to
seems
of tails you
case
a
lose, heads I win.
Moreover, withdrawals of de¬
posits were possibly made without
prejudice to the assets of the for¬
securities and cash'
vanquished would be made to foot assets
City or for jolly old Hongkong eign banks. That is to say the de¬
with
the
Office of the * -The -attorneyS for the foreign
posits were paid out with the
thfe billy if* they lost thq wte
Bank.,United, States' High
banks in the Philippines have
liquidator's own money advanced
Commissioner;
well, all - wohld have been lost and
Most fair-minded Filipinos ac¬
th^se were sent to the United gone to the extent of claiming that
by the Japanese Government. The
I anyway. '
'•
-j :
cept the simple proposition that
States. In the latter days of De¬ any person who
assets of the bank have remained
.
creditor class
The
in the
Phil¬
argues
cember of
that fateful year, people
ippines which would naturally be began
depositing moneys into the
adversely -affected by the valida¬ banks for
safe-keeping for gen¬
tion of payment of prewar credits
eral disorders were more
or less
iV/ith the Mickey Mouse may be
anticipated. Thus, when the>Jap¬
divided into local and foreign. The
anese came to Manila on
Jan. 2,
latter is vocal in its protest against
1942, the amount of actual cash in
validation;, the former is silent, circulation
was
but wishful. Reason for local cred¬
-Japanese - had the
•
relatively small.
Uurihg 'the: first days
pation,
many
-
of -trade
occupation,
•
Mouse
scarce, and local cred¬
was
fithe))?^|cjte;y
even
functioning
again.
When Japan
Manchuria -\during the
invaded
itors who >were
paid with it were
Russo-Japanesewar,
also ^rei '
advantage of flow sorted to the use of
Military Notes.
prices and were able, to reinvest
Japan won that war, made good
| the payments. • Invalidation^fur?* those -Military Ndtes, and writers
thermore, might well mean the have acclaimed the action as con¬
; annulment
of
all
transactions sonant- with International Law.:
made by local) creditors with the
The Filipinos invoke authors on
Mickey Mouse they had received International Law to sustain their
in payment of their credits.
Many point. The most quoted is Feillocal compapies, led by the Phil¬
chenfeld (Int. Eco. Law of Bel¬
ippine National Bank, apparently
ligerent Occ. p. 71), who has stated
able
to
take
also stand by validation. The feel¬
ing
seems
to
that "the occupant will normally
be that invalidation
of payments
to.
readjust
or
unravel
transac?
lions
through
contributions.
credits.
creditor;
If
mortgage
a
inadequate.
During
for
the
war
!of
example, had re¬ 1914-13 the Central Powers found
ceived P10,000 in Mickey Mouse
such situations in several Balkan
as- payment
; for a prewar credit Countries.
!
\'
and
he
had
the
used
money
to
acquire another property, he can¬
not retain the latter. if
payment
to; him being invalidated, he can
again go after the original mort¬
It would be akin to eating
gagor.
cake and
a
having it too.
In
Belgium
similar situation
a
when
y
the
Belgian
ues to be used, an occupant may
reorganize the national currency
> :
Shortly af ter the Japanese came, by appropriate methods, such i as
the creation of new types and
foreign banks in Manila were or¬
dered liquidated, with the Bank supplies of coverage." The attbrneys for the foreign banks cite
of
Taiwan, Ltd. acting as liqui¬
dator. Bank credits were collected the statements on looting by in¬
flation made in July, 1943 at Ldnand deposits were
paid. The peo¬ don
by an International Law Con¬
ple were made to understand
by
ference.
The
part cited ) reads:
the
Japanese that they had to pay
"Looting by inflation.
Nothing
or withdraw
as the case may be,
has been more devastating to the
or else.
Specifically, the Jap¬
National
economy
of
occupied
anese, in ; a letter dated May 3,
i942, from the Military Adminis¬ countries than this form of loot¬
tration j Office, : circularized the ing to which not even the faintest
Liquidation of Foreign Banks
.
.
.
•following:'*'1--v<>..
We
happened 4o notice that
debtors to a bank or other
financial institution or insursome
rNance company-has been failing
<to meet their obligation when
f
matured and presented for
ment, with
Moratorium
i'"
sued in
:>
an allegation that
Order will be is-
near
This Office
.of
it.
a
pay¬
future,
has
never
thought
its
■
issue and no idea about
And if you know
any person
r; or client who refuses to meet
bis obligation on account of
this
at
"
4he
allegation, please inform
once
his! name,
transaction'
us
address and
concerned.
made
in
(Hague), it being a new de¬
vice entirely out of keeping with
the assumptions;-of the basis of
that
The
document;
measures
serve
co-ordination
system
with
that
of
the
of
-
of
at
inflationary
the
the
time
the
monetary
occupied country
Germany (already
heavily inflated) and the exploi¬
tation
for
the* benefit
of
central
Reich authorities of the available
rf
banks
*
to
if their
argue
against inflation
own
governments had-not
contributed at all to the inflation.
invalidate the payment to
ein bank of that
same
the settlement of
a
tion
resources
of
the
occupied
terri¬
tories; they enter thus into a sjrsem
of
policy ^and government
which is on another plane - alto¬
belligerent
)■'•;.
)'•;j
"Under Hague Convention" IV,
belligerents who transgress 'the-gether; than that
occupation. '■:>[]• '
of
intact, and
were
not affected sub¬
an en¬
incurred
by
for
prewar obliga¬
the farmer in
to the foreign bank
invalid,
can
be
declared
the farmer
recover
his rice?
i
the
When
Italians
dure and
international
precedent
the Japanese attempted to liqui¬
date the foreign banks in Manila.
To
the foreign banks' contention
that the liquidation was void and
that payments of bank credits to
the liquidator were therefore also
void, the Filipinos readily reply
that the liquidation was legal for
it was made necessary by the fact
that the people's money
largely
with
was
tied
banks and
liquidated,
the national eqonomy would have
seriously suffered. One could eas¬
up
unless the latter
imagine
would
total
what
follow
U.
S.
the
were
if
dire
one-half
results
of
the
outstanding
should be deposited into American
banks
and
currency
the
main closed for
latter
a
should
re¬
number of years
with the resultant freezing of as¬
sets
and deposits.
What would,
happen in £ the United States in
that
hypothetical case actually
happened in the Philippines. The
average Filipino expects that the
average American, ^who is essen¬
tially not an imperialist, will un¬
derstand his plight and will con¬
cede
the - practical
necessity of
bank liquidation in the circum¬
Moore-Handley
Stocks
on
'Equitable
Market
) '
Securities
Corp.,
on his deposits in the bank so he
Paul H. Davis & Co., and John¬
could pay a debt due another. If ston, Lemon & Co., headed an un¬
his payment is invalidated, he will derwriting group which on March
lose the full extent thereof as his 12
marketed
$1,600,000 > of 5%
withdrawal
of
prewar
$100 ' par preferred
deposits cumulative
with the China Bank is valid and stock and 85,000 shares of $1 par
binding upon him.
common
stock
of
the
MooreThe
for-
a
money
favor of the bank? If the payment
the Regula¬ ily
tions
I ;" itfe pelinquent Payers.
f i
is
allusion
*/*1
payment made to
tity other than the creditor him¬
-
conquered
Government removed the metal Ethiopia, they liquidated the Bank
of Ethiopia, and their action was
coverage of the national currency
to London.
If in such a contin¬ upheld by the English courts. Per¬
haps, following the same proce¬
gency Ithe local currency contin¬
created
was
injustice for the valida¬
a
American and Australian-printed
of the Mickey Mouse parted with
Mickey Mouse also contributed to
it, he parted with something. Take
the inflation, and the Filipino the
case of President Roxas him¬
people can hardly be penalized self; He had some
money on de¬
for its use of that currency. It
posit with the China Banking
might be all right for the foreign
Corporation. On demand, he drew
American operative had
circulation the currency If an
occupied region. More often bought -P10,000 worth of rice in
Philippines in
1942
than not, even payments for req¬ the
with
Mouse printed
in
the
uisitions will be made in this Mickey
United States, would it be just to
currency, a supply ' of which r is
obtained;
there is
tion of
stantially by the withdrawals.) If
deposits are validated, the foreign
self.
If would indeed be unfair
had their way
banks will be tremendously bene¬
perhaps, should be to the
foreign banks if any of
shot.
fited, because they will retain the
Everybody concedes that the their credits
should be deemed
assets represented by the deposits
Japanese
violated
International
paid when the money used for
but they will lose the correspond¬
Law through the inflation of the
payment was the Mickey Mouse,
Mickey Mouse. But the Filipinos
ing liability to the depositors. If
and this went to the
liquidator at payment of credits be invalidated,
contend that the right to
circulate that and
not to the banks them¬
the banks will have made money
it) "existed,; and its subsequent
selves.
On the other hand, fairabuse cannot nullify the right,
by reason of the occupation. Their
minded people should also con¬
assets will be intact; their, liabili¬
especially so if the end in view of sider
that the debtors who paid
ties will be lessened. It is for this
invalidation is to benefit foreign
off credits in Mickey Mouse will
reason that the banks are fighting
creditors to the prejudice of the
also suffer damage if the payment
tooth and nail for the invalidation
peopleof the forum. The position
of the credits be invalidated. The
of
of the/Filipinos seems to be bol¬
payments with the Mickey
Mickey Mouse, during the occu¬ Mouse. The
stered up by the fact that the
foreign banks, mostly
pation, had value. It was the only
Australian and American Govern¬
non-American, vs. the Filipino
money irx circulation. It was bad
ments had also printed about 30
people. If apprised of the situa¬
money,
and it Sdrove away the
million of the Mickey Mouse for
tion, what will be the view of the
good. This is Gresham's law that
use
American public?
by their agents in the is¬ "bad
money
drills
out
good
lands during the occupation. The
money." But if one in possession
in the
originating from the receipt Complications arise if the Cover¬
©r Mickey Mouse in
payment for age of this currency has become
prewar
issue
leave in
might appear simple
foreign creditors are con¬
cerned, but \ if pursued-to logical
ends, it will take several years
as far as
to
Mickey Mouse should be con¬
sidered as-pro-Jap and, if
they
of tbe
Filipinos underwent
hardships.:. They had no money;
creditors demanded payment of
and they could not withdraw their
their credits in the early days of
deposits, for the Japanese Invaders
the Japanese occupation, and for had
closed;: the banks; In therein
them. to. claim, nowl that payment
cumstances,v the issuance of tfie
was - void ' would be inconsistent.
Mickey Mouse; was- really a god¬
Moreover, in the early days of the send for it set the wheels
itors' resignation to validation may
be given as follows: £ Many local
that the
right
the
Filipinos) also blame the
foreign
banks
for
having
made
their records available to the
If the originals of the
emy.
en¬
abroad
together with the bank
securities, and if the retained cop¬
ies had been destroyed before the
entry of the Japanese forces into
Manila, the bank debtors could
have
been
compelled to pay
obligations.
It is claimed
their
that there is no morality in mak¬
ing the basis for forced collection
available to
demand
of
a
foe, and ex¬
to resist the
for payment at the risk
the
pecting
savage
debtor
physical danger to himself.
Ambassador McNutt's Proposal
If
payment of credits were the
question
involved,
there
could perhaps be found a way of
compromising the problem by ad¬
justing the loss which creditor and
only
debtor
should
bear.
Ambassador
McNutt would want this compro¬
mise to be
make
as
follows:
He would
and
he
ceeds
would
validate
the
pay¬
from
applied
to
the
share.
per
Pro¬
financing will be
redeeming
the
entire
issue of 44,000 shares of $3 cumu¬
lative $50
par
preferred stock,
with
the
remaining funds
fect this retirement to
to ef¬
from
come
the company's treasury. This will
leave the company with only the
present issue of 5% preferred and
575,000 shares of common author¬
ized and 500,000
ing.
shares outstand¬
•<
Moore-Handley is
of
a
<
,
an
;
outgrowth
wholesale hardware and sup¬
ply business originally formed in
1882. The company's distribution
area
consists of Alabama and ad¬
jacent states.
Earnings in recent years have
an upward
trend; net in¬
shown
after all charges and taxes
come,
in
1945, amounted to $286,450 as
against
$276,604
in 1944.
Last
year net increased to $1,126,788.
Directors have
scale
showing the relative
exchange or purchasing value of
the Mickey Mouse and the real
Philippine peso during the entire
period of Japanese occupation,
a
at $7.50
common
rec¬
ords of the credits had been sent
not
Handley Hardware Co., Inc., Bir¬
mingham, Ala. The preferred was
offered at $100 per share and the
announced their
intention to declare
15
cents
to
per
share
a
dividend of
on
the
com¬
paid around June 1,
and give consideration to continu¬
ing similar payments each quarter.
mon,
be
ments to the banks made with the
Mickey Mouse only to the extent
of the relative value of the
Mickey
the real Phil¬
ippine peso at the time of the
payment.
The most important
consideration against any such ar¬
rangement relates, to the with¬
drawal of deposits during the oc¬
cupation.) Everybody concerned,
the foreign banks foremost, agree
that deposits paid on behalf of
stances. ; -'■ ;•
Vv;;
/ the banks by the liquidator are
:r What is not generally known is valid..
Majority of the Filipinos
that during the occupation foreign contend that by adhering to the
Mouse compared to
Cavenee & Curtis to Be
Formed in Chicago
CHICAGO,
Cavenee,
York
neth
&
Stock
Curtis
March
nrtlvp
La
New
Exchange, and
Ken¬
are
Salle
of
forming Cavenee
offices
Street,
at 135
effective
20. Mr. Cavenee has
nc
an
M.
the
with
Curtis,
South
ILL.—Clark
member
been
individual broker.
America Has Stake in Austrian Reconstruction
difficulties
of " self-interest
rather
in
than
part of manufacturing plants most
attempt to present a fac¬
tual
appraisal of conditions in
Austria is greatly hampered by a
scarcity of statistical information.
since Austria
than facts
stantiated
as
from
statistical
all
of
the
most
pertinent
Will be discussed here.
one's
,/iV-*
,
The
7j
first
receive
from
loans
is
assumption
will
the
and
.Allies
theimportance
such private
of
This
decision
a
favorable
some
favorable
a
im¬
psycho¬
very
a
and
some
developments
previous
favorable
fields
kind
side
of
the
-
agreement on a treaty with
Austria during 1947 which will
result in a withdrawal of the oc-
The
armies
Austrian
then
be
ereignty
at
or
to
tons monthly and^this is
(Probably not the limit. How much
wili ? ?
Y. be Permitted
to
sovtn benefit thp Austrian economy
hpnpf,t the Austrian
its
full
remains to
country's ter¬
ritory. However, any such treaty
will;; be dependent on Russian
consent.
the
-
(Russia Will Continue to Have
Austria
still
as
have
interests in
Austria
is
mind
hi
,
it
but
her
that
the
during the
foqd
for
(the
raw
ex&eption).
Sources
materials
raw
the
are
of
a
!
if
the
large
amounts
of
'
,
Finally, there
nificant
trial
in
increase
production
Western
the
tion.
„r
basic
Austria
American
The
of
during
indus¬
the
war
.
land. The
of her
its I
War-Time
in
Equipment and Manpower,
On the unfavorable side
are
the
a
now
con/J
s&rtsof ^itra'rEurooSn
..fairs
in.this
coult
,
A
1
,
resources
the
exported to Germany
dependent on imports
was
were
No
food
steel
trian
combine
iron
tion
could
the
make
to
depends
on
ties for the time being.
Romania,
bread basket of Europe" is
duction.
But
"the
these
from
now
food
gency
terrible
famine
received some emer¬
supplies
from
as
production is at
States.
Hungary
and
These
Yugoslavia,
both
former
large
scale exporters of food stuffs have
applied for funds to finance food
for
85%
some
dislocate
ofmuch
and
any
unable to make
are
(These fundamental economic
changes, are not only the effects
of
losses but also of shifts in
war
the ownership of the tilled land.
Hundreds of thousands of peasants
been
place to
transferred
another,
from
many
well
k.;;
native countries.
managed
Large and
estates have been
selves
to
and
there
this
is
unaccustomed
living
standard
sidered low
results
in spectacular
production.,• The
of
appears
importers,
try
on
to
the
people
to
assistance
Austria
will
during the next few
There is
ment
out¬
up the un¬
avoidable results of political de¬
scale
Trade With Germany Almost
at
The
which
a
Standstill
situation
used
to
of
the
have
i;
American
large-scale
not
entail
risk.
It
The case of Austria is
very
to
are
contrary, they have been
are
bound to the west-
J?
collectivism as may threaten
individual freedom unduly. How¬
ever, they do not favor vigorous
competition
in
the,: American
fashion but rather some form of
regulated
cooperation
like
advanced by the Catholic
There will be
that
f
:
Church."
definitely no ob-J
participation
long
stacles to American
in the Austrian
economy as
as the
people feel that their"
equal
ners
want
part¬
long-range cooperation
rather than quick profits and ex¬
ploitation.;
activity. The
American
economic)
srtril
■
I
investments which
•
remains ; to
do
unconscionable
any
;
'
•<
be
i\ \
"
determined
at least not less favorable and
preferably
fspecial
will
e
not nationalistic in the
Amerieati'
more
favorable
than
procedures that may give rise to-
justified complaints/
-reasons-
w
i.-i it
Western Austria Suitable
;Investments
be
.
concentrated
"T * >'•
Foif\:;i
td
:r
American, investments
,
in. the
ule
should
wcirell.
western
Part of .the. country; Here
v** the 4 issUe of the London Economist l:those in othpr Darts °f Central
mntbJIS 'fnor,an lnteresti"g conditions.—re- Europe. In addition, there may be dustries based'on
eye-witiiess
port on present
t affect almost the-whole continent
1
p e o p
of
now
whether opportunities in Austria
are
r
*
™yJ^™Ca" buf" businessmen need to be aware of
t
Sood reasons why that' situation,:and should avoidC
business should under-
take these
Germany has
recently been given wide pub
licity by the Netherland Govern
ment.
J Austrian
DrovidediCfor s'an('ards». shou^d be | oppose and resent them.
-
countries
Foreign
spiritually, politically
and economically. They have op¬
posed totalitarianism in the past
and they will object to such forms
receive
are
of
world
ern
years.
required amounts, which
Favor
foreigners. The vast majority of
nged for such large-
no
governmental
The
Austrians
some¬
loans may
in
accustomed for centuries to adjust
themselves to and to work with
requirements; in fact there
should be
cisions.
or
/
looking with suspicion on
foreigners and foreign customs.
chance that govern¬
no
grants
actual
side assistance to make
,
as
ob¬
sense.of
con¬
but
final
Participations
trians
and
was
time
difficulties
a
readily cooperate with foreign in-'
terests and probably rhdre so than
any other European nation. Aus¬
thing highly desirable. The tempo
and success of this
rehabilitation,
however, will be greatly influ¬
enced by the amount of foreign
concerned, both former
and
;
these
'V;
_
On the
chance
and
attempt
they suggest care in
objectives
and
pro¬
Austrians
dififculties
which
at the
,
;
'J;•■■■}'
reasonable
a
asso-
Central
~
" *
and. no
present
cedures.
Can Be
discouraging
but
selecting
chan¬
enormous
Yet
not
stacle
rebuild the Austrian economy and
to restore gradually the pre-war
conditions.)!
All
spite of these
often
ability to adjust them¬
new
should
r
Rebuilt
Europe
succeed.
needed
•
In
broken up and distributed to new
owners who lack equipment, skills
and often
:f:-
until
countries
to divert them to the West could
studies furnish
Austria's Economy
the
mainly ; with
Eastern
^
trade
Europe unless and
and
for her economic ties^ will always
be
all
of
,
lief directed toward the west.
efficient
States
ciated with her agree to join. This
ls particularly true for Austria;
pro-
one
producers have been driven from
their
steel
to the detriment of innocent by¬
stander? who suffer without being
able to influence these develop¬
ments/which, in turn, furnish
some background information re¬
garding the unexpectedly high
applications for assistance and re¬
contributions.
now
Russia
supplies. Eco¬
nomic considerations are pushed
aside by political zeal these days
of
United
a
Central
recon-
^
accustomed
the
hope for real multilateralism in
nels and to slow down production
Austria's grain imports before the
war
case
a
Aus¬
ample proof how politics tend to
imports after the expiration of
UNRRA, These three .countries
accounted
few
and
holds
very
short of steel.
of
Austria
low level
and manufacturing industries are
the
of
on.
The
payments ' between
balance
Austrian: steel
a
basis
produc¬
result
a
dislocations
the
on
disappointmentslater
large degree
a
,
United
undertaken
These
should be
central position in these
deliberations.
For
there
is
no
European
sufficient
coun¬
justify
realistic appraisal of the situation
as a matter of principle to avoid
considerable
a
struction which to
be-ex¬
can
Danubian
steel
to
reasons
investments, however,
1946
put in
Linz.
at
and
ore
;;;
suffi-;
are
to those mentioned before.
quantities
to
contribution
exports
from
,
to
operation with coke supplied from
.which^eo fa^^LnnATnii^'w3^^."!*0."*100^ p™s"!
Sfelt^lmottle"whrfe
cient economic
the first blast furnace
was
there
investments in Austria in addition
iron
result pig iron probe discontinued
a
had
Fortunately,
.
altogether; only in August,
side, the Alpine regions of
Austria had large sur¬
pluses of dairy products most of
but
doubtful-or even hostile.
,
considerable
exported
duction
should^^be pub-!tremendous destructions and dis-1 similar. Unless the conditions o"
condensed version and ; locJati°ns jesiUting from the war ,
i
without delay (which is
shortage.
and as
now
On the
oppor-
i
Germany and
Czechoslovakia in exchange for
coke. No coke is being imported
Western
of occupa¬
Losses
coal
and
ore
other
which
enterprise system has an
which is in short sup-
railroads, utilities and inare suffering from an ex¬
were
exchange for manufactured goods
from Austrian industries.
will
tumty to prove its effectiveness
everywhere in Europe. Aus- and superiority to people who are
ply
able to
countries of the Danube basin in
Austria
balanced
No' Political and
country is dependent on
Ruhr coal
grain requirements;1 most of
imports came from other
own
her
Eastern
by similar
foreign investments in the Wes-
point
completely.
almost
up
treme
was
be
tern part of the country if its
economic stability
Czechoslovakia coal is reaching shall be permanently preserved,
Austria and very little from Po- I Here is a spot where the free
dried
rian
two-thirds
in
to
of view: Now these sources have i
countiy
lished in
i
about
trade relations with
Great
dustries
have
the
of
Austrian railroads from that
Imports
Up to 1938, Austria
produce
West,
,
electrification
of
Austria has large stocks of
problem * of
.
;rt
Countries Need
„
particularly
zone
complex
sig¬
a
politically, culturally
economically.
The
strong
position Russia will hold as owner
of many important Austrian in¬
period in opposing any ex¬
tension
Exporting
ever-growing dependency
has been
and
dustries
Grain
in
conspicuous in
Once again, Austria
and
tremely .active during the inter¬
war
PHDcniPlimic
mATP
is at the cross roads between East
important for those
was
Piion
even more
recent years.
mines and their owners were ex¬
industrial products they used
exchange for their agricultura
surpluses.
Thus the effect is an
these industries will be discussed
later in this article.
of I
usefulness. Those data which are
i
eauy signitiCctii t
refer to the
Whole
market
to
'.
Europeans. This key position has
become
now
are
key position held by Austria '
Knnnmo
Moravian-
which
well
the center of Europe a fact long
recognized
among
Continental
territories of Czecho¬
within the
the
*
Austria
water
sharnlv
expansion
New Industries in Western
.
data and information. But
most
pf it refers to the American zone
cmlv
vast
capital required should be forth-
only
wealth
ex¬
the
slovakia and Poland. The Austrian
get supplies from oversea sources
And the grain exporters lack also
in
include
Former
•} v V;... "
exports
monthly report of the
American
Military: Government
Austria
a
'■
war.
exporters
*The
in
the
of power production and increased
domestic
including
before
countries
materials, and
oilfields
the output is
for
room
fields
v
,
close trade relations with Austria
much
to
outside
A consider¬
war.
Silesian
is
m
it*
the
from
Very serious are dislocations re¬
sulting from social and political
changes in- countries which had
reductions
Russian
on
Austrian economy..
especially in the western
parts of the nation. There is still
XT
tries but is dependent
additional expan¬
'
ji
«
imports
it
But
founded in the final realization of
than 80% of its coal
to get more
relations.
eign
paramount significance of
problem for European relabilitation in general. Yet there
are some
special features in the
case of Austria. The country used
only and is something
in the field of American for¬
new
,
duced
without
important
of
machinery
and
her
claims for a large part of the in¬
dustry in
Eastern - Austria ; are
greatly hampering efforts to re¬
habilitate. and
reintegrate
the
have
remarkable extent.
some
zpne includes a large section of coming.
Austrian
manufacturing indus-1
sources
pay¬
mainly to Germany. The
country's
dependence
on
coal
imports has been considerably re¬
al¬
scope
"German assets."
However,
of
ported
regarding" the
of the term
balance
able portion of
struggle
the Potsdam
occupation
clarification
sion
regardless of
Agreement when Russia was
lotted all "German assets" in
zOne-of
has been
economic
of the
Interpretation of
oh
Russia will
considerable
the final outcome
a
any
ing the interwar period and there
result,
a
At
Austrian water power resources
have been greatly developed dur¬
Strong Influence in Eastern
Third,
seen.
Austrian
ments to
*
"vj
be
rate,
the oil fields represent an
impor¬
tant new asset and should improve
the
over
first
forces.
government
returned
mentioned
in'
least
token
Ibe
though they may not be the most
important item, after all. Their
present production is about 75,-
of
reduction
The much discussed oil¬
shall
abroad.
from
Obviously, Russian-removal
and has
Austrian? Oil Fields
the
On
resources.
chpatiori
received
be
industrial
un-
corn-
conditions.
their
should
acted
in
ledger, .there is a significant ex¬
pansion of domestic productive
some
national and
income as an
intermediary in trade and finance.
It will take a long time to make
up these losses , unless assistance
exchange
cent years
;he coal
are
war.
The
if
much
so
agreement that the United States
a strong interest in a
stable
and economically sound Austria.
This interest has developed in re¬
the
on
of feed stuffs.
be made at all, to what extent and
under what kind of terms and
Second, there will be
the
suffering
should
is
-
foreign tr^ide and
past derived a con¬
on
.
parison with the period after the
proves
investments
joining
In the economic field there
significance
failure.
and
is
matter from
logical viewpoint. .
and spell the difference between
success
and
last
in
instance
..
has
re¬
elaborate
to
need
no
,
There is now almost unanimous
!
Coal Problem
is
There
war-
they are par¬
which
Austria
in
but
all
in
serious in the
ticularly
of
felt
The
Similar
Nazis.
,
are
countries
torn
it
possible.
boundaries.. This
private sources.
private contributions
utmost
interest
portant
from
of
at
as
European
gravely
hamper
habilitation.
Austria's Key Position in
Central Europe', (/
,
.:
,
change) the effects will be serious
dor all countries concerned and
been
have
others
disqualified
difficulties
victims of
were
or
.and
war
,
are
ex¬
'•
"
ness.
payments changed
(for all European countries
critically
short; of
dollar
a
The people have
finally adjusted themselves to live
and
work
within
the
present
rely heavily on her own resources
plus ;whatever assistance can be
be
fact
a
little
is
were
supplies and equipment.
As a result, Austria
like other
European countries will have to
may
which
of
part for such
German economy even if this
terials,
these
a.
become
there
of this year and beypnd- But this assistance will fall
short of full requirements to re¬
plenish depleted stocks of ma¬
Thus
territories
been
has
the worst
over
a
long
time were beyond a solution ac¬
cording to many expert opinions
of the 'twenties. But separation
difficulties
arranged
country's . living
is relative rather than
the
from
that
grants
Western
which will tie her
of
that
was
reason
absolute fact.
had
.^J.'The Austrian Problem
Austria
main
spiciously low in comparison with
her neighbors particularly .Ger¬
many.
This difference does no
longer exist, at least for some
years to come. The difficulties of
extricating the Austrian economy
government Credits Cannot Solve
,
great deal of
the last 30
Austrian living standard was con-
Yet only a
few
a
After the First World War, the
conclusions
which
upon
the
foreign
r
con¬
the founda¬
tion
A
standard
will have to be built.
exterminated
siderable part of her
whether
to
level
the
data
are
Many left the country after
Nazi
invasion, many were
dependent
Self-
Made
Be
during
as
settled.
number of reasonable
a
plants
on
zones.
Austria
(within her
present
frontiers)
would
ever
be self supporting.
The
argument has never been
years
ditions, the analysis will have to
start from
influence
Austria
discussions
an
assumptions; they
deposited
were
There has been
either present or past.*
In view of these unsettled
their
and
Supporting?
be sub¬
can
ma¬
large
has
Can
will, unavoidably, deal in certain
aspects , with - "potentialities"
rather
stock
actual
mean
discussion
the
Vienna
located in the Western
aftermath of the lost First World
War/, Therefore,
raw
with Viennese banks. .But posses¬
sion of offices and shares does not
created in the
was
of
shares
fact
highly
are
offices in
head
effect of technical
(in
statisticians
the
tied to the
are
terials they use. To be sure, most
industrial corporations had their
Austrian
regarded
among experts in the field) but
the consequence of present con¬
fusion.: Moreover, there is little
chance of measuring actual data
against those of "normal" periods.
In fact, there has never existed
anything like a "normal" period
inefficiency
ent.
of which
a
"''"•Any
an
section of the country's
professional and managerial tal¬
steel
furnaces,
spirit of humanity.
This is not
of Europe. Equally disastrpus as
the material losses is the loss of
basic
power,
result
-as - a
industries
(blast
mills, paper and
pulp mills, etc.) are in the western
zones
as
well as the remaining
(Continued from page 1384)
Austrian
particu¬
larly advisable to American busi- V
neighbors are modified in the nearfuture and especially the provi¬
sion for dollar
Austria
in
investments
trade relations with her
German
*
Thursday, March 13, 1947
THE COMMERCIAL & FINANCIAL CHRONICLE
1408
are
the
those resources.
that-make-Moreover,, these-parts
••
of
-the
ii
,7
'
;
-
■ J
' '*.
/
";t
;
imiiwijiniiVxmMilii
m
V/'Y
;
>
i•'
f
Number 4576
Volume 165
procedures.
quiry
/
Only
could
an
iri— l Competition to American
produc¬
tion and thus should not meet
any
opposition from that camp.
expert
determine
whether-
'4 than Vienna-and its environs.;In
addition, there is little doubt that feasible G^Se -n these exP°rts is
Russia .would resent any large / The other
possible material for
/.a scale
infiltration-- of American export is
pulp and pager products.
capital into a \egion which she Austria,, possesses
large forests
"
will continue to consider part of
sphere of influence. For the
rail and .road junctions
•
her
*
Vienna
integral part of the Russian
system ..between Stettin
Trieste.
But - this
Russian
»;
are an
/
defense
and
•
position will not necessarily inter-,
with the
fere
attempts
to
make
leading
trading post
between East and West; there are
Vienna
-
a
/indications
that
the
Russians
? would look
favorably upon such
i a development.; ;
,;.
.
On the other
V
in
terest
the
hand, Russian inwestern
parts
of
Austria. is almost: non-existent.
Moreover, this part of Austria has
'
a
border with American-
common
occupied Bavaria all the
from
frontier to
Czechoslovakian
the
Lake
■
Constance.
way
Even
x0\s
■
THE COMMERCIAL &
FINANCIAL CHRONICLE
country are much less "dependent
on
trade with v Eastern' Europe
:
.!. ''
•■(..
\-l.'
when
American
in
Austria"./
the
Alpine regions; lumber and
products had
always an impor-
its
If*+* those iA
J^are
but
to
+
Austrian exports,
America were insig¬
nificant. There are
certainly ob¬
stacles to any
large-scale expan¬
of
sion
view
these exports.
However, in
of the tremendous
volume of
the American
gation
market,
would
determine
be
an
investi¬
worthwhile
to
which
changes in
Austrian production
methods
would have to be made
to permit
Austrian exports to fill a
very
modest quota of the
American de¬
mand.
Possibly, lower
wages may
be able to offset
additional
charges to the
nearest
freight
sea
ports if
American capital and know-how
could be made available.
•
;;;\
/
The second important
-group cf
second
of
group
investments
>
would
X.
be
de¬
signed to improve directly
Austrian balance of dollar
the
.
ments
but
money
is quite important) but
that in a chance to re¬
assert free enterprise where it
is
Return
To Gold Standard
Deyond
:y T most
American
not
only in
(which
challenged
most
strongly and
ruthlessly. If the results
American Branch Plants in
A
be conspicious not
pay¬
rather
should
be
favorable
in
spite of
predictions to the contrary from
lostile groups,i the effects would
world-wide and of very great
Thus the problem of
private
investments
in
Austria
De
strengthen the
Austrian economy by
expanding
importance.
use of domestic
resources of
materials and manpower.
This, in
should be considered
carefully by
'eaders of American business.
the
turn, may lead to an increase in
Austrian exports and a general
improvement of the living stand¬
ard.
American
dustrialists,
may
find
investors
the
on
profitable
a
their funds and
undue
risks
in¬
and
other
hand,
outlet
for
long as their in¬
vestments are kept within
appro¬
priate limits. /' Z / -.
- j*
/ - >
American* investments
may be
•
based
such domestic resources
on
water
as
Only
a
and
power
iron
ore.
portion of the.former have
a
block of 177,000 shares of
stock of the Cory
par common
Corp., priced at $10 per share. The
"inancing represents stock of cerain
stockholders and
families and
"I claim
>7
/
no
erosion of the
Glore, Forgan & Co., headed
a
cerned about it.
past 15 years will
the very sup¬
ports of our institutions and gov¬
ernment. I respectfully submit the
following and request that it1 be
have
nation-wide group of underwriters
which made public
offering March
1 of
our
children, demand it. The mone¬
tary systems "of the rest of the
world, likewise, are- much! con¬
to urge effective action before the
Gory Corp. Common
$1
for the future of
pride of authorship
for these
thoughts. 1 Others too
share them, I believe. I seek Only
Glore, Forgan Offers
products without
as
(Continued from page 1387)ai
panies, the safety of the savings
officers
of
troops, will have been Austrian exports to America that
he
been exploited so far.
corporation, who are disposing
European
'i withdrawn across the border, the may be capable of remarkable ex¬
of a portion of their
souroes of water power are limited
holdings. It
very fact that they are so close pansion
con sists / of;
is the first opportunity the
noveltfes, and with declining output of coal
public
i on hand will not fail to increase leathergoods, knitted
has had to participate in the own¬
goods and mines the demand for additional
confidence among American in- other
merchandise
ership of Cory Corp.
/
representing
/ :
| vestors and at the same time have high artistic and professional skill. power; is almost unlimited. By
Capitalization consists of $1,providing capital and technical
a
healthy influence on Austrian This production has, always been skill for
000,000 shares of common stock,
the exploitation of Aus¬
domestic, policies especially in the concentrated in Vienna and has
646,250 sharps are outstanding, in-^
trian
water
power
resources,
been mainly performed in small
Westernprovinces.
y
Americans could make quite' a eluding the block being marketed.
l!
These parts of the country par¬ plants whose owners did
not have remarkable contribution toward A bank loan of $300,000* is due
ticularly
Upper? Austria
(now sufficient capital and experience the revival of
July 2, 1948. Directors have de¬
Europe's economy
■i occupied by
clared an initial
Americans) have in¬ for any large scale export drive.
quarterly divi¬
and, at the same time, gain an
dend of 17V2 cents on the com¬
creased their position within the Some American
department stores important. foothold in one of the
Austrian economy during the last had buying offices at Vienna but
mon, payable June 1 to stockhold¬
key spots of that economy.
ers of record
decade.- Industrial
capacity has the total sales to the United States
May 10. They plan
The Austrian iron and steel in¬
;o
continue
vkI/b e e n
expanded /considerably. were hardly significant. Mean¬
payments
on
that
dustry holds a position similar tb
basis as warranted
Large/ plants for/the production time, a large part of the pre-war water
by business
power.- With
additional
conditions. ,/..//;;;, 1/
;; - of steel, aluminum, nitrogen, arti¬ organization has been dissipated. funds and know-how
//•:X./"!:v;
'available
The corporation is made
ficial fibers, etc., were constructed A considerable
number
up of
of the from America, this
industry could
wo
separate manufacturing and
during the war most of them manufacturers have emigrated to be rehabilitated and
expanded for sales Divisions.
One is the Cory
based On domestic raw* materials. this country and some were
quite the benefit of the whole continent
eaten
away
referred to the
distinguished CqittCurrency and Finance
early consideration!/
"RESOLVED, that the Commit¬
tee on Currency and Finance-be
requested to investigate and..re*
mittee
on
for their
port,
the
upon
adopting
tion:
desirability ii?of
following Resolu*
the
V-/ •".",/
;v
,
•.
•
:■
•
,
/RESOLVED,
.
that
the
Con¬
of the United States, now
session, be petitioned to re¬
gress
in
*
store the
.
.status-quo-ante, 1932,.
and!r
in respect to those
currency
banking
the
acts,
rewritten
accession
New
to
power
;
upon
of
the
■
Deal, in that year, which
require the
repeal' of
would
-
those sections of laws indicated
*
below:
31
June
316c,
.
*
There
have
been
dismantle these
reduce
proposals^ to
plants
new
unduly
their
or
to
they
.
that
can
time
constructed
were
purposes.
However,
be
for
readily used for
production
in operation and
should
war
plants
those
peace
be
kept
fully utilized to
V the advantage not only of Austria
>: but of all
Continental Europe. If
C they should be kept under Ameri-
;
•//.
can
management and control there
could be
suspicion of any pos¬
sible use for war preparation and
these plants might form- the nu-
>
cleus for
>
.
terial purchases and production, as
well as an adequate merchandis¬
ing effort in this country, there is
considerable / chance to
open
a
large new supply, of dollar
change for the benefit of
ex¬
the
Austrian economy which, iri addi¬
tion would take advantage of 'em¬
a
aluminum
nitrogen production
best
safeguard
conceivable abuse of
or
would
be
against
any
the
these basic industries;
In
connection
aluminum,
American
the
v
with
steel
branch
of
of
assembly;
or;
plants may be attractive to
facturers
and
organization
manu¬
durable
great
third ,item
tral and Southeastern Europe. As
.a
.
Tourist traffic is
pointed but before, American in^
fluence upon industries like steel/
goods who
require large export outlets for
their products. These plants could
be designed tb serve all of Cen¬
ployment possibilities for
many people in Vienna.
,
i,, ? There has also -been
:
selling could be associated with
ample funds to finance raw ma¬
large scale industrial
ment and financed with American
capital.
-
;
v
•
It the" experience of these men
the fields of, production and
a
remark-
only a very small, share in the
expenditures of American tourists
in Europe. The customary Euro¬
able f shift /of - population from pean tour did not include Austria
".Eastern Austria into the Ameri- ybut was restricted to Western
can
occupation zone
(Austria's Europe and Italy. Only the Salz-
i
if
cost
calculations
feasible, to inte¬
grate the plants into the Austrian
economy to the largest possible
resource^
should make this
The
smalt European countries
of Central and Southeastern Eu¬
zurg Festivals attracted a larger
number of Americans during the
the
rope will not be able to produce
; eastern
part of the country are iri 'thirties. During the war many of, durable goods at prices that could
the prerwar facilities, which were
the American
attract mass markets. By using
zone, most of whom
are
feeing gradually absorbed into already inadequate by American modern American techniques this
," the .local /communities. Even a standards, have deteriorated still aim
may be gradually approached
number of smaller plants have further. J;
to
the
great advantage of *all
been "unofficially" transferred to ;/; An America n : organization Europe.
• "
/ "
**
/the American.; zone with their which would guide Americans to
equipments and,' their -workers. Austria and, at; the same time, v/ y Free Enterprise Has An
-These developments show more! would invest the necessary funds /
Opportunity to Prove Its
"Golden West"), More than 50,000
•
"displaced" *Austrians
I
from
-
*
.■-v
.
-Austrian
Scial"
I
,
people
than
any
V
to
dfu transfer
vestments
avoid
any
channels.
that
of
clogging
in¬
lead to an
/immediate expansion of that bal,©rice,. therefore, deserve particu¬
may
lar
attention and shall be
/"©mined first.
'
Austrian raw materials
may
be
naturally
these
raw
needed
hold
a
in
this
of
ex-
/
that
country
leading place in
endeavors. Two Austrian
materials may belong to that
;
/
call
to
no
would
payments
American
in
be
made... in
be
a
con¬
may
unique opportunity
represent a turning
a
point in the present struggle be¬
tween free enterprise and collec¬
Here
to
advance
before
position
in
American
tivism.
is
a;
American
can use
a
real
challenge
enterprise.
private
section of
to
It
a
small
coun¬
freeing the remaining profits for
to
Austria.
Moreover,
try in the heart of Europe whose
remaining ■/ territories
will
be
these
dominated by totalitarian ideolo¬
gies to show through deeds rather
transfer
profits might serve as con¬
to secure other
venient collateral
investments in Austria
American
would
which
ately
the
to
not
lead
immedi¬
of
creation
dollar
There may be many more pos¬
for expanding Austrian
sibilities
exports
mentioned
to
the
seem
U.
to
S.
But
be
the
those
most
ucts. Yet / these exports had a important ones which could; be
tendency to / decline during .the developed within a comparatively
decade before the war probably short time. Moreover, these im¬
ports
what Ameri¬
can techniques and know-how are
able to perform for the benefit oi:
would
offer
no
materia
to
nations.
refute
It
facts
would be
visible
body even with
propaganda.
•
Of course,
difficul
to
every¬
broadsides
*o:
•
primarily to the devel¬
opment
of
new
and
exclusive
ieatures. Noteworthy
is
among these
Cory Glass Filter Rod, of
20,000,000 have been
the
which nearly
sold to date.
now
the
The
developed
Coffee
Brewer
need
qf
a
which
new
Corp. has made a rapid
rise to industry
leadership under
the/ present
management,
with
earnings / increasing : materially
during recent years. Net profits,
after
all
charges
and
Coffee Brewer Division and the
Fresh'nd-Aire Circulator Division.
Money
Circulation
in
;
413;
and
would
'
the
"Mr.
President,
the
subject
is
;
technical and somewhat involved,
as there is conflict, or
ambiguity,'
in
places, in the particular laws
concerned.
However, your Com-,
mittee is able and well
informed,,
The Chamber
previously is on rec¬
ord, along these lines, in November 1933, and October 1934, dur¬
ing the notable administration of
our
day,
>
distinguished speaker of to-/
whose; message we eagerly4
await.
The
United
States
Cham¬
ber of Commerce, the Federal Ad-
Council,
the
National
;
As¬
sociation
ary/monthly
Presidents, and other organiza¬
tions, also acted somewhat simi¬
larly, about that time. Since then,
statement
Federal
Reserve
showing
Banks
and
agents. The figures this time
those
of Jan.
are
31, 1947, and show
"I
shall
be
to provide a vdetail, covering
reasoning upon
which is based the foregoing, the
memorandum
glad
in
that the money in circulation at
that date (including of course, that
held in bank vaults of member
banks
and
of
the
Federal
Reserve
system)
was
$28,262,149,666 as
against $28,952,436,702 on Dec. 31,
1946, and $27,917,081,002 on Jan.
