Full text of Commercial and Financial Chronicle : March 16, 1950, Vol. 171, No. 4890

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

ESTABLISHED 1S39
BUS. ADM.

LIBRARY

~Tke

Chronicle
Reg. U. S. Pat. Office

EDITORIAL

As We See It
«

Free" Housing,

object to the use of
the word "free" in connection with much ol the
Deal

with which

program

past been garnered in.

decades

for

have

votes

Fair Deal

and

object to it ourselves. It was for that reason
that we placed the word in quotation marks at

We

The Administration
avoids the use of such
plain, straightforward terminology when pre¬
senting these proposals to the public. It doubt¬
less avoids them because to do otherwise would
heading of this article.

the

country, due to

These

taking
cessful

in

.

people

concerned,

rulers

study.

really free, at least so long as

of

under the
The cold war
these: Assist

objectives of the people of America are

the peoples of every

nation to live under

choice, with in¬
rights, with economic freedom and im-

frontiers they are

William

Continued

BE

TO

on

page

FEATURED IN NEXT WEEK'S ISSUE

unable to lay down the

barriers and take part

Roepke

sincerely in

its

on

own

that degree of it

will

ensue

European

home,

1

'

■

grade
is

public

being

tributed"

■

'

outlook

the

cusses

■'

integration

for

on

Funds,

Dis¬

across

inc.

available

are

on

28

State and

Municipal

Canada

Bonds

Monthly Commercial Letter
upon request

request.

COMMON STOCK FUND
address

Please

Dept.

r

Members New York

Stock Exchange

Prospectus

Wall Street, New York 5
Chicago

Boston

on

CANADIAN BANK

OF NEW YORK

OF COMMERCE

FUND

request

Head Office:

FRANKLIN DISTRIBUTORS, Inc.
64 Wall

Bond Dept.

Teletype: NY 1-708

Street, New York 5

Aeic York
Seattle

Stocks

Underwriters and

Municipal

Toronto

Agency: 20

Portland, Ore.

BONDS & STOCKS

Ill

SANDERS & CO.

Los

Established

Angeles




ESTABLISHED 1891

(Incorporated)

Chicago

New York

Goodbody & Co.

OTIS & CO.

BOSTON

CITY OF

MEMBERS

1899

NEW YORK

Dominion Securities
Grpoeation

STOCK EXCH.

40 Exchange Place,

CLEVELAND

115 BROADWAY

New York

Chicago

Denver

Dallas

Cincinnati

Columbus

Toledo

Buffalo

NEW YORK

NEW YORK

New

England

Public Service Co.
An interesting

workout situation

and

for

Dealers

1

Corporate Securities

Devonshire Street

THE

OF

Institutions

~

VANCE,

NATIONAL BANK

Booklet available

,

authorized dealers or

■

CHASE

THE

bonds

and

Prospectus from

Department

.

San Francisco Los Angeles

„

and

•

Exchange PL

CANADIAN

Canadian

Distributors of

4

Bond

THE NATIONAL CITY BANK

UTILITIES FUND
INCOME (BALANCED)

i

y
'

'

'

•

THE

BOND FUND

White,Weld&Co.

.

A.

C.

PREFERRED STOCK FUND

40

page

basis.

A Mutual Fund
Copies

on

—The "Chronicle" of

550 Branches

Franklin Custodian

which

"When

a

dis¬

the

where

begin

Continued

39

articles concerning various phases of Puerto
for further enhancement.

high-

this

stock,

utility

traded

Bulletin

As charity begins at

must

'

Research

current

itself

which is simply indispensable

automatically.

& Electric Company
Our

international effort of

responsibility, European "integration," or

Thursday, March 23, will include a series of
Rico's growing economy and the prospects

Iowa-Illinois Gas

an

external

effectively and

isolating and dislocating policies, each country for

today,
Mo., March 15, 1950.

lead

"integration." Once, however, they cease to pursue these

at least

the John Marshall Club, St. Louis,

to the
of pay¬
Under these conditions, they

ments."
are

dividual human

by Mr. Stassen at

bound to produce

which

disequilibria

famous "crisis of the balance

and

address

countries pursue certain
policies within their own

economic

the

international,
first of all a
different

As long as the

one.

European

representative governments of their own

♦An

all

European integration.
is to believe that the

is primarily
reality it is

in

national

with a god¬
philosophy,
and

kind of dictatorship.

same

almost

and

frustrating

fallacy

fallacy

while

economy,

police force;
keep each national dictator subject to
the central control of Moscow; and
above all, keep the Russian people

Harold E. Stassen

RICO

PUERTO

The

problem

30

page

of

rulers

The

Europe?

in

fundamental

a

the efforts for

backed by a tommy-gun

inquire into
on

and

sanity

is

ineradicable

objectives of the
Russia are these: Bring

materialistic

less

the system actually

Continued

reason

war

socialist

ized

and until sufficient time
has elapsed for chickens to come home to roost.
It would be well, accordingly, if each citizen of
country of ours stopped to

economic

social

munfst dictatorship, with

operates as indicated

this great

fun¬

a

nation under a national Com^
a central-*

every

of them, what is offered is

some

or

America

of
cold

The

people. The
the beneficiaries are

that so far as

omies is

Russia.

offering many things free to many
truth is, too,

SWITZERLAND — The disintegration of
disequilibrated national econ¬
pitiful. Every effort must be made to overcome
this wasteful and parochial system.
But what is the
reason
why so little headway has
been made
so
far in the fight for
GENEVA,

Europe into isolated and

ference

has

and

Clearing Union, is crucial factor.

political systems and a basic dif¬
of philosophies between the

and

for years been suc¬
selling, programs on the basis of

sell,

to

involves
economic,

of

cold

The

out.

stand

clash

damental

Administration is under^

is that the

facts

is world-wide. It

war

a

untary European integration is

in America today.

varied by use of such terms as "tak¬
ing the dollar sign off" social service, or "remov¬
ing financial barriers to adequate medical care,"
and the like. So much for the politics of a matter

The fact

Concludes vol¬
incompatible with national
collectivism, and instead requires the Market Economy.

for

with the Nazis of Ger¬
many and the militarists of Japan, this cold war with
the Communist rulers in the Kremlin needs re-analysis

are

which will bear much closer

Roepke holds Europe's economic insanity continues
overlooking fact that basic problem
is really national, not international. Asserts present na¬
tional policies are following Hitler-Schacht pattern.
Declares retention of exchange controls, ratber than need

with the ending of the hot war

politics to

of

Institute

Graduate

because of fallacy in

Beginning

of the cold war.

the

Dr.

Stresses need of reaching

We meet in the fifth year

at

International Studies, Geneva

people to counteract Red propaganda and says
Truman must be willing to meet in peace conference.

suggest such "benef its" as long due the recipients,
but up to now denied them by "greedy" men
or the "interests."
Such tactics can and ordi¬

narily

Professor

minds of

"politics."

By and large, it is ordinarily better

our

consider battlefronts.

to

ers

itself, of course, ordinarily

be dubious

By DR. WILLIAM ROEPKE

cold war, has lost most of
what it fought for so valiantly and victoriously in World
War II, prominent Republican leader ascribes this to
present policy of waging a cold war on defensive basis,
together with failure of Administration to follow out
bipartisan foreign policy program. Urges President
promptly put foreign policy on bipartisan basis by call¬
ing conference of both Republican and Democratic lead¬

Asserting

Medical Care, and Much More

Copy

a

Fight for Economic
Sanity in Europe

STASSEN*

President of the University of Pennsylvania

There will be those who

New

The

Battlefronts of the Cold War
By HAROLD E.

Cents

Price 30

York, N. Y., Thursday, March 16, 1950

New

Number 4890

Volume 171

105 W.

New York 5, N. Y.

ADAMS ST.

CHICAGO

IRA HAUPT&CO.
and

other

111

Broadway, N. Y. 6

WOrth 4-6000

Teletype NY 1-702-3

WHitehall 4-8161

York Stock Exchange
Principal Exchanges

Members New

Boston

Teletype NY 1-270#

Telephone:

Enterprise 1820

2

(1094)

THE

TRADING

MARKETS

The

IN

Central Public

on

New York

Members,

Corporation

New

&

Co.,

City

York

Stock

New

1920

120 Broadway, New York 5

York

Curb

Exchange

W.

favorite

stock

is

It has all the good
inherent and acquired,

qualities,
to

number

the aristo¬
of equity investments. Com¬

cracy

bined

with

which

esting

HC flONNELL & CO.
Members
Stock
Curb

REctor

considerable

a

of

be¬

is

preciation.
tation

is

due

com¬

to' limited

de¬

Relief from this limi¬
in

not

but

for

In part this ob¬

reasons.

is

it

situation

as

pros¬

something to look
intangible, bullish

an

in

roads

the

machine

of

™

Incorporated

walls

vast

by

prevented

amounts -of

cheap

labor,

protection

im¬

goods

and

the

to

our

brought

shores

great numbers of skilled
mechanics.
They helped build
up

Bell Tele. LS 186

the finest and largest markets for
goods of all kinds.
The markets
created

under

and

were

under

tariffs
With

free

trade.

the

coming to power of
free traders, our good mar¬

the

BUY

not

protective

kets, envy of all foreign business,
slowly opened to our com¬
petitors through reciprocal trade

its

S.