31; 1946, and compares with $5,-
698,214,612
before
the
Oct. 31, 1920.
on
outbreak
of
the
Just
first
World
War, that is, on June 30,
1914, the total was $3,459,434,174.
Wm. Ede Jr. Forms Firm
SAN
FRANCISCO,
CALIF.-
need for which action is both vital
fornia
offices at
482
Cali¬
Street, to engage in the
curities business.
in
L.
Ehrman, Jr. Mr.
formerly a partner in
a
Mr. Ehrman
partner
During
Maybe
the
our
past
pa¬
dozen
and more that grand* old
gold eagle—his wings had been
clipped and his head hidden in
years
shame.
But
soon
he will
fly'free
proclaiming to the
world that again, when we point
to the motto on our coins, which
reads "In God We Trust," we can
once
more,
add oroudly
Dollar, too."
"I
move
"and in the American
u; 7 ,
the adoption of the
Resrhition."
Partners will be
Ede, Jr., member of the
Francisco Stock
Exchange,
past was
Strassburger & Co.
vain.
*
se¬
William
the
imperative.
tience and restraint have not been
William Ede, Jr., & Co. has been
formed with
in
.
until now, discretion appeared the
better nart of valor.
/
? •«,/.
the facts, and the
in
should
Sec.
coinage of gold
and silver,
(excepting change,
however, in the present prices?
thereof), / ///■'" ;a,:"/:/;:/v /!,;":,7; V3*/ ';//
Trade
the amount of money in circula¬
tion after deducting the
money
held in the U. S. Treasury and
by
risks
rewards
USCA
of
of, Manufacturers, the
Association
of
Life
Insurance
was
and
Law
Treasury Department in
Washington has issued its custom¬
The
Holt, Collins & Ede.
bounds
Sec.
822a;
visory Council of the Federal Re¬
serve Board, the National Foreign
Ede
reason¬
provisions
1946, amounted to $1,both the Cory Glass
146,785 for
But it has been shown that these
within
/;•'//',■
Cory
tral Europe are not without risks
be held
a
Domestic Automatic Unit for
home use.p-7—.rl <j,,y•
Alexis
can
the market.
on
and
able
This
only all-
Cory Corp. has also developed
San
investments in Cen¬
eliminates
parts.
Sec.
1934)
821,
reestablish
Domestic
be the
glass coffee brewer
12
has
company
new
rubber
model is said to
than through words
all
balances.
category. One is magnesite, which
always been among the most
that
of
attention
business to
would
deduct
organizations
their; share
For
the
dollars and the
in U. S.
America
transfer risk
investors.
American
the
thus
be
would
Pas
"~V as a result of
changes in technical
This brief sketch of actual
to
payments.
important Austrian export prod¬
\
profits
large
earn
Superiority --J,,
//;/;•'■
/■
American promoters and investors, ditions and possibilities for ex¬
as well as to the Austrian balance
pansion in Austria is designed to
there
dollar
Those
could
■:,/. In all the cases discussed so far,
As; pointed out before, Ameri¬
can investments
should be closely
-payments
;
.!
Dollar
; related to the. balance
-
constructing up-to-date facili¬
for
"offi- ties
for Expanding the /
^ Austrian Balance of
MvjV.
* 'Payments '
2
of the
statements could do./S-S./'!
Possibilities
T
*"
true. feelings
Division—!
sion is due
•
clearly the
Brewer
other, the Fresh'nd-Aire Cir¬
culator Division.
,/
/;. ;/ ■ i ■'
Rapid growth of the Cory Divi
for taxes in
extent.
-
;
Coffee
19,
>
Purchase
the
■
development; inthe. ./centers of
many parts as possible should be
Europe under American manage-? siderably. In the past, Austria had produced from Austrian domestic
_
*
a
in
Which needs such large amounts
of steel for reconstruction. As
that may be expanded quite con¬
.
..
no
pre¬
vious activities
productive
! capacity in view of the fact that
s
Glass
successful, in resuming their
;
.
3147 316,
(the
Silver
July 6, 1939,
if not now entirely
repealed). 7
; .31 USCA Sec. 734 (Gold Re¬
serve Act of 1934, Sec.
8). '/^r7 .;.//i
31 USCA'Sec. 733 (Gold Re-.
serve Act of
1934, Sec. 9). 7 7*
Pub Res No. 10, June 5,^1933*
(the "legal tender" act, which
apparently is in conflict with
-
j
'-•''/
USCA
A 311a, 316a,
,316b, 405a, 448-448e, 734a, 734b;
(the Silver/Purchase Act of
'
Pcrn?«r,li
Co. Ot>®nS
1
CALIF.—
resuming
the investment business from of¬
fices at 256 Montgomery Street.
SAN
David
FRANCISCO,
Monasch,
Jr..
is
Hegeneral partner in the firm
of Monasch & Co.
...,.
''"I "J
No Anthority ior
lishing control over the costs of
Treasury borrowings, and in the
education necessary to convince
the country
that the war would not
be financed under a rising trend
interest
with
rates, the Treasury,
cooperation of the Fed¬
the
eral
Reserve
terest
and
thereby caused
to
was
the
to
Act.j This amend¬
passed by Con¬
never
It is best that this was not
in the calmer light
gress.
because,
done
of
unwritten
an
added
be
Federal Reserve
ment
levels
maximum
at
rates
amendment
pegged in¬
System,
peacetime,
chance
to
have
we
to
return
better
a
our
pre-war
relation be¬
tween politics, banking and credit.
Be that as it may, the amendment
concept of
proper
a
unwritten
was
stricken out in the
in which it
interest
be
can
same
manner
inserted. .Most of
was
about
discussion
the
it
and
patterns
of
rates, the monetization of
Public
Debt, and the present lack
of effective control by the Fed¬
eral
Reserve
credit
bank
over
the
volume of
.
is
extended,
con¬
a
of this wartime usurpa¬
tion of power by the government.
sequence
r
} The Federal Reserve Act specif¬
ically
market
prescribes that the openoperations of the Federal
be governed
Reserve Banks shall
follows:
as
-
.
/ "The time,
character and vol¬
of all purchases and sales of
ume
paper described in Section 14 ; i
as
eligible
with
view
a
.
shall be governed
.
.
.
accommodating
and with
to
and business
commerce
These
independent spirit on
the part of other Federal Reserve
bankers. I said earlier that the
Perhaps
can
gency,
are
that
recognize
difficulties
our
ment
interest
with
of the
direct and
a
basis.
.Next
lower
than
banks,
all
of
that it
confidently proceed to
discharge its duties with respect
to "the general credit situation of
the
country," and "to establish
an
elastic currency." But I am
while
turn
that
largely deter¬
mined by the size of the Treasury
deficits
not by the banks. The
indirect method of lodging1 the
have
written)
are
removed
been
nothing
in
the
to
additional
attain
The
achieve
lower
forced
financings. ; To
less
issues
literally
the
down
bankers
for
popular
were
the
this,
rate
to
ner
Treasury !, securities
shall
of
any
political philosophy. To continue
the wartime procedures at this
time
inconsistent with
seems
actions
other
in
fields
fly in "the face of
statutory authority
to
conform
that this situation
to
the Board's
rather than
it. " It
to
our
and
time
is
ended; that
the Federal Reserve give more
weight to the Congressional stat¬
utes, and that the necessary co¬
operation emanate from the Gov¬
ernment, and less wholeheartedly
was
from the Federal.
f
and Credit
Banking
From National
You will
note that
ferentiated
between
ment
the
and
Insulated
I have
the
Federal
dif¬
think
I
that
it is clear
that
the authors recognized the teach¬
ings of history which clearly
that
individual
social
freedoms
warn
economic
depend
upon
in¬
is that the management of it
increases the difficulties of avoid¬
ing an unwise < infiltration by a
political government into our pri¬
banking system. The private
character
of
these
heart
institutions
of
our
pri¬
vate
capital economy. Under all
of these circumstances it was dis¬
turbing to
see
the Board of Gov¬
ernors
so clearly outline the situ¬
ation in their annual
report, then
resort to recommendations which
'
would
cause
the Federal to virtu¬
ally operate, rather than to
vise,
some
and
super¬
15,000 banks. It has been
encouraging to witness the
operating
at their option, may be
purchase securities from
to
non-bank
investors
to
or
make
amount about 5 times
an
than
the
volume
of
se¬
curities sold,
Currency
resur¬
Destroyed
I would like to make
comment
the
of
this
on
the
more
phase of things.
purposes
of
stated
".
.
to
,
currency, . ;
this country
furnish an elastic
." The currency of
is largely measured
by check-book money. As long as
the open-market rate for Treasury
Certificates
stays
level
same
as
about
at
the
th^ Federal Re¬
serve's and the Treasury's peg, it
seems to me that we have a cur¬
with
rency
stretch."
find
a
only
We
way
degree of
"one-way
a
should
to
be
regain
a
elastically in
able
to
greater
our
cur¬
rency.
We know that these matters
profoundly technical.
difficult to
derstanding
volved
in
throughout
means,
the
of
the
the
a
the
It
is
are
most
proper
un¬
subjects
in¬
Congress
country.
or
This
therefore, that changes in
status
scribed
achieve
by
quo
will
definite
If the open-market rate
measur¬
return flow of currency
inflow of gold that would
a
the Certificate rate to1 move
from the %%
(or 1%) peg
toward
lower
yields.kln such
event, the Federal Reserve might
be able to sell
and
provide
a
preventing
these * funds ; from
broadening the credit base. But—
of action available to the
area
Federal would be too
.
be
circum¬
limitations.
today
>
tell them the facts—
can
about interest 'C6sts
the
measured
Public Debt, T hope to prove
that
new
a
not
1%%
of
peg
on
would
as
fiscal
of
year
is
elements.
enactment
is
these
that
paid
trust funds and
to
narrow.
/
from
to
Savings Bonds. The third is that
cost
Treasury 7 .obligations
publicly-held
marketable debt.
;; •!/
■
1.60%.
In the year 1946 the Treasury
paid to its trust funds and agency
accounts
terest
Treasury
of
1%
and
the
is
measurably increased
Federal's
area
of
action.
It;
judgment
that, at this
time
and
for
some
time, the
open-market rate for Treasury
my
Certificates would tend to stabil-,
ize at
point not materially above
the rediscount rate—1%. A num¬
ber
funds
about $6%
received
bankers
believe
it
would
stay right where it is or move
lower. The point is that the Fed¬
eral
would
be
able
to
more
ef¬
fectively
under
these
Federal
Reserve
has
$24 billions
engage
in
open-market
activity,
then the volume of securities heid
would give it ample powers. That
is
the
essential
difference ! be¬
tween
what
defrosting, refrosting
I
term
The
and
"limited decontrol."
Treasury's Position
due
4!or
is about
time the Treas¬
policy of
issues /into
interest ,at
a
bearing
ice .Life Insurance Fund
sary
a com¬
pound interest.! The interest pay¬
ment of one year is capitalized in*
ing
bilization.-.
debt and, in the succeed*
the / interest
years,
must
•7
paidvoii .the Original investments
^:/
//
Interest Rates
.
~
It
to me that the- average
seems
might be justified in
the
policy of stabiliz¬
ing interest rates implies that the
level- qf interest payments on >a/7
person
inference that
securities,
a
was ; devised,
in most
to, provide a '7 means: by
which they > coilld earn v on their given total of debt
,
assets
and
reduce
the
series
direct
but,
to
in
—at
ap¬
a
via
of
Interest
of
the
on
Public
Certainly there is only
item
an
Debt.
indirec
relation between this interest cost
and interest rate and credit
prob-.
iemsv.
The
...
an
/7\!
...7.
second*. element 7\is
the
amount of interest
appropriated
7
-
for the account of
Savings Bonds.
Treasury accounting procedure in¬
cludes in the annual
interest ap¬
propriation the difference between
the
succeeding years should be sub¬
stantially higher. This assumes, of
course, that no particular change
occurs
in
the.
amount,
series
or
distribution, of the outstanding is¬
sues.
>
We
estimate
propriation
almost
$500
for
1948
interest
million
which would be the
E
the
to
below
case
ap¬
be
that
of Treas¬
accounting procedure figured
at their.5.90%
yield to
bonds
bank-held
\t
aimed15■
which J
securities. 7 But
I
policy which reduces interest- costs *
without
retiring debt, and thereby
tends to'Unstabilize market
Holders
yields."
securities
short-term
of
seek to recover the loss of income
that
is
entailed
in
the
refunding
policy by buying longer securities
in the market and thus depressing
market yields. It is small wonder
account Anvestmenti
should be re-examined. It seems
as
good.
is then combined with a" refunding
agency
included
low enough Z
can't go along with a policy
at stabilizing interest rates
the appropriations were not made
under the- guise of ''Interest on
funds
are
.common
ductions in debt should be made
indirect appropriations.
The benefits; are pot always
gen¬
eral. Some go to special groups. If
these
least 'for the
I go along with the view that re¬
es¬
create
which
Low Short-Term Rate Unstabilizes
be
plus these increments of capital¬
ized interest. This theory of Gov¬
ernment •: investment
in its own
cases,
neces¬
plan
7
necessary/ would be that interest
rate and refunding pplicies will
not be combined in an attempt to;
reduce; interest* payments while
adhering to a policy of rate sta¬
receives
of these funds amounts to
new
It is not
/to! defend • % a
would create higher interest costs.
The only other point of agreement
3%. But this is not all of the story.
The interest which is paid to most
to
are
marketable debt.
example: The
Government
Life Insurance Fund receives in¬
terest at 3^ %. The National Serv¬
ury
This brings us back to
politics:
Can the Treasury afford to in¬
7
satisfied with the present costs on
the currently outstanding total of
Fpr
-
of Treasury securities. If it could
obtain a larger area in which to
a
//7
Thus
policies
2%y others require more favored
treatment; i.e. at rates Up to 4%.
redemption values of discount
Savings Bonds at the end of one
period and the redemption values
I would like to
emphasize that at the end of the prior period. Since
such
a
circumstance: does
not the schedule for redemption val¬
envision
affecting '-credit
by ues accelerates, the amount which
changes in interest rates. The will have, to be appropriated in
v
some
,
%%.
billions of market*
would
contract
credit
circumstances than
otherwise be the case. •
For
Certificates
interest-
funds receive interest currently at
a
of
of
present
refunding
steadily reducing the!;;
topublic /;holders of able; securities. According to our payments
estimates the 1948 total figure of marketable debt, while Saving3 •
Bond
interestcontinues1 on its--;
interest should total $700 millions
or*ii8ore. Over succeeding years original schedule, and payments
to trust ifunds, etc., are .increased.
the total payments will show fur¬
The/first point of agreement''
ther : substantial
increases, ;f^Itthat would be necessary in order \
should not take many years (un¬
to permit the new peg for Certi¬
der existing practices and require¬
ficates to be set at 1%% is that/1
ments) for the total to materially
the Treasury, and
Congress, be
exceed $T billion. Some of these
the
Certificate
up
to
would have
■<
holdings 7
years
has indulged in
refunding
all such
$500 millions of in¬
special issues. In addi¬
willing to see- its
borrowing costs move to me to be misleading, however,
lx/2%
(if necessary) we to have the interest ^payments tc
were
tax,
marketable
on
ury
some
on
interest
of
maturing within 5
/
hand, if the Fed-5 enacting legislation changed.: The
Reserve Banks maintained a whole theory of trust fund and
rate
Federal Reserve
the
which is paid on the
■
rediscount
franchise
Excludihg the Federal Reserve
holdings, the average weighted
accounts.
On the other
eral
the
1
re-
.
earnings impact
higher short-term rate.
the Public Debt" they would have
A 1% Rediscount and Certificate
toi?e made as direct appropriations
Rate v':;
to the particular accounts or their
■
was
remove
Treasury
agency
a
a
part of the original
Federal Reserve Act, either would
of
The second is that attributable
of
which
$5
first
The
in-!
method
be less desirable than
may
billions. This is made up of three
principal
which
this
While
Banks.
serve
cost for
1947-48
*
unpegging Treasury Bills, Mr.
suggested
an ,vindirect
means of taxing away any exces¬
sive earnings of the Federal Re¬
to return to the Federal
some
capacity tov dis¬
charge its legislated responsibili¬
ties.
>.'• J.XV'./'.
\
the
basis
a
Eccles
Reserve
The estimated interest
on
*
of
ury's interest costs. I have already
to
you
how such a
new
peg
might be sufficiently
illustrated
high
and the
short-term
cludes.:vpr '.7exeludes . the Federal
Reserve 7holdings.7 7In
recently
commenting on the desirability
the Treas¬
increase
to
serve
for:
•
is
;
facts
of its
currency at least to the extent of
the
answer
holdings propriations needed
"two-way stretch" sence, the result is
some
.
one
original Federal Reserve Act
was
an
the
Elasticity
job.
cause
the
on
they obtain Federal Reserve funds
which,
%%, I don't think
away
the
by
basis of their particular situation,
sell such securities to the Federal
ours
represents the
banks
instead of
witness
Board, and by many others. The
Chairman, however, is still "satis¬
fied" with the y8% rate. As in¬
dividual
we
Bill
ably increased over what it is to¬
day. It is possible that we. might
Chairman of the Federal Reserve
and
sulating banking and credit from
national politics in the maximum
practical degree. One of the dan¬
gers of a Public Debt as large as
vate
condemned
that
to the new peg, the abil¬
ity of the Federal Reserve to con¬
Certificate rate. The consequences
One
point of technique.
a
moved up
dpen-market procedure which
bases largely on the objective of
protecting the Treasury's
Vs%
larger
seems
could rely on this to do much
of a
man¬
govern¬
Reserve
System. The Federal Reserve Act
is replete with such a differentia¬
tion.
1%
an
loans in
Politics
ap*
effective return of the
emphasize
we
in which these war powers of
been
we
My
the
on
should unpeg the
rate, and eventu¬
ally refrost the Certificate rate at
government operated and still
operate. The Federal Reserve Sys¬
tem stands ready to buy securities
used
accepted
tract credit would not be
familiar with the
are
have
more
a
Treasury
markets .' in
interest costs from the commercial banks under
desires
the
follow
longer.
Monetization of Debt
commonly
means
the
peg the
no-
"defrost" short-term rates. If this
Pegging Procedure
Reserve
order that Treasury
delay
It has been suggested by rec¬
ognized authority that we should
stood
Reserve
things and
.
ones,
You
re¬
Federal to the ostensible purposes
of its functions. This requires me
of
throats
a
to;.emphasize the desirability of
reducing so-called monetization of
the Public Debt. I would go fur¬
ther, as you can see, and provide
interest
record
these
of
tion of the Federal Reserve
further
of
effect
low
a
cost * for
should attempt to
Banks
Federal
that
states
order
should
start
can
proach for moving away from our
unlegi slated changes in the posi¬
lowering rates. Political consider¬
ations seemed to inspire a desire
the
that
Act
.
this
Reduce
or
in the process. This unwritten
remains.
There,is
amendment
we
was
Treasury's residual financings had
the
that
tion
who
preferred
longer
while the Federal Reserve
by to take care of the in¬
country."
'7.'f f digestion. Politics then intervened
This is the actual authority. We to
prevent changes in this pattern
may grant that the Wartime pro¬ of rates. Sanity showed its face
cedures might have been neces¬ With Vinson's refusal to force this
sary during the early phases of rate lower. Politics is today re¬
Reconversion. Rightly, or wrongly, sponsible
for
the
fact
that
however, virtually all of the War¬ measures are not underway to re¬
time
powers
(written
or
un¬ move these Wartime controls.
regard to their bearing upon the
general credit situation of the
to
we
if
interest rates.: These securities
tie ''
into the longer-term 2 % % rate.h
The third element of interest
is v
that paid to the public holders,
of v,
marketable, debt.
This "can lbs
can
confident that
quire the higher yielding securi¬
deposits
created
it
agement places in the path of as¬
suring to the Federal Reserve,
ties. The volume of bank
thus
that
reasonably full answer to the
complications which debt man¬
than willing to ac¬
were more
admit
to
even
was
rates
wish
I
..
in view
political and public con¬
siderations, to produce a full or
other investors, lost
higher interest rates
and
fear
and
longer
"•■/.. •,,/
the
of
in¬
an
Hill?"
of, interest cost
cbahges;-outlined
..
ington officia 1 s always<ask
"What can we tell the boys on
almost impossible,
seems
the
rigidity with which the shortterm rates were held materially
Second,
ability to evolve the more
appropriate courses
effective and
mercial banks of Treasury deficits.
on
corner,
no
national welfare, or
our
of action.
higher living costs. First, was the
large scale absorption by the com¬
was
for
cern
during the War that two phases
of the War financings were build¬
ing up pressures — not toward
higher
interest / rates,
but for
direct
con¬
no
serve
that
in¬
without, on morality of
on the sincerity of con¬
or
purpose,
rates, debt management, and con¬
trol of credit. It was quite clear
This'
dealers
or
structive ends. There is
well as the War emer¬
responsible for many
as
of;s bankers,1
either within the ranks of govern¬
first
must
politics,
of
vestors
direction.
We
&;.y&
should ' add
I
recriminations
just as it was inserted.
I hope later to outline a start in
that
a
the
be removed
element
short-term financing
When any-* in¬
in rates is suggested Wash¬
to;'£ 11/2%?
-
crease
political. and
a
1947
crease, >its
i ■'
costs
public character.
un¬
Wartime amendment
written
of
are
U
'fa
i.'.
Pegging Interest Rates
gence of an
(Continued from first page)
of
.1
THE COMMERCIAL & FINANCIAL CHRONICLEWi
1410
that
Chairman
Eccles
foresees
future trend toward lower
yields.
/
;
:""r-./; .V'';"
"
Now I would
like
■
to
a
market
-A:"/ : AAJ
comment
two points. The first concerns
Government accounting. Two off¬
on
setting .items cannot be lumped. :i
probably standard account¬
This is
ing
procedure
but
it
doesn't :
change the facts of life which are*
as
follows:
ments
are
that
we
tive
rate-
Treasury interest pay¬
One estimate '
taxable.
have heard-of the effec¬
was
"about 30%.
If this
is
correct, then the real'cost of
third element of interest' is
less than-2% billions or one-half
:
our
of
the
total
This
is
that
can
the
gross
real
be
appropriation. 1
of the debt
cost
directly affected by
Treasury and Federal Reserve
policies concerning interest rates.'
.
The- second-point
interest costs
ing to rise
no
on
is
that
the
the debt 'are gp-7 ;
matter how persis¬
tently the Treasury continues to
refund with %% Certificates.
-I
might digress to repeat that the
further that the Government per¬
sists in this
refunding policy at
the '%•%. rate, the more it increases
the problems of stabilizing inter¬
maturity,-; Again there can be very est rates.Eventually it meets up
little
relationship betweenthis with the necessity of increasing
Number 4576
Volume 165
THE COMMERCIAL &
FINANCIAL CHRONICLE
by offering higher coupon
securities. The increase in the in¬
its eosts
S" clearly the. , manner - in ployed are of the utmost impor¬ of his income
fl! tw +r wartime heeds continue tance:! in : achieving the desired to provide himselfenough money
with a pension
payments called for by the
t£ J iXS the purposes for which result. That result is to strike out or retirement
allowance.
investment requirements of trust
Inter¬
al ^eserve System was the unwritten amendment to the est rate declines have
funds, etc., will alone far outweigh created.As
reduced his
bankers you can Federal
Reserve Act which was
capacity to provide for his old
decreases in payments to the pub¬ judge whether I am correct
in an
exigency of War. It now is a age. The same amount of
lic on marketable securities which
saving
°J:r\ng
based on money heritage. It can be removed, just will today buy him a
rrime
from refunding debt costs
pension per¬
F. ® consideration, these sug¬ as it was
inserted, by the com¬ haps three-quarters as great as
of about l.'ZO% into %%- issues gestions might widen the area
bined actions of the
Treasury and 15 or 20 years ago. This affects
and occasional offerings of longer
uroughout; which the Federal the Federal Reserve System. Of millions of
people and is heavily
cecurrties. When one must add to Reserve might more
successfully all the wartime powers this has on the minus
side.
the increasing cost of > interest to pursue its responsibilities. I
do proven and
remains—one of the
Low interest rates reduce the
not claim
trust funds, the increasing costs of
these ideas constitute
most dangerous to our
economy. income of colleges, foundations,
servicing Savings Bonds, the pos¬ the
only
desirable
workable At this
time, when we cannot and charities from their endow¬
I
sible offseil in g reductions Via re* mechanics.
must
emphasize, move too far, we should be sure ment funds.
This
reduces
the
funding policies appear <sy&i less however, that the methods fol¬
that
ness
terest
■
lowed
effective.
for the politics and
arithmetic of interest payments.
Now to another politicalconsideration—commercial bank earnings.
The Chairman of the Federal Re¬
serve Board has predicted that the
i
they adopt laws and
do.
ous
rate
so,
The effect of these
of Joan losses.
will
level
lower
be
though
today
mar¬
trend
of
The
other
what
of
for
com¬
to
apply
need
in
this
country,
to
do
to
and
meet
the
may
dollar,
and
(2)
the
economy.
expenditures.
war
The
es¬
cur¬
has been
same
as .? far
measure
pegging
the
as
short-term
produce
no
investment
concerned.
are
But
rates
un¬
would
market
calamity. How
degree of fear enter
can an undue
into
or
a five-year
security at 1.50%
thereabouts if the new peg is
to be maintained at
equal fig¬
exists the
degree of fear is reduced.
:
ure? As
long
of
consideration
time, I should
ments to
draw
close.
a
I
for
your
these
shall
com¬
not
at¬
tempt, therefore, to comment on
other
suggestions; i.e., the desira¬
bility of offering long-term -2%s
to
simple
it needs
the
common
but
sense,
thinking about, for when
government
its power¬
uses
ful instruments to reduce the in¬
terest rate
not
its
on
to these low
alone
own
securities
every lending op¬
country from bank
on
loans to railroad bonds and mort¬
Today what is happening
gages.
that
is
fast
as
as
these
various
sue-*
low¬
so that the country's
interest rate structure is
rates;
er
whole
being brought down to lower and
levels.
We
think
to
need
carefully about the effects of this
First, perhaps we ought to ask
how far
our plishes
Today money,
the government accom-
its
for
purpose
it
bered that the
achieve stabilization; Mr. Eccles
of
be
saving
must
remem¬
government is not
marketable;
on
nalize the
versus
dan^r.; > .:
■
financial
the
»
It
group.
'
means
-
es the Treasury short-term
Wc
can
see
that
a
,
new
-1
conditions
inis would be
fng at %%.
costs
required,
in lieu of refund-*
Since, however, the
of, such debt due
or
five years
C£
ke related
+
that
the
which
We
increased
can
see
interest
also
costs
will
inevitably arise, base
debt considerations which are
beyond vthe real control- of the
on
~
reasury. x-1
(
>1
i
trust
•/:
r
i
that
;
v.;-
■rates
*
'
I *
d
have!
of
ers
government con-
(c) Excessive
is about
to this increase in
easier
borrow
to
and
'
callable
i.bu%—no increase in Treasury
interest costs
during such a period
snort-term rates.
1
is
cut down its vigorous
money to build a house, and that
growth and energy. This debili¬
again goes into the plus column,
tating effect of debt operates in for both have a mild
tendency to
three different areas: ^ ~
stimulate business and building.
(a) The drain of taxes
On the other side of the ledger,
t;
(b) The distortion of interest the
people who lose are all hold¬
try
of
k % would mean that the Treas¬
ury would refund at such a rate
Hy. market
it
means
rates.
peg
agencies
which
and
the
custodians of the people's savings
and have forced them to cut down
service
they
can
are
render
try.
Broadly
"With this group
ested
in
of people inter¬
savings I shall
discuss
means
ilies
life
insurance,
and
this
three-quarters of the fam¬
in
the
terest rates
At low
country.
their insurance
in¬
costs
them more and so low rates limit
only the second of these dangers
the provision that each house¬
—distortion of interest rates.
j
holder
The Distortion
of Interest Rates .i in
Because of the
est
on
on
burden of inter¬
the debt-and its pressure
case
ily
on
can
make
for
of his death.
his
family
This is heav¬
the minus side.
Another
loser
is
the
man
or
this
theory may have, it
theory, and it would f
rash thing to throw over¬
is still only a
seem
a
board
a
proved method, in factpractically the only one which has
had the test of
experience, for
dealing with business cycles, andT
rely exclusively on methods
which
interest
their
own
provision
for
their
emergencies and their old age, and
have
driven
more
and
them
more
on
back
to
their
govern¬
for one's self and
family by one's
human right, just as
the right anyone may
a
precious
as
have
borrow
Perhaps
the
is
do well to avoid
even
more
actual
level
the
effect
rates
fluctuations
ibility in responding to the forces
of the market and
of
credit
control
as
ated in
a
son
of
the
In
the
debt
are
real
not
summary,
of the
the
dangers
outbreak
some
cataclysm, but rather its
dilution of the money supply and
its
devitalizing
of
the
active
forces in the country's economy.
The
to
and
as
a
•
freezing of interest is likely
this tendency.
have
.
What to Do—A Program for Debt
Management
There
two aspects to
the
problem of debt management. One
are
of these is
C*
the technical
problem
dealing with the debt itself and
of
its
financial
even
phases.
more
The
other,
possible step to
every
-
important, is to
assure
money' dynamic, vigorous economic life.:
coun-1 Even
though we were technically
prevent
any
mechanism
for
they have usually oper¬
These are
free economy.
large words and need explanation.
The economic writings of to¬
day constantly emphasize the dan¬
of booms and busts—the dan¬
ger
the necessities
by our Federal
Reserve System.
cheaply. knd
important take
avoiding - increased
interest
charges to
the
Government
changes the pattern of economic
forces
commitments to
interest rates at any level
and should leave them some flex¬
money
try's
economic
well-being
of
changes in interest rates.
The
present disposition to freeze in¬
terest
should
reasons we
freeze
rely
This is on the minus side,
just financially but morally,
for the right to save and provide
rates
theoretical
j.'-
For all these
ment.
than
the
in the armory.
not
to
still in
are
stage. In the struggle for econom¬
ic stability we need
every weapon
of
speaking low
rates have made it less attractive
for people to be thrifty and make
saving is
--
proposal
virtues
to
the common people of this coun¬
wise in
be
handling the debt, it would
unless the country is
futile
strong
and has a large national
with which to pay the
income
service of the debt.
If each family
is to carry its share of the national
debt, that is
a debt of about $7,000,
that family must have a good-sized
income to meet its share of the
interest and
principal..
can
we
the
on
debt
much
depends
carry
we
how strong
on
We must deal with both \
are.
the
payment
some
How
technical
problem
of the
and the
national
ger of the business
broad
in American business life and the
debt also affect the vitality of the
business machine—the goose that}
cycle with its
period of prosperity followed by
depression. The greatest tragedies
' we
position of another
the transference
The Smothering of Enterprise
;
of money from one group of citi¬
non-marketable
bonds;
on
the
^e'other dodger is to the yital- zens to another, and we ought to
validity, or rather the large lack
ity r f cur economic life! Just'aV id think
of
pretty carefully about who
validity which suggests the re¬
private life debt is like a leech is benefited and who loses.
The
funding of short-term debt as a
which drains off some of the
people who benefit are the bor¬
conservative course, or anti-infla¬
strength of the •debtd^ Mln pub¬ rowers of
tionary limplement, and so forth.
money; that is, it is a
lic life a high national debt is a
f bnve tried to illustrate that the constant drain, and unless han* little easier for thp business man
to borrow for his enterprise, and
arithmetic of interest costs weighs
died with great wisdom, may de¬
against any
It
objections to increas¬ vitalize the economy of the coun¬ that goes on the plus side.
comments
other
securities
levels, the act affects
government
eration in the
building and loan associations
>
an
as any peg
-
Out
source
just a payer; of interest,
but tragedies to the wage earner have
have through its tax system is a bene¬ been the great depressions. The
^moderately; successful in ficiary of interest payments and worst of all was that of the early
holding, it in check in one way or dividend payments made in the '30s, and it brought untold dam¬
another/ partly by price controls country, for the government takes age.
There appears, in fact, to
but mostly by the good sense of its slice of the people's income. have been a
tendency for business
the American; people who have So when interest rates are re¬
depressions to deepen in recent
refused to be stampeded into fear duced; the
government slice is years, and correspondingly, for
While it would be al- the booms that have preceded the
about their money and have been smaller.
willing -to save some substantial most impossible to compute exact¬ depressions to go higher. People
how much the government in distressed countries abroad are
part of their increased accumula¬ ly
tions of money rather than pour¬ loses in this way when interest worrying
whether
the
United
ing them into the market for rates decline on the 75 to 100 bil¬ States will go into a postwar de¬
goods at constantly higher prices. lion* dollars of private debt out¬ pression, for such a depression
The problem of whether or not standing,
a - substantial part
of would be a frightful handicap to
this vastly increased money sup¬ what is gained in the lower rates, recovery all over the world. We
must
somehow
learn
to
ply, this diluted dollar, gives us the government loses in taxes.
resist
There are other effects of a low booms and busts, for they stop
price inflation, is fundamentally
a
problem of Jhe psychology of interest rate policy enforced by progress and drain away the vi¬
the
American people, - the way government controls:
tality of the country's economy,
The lowering of interest rates
^Now the fact is that raising
people use their money. We are
not out of danger and recent in¬ reduces the income of one group interest rates has historically been
of citizens as much as it improves one of the
creases in agricultural prices sigaccepted methods of
cniy their income needs. The li¬
quidity of various ^maturity sec¬
tions is considered virtually the
portfolios
this
been
without
to
seem
like
mut$gf£ss than half
Today investors buy intermediate tionaryforce.: So far
securities
On the;face of it this may look
•
tremendous operation.
/ffear" in order to de¬ national annual income.
the demand for intermedi¬ it is 75% of the total income. This
ate and longer
Treasury securities. is an enormously powerful infla¬
They
a policy of
keep¬
ing these rates at low levels.
lower
some
longer;
has announced
mature they are
ceeded by new contracts at
crease
qualms.
the country has ever experienced.
The President of the United States
country's volume of business and
production. , Normally,
in
this
country, the volume ' of money
other item which
is,
of
contracts
Dollar
sential of the matter is that
partly political." This is
the "fearJ' of
making changes. We
and
politician
rency and
bank deposits have
been increased far faster than the
these longer rates.
govern¬
the government debt."
Today
have the lowest interest rates
we
but the rate
the debt and its
be classified un¬
headings: (1) the dilu¬
us
The dollar has been diluted
by
vast
be
need
taking
Congress
our
Dilution of the
This would reduce
one
Now for
we
strangulation of the
rates should
on
is
time
no
ought
two
tion
an
today with the various savings
institutions for longer-term loans
the pressure
test
legislators and gov¬
dangers®
der
are
;
we
The
will be less inclined and less able
to compete as
strenuously as they
may
are
Then commercial banks
and securities.
our
threat to
is
not
them.
If short-term rates
"loaning
increased,
increase.
as
debt
Bank
consideration
indirect result
is
best intelligence to see
just
exactly what the dangers of the
earnings to lower
levels should mitigate this politi¬
cal .problem, " '
•"
on
government
States
our
bank
Effect of Higher Rate
Holdings
crucial
a
budget. It is
placency, and
prices—hence bond profits
or
"Let's reduce the rate
on
the
United
ernment officials discuss the 1948
of
be quite » smalll They have
quite large. Therefore, the
may
been
the
place in the halls of
Simultane¬
composed
of
out of control-4rnot
yet at least—
Tr^asut'y'Certificates would bene¬
ously, however, the average
can
^every
interest
National debt is just as seri¬
and, so keep down the taxes we
private debt, perhaps more
have to collect to pay the
charges
but its impact is different.
debt
Higher rates for
fit operating earnings.
from
x:/'Low interest rates penalize the
operation
of
savings banks,
the
of
as
Fortunately,
losses, when they come, in de¬
creasing net earnings may well be
sharp ! ond.
available
for education,
research, and phil¬
anthropies. This is on the minus
regulations:reaction
are
reaction
ment
official
that govern what citizens
who
creditors of the government
income from loans with which to
annum
tion,-::'
(Continued from page 1374)
add other considerations. The
present level of loaning rates pro¬
vides a relatively low gross annual
higher'per
em¬
National Debt, Interest
Rates and the Saver
may
absorb any
technique
funds
side.
of. commercial banks
Will drop -by more than 25% in
1947 relative to 1946. To this one
are
the
in^the right direc¬
move
■;2t
net earnings
ket
and
much
So
a;
we
cycle. In particular, there is
lor fluctuations in
the
Government spending, whic^i may
be called the theory of the "com¬
pensatory budget." No matter what
problem
well-being.
that
The
technical
with
do
we
respect
things
to the !
lays the golden eggs—and while
we shall here discuss mainly the
technical side of debt management,
shall
we
be
glancing
over
our
,
shoulder frequently at the larger
*
question of the national income,:
d
H.
I
£■>},
•!
'
vV
V
?■
;
:
'
*
i
•
'
^
*
*
Control the Budget
p
The
first step in
very
dealing I
with the debt is to get the national
budget under control, for the budget is seriously out of control. The
President has
presented to the
<
•
Congress
This has
$37J/2
a
billion budget.
to the country
come
as
great shock and disappointment.:
This budget is four times as much
as in
the biggest spending years
in the '30s.
The budget would
a
provide
the
for
of
Government's
and
controlling
25%
the
spending nearly
national, income of
,
checking the excessive booms in
the United States.
business
makes no real provision:
for even a beginning at reducing
which
precede
busts.
Similarly, the instrument of open
market operations, or other means
Even this huge
budget
the national debt, for it shows :
tightening up the volume of only two hundred million dollars
credit, has been an instrument of surplus. There^is no use in even
supplementing rate changes and discussing other methods of man- •
inevitably brings about changes aging the national debt until this
in market rates.
hurdle
has
been
cleared, until
If we freeze interest rates at
somehow the national budget is
their present levels and give them reduced to a point where a be¬
of
no
freedom J;o fluctuate, we are
throwing overboard the principal
ginning
methods by which civilized coun¬
tries have in the past tried
load
^ to
prevent the booms and the busts
of
business
damage.
is
a
man
which
do
so
much
To freeze interest rates
little like
in
locking the police¬
the jail.
This policeman
has indeed
sometimes made mis¬
of
be made on debt re¬
and where the terrific
can
tirement,
taxes
can
least somewhat,
The country is
of
a
almost
before the
war.
reduced
at
V
;
with
twice
a
as
national
high
as
This boom is sup¬
ported by a huge accumulation of
readily available funds as a result
war financing, coupled with a
takes, but in other cases he has
performed well. We ought not to
him up before we find an¬
of
other.
all types of durable
lock
There
have, it is true, been
other proposals for methods of
restraining
the
fluctuations
of
the.budget and taxes, the nat- woman who is trying to save out business, which
we call the busi¬
large deferred demand for goods,
machinery, and for
consumption
goods.
Thi« combination creates
the boom. We cannot expect the
for houses, for
boom
to
continue.
(Continued
.
in the midst
now
business boom,
income
be
x
There ore,
on page
1412)
a
.
-y
J
THE COMMERCIAL
l«2
Thursday; March-13,194*
& FINANCIAL CHRONICLE
i.
National Debt, Interest
Rates and the Saver
<1l
t'•
!•
■'
and small means, and selling
these
people as pos¬
bonds to as many
savings bonds is sound policy to¬
day, and offers one of the best
ways for. banks to contribute to
wise management of the nation¬
activity
world
today:
Take, my
favorite: illustration'
The Treasury sold some 100 mil¬
lion dollars into the banking sys¬
al debt.
tem to provide for the cost of the
These then are the essential carrier Hornet/ The banks
popular investment, and they
didn't
have
been
sold to
something things we must do as a nation in use previously-existing money to
like 75,000,000 individuals in the the management of the debt. We pay for that 100 million dollars of
amount of some $50 billion. Thus must cut down the budget so that Treasury
bond s.
The
banks
we stop increasing the debt and
a substantial part of the debt was
created,; accounts — deposit ac¬
widely distributed; but more than begin to pay it off. We must dis¬ counts — in favor of the Treasury,
that, the Sale of bonds to all these tribute the debt just as widely as and when the Treasury drew on
people stirred a greater incentive possible into the. hands of in¬ those accounts to pay workmen
to patriotic support of the war. vestors and so reduce the infla¬ and for materials for that
Savings bonds have proved
sible.
a
(Continued from page 1411)
/
;
ings bond that would be attrac¬
tive to individuals of both large
Sale Of business
The continued vigorous
adopted of devising a' sav¬
was
•
f
budget which is barely balanced
at a tax level which is confisca¬
•
its
in
tory
brackets, and
upper
the
business, is clearly
places a serious burden on all
people and on
budget out of control, and the
country's first task in any program
of debt management is to reduce
budget expenditures.
; A careful study of the matter by
a
r:
•
.•A "
/i
Committee
the
Postwar
on
Tax
headed by Mr. Roswell
formerly Undersecretary
recommends a
budget by * six
billion dollars, and describes how
that can be done. Clearly some
such reduction is necessary, for
important than his program of expenditures. We must back up the
successful
and
sane
program
of
General McArthur in Japan.
In
China, when she'herself has
put her house in order, we have
already indicated our readiness to
lend
*
hand.
a
this first point,
be' selective and
must
aid
our
V
-
summarize
To
strategic and given to the people
who are willing and able to help
Policy,
Magill,
themselves.
the Treasury,
reduction of the
The second point to note is that
for this purpose we have already
of
presented by the
President, based indeed on many
laws passed by Congress as well,
as
many established and en¬
trenched practices, is a dangerous
budget. It has so little margin for
budget
the
Kr
as
aside
set
and
in
included
the
budget both for this and for the
coming'- fiscal -year v a very large
sum of money to accomplish these
purposes.
We have set aside 6
Fund
is
now
and
position to
pari-passu
make
financing if there
jdiould be any decline in the vol¬
with the efforts which other coun¬
of business and national in¬
come; it keeps taxes at such high
levels that
they will interfere
omies.
deficit
snore
'
ume;
4
V
country,
sential
a
if
to
are
we
carry
our
huge debt without unhappy con¬
if'
tv.
•
question has been
raised, and that is what effect the
Today
.
I'. I,,
'
.
crisis
'■'!
-,'4
o/;'''''"
sequences.
•
a new
abroad
will have
on
the
the weakening in
the British: position and Britain's
prospective withdrawal
from
Greece and possibly from India,
Palestine, and Egypt mean that
Does
budget.
the United States must assume
substantial added responsibilities?
Hoover's
report also
brings vividly to our attention our
obligations in Germany.
President
Whether
rv.y
we
like it
not the
or
"United States has been thrust into
position of world leadership, and
is, I believe, a vast majority
opinion in this country that we
cannot dodge this responsibility.
a
ty'v.:
strategic
loans
tries make to build effective econ¬
It recognizes the
there is nor use
that
principle
building
houses without foundations.
:
growth of the
Without counting this 6 billion
growth which is es¬ dollars, all of which has already
with the dynamic
there
While we have a
position of world leadership we
governments.
v
undertake
cannot
section
every
to
walk
of the world
into
and
other
countries, nor can we
Unance and feed them all. To do
xun
is impossible both in terms of
"the amount of money and our
jso
products which would be called
We cannot, by any stretch of
Ihe imagination, lift the rest of the
world to our standard of living;
nor, indeed, can we even guarantee
against starvation in every quar¬
for.
ter of the world,
There are many
places where the population-is in¬
creasing too fast for the means of
subsistence. The only effective use
£or our resources is selectively, iri
spots where we can help people
to help themselves.
As
look
we
the situation
over
there are key areas from the point
of view of determining the trend
of world affairs, and we have
already committed ourselves in
certain
of
these
areas.
We have
undertaken to
help the British in
their trying problems, and if that
eventually calls for
frt
more
financial
aid of one sort or another I be¬
lieve the people of this country
are
ready to help further.
Germany is another key spot,
Europe is be¬
V
ted
to
see
President
I:
■
-down
is
:?/
i"
a
lean
against depression and un¬
years
employment.
■
that
life.
Pacific,
For that will make the bur¬
den
of
and
will maintain
(Continued from
he chooses for goods and serv¬
ices by his draft, rather than by
as
coins
or
paper
That
money.
is
money supply,
;y•
At the end of 1945, our money
our
supply
was a
little larger—about
176 billion dollars. Before the war,
our
of dollars and
bring pres¬
.
#/
Went
to
the
the
bottom, That's what hap¬
to
all
war
production;
nothing peculiar about the carrier.
But the point that I want to em¬
phasize today to you is that the
money that was created and addedl
to bur money supply to pay for
that. corner did not
disappear
pens
when the carrier went to the bot¬
too much for
are
me;
terms
you
are
individual
an
the
or
nothing
reason
for increased cost of
living,,
Treasury of the United States, the
resulting in demand for increased
wages; if all these political fi¬
propriations for this year and creased wages to meet the cost of loan and adds it to
the money nancial, business, arid social con¬
iyy
those contemplated for the next living,.
'•/'; ■ ' y';'
I said that the money
sequences flow from this;largefiscal year ought to be adequate
supply supply.;./:^,;^y
So, when the United
States supply of money, I think we may
to cover the reasonable require¬ a year ago was a little larger
ments which have emerged out of than it is now. That is due to the Treasury sold its paper to the very well ask ourselves: How is it
we
have already made in the ap¬
the recent crisis.
sure
from
wage
earners
for in¬
fact that bank deposits have come
down. The amount of currency in
circulation is about the
same or a
little, larger than it was last year.
To be specific, at the end of
1945/
total bank deposits in this country
148 billion dollars. Twenty-
were
four billion of that was the Treas¬
ury's own deposits, which you
important principle
bankers call by the poetic name
to recognize is that' one of the
of "war loan accounts." At the
greatest responsibilities of our
end of 1946, total bank deposits
world leadership is that we our¬
were 140 billion
dollars/ but only
selves maintain financial stability
2 V2 to 3 billion of that was Treas¬
in this country, Serious instability
here would do more to wreck the ury deposits. \<
Mr. Eccles, head of the Federal
economy of the world than we
could ever offset by any possible Reserve Board, when he recently
grants in aid. We cannot have announced a change in margins
stock
financial stability unless we deal on
transactions,
stated,
with our ^budget and get it under among other things, that the in¬
control.
This means that to the flationary peak had been passed.
other
The
extent
we
must employ our finan¬
cial powers
But I ask you to direct your at¬
a moment to the fact
abroad, we must deny
ourselves something else at home
in terms of government spending.
I am sure each of you has a little
list of government projects, none
of which would be missed, except
tention for
by
of
the
bureaucrats
or
pressure
groups which have their
the trough.
r f" i
feet,in
the money
it
is
supply, and the
total
amount
148
deposits had decreased
billion dollars to 140
of the debt, it
and
depositors
other
may
ask
me:
How
does it happen that in a year in
the Treasury was paying
Which
off 20 billion dollars of the public
It was for this reason that the
promDtly take the burden off the
American taxpayer by restoring Treasury during the war adopted
a
going German economy,
a
policy of selling its bonds as
Too
little attention has thus far been widely as possible to individuals
paid to his recommendations in and corporate investors. Even be¬
this respect, which are even more fore the war the
sound policy
that question
along.
First, let
get this big
as
I go
y
me
ask: How did
.
went
the
and in
1929, too" big for the time, and!
bought Government bonds, not yet it was only 57 billion dollars,
just a few, but a lot. When the it had been run up to that point
banks bought those Government
by
individual A and
corporate
bonds on the market, they paid
borrowing, largely for specula¬
for
them
on
with
v
market
expanded
bank
tion
in
security /markets.
the
crasp came in
And.
credit, and they increased the
bank deposits, and thereby they
increased the money supply of
the. country.
*•■;//;/<;/; V';/ y
when
dollars in 1939 to 170 billion dol¬
pushed Up the money supply to*
57 billion dollars, it came down
those
markets, the mbhey supply came
down because the loans which had
created it were called, foreclosed,
That is the way we got this washed up, and after a year of
huge money supply, expanded liquidation of those corporate and
from somewhere around 60 billion individual
loans
which
had
lars at the end of last. year. Every
the
banks
either
bought
time
Government
bonds
from
the
Now, if
somewhere
But, the
way it came down was by fore¬
closure, and call of the loans that
had built it up. You can't call the
United States Government, and.
you can't foreclose the loans of
quickly;;tO
very
around 42 billion dollars.
you don't believe that,
me
a
letter; I am really
anxious to discover any error the; United: .States Government,,
in the facts and the thinking that which, in the banks this time, are
I am presenting to you
responsible for this huge increase
today.
write
very
in
Bank Purchases of GovernVy ment
The
total
Bonds. ;•
purchases
.
by
our
money
■
supply.
may
be said
gold standard- It wae
Whatever
'
about the
else
the
a check; it was a
measure/ espe¬
Government,bonds since cially for those of us who' tried to
determine, the problems ' of the
long-term. When we went off the
gold standard, we certainly de¬
true, then the banks, by veloped a need for more astute^
the Treasury refused to permit the
banks to subscribe to its issues
has exceeded 50 billion dollars. If
that is
answer
down by more than 8 bil¬
dollars? I hope to suggest an
to
prevented from
banks of
Money Supply Not Reduced
you
or
increasing?
,
banks
y
Now,
to be reduced
further
paper,
than
who will hold the
debt securely out of the current
stream of spending.
the
$ ;K
increased bank de¬
Means of Decreasing / ^
posits and added to the money
t,
supply of the country the amounts
M Money Supply
U
of that increase, When the Treas¬
Well, there are only two ways
ury prohibited subscriptions by to decrease; it.
You remember
the banks to its offerings, the
when we had a big money Supply
that
over
banks,
of
amount
banks during the war, the banks,
to the extent that they bought
than the Treasury of the United
States had increased from 124 bil¬
lion dollars to 137 billion dollars.
money
supply is the inflationary factor.
If money exceeds goods it tends
to force prices up. So in addition
to making every effort to reduce
the
bank
from
dividual,
held by the
banks, for in that form it adds to
when
the
Treasury or bought them on the
Treasury were
market from non-banking
sellers,
only 124 billion dollars, and at
they increased the money supply.
the end of 1946, though the total
billion dollars, the bank deposits
The national debt is most dan¬
creates
the United States
under the control of corporate, in¬
Distribute the Debt
gerous
that, at the end of 1945, bank de¬
posits in the hands of others than
bank
lion
for a
Hornet
performed ; marvelously
few months, arid then, went
tom of, the Pacific.: It still roams
around this country representing
in the way of business
other fields of activity have used
activity, : production,
Or
other
for a long time frequently confuse human.
relationships. It is, as the
and disturb me. I have never been
President of the Southern Cali¬
able to manufacture a vocabulary
fornia Edison Company shid the
of my own, so, I .have to do my
other day, precisely like counter¬
best to try to understand these
feit money; that is, something a*
terms that other people have de¬
gang might produce-and get away
veloped and sometimes have not with for a time. It has no relation
put into the dictionary where the to production.
y /y,i
layman can find out What they
That is the way we got this
mean.
y;/ /.>•>■
/
big money supply. If I am rights
Expansion of bank credit — that it is more than We need; if
that doesn't mean what I thought
I am right, that it is the most im¬
it meant some years ago. I thought
portant contribution to an infla¬
bank credit was your right to go
tionary trend, that
it presses
to a banker and secure a loan.
prices upward, necessarily be¬
Oh, no. Bank credit now means cause of the decreasing purchas¬
the loan that you have received,
ing value of the increasing num¬
and when you receive it—whether
ber of dollars, and that it is the
use,
into the hands of investors other
method for doing so that
and
will
rather
?
that my associates and fellows in
things through there,
practical
American
our
page 1374)
bonds
Hoover's program lays
bear
to
the
bankers and the financial experts
come
are
easier
Money
commit*
We
the- debt
community as part of the money
supply of the country. You know
to
"Too Much
words, the provisions in terms
other
dynamic energy of Our economic
heritage; of Freedom.
t
v
In
carrier, it pushed those newlycreated bank deposits out into the
debt, the money supply did not their
ing worked out.
;
in
use
tionary money supply that goes
with a floating debt. Beyond this
we must take every possible step
to preserve and. to increase the
is sound fiscal policy to distribute
as much as possible of the debt
where the future of
<r--
for
average money supply, bank
deposits and currency in circula¬
the budget for tion, was around 60 billion dollars.
the fiscal year '48 includes $3%
Effect of Money Over-Supply
billion of foreign aid. As I under¬
stand
it, the recommendations
Now, I ask you whether it is
made by President Hoover call reasonable to expect that a
money
for no more money than is al¬ supply swollen from 60 billion
ready provided in the budget; the dollars to 170 billion dollars will
principal difference being that or will not tend to make each one
Mr. Hoover would provide this of those dollars worth a little less
money as loans rather than gifts, than it used to be worth; will or
and would set up the economic will
not
bring
about
higher
machine in such a way that it prices in terms of dollars for the
would shortly become self-sup¬ things we
buy and sell; will or
will not increase the cost of living
porting;-"'; r/:;'r
:'y//:
As promptly as
possible, however, foreign coun¬
nitely
what
the v responsibility tries ought to get their affairs in
means.:
y y ; -f/ ■.■ :y.
order, so that after the next har¬
President Truman has just made vest they can feed themselves, and
asm address in Mexico, in which he
so that they can become worthy
emphasizes our historic policy of borrowers at the World Bank or
mon-interference with sovereign the Export-Import Bank.
'■
cushion
a
been provided, for,
We do want to know more defi¬
t!'
also
Bank.
excellent
in
of
has that many more shareholders.
These bonds in many hands are
The World
Bank; with its new management,
al
interest which should prove
an
value in the support of sound fi¬
nancial policies. The United States
billion dollars for the Internation¬
debt retirement that it threatens
K.'
great
It also gave these people a share
in the affairs of their government,
we
purchases
on
50
of
Government
the market, have added
billion
dollars to the
money supply, which I say, gently
and with something of a question
mark after my
skillful, patriotic, farseeing man¬
agement of
ever
we
were
our
currency
than we
that is what
promised by those who
had before, and
were
so
enthusiastic about
aban¬
declaration, is too doning the gold standard. It would
billion dollars at the end of 1945,
and 168 billiUn dollars at the end
of 1946? We got it through the
large. It is not only too large, but be ^management of currency, and
it,is out'of all relation to produc¬ then,
later, we were introduced
tion and business activity in the
to
the term,. "management °£
community. And why? Because so debt." But the trouble is that
expansion of bank credit.
much
money
supply of 176
of
that
Sometimes, these terms that the created, bears
money
no
supply,
so
relation .to any
there
is
currency.
no
manage^ht of the
The management'
that
,,
*165'^Number
Volume
>
4576
in ~ the • past/ proceeding
the Board of Governors of
had
we
from
Federal Reserve system was
supposed to , be independent of
the
.
.
■
•
•,•
...
r
.
1
,
[
* I
t
ical
atmospheres
very difficult to
judicial side was — a
and independent and
the
patriotic and far-seeing group, re¬
moved from the passions and the
responsibilities of the political
situations of the day. Now the
Federal Reserve system has fallen
under the control which is purely
that of the Treasury administra¬
tion of the financial side of the
Government of the day.
Low Interest Rates
in the life insurance busi¬
ness,
and T am leaving a few
strings out here that I hope to
Mie together if you will give me a
^few more moments — we, in the
Hife insurance business, are not
^concerned over ,our ability to meet
dhe requirements of our contracts,
:tthat is, to pay the number of
v
i We,
for
^dollars called
by those
conr
itracts. We are not concerned
i:
over
ithe low interest rates which make
difficult-for
fit
•
to invest
us
our
.
[policyholders' money in securities
:
>'of quality..-.'
/;
I say we are
not concerned over
low interest rates, except as
the
they reduce
come
investment- in¬
our
our4
••
.
•
Many of you gentlemen have
Ibought life insurance for a parti¬
jsome
purpose
to
be
realized
time in the future,
those
of
you
who
are
,
take that 10 billion dollars to
one
Federal
a
and
get the
as a re¬
so
prosaic
the payment of debt.
as
But, by methods which will not
recur, we have succeeded in
pay¬
ing off around 20 to 23 billion dol¬
lars of
debt, since the
at
Reserve,
off,
held
was
end of 1945.
by the banks, that
payment
not only reduced the
debt, but it reduced the
money
supply. A very large part of the
debt
paid off was held by the
banks, but the trouble with our
so
operations in 1946 is
that, while
reduced the debt and
paid off
amount of Government
we
a
large
banks, the banks
forward, replenishing their
portfolios by the buying of other
Government
bonds,
other
cor¬
porate bonds, and the making of
corporate and
individual loans,
all of which, added to the
money
supply,
or
rather
prevented its
with the result
being
reduced,
that, though the debt
23.
billions,
the
came
down
supply
came
down only 8
billions, and
the money supply in the hands of
the people, as distinguished from
the Treasury, went up 13 billion
%
money
dollars.
Do you suppose that when those
able public representatives
very
and experts in financial matters
evolved arid drafted the Federal
Reserve legislation of 1913, mak¬
ing provision,
expansion of
as
at
they did, for the
money supply
our
and for
younger,
hope, and we hope, that it
/will be a long time in the future.
Well, if this dollar which so much
requires management now, and
which I say lacks management,
you
they envisioned
in,
of purchasing
means
least 50 billion dollamof
Here again I
these figures.
bonds
new
the money supply.
ask
you
.{• /-'.
;
to
check
ft/ ■■■;/,
;•>
Sproul of the New York
Reserve Bank, talking to the New
the Federal Reserve had lost
trol
any;
such
expan¬
sion *of the money supply as that
which has taken place during the
last few years, or the methods
which it has taken place?
by
It; is all right to increase your
when a responsible
borrower goes to a responsible
banker and is appraised as worth
the loan he asks for. It is all right,
then, to give him an account,
over
He
said,
indicated
"We
are
our
that
own
the
Reserve Bankers
longer
no
house," and
hands
were
of
a
»♦
few.
result
It must be done
as
of
general policy.
The
suggestion that I have to make is
fthat
this
matter
is
of
much
so
Well
now,
if
authorities
the
are
the
it, about the
don't
:o
for
that
the
time
has
come
re-examination of the whole
a
matter of Reserve
administration
Banking, of the
of
the
Reserve
3oard,
■
of its relationship to the
Reserve Banks, and their relation¬
ship to the member banks, by a
monetary
commission
/
specific
committee
Congress,
which
tied.
Federal
.
ways and the means'
dangers of increasing it,
then surely you have an interest,
in doing something about it. If yosi
mportance to
some
created
similar
evolved
or
to
the
by
the
tion, what I want to point out is
that, so far as I understand the
situation, it is of their own mak¬
ing. They are in that position be¬
has
supporting the Government bond
market, and they do not choose to
change their own policy.
Until
they are prepared to say that they
ing
will not
permit the member banks
to come * and' dump any paper
they happen to have into the Fed¬
Committee!
been
for three
before
days.
some
Mi*.
that
Eccles
Committee
He has been mak¬
important
very
what
I
said
have
today, I wish you would per¬
sonally and institutionally bring
to my attention the error of my
figures or my logic or my deduc¬
tions.
V/v;!
- ■ ft
■'
is true, there Is
need for action. A monetary sys¬
If
what
tem
I
say
which does not involve
con¬
the
in the last few days in the House
of
Representatives before their
Banking
believe
here
version
The necessity for some such ac¬
tion is emphasized by the hearings
they adopted a policy dur¬
ing the war of maintaining and
cause
the
one
Mr. Eccles' Proposals
Re¬
in that posi¬
and
Re¬
Federal
System in 1913. -Ki-V^r
serve
serve
I have said to you today about the
volume
of
the
money
supply,
about the difficulties of reducing
you and to me, and
all the citizens of this
country
now
and for a long time in the
:
Responsibility of Federal Reserve
state¬
ments, all of which wind up with
persistence
in
maintaining
the
low interest rate—even though he
knows and says, that the
only
of
into something
people have absolute con¬
fidence in for the future requires
management — competent,
in¬
dependent, patriotic management
and it is not getting it.
paper
President
Sproul
right: Ex¬
loans and of
was
pansion
of bank
credit and,
bank
amount
this
the
of
country
future
of
therefore, the .
supply in '
money
and,
is
because
of
is
under ik>
And that
terest rate is to keep on piling up
Board
Reserve
a
government ob¬
whether short-term
policy that
ligation —
way you can maintain the low in¬
.
the
therefore,
dollar
the
control at this moment.
any
long-term
government
paper
or
government
bonds
held
the
by
can
be dumped in the
newly made money through bank banks
holdings of government or other Federal Reserve at the choice of
other
bonds
that
increase
our
bonds.
His whole
planning or the banks and the reserves which
money supply; until the Federal policy for the future contemplates
are thereby obtained can be used
Reserve authorities are prepared not getting government obliga¬
to change their existing policy; tions 'Out of the banks, which by the banks in their discretion
made by themselves, to that effect; would tend to reduce the money and are being used to further in¬
certainly they are not in control supply to something more normal, crease the money supply.
of the expansion of bank credit. but keeping them in the banks
I am sorry I did get into some¬
That's just what the banks have and making them more attractive
what of what I call a speech, am!
'
been doing, aiLthe banks. They've to the banks.
I have gone
been doing it because the Federal
on
longer than I
He suggests that: it might be
Reserve policy permits them to do wise
to increase the interest rats meant to. I am very seriously con¬
it and because it enables them to on short-term
governments. The cerned about this whole matter.
increase their earnings.
short-term governments are held
If this great
institution, which
eral Reserve and get the proceeds
thereof to make loans or to buy
I
:
money supply
con¬
expansion of bank credit.
masters in
or
'3
::uture,
and! adding
Mr.
debt held in the
went
it
turn
feat debt, paid Jersey bankers the other day said,
referring to this very subject, that
To the extent that
.
cular
,
the
the dollar in the future. •?. when the needs of business called
for more money—^do you suppose
;
•
'
,
can
make
surplus
and increase the net cost "of
service; to
policyholders.
They are not a matter of concern,
if I may make; it Cleat,> to the
corporate entity and/its manage¬
ment. What - we ' are
concerned
"about is the purchasing value of
our"
■
"it
that
and income
up, and even if
you do and get a
competent
Concern Over
'
,
keep expenditures
down
political considerations, was sup¬ sult, it is very difficult to keep that
loans, or new
posed to be as our Supreme Court surplus and apply it to anything that amount to
on
,'r
>1
,
'THE COMMERCIAL & FINANCIAL CHRONICLE
don't
want
to
appear
to
be
—
the
by
banks or the
Further, he points
member
critical of my banker friends,
Reserve banks.
have
out that with the maturities dur¬
banking responsibilities
my¬
has
served
state
and
nation for the last 175 years,
isnt
city,
our
but
I
also
have
huge ing the next five years of higher prompted to do something about
responsibilities for deposits in coupon bonds, it will be possible it, then I will say that the probbanking institutions. The banks to decrease the net cost to the
lem of stirring up action some¬
ing value, you had better look to
have been taking their short-term government of its interest pay¬
created
bank
account.
He be¬
your policies and call in your life
governments to the Federal Re¬ ments, even though the rate on where else becomes pretty diffi¬
comes responsible, and when he
insurance agents and see whether
\
serve, and without question, under the certificates, which can be used cult.
//
pays it off, that addition to the
you have • enough life insurance.
the established policy of the Fed¬ to refinance those maturities is
money supply is eliminated. But
To
increased.
continues to decrease in purchas¬
self,
•
_
accomplish at that point in the
future when your purpose arrives,
for which you bought your
that
insurance
•and
I
our
originally, that is
concern.
have
given'
your
-\t
.
most
of my life
business, and
I have nothing to
regret in so far
."as the
management of my instituf ion—my; contributiqmto the busi
: t
^ which
we
promise
to pay and
readily pay, do not
Jbuy the things that we promised,
which
-
of
framers
when
bank
a
the
Federal
Re¬
•or
we
.
can
urged upon the policyholder as
wis reason for
buying insurance.
bonds,
them,
Reserve
Board
they get the
that
its earnings, it could go out on
market
eral
proceeds of what they take, which
wanted to increase they can go out and use for new
loans or new purchases of bonds,
contemplated
never
serve
and
buy
the
Government
paying a.premium for
or buy Michigan bonus or
highway bonds,- and create the
means Of paying for them,' there¬
by adding to the money supply , of
ness as
a
whole—goes. My con¬ the country* That's what happens;
cern is with the
possibility that all that's what has happened during
my effort will be in vain if " it 1946.
That's what is happening
should develop that these dollars
now.
to this life insurance
i
the
even
both of which increase the money
supply.
Look at the figures.
Every Fri¬
j
\
'
.
of
some
nanced
maturities
those
with
refi¬
bonds
with an increased coupon, which
would have the effect of drawing
long-term
those bonds out of the banks and
in our New York papers,
will find a report of the Fed- putting/ them in the hands of
'Reserye * system, There/ are •lcuigMtetttf investors. But, s^ys Mr/
outstanding 17 billions of Treas¬ Eccles, the policy will be to main¬
tain the low interest rate gener¬
ury bills; 15 billions of them are
ally, even if it results in bringing
in
the
Federal Reserve
banks
How did they get there?
They the long interest rate down*
H. A. McDonald Named
To SEC Post
Harry A. McDonald, McDonald,
& Co., Detroit, Mich, has
been nominated by President TrtrMoore
day,
you
eral
passed through the member banks.
When the member banks bought
supply too large?
Treasury bills
from the
Is it inflationary? Are we to go those
on
drifting to a higher money Treasury, they added the 17 bil¬
lion dollars to the money supply
supply due to the demands that
When and if they take those bil¬
we
are. very shortly to receive
What of Future?
Is the money
~;J My concern, then, ;over the inMerest, rate; over' the' money sup¬ from the states and municipalities lions to the Federal Reserve—anc
ply? is that the methods by which for the sale of their bond issues, they have already taken 15 billion
> v they
dollars of them to the Federa'
are. both maintained, affect
from corporations, from business
Reserve—and get their value in
/fee future purchasing value of the expansion, from individuals?
•dollar.
It .is the bigness of the
new
reserves
and use those re¬
Are we to go on increasing this
?
serves to buy other higher coupon
money supply that forces prices
money supply or whose job is it
; wp and that forces interest rates
they
to do something about it? I know governments' for earnings,
: «down,
add to the money supply again to
and it is the maintenance that a
good banker will tell you
the extent that they make; those
that when an application for a
'
,v
Of course, we in the life insur¬
ance
business would like to see
i°w interest rate, especially
We in the life insurance
ness
■
busi¬
don't ask the Treasury of the
United States to issue any bonds
in order that
we
may
have some¬
to invest in. What we do
say is that we will not invest the
funds for which we are responsi¬
thing
unless
get a satisfactory
satisfactory rate,
and that includes the issues of the
ble
we
investment
United
at
States
a
Terasury.
We
are
Harry A. McDonald
r
not
asking for the favor of some¬
thing in which to invest. We are
asking for a financial policy that
will protect the future value of
!
obligations of the Govern¬ loan is made to him, he appraises purchases. In other words, those the dollar.
itself, that is at the heart of the borrower and he appraises its billions have been through the
;•
:
Conclusion
; ,'r
Whatever financial policy there is
mill once; and if they are dumped
effect on the bank's liquidity; but
The only fiscal policies that will
m the
^administration of the Fed- does he appraise the effect on the in the Federal Reserve and the
do that are a balanced budget
feral Reserve
.Banking System to- general public welfare of that ad¬ proceeds of the dumping used to
with a surplus that will pay off
slay. j;■/... vi.v:y;v". - \x" dition to the money supply?
buy an equal r amount of other
a considerable amount of the debt
A Government Surplus
I
think
the
average
banker government bonds, as they have
in the banks or a refinancing of
as Corrective
would tell you, no, that* is not, been, or used to make loans, as
that bank-held debt with a longer
Hbwi ;dbi we get this big money his job; that is the job of the Fed¬ they have been, they again add to
,the money supply. Thus, for the term bond and a higher coupon
supply, down this time? Only two eral Reserve officials. The Fed¬
which will put it in the hands
Reserve
officials
used to original 17 billion dollars of bank
ways; as I said. One is not merely eral
m
15 of permanent investors and re¬
Pay off debt, but to get it out perform that job, but today, the purchases of , Treasury bills,
!
billion of which are now in the move its inflationary effects.
y of the » banks
and keep it out of only thing the Federal Reserve
:
The short-term view is the poli¬
the'banks: Now, there are only does is to maintain low interest Federal Reserve banks, we have
tical view. The long-term view
an addition to the money supply
**v
twouways in which you can do rates.
should be the business view. Un¬
:
of 32 billion dollars.
How are we to get someone to
I .a^ * One is by not only main¬
less we in the business world are
Now, how long are we going to
taining a: balanced budget, but by tackle the job of determining how
ready to take some responsibility
getting a surplus of income over much money is enough and of go on like that? Why doesn't the in this
matter,' unless we believe
Federal Reserve Board, establish
-Expenditures and then seeing to decreasing the money supply we
there is a problem here and a
a policy which will get control of
lt mat
that surplus is used to pay now have, and of preventing it
danger, how can we- expect our
this expansion of bank credit?
^ off Government debt.;//• from rising higher?
political friends to have the cour¬
I know most of the responsible
The banks still hold a billion or
^ ft is hard to get that surplus. I
age to do anything serious about
have seen-enough public admin¬ so of thirty-day Treasury bills and bankers would like to see some¬
it?
•••'
istration to know that our public .about ten billions of Treasury thing of the kind done. But it's
L
.If you believe the things that
representatives operate In polit- certificates of indebtedness. They something that can't be done by
for the
>
.
.
ment
tov the
man
Ex¬
and
Securities
change Commission, to fill the
post held by the late Robert E.
term of
1951. He
member of the Detroit Stock f
Healy.
Mr.
McDonald's
office will expire June 5,
is
a
Exchange.
•
~
-
■
.
Truslow Honored
Francis
Adams Truslow,
change,
was
the
Presi¬
Curb Ex¬
dent of the New York
guest of honor
'
.
.
March
'
'
board
of
York
Stock
.
.
a
dinner
governors
of
the
Exchange
and
New
at¬
the board of gov¬
of the New York Curb Ex¬
ernors
change. John A. Coleman, Chair¬
of the board of the New York
man
Stock
Emil
Exchange, presided,
Schram, President of
Exchange,
Edward
Chairman of the
Werle,
and Col. Wil¬
board of governors,
liam A. Lockwood,
counsel, spoke.
C.
and
that
Curb Exchanges-
Curb Exchange
-
V
Louis
at
tended also by
^
.
at
Sherry's which was given by the
'
-
7
r
kf.
'
1414
THE COMMERCIAL & FINANCIAL
CHRONICLE
Outlook for Automobile Industry
(Continued from page 1316)
Normally 36% of all tires sold are
,
sold
to
manufacturers of auto¬
mobiles to put on new cars. That
is not the ratio at
present for ob¬
vious
but
reasons,
even
now
mobiles has not
gone
enough
to choke off
demand, I just want
to remind you that
against the 55
«
that if
up
V
-r
.
J
:
car
or
60% increase in the automobiles
since 1941, we have,
according to
or
he official index which
ac¬
do have
we
.
»i
•ill
1
of
for this year is the
scarcity of certain essential mate¬
rials. As you all know, we have
probably
reason
cording to the latest figures, 21% understates the
situation, a 46% been held back all during 1946
of the tires are
going onto new increase in what they call the cost and are still
being held back by
cars
and
the
of living or used to call
old
the cost
relationship
shortages in copper, lead, certain
should
be
reestablishied
before of living, the retail prices of things kinds of
textiles, and especially
very long.
.i;-., -i • 1.f.v--.v.7 bought by wage-earners. We have at the
yy Take the matter of
steel. There
are various
estimates of the pro¬
portion of the
output of steel that
goes to the
automobile industry,
but roughly
speaking, if
between 10 and
16%,
probably hit it.7.7:;y-
There
..•
so
other
are
industries not
obviously related.
The trans¬
portation of automobiles
by rail¬
road
is
an
important
Take
the
ployed.
matter
About
is
im¬
an
are
of
2V2%
in the
in the
automobile in¬
were
any reason
that
might
0
analogy of previous postwar
in the first half of this
than it was in the last quar-
year
of last year. :y
the middle
er
After
hings
should
of .the
pick
year
but it is
general feeling that we will
he
not
be
able
to
up
turn
out—the in¬
dustry as a whole—more than
4,000,000 passenger cars this year
and, as a matter of fact, 3,500,000
is just as popular a
figure as four.
Now you
and I do not think any of the
pro¬
duction
men
in
the
industry
1945, the number of
was
24,700,000. I
cars
or
do not
to get you confused
with
registrations because the
figures
for registrations are
higher. I shall
talk
The demand for
automobiles at
the present
time is
perfectly ex¬
only about
v
know,
you
in,
cars
good many
a
cars
are
anything
have
you
overall maximum of
would think
5,000,000,
than
more
hat
was possible in 1947.
When it comes to
that
As
use.
add to that 1,000,000
can
1,500,000 trucks and
an
in
want
Extraordinary;
be
1948, we hope
material shortages will
the
greatly
alleviated
and
we
registered, even simultaneously, in •enow that the bottlenecks in
traordinary. Before going into
t\ie more than one state for various plants will be taken care
details of it, the
of,
nature of it and reasons.
That is
the
particularly true so it is possible that in 1948
reasons, I just want to
of trucks that
one
point which has received
a good
deal of attention
lately, and
that is the question
as to whether
that demand
may not be choked
off by
high prices. You hear so
amount
twice
But
car
month
great
it
as
is
was
incidentally, only
out
now
of five
is
anyhow, and
mean
sold
very much.
of allowance
one
course
hard
a
no
that
thing to measure, be¬
cause
the used car is
declining in
value all the time
and you have a
sort of a
sliding base from which
to measure
the
increase, but we
know that a good
many five arid
six year old
cars have been
sold
within the last
year at a
great
as
price
was
them, and
many
originally paid
know
we
that
a
as
for
good
nominally
latest model
a
used cars of the
that have been
run
couple of weeks are sold
for $200
$300 or maybe more
than the
authorized price for the
new
car,—
a difference
between the
or
market
was
r
a
the
on
black
cars and
market
until
months ago in the
used
And that the
present
thongh the market in
cannot be
considered
a
few
cars.
cars
for reasons of
public policy
if not for
law, are keeping down
price of the new
cars below
what they could
get for them
whereas there is no
such restric
tion on the
buyers of the new
the
cars
who
turn
around
them again.
and
Auto
Prices
of
in
have
1945
cars,
of
24.7
24.7
That
use.
mil¬
se
^
new
act, first
that
%, because
rate has been
very
age age of the cars.
being carried
high aver¬
They were just
until they could
be replaced and then
were
scrap¬
ped, and so, although there have
been since that
count was taken
perhaps
on
two
oassenger
and
cars
half
a
million
produced, it is very
and
000,000 and also mentioned that
the high prices are not
having any
particular
effect, but there is
another
The
not
is
thing
to
bear
a
they must
situation ;will
not
of
continue
new
car
after
like
have
we
12,000,000
cars
this
and
in
1941
In other
ably
the
number
words,
we are
was
prob¬
million to a million and a
half below what we
were in 1941
Since then the national
income
even after
.allowing for increased
taxes and after
allowing for the
reduced purchasing
a
power
income
might
could
has
national
de¬
increase
in the number of
cars will be
the
slow.
population
gone
naturally
afford
think
would
present
20%
that
not
be
20%.
You
think that we
up
more
that
and
cars
year
at
the
time.
Six Million
More
In other
words, we
have about six million
than we
Cars
ought
more
cars
actually have.
tion
is, how long
get
them?
You
and
There is
years
production.
s
made
^
if
up
new
we
cars
next.- That
in
would
we
get right back ed
normal and the abnormal
demand
that exists because of the
fact* tha
the cars are
falling apart wotild
disappear.
Just
when
that
nobody knows.
solution
of
will
happen
After all, the dis¬
a: car
is
not
an
im
mediate event.
It can be
delayed
by appropriate measures and
how
anxious
old bus
people are to keep the
running is partly a func¬
their
of
of
going
assumptions
to
chasing
and
is
as
of
normal
the
make
can
to what is
happen to general
pur
If you think there
power.
sometimes
six-million-car
income
replacing it. You
going to be
this year or
statements made by
people who
say that we are going to
have
as the
population grows.
demand after that
point
will be almost
entirely a replacedemand.
N
' *
>
obviously
be
Increasing Cars Per Capita
If Vyou
studythe
growth
that 33,000,000 divided
by the
number of years that the
average
car
lives.
I have
seen
a
good
many statements made to the ef¬
>
of
the
beginning down
to
That
the
a
depression either
next, why, the ab
insatiable
demand
for
automobiles of the sort that can
not be deterred
by high prices
will come to and
end before the
end of next year.
by /year, you will
find that up to«?1929 it
was
in¬
creasing rather rapidly according
the rate that
you* would expect
a normal
cumulative curve.
have a chart here that I can
hold
0
from
and you
going
r
can
get the idea
^
•
was
models, it has certainly been over,
eleven years.
"
«
We do not know whether.
it is
(in¬
dicating).
going to increase in the future at
There is the actual
number of the same rate. Of course, the cars
passenger
cars
sons
and
the
you
see
as
normal
smooth
very
they could be made
twelve
rnd
"ines; went
ning
;ogether.
probability
1929, the two
very
closely
alonf
After "that
hundred
cars
per
and
there
the
or more
the
on
so
to last
seen
streets
aver-
,
cars run¬
that
.
that
eleven,
years on the
You have all
age.
the
cumulative
You see in
curve.
made well enough now
are
per hundred per¬
dashed line which
symmetrical, which represents
20,
are
old; but against that, of
course; there is the question oti,
years
v
whether
actual
run
persons fell off
the
public will ;■ want ton
they can
old car, whether
an
afford to scrap it and
replace .it»
very ir¬
regular line since!" then. Even in with a new bne, Tory whether the
1941 it did not
manufacturers a can
get back to the
change; thecurve.
models so that it is; no
has
been
a
longer
either
to
convenient
-
run an
fashionable
or
new
cars
old one," or whether the
can
be made so cheap
that it is not worthwhile to
run an
old onC.v
7'' f'vaa 77 •: y .-yyy' 77
What I am; getting; at lis that as
far as the- replacement: demand is
concerned, at: thp: present rate of
life, that would
average
3,000,000
we
pre more
diately effective.:
passenger
similar
tion
the
one
of
basef
ceiling
th£
is
the
as¬
cannot
run
on 7
car
driver,|\vill
same
A
on the popula¬
driving ^age,
the
was
to1$d population.
sumption that
without a
most
the
particular! calculation
on
give
perhaps
a
you
but
-answer,
year
al¬
the
or
so
earlier.
Then there is another
ap¬
proach and that is the number
of
people who can5; afford or think
they can afford new cars as dis¬
tinguished from | those Awho can
afford any kind of
If you will
made
a
car.
Labor Statistics
automobile
st^id
other govern¬
departments^ with regard to
the number of
in
some¬
.y.
cerned, is that
this, as far as;,
industry is con¬
we
headed for
are
probably, two
years, possibly three
of capacity operations. After
that,
no matter how hard we
try, we,
not going
are
to keep up at that
high rate." We
back to
going to drop *
are
level of perhaps 3,000,domestic passenger car sales.
We. can add to that, of course,
a
000
any allowance you wish to make
for exports.7 That is an entirely
different problem not affected by
such
things
ceilings
as
distribution
.
tak^the studies that
by pthe {Bureau
of
is
Jt
on
car v population
The net result of
If
This
based
imme¬
only
yyear
that the total limit
assume
the
mean
passenger cars a
income.J There fee otHer; qeilirigs
the next 10 or 15 years
of a somewhat
pifferent nature thing like'33,000,000.;
which I think
of
country, and
you can
of course,
still have
a
what
you can
so
would
seem
to
year
this
in
add to that,
trucks, and
good
very
by the
or
income
like
the
in
us
car£ owned by peo¬
ple in each income class and the
study of the National Resources
the most optimistic
spokesmen
the industry have been
Planning
ing*!
30's, but nothing like what
of
of
proclaim¬
Board |hat was made
back in 1936
along the same lines,
you can make the
assumption that
by 1941 the proportion of new
car
owners in each
income class had
reached its limit.
After
granted that there, is
had
a
all,
been
cars
very well known arid
admired for 40 years and it
is not
unreasonable to suppose
1941 everyone with
an
that
by
income of
$10,000
sible
or over
who had
for
reason
any pos¬
Ranting
a
new
car, had got one, and the
same as¬
sumption is probably true if
you
go down to
In other
a
$5,0^0 income,
words, *you
the increase in
from now on
question
move
classes
If you assume
there is not
to be any
serious
life is
'
true back in the
mid¬
dle Twenties. It has not
been true
since then. The
average life of a
passenger car has been
increasing
and beginning with 1933
or 1934
present,-year
up
car
*,
from
ment
The ques
will it take to
see
little bit
has
been .increasing,
and
hirdly and most important of
all, that automobiles were still &
probably
make
it
possible
to
scrap 6,000,000 of these old ones
various
to
\ceilings are hot ab¬
They change a
rigid.
But the
come
were
cost of
Need
be
wc
tion
calculation
misleading
very
These
solutely
is
increasing,and, secondly and more
'mportan^, that ^tjhe national .in¬
would
of the
disposable
could
seven
In 1941
cars over seven
around 25 y2 million.
That
so
the
something
half years old.
a
or
At
over
half years old.
a
only had 5,600,000
and
year
production.
present time
and
a
8,500,000
Back
the exist
nig cars are so old that
be replaced.
That
produced
26.6.
mind.
why high prices are
deterrent at the present time
largely the fact that
6,000,000 difference, a
likely
in
reason
likely that over half of them were
offset by cars
scrapped, so the net
cars
in use now is
very
I think it
would
between 1951
and
1953—after that point the
sometime
a
based
the
reason
on
demand,
cars
•;•-.
as,
become:
effective—and
v
num¬
*
\ r
Well, I do not thin
j
tilJUir
saying that the price of
auto- that is true
and I feel
very certain
^
a
account of the
on
several
n
we
mar
ket, nevertheless the
manufactur
ers,
end
were
the scrappage
high
I
time, al
used
black
a
what
the
b
cars.
that,
passenger
legitimate dollar, the real
new
engaged in in-
ber may not be much
greater now.
1 doubt if it is over
25
-Also in the
for the used
the prices, of
used cars have
gone
up as much
or
more
than the
prices of new cars. Of
is
million
lions that
terms
turned in, it is
obvious that
cars
Allowing for
figure at the
perhaps
on
are
han the number of
in 1941. 7
about
for
,
that
that does
so
so
matter
-
per
as
replacement
mand
The
am
be
In the past we have had besides
the
erstate commerce and it
also
much said about the
high price of
automobiles, and it is true that as
compared with
1941, the average
price is up
perhaps 55 to 60%, and
if you take
into account the re¬
stricted
terms V; of
credit,
the
amount that has to
be paid
by
people who buy on
credit,
cars will be
largein the nature of replacements.
y
V 1
we
That implies that there is
might get an overall output of
such
a
thing as a saturation point based
hap¬ 6,000,000 or so, an^ passenger cars
pens that a good
on :
many states have amounting to five. After
population.5^ Xs, far ;.'as I can
that, as
a rule that a
new car
requires a far as the production is concerned, figure, that particular saturation
new registration even
if the owner we might be able to
point will not become
increase, but
effectively
ias
previously had one1 for ! his by that time we have to consider a fact until around 1954 or 1955.
previous car, and, on • the other
1 (merition t it
hat something is
going to happen
hsimp
band, other states adopt the pp^
the ceiling
o demand.
•' *;•
thaOgust exist on the
posite practice^ so
number of ca¥§^ use aside
that, generally
from
Effect of Prices
the number that
speaking, the number of registramight possibly
ions is two or three
be bought out oLa
million higher
certain annual
J spoke about the backlogs of
take
up
and
also
end of
Present Auto Demand
:
and
higher
other people.
existence
pe
riods.
that
of
-Now l want to go to the
nature
of the demand.
According to the
atest
count, which dated at the
expected tin y general
filled
little bit closer.
a
-
that
bring the ceil,
necks in the plant have not been
the
automobile ^population 7 in
wholly removed yet, the rate of terms of human
population, that fect 1 that v the? average
output will not be very - much is, the number of
ears per
capita, seven years. ' * * * •
Nature of Demand for
Cars
otherwise
been
you will
on
talking about ceilings is
that
whenever the
ceiling does
he demand for
the
other shortages I
mentioned, and
also because a few of the bottle¬
against
General Motors as
long as it was
in existence and
refused to grant
us
increases that they did
grant
to
has
I
work it out
:
Because
for that raise
being neces^was the fact
that
OPA
discriminated
he
of
ing
you reach a
vacuum
you
able to do that, our
Future Replacement
comparatively rfbw product and
Demand;
during the strike did the
market
Md- not
The question then
become
arises: how
not go down very
much,, but we saturated in the sense that not all great will the
replacement de¬
have since been feeling the results
he people who might be reason¬ mand be? If we
say, just to take
of that strike, and for that reason
ably expected tobuy a car with a figure, that the limit
on a
the January and
car
February figures
given income had yet reached population is
33,000,000^ the re¬
were very low.
that stage.
■•>
placement demand will
7
t V-'::
enough
spite of all the
realize that in
some
the
past.;:
If
think of, into 1950, but after
situation where
can
that,
1949
eYtreine hypotheses sumption,
production
as
how much the various makes
tiave gone up. I
suppose you have
all gone into the situation
o
up
cause we were
-
_
confusion also
under most
or
.
sary at the time
business cannot be as
deep as
might have been
expected on the
:
some
use
on
only
the * automobile in¬
dustry is going to be active in the
coming year, it follows that the
been
t/•':y::■;
There is
had to
we
the supplies of steel that we had
hand and for that reason, be¬
present
reason
that
depression
sedan at the
time, sheet steel
iron.. During the coal
pig
strike
few weeks before that for
raising
prices, they were still lower than
he rest of the
industry. The
factory workers alone, the
pro¬
portion of
factory workers in the
industry is about 6%.