SAVINGS

treaties, followed by huge gifts to
build

BONDS

J

competitive

up

V.
GREER HYDRAULICS

A Growth

Investment

THIS iswhose stock affords
a new product com¬
pany

an
exceptional opportunity for
profit through expanding sales

indicated for 1950-51.

was

engineered to make still more
effective the attack on our indus¬

tries,
already staggering unaer
prohibitive costs and contracting
markets.

k'
^

and

increased scale.
These
evident
circumstances

on

an

clearly

call

make for tremendous demand
machine
tools.
There
are

for

', not

It is rich in

cash,

latest current assets position show¬
ing $5 051,103 including cash $2,-

935,659, against current liabilities
$242,186. It has no bonds or pre¬
ferred

gation

stock, its sole capital obli¬
being 210,000 shares of

stock on Which
dividends
have been paid without
interrup¬
tion since 1913.
common

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

7-0425

:

Teletype BS 259

:

Monarch's

ciently in

earnings

excess

Foods

All

request

as -

Prospectus

on

-

level

far

Buffalo

as

volume

freight

the

with

of

Lacka¬

conditions

is

substantially

improved
by the
Wheeling and Lake

the

Erie,

which

Dec.

1, 1949.

became

effective

in effect

throughout 1948
per

share

would

on

have

been

$61.12

Nickel Plate's past financial dif¬
ficulties arose not from a lack of

earning power,

but

largely
unwieldy debt
structure
which
brought about
continuing maturity problems.
of

were

an

maturities

and

the

desire

of the company to reduce its
debt
to a more conservative level were

for

the

of cash for modernization of
prop¬

erty and to purchase stock in the
Wheeling and Lake Erie! These
1937

now

funded

duced

53%.

24%

past history. Since

and

should be

Plans

for

eliminate

has

debt

From here

ments

a

fixed
on

been

charges by

cash require¬

more

modest.

recapitalization

preferred

dividend

Detroit

208 South La Salle St., Chicago 4
Tele. RAndclph 6-4696

Tel. CG 451

obvious that large holders of
Plate common would not

abandoned when it be¬

Nickel

accept any dilution of their
equity,
and
the
company
has whittled
away at arrears by payments of
$14 above regular requirements




City

WALL

Lansing

Muskegon

be

the

Tel. HUbbard 2-5S30

iciUand,

Tele. 03

142

Me.

present

SPECIAL CALLS OFFERED

"business¬

May 31 $ 50.00
20% May 20 1)0.00
May 26 137.50
38
Aug. 9 162.50
31% May 11 162.50
8% 3/3/51 175.00
40% June 19 275.00

brokers,, like

South. Railway
Schenley Ind...
(Com.)

calamitous
arose

Richfield Oil..

Sul¬

Richfield Oil..

"Fa¬

one

that

South. Railway 33%
Atch. T. &S. F. 109

I

be

would

fat

Nickel PI.

to

like

du

300.00
300.00

16

337.50

11
25

825.00

675.00

June 14 $225.00

Park & Tilford

42% May 27 275 00
Atch. T. & S. F. 105%
May 27 300.00
Tex.Pac.Ld.Tr. 57% June 12 425.00

be

Pont

and not

13
20

SPECIAL PUTS OFFERED
Southern Rail. 34

cat

Henry

Holt.

39% May
May
Aug.
May
Pfd. 139
Sep.

Tex.Pac.Ld.Tr. 56

regi¬

perpetual

some

.

St. Paul

But

since

we

still

to

<??;.'*

Cnlh

Ay^'uuoi

Filer, Sc^sbt

and

Members

choose, to buy
and

later

sell,

Put

&

Dealers

I believe

that

Pvts

cv.
no

are

free

pick

Booklet

to

Holt

Call

Co.

B-.tlceri &

Assn., .Int.

30 Pine St., N. Y. 5

WHitehall 3-9177

Washington Dodge

possesses

much

to

attract

the

speculative

Otter Tail Power

eye.

Upper Peninsula Power

Although the orthodox investor
relies

perforce

book data

value,
search
must

as

such

upon

text¬

past earnings,

book

etc.,
the
prospector
in
capital gains usually
rely upon more nebulous
of

guides. «In

my

own

experience, I

have found that the vital
ingredi¬
ents of

a

are:

basic

business; (2) Small
capitalization; (3) Good
ment.

Harshaw Chemical

Philadelphia Electric Common
Allan Wood Steel Com. & Pfd.

Central Public Utility S1^ 1952

Philadelphia Transportation Co.
Issues

good capital gains cock¬
(1) Assured position in a

All

of

these

common

manage¬

appear

to be

offered by Holt.

Henry B. Warner & Co., Inc.
Members

Henry Holt has been in the pub¬
lishing business since 1866
its

123

National

Assn.

South Broad

Securities

St

Dealers

Phila.

9t Pa.

—

reputation

in

the

field

Continued

on

and

with

page

American Mercury
Insurance Co.
on

Request

22

Phila. Telephone

PEnnypacker
New York

Bell System

5-2857

Teletype

PH 771

City Tel.: BOwling Green 9-4818

N. Q. B.
OVER-THE-COUNTER
INDUSTRIAL STOCK INDEX
11'Year Performance of

Bought—Sold—Quoted
Liquid

Exports—Imports—Futures

Ino.

Enterprise 2904
Hartford, Conn. Enterprise €800
Optm,End Phones to New York Carnal 6-it! 1J

ownership of
but one single
security,,, that

SUGAR
—

Dealers

(PLUS TAX)

conditions

Report

Refined

Securities

outstandingly at¬
are willing

such

confined

NEW YORK 5, N. Y.

Peter P. McDermott & Co.
Members New York Stock
Exchange
Members New York Curb

Exchange

DIgby 4-2727
—

If

should

STREET

Penobscot Building

—

to

of

Schenlev Ind.. 33

mentary

LAMBORN & CO., Inc.

DETROIT 26, MICH.
Bay

to
ar¬

came

—

its

at

Assn.

75 Federal St., Boston
10, Mass.

Magnayox Co.

vorite."

tail

were

Members:

Exchange
Stock Exchange

appears

Fortunately

re¬

rears

Raw

With lit¬

the ^equity

stock

tans. are not confined to

Request

Moreland & Co.
1051

pro¬

longed preferred dividend drought.
Further, the company was* in need

are

of

the

Members Nat'l

(Henry Holt & Co., Inc.)

one

$39.94. respectively.

result

I. B. Moguire & vl., Inc.

solu¬

a

Partner, Roberts & Co.,
New York City

and 1949

Nickel Plate

Midwest Stock

ZIPPIN & company

on

Had this lease been

earnings

factors

branch offices

.

WASHINGTON DODGE

high.

the

on

The basic status of the
company
and its earning power has been

These

our

Co.—

North Amer. Co. 22.95

of

$30.55.

the

Birmingham, Ala.

Mobile, Ala.
Direct wires to

man's risk."

a

common over the
past ten years averaged $20.57 per
share, and last year amounted to

common

NY 1-1557

New Orleans, La. •

Lehigh Valley. It is

normal

Earnings

and

Exchange

In addi¬

probable

tractive for those who
to assume a so-called

these factors con¬
high degree of oper¬
efficiency. Earning power

tribute to

seems

.dilution

saddled with the heavy
terminal costs of the eastern sea¬

99

Grow With Oleo

Bought—Sold—Quoted
on

suffi¬

of

Shedd-Bartush

BONDS

Analysis

are

payments to
reasonable
dividend

indicate

Mexican Railways

-

.

efficiently, largely responsible

many machine tool companies and
among them Monarch occupies a

for de¬
scriptive analysis
or

_

Now, to have any chance of re¬
taining the domestic markets, it is
absolutely essential that machin¬
ery be used here more

strong position.
W rite

business.

Then, these steps not working fast
enough to give away our. heritage,
devaluation of foreign currencies

tle

feared,

and the

of

Line

past three years.

now

itself

lease

Pipe

holders will be reached.

interchanged

under

S.

tion of the back dividend
problem
that will be
"satisfactory both to
the preferred-and common stock¬

W. Everit Burnet

only
large

a

ating

Stock

MARKETS

the

It

its

lines

extend

board.

Company—Norman

$68.50 per'preferred share.

the

busi-,

were

U.

in

In * the

not

tariff

York

St., New York 4, N. Y.

tion payments of $6.50 have been
made so far in 1950.
Giving, effect
to
these, arrears now stand at

jL.C.L.

freight

is

New

-

25 Broad

TRADING

rela¬

of

where

Oil

,

passen¬

east

Members

the

on

ness.

Steiner, Rouse & Co!

Sterling, Partner, Watt &
Watt, Toronto, Ontario..

Ion g

or

Inc.—Wash¬

T: M.

traffic. It does

ger

Co.,

the

a

little

&

rail¬

tively
bulk

Bought—Sold—Quoted

Hill, Partner, Hill & Co., Cin¬
cinnati, Ohio.

,as

of

enjoys

Holt

standpoint Interprovincial

main line and

The

Floor, Kentucky Home Life Bldg.
LOUISVILLE 2, KENTUCKY

Long Distance 238-9

of

one

"
St. Louis

HAnover 2-0700

Lion

long been

wanna

made

1st

has

operating

Plate

•accepted

perity
here
undoubtedly -was
greatly aided by protective tariffs.

same

BANKERS BOND

regards

the

of other "countries. Pros¬

excess

ports

m

as

nub' of

industry we must review
briefly the reasons for past pros¬
perity in the United States so far

Preferred

an

Nickel

haul

immediate

tool

Kentucky Stone Co.
5%

From

&

&

New

all

Coming to the real

Common

is

It is

soon

factor.

American Turf Association

best

Louisiana Securities

F.

ington Dodge, Partner, Roberts
Co., New York City.