Well, you
can see under
those circumstances
that if there
have
and
still, on almost every model,
higher than General
Motors', and
labor em¬ in spite of all the
unfavorable pubof all the
icity that General Motors got a
dustry or something
closely related
to it, and if
you come down to
suppose
wholesale
are
gainfully employed workers
country
the
publicity that Ford got a while ago
the demands for
reducing prices, Ford's prices
also.
use
in
of
source
railroad revenues and
of the
industry for coal
portant
present
increase
tie average
ime. ' •'
you say
somewhere
you will
56%
,
price index which is almost ex¬
actly the same as the increase in
might continue into
cars
1
year, it will not: be this year
next.
77 a;.:;.7;
The
why, buy cars in any larger
high production and high sale than they have in
proportions
the
the
six-million-
a
Thursday, March 13, 1947
will continue
prosperous,
we
into
classes and
recession, that pie in
the
of
that
cars
will be
mainly a
hovfry many
people
of
from
th^ number
-
thejpower
income
th#' higher
not'because
income
the
highel^income
peo-
classes
a';.
Will .There Be Manufacturers'
y! ' y y' yyy Profits? y:,;
Then
the
next
large number of
'
•
question
•
a
is,
market for
that
and
cars
the
capacity . to produce * is for ,a
large number of cars, will there
be any profit in
producing
The answer to
creasing
out
them?
that, of
principally in
labor unions.
gin
y
assume
some
the
If
course, lies
hands; of the
they insist ori in^
wages as fast as the mar¬
of which wages! can1 be
paid increases and
leaving nothing
for
the
stockholders-, why, natu¬
rally the stock will
very
much.'-There
verse
effects
selves
on
which
not
are
be
worth
ad¬
some
the laborers them¬
some
beginning to realize.
of
them
a
•
In the first
place, when the
of the car
goes up,
are
*
price
it did not use
Volume 165 "Number 4576
I
•{'
THE COMMERCIAL
& FINANCIAL
CHRONICLE
1415
difference to the or-' some cases
that can be taken
denary worker in the factory be¬ of profits or
part of it
to /nake any
although he owned
tomobile, he did not own
cause,
He always bought
one.
hand one, and so that
of the
price
the
an
if
au¬
a
new
second¬
a
the
would
car
not
the ordinary worker in an
automobile
factory
i s
making
effect, of
diate
course.
effect
Another
is
if
the
replaced
are
rofits left to the stockholder
that,
If
lot suficient to encourage invest¬
we
ment, there will be a smaller part
plowed back, there
will be less expansion of
in
this
Practically always
loan
is
tied
bear market, is also
pointless
seen bear
markets where it was
possible
to the trader. I have
to make
have
plenty going long. I
also
where
bull markets
seen
going short
the
was
with a most profitable for the time
arge commodity purchase. If
being. It all ends up in a ques¬
country, or an individual tion of
makes
a
up
timing.
loan with the idea of
point )uying a predetermined
f ood amount of supplies, and then
he
price of the supplies
increasing¬
to
International
problem becoming
ly acute,'with daily commod¬ mounts sharply, the loan is
ity price rise.
obviously watered down. Eng-
why,
years,
continues
lower.
to
average every five
that means that
-f the income
he
Says—
i Market
materials
country.
==By WALTER WHYTEs
a
period of years.
that the
average ma¬
be replaced on the
say
chine has
raw or
inished
Whyte
over
are
in cash. They
ever,
call for credits to be
used for
he purchase of either
Markets :fi||§i
Walter
have to
we
of them. These loans
seldom, if
Tomorrow's
plant and equip¬
ment is also made
by labor. It is
not replaced
every year but it is
Jthat
most
In addition to
consider that the
imme¬
an
general round of in¬
all
industry, which is
be taken out
of profits.
enough money so that he can buy
a new
car and a good many of
Well, there is
But
a
in
mediate
time
them do.
more
likely prospect, the im¬
increase in the cost
of
making the car would be some¬
thing like 7% and, of
course, no¬
body would maintain that
that can
increase in
him, At the present
have deterred
out
could.
there is
creases
j'
tx
%
.n
I wish
that
for this
anyway I could be
cific.
There is
week
more
spe¬
enough shilly¬
shallying going around to con¬
fuse you without
my adding
and, for example, has agreed to
With every
passed on
it. But all I can see is more
duction of new concerns
day that passes
into the > cost
o
of the car in the the
buy a predetermined dullness
market gives additional
idustry and, in fact, there may course of five
followed by more re¬
years.
I am just
amount of
je
some
evidence that
grain from us. With action. With
withdrawal, of capital using rough
figures for purposes
that likelihood
something is corn and
'rom the industry by
wheat
the process
illustration.'
making new facing us, I can't
wrong.
Last week we saw
:f letting it wear out without revery well ad¬
lighs, her situation will either vise
prices rise on news of the
Jacement, and that will mean, of
Wages and Car Prices
any new buying. So until
call for new loans or curtailed
John L, Lewis
the market shows better
jurse, a correspondingly smaller
Supreme Court
What it. boils down
per¬
purchases.*
to is this! decision.
lemand for labor.
Rise, however, was
formances the sideline
that a 10%
r '
*
*
wage increase all over
#
posi¬
short-lived and followed
the
tion will continue to be
country .in the automobile in¬
Question of Future Wages
by a
ad¬
That England is well aware
dustry and its supplying industries spill-over the
vocated. '
1
Even aside from the
following day. of her
decisions would
15
*
*
plight is seen in her
immediately raise the cost
*
lhat might be made
by the man¬ of the car about
More nCxt
desire to pull out of Greece.
7% and in the
Thursday.
agement, if the price of 'cars if
The excuse for the break
; course of the
most
practically
no
of
the
maining 3% out of.that 10%
increase will also be
existing
and
concerns
intro¬
in the
re¬
wage
^
•
.
.
*
,
,
'orced up
side
'n which
we
are
and which
more than
two or
yea^Sj when that abnormal
jeriod is over, the higher
price of
rs will
naturally reduce the denow
That is just the
plain mathematics
tance prevented his
of it.
lree
aand
for
nost
of
cars
cars would eitherr reduce: the
sales
and
thereby /reduce the
Jar$-. not
certainly not
utomobile
earners
and
to the
wage earners in the
industry,
;
nbome will
wage
and
reduce
their
not be pushed
up
else if it is not added
..selling price,
the
sales,
so
but
as:
not to
comes
out
of profits
directly, then you have
to
consider that the
remaining
by
!ifo m5riefSe '^utomobile- wage {profits may be insufficient to in,
* fui Vi ^
.e ^JnPelled to ^uce management and investors
£ +i!as
geij a„nd t6 keep on producing at that rate.
n
X
•ar«
t
^eman(^
demand
roHn
£ ^ A; reduced.
If you take
the
f
; ■x
long
run.
view, then, the unions
iy
overdo
the
,
other
words,
the
in size
be. reduced
industry
or *pre.^
I result that at the end of five or
point; ten years, more than 10% of the
can
demand
I—in
for
eas-
for
increase
in-
i«hSon^
will
have
in the shape of
on
been
the
flag
where
Greece is concerned. There's
views
article do not
time coincide with
Chronicle.
Whyte
expressed in this
necessarily at any
They
those
of
the
presented
those of the author
only.]
*
are
as
a
Trans-Ocean Teletype I
Model, Roland
1
,
or
sionist dictum of the dollar
following
[The
simple reason against it. The
the Truman stand caused the
Greeks don't have the
money
break; is unimportant. In fact to
buy our products, nor for
the only
For
thing that is impor¬ that matter has
Go.
any other
tant is the fact that
day after country unless we lend them
Model,1 Roland & Stone,
76
Beaver Street, New York
day the market either walks the
City,
money. Loan may be di¬ have inaugurated the
around in a fog or stumbles
operation of
rect or
arranged thru the in¬ a privately leased trans-Atlantic
over its own feet.
Whether
ternational bodies set up for teletype. This is the first direct
this means that we are
in for that
communication
between
New
purpose. "But however
York and London financial
p bear market, is likewise un¬
in¬
it's done, their loan must have
terests. The method of communi¬
important.
a fixed
♦
*
buying level, as well cation, carried over direct
*
-
profits,
a
—Walter
in. That
spend money. We
impor¬ can't follow the old
expan¬
taking
ruling was respon¬
the rally, or whether
sible for
^of
because, after all,
possible "buyers of
means we move
means we
vacation at this time. Whether
the Lewis
If you now take into
considera¬
tion the fact that the
higher cost
cars
the
That
five
or
this time was Truman's
would raise it
state¬
by another
2%%, something like that: ment that matters of
years
2 or
hot last
nil
four
next
by higher wages, why,
the abnormal
period
from
,
.
•
passed
by anybody's .statements,
higher prices.
sub¬
.
Bear markets aren't made
as a
fixed repayment level.
marine cables, is an
adaptation of
the Varioples
system used by the
United States and British Gov¬
or
It has
As the sales are reduced, the by anybody's decisions. They
frequently been said ernments during the war. \
ave
doni^ cn
i + * overhead per u n i t becomes are caused by a series of that American prosperity is
ourse
thev
+
often based on the amount of
[ greater, obviously. If you are pro- events of
long
E'
t0vg6 ducing 5,000,000 cars and you statements are standing. *The foreign business we do. You
merely road
^0lJ,have an overhead of $100,000,000,
The most serious can take it from there.
for illustration, that is $20 markers.
lavbe
S L
#.
♦
*
(per car/If you are only producing situation in my mind is the
•Jerome G. Davis,
security and
uarter hf fhfw
uarter of the cost
rade analyst, has become
01Je* '
for an auto- 14,000,000 cars, your overhead can- continued
rise in commod¬
associ¬
The market doesn't
t
Lp rPfi,mpri immediately or
while is labor
pretend ated with
cost. That is one
ot
reduced immediately or ities. We have made
Seligman, Lubqtkin &
-[■ those
loans, to have the answers to every Co., 41 Broad
very misleading state¬ very much. There you have $25
Street, New York
and are
ments which
thinking of making problem. In fact it isn't even City. Mr. Davis was formerly as¬
would not be made per car. Well now, because of that
«ir
Jerome Davis With
«
ffl?XtSw''just'
thpl
Seligman, Lubetkin Go.
ac
n
y
increase,
in unit overhead, it is
likely that in the course of
four or five years a 10% increase
any good' economist.
The
figure
is
taken
-ensus of
from
Manufacturers where it
true that if
you take the
wages
tat were
supposed to have been
in wages now would increase the
■
ai<J by the
1
1939,
olal
and
cost of the
than
automobile industry
it with
compare
of the
timing,
the
It
you
The
considerably
car
10%.
is
all
more
matter
a
of
see,
labor
people
emphasize
product, the those
■'ages run
misleading figures from the
around one-sixth.
Of
census
and say that a 10% in¬
ourse, it differs from
company to crease means
only a 3% increase
wripany depending on how
much
in the costs, but if you interpre
their own
parts' they make and
■ow
the census correctly and take into
much
they are just assembly
account the long-time results as
Perations, but the census
value
volume
setf
warns
specifically
rawing any
such
muse m addition
oor
cost
in
any
n?Gi lsa11 the
niall bouSht
5* t"®re is
a
emulative
nnn
against
conclusion, be¬
to
the
direct
certain process
of
duplication, you might
tb that, so that if you take
Lture in general, instead of
'f* being one-sixth of the total
ialfM 'will work out oyer a
tfV-
n7
£
5
yph will take
'"third
ii
5 '£
"
;ri^ ?try,
the automobile
you will get instead of
of the total
cost, if
you
Ow for
the cost of
labor in the
wn
+K •
nit
SZ you will get
to
fu
y
up
over
? and, of course,; that is
the
immediate
labor cost.-
♦v
V
ime ^ustrate by-saying what
xnink
-would
be the effect of
a
^81^
'tncrcasg
|n wages. A 10%
in-wages would'
obviously
total cost of
ease the
lea
l"3
making
?bout 3%
"Jpamed by
fp,
immediately.
not
ac-
increases
?r industries
y, increase
car
I
increase in wages in
.Mobile industry,
im
the
well
".£•/
in wages
would immedicost of
making
about 3%.. Of
course, in
the
as
could
'•
immediate
easily be
v\::.
'■/'
Relation
given industry,
labor cost of maby that industry
interested in the major ones.
various other assumptions for ex¬
perimental purposes and we can¬ It merely
not be sure of anything, but at and the
very
the
-»•••
of
ones, T
than 10%
more
:'">>•
i
Prices
Demand
to
least
think we have a pretty
good idea of the possible range,
and just to illustrate the uncer¬
tainty of it, I will give you a few
extreme figures of what we think
a
good deal of differ¬
of ^opinion as to how much
reduction in demand would fol¬
ence
low
certain assumed increase in
a
cost
in
or
that
price. We have founc
practical reasons it is
for
to assume that a 5%
in price will ordinarily
necessary
increase
reduce
the
easiest
figure
sales
way
5%. That is the
of doing it and that
correspoi|is to all the in¬
formation'that | we
can find as
other figure that you
might take. Therimportant thing,
however, is to realize that this
year and next that general rule
well
as
any
not
does
mand
is
apply .because
so
am
not
details, what
we
be the demand for
alent
to
out, «dthoiigh
going to bother you with
assumption of
first
de¬
that
World
a
think would
cars
under the
recession equivr
which
War,
followed
and
we
not
tivity, I
include
get
top
In
is
that
set
by
ability to produce
ses,
to
I just want to
rely
made
we
demanc
in the
United
particular
it
in¬
because
contemplating such
Any kind of
everybody
a
cannot
be
so
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Exchange,
Board
And other
99
Exchange
of
New Orleans Cotton
WALL
STREET
NEW YORK 5, N. Y.
Inc.
%
Trade
Exchange
Exchanges
more
,
or
Chicago Board of Trade
14 Wall Street
1856
New
/ s
rates
for
1
Exchange
H. Hentz & Co.
o
Such
maintained
year
a
San
is
high rate
in the future.
a
end of
Monterey
Established
else, gives very high an¬
in terms of automobile pro¬
income
than
beginning,
the
or
Stock
Private Wires to Principal
Offices
supernumerary income or any¬
duction,
Members
York
New York Curb Exchange
(Associate)
San Francisco Stock
Exchange
4
Whether it is the
the middle
whether you take income
payments or disposable income
thing
4
on
Schwabacher & Co.
New
come,
swers
foolhardy
Orders Executed
Pacific Coast Exchanges
warn
correlation against national in¬
or
be
you not
the method of correla¬
on
Securities
it.
more.
to get absurd results.
a
would
4
and
could not be attained in
probably
N. Y. Cotton Exchange
NEW
even
one
YORK 4,
,SUGAR
Bldg.
Exports—Imports—Futures
N. Y.
-■
the
production
;•
the limits
capacity
of
on
the
CHICAGO
,
&
;
4
anybody to start fighting
case
of
reason
to
tion,
'
Pacific Coast
4
For the past
for
Investors
Standard
•,
watch
stock
against national income in
the past, because you are going
industry.
have
any
Fitch
with
It is this
when
4
with
and
Poor's Corporation.
the stock tape.
tion
gin.
we
or
If any of you are interested in
working out the statistical analy¬
year-on account of
course,
of
range
cars
made three different assumptions
as to when that recession
may be¬
Of
trucks
running from 3,141,000
3,500,000.
the
a
passenger
States
the
have
we see
sociated
Service
few weeks the
tape has been signalling
exports and it is more for illus¬ "down."
Nothing it has done
trative purposes than
anything in the past few weeks has
else.
changed that. So long as it
On six different assumptions
here as to general business ac¬ persists in pointing the^direcdoes
urgent.
We haive worked
the
the
moneyed interests.
action
will be the demand for
passenger
cars
in the United States. This
for
There is
we
reflects the. thinking
acting of informed
DETROIT
PITTSBURGH
GENEVA, SWITZERLAND
'■•■ i;
DIgby 4-2727
■;
1416
JTHE COMMERCIAL & FINANCIAL CHRONICLE,
Thursday, March 13,
1947
foreign countries during
•;hese
and
other-
Government
(Continued from page 1384)
■
stances
each
in
case,
mis
ui
(3)
.
at
way
the
remaining lending authority
«£ the Export-Import Bank will
countries."
States
and
•.
foreign
Bank, plus
and
On the subject of
export credit
guaranties, 1 Mr.
Martin
stated:
Export-Import Bank is continuing to give careful study to
current proposals for the
extension
and transfer
With regard to credit
the
entering a field of
activity which might be consid-
si
a
"With
demonstration
government
resnect
to
of
system.
expense
Export-Import Bank
Bank
maturity,
that
function between the World Bank
the i
Export-Import
;
Bank
credit
could be worked out without the
complication of a significant difference in ythe effective cost of
credit
risk
(and transfer risk as
by extending credits with-
well)
out
recourse
finance
the
on
specific
exporter
export
l°ans»
because
changing conditions, it
on
PIn
SS to the
thL wSS III
por t fhJ
Congress, the Bank has
extensive
an
need
States
credits
from
foreie*
is
EX.jmn
imDorts
pnate
^ible
wide-
o^e^lnwhich^he^Presiderft^s
Which
Trade^has
thA
the
President
well
S I
mlan^
both
to
xxroii
'p.*inciP*M
a
govern-
regarding
+
<f^ t!f
Ijfnio 1 i?
hiparIfcff,iigU0arar
i
? uscfnlncss in
n
>
vflic
others that
as
appro-
it
nos-
American
v\Y*inomn1
v\nir
JJSFK®
expresses
contribution of proposed loans
to
improving the balance-of-payi
ments position of the
borrowing
country has always been an imp0rtant factor in their considera-
f
encouraging paritcipation by pri- ron ky the Bank and should
given even more weisht in
capital in foreign-trade fifuture''
nancing. All aspects of the probare
continuing to
close attention of the
receive the
Interest
jit will be
Rates
Advisory Council
ternational Monetary and
In¬
on
Finan¬
cial Problems
ed
(NAC) recommendSeptember 1945j that the
in
Export-Import
Bank's
late of interest
on
loans to
foreign
20- to
of
loans.
4%
The
followed
governments for
Mr.
Martin
The
s
going
long-term
other
on
Bank
t h i
r
has
naturally
recommendation,
pointed out.
Ex-Imp's
report
to
on the basis
studies the NAC in
July recommended, and the Export-Im-
to
new
would
be
credits
effective in
de
veloping imports into the United
States may be extended on
appli
nation of United
States citizens
"ancmS to be channeled through
mem in the form of advance pay-
ments for goods to be
"There
are
still
delivered,
other
methods
open to the Bank of carrying out
its mandate from the Congress to
facilitate* the import as well
expol1 ?rad®.of the United
the
Congress records that,
policy
which
Other
as
of
port Bank
application
foreign entities.
wh° desire either financing of
general
Production in a foreign country
30-year I unde!' lhelr, own control or fi-
reconstruction purposes should
be
3% as compared with a
rate
"This approach" the
report con
"refers
particularly
to
credits extended
on
of
recalled that the Na¬
tional
be
the
tinues,
Bank."
"
•
the
play a usefu1
this purpose.
vate
lem
to
volume and to
J
,
^
re-
United- States
r
the Export-Im-
t
adopted, the following
interest rates applicable
loans:
1
on
(1) An average or effective rate
of 3%% on
long-term loans other
than reconstruction
loans to
"eign governments, to
agencies of
.^aces
anp
in
this
way
also
to
lmprove the
prospects of repaymen'; °f "s existing loans,
"It
can explore with representatives of foreign countries
owing
substantial sums to the Bank
steps
necessary and appropriate to env#
COUfa!e on a aelectlye. bas's ™such countries into the
for-1 P°r.ts
foreign governments, and to
private
firms when
anteed
or
their
by
effectively
foreign
agencies.
guar-
governments
-
to
guaranteed
ly foreign governments or
their
agencies, if justified
by the risk
factor.
Unlted States,
"It can arrange
with other gov-
ernment agencies, or, if necessary,
w*th private agencies, for research
studies of the
possibilities of for-
.
1(2) Higher rates
on, loans
private borrowers not
Structure.
however,
ences,
will
as
creased
supplies of
States.
I agenCiesnjin the "in,J '°- *ore^n
-aS^ United States the
means
they have found mosLef-
to
products
and
States.
The value of services
sup¬
plied to foreign countries by the
United * States will decline some¬
what and the value of services re¬
ceived from foreign countries wil
time increase. All fac¬
same
as
at
the
of
"There
are
also
riod
the
dollar
' resources
first half of the
year, contribu
tions by the United States in 1947
will be considerably smaller than
the
Export-Import
approximately
the
end
the
of
year,'
the unexpended balance
the British loan
amounting to
of
$3,-
150,000,000; the annual production
of gold outside the
United States,
areas
now
goes
pro¬
posed, and if private donations to
foreign countries continue at the
1946
level,
total
contributions
of
£350,-
000,000, which
external
loans
is to be covered
by
this year, is ex¬
pected in many quarters to be too
optimistic, in view
of the effect of
the fuel
crisis on exports and im¬
ports. The Government views with
concern the
effect of the impend¬
ing restoration of the convertibil¬
ity of sterling on the drain on
Britain's dollar : reserve. In the
;
running currently at the rate of
circumstances there seems to be
$700,000,000 per annum; and
no
device but to
y foreign
refuse| tcf sigA
investment
through the purchase of the obli¬ any "funding: agreements Unless
about
private
gations pf the International Bank
.
supply pro¬
administered by the
military
'
billion;1 the uncommitted lending
or through other
channels,
The proposed foreign re
\., [
fy. "The existence of these poten¬
lief program to be
administered
tial financial means
for maintain¬
by the United States Governmen
directly would be of much smaller ing a high level of United States
proportions than the United States exports and making possible a
contribution to UNRRA.
If the heavy surplus of exports over im¬
ports
new foreign relief
during the next several
program is ap
years
should not
proved, if the civilian
gram
»
the
in 1946.
authorities in occupied
forward on the scale
in
London.
Indeed, among all
Britain's economic
worries—and
there are many of them—it is con¬
sidered to be
by far the gravest.
The Government is
unwilling to
aggravate
it
even
further" by
agreeing to liberal terms of re¬
payment for the sterling balances.
The estimated deficit of
International Bank and
Monetary
Fund, amounting to more than $4
was
"Because of the termination o
UNRRA program during the
In any case the balance
of pay¬
a matter of
grave concern
mar¬
of
balances
of; British invest¬
these
ments is
potentially
at
I
Their
available for financing the credit
balance
due
the United
States
during the postwar transition pe¬
million
the
1946,
regards individual foreign
kets and debtor countries.
excess
in
on
The three largest
and Iraq,
countries, so that
the settlement of the
former with
the aid of the latter
cannot be
effected, y/y•'
more
as
$900
1947 will be of
the order of $7 billion as com¬
pared with $8.2 billion in 1946.
1941.
in
ments
distribution among coun¬
tries, however, makes the .effec¬
tiveness of the cushion uncertain
due the United States on ac¬
count of goods and services to
be
during
well
uneven
authority of
Bank, which
supplied
minor:creditors
similar basis.
a
United States
against default on
end
Possibly
creditors, India^ Egypt'
however, hold sterling
compared with about $111/2 bil¬
lion
of
must
balances;
buy
to
than $19 billion at the end
of
y.'-j
agreements may be
reached with
several,, other
These reserves,
cushion against
a
con¬
jS
now be
ruled
The only
country with which
an
agreement
has so far
been
concluded was
Argentina, which
country repurchased the Britishowned railroads with
the aid of
its
sterling y
of a
the
from
'
out.
of
au¬
years
exports
\
by the time limit
July 15, 1947,
maintenance
several
tors taken into account, it may be
conjectured that the credit bal¬
ance
hands
foreign loans, amounted
materials
foreign products ac¬
demanded by the United
agreements
.
capacity of foreign
countries
other
obscure,
ever,
i;o
how¬
the fundamental
importance
the United
States,
as consumer
and
creditor, of maintaining a
high and rising volume of
imports.
As
consumer,
riched by
the country
importing
of
is
en¬
kinds
produced
many
and
until
ments
the
creditor
Govern¬
have adopted ^ more
ciliatory attitude.
con¬
;
Conn. Inv. Bankers
Elect New Officers
i
yi-
HARTFORD,
CONN.—At the
meeting held on Feb. 27,
1947, the fol-'
7
lowing officers
annual
were
for
elected
the United States in 1947
may be
expected to finance the
prospec¬
tive credit balance to the
goods that are not
at home or are
produced at home
less
the
Connecti¬
of
as
cut
Invest¬
extent
more
than $2 billion.
"Drawings by foreign countries
against previously authorized
and
credits from the
United States
Government
will
new
smaller
probably
in
1947 than
the
they
be
aggregate during
in 1946. Loan
were
disbursements by the
Export-Im¬
port Bank are expected to
con¬
tinue at about the 1946
rate, that
is, to be
approximately $51 billion
for the year.
Disbursements under
the British loan
during 1947 will
be larger than In
1946, both be
the
cause
credit
convertibility of
sterling beginning July 15,
1947,
may
upon
the
result in
increased drain
British dollar resources.- On
other
an
hand,
"pipeline" credits
surplus
advantageously than abroad;
creditor,
it
must
receive
im¬
ports as the principal means
by
which foreign countries can
make
payments of interest and principal
on their debts to the
United States.
The prospects of
bringing imports
ultimately into
a
with
exports are
the economy
as
States
is
balance
proper
bright
of
..
Ion?
so
the
United
kept running at
the
lend-lease
will
not.
in the
1947
fore the end of 1946.
Drawings by
by
ment
Bankers
Association:
President: An¬
drew L. Tack-
Putnam &
us,
Co.;
Vice-
Preside nt:
Everett
B,
trade
urer:
level and
is
ward.
high
on
vigorously
'•X 'i'
pushed
for¬
y>:•••*■/v.-
1 The
figure represents' the
Fund, and the
tions
to
estiihiated fold contribu¬
the
Monetary Fund of its other
*.
:
elected
1951:
:
&
•.
(Special
to
Thi
OAKLAND,
financial
Chronicle
CALIF.
—
E:
Hutton &
staffy>;J ;t\
serve c
until .March
A
&
Co.
and
Harold
Ballard;
Faust, Equitable Securities Co.,
and
F
Company, Central Bank
Building, has added Theodore F
Patch to the firm's
E.
to
y-y
George L. Austin, G. L. Austin
Co.; W. Thurston Rdwjey/Cp11'
ning
E. F. Hutton & Co. Adds
4
following Goy^rnofs wer^
the
International Bank
dollars, the United
contribution //i6 f the
Monetary
members.
L-> iTackus
Marshall H. Williams,
The
of
sum
paid-in capital of the
in the form of
gold or
States
Andrew
Stoddard & Williams,
figure
eign countries will be
small, since
most of the
surplus property lo¬
cated abroad .was
disposed of be¬
com¬
year
an even
keel, and so
long as the program from the
re¬
ciprocal reduction of barriers to
balance
and the utilization of
property credits by for¬
the
ing
Miller, Robert
C.; Buell &
Co.; Secretary-Treas-
a
was
available
only during the last half of 1946
and because the
eign Production of articles which significantly
of
payments,
f°H d e usefully and economical¬
y*™po?tedinto'theUnited
raw
next
;he United States.
of surplus goods lo¬
abroad, will be much less
stantially in 1947 because of in¬
the
pleading for
Judging by the negative result
of the talks with
India, any pos¬
sibility for the conclusion of
large gold and
the
which constitute
a decline in the
compared
than in 194-3.
Imports from for¬
eign countries should increase sub¬
^
reasonable attitude of
the
Governments in face of
arguments
cessions.
"
' and
the
prompt
servicing by foreign countries of
;heir "mounting
indebtedness to
1946, but that other transfers
goods to foreign countries and
cated
for
level of
United
States
with
of
the
ligh
in
increase
well
gurs
over
the way in
which the credit balance due the
United States will be financed.
The prospect is that commercial
exports of goods from the United
States
in
reserves
v',
relying
the
mere
resources
U
foreign monetary authorities
Ac¬
ransactions which prevailed dur-r
tively
is evident to
export^
Products in large
5ninrnoi
®
v
debt
ing 1946 will prevail also during
1947, with some significant differ¬
at the
th^
into
nint ntJport-Import Bank
llf belief "that it can
r% lu
"J
I r°le in furthering
ao
n
as
it
Sld be^m^^bv til
in
one
to„ be
postwar
countries
con^\^^
exporters. The subject
Which ;there" seems
foreign trade and the
"The general pattern of foreign
and
other
international
and
view of the growing creditor
suiting
investigation
and
y elusions
regarding the advisability
£■ of offering them to United States
Snii
revise
Position of the United
feasibility, without
reaching, however, any final
Trom
be
may
and
review
other
Imports Must Be Increased
to
made
to
necessary
of
judgment, the Export-Import
Bank reports.
to
transac-
dollar
Ban.k of interest and other charges particularly
J
.
of
money to borrowers from the two
institutions. However, with the
actual determination by the World
our
"The existence of
rade
comparable
the division of
so
can
be financed during 1947
without any serious drain on the
cording to his report:
its loans of
on
the prospect is that a
level of United States ex¬
foreign countries.
In
on
"Thus,
existing gold and dollar
could
creditor
ports
of
in
ill afford
to
fact, Mr. Dalton
definitely committed himself
to
the principle of
putting forward
counterclaims instead of
''
-
iiigh
operations of the Ex¬
port-Import Bank tells .of the outook for
Government
disregard it.
new
provide
1947,
1379)
Britain's war
campaign has
immensely popular, and the
been
tive credit balance payable to the
United States on goods and serv¬
ices in
page
thecampaign
share in
expenditure.
This
gold pro¬
additional
::unds to help cover the
prospec¬
reviewing
international
their
of
will
of
putting forward
counter¬
claims
representing the creditor
countries'
private United States in¬
the purchase of dollars
countries
duction
result
a
favor of
the International Monetary
Fund by its members, and the sale
to the United States by foreign
ing the second half of 1947, Wil¬
liam McC. Martin, in addition to
adopted, it was believed to be
conformity with the rate which
would be charged
by- the World
which exceed normal commercial risks and which
business
firms are
unwilling to assume, or
private financial institutions to
underwrite,
the
Export-Import
Bank has for
many years stood
ready
to
relieve
exporters - of
exDort
vestors,
In his report to Congress cover¬
and thus
as
from
of
Foreign Trade Outlook for 1947
was
and
risks
ments by
Einzig
(Continued from
.
t'W all of these and other ways,
he Export-Import Bank can in¬
in
more
convincing
administrative
Talks Fail:
by the International Bank
for Reconstruction and Develop¬
ment, foreign loans and invest¬
removing the ob¬
stacles to larger imports consti¬
tuted by poor distribution facil¬
ities for imported specialities.
means
Sterling Balance
ex¬
Disbursements under dollar loans
work with national im¬
can
certain
reflected the general reduction in
interest rates over the
past several years.
At the time the rate
about
need for
for
"It
be
may
made
a n c e
associations and with other
oublic and private agencies to as¬
allowance for risk
an
t
port
past by
the
establishment of a
general system under its administration. The Bank has also had
.
cost
ers.
It represented
a
reduction
from rates
charged in the
-
appropriate for private
enterprise and has therefore taken
the position that there
should be
'
ipation, while avoiding burdensome
charges on foreign borrow-
the Bank that the need for
shortterm
credit
guaranties
in
the
United States is large
enough to
ered
the
cover
of
rate
securities to attract
private parti c-
guaranties, it has not appeared to
doubts
3V2%
stimulating
national
s
adequate to make possible the fix- crease its
contribution
to
the
ing of interest rates on foreign maintenance
of a high level of
securities issued under
Export- two-way foreign trade for the
Import Bank agreements suffiUnited States."
* - •
?;
ciently above rates on domestic
"The
warrant
number
a
i
as s
on
States
pected to total roughly $3 billion.
sales
products and what
the -Export-Import
Bank might lend to their efforts.
heir
the
judged to be the minimum necessary to keep the Bank on a selfsustaining basis. It was deemed
»
guaranties.
to
of
fective
to the United States Government
of the public
money used by the
^
by it of export credit
on
The
calculated
was
Export Credit and Transfer
.Guaranties
-yy
based
was
considerations..
:.
:
the
NAC
effectively in carrying out its statutory mandate of
financing and facilitating the exchange of commodities between
United
short-term loans
discretion of-the Bank,
on
The -recommendation
be used most
the
Rates
1947
United
credits
S.
Steiner
Jackson ,Steiner,
&
JEipkson
Co., to fill the unex¬
pired term caused by the decease
v
of
V.. Russell Leavitt
Macch(5if95»);;L^^;':,^
.
(to; expire
Tinman Aslis Aid for Both
and
(Continued from first page)- * | .small and poorly eciuitmpri Tt
to work out a way of life free needs supplies and
equipment if
from coercion.
The text of the it is to restore the
duuioniy o:;
authority 01
the government
message follows:
throughout Greek
Turkey
t
Mr.; Speaker, territory.
President,,
Congress of the
:
to
is
become
a
self-supporting
self-respechng democarcy.
.
and
of the situation
which confronts the world today
necessitates my appearance before
ai joint session of the Congress,
i. The fore.gn
policy and the na¬
tional security of this country are
gravity
The
.Greece must havei
assistance if
it
U.
S.
Turkey.
As
Supply Relief
.The United States
must supply
it
of
relief
these
and
are
There
which I wish to present to
vou'at this time for your con¬
sideration and decision, concerns
tion,
aid
democratic
No
other nation
country
Greece
I
to
tive
if Greece is to
free
nation.
survive
as
a
c
,
Turkey,
these
ican
'people
and
the
Situation Too Urgent for
United Nations
deaf
wish'totituain >a
Congress
to
ear
.
forced the
work hard to
make both ends meet. Since 1940,
this industrious and peace-loving
has;; always
sources
Greek
people
country
four
to
of cruel
pation, and bitter- internal strife,
ny
When, forces
liberation
of
en¬
tered Greece they found that the
retreating Germans had destroyed
virtually all railways, roads, port
facilities, communications and mer¬
chant marine.
More than
thou¬
a
sand
villages had been burned.
Eighty-five per cent of the chil¬
dren were tubercular. Livestock,
poultry and draft animals had al¬
most disappeared.
Inflation had
Wiped out; practically "all savings.
As
a
result of these tragic con¬
ditions, a militant minority, *: ex¬
ploiting human want and misery,
able to create political chaos
was
which, until
now,
has made
eco¬
nomic recovery impossible.
; f
'
Greece is today > without funds
to finance the
goods which
importation of those
essential to
are
bare
subsistence. Under these circum
stances the people of Greece
not make progress in
solving their
problems of reconstruction. Greece
desperate need of financial
and economic assistance to enable
it to
resume,
purchases
food
of
clothing, fuel and seeds.
These
indispensable for the subsis¬
are
tence
of
its
people and are ob¬
tainable only from abroad. Greece
must
have help to
import the
goods necessary to restore internal
order and
security so essential for
economic and political recovery
The
;
also
Greek : Government
has
for'the assistance of
asked
experienced; American adminis¬
trators, economists and technicians
to
insure
that
the
othe,r ajd .given
financial
Greece
and
shah
ar|d in improving its public ad¬
ministration.
The
very existence of the Greek
state is:
tciday threatened
by the
terrorist activities of several thou¬
sand
armed
munists,
ment's
led by Com¬
defy the govern¬
men,
who
authority
Points,
at
a
particularly
northern; boundaries.
number
along
of
the
commis-
A
,appointed by the United Na-
^ons Security Council
is at pres¬
ent investigating disturbed condijons in northern Greece and
•neged border violations
along the
^ontier between
Greece
on
the
,n® hand and Albania, Bulgaria
md
Yugoslavia on the other.
Meanwhile, the Greek Governyfent is unable to cope with the
uation.
crisis.
its
and
in
a
which sought to
impose their will,
their way of life,
and
how
the
the utmost • importance
supervise the use of any
funds made available to Qreece,
manner
a
spent will
Greece
count
that each dollar
toward
making
self-supporting, and
help to build
wil"
of
an economy
chief virtues
the
of
democ¬
a
however, is that its defects
are
always' visible and under
democratic
processes
can
be
pointed ^ out and corrected
The
racy,
Government of Greece is not per¬
fect.
Nevertheless
of the iriembers
Parliament
an
it represent
o| the Greek
who were
in
chosen
election last year.
Foreign ob¬
including 692 Americans,
servers,
considered
election
this
be
to
a
expression of the views of the
Greek people.
of
Government
Greek
The
has
operating in an atmosphere
been
It
extremism.
and
chaos
has
made mistakes.- The extension
aid by
that
of
this country does not mean
States
United
the
everything that the
condones
Greek Gov¬
States
has
free, institutions
their
and
na¬
integrity against aggressive
that Seek to impose
them totalitarian regimes.
movements
Upon
This is
than
no more
a
frank
rec¬
ognition that totalitarian regimes
imposed on free peoples, by direct
indirect" aggression, undermine
or
integrity of
foundations
of
international
peace" and hence the security
the United States. :
have
a
profound
countries
peoples
effect
Europe
struggling
much.
Collapse
would
fail
to
aid
of
developments.
We
must
take
history nearly
choose
of
not
every
between
life.
The
nation must
alternative ways
is too often
choice
free one.
a
One way of life is based upon
the will of the majority, and is
distinguished by free institutions,
representative
government, free
The-Greek
Army
is
I believe
tfrat it must be the pol¬
icy of the United States to support
free peoples
tempted
who
resisting at¬
armed
by
by outside pressures.
are
subjugation
which
minorities
I believe that
Greek
and
.
and
sonnel.
Turkish
*
.
.
r;
-
peoples
or
we
must assist free
work
to
destinies
tegrity.
in
out
war
:'F;;
.*■•••;'
That integrity is
essential to the
>
that
their
their
own
primarily
way.
stability and orderly
litical processes.
status
own
I
help should be
through economic and
our
..
The world is not
financial
;
believe
'
Turkey
has
assistance from
Great
Britain
andN the United
States for the purpose of effecting
that modernization necessary for
the maintenance of its national in¬
the
Since
sought
the
Frank
company,
elected
L.
Ritchie
Treasurer, Robert
Secretary,
elected
was
Secretary.
~
t
s
ii
Rhila. Slock
Exchange
Re-Elecls F. E. Baker
PHILADELPHIA,
PA.
iti
The
—
Philadelphia
its
Stock Exchange at
meeting; re-elected
Baker, Baker, Weeks &
annual
Frank E.
Harden, President.
>
;,,
;.
,t
Elected to the Board of Govern¬
for
ors
three
William
.
one
year
terms
were:
K.
Finally, I ask that the Congress
provide authority which will per¬
mit the speediest and most effec¬
tive use, in terms of needed com¬
modities, supplies and equipment,
of such funds
ized.
as
be author¬
may
a
;
United
quo
po¬
$341,000,000,000
World
War II.
contributed
toward
This is
winning
invest¬
an
ment in world freedom and world
The assistance that I am
recommending
for ' Greece and
Turkey - amounts to little more
peace.
than
one-tenth
of 1%
of this in¬
vestment. It is only common sense
that
should safeguard this in¬
we
and
make
not in vain.
static, and the
But
we
cannot allow changes in the status
auo in violation of the Charter of
that
sure
it
;v
soil
of
poverty
strife.
and
the.United Nations by such meth¬
ods
has died.
coercion,
terfuges
In
as
^Guests of N. Y. Curb
Etienne C. Biernaux, Treasure#
of the Brussels Stock
Exchange,
Brussels,; Belgium, and
Gaston
Kleefeld, a member of that ex¬
change, were the guests of theYork Curb Exchange at n
luncheon at the exchange March &
Francis Adams Truslow, who took,
office as Pres'dent of the Curb-
Exchange last week, was host, and
Edward C. Werle, Chairman of th&
Curb, Fred C. Moffatt, Chairman
of the exchange;public relations
committee, William A. LockwoocF,
general
counsel
of
the
Curb.,
Howard Sykes, a governor of the
exchange, and Henry L. deGive,
partner in Reed, Mulligan, Crane
&
deGive, of counsel for the Curb,
were
•
also present.
problems
possibilities of
the*-
American
and
in
York
1 ;
-
Mutual
securi'ies
the
trading
in
in
Brussels
subject of discus¬
sion during the meeting. The Bel¬
exchange
gium
representatives
visited the floor of the Curb" Ex¬
change
in
the
company
of
Mr.
Werle and Mr. Moffatt and viewed
of the posts.
by such sub¬
political infiltration.
or
helping free and independent
nations to maintain their freedom,
alive.
We must
.
keep that hope
v
•
.
On Member Firm Comm.
Charles Moran, Jr., of Francis I.
duPont &
New
been
York
Co.,
a
Curb
governor
of the
Exchange,
has
appointed Vice-Chairman of
The free peoples of the.world, the exchange committee on mem¬
to us for support in main-' ber firms.
look
/'
surrounding'
Belgian securities in New-
were
stock trading at one
regimes
are nurtured by
misery and want.
They spread and grow in the evil
They
reach their full growth when the
hope of a people for a better life
as
; '
The seeds of totalitarian
.y
is not sacred.
States
a
New
,
If further
The
terms.
year
per¬
'f.1 ?
s
was
support.
com¬
nett, Joseph B. Warren, Lewis W.
Bailey,
Vice-Presidents;
T.
G.
Snowden, Cashier and Assistant
Secretary, and Ed S. Otto, Assist¬
starvation and' suffering in coun¬
tries devastated by the war.
In addition to funds, I ask the
economic
our
r
was elected Audi¬
tor and Assistant Treasurer. The
other officers of the
company are
W. Rex Cromwell, Carrol M. Ben¬
of; the $350,000,000 whicfi I re¬
cently requested that the Congress
authorize for the prevention of
terial aid.
.
F.
consideration
the
maximum
amount of relief assistance which
would be furnished to Greece out
vestment
.
The
Gordon
James W. Beard
I therefore ask the
Congress to
provide authority for assistance to
Greece and Turkey in the amount
of
$400,000,000 for the period
ending June 30, 1948. In request¬
ing these funds, I have taken into
financial aid which is essential to
Nevertheless, Turkey now needs
of
was
ant
spared the disasters that have be¬
Greece. And during the war
the United States and Great Brit¬
ain furnished Turkey with matset
tor
Greece
immediate
resolute action.
lected
At the present moment in world
are
Turkey finds itself today
considerably different from
those of Greece. Turkey has been
ident
to the East.
as
D.
Cornwell, formerly General Audi¬
Turkey in this fateful hour,
the effect will be
far-reaching to
well
the board.
are
replace his father, Dallas
Rupe, who died recently.
T. A.
Rose, Jr., was elected a Vice-Pres¬
and
as
of
pany to
quickly be the lot of
peoples striving to
we
on
directors
Rupe, Jr., President of the
of
maintain their freedom and inde¬
Should
board
Rupe & Son,
The directors elected D. Gordon
only for them but for the world.
Discouragement and possibly fail¬
ure
1
Rupe, Jr., W. Rex Cromwell, and
free institutions and loss of inde¬
pendence would be disastrous not
neighboring
Dallas
Carrol M. Bennett.
victory for which they
so
of
vacancies
other
unspeakable tragedy if these coun¬
tries, which have struggled so long
against overwhelming odds, should
that
confident
am
Kirby Building,
elected
R. 'A.
Ritchie and Joseph B. Warren' to
fill
dependence while they repair the
damages of war. It would be an
lose
I
Barclay, Jr., Stein
Bros. & Boyce; Harry C. Dacker>
The peoples of a number of
man, Dackerman & Waber; Rob¬
ert Y.
countries of the world have re¬ Congress to authorize the
Guarniery, R. Y. Guarniery
detail
& Co.; George E.
cently had totalitarian
Snyder, Jr., Geo.
regimes of American civilian and military
forced upon
them against their personnel to Greece and Turkey, E. Snyder & Co.; Harold P. Wood¬
will.
cock, Woodcock, McLear & Co.;
The
Government
of
the at, the request Of those
countries,
'United .States. has made frequent to assist in the; tasks of recon* Spencer D.; Wright, Jr., Wright,'
Wood & Co; and John S.
protests against coercion and in¬ struction, and for the purpose of
Wynrir
J. W. Sparks & Co.
Ralph E. Pentimidation, in ■ violation of the supervising the use of such finan¬
Yalta; agreement, in Poland, Rii? cial and.material assistance as may dergast, Paul & Co., Inc.; Charles
mania,, and Bulgaria., I musf also be furnished. J[ recommend that Sheridan, Sheridan Bogan Co.j
state Vth^t in a number of other authority also be provided for the and Edward B. Smith, Jr., Smith,
countries there have been similar instruction and training
of se¬ Barney & Co. were elected for
state is clearly no less
in
directors
against great difficulties to main¬
tain their freedoms and
their in¬
sacrificed
events,
DALLAS, TEX.—The
in
are
of
Dallas Rupe & Son
Elects Directors !
throughout the entire Middle East.
Moreover, the disappearance of
Greece as an independent State
-
circumstances
ment
immediate and serious. Confusion
and disorder
might well spread
those
owu nation.
that the Congress will face these
responsibilities squarely.
minority, the effect upon
neighbor, Turkey, would be
whose
surely endanger the
our
Great responsibilities have been
placed upon us by the swift move¬
armed
funds, or further au¬
elections, guaranties of individual thority, should be needed for pur¬
have
liberty, freedom of speech and re¬ poses indicated in this message, I
we
condemn
now,
extremist ligion,; and freedom from political shall not hesitate to bring the situ¬
ation before the Congress. On this
measures of the Right or the Left.
oppression.
The second way of life is based subject the executive and legisla¬
We have in the past; advised tol¬
erance, and we advise tolerance upon the will of a minority forci¬ tive branches of the Government
now.
v
bly imposed upon the majority. It must work together.
relies upon terror and oppression,
A Serious Course
Turkey Also Deserves Attention
a controlled press and radio, fixed
This is a serious course upon
Greece's neighbor, Turkey, also elections, arid the suppression of
which we embark.
I would not
personal freedoms.
deserves our attention.
recommend it except that the al¬
The future of Turkey as an in¬
U. S. Must Support Free Peoples
ternative is much more serious.
dependent and economically sounf
The
welfare of
should
its
fal¬
we
leadership, we may enthe peace of the world—
and we shall
importance in
much wider situation. If
Greece
fall under the control of
a
If
our
I danger
the Greek
We
condemned in the past, and
Greece.
ter in
of grave
are
ernment has done or will do.
important
to the freedom-loving peoples of
the
world
than
the future
of
taining their freedoms.
the
Requests $400 Million
objectives,
however, unless we are willing to
help free people to maintain their
tional
of
necessary only to glance
to realize that the sur¬
the West
pos¬
inde¬
lasting freedom and
pendence for all its members. We
shall not realize our
the
in which
healthy democracy can flourish.
No government is perfect. One
a
United
sible
we
we
leading part in establish¬
a
ing the United Nations. The United
Nations is designed to make
for
of
the
taken
utilizing effectively the
£>e giving
pendence.;
ercion,
give to ■ Greece, and in im¬
proving its public administration
in such
other
upon
To ensure the peaceful devel¬
opment of nations, free from co¬
may
that
was
nations.
financial arid other assistance
is
of
way
fundamental issue in the war
Germany and Japan.
Our
victory was won over countries
required.
It is important to note that, the
It
a
This
with
related organizations are
position to extend help
aid in
foreign policy of the United
a
of the kind that is
our
primary objectives
life free from coercion.
urgent one requiring immedi
action; and the United Nations
not
at
\
the
of
will be able to work out
assist in
situation is
the
discuss
you
States is the creation of
-conditions
which we and other nations
might
But
shall
with
1
wiii
principles
,
to
be uspd
effectively in creating a
stable abd
'sejif-sustaining economy
,
an
ate,
considered
Nations
nation
upon
ih
fair
can,
is in
this
85
Position of Greece
One
.
Greek Government has asked
occu¬
enemy
have
United
invasion,
suffered
nas
years
We
the
appeal of the Greek Government.
Greece is not a rich country.
Lack
of sufficient
natural re¬
this time.
of the
world, including Greece.
"v
I
and
implications
is
a
would
am
States ex.ends assistance
to Greece
and
is willing
mitments in several parts of the
I do not believe that the Amer¬
must
coun¬
fully aware of the broad
implications involved if the United
Greek Government an
urgent appeal for financial and
The British
economic assistance. Preliminary
Government, which
reports from the American Eco¬ has been helping Greece, can give
nomic Mission now in Greece and no further financial or economic
reports from the American Am¬ aid after March 31. Great Britain
bassador in
Greece corroborate finds itself under the necessity of
the statement of the Greek Gov¬ reducing or liquidating its com¬
ernment that assistance is impera¬
States
the only
are
Admits Broad Implications of
bu'
and
able to provide the
necessary sup
port for a democratic Greek Gov
ernment.
the
from
United
We
the
map
vival and
if
assistance
try able to provide that help.'
turn.
and Turkey. •
The United States has received
Greece
Greece,
Move
other
no
of
case
have the
to
the
inadequate.
is
which
economic
needs
supply it.
We have
already
extended to Greece certain
types
involved.
One aspect of the present situa¬
the
Turkey is
Must
that assistance.
It
at
an
in
to
Charter of the United Nations.
The British Government
has in¬
formed us that,
owing to its own
difficulties, it can no longer ex¬
tend financial or
economic aid to
v
Mr.
effect
preservation of order in the Mid¬
dle East.
tllc
members of the
United States:
the; United States
''
THE COMMERCIAL & FINANCIAL CHRONICLE
1418
State Bank Resources
(Continued from
Although United States Govern¬
ment
deposits
vised
dropped
end
banks
of
war
continued
to
reflect
their
importance in the national
economy through the growth of
their deposits of individuals, part¬
nerships, and corporations, and
the expansion of their loans and
discoun s,
March 3
of
the
National
Asso¬
Supervisors of State
Banks, and Bank Commissioner of
commission
Arkansas, in releasing jointly with
State
Bank
Division
Bankers
Charles A.
the
of
Association
a
functions.
Amended Bill Reveals Details
The
meeting was arranged by Rep.
Wolverton, of New Jersey and plans called for
to SEC Chairman James J.
banks.
The report shows the total
resources
of all State-supervised
Caffrey.
(Continued from
Columbia, and the Territory of
Hawaii aggregated $84,148,564,000
at the close of business Dec.
-
STATE
Section
was
$1,842,768,000,
decrease
a
2.1%, compared
June 29, 1946, and $3,281,961,000 during the year 1946. This
decrease of $1,842,768,000 is ac¬
counted for by a drop of $3,797,584,000 in holdings of the United
States
/y/S
tration
institutions
9,585 and consisted
study."
The
(i[
N>/\ /
-'V V
•i
'
'^r,
v'
:
;
.
•ft'S
;
•>'
.
C'J-
banks
had
Deposits of
•
since
"As
2,144
State-
Government
000
:S,S
of you
some
'
*•
.
,
,
>
.
.
-
;•
shall be the state securities
control board which shall
eonsisl
of five members all of whom shall
be citizens and residents of
thJ
state.
§4. Appointment. The .members of the
board
appointed by the governor by and with the advice
and
senate,
S
;//
The chairman of the board
shall
§5. Expenses.
deposits
shall
56. Removal.
Any member of the board may be re¬
opportunity to be heard.
/!,/://
; •
§7. Vacancies; quorum. : In the
event of a vacancy
by the death, resignation, removal or
disability of any
moved for cause after
gentlemen know, in 1940, the Com¬
caused
her,
com¬
the
vacancy
an
shall be
filled
by
mem]
the
governor
by and with the
a
lawyers and
and other institutional
accountants
Commissions,
.
ployees within the limits provided
by Appropriation. The executive
officer, and other assistants, inspectors, and
employees of the board
asso¬
insurance companies
Shall'all be in* the
competitive class, of the civil service. The board
shall; have its principal, off ice
in the city of
Albany/ and may main¬
tain a branch office in
the cities (of New York
and Buffalo and suet
other places as it
may deem necessary.
* V / >
;
*
/:
investors, dealers, underwriters, and
issuers. We have also received
many suggestions from in¬
to
terested members of the
of collating the
$45,051,031,000
Dec.
on
31,
the.
1946.
suggestions received relate
This represents a decrease of $3,-
797,584,000,
■//',: /1
"
of securities and the
7.8% in the last six
months of the year.
Other secu¬
rities amounted to $4,738,903,000,
while cash, balances with other
banks, and reserves with Federal
Reserve Banks totaled $15,088,821,000.
:
/
"Capital
or
stock
of
State-super¬
"The Lea
since June
On the
Mr.
I'
liabilities,
and
the
'■/
■if
expenses
of
all
earnings
anc
a
return
to
Wash¬
Congress who have
ings Administration. All of those with whom
the subject
has been discussed have
indicated their concurrence
in the
view that the move should be
made
and
State-supervised
as
banks.
of
expressed interest in the matter and with
various interestec
officials in the Bureau of the
Budget and the Public Build¬
publish its annual study
-
•
manner
have been informed that the SEC
is
f
^
Jp
*0
•
t
AX
ri.
«
} \ >4 •»
'
•
1 l
t
Sat
J
L
V
-
-«
.
t
1
*
1
^
!
ltr
soon
high
as
possible. We
up on the Public
V
I
•
'
V
,
and
"-
•
--
-
'
>
revoke for
licenses tc
cause
otherwise! deal in
stocks, bonds
provided hereinafter. ///■•
'i/
or
or
securities
.•/
'
(2) To keep records in
'
'
proper form to be pre¬
scribed by the board of all
licenses issued and all licenses revoked
.
of persons
buying, soiling
securities.
or
*
-
otherwise dealing in' stocks, bonds oi
J"
-
'
■*,
.
(3) To adopt rules and regulations for the
supervision and regulation of persons
buying, selling or otherwise
dealing in stocks, bonds or securities."
'
;
'
'
'
I
./■• f-N(4) To
carry on by its agents or employees!
inspections of any premises where
stocks, bonds or securities are!
bought, sold or dealt in.
•>,
<
• ■
\
;
(5) To prescribe forms of
applications for li¬
censes under this law
and of all periodic
reports which they deem[
necessary to be made by any licensee.
r.-..-v1
i
,
-
'
.
■
-
-
,
(6)
and
shall
the
To make
an
annual renort to the
legislature of its activities for the
include
information
as
the
amount,
of
license
it deems advisable:
'
' 'V
•*
'
-
oath any licensee
t
and
,
jr
^
,
i
examine
or
fees
oast
year:
collected
and
governor|
This renort
such,,otherj
"
•'
.
Td examine
:
of any such
material for its
subject of the SEC's moving back to
Washington
ington with the President, members
Association
assets
in the
buy, sell
^
legisla¬
Washington
"We have discussed this matter
of
The State Bank Division of the
the
now
Caffrey's statement said:
liabilities."
soon
it
persons to
and records
Return to
capital accounts amounted to 7.5%
showing in detail
as
protecting the investor.
discounts, 21.9%; other bonds
5.7%; all other assets, 1.0%. Tota
will
inspection
And the Commission recommends the
enactment of
tion to deal with this
problem."
and
American Bankers
power of
with respect to the
books and records of brokers and
dealers. I have referred
previously to the manner in which the absence of such
power
limits the Act's effectiveness in
17.9%; loans
of total
as H.R. 7151.
H.R. 3691 in the last Con¬
Exchange Act
State banks showed United States
bonds 53.5%; cash,
'•V.
as
same
"The average asset distribution
compared to total assets of al
:■
Bill, introduced
of the books and records of
investment advisers
has under the Securities
r:','
»
use
gress, would have amended the Investment
Advisers Act of
1940 to give the Commission the
29, 1946.
(1) To grant
procedure for registration
of the
statutory prospectus.
f
Congress
vised institutions, including capital debentures and common and
duties:-
to the
"At the time the
recommendations for amendments are
submitted, the Commission also expects to renew the
recom-;
mendation made
by it in 1946 to extend the
reporting and
proxy requirements to the larger
unregistered companies.;
This recommendation was
incorporated in a bill introduced
in the
closing weeks of the last
preferred stock, totaled $1,519,478,000;
surplus,
$3,106,928,000
undivided profits, $1,274,364,000
and reserves $381,816,000; giving
total capital accounts of
$6,282,586,000, an increase of $16,118,000
[S
receiv<|
per year; and the other member]
receive seven thousand five
hundred dollars peJ
year.
They shall also be entitled to their actual
expenses in thJ
performance of their duties.
of the board
-
;••
h\
thJ
-:
public. We are now in the process
§9. Disqualification of
members and employees./Nc
suggestions received and
developing our member of the board or any officer,
own
deputy; assistant, inspector oi
proposals for amendment of the statutes: As soon as employee thereof shall have
any interest/ direct or indirect, either
the suggestions from all sources
are
developed in definitive -proprietary or by means of any loan, "mortgage or lien, or in any
business wholly or
form, they will be circulated to the interested
/ "Holdings of government secur
partially devoted to the buying, selling or dealing
groups and in stocks, bonds or other
securities.
ities continued to decrease reflect¬ persons for comment. Thereafter, with the areas of
Any one who violates any of
agree¬ the provisions of this section shall be removed -•* '
: ' d [' ing the policy of debt retirement ment and disagreement marked
out, the Commission-pro¬
/
/.//
§10. Powers of the board. The board shall have the
by the government and totaled
poses to report to Congress.
At present the bulk of
following powers, functions and
V
I
shall
consent of
/'//
../
•
salary of twelve thousand dollars
a
•
representatives of State Securities
ciations of
$1,388,995,000. All other
increased $79,568,000 to
$8,241,343,000. Loans and discounts
aggregated $18,404,430,000 repre¬
senting an increase of $1,354,813,000 since June 29, 1946.
/:'
y.
.
,
,
•
deposits
v.
-
•_
joint study of the operation of the advice and consent of the senate for the unexpired term. Three
members of the board shall
Securities Act and the Securities
constitute a quorum for the purpose oi
Exchange Act with a view conducting the business
to
thereof; but a majority vote of all
presenting recommendations to the Congress for
memoer]
in office shall be
any
necessary for action.
'■/
/'/s;/ ^/^/y^l -1
amendments believed to be
necessary. This study, as well
Executive officer;
employees; offices. The board
as
hearings before this Committee on bills proposing amend¬ shall appoint a chief executive yofficer and fix his
eomperisation
within the budgetary
ments to these
appropriation therefor. Such
statutes, were interrupted by the war. The
executivqiofficd
shall, subject to the supervision and control of the
study has recently been resumed. The Commission,
board, /exercise
by gen¬ any of the powers, functions and duties conferred
eral and specific invitations is
upon the board by
seeking the maximum public law which the board may delegate to him. The board shall also havd
participation in the study and has held a series of conferences power- to engage necessary deputies,
assistants/inspectors and em¬
with
decrease of $4,438,538,-
a
:
munity undertook
June
from $31,031,115,000 to a total of
$31,988,480,000,
while
United
States
are
i-l/v/
•
quorum.
,r
exempted from all regis¬
subject to the anti-fraud
are
mission and various interested
groups in the financial
partnerships, and corporations in¬
creased
from
$34,172,890,000 to
$35,718,414,000, time deposits made
by the same groups increased
showed
Congress to
Acts, the statement contained the
following
passages:
29, 1946 from
$79,193,313,000 to $77,337,232,000
of which $60,240,122,000 was held
by commercial banks, $16,811,405,000 by mutual savings banks, and
$285,705,000 by private bankers.
Demand deposits of individuals,
crease
this
Exchange Act growing out of the pending joint
to the securities
supervised banks continued to de-
'],;
•'*
9,585
branches.
.
in
With respect to other recommendations for
amendments
bank
and cash
depositories), 531 mutual savings
banks, and 36 privafe bankers.
.*v
1881, the
in
municipals
requirements but they
Removal.
-Vacancies;
.
municipal bonds from certain of
provisions of the Securities Exchange Act. As the
Securities
of
9,018 commercial banks (loan and
trust
companies,
stock
savings
banks, industrial
introduced
.
officer; employees; offices
9. Disqualification of
members and employees.
10. Powers of the beard./
/
11. Oath of office; bonds.
;
Y
§3. State Securities Control Board.
There shall be iri
the executive department a securities
control division, the head
ol
which
provision of the Act. The Commission believes that this
Bill should be considered
by the Congress, along with the
other proposals for amendments of the
Securities Act and
ABA state:
"Stat e-supervised
been
statute stands now,
Government
numbered
has
transactions
the fraud
obligations
during the six-month period. As
to the further showing of these
institutions, the advices from the
Is/
t:;':
exempt
1881
-
8. Executive
v
■
BOARD
.
6.
;
"H.R.
Appointment.
Expenses.
5.
commission's statement said:.
,with
'
CONTROL
State securities control board.
7.
Concerning the above-mentioned bill, H.
or
SECURITIES
4.
sible amendments to the securities laws.
of
II
3.
31,
This
1378)
page
ARTICLE
'
Among the developments at the conference was the
presentation by Chairman Caffrey of a 47-page "progress"
report on the SEC-industry discussions looking toward pos¬
banks in the 48 states, the District
oi
Proposed SEC for N. Y. State
McConnaughey,
Hanrahan, in addition
Richard B. McEntire and Edmond M.
semi-annual report on assets and
of
State - supervised
1946.
to
that
the attendance of Commissioners Robert K.
liabilities
of
//;!/
proposed amendments to the basic laws under which the
of
American
ret
■
it was announced on
by Thomas W. Leggett,
President
ciation
•
applying to municipal as well as other securities. What
"We have also been advised that the
the SEC is this year likely to do is to issue a statement,
budget, as sub,
mitted, includes funds to cover the move of certain
citing as authority for its powers to compel disclosure,
agencie]
including the Commission, and that the next
another section of the
step must awafl
existing law which excludes from its
Congressional consideration of the Budget. While no
scope municipal bonds. Thereby, it is thought the opposition
defiajj
date has been assigned, it has been
indicated that if
to the still
pending SEC proposed rule from a small segment
approved budget includes the necessary funds, -the
of the investment business
may be eliminated.
movl
'/./.
will take place shortly after such
approval."
/
Meanwhile, Commissioners and key officials of the SEC
met today in executive session with members of the House
Interstate and Foreign Commerce Committee to discuss
any
sharply
financing
during 1946, the 9,585 State-super¬
the
with
Buildings: Administration^I list of I agencies to
Washington, " that consideration* has been given
appropriate office building for the Commission, but
to
1375)
page
Thursday, March 13,
194
.
to
Reflect Importance;
the
i;f, Ji.
--
or
(
'
•
p
•
cause
to
1
.
' i"'--
'V:.,
•
.
1
to be examined under
cause
be examined the books
licensee; to hear testimony and take proof
information/to administer oaths; and for any-such
purpose to issue a subpoena or
subpoenas to require the attendance
of witnesses and the
production of books, which shall be effective
in any part of the
state. Thb powers provided in
this subdivision may
be delegated
by the board to any member or
employee thereof. The
provisions of the civil practice act
shall, where practicable,' apply to
such subpoenas.
V'
/
i!
§11. Oath of office; bonds.
Each member of the board
entering upon his duties, take and file an oath of
office as prescribed bv
section ten of the
public officers law acd
shall execute an
undertaking in the penal sum of ten thousand dol¬
lars. as prescribed
by and to the effect provided for»in section eleven
of the public officers
law. The board
may require any officer or
employee of the board to file with the
comptroller a bond in such
shall,
before
V1":
k
,
>v
^
...
,
i
•
ty
7-r
bS3twSwv*fMW«i
>^4 ••:_ ijj
Number 4576
165
Volume
.
article'
:
SELLING
•'
*
V.
and/or penalties imposed
by or under the tax law, and for
thereof r C °r re^u
^
iii
u
,i
or
dealing
in
; BONDS or securities
provided
stocks,
•
Section 12. Buying, selling or dealing in stocks, bonds or'securities
forbidden without licenses.'
,,v'V
13. Inapplicability of act to certain
classes of securities
14. License.' i•/••"' /:
in
on °f
a
state tax commission in
§19* ?eview by the
u
'
buying,
•'.», -;i Yi 'f(\
be subject to review
article
violation
pursuance
courts. The following actions by the
by the
supreme court in the manner
seventy-eight of the civil practice
act, or by other
appropriate remedy, except that no
stay be granted pending the
determmation of the matter.
Proceedings to review any action by
the board shall be
brought in the third
department.
/x/....'
•
15. Statements to be made in
applications for license
k 16. License fees; when due
and payable; renewals
'
(1) The refusal by the board
v-
Revocation of
'!
19.
'
20.
I
f
5
(
'
»
'
>
where such business is carried
on.
Whenever a
or destroyed without
fault on the part of the
licensee or his agents or
employees, a duplicated license in lieu
thereof may be issued
by the board in its discretion and in accordance
violations.
V
*"
-
'4-
22. Time of taking effect.
.
tion
or
assessment.
,
:
'
-
1
verified, and shall set forth in detail such information concerning the
application for said license as the state board may require. Said
application shall be accompanied by a certified check, or cash, or
postal money order for; the amount required by this chapter for such
license.^ If the; state baard ■ shall deny the application it shall return
|
|J^-fde^/-the.rapplicant. If the state
j
it shall issue
license in such form
board shall grant the application;
shall be determined by rules.
; §15. Statements to be made in application- for license.
a
as
Payment of fees
it
as
may
Penalties for violations:
;
,,
person who after January first, nine¬
teen ;.nphdred forty-eight,
engages either wholly or in
part in the
business of buying, selling or otherwise
dealing in stocks, bonds or
f
W-5^;i,5^curi^ies, without having
an
whose
appropriate license therefor,
or
license has been revoked or
canceled shall be guilty of a mis¬
demeanor and upon conviction therefor
shall be punished by a fine
of not more than five
hundred ddllars or by imprisonment in a
county
jail pr penitentiary for a term of not
more than six months or both.
x.(2) Any person who shall make any false state^®ptjn "me;, application for a license under this act shall be guilty of
-
a
a
misdemeanor, and upon conviction thereof shall be
punishable by
fine of not more than five
hundred dollars, or by imprisonment in
cpumy
or both.
jail or penitentiary for
a term of not more
than six months
"i
violation by any person of any provisipn of this law for which no punishment or
penalty is otherwise
provided shall be a misdemeanor.
'
I
/
„
tual
construction
the
larger
costs.
Some
builders, looking
of
for¬
ward to years of continued
opera¬
tion
in
their' communities,
are
pricing their properties at a fair
normal mark-up over actual
Others
are
undoubtedly
charging whatever the market
and
costs.
will
regardless of
pay
the longproperties.
term value of their
However, even these factors
likely to be influenced by an
tive construction year.
are
ac¬
If the in¬
dustry, free of major work stop¬
pages,
succeeds in starting ap¬
proximately a million dwellings in
1947, the competition of these new
should
bring a. downward
housing prices. Exist¬
trend in all
ing homes will face the compete
tion of the newer
dwellings and
their prices will also reflect their
true worth.
;
•" >
In the light of all of these con¬
ditions it is reasonable to believe
that the peak in building costs has
.
been reached and that the future
trend will be downward. While it
is
possible that costs might drop
as
much
the
as
20% below 1946 peaks,
probability
of reaching this
largely on wages
productivity that no safe fore¬
can yet be made.
level depends so
and
cast
^4) Violation by any person of any. rule of the
misdemeanor if such rule so
provides, and if such
.
.
board snail be
a
rule shall be published
.
are quite
likely to be related more
closely to local demand and local
real estate price levels than to ac¬
homes
,Any
.
t
§1C License/ Any person may apply to the state board
fpr a licfsnse to buy, sell or otherwise deal in stocks, bonds or other
securities within this state. Such application shall be in
writing and
'
^ regulations and such
prescribe
a
'$
.
>
shall be lost
;
§12. Buying,
selling or ,deal'ng in stocks, bonds or
securities forbidden without license. No person who
engages either
wholly or in part in the business of buying, selling,
offering for sale
negotiating for the sale of or otherwise dealing in .any stocks, bonds
or other
securities within, the state after January
first, nineteen
hundred-forty-eight without a license therefor issued
by the state
board as hereinafter provided. /-v
i
§13. Inapplicability of ac^ to certain classes of
securities.
The provisions of this act ishall not apply to the
buying, selling or
dealing in any stock/ bond or other security lister! on the New York
stock: exchange, any security. issued or guaranteed by
any foreign
government with which tlie ,United States- is maintaining diplomatic
relations, or political subdivision thereof having the power of taxa¬
.
a license by the board.
room
license
■
license.
a
•
-r20; Posting Of license. Before
business for the time for which a licensecommencing or doing
has been issued said
icense sliall be posted
up and at all, times
displayed in a conspicuous
place m the
)'•. '""
Posting license.
21. Penalties for
.
:
license.)
Review by courts.
Th? ^vocation of
t>
to issue
U
any
17., Disposition of moneys.
,
V
THE COMMERCIAL &
FINANCIAL CHRONICLE
penal sum as it may deem necessary; conditioned for the orooer and
faithful performance of his duties hereunder and the
satisfactory
accounting of all moneys received or disbursed by such officer dr
employee pursuant to this law.
■
•■
vt ■''*
,
immediately.
in
a
manner
prescribed by such board
act shall take effect
^2. Time of taking effect. This
,
I
.,,Jn addition to such other information as the state board may deter¬
mine shall be furnished in .any application for-license under this
act,
■the .following information shall be .given, under oath:
(
(1.) The name, age and< residence of each applione and they be
partners, the partner¬
ship " name and the age and "residence of the*.several persons on
applying; and the facts as to his or their citizenship;
/
(Continued from page 1387)
slow-downs when supplies are terials;
second, shortages in sup¬
running short hand the lack of ex¬ plies that cause
Postwar
Trends
in
long interruptions
Foreign
perience of many new workers, in construction
ISjjV,Y:*^ v - ;i (2) The name and' residence of each person
schedules; third, Trade of the United States—For¬
Jmterested, or to become interested, in the .business jof buying, selling has further complicated the cost., labor inefficienmy fostered by the eign Commerce Department,
reasonable
to tendency to stretch
.or otherwise dealing in stocks, bonds or other securities for which problems. ; ft; is
jobs when ma¬ Chamber of Commerce of the
|; the. application is made, together with the nature bf such interests; anticipate that as these abnormal terials were being installed faster United States, Washington 6, D. C.
conditions disappear,
costs will than they could be
and if such applicant be a corporation, the application shall set forth
delivered; and —Paper.
•;/ ' v■ /r;;
the name of the corporation, the names of its directors or other gov¬ again drop and the competition fourth, the persisting enforcement
between alternative mater la Is of
work-output
restrictions
in
erning 4 body/, the names of 'H its officers and, stockholders if it be
"Security
Dealers
of
North
suitable for the same building use, some
.stock corporation, and! the state under the laws of which it is
highly unionized areas.
America"
organ¬
Directory of stock
or the
competition between manu¬
ized;,
Elimination of the first three of and bond houses in the United
cant and, if there be more than
—
^
i,
vAJ-Vvt'-ti (3)
statement that
A
such
applicant has
not
$eeriy£ohvlctedkhf •* a#eloriyi an^! not had
a Iteense issued4o Riin
/.prider this act revoked for cause within two years prior to the date
of such application. If there be any change,; after the granting of a
I license, in any of the facts required to be set forth in such applica¬
tion^ notice of such change shall be filed- with the board within ten
days after such .change in verified form. Failure to do so shall, if the
boardt find that it was wilful and deliberate, be cause for revocation
I
of the license., In
giving
notice, or taking any..action in reference.
license, the board may rely-upon the information furnished in
JJsuch application and in any supplemental statement connected there¬
with, and such information may be presumed by such board to be
correct, and shall be binding upon a licensee as if correct. All infor¬
mation required to be furnished in such
applications or supplemental
Statement jshall*beseemed material in any prosecution for perjury.
§16., License fees; when due and payable; renewals. The
fee for a license to
engage in the business of buying, selling or other¬
wise
dealing in stocks, bonds or other securities shall be the sum of
ffiyp^hundred dollars per year, / t ] / ^
.
:
V*..;' Each license shall be/issued.for, a license, year
expiring on the thirty-first dav of December following the date of
its issuance
and the license fee prescribed therefor by this section
shall be paid in advance at the time the application therefor shall be
,
,
to
facturers
of
products,
will
downward.
.made
as.
Each
act/4
license
issued
pursuant to this act may be
renewed upon application therefor by the licensee and payment of
the annual fee for such license.v In. case of application for renewal of
licenses, the board may dispense with the requirement of such state¬
ments as it deems
unnecessary in view of those contained in the appli¬
cation made for the
original license.
lines
of
turn price trends
Evidence of this has
Of distributors and dealers toward
accumulating inventories of build¬
ing items; still consideerd out of
lineJn price.
any
provided by this
same
already; appeared in the resistance
It
is
significant that building
prices as compared to
1941 levels'have risen less than
material
the
average of all commodities
and far less than the rise in prices
of foods and farm
products/ Peo¬
ple who believe that building ma¬
costs are abnormally high
are either poorly informed as, to
terial
the general situation or are draw¬
ing theft* conclusions from isolated
examples.
^
t<^other;^
factor
in
'
me
following causes:}'?:.4/■
(1)
Worth, merits, valuer
;
or
t
Misrepresehfation, either as to the financial
price of any stock, bond" of? other
security.
.
-
'
,
,
h
.
.
.
credited
States and Canada, 1947 Edition
entirely revised—Fabrikoid—$9.00
ment controls. With increased
sup¬
Southern
Pacific
Railroad
Sys¬
plies of materials the exorbitant
tem
overheads due to interrupted
System—research report—Thomas
G.
Campbell
and
William
T.
con¬
struction schedules will shrink to
Jobs
that
to a year
1946 have at least
being- finished
thirds
that
took
eight
to complete in
a fair chance of
in
time.
half
to
Labor
Pennsylvania
vs.
Campbell,
York 5,
two-
Wall
67
Railroad
Street,
New
N. Y.—$10.00.
With Slay ton & Co., Inc.
ineffi¬
(Special to The Financial Chronicle)
ciency caused by the natural in¬
ST.
clination to slow down when work
LOUIS, MO.
—
Gordon O.
Blaine is now with Slayton &
Co.,
to be running out should
be replaced by the normal pres¬ Inc., 408 Olive Street.
sures to complete work on sched¬
ule.
//■;'
a:
/"'V V: ,/ "
With Herrick, Waddell
The trend in the fourth factor,
(Special to The Financial Chronicle)
appears
involving work output restrictions
established during the depression
and continued insistence
maximum overtime work as
years
on
LINCOLN, NEB.
Luikart
staff
has
been
—
Gordon A.
added
to
the
of
Herrick, Waddell & Co.,
Inc., 55 Liberty Street, New York
regular
City. '
'
a
condition
provement already evident in dis¬
work, cannot be forecast at pres¬
ent. These labor restrictions vary
tribution
of
building
materials.
Black markets have largely van¬
ished. During the seasonal slack
of
this
rates
Winter,
have
high
been
production
maintained
in
stocks in anticipation of an active
Spring and*Summer demand. The
exceptions already noted are in
the case of'materials which are
priced out of reach of the average
builder; in such cases the dealers
are simply refraining from build¬
ing up their inventories and are
i Vv (2) Charging more than the.commission allowed
by any
regularly recognized stock 6r purchase exchange for the buythus forcing price revisions in the
m er selling of any stock, bond or other.
security.^y^^;:.^v;'//: r •' 4k
right direction. ;
(3) Bucketing, or while acting as a broker under
orders to nurcbase-'or sell stocks, bonds or other securities foir;cusBuilding material costs are only
tomers,. selling or purchasing for his own account of the same stocks, one factor in the finished costs of
ooods or
securities with intent to trade against the customer's order. homes and other structures,
v
Most of the factors which con¬
'V (4) For being in the condition of insolvency.
■?. r;-r.iv(5) For failing to keep or maintain sufficient tributed to abnormal construction
records to nermit an audit
satisfactorily disclosing to the board the costs in 1946 are expected to com
•true condition
pletely disappear during the com¬
of the business.
'
/
A
'.'If
-r
.a:.'
^
(6) iFor making any,false material statement in ing year. These were: first, black
,.application:-for aJicense. :/ 4..-r-y■/->!:-T> market prices or the forced sub¬
(7) For failure, or default;of ^ licensee to pay stitution of high cost specialty
any tax,
relating to stocks, bonds or securities/or any part thereof. ; nroducts for low cost staple ma_
be
building costs/is the great im¬
•
comptroller las provided by law.:/V''
> 4
§!&;;Revocation - of licenses. Any license issued pur¬
suant to this, act
may be revoked for cause,- and must be revoked for
can
largely to relief from impractical
and poorly administered
govern¬
months
The board shall make rules
most
manufacturing
enterprises
regarding applications for renewal of licenses and the time when
-with the result that the pipe lines
application shallmade'
;;4
of supply have been filled and
444'-- §17.: Disposition of mOrieys^Moneys received for license
dealers L are
fees provided for
now' accumulating
in this act shall be turned over by the board to the
rotate
these > factors
normalcy.
,
Rise in Prices Not Accepted
a
,
the
to
accepting
widely from city to city and de¬
largely upon the attitudes
With B. C.
pend
organizations.
ification will
reveals
Perhpas
come
tions.
ence
clar¬
when Congress
its final program for
establishment of
fecting
some
the
fair-play laws af¬
labor management rela¬
Perhaps the biggest influ¬
will
come
from
the
OMAHA, NEB.
Gillern
has
staff of
B.
.
t
Just
—
Emil J. Von
added
C. Christopher
Grain Exchange
Building.
to
the
& Co.,
In the
past he was with Harris Upham
& Co.
•
•
/•
.
y
;.-;
Joins Staff of Otis Co.
(Special to The Financial Chronicle)
AKRON, OHIO—Harlan H.Mon¬
tis has become affiliated with Otis
&
Costs and Real
been
unions
themselves when they realize that
they alone can reduce the cost of
living and housing by their own
productivity.
Christopher Co.
(8pecial to The Financial Chronicle)
of local rather than national union
Estate Prices
Co., Terminal Building, Cleve¬
In the past he was with
land.
distinguished be¬
tween building materials costs and
Mayfield-Adams Co. in Akron and
prior thereto conducted his own
the final
investment business in New York
ings,
as
we
costs
of
finished
build¬
also- distinguish be¬
tween the costs of the buildings
and the prices at which they sell.
we must
The final
price includes land and
improvement costs, overheads and
profits. The profit *factor is very
city-
/I
Now With Field Richards
(Special to The Financial Chronicle)
CINCINNATI, OHIO—Joseph B.
directly influenced by the Wise has joined the staff of Field,
& Co., Union Central
pressure of demand in relation to Richards
supply. While the housing short¬ Building. He was formerly with
age remains, prices for new homes J. A. White & Co.
often
*1
-•I
wppSiie'!
COMMERCIAL & FINANCIAL CHRONICLE
THE
1420
:
Thursday, March 13, 1947
both management and port from foreign sources of sup¬ rubber, in a revolution, the bank"
ply, none of the millions who use ers and newspapermen could keen
oil products raised a voice in pro¬ their feet on the ground a
little
gaining unless the law permits test, although there are some 5- longer. In such an event, I WOn
million
persons
sustained
by der where management which
equal freedom in bargaining for
jobs provided by oil production could-not provide jobs and pav
both labor and management.
;
in this country. None of the oil wages to
buy food for hungry
The management of American
(Continued from page 1387)
companies that own oil produc¬ stomachs, could hide. I' suspect
to buyers with little to pay and business is not asking that many
certain economsts, was not to cre¬
tion
in
foreign countries pro¬ they should be charter member*
laws be repealed, or even mod¬
ate more wealth, but to divide just break even on the program,
of the Rubber Pole Club.
X
ified. The astonishing interpreta¬ tested, and some advocated pro¬
will tax to the maximum the en¬
what we had among a greater
A revolution arises when
tion by the Courts of certain laws, ducing less/oil here and being
stomnumber of
people.
Propaganda, gineering genius of this country.
permitted to import more without achs are empty because there
and particularly the unreasonable
are
and particularly the appeal to self Yet, that is the nation's new as¬
paying taxes. Only those owners not enough jobs. The
and harsh administration of others,
termination
;
gain at the expense of somebody signment to you today. ;
of
oil producing
properties lo¬ of all revolutions in modern
has produced such uncertainness
time*
else, succeeded in advancing this
To undertake this new assign¬
cated exclusively in the United is a
dictatoship.
Y ;
and unpredictableness in business,
/
S
general idea even to the point our ment, and you will—it appears
States protested Mr. Krug's the¬
that
management
recognizes it
There must not be a revolutionSupreme Court actually found it reasonable you and your associ¬
ory, and they are now, through a
cannot provide the jobs and the
but the only way to prevent it is
compatible with our written Con¬ ates in management should be
products at the prices necessary system of educational propaganda, to provide jobs for all who are
stitution, under the astonishingly fortified with such legislation as
endeavoring
to
preserve
their
to preserve our economy and the
willing to work; and only states¬
revolutionary interpretation that will give you a fighting chance
stake in Free Enterprise.
system of Free Enterprise, unless
manlike management assisted
all such legislation came within to succeed.
You certainly must
by
Last
summer
when
packing the
there ' are
some
constructive
engineering genius of this
the Court's interpretation of these know the cost of labor and how
plants were closed by strikes and
changes.
country can perform this miracle
simple words—"General Welfare." much work you will get for what
meat was impossible to obtain, I
under world economic
Business alone must provide the
conditions
And, without thes6 t\yo words in they are being paid. .You certain¬
heard;, business mem, say — the
today. Lawmakers cannot make
the Constitution, which have Jjeen ly must know in advance when payrolls and the products that will
packing plants should be taken
make a system of Free Enterprise
jobs/ Economists
can
there since 1881, the Court admit¬
only tell
over by the government, but they
your employees will work.
You
what caused something to happen
ted most such laws would have
work, and to provide these man¬
certainly must be able to dis¬
would denounce the government
that has already happened. Only
agement must be able to compute
been unconstitutional.
charge those who will not work,
land upon
Management's Responsibility for
Consbnctive Legislation
employees
alike.
Management
cannot
expedite collective bar¬
■
,
•
In
it
1940
appeared likely this
nation would become engaged in
a world
war.
In 1941 we were
compelled
become
to
participant in that
the
of
defeat
the
Avar,
those
major
to prevent
that
nations
employ some
who will. You certainly must be
able to decide what work is to be
be
and
allowed
to
done, how it is to be done, and
You must
able to contract for raw ma¬
when it is to be done.
be
most
nearly practice our way of
life; and to prevent our own ulti¬
terials
mate enslavement. In this national
dates.
You
emergency,
the lawyers and the
economists who had been passing
amount
of taxes you will be
laws to divide the wealth of those
quired to pay; and you must have
confidence in the predictability
who
had
with
some,
those
who
,
ascertainable
prices,
predictable
delivery
at
for
and
of the
know
must
the
re¬
meaning of simple English
had less, were of little value. They
could tell no one the kinds of ma¬
words written
chines, the type of explosives, the
legal advisors, know for- certain
any of these pre-requisites for the
possibility of accomplishing the
nation's vital assignment to you.
methods
of
transportation, the
of communication, or the
meaning of logistics necessary to
fight a war — if we had had all
ways
such things available. They knew
much less about the number and
size
of
plants,
war
should
be
where
located and
they
how
they
could be operated; and how they
could be built in the shortest pos¬
sible time, as well as manned by
literally
millions
individuals
of
who knew nothing about such op¬
erations.
In that life
or
death
emergency, this nation turned to
the brains and special talents of
its engineers. The magnificence of
that
profession's < performance
is
evidenced by the fact this nation
was
making one-eighth of the
machines
Allies in
of
its
war
later-to-become
1940; but by the end of
1944—a short period of four years
—it was making more fighting
equipment than all its Allies and
all its enemies combined.
time it
same
was
At the
producing suf¬
ficient necessities of life to main¬
tain
its
home
population of 130
million people on a standard of
living far superior to that of any
other nation in
the world.
This
fantastic, almost unbelievable, ac¬
complishment that has preserved
this nation, is credited to the en¬
gineering profession of America'to
a
higher degree than any other
profession.
.'"V
(X
•'
,
1
Now
are
that
the
involved
in
war
is
over,
another
life
we
and
death
struggle to prevent a de¬
pression of disastrous proportions
which has always followed every
war we have engaged in.
To pre¬
vent
this
depression, the nation
desires continuous employment of
the maximum number of employ¬
ables
at
the
highest
possible
wages; and to produce an unin¬
terrupted flow of products which
will
be sold at a profit, but at
prices less than they are now be¬
ing sold, In addition, the nation
knows we produce more of almost
.
everything than we can use; and
in the past this excess has totaled
10% of
our
total production. This
percentage
greater
crease
may
because
soon
of
our
become
in¬
vast
in productive capacity. The
surplus production must be
sold
to foreign purchasers or there will
be a decline in the number em¬
ployed, as well as the value of all
commodities, because the price of
a
surplus will eventually affect
the price of the whole.
To sell
■■
1
our
-r
7*
~"<n
surplus
countries
\v+.
in
products
in
foreign
competition
with
■
cheap
and
labor, long hours of
depreciated
currencies,
work
and
land.
the
as
law
of the
Today neither you, nor your
of
the law
When
the
land
re¬
management
to employ
more
employees than there is
work to do, at wages and hours
and
values of efficiency which
the employees determine — then
that law should be changed or
management will not long sur¬
quires
vive..
(}//■(•,('
1
'X
When the law of the land per¬
mits
one
group
of employees to
compel other employees by bodily
force and threats upon their fam¬
to pay a sizable sum of
money each month to be allowed
ilies,
to
work, and compels them to stop
working or only do a limited
of
amount
want
—
work—then
to
must be
work
when
they
that
law
the
land
changed.
the
When
law
of
group of employees to
another group of em¬
ployees in a distant state whom
they do not know to cease work¬
ing for a management with which
neither group has had any dis¬
agreement, then that law must be
changed. v
permits
a
compel
.
When the laws of the land
are
interpreted by the Courts en¬
tirely different from the intentioh of the lawmakers, and at
variance with the ordinary mean¬
ing of the language employed in
the laws, then there must be some
changes in the authority of our
with
costs
reasonable
accuracy,
extent
many
are
in doubt it
management of business and
,
Government.
Payments!
Nigh in 1947
economic
desire to withdraw their deposits
faster than loans can be collected.