City

like

M.

—

Burnet, Partner,
,Wj E. Burnet & Co., New York
City.

Henry

Co.,

Tool

McDermott

P.

New York, Chicago and
■—-W.
Everit

common..

sound

the

I

country.

forward to

Common

stock

Peter

Co.", New York City. r '

Chicago and St. Louis RR.

virtually

pect

American Air Filter Co.

The

York.

It must be replaced

solescence

2-7815

part

a

&

Alabama &

and

Selections

Machine

Beal,
■

BURNET

York

machinery with which industry is
equipped, is close to obsolescence.
petitive

Exchange
Exchange

BROADWAY, NEW YORK 5
Tel.

industry is in

particularly favorable position
cause

York

its

speculative possibilities.

on

Monarch

(New York, Chicago and St.
Louis)

a

The machine tool

Since 1917

York

among

investment quali¬
previous price range
makes it decidedly inter¬

ties it has

New

it

New

Monarch

Machine Tool.

Rights & Scrip

EVERIT

Partner, W. E. Burnet

Teletype NY 1-583

Specialists in

beautifully

Participants

Their

Buy it!

(Monarch Machine Tool)

My

120

It is selling at a price to
show a yield
approximating 8%.
By every balance sheet ratio that
cairbe invoked it is a
solvent enterprise.

Exchange.

Thursday, March 16, 1950

This Week's

Forum

safety.

Analyst, Peter P.McDermott

New

CHRONICLE

Security I Like Best

M. F. BEAL

New York Hanseatic

BArclay 7-5660

FINANCIAL

which, each week, a different group of experts
in the investment and
advisory field from all sections of the country
participate and give their reasons for favoring a particular
security.

request

Established

&

A continuous forum in

Utilities 5y2/52
Memo

COMMERCIAL

44 Wall
Tel.

Street, New York 5

DIgby 4-7140

Tele. NY 1-1817

35 Industrial Stocks
BOOKLET

ON

-

REQUEST

National Quotation Boreau
c

Incorporated

46 Front Street

-

-

New York 4, N. Y.

Volume 171

THE

Number 4890

COMMERCIAL

&

FINANCIAL

CHRONICLE

(1095)

A Test of Speculative Behavior

I j| q E x

licHTfnsTfin

-

By O. K. BURRELL*

Articlea and Newa

Page

..

Professor of Business Administration, University of Oregon

The Fight for Economic Sanity in Europe—William
Roepke_Cover

Battlefronts of the Cold War—Harold E. Stassen

Cover

A Test of Speculative Behavior—O. K. Burrell—
Most Favorably

Prof. Burrell describes

dents

,

3

Situated Railroads in 1950—Walter F. Hahn__

Farm Surpluses Passing Their Peak—Julius and Edith Hirsch.

Concludes there is

6

Catastrophe!

or

Clem D. Johnston

10

Earning Power and Merger Trends of New York City Banks
—Morris

A.

Schapiro

11

Buy $2 Billion Yearly From Europe and Save Marshall Plan

<phis

—Leland Stowe

12

Pro and Con of Point IV Program—August
Maffry

evidence

no

report of an experidesigned
to
throw
some

ment

a

13

on tbe nature and basis of

14

investment and speculative deci^

Status of Savings and Mortgage

15

The

A

Choice

Some

Between

,

j

-»T

-p,

.

,

Retirement Benefits

j

Superannuation

or

Problems

behave

men

;

jg^^imct"

Arising From Expanded Pensions

Gainsbrugh__

objective"
that

Louisville

Chamber

of

Commerce

Registers

Opposition

Sure'n

to

at-

no

madetomeas-

5

—

to

»

7

Selling Will Revive Securities

i
;

;

Industry

all

of

&

that^servc to

8

Co.

Appeals NASD Suspension to SEC

10

.

0

K

inis

.

,

Year

r

15

Public Relations Roundup Discussions Series at New School
T

,

'

,

Investment

...

.

Association

Groups

..

New

,

.

York

_

Announces

.

.

_

,

,

to purchase

.e.,

stock

about to pay a
receive

i;o

.

_

.

.

„

•

Sees

,

20
„

tn/in

.

1949____

.

23

Salesmanship Shaping Business

i

of

dividend.

would

illogical
stock

a

alysis

Such

Jt

29

—

NYSE to Review Trading Hours and Summer
Closing.—
;

.

31

to

seem

be

that The

in

the

immediate

and

Insurance

Man's

Canadian
Canadian

dividend

^

dividend

the

has

Our

ef¬

Security

Utility

in

______

;
-

1

WILLIAM

B.

S.

DANA

*■

REctor

Drapers' Gardens, London,
c/o Edwards & Smith.

Reentered
ary

COMPANY, Publishers

2-9570

to

defined

stocks

constant.

E.

C.

Eng-

where

Condensation
to

be

other

of

published

Research

of

WILLIAM DANA SEIBERT, President

WILLIAM D. RIGGS, Business Manager

25,

York,

as

1942,
N.

Y.,

Chicago

Offices:

3,

111.

135

study

by Prof. Bur
by Bureau of Busi
the

University

to

valuation.

has

We

second-class matter

at

the

post

under

the

office
Act

bank

South

(Telephone:




Salle

St.,
0613);

in

fast-growing

gen¬

Analysis of this Company and

following

a

review of the Cement Indus-

tends

to

let

losses

cut

sell but if the

is

price

above

LERNER & CO.
Investment Securities

moves even

10 Post Office Square, Boston 9, Mass.

likely to sell.

Tel. HUbbard 2-1990

is

likely
to

have

stock

a

below the investor's cost,

moves

he

to

buy

and

more

sell other stocks which

declined

not

obtain

funds

in

for

order

to

increasing

holdings of the stock which has
declined.

■(c) When the price of
below

moves

chase

cost,

an

and

that cost for

stock

a

investor's pur¬

remains

below

For

complete record of

a

1

ing consult

;

in

vestor is likely to sell when the

approach

purchase

cost.

(d) When the price of a stock
moves upward,
from an invest¬
or's

purchase

vestor

does

cost

in

and

fact

hold the stock for

in¬

the

continue

a

to

substantial

rise, he will sell quickly in the
event

price

of a sharp break in the
provided the break does

price

the

carry

below

his

average cost.

(e)
traits
age

Because

unable
market

of

of

the

above

and reactions, the aver¬
investor or speculator is

show

to

in

a

which

Continued

profit

in

stocks
on

*

page

a

are

36

NATIONAL READERSHIP
that

pays offfor you

are

interested

in

The New York Times is read in

offerings of

Febru¬

at

of

March

cities,

11,000

New

High Grade Public Utility and Industrial

in all the

48

Union,

ir

Canada,!

in what

Other

per

$38.00
per

year;

per

year.

year.

Publications

Bank

and Quotation Record —
Monthly,
$25.00 per year. (Foreign postage extra.)

Note—On

account

of

the

fluctuations

made

in

New

York

New

25 Broad

York Stock Exchange

Street, New York 4

Albany

-

Chicago

-

York

Hubbard

Glens Falls

2-8200

Schenectady

by peoplewith

invest who have faith

they read in The Times.

they reading

your

story?

'r

Slfe jNhb fork Suites
"All

1-5
-

Are

and villages

and the District

Curb Exchange

50 Congress Street, Boston 8

Teletype—NY

remittances for for¬
funds.

Members New

HAnover 2-4300

in

eign subscriptions and advertisements must
be

Spencer Trask & Co.
Members

towns

states

of Columbia.. .read

PREFERRED STOCKS

Pan-American

$35.00

section.

a

Dominion

of

"Securities

our

Registration"

prolonged period,
and subsequently moves upward
toward purchase cost, the in¬

prices

-

Worcester

.

potential corporate financ-

money to

Countries, $42.00

$9.25

Selling about

his purchase cost

(b) When the price of

even

t

J

try available on request.

profits short, i. e.,
when the price moves below his
purchase cost he is not likely to
little

Southern

California.

of

clearings,

State

leading producer of cement

S.

the rate of exchange,
La

CLASS B (co.nmon) STOCK
A

modify

This

the

SUGGEST

RIVERSIDE CEMENT CO.

value

Subscriptions in United States, U.
Possessions, Territories and Members

Thursday

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

Other

are

a

WE

Dana

8, 1879.

Other

Thursday, March 16, 1950

corporation news,
6tate and city news, etc.).

reluctant

He

but

Oregon.

Subscription Rates

records,

factors

For

Large Appreciation Potential

<

•(a)
run

not

Other factors refer to

its

9576

HERBERT D. SEIBERT, Editor & Publisher

Every

patterns

the study follows:

38

Copyright 1950 by William B.

Office

Park Place, New York 8, N. Y.

25

following

paid for

and

CHRONICLE
Patent

clearly

48

i

Company
U.

both of the

or

based

(i) That security buyers prefer
low-priced stocks to high-priced

5

land

Reg.

were

of human behavior.
A formal statement of the hy-

*

FINANCIAL

a way

suggest

ness

COMMERCIAL

test

economic

rell

The

dol¬

a

bu.yer and re¬
subsequent develop¬

is

results:

ex-

to

designed

price

tendency

(2) statistical studies of stock
price behavior which appear to

2
:__

______

(Walter Whyte Says)——

Weekly

the

Teletype-BS 123

greater

a

establish

to

initial

behavior held by men
jn ^.jie securities business.

;

the

of

he

ments

he

of

1923

STREET, BOSTON 10

HUbbard 2-3790

the mind of the

gardless

W beli?fi concerning patterns

42

...