If any considerable portion of the
651,000 daily from
advancement; of
new
theories, the spread of gossip and
the support of laws which would
destroy the system continues un¬
interrupted with each of the ad¬
vocates proclaiming such laws are
necessary to preserve the system
and make it work under the
new
changed conditions. Such ad¬
vocates enjoy calling themselves
"Liberals," and all who oppose
them, "Reactionaries." Strangely,
and
each
of
these
theories
new
proposed laws find
some
and
business of
indebted
They
this
to
there
are
the
Federal
those
during 1946,
.average
of
$7,308,000 daily in 1945 and $6,798,000 daily in 1944, the Institute
of
Life
Insurance
reported on
Feb. 27. Aggregate benefit pay¬
ments during 1946 were $2,792,724,000; in, 1945 they were $2,667,305,009 and in 1944 they were
compared
Reserve
businesses
a
among
management (who really
think they are staunch and unfal¬
de¬
would
become owned by the Federal Re¬
serve Bank just as the Adminis¬
reached
staunch defender of the system of
Free
Free
instance,
which
close
drill
of
the
caused
during the
last
the
coat
seri¬
strike
steel plants
to
down, resulting in making
pipe and casing impossible
not
accept
an
contracts
for
work, I heard two such contrac¬
tors
suggest — the
government
lic
Enterprise, and at the
Service
eminent
same
the
I
of
of American business
,
/
is not open
but by piece meal, and
that
the
even
most
$1,279,667,000.
death
would have
for (
a
carryover
claims,
1946
the
shown
de¬
a
greater
the
amount
'•
Payments to
v
insurance
of
(( owned.
hidden
so
sincere
total of
first, time in
several years. Last year's death
benefits were 27% greater than
in pre-war
1941, reflecting the
From
these examples, it is ob¬
vious the attack upon the system
war
crease
this paper would strenusously op¬
pose the government taking over
the newspaper business.
1945
total
confident
am
record total last
new
Had it not been for
Company by right of
domain.
a
at $1,280,362,000, just over
year
time aggressively advocates the
city of Tulsa taking over the Pub¬
Enterprise. This confusion
management arises from
the new approach to change the
system by segments, rather than
in one operation. v <
within
For
with
tration ia power directed.
The
system of Free Enterprise could $2,481,257,900, The Institute's an¬
be destroyed forever by that sim¬ nouncement
issued Feb. 27, fur¬
ple process.
ther said;
v- ;(((/ X Y( Y'
r(r.
In the city of Tulsa we have a
Death
benefit
payments
newspaper which professes to be a
tering believers in the system of
ousness
their life in¬
companies
surance
country becomes
Bank, and there should be
pression,
American families received $7,-
,
support
could
the
the
Today there are no open advo¬
cates
to
destroy the American
system of Free Enterprise; but the
to obtain and oil well contractors
and these inequities have
placed that system in jeopardy to
.
Insurance
Today the nation is at long last
conscious of many inequities that
prise;
their business.
over
to
protect the banks of this country
agaiflst closing when the depositors
Courts.
experience with laws directing
business through the regulation of
human
relations
has
imposed
upon our system of Free Enter¬
taking
For some years the principal
profit. Several years
engineers working together can
lender oh government money has
ago, management to preserve this
makev continuing jobs, and they
been the RFC and some of its
must not fail. They have the first
right
to
operate
business and
know what payrolls could be pro¬ practices and unusual acts of fa¬ responsibility to use
every sound
voritism are about to be investi¬
vided, initiated a campaign to pre¬
argument, ': every ; persuasive ap¬
gated by the new Congress.
To
serve the Free Enterprise system.
peal; every factual presentation,
This was-an attempt to educate avoid this airing of dirty linen, and an unbiased demand to
cause
the Administration is now
the mass of people on how the sys¬
sup¬
constructive legislation, conducive
porting a bill to emasculate the to the operation of business to
tem worked, how it had developed
be
this country, and why it was the lending power of the RFC and
adopted. Will they do it, as tired,,
center this privilege in the Fed¬
best in the world, so as to prevent
discouraged X and
ineffective /as
eral ;; Reserve f' Bank.
Even ; the
any more untried economic the¬
their efforts (have
been (in the
ories becoming the law of the Chairman of the Federal Reserve
likes
this plan and has
land. That campaign'was by large Board
X-I don't know. "But if all the
effective in making most of the identified his name with the new
which we 1 think should
bill on which hearings are to start things
people
understand * what
was
happen in our country fail within
meant
by FreQ Enterprise, and immediately. Will many people
a few months after
military vic¬
making the economists, the labor protest? So : long as there is a
tory, don't give up. We can and
leaders, and the ordinary laborer, lending agency available,
why do make
progress toward higher
should they worry about the name
as well as our lawmakers, reaffirm
goals so long as we keep the goals
their belief in the system and ex¬ of it. Well, the old propaganda is
clearly in mind."
: 1
under way to gain support and
press their determination to pre¬
serve it.
That campaign made it dampen opposition. Now all the
•'i H»'
extremely unpopular to admit a deposits in the Federal Reserve
belief in
a
different system of Bank
belong
to
the
member
banks of this country and the U. S.
economy for this country. v(
and sell at a
'
living
policy¬
holders /totalled
be¬
in
lievers in the fundamentals of the
1946,
up
$1,512,362,000
$124,724,000 or 9%
over the
1945 total of $1,387,innocently permitting
638,000. Last year's total was
should take over and nationalize its destruction without recognizing
about
the
same
in
1941.
as
the coal mining industry.
These the manner in which it is being
Matured endowment payments
men
were
willing to have the done. By propaganda, business is X accounted
for
$398,340,000 of
other man's business taken over being persuaded all this is an ex¬
the 1946 payments, a slight de¬
by the government to eliminate a ception to the rule—to take care
crease in the
year but 53% over
hardship, but I am sure they of some special situation; and
the 1941 figure. Disability pay¬
would not want the contracting Free Enterprise is going to be
ments were $91,774,000 in 1946
business nationalized.
preserved.
X
( '
and dividends to
policyholders
When last year it appeared the
Two
weeks
ago
in Dallas, I
■„ were $501,600,000.
! (
railroads would cease operating heard the editor of a
large Texas
Calls for
policy cash sur¬
because of a strike and every newspaper open his address be¬
render
values
during
19 46
business was in jeopardy for lack fore a convention of
bankers, with
amounted to $316,727,000, about
of shipping, I heard some success¬ the
statement—"In
the
coming
31% greater than in 1945 and
ful business men say—It looks like
revolution, you bankers will be
38% over the low point reached
the government will soon have to the first to be
shot," and "I think
in 1944.
Last year's payments
own
the railroads to keep our we
newspaper
people
will
be
were 44% below the 1941 total.
economy going.
The same men next, not because you have not
would certainly not want the gov¬ provided
a
necessary
function
system
are
,
-
will
survive, unless these laws
are
constructively modified.< In
formulating these
modifications
in the
laws affecting business,
management must accept its re¬
sponsibility to preserve the social
benefits, such as unemployment
insurance, old age benefits and
free collective bargaining within
the industry that management is
responsible for; and to the extent
the employees bargaining
work
under the direction of that
man¬
agement.
Management first and foremost
cannot
fulfill
employees, the
investors
and
itsk duties
consumers
the
nation
to
its
and the
in
this
.
<
,
ernment to
take
over
their busi¬
ness.
Krug
last
Secretary of the Interior
stated in
a
summer—our
fast
depleting,
keeping
public
oil
our
address
reserves
are
discoveries
coming crisis unless a contract re¬
sulting from collective bargaining
are
is
should stop using our oil and im¬
enforceable
by the law of the
not
tion,
and done it
mass
When
and
up with produc¬
for national safety we
money
of
well, but because the
the
and
people
your
will need
banks will have a
Edgerton, Wykoff Adds
(Special to The Financial
lot of it." I recall he proposed the
immediate
rubber
organization
of
the
pole club; and to start with
bankers
LOS
W.
ANGELES, Calif. —James
Gerig has been added to the
staff
of
Edgerton, Wykoff & Co.*
Spring Street, members
the Los Angeles. Stock Ex¬
and newspaper men as
charter members.
He thought by
618 South
changing
change
all
telephone
poles
to
/
Chronicle)
of
.1
,Y <.
,,
;
;
r.
Number 4576
tVolume 165
THE COMMERCIAL &
FINANCIAL CHRONICLE
•
Acme Electric
June
Corp., Cuba, N. Y.
26 filed 132,740
shares
($1
par)
common
American Telephone &
Telegraph Co.
(3/25)
Feb. 26, filed
$200,000,000 35-year debentures due April
1, 1982. ; Underwriters—To be determined
by competitive
bidding.
Probable bidders include
stock.
Underwriters—Hernck, Waddell & Co.,
Inc., and First
Colony Corp.
Offering—To be offered
publicly at $5
a share.
Proceeds—Company will receive proceeds from
the sale of 68,880 shares and four selling
stockholders
the proceeds from the sale of 63,860 shares.
Company
also will receive proceeds from the sale of
20,000 warrants for common stock to underwriters at an
<
aggregate
Of the net proceeds ($292,940) $50,000
will be used to pay current bank loans; about
$20,000
will be used for machinery and equipment, and the re¬
of
(letter of notification) 214,890 shares ($1
par)
Being offered for subscription to stockholders
cof record Feb. 20 at $1 a share. Rights expired 3
14
;,
intends
new
Alaska
Radio
shares
to
mon
35,000,000, c
to
issue
invite
as
sealed
bids
for
Vs
,
Inc., Washington, D. C.
March 6 (letter of
notification) 4,000 shares of common.
share. No underwriting. For development
Price—$25 a
<of public radio communications network.
•
stock"
as
have
11
filed
896,404
shares
by
and
B
common
com-^
($25
amendment.
Subscription
price to be
a
basis
will
be
any
to
the
stockholders,
conclusion
will
it
additional shares of
com¬
part of company's refinancing plan.
Armstrong Co.
(G. D.) Inc., Laytonsviile, Md.
(letter of notification) 2,500 shares ($10 par)
common.
Price—$15 a share.
No underwriting.
For
working capital. -
Artcraft Hosiery Co.,
Philadelphia
Sept. 27 filed 53,648 shares ($25 par) 4te% cumulativeconvertible preferred and
150,000 "shares ($1 par) com¬
-
one
share of B
common for each five shares held of record
on April 2. Unsubscribed shares
will be sold to under- |
writers. Proceeds—Net proceeds will be added to funds
for the reduction of
outstanding bank loans aggregating
$85,000,000 as of Dec. 31, 1946. Business—Manufacture of i
cigarettes, cigars and tobaccos.
It also
ance
stockholders at
come
to issue
mon.
filed
be
"we
the
whole, to be received
a
American Tobacco Co., New York
common
common.
*
the
said
March 5
par) B common j
stock.
Underwriter—Morgan Stanley & Co., New York.
Offering—Shares will be offered for subscription to ;
New
Will
of
22
not be
necessary
an
by 11:30 a.m., March 25, 1947, at Room 2315 of the
pany offices, 195 Broadway, New York
City.
•
York
•
Dec.
on an instalment basis.
eligible to participate under the plan.
purchase
March
Inc..
not
are
Bidsr—Company
p.m.
July 22 filed 125,000 shares of 50-cent par
Underwriters—Hayden, Stone & Co., agents.
added to general funds.
authorized
redeem ftl
to
.
2,800,000 shares rhay be sold
Officers
t(EST.) March 11. Unsubscribed shares will ee oneieu to
the public through Greenfield, Lax &
Co., Inc., New
York.
For reduction of current obligations and
for
working capital.
v
'
Agency,
its
of
common
will be purchased by the
Price—Public offering prices by amend¬
Proceeds—Net proceeds will be used to retire all
unexchanged shares of $6 prior stock and
outstanding 7% preferred stock.
George Eastwood, President, in letter to
offering of capital stock
plan under which a maximum
Lines, Inc., New York
Express International
(3/18)
increase
company will proceed with
under its employees' stock
shares
underwriters.
ment.
appli-
j: cation to
common.
Air
scribed
porate purposes.
The registration states that upon ap¬
proval by the New York P. S. Commission of its
mainder for working capital.
Feb.
stockholders of the
company in the ratio of one-thild
of a new share for each
common share held.
Unsub¬
Morgan Stanley &
Co.; The First Boston Corp., and Halsey, Stuart & Co.
Inc. (jointly).
Interest—Coupon rate will be determined
by the successful, bid.
Proceeds—Proceeds will be ap¬
plied for additions and improvements to the
company's
plant and plants of its subsidiaries and for
general cor¬
price of $200.
Air-Borne Cargo
INDICATES ADDITIONS SINCE PREVIOUS
ISSUE
upon conversion
covers
shares of
common
reserved for issu¬
of preferred. Underwriter—New-
burger & Hano, Philadelphia. Price—$25.50 a preferred
share and $12 a common share.
Proceeds—Company wfcii
receive proceeds' from the
and
100,00
shares
of
sale of all
common.
of
the
preferred
The
remaining 50,0t:fl
being sold by three stockholders.
Estimated net proceeds of $2,300,000 will be used
by
the company to pay off bank notes of about
$1,100,01'®
and to purchase additional
machinery and equipment
shares of
common
are
in the amount of $1,200,000.
Offering date indefinite.
Automatic
>
Firing Corp., St. Louis, Mo.
gt. (3/24-28K
777
March 3 filed 25,000 shares ($10
par) 6% cumulative
preferred, 25,000 shares ($1 par) class A common and
100,000 shares ($1' par) class B common.
Underwriter—
O. H. Walker & Co., St. Louis. Price—$11.25 for pre¬
ferred share, $2.90 for class A
common, and $3 for class.B
American Water Works Co., Inc., N. Y.
Inc., N. Y. n
March 30 filed 2,343,105 shares of common
(par $5) plus >
950,000 shares ($1 par) common stock.
ftn additional number determinable
only after the re¬
Underwriter—Dillon, Read & Co. Inc., New York. Offer¬
mits of competitive bidding are known. Underwriters— >
ing—-A maximum of 100,000 shares may be sold by com¬
To be filed by amendment.
Probable bidders include
pany to persons, firms, or corporations with whom the
| Dillon, Read & Co. Inc.. White Weld & Co., and Shields J common.
Proceeds
Preferred and class A common
corporation had network affiliation agreements on March
& Co. (jointly), and W. C.
Langley & Co. and The
shares are being sold by company while class B common
81. The remainder will be offered
publicly. Price by
First Boston Corn (JointlyV.
Offering—Price to Dublic
shares are being sold by five stockholders.
amendment. Proceeds—To prepay notes
Estimated
payable to ac¬
by amendment. The SEC has approved the amendments
net proceeds of $303,524 to the
company will be used to
quire radio station WXYZ, to construct broadcast trans¬
filed Jan. 23 to company's recapitalization
plan as sug- * increase working capital and to
mitter for station KGO at San Francisco and for
pay off short-term bank
working
gested by the Commission. These provide for escrowing
loans.
capital.
;.
the sum of $2,200,000 to cover the call
;r;7
premium on the
preferred stock; increase in terms to Community Water
Bachmann Uxbridge Worsted Corp.
American Colortype Co.,
Clifton, N. J.
Service Co. and Ohio Cities Water Corp. preferred stock
Nov. 27 filed 45,000 shares of 4% preferred stock
(par
Aug. 12 filed 30,000 shares ($100 par) cumulative pre¬
to $180 and $159 a .share, respectively,
plus accrued divi¬
$100) and 200,000 shares of common stock (par $1).
ferred stock.
dends at 7% annually from Nov. 1, 1945,
Underwriter—White, Weld & Co. Price
compared with
Underwriters—Kidder, Peabody & Co. and Bear. Steam*
by amendment.
Proceeds—Net proceeds initially will ; $135 and $120 a share offered in the original plan; and
& Co. Proceeds—Will go to selling stockholders. PrJc#
be added to general
the issuance of one share of common stock of the new
funds, however, the company antici¬
by amendment.
Offering date indefinite, y,
Water Works Holding Co. for each 20 common shares,
pates it will use the funds for its building and
expansion
of community outstanding. The U. S. District Court at
•
program. Offering date indefinite
Bartlett Aircraft Corp., Reno, Nev.
Wilmington, Del. will hold hearings March 19 on issuing } March 7
(letter of notification) 25,000 shares of com¬
I
American Iron & Machine Works
orders to enforce the plan.
Co., Oklahoma
mon.
Price—$1 a share. No underwriting. To complete
City, Okla. (3/26-28)
fabrication of Zephr airplane.
<
<
American Zinc, Lead & Smelting Co., St. Louis
Feb. 24, filed
$1,000,000 of 4% sinking fund debentures,
Beaunit Mills, Inc., New York
Sept. 6 filed 336,550 shares common stock (par $1).
due 1967; 25,000 shares
Un¬
(no par) $1.10 cumulative pre¬
derwriting—No underwriting.
Offering—Stock will be
ferred and 60,000 shares
Sept. 27 filed 180,000 shares ($2.50 par) common. Under¬
(no par), common. Underwriters
offered
for subscription
writer
to common stockholders in
White, Weld & Co., New York. Price — By
—Rauscher, Pierce & Co., Inc., Dallas, and Milton R.
the ratio of one additional share for each two shares
amendment. Proceeds—Of the total, 140,000 shares ar®
;
Underwood & Co., Houston, Texas.
Price—Debentures
held.
Unsubscribed shares will be offered for subscrip¬
will be offered at 100 while
being sold by St. Regis Paper Co., New York, and tb®
price of the preferred and
tion to officers and directors of the company Price—By
remaining 40,000 shares are being sold by I. Rogo8S%
common stocks will be
supplied by amendment.
Pro¬
amendment.
President of Beaunit Mills, Inc.
Proceeds—Working capital. Offering in¬
ceeds—To pay $712,500 balance on a bank
loan, retire¬
definitely postponed.
ment of $850,000
promissory notes, and provide working Y V^
*
Berbiglia, Inc., Kansas City, Mo.
'yyjY vY-'
capital. Business—Manufacture, sale and rental of ma¬
Arkansas Western Gas Co.
Sept. 12 (letter of notification) 41,000 shares of £%'
terial and
equipment used in drilling and equipping oil
June 5 filed 16,197 shares of common stock (par $5).
cumulative convertible $6 par preferred. Offering prlcbi,
and gas wells.
y.7/
y;v:,/7:yy-$6 a share. Underwriter—Estes, Snyder & Co., TopekA,
Underwriters—Rauscher, Pierce & Co. Inc., and E. H.
Rollins & Sons Inc.
Kans. To pay outstanding indebtedness and expenses acid
Offering—Stock will be offered to
American Locomotive Co., New York
to open five additional stores in Kansas City, Mo. Offer-*
the public.
Price by amendment. Shares are being »old
July 18 filed 100,000 shares each of $100 par prior pre¬
ing postponed indefinitely.
by six stockholders.
ferred stock and
$100 par convertible second preferred
•tock. Underwriting—Union Securities
Armour and Co., Chicago
Berkey & Gay Furniture Co., Grand Rapids,
*
Corp., New York.
Price by amendment.
Mich.
Proceeds—Net proceeds, with
July 12 filed 350,000 shares (no par) cumulative first
other funds, will be used to redeem
Feb. 3 filed 733,575 shares ($1 par) capital stock. Under¬
$20,000,000 of 7%
preference stock, Series A; 300,000 shares of convertible
cumulative preferred stock at $115 a share plus accrued
writing—None. Offering—Company said all of the share*
second preference stock, Series A, and 1,355,240 shares
are issued and outstanding.
dividends. Indefinitely postponed.
The purpose of the registra¬
common stock
(par $5).
Underwriter—Kuhn, Loeb Sc
tion statement is to enable holders to effect sales by
! Co., New York. Offering—The 350,000 shares of first
use of the prospectus.
American Potash & Chemical Corp. (3/19)
preference stock will be offered in exchange to holders
Berkey & Gay said the shares had been sold in 1944
Feb. 27 filed 70,000 shares
of its 532,996 shares of $6 cumulative convertible prior
(no par) cumulative preferred,
and 1945 to a group of about 50 persons who represented
series A.
Underwriters—Kuhn, Loeb & Co.; Lehman i preferred stock at the rate of 1.4 shares of first prefer¬
they were purchasing the shares for investment and not
Brothers; Glore, Forgan & Co., and A. G. Becker & Co.,
ence stock for each share of $6 prior preferred.
Shares
for distribution.
Inc. Price
of first preference not issued in exchange will be sold
by amendment. Proceeds—For construction of
So far, 231,204 shares have been sold in the open mar¬
addition to the
company's power plant, estimated at i to underwriters. The 300,000 shares of second preference
ket and the Commission had raised the question as to
52,000.000; and for construction of new soda ash and
stock will be offered publicly.
The 1,355,240 shares of
(Continued on page 1422)
borax
common
will be offered for subscription to common
plant, estimated at $3,850,000.-.
.' ;
%
American Broadcasting Co.,
June
27
filed
—
.
?
—
•
•:
:■
..
'
,
.
7
☆
—
'
SPECIALISTS
IN
—
Underwriters and Distributors
Corporate and Public Financing
United States Government Securities
of
Corporate and Municipal
Stat, and
The
Municipal Bonds Y
Securities
r
C. J. DEVINE
FIRST BOSTON
CO.
&
Kidder, Peabody
INC.
•
Y
CORPORATION
Boston
*
New York
48 WALL
Pittsburgh
HAnover 2-2727
Members
»
of the New York and Boston Stock Exchanges
*
Chicago
Chicago and other cities
ST., NEW YORK 5, N. Y.
Co.
Founded 1865
»
Boston
•
Cincinnati
!☆
Y
YY
...
Philadelphia
*
St. Louis
•
...
•
Pittsburgh
•
Cleveland
San Francisco
...
■
New York
.
'
-
-
Y
':
-k
Boston
Philadelphia
Chicago
1422
THE COMMERCIAL & FINANCIAL CHRONICLE
■
•
i
■l.ipwu. ■■"■.■■I .I'll...11
.
amendment.
NEW ISSUE CALENDAR
March
will
who
Braunstein
date of offering)
is being sold
proceeds.
.< /
receive
common
stock. Underwriter
Common
Agency, Inc
Consolidated Edison Co. of N.
Y., Inc.
11
a.m.
(EST)
tent
—
Doman Fraser
Helicopters Inc
Common
Vertientes-Camaguey
•'
Common
7/7 ;•://>
Sugar Co...
March 19,
March 20,
Book-of-the-Month Club
Carney Fasteners, Inc
Bids
Preferred
March 24, 1947
Firing Corp...
John & Oilier
Engraving Co
Latin American
Airways Inc
March 25,
a.m.
.Common
Common
will
Bonds
American Iron & Mach.
'
be
used
to
finance the cost of
the third week of
"
1947
Jari.
Common
13
capital
whether such sales had the
:
regis¬
;
company's
treasury for
funds
expended
in
re¬
3,907
shares
of
7%
cumulative • pre-7!
ferred on April
1, and for funds deposited
in trust for
redemption on Oct. 1 of
remaining
•
of
preferred shares. Al¬
was proposed to
offer the stock for
tion to
subscrip¬
stockholders at $10 per
share, company on Sept.-7
t
20 decided to
though it
withhold action.
Mar.
3
Motor
(letter of
common.
Price—$5
12,997 shares of
promissory notes
Price
—
Corp.,
race
■
Crawford
Clothes, Inc., L. I. City, N. Y.
9 filed 300,000 shares ($5 par) common
stock.
Underwriters—First Boston Corp., New York.
Price by
amendment.
Proceeds—Go to Joseph Levy,
Aug.
$6.50
share.
a
notification) 60,000 shares .($1
par)
a share.
Company- proposes to offer
in exchange for its
unsecured
in the amount of
$64,985 held
common
by dis¬
tributors of company's
proposed products.
Underwriting,
stock will be sold
by officers and directors of the
company. For completion of
display automobiles now
under construction.
Cyprus Mines, Ltd., Montreal, Cantdi'^7
May 31 filed 500,000 shares of common stock
(par |l).l
-Underwriters—Sabiston-Hughes, Ltd., Toronto. Otferrl
ing—Shares will be offered to the public at 75 cents afl
share. S Proceeds—Net
proceeds, estimated at $300,000,1
will
used for mining operations.
"7
' h I
Mines, Ltd., of Toronto,
:'7
common
Btock.
Under¬
.
,
•
'-V
'7
'A*.
,
v>/V7.1' ^
-
■
-
'""K ''0
j/:'':'--'
—
,
Cleveland
Y.
(3/20)
struction and
filed 300,000 shares
($1.25 par) capital stock.
Dillon & Co., New York.
Offer¬
ing—Of the total, the
company is selling 100,000 sharei
and six
Underwriter—Eastman,
Proceeds—Company
will
Co.
'
and
other
raw
Boston Store of
and
book
inventories.
notes
Sept. 10 filed 30,000 shares
preferred and 500,000 shares
writers—Paul H. Davis
&
issuance upon
be used to
pay the company's
the principal
amount of
Offering
date indefinite.
Proceeds—For prepayment of bank
loan
American.
s
/*
-
exer¬
amendment:
with other
funds, wills
on
'
company.
V
Price—$6
Hague & Co., Detroit.
holder.
-
a
($1 par) common. Under¬
writer—Van
Alstyne, Noel & Co., New York.
Price—By
share.
Proceeds
;/v
Feb. 24
selling stockrr.^
(letter of
notification) 6,500 shares of common
(par $1) on behalf of
selling stockholders. Under¬
writers—F. H. Roller & Co.
Price—$6 a share.
stock
Columbia
Machinery & Engineering
Corp., t
Hamilton, O.
(letter of notification)
24,000 shares of common
James C. Hart. Price—At
market. To be
through Jackson & Co. and
Flannery & Co., both of
Youngstown, Ohio. Proceeds go to the
selling stock¬
holder.
:
■
behalf of
sold
.
'
I
r
development of helicopters and other c0^rl
:
I
!
,!J
7
'
1
Drico Industrial
10
(letter
stock
,<•**/
>
ft'l.-
I
4
Corp., New York (3/.171
of
I
notification) 150,600
(par; $1). Underwriter, Kobbe
shares_|Pf|
&
7'v Edelbrew Brewery, Inc..
Brooklyn, N. Y.
,
7
Dec. 31 filed 5,000 shares
($100 par) 5% non-cumulativei
preferred. Underwriters—None.
Offering—To be offeredI
at par to
customers, officers and employees of the com-l
pany. Proceeds — For corporated
purposes including I
modernization and
improvement of the manufacturing I
v&pat;. hn^jm^nery and equipment.
I
7> Empire Millwork Corp., New York
7
Aug. 28 filed 50,000 shares of
$1.25 cumulative
ble
preferred
common
Underwriter—Smith,
go to the
;;v';V,' :• *■;/
n-;i;V
Clinton Machine Co.
.7/
•
on
7.
7
($1 par)
behalf of Donald D:
Thomas," President of the'
Feb. 24
Bowman Gum,
Inc., Philadelphia
.
Feb.
stock
2% subordinated
note in:
$5,268,750 and accrued intereft.
Sept. 27 filed 268,875
shares
-
Clinton Machine
Co., Clinton, Mich.
17 (letter of
notification) 10,000 shares
($50 par) 5% cumulative
($1 par) common. Under¬
outstanding warrants.
Price—By
Proceeds—Net proceeds, together
v
Rights will I
t
■
of
7
,
Co. and Stroud &"
Co., Inc.
Offering—Preferred will have
non-detachable stock;
purchase warrants for
purchase of 30,000 shares of
com¬
mon stock of
the total
common, 375,000 shares will be.
offered for sale for cash.
30,000 shares are
reserved fori
issuance upon exercise of
warrants attached to
preferred;
rnd 95,000 shares
are reserved for
cise
of North
:l
va»|
Inc., Price—$1.75 per share. Proceeds to finance manu-l
facturing and sales program and
paying for materialsI
and labor in
connection therewith. /
I
Price—Rights to purchase will be issued at the
$15 per share of Cleveland for each
five shares/
of North American
common held on March
19. The sub-7
scription period will commence March
Chicago, Inc.
'
common
.
rate of
28.
*
March
which proposes to sell
expire May 27.
'
/
writers.
v
use
materials
Illuminating Co.
'
4
1,714,525 shares to common
stockholders and the
remaining 133,383 shares to under-
its net proceeds for
work¬
for expansion of
inventories of
ing capital to be used
paper
Electric
i
porate purposes.
•
Feb. 21, filed
1,847,908 shares (no par) common.
Under¬
writers—Names by amendment.
Probable bidders in¬
clude Dillon, Read & Co.
Inc.; Blyth & Co., Inc. Offering
—All of the shares are
owned by The North
American
7
stockholders, including Harry
Scherman, Presi¬
dent, and Meredith Wood,
Vice-President, are selling
the
remaining 200,000 shares.
Price by amendment
(O.)
Helicopters, Inc., N. Y.
March 3 (letter of notification)
30,000 shares of commonI
stock (par $1).
Underwriter—John Nickerson & Co., Inc.,1
New York.
Price—$1.25 per share. Proceeds for con-l
-
—
28
Frasier
(3/18-19)
Cleveland-Canada Steamship
Co.f Cleveland, O.;
(letter of notification) 1,740 shares
($100 par)
<7/
Book-of-the-Month Club,
Inc., N.
sharei
a
Proceeds
; Stock is
being sold by si? shaye-l
holdera who will receive proceeds.
I
Boston. For working '•
capital.
I
Doman
5% cumulative class A
preferred and 875 shares (no
par)
class B common.
Price—$200 per unit consisting of 2
class A preferred shares
and 1 class B common
share.
No underwriting. For
outfitting passenger steamers.
Trust of
America, Boston
March 7 filed 60,000
units of beneficial
interest. Under¬
writer—Whiting, Weeks & Stubbs. Price
—Based on
market price. Proceeds
For investment.
Business
Investment business. *
Oct.
$5^#|
r
,
" >// '' '.V.
v.-;-.'
March 6
/;•/ Bond Investment
pro¬
Delaware Power & Light Co., Wilmington, Del.l
Feb.
filed 50.000 shares ($100
par) cumulative pre-1
Offering—To the, public at 7
ferred/t Underwriter—To be determined by competitive!
$1 a share in Canadian funds,
Proceeds—Far a variety
of purposes in connection
bidding.
Probable bidders include Lehman Brothers;!
with
exploration, sinking of
The F§-st Boston
shafts, disunond drilling and working
Corp., and Blyth & Co., Inc. (jointly);!
capital.
Shields & Co., and
White, Weld & Co. (jointly); Paine,!
Central Soya Co.,
Inc., Fort Wayne, Ind.
Webber, Jackson & Curtis, and. W. CV Langley
Pp.!
Aug. 21 filed 90,000 shares (no par) common.
Price—To be determined by competitive bi<l*!
Under- < (jointly).
writer—None.
Offering—Common shares
initially will 7 /ding. Proceeds—?To be added to cash funds and *%ill fe!
be offered for
subscription to common
stockholders at 7 used, among other things, to finance epnstruct|CLh.
I
rate of one share for each
7lk shares held. Unsubscribed /
shares will be sold to
I Detroit
underwriters.
Typesetting Co., Detroit, Mich. Vvz I
Price by amend- /
ment.
Proceeds—Working capital, etc. Offering indefln^ 7 Sept. 25 filed. 70,920 shares ($1 par) common.
Undei-|
itely postponed.
writer|— C. G. McDonald & Co., Detroit. Price —
I
.77 7/ ■•''•V,
/«
•
1
250,000 shares ($1 par) class A common.
Underwriter—Hodson & Co, Inc., New Yprk'. will act as
selling agent. Price—$4.25 per share. Proceeds—Net
■
—
.
utility,
,"•/.'
Wilmington, Del.
22 filed
—
the
<
Crown Capital Corp.,
Jan.
President,
indefinite.
used as capital for
company's subsidiaries
engaged in the small loan or personal finance business.
Citizens Utilities
Co., Greenwich, Conn. (3/25)
;
March 6 filed $4,500,000 of first mortgage and
collateral
trust bonds, 3.^2%
series, due 1972. Underwriter—Lee
Higginson Corp., New York. Price
By amendment.
Proceeds—Company will use $4,200,000 of the proceeds
to pay off bank loan notes and add
the remainder to
general funds, Business—Public
7
stockholders. Offering; date
ceeds will be
(3/20)
Underwriter
•
■■;v^
Birmingham, Ala.
felling
Under¬
7/,
'f /'•.1,.'.
-/•/./■ '....if,//
Car
a
tive
notification).: 32,950 shares ($5 par)
June 24 filed
400,000 shares of
writer—No underwriters,
Blumenthal
/r..;^:..;/ V'- ;V-
(letter of
stock.
Ontario;
remaining 733,575 shares
Proceeds—Go to sell¬
(Sidney) & Co. Inc., New York
Aug. 30 filed 119,706 shares
(no par) common and sub- :
scription warrants
relating to 30,000 shares thereot I
Underwriting — None, Proceeds—For
reimbursement' :
of
'
Corning Glass Works, Corning, N. Y.
(3/26-28)
-
a
Caracor Porcupine Gold
market.
Bobbi
year
•
call for bids to
be, opened
April will be issued shortly.
working capital.
effect of
making the entire
offering public. The Commission staff
stated that
ing stockholders.
($1 pW)
and 35,009 warrants for purchase of
common
after present public offering. Price—$2 a
common
March
Mitchell Securities
Corp., New York. For equipment and
(Continued from page
1421)
tration is required if
any of the
are to be sold.
Price—At
,
one
-
Carney Fasteners, Inc., Columbia, S, C.
Maguire Industries, Inc
Bids
Continental Car-na-var Corp. (3/25)
;
4 (letter of
notification) 132,500 shares
Nov.
>7;-7:
completing
Lincoln, R. I.
Bids—It is expected that
1947
Richmond, Fredericksburg &
Potomac.—-...Notes
March 29,
Proceeds—p0r
oiiice, 4 Irving
Place, New York City.
writers—Names by amendment.
Probable bidders in-,;
elude Blyth &
Co., Inc.; The First Boston Corp.; Harri¬
man Ripley &
Co.
Offering—Stock is being sold by
Standard Gas and Electric
Co., parent, of California, r
1947
March 27,
N'\;-
California Oregon Power Co. *
May 24 filed 312,000 shares of common stock
(no par).
Stock will be sold
through competitive
Common
Debs. & Com
Works Co. Debs., Pfd. Com.
Western Pacific RR...Conditional
Sales Agreement
demption
777777-;7/.-/7
bidding.
March 26,
\
■
Rejected—Company July 23/reje6tedf fcwo bids re¬
for the stock.
Blyth &
S. Mose-/
track at
(EST)..Debenture
Continental Car-na-var
Corp
White's Auto
Stores, Inc...
:
bidding.
6 filed-50,000 shares .($100
par) 3V2% cumula¬
preferred stock, series 1947.
Underwriting—Har¬
derwriter—Barrett & Co.? Providence, R. I. Offering—/ riman Ripley & Co. and Lazard Freres & Co., both
of
The shares will be offered for
New York.
Price—By amendment. Proceeds—For ex¬
subscription to class A
stockholders at $20 a share, on
pansion program including erection of new plant,
the basis of one share
at
for each share held.
Unsubscribed shares will be offered
Muskogee, Okla., f%r about $1,800,000. Business—Glpss
works.
publicly at $20 a share. Price—$20 a share. Proceeds
;
Pfd. & Com.
....
77"7777
"y' 7-.7
7
*
Burrillville Racing
Association, Pawtucket, R. I.
Feb. 27 filed
38,500 shares (no par) class A stock. Un-
1947/
American Tel. & Tel. 11:30
Citizens Utilities
' ■'■'v
(3/ig*
Invited
—Bids for the purchase of the bonds will be
received up
to 11 am. EST March 18 at
company's
Union Gas Co.
definitely postponed.
Common
Automatic
(N. Y.)
'*■
of
a
a bid of 100.06 for a
com4.30% dividend.
Harriman Ripley & Co. and Mellon! 1 mon share, one cent a warrant.
Underwriter—L, D,
Securities Corp. bid 100.779 for a 4.40
Sherman & Co., New York. For working
% dividend. ■ In¬
capital.
Common
Pfd. & Com.
Building Sections Inc...
J
ceived
Capital Stock
Capital Stock
Plymouth Rubber Co
'•
ratio
Price—$50
To be determined by competitive
ley & Co. and associates submitted
1947^-^
Inc
Joyce, Inc.
Precast
Brooklyn
7',,:
the
in
held.
redemption of outstanding mortgage bonds.
May 3 filed 70,000 shares of cumulative preferred stock
($100 par). Underwriters—To be fUed^-by amendment.
1947
American Potash & Chemical
Corp.
'
•
shares
mortgage
bonds, series A, due 1982. Underwriters—To be
determined by competitive bidding.
Probable bidders
Morgan Stanley & Co.; Halsey, Stuart & Co. Inc. include
Price^
*eing sold bj
•
Hartford, Conn
(no par) common.
Under
Offering—Shares will be offered
to com
Consolidated Edison Co. of N.
Y., Inc.
Feb. 21, filed $100,000,000 of first and
refunding
outstanding $149,300 mortgage liabilities.
Offering date indefinite.
7."
,.Bonds
__
possible
164,018 shares
one
share for
share.
Proceeds—
construction program. Business—Public
utility.
a
ferred shares and all of the common are
filed
stockholders
mon
seven
present stockholders. Net proceeds to the company, es¬
timated at $147,500, will be used to
prepay to the ex¬
18, 1947
28
writing—None.
Preferred
Bonds
$25
—
Connecticut Light & Power Co.,
,
Feb.
(Harry), Inc., Wilmington, Del.
New York. Price
Debs., Common
-
Air Express International
share¬
C. K. Pistell & Co., Inc.,
share for preferred and $11
a share
for common.
Proceeds—7,000 preferred shares
are
being sold by company, the remaining 5,500 pre¬
Common
Farquhar (A. B.) Co..
Iowa-Illinois Gas & Electric Co
Sardik Food Products
Corp
March
by
Sept. 25 filed 12,500 shares ($25 par) 4%% cumulative
convertible preferred stock and 50,000 shares
(200 par)
17, 1947
Drico Industrial Corp
Proceeds—Stock
holders
|
^
(Showing probable
Thursday, March 13,
ig4?
.
stock,
stock
(par
Noel & Co.
(par
$1).
$25)
I
cqnvertH
and
150,000 sharei/™!
Underwriters—Van AlstynM
will receive the Pr(H
Proceeds—Corporation
ceeds from the issuance of
50,000 shares of the comian
stock which will be used
to increase productive caP
new lines of
products and
add
remaining 100,000 shares
ferred
•
shares
will
be
expand the business.
stock and the pre?
of common
sold
by present stockholders,
Emsco Derrick &
Equipment Co., Lo$
3 filed 10,000
shares ($100 par) 4%
March
preferred, which are
Underwriting
None.
convertible
—
Offering
—
into
Angelf|H
cumulative
commonpstpcf;
oft?
Company-will
9,831 shares of the preferred for
subscription to comm
stockholders at $100 a share in
ferred
the
share for each 38 shares
of
shares, and
persons
yet
any
to
ratio
common
scription period will expire
April 30.
of4 one
held.
unsubscribed shares, will be
be determined.
Price—$100
Proceeds—Proceeds
are
Iff®];
The remaining 1.
offered
a.
to be applied to reduce an o
snar^
r t:
t
[olume
r
Number 4576
165
>•
THE COMMERCIAL &
FINANCIAL CHRONICLE
loan and to finance capital improvements
additions to its plants. Business—Manufacture of
anding bank
id
[lwell drilling equipment.
Price
E?
entire
the
fei
None.
—
:
«old
to
•tuck
Zw!
it*
Proceeds
For
improvement and
Ottering indefinitely postponed.
—
Society, Inc., New York
July 29 filed 18,500 shares at
$4.25 cumulative
P^c^d^s^d^S
Price-Par.
officers.
be
"
Grolier
Offering—Company WticiDates f
offering will
share.
a
modernization program.
' jY;
Equipment Finance Corp., Chicago >
A). 28 filed 8,025 shares ($100 par) 4% cumulative
pre[rred, series 2, and; 25,07Q shares ($10 par) common,
Inderwriting
$25
($10(Kpar)f:with non-detachable
I
$4^5. preferred-to
I
at
preferred
any
of
common, 5 cents.
Each purchaser
preferred share shall have
right to purchase two
shares.
Proceeds for purpose of
one
time 64,750
purchasing
materials, renting factory and office
Feb. 15 filed
etc.
space,
Iowa-Illinois Gas & Electric
stock
common
share at the ratio of 3%
a
Price—Preferred, $10;
common
registered holders of shares
purchase at
1423;
Co.
(3/17)
$22,000,000 of first mortgage bonds
due 1977.
Underwriter—To be determined by
competitive bidding.
Probable bidders include
Halsey, Stuart & Co. Inc.; The
First Boston
lvi.
(A. B.)
Farquhar
Co., York,,Pai
to
de¬
fun^ mortgage bonds,; due Aug.
Products Co.,
Newark,N.
stoqkholder has granted the underwriters
an
[roceeds—Proceeds^of approximately $870,000,
j,
a
Hammond
together ^
ri
'''.V
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'
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.
t
,
•
•
&r
ri
-
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^
"
Films
Inc., New York
7 /.
v
25, filed 100,000 shares ($5 par) class A stock and
>,000 shares (10 cent; par) common
stock, of which
),000 shares reserved for conversion of class A. Each
of
lell
&
June
Offering—To be offered
(ublicly at $8.10
a .unit consisting of one share of class A
and one share of common
stock.
Proceeds—$201,-
|D0 for retirement
ltock
at
of 2,010 shares
100,000
shares
lnstitute, lhc., Hot Springs, N. Msx.
Dec.
16 filed 50,000 shares
($10 par) 5Vz% cumulative
prior preferred and 40,000 shares ($10 par) common.
Underwriting—None. Offering—All preferred and com¬
lily
29 filed 110,000 shares ($1
par) common stock, all
.
Underwriters—Cohu & Torrey.
Price by
jroendment. Issue may be withdrawn! ."v
*■ *';
•
"
•!*
"/i'
''I
-y.
,u-
*"
' ft
'
">•
Inc., N. Y,
irch 5
ltock of
,,
\f
i:Vvv
•
notification) 200 shares (no par)
Publishing Corp. or 600 shares ($1 par)
March 6
pf F-R stock
&
a
Price—$59 a share
share of New Yorker, stock.
,
Fresh
1
'
-
■:
"
-
•
-v
'/
;
v".&"l\u
Funds).
■■■■'•-■
1
........
Proceeds^-For
mine
j^g. 28 filed
5,000
shares
«e
of
Alstyne,
Qot
common, of
issuance upon the
which
full registration will be filed later with the,
exer-
outstanding and being sold for the account,
common
•
Instruments
Corp.
pro-
the
to
treasury
reaemption
funds.
par).; Underwriting,
Landsdale,
Pa.
149,000 shares of capital
none,
Price
—
$1
per.
Company has also issued 55,000 :
share. Pay
of $53,000; deferred ob¬
|tock purchase warrants to the selling stockholders at ligations of current obligation capital.
$55,000;; working
Jeents a share entitling them to purchase up to Aug. 1, v
J949, common stock of the company at $11 a share. Prlce
/ ' International Dress Co., Inc., New York
y
amendment. Offering temporarily postponed.
•>
Aug. 28 filed 140,000 shares of common stock (par $l)v
Underwriter—Otis & Co. Offering—Price $10 per share,
Goldfield (Nev.) Deep Mines Co. of Nevada
J Proceeds—Selling stockholders will receive proceeds
Jlarch 7 (letter of notification) 1,200,000 shares (50 par) Offering date indefinite.
•
vmmon.
12
cents
a
share.
Underwriters
3
(letter
of
notification)
12,000
Underwriters—Kalman
&
shares
writer by amendment.
—All of the securities
Indianapolis, Ind.
Feb.
7
(letter
of
notification)
cumulative preferred
(SI
Under¬
common.
Price by amendment.
are
Proceeds
being offered by stockholders
who will receive proceeds,
ft
Latin American Airways Inc., New York (3/24):
March 7 (letter of notification) 21,250 shares
($1 par)
common, on behalf of Henry E. Rohlsen, Bronx, N. Y.
Price^$2,5Q a share. No underwriting. Proceeds go to
the selling stockholder.
■'
-
,
'
j
1
I
,
•
"*
,
.
"
.
J
1r
H
c
'ft
f,
i.
5»+
/
,
1
>
I
*
s.
,
par)
Co., Inc., St. Paul.
.
'
March 6 (letter of notification)
2,000 shares
($100 par)
common. Price—$150 a share. No
underwriting. To re¬
tire short term bank loan and for working capital.
Maine Public Service Co., Prequo Isle, Me.
25 filed 150,000 shares
($10 par) capital stock.
June
Underwriters—To
be
Probable
determined
bidders
through
include
The
competitive
First
Boston
being
sold
by
Consolidated
Electric
Gas
and
Co.
(parent), in compliance with geographic integration pro¬
visions of the Public Utility Holding
Company Act. Hear¬
ft
the
on
proposed
!
McAfer Manufacturing Co., Rochester, Mich.
March
7
(letter of notification) 3,000 shares ($1 par)
market. Being sold by Carlton M.
Higbee Jr., Board Chairman, through licensed dealers.
Proceeds to selling stockholderPrice—At
common.
•
Maguire Industries, Inc., New York
mon
•
stock
(3/29)
of notification) 300,000 shares of
com¬
(par $1). Underwriting, none. Price—$1 per
will be offered for subscription to stock¬
Stock
shares
3
of
1
new
share for
held.
Malt-A-Plenty Inc., Tulsa, Okla.
March 6
—$100
(letter of notification) $200,000 of stock. Price
unit. No underwriting. For expansion purposes.
a
Mays
Feb. 28
(J. W.)
Inc., Brooklyn, N. Y.
filed
150,000 shares ($1 par) common. Under-'
writer—Burr & Co., Inc., New York. Price by amend¬
ment. Proceeds—Of the total, 100,000 shares are being
sold by seven stockholders. The remaining 50,000 shares
are being sold by the company, which will use its pro¬
ceeds for general corporate purposes. Business—Opera¬
tion of department store.
ft-
10,000
shares
of
4^%
(non-voting) stock (par $10) and
80,000 shares of common stock (no par).
Gordon Saun¬
ders.Co>,
New
York
(although not technically an
underwriter) will assist in distribution of securities.
Michigan Consolidated Gas Co., Detroit
March 7 filed $6,000,000 first mortgage bonds, due
1969.
competitive
bid¬
Underwriting—To
ding.
be
determined
by
Probable bidders—Dillon, Reed & Co1., Inc., Hal¬
Stuart & Co. Inc.; The First Boston Corp.; Harris,-
sey,
Hall & Co. (Inc.).
petitive
with
bidding.
funds
common
struction
its
:
Los Angeles Drug Co., Los. Angeles
to be
Price—To be be determined by com¬
Proceeds — Net
proceeds,
received from the sale
shares to Michigan's parent,
Traction Co.,
>•/.; International. Roll Forming Co., Inc.
®rlKgs» Cooper & Co., St. Paul, Minn.
Sept.
Inc.,
Jan. 24 filed 6,564 shares
($100 par) 4% cumulative pre¬
ferred and 174,625 shares
together
of additional
American Light &
—
ooettcher & Co.,.
Denver, and Morgan & Co., Los An"pies. For exploration and mine development.
common.
Kingan & Co.,
Angeles;
pre-
common stock,
to
of America,
March 4 (letter of notification)
(no
$300,000 bank
a
Rights expire 3 p.m. (EST) April
21. Subscriptions payable at Registrar & Transfer Co.,
2 Rector St., New York. Proceeds for working capital.
will be applied for re-
converted into common, prior
The balance
will be added
stock
°Vcettain stockholders.
—
dividends; payment of
by Union Bank & Trust Co. of Los
and balance for
working capital.
each
Company has asked the SEC to defer action on its fi¬
nancing program because of present market conditions
!
purchase warrants., Underwriter — Van/
Noel & Co.
Offering—The 300,000 shares are
Price
share and accrued
note held
holders of record March 29 in ratio
a
ceeds from the sale of
stock
'ssued and
$518,242 for
the following purposes: retirement
of 295 shares of 6%
preferred at $100 a share and accrued
dividends; retire¬
ment of 9,615 shares of
4% second preferred at $10 a
share.
date.
'
pany will use its estimated net
proceeds of
March 7 (letter
,,
reserved for
(3/20)
.
demptlon of 5% cumulative convertible
t
355,000 shares ($1 par)
are
10
pany's treasury for construction expenditoes. Net
•
photo¬
sale of the stock by Consolidated.
Underwriters—By .competitive bidding, Probable bid¬
ders include Blyth- & Co., Inc.; The First Boston Corp.;
W. Ev Hutton & Co. Proceeds—Net proceeds from the
sale of preferred1 will be used to reimburse the com-
*
by
150,000 shares ($1 par) common. Underwriter—Lester & Co., Los Angeles.
Price—$6.25 a share.
Proceeds—Of the total, company is
selling 100,000 shares
and 50,000 shares are
being sold by stockholders. Com¬
ing will be held before the SEC March 7
ferred stock end 966,870 shares (no par)
development.
......
Glensder Textile Corp., New York :
working,*qapital.
Illinois, Power Co., Decatur, ill.
June 17, filed 200,000 shares ($50 par) cumulative
($20 par) and 150,000 shares
selling stockholders. Offering temporarily postponed.
1
share. Underwriters—R. S. Hecht
SEC.
Glencair Mining Co.
Ltd., Toronto, Can.
)ct. 2 filed
300,000 shares ($1 par) stock. UnderwriteriMark Daniels & Co ' Toronto Price
40 cents a share
1
Joyce, Inc., Pasadena, Calif.
pected that
10c par)
common, all issued and outstanding and being
by eight selling stockholders.
Underwriters—Van
dstyne Noel & Co. Price by amendment. Proceeds—
zinc
Feb. 24, filed
54,350 shares of cum, conv.
preferred and 50,000 common stock purchase warrants,
Price—$5.50 a preferred share and 2 cents a warrant
t>ld
'(Canadian
and
copper
are
a
Hy-Grade Supply Co., Oklahoma City
g Glen Industries Inc., Milwaukee, Wis.
uly 31 filed 50,000 shares of
$1.25 cumulative convertl-
[°
on
Price—$11
Dec. 3 (leter of notification)
,
Offering date indefinite.
le preferred
stock series A
plates
hand-engraving operations.
(lette^ of notification) 15,000 shares ($10 par)
(letter of notification) 60,000 shares ($1 par)
capital stock.-Price—$1 a share. To be sold through
Donald A. McCallum, President of company. To develop
mining properties;* -
potatoes, plant expansion, addistorage facilities, research and development work
working capital.
printing
mechanical and
Underwriter—Amos Treat & Co., New York. It is ex¬
For purchase of
sweet
ad
paring
J bidding.
Highland Princess Mines Inc., Denver
March
_
onal
equip hotel and health
Co.; Howard, Labouisse, Friedrichs & Co.; D'Antoni &
and Kohlmeyer^Newburger & Co., New Orleans.
•
(3/24)
102,000 shares ($1 par) common. Under¬
writer—Sills, Minton & Co., Inc., Chicago. Price—By
amendment. Proceeds—The
shares, which constitute ap¬
proximately 48.5% of company's outstanding common;
stock, are being sold to stockholders.
Business—Pre¬
Corp.; Kidder, Peabody & Co., and Blyth & Co., Inc.
(Jointly); Harriman Ripley & Co; Coffin & Burr and
Merrill Lynch, Pierce, Fenner & Beane. Proceeds—Shares
Proceeds for,
Dry Foods, Inc.,. Columbia, S. C.
30 filed
450,000 shares (100 par) common. Underiter—Newkirk & Banks, Inc. Offering---Of the total
wnpany is selling 350,000 shares and two
stockholders,
loland E. Fulmer and Louis H.
Newkirk, Jr., are selling
ie
remaining 100,000 shares. Price—$6 a share. Proceeds
Price—$10.15 a pre¬
Proceeds—Pro¬
Co.
Jo be sold by E. Melville Price, Chappaqua,_ N. Y.,
ihrough Silberberg & Co., New York;
nPrbcecd^dfO. tjO}he selling stockholder.
.
and
Hemisphere /Trading Co., Inc., New Orleans
common.
$19.75
publicly.
jt- »cpmmon share.
lised '3a build
facilities and. to acquire a mineral water
supply.
ltock of New Yorker
Magazine Inc.
or
offered
apdL;,$ 10.
ceeds will be
Getter of
F-R
be
ferred share
F-R Publishing
Corp. and New Yorker Magazine
j W
will
mon
Outstanding.
Engraving Co.
Feb. 26, filed
•
/ Hoalth
Foreman Fabrics Corp., New York
•
2200, 105 West Adams St., Chicago.
Jahn & Oilier
{
a
fther funds,
ceeds will, be used to
pay mortgage debt of $10,578,000
and balance will be added to
general funds. Bids—Bids
for the purchase of the bonds will
be received up to
March 17 at room
($10 par)
Stores, Inc., Los Angolos
filed
porarily'pqstppn^..
($100 par) preferred
share; remaining proceeds, together with
will be used for production of educational
$100
27
($1 par) common stock.
Undf^wrijtei^^
Noel & Co., New York, and
Johnston, vLeia^
Washington, D. C. Offering—
To bo offend to the
public at $8 a share.
Proceeds—
Company la belling 00,000 shares and stockholders are
selling 40,000 sharps, The company will use its proceeds
to pay tibe eosts
oC opening additional stores and to ex¬
pand ^lercbandise .in its existing stores. Offering tem-
initially convertible into 2
Underwriters—Herrick, Wad-
Co., Inc., New York.
be used to redeem
cumulative
preferred stock at an
$213^58,, exclusive of accrued divi-
yjt^-;Nat$Rol«!
class A stock is
of common, stock."
ires
.Pi<Hieedii---Net proceeds will
its outstanding. .=6%
%
ie
lare
writo^#^^vJ3>avics
Co., Chicago
($1 par), common,
IJader& Co., Chicago. Price by amend-
dendjs. ,«vjt,;a3^v^
approximately $402,000 toward
the pu^^: of a,manufacturing plant in
Chicago; balaneeJtor wpjrldngv^apital, Offering date indefinite.
off
amount .of $1,295,000 to. Bankers CommerNew Yoj-k, and for additional working capital/
f
Instrument
option
in the
'
provision of dissolution plan of
Engineers approved by
'•^ie:
nth $755,000 of other- bonds, Will be used to
repay
(alance/pf $34,000 of a property mortgage, to pay
'
pay
offered for
purchase 45,00$ \ shares of class Bt(.$l par) common /
$7.25 a share, exercisable for a period of three years.
V,-
Proceeds—To,
notes,, discharge a
subscription; 4o common stockholders of Gulf States'
parent,-.Engineers. Public Service Co., New York. The
subscription basis .will-be one share of Gulf States stock
for each-share of
Engineers common held. Price—$11.50
a share.
Proceeds—Purpose of offering is to carry out
1,
Corp.; Glore, Forgan & Co.; Blyth & Co.,
Inc.; Harriman Ripley & Co. Proceeds—Part of the
pro¬
shares
a
*
Federal Electric
Corp.j
company
postponed.
feb. 26, filed 150,000 shares ($1 par) common class
A,
Inderwriter^E*. F;\ Gillespie : & Co.,
vine., New: York,
|ricer-$7^5 a share* .The registration; states • princi-
iial
the
Utilities Cp., Baton
Rouge, La.
Jan. 20 filed
,1,909,968 shares (no par) common. Under¬
writer—None.
Offering—The shares will be
157, to pay off certain contracts and chattel
mortgages
id to reduce bapk loans.
ins
underwriters.
Gulf States
com-
the
preferred.)
& Co., Inc., Philadelphia. Price—
amendment. Proceeds—Proceeds will be used to re4%%., sinking
46 cumulative preferred,
WenfMteh^ioSfted '
loam
[nderwriter—Stroud
2em
as
purchase from
red $lM7ia^Me;^commo^t $14
retire
also 56,800 common shares (par $5) to be ofred to public (On Sept. 26 company filed
30,000 shares
•25 par) cumulative convertible
preferred; 45,000 shares
number of
to
withdrew
18,500 shares nf-preferred and
20,000 shares of common;
and from
^redc'Bi^Murphy and J. C. Graham, Jr., 100,000
shares of .issued and
outstanding common. Prices, prefer¬
ntures;
y
Inc.
Offering—Underwriters
(3/17)
13, 1947 (by amendment) $600,000
4%,% sinking
nd debentures,, due 1962 (with
warrants) and warnts for 600 common shares (par $5)
attached
sb.
£5 par) common; and an unspecified
Jon shares.to permit conversion of
Byliesby.-and^Cp.',
and
treasury
will be used to finance its property con¬
equipment
for
previous
program
and
construction
reimburse
expenditures.,
to
Business—Public Utility.
(Continued on page 1424)
^
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Michigan Gas
Junt
*
&
1
,
t,
fciec.
1
.
' '
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'
•
March 4 "(letter
(
Co., Ashland, Wis.
at
106.75 and
use
net
series
Registration
F.
"'■■■:
Eberstadt
Palmetto
August
16
Fibre
filed
cents
a
as
be offered to stockholders and
'
purposes.
Securities
13 filed
Co., Inc., Shreveport, La.
250,000 shares of
;
:
stock (par $1).
Price by amend¬
common
*0
1'
,
Feb. 23 filed $22,425,000 20-year collateral trust sinking
fund bonds, series A, due 1967; 77,625 shares ($100
vertible
par)
cumulative convertible preferred and 479,235 shares
common.
petitive
•
Underwriters—Bonds will be sold at
bidding.
Probable
bidders
include
The
First
to
(£1 par).
troit.
-
1947.
of the
offered
at
are
to
the
public.:; The
of $25, $50,
convertible into common
face
amounts
Proceeds—WilL be used to
notes held by Rey¬
company's
Business—Manufacture of plumbing fixtures and
heating equipment.
•
Sardik Food
March
7
Products Corp.,
New York
(3/15)
of notification) 30,000 shares of 500
cumulative preferred (no par). Price — $10 a;,share.
Underwriter—George F. Breen, New York. For purchase
(letter
of
$190,000 labor-saving
working capital.
con¬
Alstyne, Noel & :
•
Seaboard
Feb. 24
stock.
& Western
(letter of
Price
Airlines
Underwriting,
balance
and
for
Inc., New York
notificationj\50,000
$1.
—
equipment
shares of
none.
common
Proceeds for
working capital.
•
Seaboard & Western Airlines,
:
Inc., New York
Feb. 28
(letter of notification) 50,000 shares of common
stock. Underwriting, none. Price
$1. Proceeds for
payrolls, materials supplies, etc. Slick
Feb.
Plymouth Rubber Co.,
issued and outstanding and are being
';
28
Airways, Inc., San Antonio, Tex.
filed
$1,500,000 4% convertible income deben¬
tures, due 1957, and 167,781.5 shares ($10 par) common.
Underwriting—None. Offering—Debentures will be of-'
lounges in Long Beach, Riverside, Palm Springs and San
Diego and for working capital.
(par
are
$1,025,000
nolds.
pany
$10), and 30,000 common shares
Underwriter—Charles E. Bailey & Co., De¬
Shares
sold
.
to June 30,
up
retire
Proceeds—23,481 shares are being issued by comand proceeds will be used in connection with recent
purchase of four Chi Chi restaurants and cocktail
'
stock
be
ment.
>
Newburgh Steel Co., Inc., Detroit
Aug. 2 filed 30,000 snares of 6% cumulative convertible
preferred
stock
Plg'n Whistle Corp., San Francisco
retire
they will be
will
$100, $500 and $1,000. They
Dec. 26 filed 50,000 shares (par $7.50) cumulative
con-;
vertible prior preferred $2 dividend stock.
Underwriter
—G. Brashears & Co., Los Angeles.
Price by amend¬
of underwriters will be supplied by amendment. Proceeds
;■
which
debentures
working capital expended in purchase of building from
RFC and to complete construction of a building.
com¬
Reynolds
the
of
will have until April 21 to subscribe for the debentures
after
Co. and G. L. Ohrstrom & Co., New York. Price—$20 a
Proceeds—For payment of loans and to replace
White, Weld &
Co., and Kidder, Peabody & Co. (jointly). Common and
preferred exempted from competitive bidding. Names
plan
preferred. Underwriter—Van
share held.
common
Co., which holds 61.3%
share.
($8
.Boston Corp.; Halsey, Stuart & Co. Inc.;
—Financing is part of recapitalization
outstanding indebtedness of $34,998,500.
Stamford, Conn.
filed
Pharis Tire & Rubber Co., Newark, O.
Sept. 27 filed 100,000 shares ($20 par) cumulative
New England Gas and Electric Association
par)
stockholders in the ratio of $1 of
common
company's out¬
standing common, has waived its right to purchase its
pro rata share of debentures until the subscription pe¬
riod for other holders expires on April 15. Reynolds
change for entire outstanding capital stock of Taylor Re¬
fining Co., consisting of 8,946 shares (no par) common
with an underlying book value of $2,458,224 as of last
Sept. 30. At a meeting of stockholders, Dec. 23 company
authorized an increase in common stock from 1,000,000
to 2,000,000 shares and also authorized the issuance of the
present offering in exchange for the Taylor stock. Ap¬
proximately 70.9% of the common stock is held under
a voting trust agreement of Aug.
15, 1945, which it is
expected will be terminated upon the acquisition of the
Taylor stock.
; <
Underwriter—Smith, Barney & Co.
ment.
Proceeds—Redemption of outstanding 4%% pre¬
ferred stock at $109 a share plus dividends. Indefinitely
postponed.
due
scription to
912,464 shares ($2 par) common. Under¬
writers—None. Offering—Shares will be offered in ex¬
Murphy (G. C.) Co., McKeesport, Pa.
une
$1,025,000 4% 5-year serial maturity
April 1, 1948 to 1952. < Underwriting—
Offering—Debentures will be offered for sub¬
None.
Under¬
Hughes, Ltd., Toronto, Canada. Price—
share.
Proceeds—Net proceeds will be used tc
drilling machinery / and
other equipment
Petroleum Heat & Power Co.,
/.
~
ing—No underwriting. Price—$97.65 a unit. Proceeds—
Fpr ' purchase of automobile time sales paper which is
its: principal business as a finance company.
^ f
J
filed
6
Metals
a
purchase
others
Feb. 19 filed $5,000,000 collateral trust notes. Underwrit¬
$1
(par $1).
Co., Richmond, Va.
such debentures for each
Dec. 30
Motors
March
"a
Radiator
60 cents
share. No under¬
,
Richmond
writer—Sabiston
Class B
writing. For expansion
underwritten.
be
•
debentures
notification) 194,320 shares of (no par)
a
5 to the extent of one share for each five held. Issue will
not
Ltd., Montreal, Canada
common
Company has decided to
454,465 shares of common stock only, which will be
offered for subscription to stockholders of record Sept.
issue
underwriters.
Peninsular Oil Corp.,
purchase
\
July 31 covered 184,821
convertible preferred ($10 par)
Grace & Co. as underwriters.
will use estimated net proceeds of $1,473,000 for
purchase of a new factory near Punta Gorda, Fla., at
a cost of about
$951,928.
It will set aside $150,000 for
research and development purposes and the balance will
be used as operating capital.
Underwriter—Tellier &
Co. withdrew
~
shares (50c par) common stock, with Sterling,
and 277,231
com¬
pany
Corp., Harlowton, Mont.
Price—$1
Proceeds—The
share.
'■
filed
originally
shares of $1 cumulative
D. C.
(100 par); preference
shares
building,
Republic Pictures Corp., New York
JJp; ';;f"
Corp., Washington,
4,000,000
Price—50
stock.
proceeds from bonds to redeem
March 4 (letter of
To
'v
V"*'-'-/v"1;
Sept. 3 filed 600,000 shares of
stock.
&
"
Net
Under preemptive rights.
($1 par) capital stock
drawn.
—
}
4
purchase of land, construction of
of machinery, working capital, etc.
■hares of prior lien and preferred stocks.
Mon-O-Co Gil
\
Products, Inc., New York
Co., Inc.
Offering —
225,000 shares are outstanding and are being sold by ll
stockholders, and 2,500 shares are being sold by A. L
Marlman to all salaried employees. Issue may be with¬
Underwriters
proceeds from sale of com¬
mon and from shares o1 new preferred not issued in ex¬
change will be used to redeem $375,000 3%% serial de¬
bentures, due 1951. at* 101.2 and interest.
It also will
redeem at 105 and accrued dividends all unexchanged
•
^•
Food
Remco
(letter of notification) 150,000 shares of class
A stock'(par $1). Price—$2 per share. Underwriting, ,
none.
To be sold through officers and directors. For !
Inc., New York
June 28, 1946 filed 227,500 shares
A first mortgage bonds, due 1972,
interest
•
March
Blade Co.,
Pal
Middle West is selling 57,226 shares and Halsey, Stuart
A Co. Inc., New York, is selling 22,774 shares.
Proceeds
'—Michigan will
.11,500,000 3^4%
iv
,
of preferred and one share
used in organization of
Proceeds—To be
common.
business.
For or^
Price—$100 a share. No underwriting.
ganization and operating expenses.
$3,0011,000 or series A first mortgage
of
500 shares of common
stock.
bonds,
due 1976; 14,000 shares *$100 par) cumulative preferred
•luck and 120,000 shares ($10 par) common stock.
Un¬
derwriters—To be determined by competitive bidding,
Probable bidders include Blyth & Co., Inc.; Kidder, Peabody & Co.; The First Boston Corp.; Harris, Hall & Co.
(inc.;; Merrill Lynch, Pierce, Fenner & Beane, and Ira
Eaupt & Co.
Offering—New preferred will be offered
pu a share for share exchange basis to holders of iti
outstanding 7% prior lien, $6 no-par prior lien, 6%
jt-eferred and $6 (no par) preferred. Of the common
ruck being registered, company is selling 40,000 shares,
z<* me a
of notification)
unit consisting of one share
D. C.
Packaging Service Corp., Washington,
•
(Continued from page 1423)
'
,
Thursday, March 13, 1947
CHRONICLE
THE COMMERCIAL & FINANCIAL
1424
fered
Inc.«(3/20/25)
publicly at
par,
and the
common
will be offered
to present common stockholders at $10 a share in the
Friedman, President J.;- Feb. 28 filed 300,000 shares ($2 par) common, to be < ratio of
one share for each two now held.
Proceeds—For
and
Secretary-Treasurer,
respectively,
each
selling $ offered by selling stockholders, and an additional 12,500
general corporate funds, including purchase of additional
15,000 shares of preferred and 15,000 shares of common.
shares of outstanding common expected to be offered
cargo planes. Businessr—Operation of airline.
Price—$10 a share for the preferred and $6 a share for
by two selling stockholders by April 30. Underwriters— i Oi?fcv
nlvv^,/V
•
'' A1
/
'
the common.
$204,047 of the proceeds shall be paid to
F. Eberstadt & Co., Inc., and E. Wf Clucas &
Co., of New
y
Solar Manufacturing Corp.
the company to
discharge their indebtedness to it.
York.
Price by
amendment.^Proceeds-^Go^to selling \| June 14 filed 80,000 shares of $1.12% cumulative con¬
stockholders.
'
vertible preferred stock, series A (par $20).
Under¬
Northern Engraving & Mfg.
iX'*1' ''L';- k'i?s-:.
V•:• •'• \'rv']Co., La Crosse, Wis,
writers—Van Alstyne, Noel & Co.
Price by amendment
Porcupine Club, Ltd., Nassau, Bahama Islands
Aug. 29 filed 70,000 shares ($2 par) common stock.
Proceeds—Net proceeds will be applied for the redemp¬
Feb. 27 filed $125,000 5% first mortgage
; Tnderwriter—Crurienden & Co.
Offering—All shares
sinking fund
tion of outstanding series A convertible preferred stock
art; issued and
outstanding and being sold for the account ; bonds, due 1971. Underwriting—None. Offering—Of the
which are not converted into common stock.
Such pro¬
0' nresent holrWs.
Price—$16 a share.
total, $87,500 will be issued in exchange for an equal
Proceeds—To
ceeds also v will
be used for additional manufacturing
amount of outstanding 5% notes. The
selling stockholders. Issue being withdrawn.
remaining $37,500
facilities in the amount of $600,000; for additional inven¬
of bonds will be offered to club members.
Price—The
tory amounting to $400,000, and for additional working
bonds will be issued in denominations of
Nugent's National Stores, Inc., New York
$1,000 and $500
:apital. Offering temporarily postponed.
for sale at their face amount.
J.nne 21 filea
85.000 shares
Proceeds—For repayment
($1 par) common stock
of bank loan and other
corporate purposes.
Underwriters—Newburger & Hano, and Gearhart & Co.
Soss Manufacturing Co., Detroit, Mich.
lac. Price, $6.75 a share. Proceeds
Net proceeds to
•
Precast
Sept 3 filed 40,000 shares ($25 par) 5% cumulative con¬
Building
tne company from 62,000
Sections,
Inc.
New
York
shares, estimated at $350,200,
vertible preferred.
1(3/20)
Underwriter—Ames, Emerich & Co.,
Will be applied as follows: About $111,300 for retirement
Inc., Chicago. Offering—To be offered to common stock¬
March 11 (letter of
of outstanding preferred
notification) 270 shares of preferred
stock; $41,649 to purchase 100%
holders for subscription at $25 a share in the ratio of
stock
of the stock of two
(par $100) and 3,700 shares of common stock
affiliates, and balance $197,000 for
one preferred share for each five shares of common held
other corporate purposes. The
(no par). Underwriting, none. Price, preferred $100;
proceeds from the other
/unsubscribed shares will be sold to underwriters at same
3,000 shares will go to selling stockholders.
common,
$25. Proceeds for working capital and to
Offering
price. Price — Public offering price of unsubscribed |
provide and equip a factory building.
temporarily postponed.
shares by amendment. Proceeds—For
expansion of plant j
r
Puritan Fund, Inc., Boston, Mass.
facilities and for additional
•
Oglethorpe Fund, Inc., Savannah, Ga.
working capital. Offering
sold by Maurice Cohen and Samuel
c »-
^
i#
(1
<
,
'
v.
>•
„
*
,
—
I'/f.
,,
March 10 filed 200,000 shares of
Southern Securities Corp.
common.
Price—Based
ceeds—For
investment.
Pacific Power &
July 10 filed
>e
on
market. Pro¬
Business—Investment business,,
the
type.
preferred stock.
Underwriters—By amendment. Probable bidders include
Blyth & Co., Inc.. White, Weld & Co. and
Smith, Barney St
(jointly); The First Boston Corp., W. C.
Langley & Co.;.
Harriman Ripley & Co.
Offering—Company proposes to
J-'gue the 100,000 shares of new
preferred for the pur-/
pose of refinancing at a lower dividend rate
the 67,009 *
outstanding preferred shares of Pacific and the
Co.
47,806
preferred shares of Northern Electric
Co., in connection
with the proposed
merger of Northwestern into Pacific.
r
la connection with the
merger,
stocks of Pacific and
the outstanding preferred \
Northwestern will be
exchanged
poare
i;
for share, with cash
adjustments, for the
bidding for unexchanged
'
'■
' '*
..
Company Act of
investment
company
i940
of
as
the
open-end
an
management
ceeds—To reimburse treasury for
expenditures made
capital purposes and to finance construction costs.
•
share.
Proceeds—For explora¬
of mining property.
\f'"~
Martin
company.
Rolph,
ture
i
;
Price—The
stocks
will* be
sold
at
#'
$105
-.""H
f'
peU
...
'
-v
•
6k (letter of
notes.
To
at face value.
be
No
•' .J\*v
' •
"V
y
v.
V,"
|;
i'
Lou, Inc., Shelbyville, III.
notification) $100,000 5-year deben¬
to stockholders and officers
offered
j
underwriting. For expansion purposes.
Street, & Smith Publications, Inc.
v
-lH. V; f -, ,
July 17 filed 197,500 shares of common stock. Under¬
writers—Glore, Forgan & Co.
Offering—The offering
represents i part of the holdings of the present stock¬
holders. Indefinitely postponed./ ,;; ;1,
>
par) common. Underwriter
Vice-President and director of
' •**,...
Sta-Rite Ginnie
March
Proceeds-
Refrigerated Cargoes, Inc.* New York
'•>
•
800,000 shares of common stock ($1 par).
Offering Price—$0.60 a share to public.
Company has
Feb. 3 filed 25,000 shares
($100 par) 6% cumulative pre¬
ferred and 25,000 shares (no
Calif-
capital.:
+
underwriting contract.
Beverly Hills^
for
(letter of notification) 9,000 shares of common.
Price ;— $33 a share. No
^underwriting. For working"
Ltd., Toronto,
Development of mining properties and exploration work.
j
March 3
.
Canada
—John
Southwest Airways Co.,
a
Nov. 20 filed
not entered into any
Calif., Los Angeles
filed
$6,000,000 3% first mortgage bonds due
1, 1977. Underwriting—To be determined by com¬
petitive bidding. Probable bidders include Halsey, Stuart
Co. Inc.; The First Boston
Corp.; Blyth & Co., Inc. Pro¬
Proceeds—For investment.
Realmont Red Lake Gold
Mines,
19
March
Quebec Gold Rocks Exploration Ltd., Montreal
Nov. 13 filed 100,000 shares
(500 par) capital stock.
Underwriter—Robert B. Soden, Montreal, director of
company.
Price—500
tion and development
Southern Counties Gas Co. of
:
Feb.
1
new pre- *
S^ock of Pacific, the
surviving corporation. In an
amendment filed with SEC March
10, 1947,^ it is proposedto eliminate the
competitive
/■preferred.
Investment
diversified
Light Co., Portland, Oro.
100,000 shares ($100 par)
postponed.
Feb. 3 filed 300,000 shares of
capital stock (par $1).
Underwriters—Paul H. Davis & Co.' and The Crosby
Corp. Price at market. The fund, is registered under
Underwriter—
•3iX.*i.dX'r^JX, .'"■n.TIV
mi
share and 200,000
filed
28
a
THE COMMERCIAL &
FINANCIAL CHRONICLE
& Co., Trenton, N. J.
195,000 shares common stock
Swern
a
Number 4576
165
Volume
(par
K. Pistell & Co., Inc. Offering—Comselling 45,000 shares, and eight selling stock¬
holders are disposing of the remaining 150,000 shares
price-$10.50 a share.
Proceeds—From 45,000 shares
*
Id by company will be applied to working capital
initially- Offering date indefinite. ;r -g
is
Utah Chemical & Carbon
Co.; Salt
of
300,000 shares ($25 par) 5% convertible
Preferred; Underwriters—Blair & Co., Inc., New York,
and Maxwell, Marshall & Co., Los Angeles. Price by
amendment.* Proceeds—For payment of $3,950,000 of
bank loan notes; purchase of two notes issued by a sub¬
sidiary, Textron ; Southern Inc. in the amount of $1000,000 each, and for working capital.
Price—$i0.50
the
Western
Nov.
issued
filed $32,000,000 first mortgage bonds, due 1976,
160,000 shares of ($100 par) cumulative preferred
Underwriters—To be determined by competitive bidding.
Probable bidders include The First Boston Corp.; Halsey
Stuart & Co. Inc. (bonds only); Blyth & Co., Inc.; and
Smith, Barney & Co.- Price to be determined by competi¬
tive bidding. Proceeds—Net proceeds together with $4,500,000 bank loan and:if necessary, the $5,000,000 to be
contributed by its parent. Cities Service Co., will be used
Oct. 25
and
and
Proceeds—Shares
being
are
sold
#
"
by
stock¬
Shop Music Publishers Inc.,
Tune
four
(letter of notification) 20,000 shares ($1 par)
Price—$1 a share. No underwriting. To pur¬
and equip a recording studio and to carry on
April 9.
common.
Upper Peninsula Power: Co.,
Houghton, Mich.
($100 par)
determined by
$15
a
will
be
will
sold
ury
undei
Auto
Stores,
to pay
and
to
bank loans, to acquire additional warehouse space 4
provide working capital.
persons
general
Wisconsin Power & Light Co., Madison, Wis.
May 21 filed 550,000 shares ($10 par)
common stock;tc
Underwriters—By
bidders include Merrill Lynch,
Pierce, Fenner & Beane; White, Weld & Co.; Glort,
Forgan & Co., and Harriman Ripley & Co. (jointly);
TherWisconsin Co., and Dillon, Read & Co. Proceeds-
incident to expansion of business.
be
sold
at
competitive
amendment.
■
or
Part of the shares are to be sold by Middle West
Corp.,
top holding company of the System, and part by preference stockholders of North
West Utilities Co., parent
of Wisconsin, who elect to sell such shares of Wisconsin
will
which
common
dissolution of
North
be
distributed
West
the
upon
Co.
y>
\
Wisconsin Supply Corp., Madison, Wis.
Beverage Co., Inc., New York
100,000 shares ($10 par)
\
them
to
Utilities
'v'sv-t>v'v'v
Feb. 10
preferred stock.
(letter of notification) 400 shares ($100 par) 5%
preferred.
Price—$100
a
share.
Under¬
cumulative
engaged
writer—Northwestern
in
and
Manufacturing Corp., New York
Offering—To be offered to buyers
drink beverage business.
Price—By
soft
amendment.
Nov. 4 filed
selling agent.
Proceeds—To purchase operating equipment
bottling plants.
,
.
,
Inc., Seattle, Wash,
Sept. 2 filed 245,000 shares ($1. par) common. Under¬
writer
Auchincloss, Parker & Redpath, Washington.
D. C. Price—$7 a share. Proceeds—To repay short term
bank
loans
for
aircraft
Co.,
Madison,
payment
of plant
Wis., is
construc¬
Wyandotte Worsted Co.; Waterville, Me.
*
—
communication
equipment part
working capital
and shop facilities and for
Securities
For partial
tion costs and to provide working capital.
,
t
West Coast Airlines,
200,000 shares (par $1) 25c cumulative con¬
preferred and 230,000 shares of common (par
50c). Price to public for preferred $5 per share. Em¬
ployees will be permitted to purchase preferred at $4.50
per share. Of the common 30,000 shares are reserved for
the exercise of warrants up to Jan. 15, 1950, at $3.50 per
-bidding.
Probable
Underwriting—None.
vertible
(3/25-28)
expire
to
Proceeds—For
funds.
Wells
acquisition program.
Inc.
common stock is being sold
by the four
officers and directors. The
company will use its proceeds
years.
Payment may
by tender of 5%% cumulative pre¬
Proceeds—proceeds will be added to treas¬
Feb. 28 filed
notes and
expansion
way.
tures while the
share during the last five
ferred stock.
Business—Public Utility.
U. S. Television
shares
directors.
now
estimated
$7,500,000
Inc., Boston., Offering—Of the total common,
5,000 shares are reserved for offering to employees. Price
By amendment. Proceeds—Company is selling the deben¬
Baking Co., New York
be made in cash
unspecified
and by
Thorndike
number reserved for exercise of stock purchase warrants
which expire April 1, • 1956.
Price—$12.50 a common
share during first four years beginning April
1, and
common.
will be used in connection with this
Business—
24, filed 291,487% shares ($1 par) common. Under¬
writer—No underwriting.: Offering—The shares' are the
Underwriting—To be
competitive bidding. Probable bidders
include Haisey, Stuart
& Co.: Inc. (bonds); Merrill
Lynch, Pierce, 'Fenner & Beane and Paine, Webber,
Jackson & Curtis (jointly); Blyth & Co., Inc.; The First
Boston Corp.; Kidder, Peabody & Co. Price—To be de¬
termined by competitive bidding. Proceeds—Company
was organized Feb. 26, 1947 to acquire the capital stocks
and assets of three Michigan operating utilities—Hough¬
ton County Electric Light Co., Copper District Power
Co. and Iron Range Light & Power Co. The proceeds
par)
($10
the
an
company
25, filed $1,000,000 12-year debentures, due 1959,
and
50,000 shares ($1 par) common.
Underwriters—
First Colony Corp., New York, and
Childs, Jeffries &
Feb.
cumulative preferred and 180,-
10 000 shares
property.
Subscription- warrants
purposes
Ward
first mortgage bonds, due 1977;
000* shares
by
corporate
March 6 filed $3,500,000
held.
Unsubscribed
designated
corporate activities.
t
shares
the
stock
Feb.
($15 par) common. Under¬
writers—No underwriting. Offering—Shares will be of¬
fered for subscription to common stockholders of record
March 20 at $30 a share in ratio of one share for
each
Philadelphia
by
minimum
a
White's
Un¬
Pro¬
Feb. 27 filed 97,846 shares
March 6
chase
mining
share.
a
Wagner Electric Corp., St. Louis, Mo.
f
-
of
contests
capital
Price by amend¬
Company will use its proceeds
of $6,500,000 together with a
loan, toward payment of its promissory
to finance company'^
equipment and facilities
Acquiring and developing mining properties.
outstanding debt and preferred stock, involv¬
payment of $53,906,590, exclusive of interest and
dividends.
Price—25 cents
developing
Offering
par)
Inc.
bank
Victory Gold Mines Ltd., Montreal/Canada
ceeds— For
($1
& Co.
ber of shares.
at
are
Nov. 13 filed 400,000 shares
($1 par) capital stock.
yet.
—
and the total number of shares
presently stated
will be reduced if the
offering consists of a smaller num¬
program
to redeem
ing a
Proceeds
Coulter, President and Director. The amounts
being offered by each will be stated definitely by amend¬
Co.< of Cuba,
-
as
San
Inc.
shares
William A.
and
derwriter—None
Co.,
ment
amendment.:
outstanding
Lines,
1,200,000
™.™!:)er of shares being sold
($6.50 par) common stock,
Underwrittr-^White, Weld & Co., New
holders.
Air
filed
Underwriter—Dillon, Read
Havana, Cuba (3/18)
price—By
27
ment,
Feb^ 27 filed 116,416 shares
York,
Underwriter—Pitman &
.
debentures.
U. S. currency.
unit.
a
Antonio. For retiring bank loans and
for'expansion pur*poses.;.
v
t;'
City
15-year convertible debentures and
($1 par) common. ; The statement also
105,000 shares of common reserved for conversion
Vertientes-Camaguey Sugar
V
Edison Co.
(O.)
Toledo
L
Underwriter—Carver & Co., Inc.,
Boston. Price—Debentures
98; common $3.75 per share.
Proceeds—For plant construction, purchase of
equip¬
ment and for
working capital.
1 u ' >
" ",
\
— *
28 filed
Feb
Cake
Western Aero Supply Corp., 2an Antonio, Tex.
^rClv 3, (tetter of notification; ir,00J shares ($5 oar)
5%
Pr^fe^red and 35,000 shares (5)? par) common.
.
,
P0e_c-20 filed $700,000
22o,000 shares
covers
Providence, R. I.
Textron Inc.,
uf
the conversion of the
Underwriters—Names by amendment. .Price
J5 per share for preferred. Proceeds—For working caplta*,and expansion of business.
■■/•:>^ ./1.-,v-
Underwriter—C.
nanv
are reserved for
preferred.
$l)v
Feb.
26
filed
92,038 shares of
Underwriter—None.
-
common
stock
(par $5).
Stock will be sold through regular
the New York Stock Exchange
market
channels
at "the
best prices obtainable."
over
Proceeds—Stock being
sold by five stockholders.
ProspectiVellSecurity Offerings
/jij'«f.r $'
(NOT YET
its £ £» it. J® f''
IN
REGISTRATION)
PREVIOUS ISSUE
INDICATES ADDITIONS SINCE
•
(Only "prosPec^ves" reported during the past week
given herewith. Items previously noted
Allied
aining
•
Products Corp.
rch 12 reported
new
>
company
is considering
methods of.
plant on a
working
funds for erection of a new
ently acquired 14-acre site and increasing its
>ital to meet the needs of
expanding business.
Bates Manufacturing Co.
rch
10
Jin &
Burr,
>
First
that / The
reported
Boston Corp. and
Inc., will publicly offer
)00 shares of stock of the
company
?istration with
ed
by
SEC
Dallas Power
rch
5
expected at early date
Boston investment firm.
a
the
&
SEC
about April 1,
which they own.
;
to be of-
,
.
.'
273.000 shares
to
subscribe for
"If
no
material change in condi¬
Minnesota Power & Light Co.
March 5 company,
filed
an
application with the SEC for
change is
The
a
necessary,
the company said, to
plan of its parent, American Power & Light
Co., to retire its preferred by offering common of certain
);ov
of its
United States Government,
©
State, Municipal and
subsidiaries, including Minnesota.
Misscuri Power & Light Co.
March
11
*
Corporate Securities
NEW
•
Philadelphia
buffalo
stock of Missouri. One group
Co.
•
Pittsburgh
•
st. louis
Natural
Gas
stockholders
46,000
preferred shares
•
san
rranciscoi
.
•
is led by Glore, Forgan &
Co. and Shields
•
Indiana for
Co.
convertible debentures. The proceeds
offered for
sub¬
to retire the
$11,500,000 of bank loan notes which mature
An
1955.
new
application will
share of
common,
on
at par to the common
basis of $10 of debentures
Richm'd Fredericksburg
its office,
would
be
April
15,
for each
stock.
& Potomac RR.
(3/27)
(EST) March
Broad Street Station, Philadelphia for
$1,995,000 negotiable notes to be dated
Company will receive bids uo to 12 noon
at
serially "p
The
be fi ed with the SEC.
debentures would be
stock shareholders
the purchase of
debentures and common
available.
from the sale, to¬
gether with other funds, are to be used
27
new
approved it is'proposed
will be
authority to issue $11,077,800 15-year, 23A%
applied to FPC for authority to con¬
through
(par $50) and 500,-
filed petition with PS Commission of
March 4 company
additional facilities. Funds for work
raised
authorizing 75,000
on
Public Service Co. of Indiana, Inc.
$24,500,000
stock issues.
vote
ing will be underwritten. Names not presently
struct
cleveland
will
000 additional common shares. If
•
Northern
31
shares of cumulative preferred stock
March 1 company
•
chicago
•.
.
& Co.
:
YORK
•
,
reported two investment banking groups are
Co., the other jointly by White, Weld &
inc.
i
preparing to enter competition for a possible offering by
North American Light & Power Co. of the common
.4
,
•| Pitney-Bowes Inc., Stamford, Conn.
March
scription to common stockholders. It is expected offer¬
permission to change its outstanding shares ($10 par)
common into an
equal number of common shares (no
par).
2,500,000 (no-par) shares.
Blair
Pacific Gas & Electric Co.
April 8 stockholders will .vote (1) on increasing author¬
ized common stock from 8,000,000 to 10,000,000 shares
and on-making stock non-assessable; (2) on reclassifying
1,000,000 shares of authorized but unissued 6% first
preferred as a new series of 4% first preferred stock.
The additional common and 4% preferred shares are
to be sold as needed to finance a part of $300,000,000
construction program.