The State of Trade and Industry

Twice

in

potheses which form the basis for
—_

■Tt:{/Security I Like Best

Published

pattern

was

either

on

23

Corner

Registration-....-

.

That
tends

considerations:

26

__________

Tomorrow's Markets

whoie

INCORPORATED

another

(4)

of

44

;

Washington and You.:

impact

22

Offerings..

Salesman's

the

Walter J. Connolly & Co.

equal

stock

Thege hypotheses were not sim_

16

Railroad Securities

Securities

of

p]y "dreamed up" but

47

___—

Securities

Securities Now

into

dividend.

theses^Permit a test of the hypo-

of

Our Reporter on Governments-.

Public

effect

earnings developed in such

.

,

Bought—Sold—Quoted

way,
if two
in earnings and
general quality, stock buyers will
prefer the one that pays the larger

situations. These hypotheses were

5

—

Reporters Report

Prospective

are

first worked out and then the pat? tern
of
prices, dividends,
and

20

.

„

in

stocks

■

8

...

,

,

20

—_

Notes

Stock

earnings retained in surplus.

Stated

Hypotheses

40

Observations—A. Wilfred May

the

6

Bargeron

Business Activity

News About Banks and Bankers

.

lar of

eral

7

J-

Mutual Funds

„

translated

market value of stock than

certain hypotheses concerning
human behavior in speculative

8

-

Einzig—"More Sterling Devaluation Talk"

NSTA

be

on

periment

8

1—

_

Common

the

on

(3) That a dollar of earnings
paid out in the form of dividends

accordingly possible to iso-

The

18
18

—

From Washington Ahead of the News—Carlisle
of

specula-

upon

47

Coming Events in the Investment Field———

Indications

is

14

—

...

Dealer-Broker Investment Recommendations

PRENTICE

30 FEDERAL

a

Stocks

Securities
Secunties

the

security anevaluation of eco-

on

!
Cover

Bookshelf

WHitehall 4-6551

CORP.

en¬

tax.

>

(Editorial)

STREET, NEW YORK

REED

price

converting capitaTinto in¬
come
and necessarily
results in
the payment of a higher income

' Pure price change on the mind of
the investor-speculator.
-

*

Regular Features

Business

or

was

late

:

.

your

a

"ex-dividend" date. The purchase
a stock in order to receive an

nomic and political developments,

27
u

Reports Home Mortgage Debt at $38 Billion...

fine

a

for

normally falls by the

of

that

choices based

no

i

Relations
Relations.

Probably

^

Steinkraus Sees Government and Labor Outstripping Business

Bank

phase of specula-

narrow

price change

pure

.

See It

at

most valid feature of the study

*7

«

As We

directed

the measurement of the impact of

23

Bern a

Public
rUDiic

was

price-'Change.

:

Output Per Man-Hour Lower Than 10 Years Ago, Says Tell

in
in

experiment

very

way

of saying Jhat

,

,,t;ate response to dividends and the
19
dividend rate, to price level, and

<.

m

'tis

—

you

when it is

dividend in order

the

tendency

will

tive behavior. In general the study
attempted to measure and evalu-

'

.

Speakers'

(Boxed)-A.—

WALL

99

■

When?

i.
,
Preston Delano Reports Gams for National o
Banks

W. W. Townsend

a

,

16 .;

_

"Time and Time Again?"
u

,

of

the

This

another

Burrell

Q. Forrest Walker Sees Retail Business Reverting to Normal
Th.

the

tfl^u eTfces

n

vior
Otis

pay

of

F. W. Dodge Corporation Reports
January Building Rise

G. J. Stubner Says Aggressive

we

obsoletes!

''

fect of

Eisenhower Deplores Atom Bomb Fears

begorrah

price

earning rate, and
general measures of quality.
(2) That there is a strong ten¬
dency to "buy for the dividend,",