/
' T
4
additional share for each four shares
one
there has been
time," Mr. Bertron said, "the price for the
new stock will be $37.50 per share." If the stock is not
taken by stockholders the directors may sell unsub¬
scribed shares as they may deem advisable. ;
facilitate
boston
•
tions at that
'•
charter amendments pro-
)>y the company. Among the changes to be made
( be cin increase of the authorized (no-par) common
Pa
& Power Co.
will seek $9,700,000 for expansion by
increasing the authorized common stock from 600,000 to
2,000,000 shares, S. R. Bertron, the President, reported.
The financing plan will be submitted to stockholders at
the annual meeting on April 16. ,
The outstanding 517,999 shares of common stock would
be converted into 1,035,998 by issuance of an additional
share for each one held.
Owners would get rights to
March 6 company
held.
are
repeated)
that
Light Co.
approved
Houston Lighting
are not
1947.
(Continued
on page
1426)
THE COMMERCIAL & FINANCIAL CHRONICLE 'ItvVi ,v^"'
1426
--•
t
■■■
■
11
1
(Continued from page 1425)
•
*
.
4
^
stOCk for one
Share of either outstanding
The
series.
company
vertible
an
are
new
El
into
stock is to be made con¬
The outstanding preferreds that
preference
common.
not exchanged are to be called at
cash
to
of the
raise
the
funds
are
Corp. The
preference stock and Cumulative preferred
stock. Under the plan* holders of 6 and 5y2% preferreds
for
such
$28.75
a
company
discussed
being
with
The
"•'
-
activity
industry
of
Commission's competitive bidding rule.
trade. Continuance
cise
offset
some
government
It
unctions. It is clear that members
of
believe
in the fiscal year
cost.
that
at
and
to
contribute
taxes
lower
against
a
That
welfare
the
country
tion
the
in the unhappy posi¬
scarcely able to
as
of
being
meet expenses
structure
otal
in spite of a tax
war-time
practically
at
It
be
has
been
-
wisely said:
are
the challenge of the President's
budget. Under the new Congres-,
sional Reorganization Act, it is the
priations for the next year are to
be held. This is the first year of
\'t
that
is
as
of
ure
a
To
see
benefits and services
a
most
the
figures
careful
will
'
'
,
.
44/
shortage,
000, and $200,000,000 for self em¬
ployment allowances. In justice to
the
veterans
themselves, f stock
so
only after all study by the House
must be taken of the whole situa¬
Appropriations
Committee per¬
mitted by the short time allowed
tion.
so
far would limit the
reduction to the lesser amount
o
a
low
even
figures at which it
Yet
?
expenditure
peace-time
Repub¬
total
subject. The
includes
pro¬
further
authorized funds for the
Export Import Bank, $645,000,000
for
relief 4 in
occupied
areas
bv
United States troops.
year
has
pre-*
Mr. Taber also adds that in the
Census
Bureau
there
are
provi¬
Whether
can
be
..
V 1 *
inclined
brought
''
,>
in
'•
o
No
need
of
one
for
'*■
ti'ittSM!
It
1
<*■
v:
of
•
institutions, the period o
relief
grants and
recon¬
loans
may
of
be beyond
all
advances
gested.- However,
budge
of
:\|
i t Ml i
words of
founda¬
well Address—"As
small.
very
Income
calls
Truman Visit to
Federal
ity
have
of
President
For
from!
three-day
official visit to
Mexico, the first everfmade by a|
President
tof the United
Stafees 1
advices from the Associated
Press!
stated. The visit was the
Occasion
the
stabil¬
of
the amount of the
as
tol
returned
Mar. 6
on
his
was
of
Truman
the White House
for
course
reliance
Government.
well
as
act
Mexkol
Mailed A Success
excess
relief
that
main
the
very
impor
strength and/securl
tant source of
>
taxes
a
for
^
the
Decome
thoL
Farll
remain
individual
the
under
ever
as
Washington in
ity, cherish the public credit."
severe
while
individuals
several
conference^ between
Mr. Truman and Mexico's Presi-1
revenue, the Government needt
and must retain the
support
p\
dent, Miguel Aleman, apd
these!
taxes, yet the income tax, meetings were later described as!
corporate and individual, tyill he-, having befen a complete success!
main much the major source.
A from the viewpoints of Both na-l
excise
>
tibns, according to
permanently reliable income tax
must be
bearable tax, consistent
a
With 'full energy
Individual
reach
now
able
20%
bracket
in
the
the
3%
the
rate)
18-20,000 bracket they reach
50%, so that of the next dollar
than
one-half
to
goes
City to
that
moment
Trh-I
President
stepped from his plane the
morning March 3, at the Mexico!
City airport, until in the eanyl
morning hours of Mar.. 6 he re-
the
more
Mdxido
special
man
net'
steeply graded that in
are so
dis-|
lhe|
As one
Mex-|
Popular" put|
a
ican newspaper, "El
it, "Truman Renews Our Faith in
the Good Neighbor
Policy." Frirnil
first tax¬
(including
frdm
New Yofk "Times."
fates
tax
less the 5% reduction, or 19%
They
patch
arid production
income
normal and the 17% bracket
boarded his plane to
depart, every
effort was made to ,assure the!
the
Government; at $44,000, 68%, so
the
crease
bracket.
and
doubt the urgent
thorough combing out
are
for
longer
no
stream-lining those that
The
necessary.
Presidents
are
made Up on the basis
that all
are
necessary.
44:;!::444:
Every dollar justly saved from
public expenditure will make its
eral
welfare.
»
power
that
the
are
to
sug¬
possibility
large demands in this field
is
of
the
ment, and such reduction must be
begun. It is questionable, how¬
ever, whether a definite figure for
such reduction should be set forth
which
will
excess
be
of
available
termined.
:4;4'
revenue
is
revenues
de¬
/'4:i:;4; :;'>4.y:"4'
earmarked
Tax
The
Reductions
President
Taking
for
'
'
/
tax
City
"
rin
r°tes
credits
to
in
income,
rate
reduction
by
se'cUriiy of
the
that
bracket
taxpayers.
Mr. Truman
surtax
rates
a 14
present
the
line.
not
have
fect
Such
drastic
lax
leave
benefits
the
would
•
woulc
its
income-tax
suppose
only
in
It
is
that
City.
ef¬
on
mis¬
as
taxpayer.
Re¬
put
increased
Federal
truly in hand
are
of
so
in
until
both
reduction
debt
can
he
reduction
and
and
employ¬
the ruir
warning, according
1
oj
desert."
and
Mr.
Adding that
President
hard
Truman
for
tion,
-
neither
Aleman
World
continued:
not want to be
+ax
begun. Nothing
such stimulus 'tc
the
working
course
be
.will -give
industry-arid trade
■
serted
expenditures
that the
Mar. 5, standing amid
voiced
as
controlled
Truman 4: visite
President
United Press advices, "Unless u
have world peace we will be W
these deserted ruins here—a
increased
tax
in increased jobs
finances will not be
well
fh'
win
of the powerful and warlike Tbl
tec civilization of ancient Mexic
reduction
industry. If history re¬
peats itself, reduction is likely tc
reflected
Chapultepec
Mexico's spots of unusui
interest during his brief stay,
drive inAo
be
of
other
rate'
a
heroes
some
time
afterward * he wa
hailed by the press and elsewher
as the most
popular man in Mexic
along
yield and woulc
progressive.
to
all
reduction
be
to
the
on
still
time
The wises
percentage reduction
on
against United States troops
j
hundred years ago, and placed i
wreath at the national shrine. Fo
o'
is therefore again to make
course
the
had defended the Mexican capita
revision
be impracticable.
may
a
the
won
visit to the memorial honoring
Surtax Rates
at
all of u
apprecia
Mar.A
according to a dispatch to the Nev
York "Times," he paid a sufpris1
"■ 1
thoroughgoing
of this doctrine by
tion of all Mexico when
boy
A
strong nation does not havi
ican-system," he continued;
basic
includes
1
March 4, he declared tha
non-intervention * mean
is the keystone of the inter-Amer
one
because
a
ance
and
percentage
poinwould decrease the yield of the
tax by $660,000,000. That again i
yields
maintains' tha.
of
on
him
that
$100, would reduce the
by about $1,600,000,000.
fc Again, taking the 1946 rates
American Presi
the
the right by reason of its strengt!
to impose its will on«a weaker na
tion. "The whole-hearted accept
as
revenue
by
dent in which, according to Asso
ciated Press adyices from Mexie
the tax and
that; even so
increase in the personal
exemption and ;d e p end e n c y
A
he country. Yet the
general view
eeonomistc U tVt high - taxes
are in themselves a
burden onTS
of
1946
It was the occasion for
address
an
steeply
high taxes in themselves contrib¬
ute to the welfare and
lace.
tax
effected
important Purposes of ta:
Revision of
of financial health of the Govern¬
the
first
so
on
.
4
'.■.'44;.:,,:4V;4.
Gradual reduction, of the public
debt is the best possible evidence
before
in
essential
figures
governmen
our
rate
Reductions
relief.
small
can
a
agencies
•
funds may be drawing to a close
cal
bounds
very
tax,
ductions
struction
towards
Federal
profits
Excess
make
the
perdnent
pro-
a
the
take
It is to be hoped that with the
inade¬
may
bur¬
come, it is estimated
Reduction of Non-essential
-
taxes actually given up cannot be
spending
Act
from
accomplishment:^
purpose, Confer*
fullest support '•a,.
have
tax
high rate of income
in general 38%, but by the
of 1945 they were relieved
ax,
the
that. essential
should
best
the
fail
analysts, 35
and
several
and =? sundry
economic analysts*
•
large
those
subject to
In
ment.
Full
most
is
econom¬
ists,
world
nancial
government
ruthless.
in
bet¬
income tax. Corporations are still
i Reduction
in taxation is the
acid test of control of expenditure
,
progress've, and can be
with
enly
by
resolution
which
which
have drastic results
to
dealt
tax
reduction
officers,
quate. Swollen expenditures tend
be
The
some
84 economic
establishment of international fi¬
as
the
sions for 38 administrative
future debt reduction may easily
be diverted
to
expenditure bu
hardly be regarded
places
need.
single
of more than was
spent altoge her i i World War
can
excessive
production.
spurs
$305,000,000
winding
up
UNRRA
and
*326,000,000 for additional relief
in a few countries in desperate
'or
started."
a
most difficult
$3,500,000,000, is again
ready
inadequate
in
House,
an
effective contribution to the gen¬
Items
drafts of $1 200.000,000 under the
British credit, $730,000,000 of al¬
budget far be¬
the agreedly
of
jected
lican has written of the proposed
limitation as "(he ruthless paring
of the President's
total
a
and debate.
woman
Finance
International finance, down for
The real answer
will be made only when before
July
1
all
appropriations
are
finally passed, after further study
thoughtful
•/
;
International
$4,500,000,000.
A
as
•,4Agencies.
payments to
veterans for unemployment com¬
pensation approached $1,100,000,-
set was not fixed out of hand but
The Senate
Chairman John Taber* the ex perienced and industrious chair¬
man of the Appropriations Com¬
deny
administration
necessary.
employee
now
$6,000,000,000. The limit
..
In the past year of; Widespread
limit for expendirequired, the House
set a total of $31,500,000,000, a re¬
duction from the President's fig¬
fixing
tures
for
considers
Reductions
In
v
shows a projected increase
$989,000,000 in 1946 to $1,427,000,000 in 1948.
4
the
that
flourish
certificate
budget is the
sacred charge. Yet none who
are a
Proposed Congressional;
mi
a
total of $7,340,000,000.
These have been rightly provided
with the greafest gratitude, and
mpear
expenditures to estimated Federal
i
defense.
have such
Veterans'
operation of the requirement
for the establishment of a broad
framework for
relating Federal
the
$
ment
from
of
and
these
I
f0r <h
.
duty of Congress by February 15
to i state a limit to which appro¬
/.•
increased personnel by about 300,000. The cost of general govern¬
sented
Francisco,
example interesting that of the next dollar mOre
American President of the warm
ihan
figures about the Department oi two-thirds
goes
to the Govern¬ regard of the Mexican people, and
Commerce. He has pointed out
he in turn made evident the United
ment; at $70,000 they reach 77%,
that while there were only 13,004
so
Under our plan of government,
that of the next dollar more States', feeling Of good-will toward
her southern
it is for Congress to make sure employees in that department in
than 4 three-fourths
neighbor. Upon ar¬
goes
to the
that
all
preventable
waste
is 1939, the present estimate callr Government; then advancing- up rival Mr. Truman was greeted by
for
a 21-gun
36,500, "without any corre¬ to 85%;* At these
eliminated and all practical econ¬
salute, with troops drawn
rates, complete
to attention; Mexico's President,
He confiscation of all income
omies fully
explored; to make sponding increase in duties."
above
states that the budget of that De¬
the $50,000 level would add
sure that plans for the future do
only Miguel Aleman and a number ol
partment contains provisions "for
not involve facilities and equip¬
$430,000,000 net to the revenue other Mexican dignitaries, &s well
15 management
analysists,* 23:in¬ and that of course but for a brie.' as the United States Ambassadoj
ment likely to become obsolete.
formation
specialists,/ personnel period.
Walther Thurston, met him at thi
There will be no begrudging of
;44;4_ -4; 4 v4;■ ;;
officers galore, under one label
>4
s
the $530,000,000 for research, or
An often suggested thought" of airport.
or
another, 23 librarians, numer¬ the
of the $443,000,000, included un¬
4 That evening a state dinner atti
way to make income -tax re¬
ous racial relations assistants and
der
Natural
duction is to increase personal reception were held in Mr. Tru
Resources, for the
placement officers."
'
atomic development.
exemptions and credits, or de¬ man's honor at the National Pa
up
■
national
vigorously reducing
personnel, old line establishments
were
mittee
12 rioon PST
Ma
St., San
constitutional duty of Congress.
heading for serious trouble."
revenues.
of
we
Yet a sound
which productive
depends, is itself a
supply.
upon
that
Congress, now not in control of
the President's party, has taken
fef
money
oart
sound road
:
weakening of national
economic life
and get us on the
of paying off debts
and lightening the tax load nbw
bearing down on the incentive
for work and production, we
V
;
to
up
.
August, 1945 to November
1946, while the Army anc
Navy and emergency war agen¬
$11,256,000,000 for Army
Navy. No one will be willing
any
-
From
of
see
ranging from 100% to
26,
over¬
'
sary
penditures
v
^
cies
budget,
budget
relief
expendiures, from over $3,000,000,000 in
1939 to practically nothing.
Budget expenses for major pro¬
grams in this field show increases
defense by withholding the neces¬
a
direct
and
than 900%.
o
up¬
reestablish control over ex-
can
relief
The principal item of course is
national defense, standing at the
that is
out of hand. Unless Congress,
with the backing of the public,
have
he total is where it is now placed
only because of the drop in work
1939
and
all
spending pr-or to the war. Ii
look back ,o 1939, we see that
over
o'al
for
in the six years of lib¬
more
paid.
of late.
"We
Items
expenditure
bids
Mission
ure.
anc
appear;,
eral
we
526
office
tion under the tax and debt struc-
total is
purposes
projected expenditure.
anil Defense
reduction
government
is
reduction
for j*enand
appears at
th.s
will receive
its
at
trade
Rel.ef from
dens
due ion
practicable. True, this loao
but $8,300,000,000. Yet
equal to the average
most
and
times
for
reasons
budget in othei
expenditure
of taxes found to have been
consideration
of the striking effect on Federal
revenues of
any material varia¬
tion in national production.
The
always
of
in
Nothing can be done about the
items of $5,000,000,000. for
service of the debt, and $2,000,000,000 for estimated refunds
This is indicated by
cannot
task
is
whoiesome
so
the
high level the Treasury would be
in
a
most
vulnerable
position.
as
be
can
great
prevalence of boom conditions in
industry and employment.
With
the budget balanced at such a
ward
the
Debt
height, except for the elimination
of the excess profi.s tax, and the
variation
experience
great
expenses
difficult, none will deny: so was
winning the War. Five great items,
resulting largely from the war,
make up about four-fifths of the
strength of the country.
The President thus presents
of
that
voter, but he can zealously back
up the Congress in the resolute
quest.
J
44 4
reduc ion, maintaining
the
present time high
tax
any
1948 at
sternly
stands
He
Congress
Highly competent inde¬
pendent authorities agree. Intelli¬
gent opinion on such a complex
matter
is
beyond
the
average
the responsibilities of the Federal
Government cannot be fully met
the
government
activities
programs
that
substantial
essened.
that
maintains
strongest
in
eral
essential
of
deficit will increase the estimated
President
the
fields wherever possible.
surplus to $2,000,000,000.
The
of
one
re¬
reduction
rifice
the
to
whether
on
>;4444y'v'^earl
sale of $3,834,000 conditional sale
agreement
normal
ally be accomplished Without sac¬
ex¬
expiring,
postal
ot.-erw.se
taxes,
and
of certain
depends
course
convertible-debentures.
ter under moderate taxes.
duction of expenditures can actu¬
and
win
Western Pacific RR.
26
dustry
(Continued from page 1385)
r
V
,
Company stockholders
J
V°
Boston •; Company
has asked for exemption from the
Budget—'The Taming Point
i
nnK
,.4V2%
Details'
First
Gas
Natural
Co.
inVH
suitable underwrit-
a
Gas
on merging Western Gas Co.
and Gu.
Oil Co. into Western Natural'Gas Co.
The new com
wi 1 sell privately to insurance
companies $2 500
year 3y4% 1st mortgage bonds and $1,500 000
share, and
redemptions
financing and formation of
ing group
par)
vorable
Paso
Natural
March 25
unexchanged portions of the new issues are to be sold for
at special meetings in Los Angeles May 6. If ap¬
proval is granted, the company will issue 1,653,429 shares
The Federal
Western
.
gram
($25
•
Would exchange on the basis of one-half share of each
tiled with the California Railroad
application to issue two new classes of
preferred stock with an aggregate par value of $82,671,-,
450. The stock is to be issued on an exchange basis for
retirement of all outstanding 6
and 5%% preferred
shares. Stockho ders are to vote on the refunding pro¬
11
Commission
s
Thursday, March 13,
T
class Of new
Southern California Edison Co.
March
,
-
bo1
wei
peac
"WeJ®
passing
civili^
the* great
Mexi^
governmetttg^
States."-'^^*
a
iior
:
"the
-
Unit
Number 4576
165
olume
THE COMMERCIAL &
FINANCIAL CHRONICLE
be headed by firms which
long
have been recognized as friend¬
ly
opponents.
Until
recently
First Boston Corp. was sched¬
uled
to
one
share
management
intention to seek bids
on its port¬
of; 312,000, shares
California-Oregon Power Co.
common stock.
folio
of
group
But
due
to
will
use the proceeds from the
sale of the stock to redeem
$13,-
misunderstanding
350,410
over
the details of
management,
that big firm has withdrawn
gmd
has
4
returned
Stanley & Co.
it
I Underwriting
bankers
is
not
are
finding time heavy on their hands
was
the
to
the
■
-
;
Morgan
notes
with which y.
affiliated.
This
closely watched.
equities hereto¬
fore held by holding companies,
tnd participating: to;-some extent
notes
maturing
oil
due
two
from that
years
date.'1
-W;
A call for bids on the
stock, to
biggest corporate deal in
be opened
during the third week
and, naturally in view of
of, April, is expected to be made
weeks
[hese 'days what with the distri* hhitrent:ftisrfcet cdh<kti6ns>fwiiibe
bution to the public of utility op¬
erating
in
April 10 next and to negotiate a
reduction hi $25,500,000 of bank
group
orginally
The company has indicated it
y:
with Halsey, Stuart
Co., Inc. ' V;'v"yw';; ■.' .v"
'•••
&
holdings
of
'
soon.
^
In the
:
company
Divestment Moves Along
;the,
Offing
company's
bankers
are
program"tif,utility integra¬ making preparations necessary to
underwrite the projected offer¬
tion outlined
-.■under^ the Public
bonds.> ■"
•;:' v'. > •<.'•
ing to its shareholders by Amer¬
^ Utility Holding
Company Act. is
ican
Tobacco
Co.,
of
896,404
jWith plenty of business loom-ca really ; starting y tb move along.:
class
"B"
log ahead ^4hoy^Kave^the;;'addiW;»' One
has ? but'1 to
note*;, the in* shares^ of iadditional
•
t
'The
b the marketing, of soldier bonus
tional chore of setting up new *
urned to
6 from
groups
bid - for this
to
that
appearsron the-caK
creasing speed with which daeld
ing companies are disposing /of
certain earmarked holdings to be
*
*
or
-
visit
ade
to
by
a
StateesJ
ted
Press
| issue- asTt
endar.
I i| NextV Tuesday; .for / example,
York, launches its
of New
tensive
between
which
''s Presind
these
jiibed
as
success
both
to the
7
Mex-
ne
ilar" put
ex¬
involve
close
In. the running, for this business,
both of nationwide proportions, v;
7" From
that the ; bidding Will be! close
$nce the competing groups*will
the
calciilates
Street
lane the
Mexico
he
rt,
every]
the]
warm]
le
>ple, audi
e United!
towardl
f
was
.
indicated
terest
in
both
that
fneht.
of nearly
'
/
,
was
>
* -
tribution.
its
on
Reports
are
haent that it
Securities
mission
SITUATION WANTED
''Tlie'
"
lively
plaee-
ofj
fr. Trunal Pa; for an
Presio
Asso-j
Mexicb
•edjtbat
meantl
ot
experi*
years
fence, iii~ Wall "Street
in-
several; years
as
ferdeir clerk. Salary And/or
commission.
Box ZT
Commercial
&
H
313,
Financial
•IS-frfc-.i,;..
■i-J-i;-..'*.' -bi
Chronicle, 25 Park Place,
trengthl
at
current
the
'
..
"/
such
on
,
bidding.
Two
in the field.
are
financing
its
war-delayed plans
mofor expansion and improvement.
declaration
a
institution
nancial
*
district
•-
and
in
Park
at
March
AttSfitES,; CALI^.—Mor¬
the
St.
&
Co., 634
South Spring
Street, members of the Los An¬
geles Stock Exchange, have added
gan
(15c)
of
1,
Ben H. Ohler to. their statf.
■
31,
Company
1947.
Wall
LOUISVILLE
fourteen
The
and
GAS
of
Board
AND
Directors
of
Louisville
Gas
Company (Delaware) at a meeting
7, 1947, declared a quarterly
dividend
of
thirty-seven
and
one-half
cents
(37^2c)
per
share oh
the
Class A Common
Stock of the Company for the quarter ending
February
28,
1947,
payable
by
check
March
75,
1947, to stockholders of record as of the
close of business March 17,
1947.
At
five
the
same
meeting
a
dividend
of
(25c) per share was declared on
Common Stock of
the Company,
B
STOCK
The above
of
50
March
of
the
the
March
31,
-to
1947.
MINERALS & CHEMICAL
closed.
A
92
NO.
March
dividend
a
Common
of
15,
record
1947,
books
Stock
dividend of
at
of
will
not
Twenty-five cents (250 PC
paid April 15; 1947 on the Com¬
Corporation, to stockholders
the close of business March 31,
:•; •'
Stock of the
mon
record at
1947.
payable
BONNYMAN,
Joseph L. Martin, Treasurer
be
Treasurer.
CONSOLIDATED
The Electric Storage Battery
NATURAL GAS
company
York 20, N.
he
board
No.
186th Consecutive
Y.
'
Quarterly Dividend
7
The
of directors
^
CORPORATION
share
>
to
General Offices
stockholders of record at the
close of business
20 North Wacker Drive, Chicago
on
the
the close of
from
the
($.75)
cents
Common
Stock,
per
business
payable
March
on
1947. Checks will be mailed.
,
.
17,
;
:
April 15, 1947.
H. C. ALLAN.
E. DuVall, Secretary
E.
declared
March 31.1947, to stockholders of record
at
pany,
,.
have
dividend ot seventy-five
capital stock of the Com¬
payable on May 15, 1947,
the
:
Directors
Accumulated Surplus of the Company a
has this day declared a regular
semi-annual
cash
dividend of
One Dollar ($1.00) per share on
-
.
Secretary and Treasurer
March 12, 1947
Philadelphia 32. March 7. 1947
Dividends
Board
of
were
declared
Directors
by the
February
on
27, 1947, as follows!
4%; Ciimulative
Preferred 2Stock
REYNOLDS
V
\ Regular Quarterly Dividend
andi
|
ruins
of
Tol-
fexico.j
ling to]
20th Consecutive
•
Dollar '($1.00)
One
per
METALS
share.
COMPANY
"
$5.00 Par Value Common Stock
Reynolds Metals Building
Quarterly Dividend of
Forty Cents (40c) per share.
Regular
we|
ilk®]
de-|
exicsrl|
bo
Dividend No. 4
March 7, 1947.
1
was |
neaceJ
dol
viliz3""!
Corporation
the
for
For
^e
not
the
on
Dividend
visited
nusual
;
at
'30 Rockefeller Plazfc
a
bothl
were!
will
Transfer
L.
P.
usl
Mexico
t
record
COMPANY
5Wh6re
-a
Wichita River Oil
103
closed.
aced a
3e
NO.
•
.
whal
capital
ess
1947.
the
;c
:e
of
stockholders
business
of
quarter ending February 28, 1947, payable
by check March 25,
1947, to stockholders of
record as of the close of business March 17,
■1947.:
G. w. KNOUREK, Treasurer.
urprise
ing the
e
Co.
8,
1947, payable March
DIVIDEND
share
per
Company
close
the
[ie New
ly,
15,
books
STOCK
New
s
DIVIDEND
Oompahy has declared
cents
preciaMar. 4,
ne.
Pacific
&
March
stockholders
to
Transfer
-Amer-|
sops
1947.
twenty-
Cents
Class
17,
share will be
ELECTRIC COMPACT
March
on
March
of
Electric
held
earnings,
Company has declared a dividend
share on the Preferred Stock of
per
COMMOtf
office
of
by
No:
past
F. DUNNING, Secretary.
New Mexico,
close of business
DIVIDEND NOTICES
231
declared
was
of
Rocky Mountain
above
$5.00
out
business
PREFERRED
The
of
share
1947, to stockholders of record
close of
Louis,
dividend
a
per
Directors
Raton,
the
Place, New York 8, N. Y.
7," 1947,
cents
Board
j.u'i
financial
na-|
On
the
payable April
with
of
THE YALE & TOWNE MFG. CO.
fifteen
of
municipal depart¬
publication.
NoW retired; but desirfes to con¬
tinue in municipal field. Would
consider
representing Out-oftown municipal firm.
Salary
secondary.. Box R 36, Commer¬
cial & Financial Chronicle, 25
years
ment
NOTICES
"rights b&sis,'*
a
wiU^gi^ter with the
Exchange Com¬
shortly
DIVIDEND
under la k i ng
and
accept-l
11 of
■
,
Twenty*two years with mu¬
nicipal department of large fi¬
Street
eluding
have|
ker
:J
catryin| >-j[This Will mark another step in
divestment plans. the huge company's program for
.
Seventeen
and
bank loans.
k. Telegfaph
AVAILABLE
n
ner
*
competitive
groups
Municipal Man
oassadorl
at thel
needed in
the liquida-
a fortnight hence the
banking wond will
last
done
Was
in
\
SITUATION WANTED
well!
as
as
85-year obligations will be sold
Sooh
fesidentj
mber
and
but this time the $200,000,000 of
Gas & Electric is not
Standard
held
next
take? -dd^d* another allotment of
American Telephone & Telegraph
Co.-* debentures
for
public dis¬
-
*
through
drawn!
Just-about
investor: in¬
issues
Telcphoiie'
investment
«
-Beoffered ••publicly-' yesterday it
Wasting \Uny £ times; in
byl
jeted
is
Indiana Public-Serviced Co.;
■
Two
spark ptU^jqf Very active
trading department of 'oyer-the-counlei- firm.
Fifteen years Wall Street
experience. Salary open. Box NO. K 35,
Commercial > &
Financial
Chronicle,
25 Park Place, New York 8, N. Y. 3
Co.-,
the v latter sold 383,484
shares of Common of Northertt
Expfert teletype and telemeter operator.
years
-
; While
I
ar-|
pon
Power
five
2
business and for
3teffe£^$s^dlng
stock T>f
common
States
Another Due
^Assistant Trader
the
Amer.
Mountain
April
ing capital; and used
r
The
614 shares of
•
for
ratio of one
each
continuing through April 21.
p: Proceeds Will be added to work¬
ahead.
divestment actions
hnd* suggestive
1 Situation Wanted—Female
"
re-|
;ure
1
current
eaiiyl
ie
3
J
plan, $100,Q00,000 of first re*
funding mortgage bonds series A,;
iue in 1982. Two groups are now
immediately
Cow and a group; of the old lnw:
suit hdldiiig units.
^V
kids .i.will be -openbd at that
on the first offering under:
the
are
for
commencing
-
•involve Standard Gas & Electric
tiriie
r| And
J.-
The
to
Faith in
ait Trti-
inore
$300,000,000 In new, securities,
na-
!cial dis-
TwosuchoperationS
completed this week; Und many
refinancingprogram
will
share
will
subscribe
shares in the
new
new
| Consolidated Edison Company
Occasion
of That;
aware
Cpmmpn, shareholders
liL
hay§-;j^e .right to
the
CORRESPONDENT
Both dividends are payable March
"
Seeks
responsible position.' Able to produce new
business and develop old contacts.
Familiar with in¬
28, 1947 to s'ockholders of record
at the close of business March 14,
Checks will be mailed.
1947.
Richmond 19, Virginia
PREFERRED DIVIDEND
The regular dividend of one dollar
thirty-seven
and one-half cents
($1,375) a share on the outstanding
pre¬
ferred steck has been declared for
ending March 31, 1947,
payable April 1, 1947, to holders of
both listed and
Robert P. Resch
For interview write Box L 30, Com¬
Vice President and Treasurer
record
over
the counter.
mercial
and
York 8, N.
Financial
Y.
-
:;
". * ■'o ;>::'V;.'
at
March 20,
The
Chronicle, 25 Park Place, New
the
transfer
closed.
close
of
Mining and Manufacturing
Phosphate
*
Potash
*
Fertilizer
-
business
1947.
Checks
DIVIDENDS
The Board of Directors
*
has declared
quarterly dividend of $1.37
'»
on Preferred Stock and a divi¬
the Com¬
mon Stock both payable April 1, 1947
to ho'ders of record March 18, 1947.
the
share
dend of 15 cents a share on
books
will
will
be
Bank of the Manhattan
•
*
5VSi% cumulative convertible
the quarter
vestment securities and their markets
WARD BAKING COMPANY
not
be
mailed
by
Company.
L. T. MELLY,
Treasurer
ALLYN DILLARD. Secretary
Chemicals
Dated, March 6, 1947
475 Fifth Avenue
New York 17, N.
Y.
r
THE COMMERCIAL &
1428
FINANCIAL CHRONICLE
Arthur Ross Director
Strikes
Against the
Court Ruling May Have on Stock Transfer Tax Exchanges Possible
By EDMOUR GERMAIN
quandary
a
what the decision might
over
in terms
mean
_
only of stock transfer taxes but also income and franchise taxes.
not
ruling of
Indiana
Court in December reversed the
S. Supreme
Ever since the U.
lower court, in the case of Hewit v. Freeman, that the
a
income tax applied®
to" the proceeds of sales of securi- Court was faced with the followties of an Indiana resident, law¬ ing issue: A resident of Indiana
yers familiar with the tax prob¬ through the New York Stock Ex¬
lems
of
some
of
New
York's change by a local broker who is
gross
banking
largest
institutions
and
wondered
have
connected
brokerage
v
with
brokerage
just
then
what effect this ruling
house.
raised
was
York
New
-a
The
were
question
the proceeds
could con¬
ceivably have on stock transfer
taxes
and
possibly even other
forms of taxation, such as income
and franchise taxes, in transac¬
tions
involving the citizens of
i
.
but excepts from
\
•
\
It
believed by
was
therefore-
some
limits than
\hk-:
narrower
being imposed
the
extent
to
are now
might
apply
which
New
other state
any
that
to
York
can
State
or
any
tax the citizens of
other state having occasion to
office
of
the
State
is
Tax
something of
tax laws
chief interest
a
in the matter there is
probably to
thought has been
that
if
sion
the
in
ing the application of
the
transfer taxes, it could
also
|!fc
ceivably
come
bearing
lawyers
stock
con¬
in¬
on
and franchise taxes.
if it
"America's
of
In any
generally
extremely
are
Court
Foreign
Lending
the
National
Foreign
can
men, much
is confusion in the matter.
In
.
the
lawyer
Indiana
case,
explained,
the
agreement, as drawrv up in
stipulation signed by officers of
the union and a representative of
thg ban)?, ,ipclude reinstatement
without
discrimination
one
agent,
it
was
reported
at ,108
•
j The "Over Fifty Club" will
shortly announce its second an¬
nual dinner. Any -member of the
Municipal Bond Club of NeW
.
who
pf the
York, to be
General
-
will have
.
With
City of New
of
the
(Special
to
NEW
Dir. of Bankers Trust Co.
S.
Sloan
CARMEL, ILL. —John M.
now
sole proprietor of
107V2
Co.,
Fourth Street.
the
the
Company, has
election
an¬
tors.
J;
Mr.
H.
New
Jackson is
Whitney
March
West
Mr. Mitchell
was
of the firm.
Hotel
in
New
York.
J,
Corp., and Chairman
(Special to The Financial
Co.
—
.
—THGUOB
the
—DLOS
TMCrtDDrtTt
Chronicle)
Members
55
National
A
contents
Old
Association
of
Securities
Dealers,
!
Telephone
BArclay 7-2663
v,
New Issues
; Calling attention to the increas¬
ing number "of citizens killed in
automobile : accidents v i n; the
M. S.WlEN & Co.
United States, President Truman
called
upon
every V State" and
;i
ESTABLISHED. 1919 '
Members N. Y.
community to work unceasingly
throughout 1947 to promote high¬
traffic
40
Exchange PI., N. Y. 5
>
Mr. Truman also
urged drivers to exercise care,
without which, he said, "law? and
148 State
regulations will be of little avail."
Tel.
Teletype—NY 1-971
tAP. 0125
*>•
Golden Crown
Mining
(freight
car
.
-J;
high
Specialize
;;'YJ
-
SPECIALISTS
.
V
'•'
1
:J.
W. T. BONN & CO.
120
Broadway, New York 5
*•
of
V
*
N
-
;'v",
,,
Telephone COrtlandt 7-0744
Bell
Teletype NY
1-886
•-
10 Post Office
»,
12
Issues
•
Utility Stocks and Bonds
TEXTILE
SECURITIES
Securities with
New
New Eng.
a
Market
Specialists in
Unlisted Securities
England
30 FEDERAL STREET, BOSTON
Established
»
Aircraft & Diesel
Equip.
Benguet Cons. Mining
Lava Cap Gold
in
10
1922
Linn Coach & Truck
Kinney Coastal Oil
Tel.
HANcock
V
8715
Teletype BS 22
~
Martex Realization
Myler Plastics
.
J
^Seaboard Fruit Co., Inc.
*
'
'
*•
Palmetex Corp.
'
Sterilizing
Federal Asphalt
Pressurelube
Gaspe Oil Ventures
Reiter Foster Oil
*"
:
•'
'
r*
{
"
1
-
Red Bank Oil
Globe Oil & Gas
'•
"'General Products Corp.
Petroleum Conversion
Electric Steam
:
.
w-
•
*
a
"'Susquehanna Mills.
Princess-Vogue Shops
Greater N. Y. Industries
Empire Steel Corp.
,
•
*•.
'•• •'*
.
;
.
'
•
-
•"
'v.'
?
*
t
'•
.
.
*Prospectus
Standard Silver & Lead
Kellett Aircraft
*
on
"
.I'
q
•
.
•"
4-
y:'-'
•
Request
Trenton Valley Distillers
Morris Stein & Co.
Established
Securities
Square, Boston 9, Mass.
Telephone Hubbard
Stocks
Investment Trust Issues
Public
New York 4$ N. Y.
all
in
Bank
Available
LERNER & CO.
Inactive
and
Industrial
MARKS <5, CO-Inc.
Differential Wheel
for,.
about
''
f
We
Consolidated Industries
manufacturers)
Circular
HAnover 2-7914
^.
All Issues
Ceraseai Chemical
-
Market about 9
1946
BS 259
Teletype
:
-
■
"i
:
I
RALSTON STEEL CAR CO.
Sunshine Consolidated
j
!
,-,K. *1
large volume
business
St., Boston 9, Mass.
fV/y: Telephone
A MARKET PLACE FOR LOW PRICED UNLISTED
SECURITIES
Freight Cars
long-term
HA. 2-8780
Teletype N. Y. 1-1397
..
put into effect.
Cosmocolor
indicates
<
Security Dealers'. Ass'n
regulations" ; and
impartial enforcement of
traffic codes," and expressed the
hope that reforms would soon be
Copper Canyon Mining >
U. S. Radiator Pfd.
jljf
Frederick c. Adams & Co.
Teletype
Shortage of
1375
page
/
AFFILIATE: CARL MARKS & CO. Inc. CHICAGO
:NY 1-277
Geroter-May
index of
BRITISH SECURITIES
;
^
see
:
Reorganization
Insurance
Inc.
Liberty Street, New York 5, N. Y.
?
vgg Securities §|ff
V*
50 Broad Street
'
Stock
Domestic & Foreign
.
murv
the
A1?1
...
For detailed
"■QUOTED
■
INCORPORATED
to
Orleans
INDEX
Harold J. Hifton Opens
Firm Trading Markets
Common
—
added
•
FOREIGN SECURITIES
Kobbe & Company
.
New
fr
.
.
•
been
'
■..Si
HAnover 2-0050
of The Con¬
$6.00 Preferred Cumulative
Chronicle)
LA.—Wilton
Woolfolk,
of
Joins Staff of Tifft Bros.
ference Board, will
preside.
$4.00 Convertible Preferred
f.
Financial
of
N"
F.
-
York.
evening,
Col.
'r-'.V
,
Exchange.
285th
20, at the Waldorf-Astoria
.,
partner in
a
Company
and
The
has
of
bers
William
of
Meeting of the National Industrial
meeting
'
"strict
Proprietorship
Mitchell
i
Huggins
Shober, 839 Gravier Street, mem¬
H. Jackson to the board of direc¬
form
MT.
Washington
;-J'
1
ORLEANS,
Bland
staff
Colt, President of the
Bankers Trust
nounced
E.
.
Trade
UNITED STATES FINISHING
COMPANY
-
East
>
Woolfolk, Huggins
.
anniversary of his birth by way safety, according to > Associ¬
noon, EST, April 10, will be qual¬ ated Press advices from Washing¬
ified to attend, and, should com¬ ton
which
also
added:
The
municate with;' Phillips TV Bar¬ President referred to the recom¬
bour, secretary of the group, First mendations of his Highway Safety
Boston Corp., New York City.
Conference "with respect to uni¬
delivered before the previously President
Session
reached
engaging
business from
■
parent company, the St. Lawrence
Corp.
'; '
Accident Reduction
Planning Dinner | 3
tional
Bank
|
PUBLIC SERVICE COMPANY
Cumulative
the
by
union, was deferred pending the
disposition of a charge of unfair
labor practice lodged by the union
against the bank. The union has
PARL
$7.00 Preferred
investment
mXI*6GL*'
a pay
The
Supreme
NEW ENGLAND
f 'i'iv.
Ltd., and St. Lawrence Paper
Co. Ltd.
Mr. Ross was re¬
rise of $4 a week for
HARTFORD, CONN. —Donald
all employees except officers and
J. Beaton has become affiliated
supervisors of the bank, time-andwith
Tifft
Brothers,
49 ; Pearl
a-half for overtime on a daily
basis.
Formal recognition of the Street, members of the New York
Stock Exchange. Mr. Beaton was
union
as
collective* bargaining
formerly with Brainard, Judd &
strike,
Drake, President of the Gulf Oil
as
the
offices
cently elected to the board of the
with
and
Chronicle)
Mills
full pay for time loss during the
Mitchell is
be said, too,
that, for the state tax
week.; Terms
a
(R? Neb.); and Shephart Morgan,
Vice-President of the Chase Na¬
may claim Conference Board. The
meaning of the Supreme will be held
Thursday
decision, it
last
50th
^cautious in what they
to be the
this
of the
Now
be thought the
may
Co.
Council; Senator Hugh A. Butler
restrict-
as
Trust
York
to Address
Conference Board
might
;;.hv :
event,
interstate
dresses by John Abbink, Chairman
possibly be interpreted
a
of
therefore
Policy" will be the subject of ad¬
case
National
state
expressed
Indiana
have
and
that
Court deci¬
Supreme
the
by
freedom
Morgan
revised to repair any damage the
Federal ruling might have caused.
The
effected in
were
Abbink, Butler, and
discover the places, if any, in the
statutes which might need to be
<
"such
scope
prohib¬
ited by the Federal Constitution;
a
although
the
commerce
quandary over
how the decision might affect the
application of New York State's
V
its
interference
an
with
Commission is itself known to be
in
won a
the
"Over 50 Club"
dd any business within its borders.
The
two-day strike against
Safety Bank and
CIO,
Corp.
Financial
Securities Corporation is
in
Paper
SUFFERN, N. Y. —Harold J.
asked the State Labor Board for
the
usual
and; customary
way
Hifton is engaging in the securi¬
such gross income by the Consti¬ permission to withdraw its charge
ties business from offices at 60
and the State Labor Board itself,
tution of the United States."
;
Washington Avenue. He was for¬
Reversing
the
lower v court, according to Rev. W. J. Kelley,.
merly with W. W. Henry & Co. of
Justice Frankfurter, rendering the Chairman of the board, has the
New York City.
;: v
' ■#
opinion, held that the'power of request under consideration.
the states to tax is limited
by the
Commerce Clause and; that the
President Urges Highway '
exaction by the State of Indiana
peding the free flow of trade be>
a
and bonds which
deemed to have the effect of im¬
I'M*
Guild,
The
_
tax upon "the receipt of
the entire gross income" of resi¬
poses
Legal opinion is not clear -yet gross income as is derived from
on
all the possible ramifications business conducted in commerce
between this state and other states
of the Supreme Court decision. In
of the United
States]. . . . to the
giving its decision, the high court
extent to which the State of In¬
emphasized the point that a state
diana is prohibited from taxing
is. precluded "from • taking any
had made sales of corporate stocks
action
which
may
fairly - be
tween states.''
■
transactions taxable unr
der the Indiana statute which im¬
■
m>i;r
:
dents and domiciliaries of Indiana
other states.
of these
Co.
to
INDIANAPOLIS, IND.—Indiana
,
Board of Directors
the
of Lake St. John Power and
inch, and the whole issue stands
suspended in mid-air, as it were.
The Financial Employees
National
elected to
the union will
probably feel it should poll
its entire membership on the sub¬
ject of a strike. Meanwhile, nego¬
tiations appear to have reached
something of a stalemate again,
with neither side giving in
an
(Special
,
Corp., 22 East
Street, New York City, was
40th
also
Ind. Securities
Ross, Vice-President of
:
thing of
Central
Street eventually,
Legal opinion is far from clear yet on all possible ramifications of
Supreme Court decision in the case of Hewit vs. Freeman.
Office of the State Tax Commission, however, known to be in some¬
tbe
.
Arthur
(Continued from page 1380) '
.*
Thursday, March 13, 1947
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