amount

1

~~~~~~~

TO YOU!

dividend yield,

sions—on how

Business—J. R. Dunkerley—

TOP 0' THE MARKET

of

tirely

Economic

Maitin R.

ni

~

stu-

to divi-

response

Telephone:

is

We Have the Best of Gold Standards—E. N. Bernstein—

t,

speculators'

preference for low-priced
over
high-priced stocks, but there is strong tendency to buy
for dividends. Holds
price paid for stock tends to establish
j{s value in mind of
buyer, who is inclined to let losses run and
cut profits short.
Says there does not appear to be inherent
tendency toward speculative losses in trendless market.

4

More Risk Capital

experiment conducted with 40

and evaluate

measure

AND COMPANY

dends, to price level, and to price changes of individual stocks.

4

Investment Planning for Women—George F. Shaskan

to

an

3

the News That's

Fit to Print"

,

(1096)

4

THE

COMMERCIAL, &

Arizona

13%,

Most Favorably Situated
Railroads in 1950

Nevada

had

have

economy

caused tremendous changes in the

field of transportation. These
1

ve

To

pments

favorably

situated

had

o

mentioned

later,

have

di¬

affects

verse

upon

our

various

rail¬

position;
of

some

the

service;

tion;

terminal

than

trucks

Walter

F.

Hahn

the

are

loss

average
due

to

Another

best

situated

to

with

the

cope

well advertised railroad problems
are
those
that
have
benefitted

most

from
major favorable de¬
velopments of the late war years
and postwar period, and have

been

not

substantially hurt by other

developments
nature.

of

The

unfavorable

an

favorable

develop¬

ments I have in mind include

greater

than

traffic

(1)
growth of

resulting

greater

average

chiefly
from
average population

than

industrial

and

growth

specifically

areas,

of

certain

the

Pacific

Coast, the Southwest and Florida;
(2) inflation of wages and other

operating costs and freight rates,
the net

effect

of

which

has been

to increase the earnings of low op¬

erating cost railroads; (3) large
expenditures for additions
and

betterments, including diesel elec¬
tric

locomotives

particularly, re¬
sulting in improved efficiency of

operation;
nancial

(4)

better

position

overall

produced

by

fi¬

strengthened
address

cash
by

and

working

Hahn

Mr.

of

or

before

the

National Federa'ion of Financ'aJ Analysts

Societies, New York City, March 2, 1950.

that

this

is

not

true

of

the

rail¬

roads

all

of

the

have

been

of

costs

during
there

those

favorable

factors.

income

the

equip¬

the

treas¬

benefitted

that

factors

The

have

and

not

stocks

of

such

reasonably be considered as¬
pirants for the title of Miss Amer¬

may

Railroad

part

of

of

1950—if

net

the

belongs

good

a

the

to

stockholders.
Time

•

prevent

any

detailed discussion of the various

the

railroads

word

or

two

of them will have

to

suffice.

First, with
respect
to
regional changes — during the
period April 1, 1940 to July 1,
1948, population gains varied as
follows:

northeastern

9%,

northcentral

states

up

states

up

9%,

states

states

34%. New York gained

only
but

7%

and

Florida

better

cost
than

off

the other hand, experi¬
in

income

net

of

individual

together

with

cluding
in

railroad

other

quite

to

factors,

marked

managerial

explain

the

in¬

variation?

ability,

differences in
and

companies,

go

long

a

wide

recent

the

earning power
positions of our rail¬

credit

roads.

Environment
make

due

plus management

railroad.

a

to

Some

railroads,

natqral

physical advan¬
tages or
greater
than
average
traffic
growth
or
absence
o!
years

been

able

lower

cost

basis

roads

not

to

operate

than

on

other

up

7%,

western

Pennsylvania

gained

24%,

8%,

Texas

a

rail¬

blessed. But natural

so

advantages, or the other factors
just mentioned, or the absence
thereof, aren't by any means the
story. Good earnings

pro¬

duced by some railroad companies
under
what
are
generally con¬

of

tough
in

are

operating condi¬
increasing number

an

the result of greater than

cases

ability

average

The

management.
railroads the

the

on

I

more

I

of

part

terest
note

en

study

hey

of

the

ments

ten

from

years

agements have
—for the

to

Not

and

recent

have

been

man¬

also for

long

in

the

ago

I

I

was

railroad
man

management

asked

road

it.

his

to

as

of

equipment
knows rail¬
no

define

one

good

managements

Other

else.
rail¬

expect

Stock

Members

New

York

Curb

Exchange

Broad St

Exchange

Telephone DIgby 4-7&0O




New York 4
Teletype NY 1-733

expect

management expects

them."

coming
over

the male species.
months, a number of
have already gotten to¬

to

be

in

overlooked

any

and

fixed

charge

complished
tion

decade.

The

Also

positions.

they

ac¬

reorganiza¬

during the past

differences

wide

in their cash

exist,

reductions

through

otherwise

or

debt

are

and

working capital
Where
inadequacies

Continued

of

e

at

the

I

end

assign¬

will

recom¬

each

of

session

reading which will be helpful in
reviewing the material discussed
here

the

at

session.

little

A

active

in
attending
meetings, ex¬
pressing there the woman's point
of view, and even requesting
rep¬
resentation on company boards of
very

annual

?ompany

have the opportunity to work out

practice

problems

which

will

later sessions.

We have limited the number at¬

tending this
might keep it
We

series
on an

that

so

we

intimate basis.

hope that this will lead to

closer

relationship

between

turer and listener—more of

lec¬
dis¬

a

cussion group than a lecture.

hope

that

questions

and

to

bring

also

be

other

free

to

hesitation

Remember,

you.

have may
problem for one of the

a

you

ladies

may

and

in

we

question

your

We

problems which

up

problem

feel

without

be bothering

may

the

will

you

ask

a

may

answering
clarify an

off the names from these cards.
A

few

words

we

is

a

about

the

take up today's

will

subject

discussion of the vari¬

not

have

but for those

any

First, we
assigned text

of you who

wish to

reading outside of the
will

course

certainly

helpful to you—I suggest that
a
copy of the
book
"Investment

titled

Professor

John

Prime

York

en¬

Analysis"

University. You
purchase it in most

of

able

attend

There

will

aminations

one

com¬

be

ever,

in

what

items

formal

no

order

for

to

me

the

each

tions

which

will

brief

you

of

ques¬

or

in

So

I

terms

by

of

few

a

true

and

will not feel

you

if you

not

form

questions

answer

that

embarrassed

the

take

written

can

words

false.

take,
sign

might

we

minutes

answering the

This

few

a

five

the previous week's ma¬

on

terial.
of

first

session

know

proving particu¬

are

larly difficult I thought
spend

ex¬

marks given. How¬

or

make

a

mis¬

that you!
your name
to the question
paper.
I have distributed a brief
am

outline

will

of

lectures.
is

the

try to

cipal

subjects which
will

down

parts.

we

during these 12

cover

You

broken

asking

note that this

into

Part

three

is

One

prin¬
con¬

cerned with the Nature of Invest¬
ments

the

—

kind

of

securities

kets where such securities may

be
found, and how those securities
may be acquired and disposed of.
In Part Two we will take up how
to

analyze

this

securities.

these

will

we

have

understand balance
and

to

loss statements

nancial

data.

In

For

learn

to

sheets, income
and other fi¬

Part

Continued

o

New

will find

Benjamin Graham—

"The

Established

Three

we

npage

24

ful,

amusing

possibly

1S56

H. Hentz & Co.
Members

Exchange

Curb

Exchange

Exchange

York

New

Stock

Cotton

New

York

New

York

Commodity
Chicago

Exchange,

Board

of

Inc.
Trade

New Orleans Cotton Exchange
And

Intelligent Investor"—help¬

and

least

at

annual meeting to acquaint
you with this phase of the field.

you

I believe that you

the book by

to

can

with the field
and has the advantage of having
been written recently so that it
is relatively up to date.
For a
acquaint

come

Outside

pany

by

probably
book shops
and I believe it sells for $5. Pro¬
fessor Prime's book is the simplest
text I know for a general review
of the
subject.
It will provide
much of the background material
to

the

be
you

secure

in

lecture

available for investment, the mar¬

course

types of securities.

ous

make

ac¬

period, we will also
plan to visit the Stock Exchange
and I am hopeful that we will be

of the

the

be

helpful in preparing for

very

directors.

Mrs. Wilma Soss, one
guiding spirits in this "new
look," will be with us at one of

fur¬

ther on, those who wish will also

future.

been

to

lecture

definite

no

However,

mend

the

other

Exchanges

a

very

differences exist

cannot

id

s

be

As

they might

has

tice,

of

ments.

t

guest

28.

to

which

variations

the amount

March

on

the

Stockholders

handy guide to investment prac¬

in

lecturer

securi¬
as

us

Women

discussion of the current positions
of
our
railroads are
the wide

wide.

30

managements

a

get

get it. Employees live

what

to

Not

York

of

one

management. He said. "Some

little—and
up

New

on your

take

from

hours—which

talking with

with

gether to form the Federation of

which

right

lot from their employees and

Members

coun¬

&

prin¬

individual

o u

the

over

will also

investment

tual investments

ap¬

changes

top officials of

large

our

railroad

Hardy & Co.

field

before

there
been enough of them.

companies. This

■

that

Executive

be

will

invest¬

or

"Commercial

of

will

there

recent

the

Unfortunately,

of the

one

road

■

the
of

May,

the

ties,
work

oversight

an

women

women

of changing

a way

better

Most

worse.

since

now,

or

Good Management Factor

i

of

field

Mr.

more

emphasizing value-

half

than

lec¬

to

Chronicle," who shares

are

I feel certain that

over.

and

years

this

the

in

or

some

these

appraisal

they have definitely let the

this must be

In

they

more

wealth

in

take

part

although

own

total

that

of

this background.

Wilfred
of

in

which

Graham's

ciple

Shaskan, Jr.

buy

clothing—and

do

'

Geo. F.

connection, I should like to know
each
one
of you
and I should,
therefore, appreciate
it
if you
would raise your hand as I read

am

ability. It follows that I increas¬
ingly dislike to predict where any

have not

for Banks, Brokers and Dealers

Mr.

in

to

A.

Financial

than two-thirds of all men's

reported

those

turning

book

presupposes

Editor

the

even

groundwork
before

Mr.

to stress this matter of managerial

direction.

BROKERAGE SERVICE

less

;he economy—

more

For

little

have covered

we

Graham's

al¬

ders

p e n

the

tures

principal
s

have

wait until
of

wom¬

are

outstanding.
who

terial in Professor Prime's book

3

ing to

though

Professor

f

I

in¬

that

actually

you

investor.

an

background
in the field, you
may first wish
to acquaint yourself with the ma¬

issue for the entire group. In this

pear

STOCK 6- BOND

is

become

Graham has long been one of the
foremost
investment
specialists

you

inclined

more

j

;

and

—

It

business, etc., have for

passenger

particular railroad will be five

southern
up

operating

decrease

sidered

some

an

increase,

rate

low

were

time

increase and

These inflation effects, plus the
wide variation in revenue trends

tions

about

each

years,

wage

freight

of

favorable and unfavorable factors

A

a

offsetting

just

mentioned.

or production.
it is demonstrable thai

recent

whole

limitations

tional

a

being hurt unduly by the unfavor¬
able

their

in

reasons

find

should

money-saver

ered

perhaps even
profitable.

on

doing well and that will do

the

this

roads,

foregoing favor¬

But

com¬

operation

was

some

of

whose

j

ap-

and his books in the investment
field have generally been consid¬

j;

series
enjoyable, educa-

enced

relatively well in the current.year
are benefitting from at least some

ican

number

Actually,

by any of the unfavorable factors
mentioned.

industry

Shaskan,

we

or

able factors and not been harmed

of

other

any

than it is true of

anymore

F.

?

you

fares. You will appreciate

senger

way

railroads

Few

guest

will

structure.

traffic

ury.

from

our

men

net

manufacturer

I am
George
Together

Jr.

to

belong to the stockholder
or

en."

try,

important qualification
part

This is the first and second
part
a series of 12 lectures
entitled
"Investment Planning for Wom¬

before, from the standpoint of ne
income. The high cost operation

re¬

duced debt and fixed charges and

*An

should

ment
are

a

good part, and if possible an

—a

—not the bondholder

today

of

greater

traffic

rate

or

ments account for these changes.
that

particularly

of

type

of

expense

of

increasing

railroads

(1)

in passen¬

(4)

among
the
strongest. Many different develop¬

The

re¬

and produc¬

movement;

length of haul

1930's

today

of

that involved in termination

freight

in

of

be

downward trend

(2)

increased
operation,

(3)

weakest

and,
fact, bank¬
rupt railroads

most

Urges

individual merit in lieu of general

on

in

lecturers,

according to my
observation, have the impression
that most, if not all, of the rail¬
roads were, on balance, hurt by
the postwar inflation of wages and

categories of securities.

classification.

hope that

Not All Roads Affected Alike

are

Among these

years.

ger

ened

a

any

of coal consumption

weak¬

be

positions

Many people,

to

developments

roads

much

to

relative

as

unfavorable

cent

very

revenues

is bound

the

late

gains

ponent companies vary widely for

increased loss entailed

a

there

in

the

railroad stock
should, in addition, not be too
substantially affected by certain

formerly
strongest rail¬
day in

in

praisal of specific issues

three

with

a

the

to¬

the

group

roads. Some of

are

In opening lectures of investment
series, Mr. Shaskan defines
and describes the various

other costs, freight rates and pas¬

in

included

be

twice
years

the

of the two.

transportation field.

de-

Partner, Shaskan & Co., Members N. Y. Stock Exchange

Louisville

railroad

one

much

as

change

capital; (5) managerial changes
productive of new leaders in the

postwar developments

By GEORGE F. SHASKAN, JR.*

Cen¬

about

averaged

When

another,

Stresses importance of good management, along

growth and reduced fixed charges, as favorable
factors. Favors, as investment, shares of Atchison,

general

York

during

revenues

those

twice

prominent railroads.

the

1949

1930's.

traffic

War and

1949

about

were

averaged

times

Topeka & Santa Fe, Kansas City Southern and Seaboard Air
Line, and gives comparison of debt and fixed charges of eight

in

the New

Thursday, March 16, 1950

Investment Planning lor Women

45%.

1935-1939, Santa Fe, Seaboard Air
Line and Kansas City Southern

which have affected
transportation in recent years, Mr. Hahn outlines fa¬
and unfavorable factors affecting individual railroads

investment

for

CHRONICLE

19%,
43%,

that whereas

Nashville

those

Members, New York Stock Exchange

differently.

find

tral, Pennsylvania and
&

After calling attention to developments

with

49%,

we

revenues

Railroad Analyst, Smith Barney & Co.

vorable

33%, Utah
Washington
California

28%,

Oregon

Thus,

By WALTER F. HAHN*

railroad

FINANCIAL

all

be

on

page

con-

26

♦This is
lectures

of

the transcript of the first two
a
series on "Investment Plan¬

for Women," given under the aus¬
Co., at the Hotel
City.' The subseou^t r'-'ejons wi'l s'milarly be published
in the "Chronicle"—Editor-

N. Y.

Cotton

Exchange Bldg.

NEW YORK 4, N. Y.

ning

pices
of Shaskan &
Barbizon, New York

....

.

.

CHICAGO

DETROIT

PITTSBURGH

GENEVA, SWITZERLAND

Volume 171

THE

Number 4890

COMMERCIAL

&

FINANCIAL

CHRONICLE

(1097)

5

Opposes Frear Bill
Steel Production

The

Board of Directors of Louisville

Electric Output
,

Carloadings

Chamber

Retail Trade

State of Trade

Food Price Index
Auto Production

and

Industry

of

Commerce

Business Failures

is-

On

J

March

rectors

of

1, the Board of Di¬

the

Louisville

(Ky.)

Chamber
No appreciable change was noted in total

for

the

past

notwithstanding

week,

of
Commerce adopted
unanimously the following reso¬
lution, copies of which were sent

industrial production
of the soft coal

the return

miners to their jobs.

to all

While country-wide output rose somewhat from the previous
week's level, it held moderately under that for the comparable

in

week of 1949.

the

almost equal to that of the week

Improvement
current

is

with

week

preceding.

looked for in
output expected

Pressure from

directions and

ported

as

Additionally revealing

are the drastic changes in this
which have occurred during the past
half-century.

Highlighting such general transition is this
new
exhibit
of
corporation
annual
over the past half-century, at the New
York
University's School of Commerce,

reports

Senate Bill 2408,
Bill, would force vir¬
all corporations with $3

Frear

in

assets

holders

to

file

300

or

Accounts,
Golden

and

pe¬

Exchange Commission;

"WHERAS, such an Act would
deny many businesses their non-

and should

are

privileges and place
additional burden on them;

an

"IT

manu¬

IS

HEREBY

gets

Louisville

collateral

American

tucky representatives in Congress

1949, the output

ruary,

announced.

Bill

In Feb¬

higher operating costs of bituminous
anthracite coal operators stemming from wage increases and
stepped-up royalties on each ton of coal mined was reflected this
price advances in northern coal fields. In the case of the
Pittsburgh Consolidation Coal Co. bituminous coal prices were
a

ton.

by leading producers from

Hard coal prices too, were

10

cents

to

75

cents

*

*

doms,

Richard

Mitchell,

head, shortly before being confirmed for

were

railroad

cut

At

down.

move

freight
one

rates

until the

a

President

now

carriers'

operating costs
point in his testimony he stated that in many

March
the

fuel

costs

noticeable

were

before

the

*

average

in January to 178%

based

on

about

listeners
free
selves

turn

of

the

naior

the

as

historical

the

of

the

century

to the mid-193Cs;

(2)

and

"Everyon
to

seems

us

who

were around

to witness the

steaming 1920s have not realized that those

(1) from i
between the ;

years sew

little change

information to the public stockholder
during the preceding generation.
Thus
the National Cash Register report of 1926 was i ot much different
from the sensationally
meagre scraps given to the stockholder in
the

last

century.

with the

The whole

total income

pamphlet occupieu on:y six

information embodied

in

brief

seven

e

D.

D.

Eisenhower

en¬

ourselves in the face of

by 1928 the Fox Film company had not abandoned the
"wilderness days" technique.
The first page of that year's report
the accountants'
certificate, with ti e rest of the pamphlet's
three pages entirely devoted to balance sheet and
income figures—
the income figures
consisting of an eight-line statement tagged on
to the end of the
surplus

account, like the antiques of 1910.

as

well

as

unconsolidated balance sheet.

statement's

But

in

line with

inadequacy universally ruling during the

expenses,

Similarly by 1924 the Pepperell Company's reporting showed
Continued on page 38

destructive weapons," the General

COAL

chance of making up steel production lost because
of the coal strike in the near future, according to "The Iron

proclaimed and added: "Don't get
the idea that someone is going
to
come
over
here and drop a
bomb on Mississippi and that the

national metalworking weekly, in its latest
summary of the steel
trade.
This week mills are telling their customers that it will be

appear.

SHARP

RECOVERY

FROM

TO

RISE

RECENT

STRIKE

There is

no

Age,"

two

or

three weeks before deliveries return

of the hardest-hit mills

is

to

normal.

And

United

make

one

telling its customers to add at least

after

However, the industry

is rapidly shaking off the effects of
the coal strike on its production.
This week ingot production is
scheduled at 90% of capacity, up 17 points from last week.
The
efforts of the steelmakers are being spurred
by unrelenting de¬
from

A

consumers

good

page

has become associated with

dis¬

to

remember

or

can

be

evil. It is

bomb—which
is still just
produced

up

advised

but added that

ber also that

ceivable

the

a

Wainwright, Ramsey &. Lancaster
Consultants

70 Pine Street

student

they must

CORPORATE BONDS
LOCAL STOCKS

remem¬

free press is incon¬

without

the

other

free¬

The Next Time You Need

has

been

added

staff of R. S. Dickson &

'

••

I

to

TRY US

Co., Inc.,

Long




LEBENTHALfi CO.

t, GEORGIA

Distance 421

f

135

(Special to The Financial Chronicle)

LOS ANGELES

ATLANTA

on

the

CALIF.—How¬

ard M. Reid has been added to the

Teletype AT 288

Bid

MUNICIPAL BONDS

Walston, Hoffman Adds
*

a

to The Financial Chronicle)

Wilder Building..

•

New York 5, N. Y.

March 15. 1950

CHARLOTTE. N. C.—Arthur J.
Perfler

Established 1894

Municipal Finance

Telephone WHitehall 4'3540

With R. S. Dickson
(Special

RHODES-HAVERTY BLDG.

on

for

to us." Gen.

including
"the
right
to
work, to keep what you earn and
to make a profit."

31

Robinson-Humphrey Company

us

doms,

STATE AND MUNICIPAL BONDS

The

pleasure in announcing that

LINCOLN E. CAFFALL

newspapers

journalists to defend the freedom
of the press "with all your might,"

really serious about their need
for steel is the tremendous pickup in
alloy orders, this trade paper
states.
Some mills are comparing the current demand for
alloy
with that of 1948.
Alloy order books of most companies are pretty
on

hydrogen

all,

Eisenhower

are

Continued

going

let

We take

pessimists and defeatists out

idea—it

an

their customers.

tip-off that

Don't

that

be

days to pre-strike delivery dates.

mand

is

States

of you! No matter how strong may

30

In

fact (because of the supervisory bodies of the
time), much more
complete information had customarily been cisclrsed back in the
1880s by the railroads and public utilities.
And back in 1914, for

and

more

16.3

WEEK

pages,
lines.

Even

Of course, the absence of an income tax
before 1913 always saved
a line of
space in addition to stockholder pain.

joy the terror we've generated for

IN

|

speculatively j

in the giving of company
from what had been done

"Manufacturing, maintenance, administrative
depreciation, agencies, commissions, etc."

A

H

the

j

changes-

entire first third of the
century, the earnings information in this,
by Baldwin lumped in one line and with the
following
legend, the deductions from the gross income figure:

bombs.

March.

POINTS

from

reporting]

report

ter¬

or

February's decline.
In the soft goods line, output in
remained at the 179% mark registered in January.
Overall output in January had been at the
highest point since last

THIS

the

Even many of

dated

to

of

ror

of

SCHEDULED

that

well

as

of

have occurred in two distinct
stages:
the

the income

them¬

fears and

The foregoing figures

the Federal Reserve Board's index.

OUTPUT

exhibit

example, the Baldwin Locomotive report, whose board included
the likes of J. P.
Morgan and Edward Stotesbury, was quite
It contained a frank statement by President Alba Johnson
regarding the past and imminent effects of railroad rate reductions
on customers'
equipment purchases, and general observations on
the company's operations. Baldwin even then
showed a consoli¬

student
journalists,
urged
his

February

STEEL

is

process,

NYU

ample.

3,500

Ad¬
pro¬

analysis of the Council's production figures indicates that
the fall in output in durable goods and
mining industries accounted
all

Uni¬

compris¬

ing

An

for

Eisenhower,

Columbia

of

tion

#

in February.

of

Press Associa¬

Council estimated

are

11

has

report to the congressional joint economic committee, the
that output declined from 183% of its 1935-39

a

the

examination

>

one]

conclusion

was

profit."

a

Scholastic

this

According to President Truman's Council of Economic
visors, coal and auto strikes were responsible for industrial
duction falling close to 3% in February.
In

to

and

earn

Columbia

coal

recent

strike, but said he has no figures to show what effect
had on earlier operating costs since the first of the year.
*

right

you

versity, in addressing a luncheon
meeting in New York City on

Labor wage increases, Mr. Mitchell
the chief factors in continuing high costs. He added,

lower

"the

General Dwight D.

17-year term, told the

claimed,
some

free¬

our

Commission

instances costs have increased.
are

make

to

dimmed last

Commerce

Interstate

Senate Interstate Commerce Committee that the Commission will
not

including

work, keep what

:[5

Hopes of shippers for reduced freight rates
when

them to defend

urges

ton

a

May

from

surprising

1930s and the late 1940s.

defeatism

mines.

week

A.Wilfred

Ken¬

Warns s'.udent journalists against
and pessimism,
and

week in

raised from 10 cents to 25 cents

its

IIorse-and-Buggy Method Lasted Through 1920s

The immediate effects of

the

all

request

Eisenhower Deplores
Mm Bomb Fears

*

and

at

and

Senate

to

were

during February, 1949.

increased

2408

opposition

do likewise."

to

operated at 88.9% of capacity in
February, compared with 93.9% in January and 101.4% of capacity

Chamber of Commerce

its

express

7,480,724 tons.

was

Steelmaking furnaces

of

be.

somewhat

that the Board of Directors of the

Institute recently

feature

a

Two Distinct Periods of Change

The

RESOLVED,

During February, steel production declined to 6,782,448 tons
of ingots and steel for castings, or 14V2% from
7,930,372 tons in
January, largely as a result of the strike of coal miners, the
Steel

as

celebration.

listed trading

shows signs of increasing in various
rise in conversion ingot tonnage is re¬

consumers

and

Finance,

estimation cf what those stockholder attitudes

facturing schedules.

Iron

and

Anniversary

Comparing
the current and past reports of 200 companies,
much light is shed on the progress of stock¬
holder-management relations, on stockholder
attitudes and on the public relations experts'

share¬

complicated,

procedure

week's

riodic returns with the Securities

a

marked

a

annual pamphlet (booklet) report of the
large corpora¬
tion today portrays
many important phases of American finance.

representatives of Kentucky

million

operations the
80% of capacity.

buyers seek stopgap supplies to assure sustained

Company Reporting Over the Half-Century
The

Congress:

tually

steelmaking

to exceed
national metalworking magazine, it will
take at least two weeks from ending of the coal
controversy for all
strike-idled blast furnaces, coke ovens, open-hearths and bessemer
converters to get back into full production.

According to "Steel,"

By A. WILFRED MAY

"WHEREAS,

condition of overall unemployment remained

The

Observations.

unani¬

mously adopts resolution oppos¬
ing measure as placing burden
on many
businesses.

Commodity Price Index

staff of Walston, Hoffman & Good¬

win, 550 South Spring Street.

BROADWAY, NEW YORK 6,N.Y. %

REctor 2*1737

IOldestHouse in America Specializing in3
ODD LOT MUNICIPAL BONDS

liiufniaiiat

f>

(1098)

THE

COMMERCIAL

100

Faim Surpluses Passing Their Peak

million

grains.

By JULIUS and EDITH IIIRSCH

authors

on

used.

enlarged market for

as

700

feed grain crops.
Foresee relaxation of corn acreage
allotments and contend there will be no shift of government
take

of

care

first to

We

large.

we

over-pessimistic

applied

and

nave

more

from

to

port,

without

regard

in the

ment

for the

world

feeding

situation.

They

corn

The

high

than

reason

"Animals
More

rate

of

disappearance.

improved
situation, had made for

few

a

commodities

even

distant future:'

so

Hirsch

Mrs. Edith J. Hirsch

ear¬

Three things have happened
to relieve the situation in the not

net

income went down

cash

more

than

receipts, because farm prices

receded

than

more

the

goods and

services which the farmers had to
First—Animal
had

been

war

years

supplies,
1949.
our

As

cut

in

the

buy.

post¬

that

due to insufficient feed

started
soon

to

rise

this

as

again in

happened,

feed supplies did not

be too

which

numbers,

down

large

any

seem

to

duction
were

and

marketing,

which

contained in all the agricul¬

tural acts since

1935,

We
the

taken

don't

1947

as

because
what

the—no

exaggerated

can

basis.

be

Farm

sharply in 1947

gone up

of

however,

income

normal

a

prices had

think,

net

doubt

—

some¬

news

about

world food

more.

Second—Controls for farm pro¬

were

put into

re¬

crop

below

because

Though
just

was

the

second

the

highest

shortages and the rela¬
shortage of meat in this coun¬

tive

try.

In 1950 the rate of decrease

of the farmers' income is
slow

down,

tinue.

though

While

the

likely to

still

to

con¬

volume

of

farm

leave

added

to

relatively
the

little

carry-over

to
of

be
825

million
bushels.
These
stocks,
nearly all acquired in 1948, will be
a
blessing rather than a curse.
After all, we cannot expect the ex¬

ceptionally good weather in

1948

and 1949 to be repeated year after

Export

year.

1949/50
as

will

150 million

demand, which in
probably be as high
bushels, may remain

high in 1950/51 because of
demand

for

good
replenished

Europe's

a

livestock herds and the failure of

such

first

as

.

,

Increased

In the

case

Livestock

Numbers

to

Utilize Most of the 1949

flaxseed, we saw the results al¬
ready last year.
For eggs, where

will

Feedgrain Crops

of

ably

probably be not inconsider¬
smaller than originally in¬

tended.

The

announced

quotas
encouraging are two sta¬
call for a crop of 2.6 to 2.7 billion
reports which the Bureau
bushels.
This would be about suf¬
Agricultural Economics has just
published: "Stocks of Grains, Jan. ficient, though definitely uncom¬
on
consumption and production 1, 1950" and "Animals on Farms, fortable, if the carryover were
are
expected to become visible Jan. 1, 1950." They have changed only 825 million bushels. But the
weather is a very uncertain fac¬
in the second half of the
our
ideas
about too large feed
year.

lower support prices became ef¬
fective just two months ago, prices
have come down and the effects

The

^

Farm

Income—How

to

Most

tistical

In

Compare It

440

the

1947.

Farmers'

1948/49 crop year about

million

Farmers'
cash
receipts
from
farming were in 1949 10% below finally
■/

those of 1948 and

tor,

put

bushels

under

of

corn

were

government

especially for the

corn

and

if there should

a

the

Secretary

of

would be blamed.

ownership and in, addition about

be

sibly
why,

as

great

is but to

ours

Agriculture

We

oped

on

page

32

The

offer to sell or a solicitation of an offer
offering is made only by the Prospectus.

an

to

buy these securities.

by

one

But

one,

readjustment.

munism"

we've

in the

be

For example, in order to "contain Com¬
the imports of Europe regardless of

own

our

Then, we must provide relief, presumably something on the
order of the potato subsidy plan, for the distressed industries which
the increasing imports bring
about;

1, 1980

for

the

industries

and

the

displaced workers.
ECA's Paul
before

a

Hoffman, pointed it

Senate committee

up

little

a

short while ago.

a

graphically

more

We must appropriate
workers to new skills

funds, he said, to reeducate the displaced
and to provide unemployment relief for those

who

can't

be

re¬

educated.
All

who

of this is to be

demurs

dealt with

Old

will

be

done to

looked

accordingly.

Cordell

high patriotic pitch and
as unpatriotic and, I

a

a

good 20

Hull,

living

now

in

contemplative

retirement,

fairly keen—at the

frete^trade idea which he harped

in Congress

upon

and then succeeded in foisting upon the

years

He

never

foresaw

day be used to "contain Communism."
Communism

never gave

was

assume,

|

try after the advent of the New Deal.
some

anyone

upon

must be amazed—I understand his mind is still

thought,

a

simply his contention that it

Foreign trade, he held,

Due March

We've got to do this so we
European nations instead of

economy.

economic orbit of the

Russia.

difference

Dated March 1, 1950

j

got to take

was

foreign trade constituted 7

Mortgage Bonds, 2%% Series due 1980

are

have this inkling from what the

we

economic

It

First

we

Secretary has recently
saying privately to various groups.
He has been telling his
private audiences that the sacrifices may involve considerable

day he

Pennsylvania Power Company

full extent of the sacrifices

They very probably are to be devel¬
by the Secretary himself, and the propagandists,

been

would

$3,000,000

die, in the sphere of diplomacy, of

do not yet know the

evolution of his

announcement is not

and

during the next few months.

A relaxation of

Continued

do

to be called upon to make.

for

This

prepared, he says, to make sacrifices pos¬
those necessitated in war.
Ours is not to reason

as

course.

crop,

drought,

could

is to lead, we must be

of

grain supplies.

they

health, or
maybe it is just his indisposition, the Republi¬
cans have been moving more and more
boldly
Carlisle Bar^eron
against the Administration's conduct of our
foreign affairs, something that has been sorely
needed for many years.
They are reflecting, or certainly think
they are reflecting, the increasing dissatisfaction in the country
against the pouring of money into Europe to "contain Commun¬
ism" and to a lesser extent, the squeals of American business inter¬
ests that foreign imports, subsidized by American
generosity, are
beginning to hurt. They can't be hurting more than a fraction of
what they will hurt in a few years under the present
plans of our
Master Planners, of course, but they are hurting some, nevertheless.
So we have a new propaganda barrage
coming up from the
State Department and one that
conceivably can have more pur¬
pose than saving the Department's conduct of foreign affairs.
First gun in this new barrage is Dean Acheson's
call, not to
arms, but to "total diplomacy."
In this all-out struggle which he

will

acreage allotments for 1950
be relaxed.
Cuts in acreage

If

outrage it would

With Vandenberg's none too good

what this does to

will

or

seem

come

to proclaim in the near future that

year.

duction far beyond all needs, have
been cut.
This was the case for

wilderness.

a

commonplace before they
anywhere near to developing it.

soon

corn

therefore tended to increase pro¬

flaxseed and eggs.

.

in

lost

to stick to one scandal

a

few

a

themselves

were

of

record, it now seems that our
larger animal herds and a good
export demand will use up all the
corn produced in
1949, or in any
case

find

1,

poultry

the Argentine corn crop, which
for minor products
marketing will probably decrease, will show
up partly in our new
peanuts, and this year for due to
acreage
restrictions and
such important crops as wheat and
crop year.
marketing 'quotas, prices may not
cotton. They are likely to decrease
decrease much further because of
Will the 1949 Corn Acreage
production.
the government price support. For
Allocation Be Relaxed?
i
; Third—Some agricultural prices the efficient farmers in the greater
Under these conditions we ex¬
which had been completely out part of the United States, 1950 is
of line with actual costs and had still expected to be a profitable pect the Secretary of Agriculture

effect,

diately blanketed by new and more daring
enterprises.
It would be utterly impossible
now for the Republicans to draw up a
thorough
indictment .against our rulers of the past 17
years.
They must content themselves with hit
or
miss charges, with shooting all over the
place.
They can't very well go through with a
sustained attack on any one point because be¬
fore they have scarcely moved, a hundred and
one
other avenues have opened up and they

seen

on

Julius

and

lier.

be

the hands of Big Government

is accentuated by their utter inability to grasp or to keep up with
what is going on.
One of the strategies of the early New Deal was
to maintain so much activity that the costly mistakes were imme¬

for

good prices have accounted for the
corn

for

By CARLISLE BARGERON

been

the farms and

on

feeding

1949

1949

can

more

bushels

in

had

of the News

The helplessness of a people in

that

used

Farms, Jan.

on

hogs,

and more beef

farmers'

surpluses

corn area

show

was

wake

financial

Ahead

corn

of

high

terrific

Washington

too

further farm mechanization in the

the

our

look at the government

a

1950."

Thus, high productivity on the
farms, due to research, to the in¬
creased use of fertilizer, and to
of

crop

restrictions

purposes

expected.

speed

improve¬

food

From

into

corn

permanently

known.

duction

full

be

Acreage

come

period, the de¬
had caught the
country unprepared.
High sup¬
port prices had caused farm pro¬
at

gone

believing that

much

postwar

on

had

consumption of corn in OctoberDecember 1949, the first quarter of
the 1950 corn crop year, have be¬

about

in demand

go

corn

Nobody thought two months ago
that they were not needed. But in
the meantime, the figures for the

a

agricultural surpluses.
Fol¬
lowing the high demand of the
crease

1948

19.7% in the commercial

our

war

other feed

for the 1950 crop were ordered
by
the
Department of Agriculture.

before plan is put into effect.

whether

wonder,

been

to be

Recommend waiting

million

would

crop

surplus will

egg

itself, and look for Brannan Plan

potatoes and dairy products.
year

not

Predict

of

record

Because the 1949

luded into

1949

parity payments to livestock products.

the

Thursday, March 16, 1950

was
again
large-^-amounting to
3,378 million bushels—we were de¬

better adjustment,

to

way

point to increased livestock

bushels

Of

stocks.

Asserting farm production is

FINANCIAL. CHRONICLE

of 3,650 million bushels, less
3,000 million were actually

crop

than

Members of the Faculty of the New School for Social Research

&

essential to
10% of

or

between depression

and

could not buy from, us unless we

'

enlightened econbmics.

our

our

it

Indeed, in his

i

was

coun¬

that

national well-being—•

economy

and spelled the

prosperity—and other nations

bought from them.

So loud did this refrain become among our "intellectuals" that
the

Conservatives, the just plain manufacturers, the tariff-protec¬

tionists, gave

up

have been

silent these many years had the Hull plan been given

an

so

the ghost long

opportunity to work.

Undoubtedly they would not

ago.

Abnormal

world

conditions

prevented

the test.

After

the

it

war

turned

out,

-ilk.-

Price. lOllA%o and accrued interest

nations had nothing to sell
ners

were

not

to

European nations
to

Copies of the Prospectus

?nay

be obtained from the undersigned.

be outdone.
money

of

But

us.

course,

our

that

the

European

"intellectuals" and

They devised

means

plan¬

of giving the

with which they could get goods to export

But now, this "foreign trade" is not necessarily enlightened

us.

economics

or

to maintain

our

national

well-being, but to "contain

Communism."
And as I
are

HALSEY, STUART & CO. Inc.

said before, we do not know what other "sacrifices"

involved in this "total diplomacy."

the

Administration,

affairs,

is coming

emergency.

We

up

can

March 15, 1950.




ing the Jamous
total

on

war

the

with

defensive
an

It looks very much as if
in

offensive

its

in

conduct

the

way

of

of

foreign

another

expect shortly to hear the waitress paraphras¬
bromide and

diplomacy on?"

asking, "Dontcha know there's

a

Volume

More

COMMERCIAL

THE

Number 4890

171

Dodge Reports
January Building Rise

By PAUL EINZIG

ling

Denies costs and prices
last

since

Contracts awarded for building

S. of further devaluation of ster¬

and

preventing restoration of confidence in British currency.

as

the

by

W.

Mr.

John

Kenney,
head of the ECA mission in Britain,
in

the course

fore

the

ate F

o r e

of

his evidence be¬

i g n

states

the

of

east

organization for the construction

000,

industry.

dential, nonresidential and heavy
construction,
than

month

month.

greater

were

in

the

with the corresponding month in

rise

was

Dodge

month

1949.

,

'

,

reported

by

the

Corporation,

F.

The

W.

fact-finding

1949

January

construction

was-$1,510,385,-

Oglesby is
Co.,

N.

now

Inc.,

C.

—

David

Ill

Corcoran

Oglesby

ton

representative for

was

Griffin &

Vaden, Inc.

Relations

costs in

Commi t t

not made

year was

the high level of
Britain, but by the wide¬
by

New Issues

spread

e

anticipation of a devalua¬
Generally speaking,
British
prices were not unduly

e,

concerning the

tion

possibility o f
another de¬

high,

valuation
st

causing

is

London.
Mr.

half of

much

concern

And

30%

Church¬

ill's

more

1949.

dollar

in

they

the

And

of

value

British

trade/balance

to

was

the

less

no

doubts

Paul

Dr.

ceeds

Einzig

dis¬

concerting.

by

nobody
Kenney's state¬

Mr.

ment

was

sible

intentions, it is criticized

made with the best pos¬
on

the

of

ports.

Although

that

offset

decline

the

by

devaluation

devaluation.

the devaluation have been

ally effected since Sept. 18.

The

concerned

passage

reads

as

prices [in Britain]
permitted to rise—and one of

the

disadvantages of British goods

in

dollar

high

markets

costs

will

has

the

—

reassert

been

too

maladjustment

itself

the

and

gradu¬
It

AMOUNTS, MATURITIES, AND YIELDS OR PRICES

re¬

once

$6,000,000 2V4% Road Bonds due $200,000 each April 10, 1951-80, inclusive; payable from

7,500,000 2% Courthouse, Jail and Hospital Bonds due $250,000 each April 10, 1951-80,
inclusive, subject to redemption after ten years from date of issuance, at

to

be

whether,

seen

tion

unlimited ad valorem taxes.

fears began

to

cause

100% and

drain

a

is

It

not

much

so

threatens Britain

inflation¬

an

of

increase

ation will have been lost.

costs

Government

valuation,

to

prevent

a

corrective

necessary

recur¬

conditions.

The

measures

complementary to deva 1

u a

t i

o n

It

is, of

the

trad¬

de¬

valuation will have been lost, and
the

sterling-dollar

price-parity

will return to its pre-devaluation
level.
But the circumstances in
which

this

at

was

made

the assumption that there
an infla¬

conveys

is

statement

present in Britain

tionary increase in costs, and that
it is sufficiently considerable to
make it necessary to envisage the
possibility of an increase of the
British price level by something
like

30%

far

is

only is

In

40%.

to

from

being

reality, this

the

case.

Not

inflationary inthe threat of it,
but the
natural upward adjust¬
ment of prices resulting from de¬

'crease,

there

valuation

have

The

moderate.

has

no

even

or

go far been very
British
Budget

surplus,
and up to the time of writing it
has
been
possible to resist de¬
mands for large and widespread
once

more

increases
Mr.

in

a

revenue

of wages.

is, of course, right
the need for further

pressing

safety

by the British
Government.
In this respect his
over-pessimistic statement should
go

a

the

measures

long

towards offsetting
frequently
over-optimistic

statements

way

of

his

chief, Mr. Paul
handsome com¬

Hoffman, whose
pliments tend unintentionally
encourage
the
government

to
in

British

while
by

the

Mr.

compla¬

Hoffman's

economic

effort

at

home, the pessimism bred by Mr.
Kenney's recent statement is apt
to damage the international as¬




1.05

1968

1-95

99

2.06f

1.15

1.15

1969

2.00

99

2.06|
2.12f

V

1970

2.00

98

1971

2.05

98

2.12f

1957

1.35

1.45

1972

2.10

97

2.17

un¬

1958

1.45

1.55

1973

2.10

97

2.17|

intentionally, material for devalu-

1959

1.55

1.65

1974

2.15

96

2.21

1960

1.60

1.70

1975

2.15

95l/2

2.23f

1961

1.70

1.80*

1976

2.20

95

2.25f

1962

1.75

1.90*

1977

2.20

941/2

2.27|

1963

1.80

1.95*

1978

1C0

94

2.28f

1964

1.85

100

1979

100

931/0

2.31 f

1965

1.90

100

1980

100

931/2

2.30f

not to provide, even

care

rumor-mongering.
said all this, one

must

heartily endorse Mr. Kenny's
hortation
to

British

the

of

ex¬

Govern¬

the necessary
measures
complemen¬

complete

corrective

What is not
had such meas¬

tary to devaluation.
is

realized

there

that,

carried out

been

ures

might

have

for devaluation.
Britain

saved

a

year ago,

been

operation,

their

material

their

favorable

effect.

What

then,
not

much

so

or

in

as

the

ensure

Valuation

need for

a

of

now,

in

measures

costs

have

the

the

de-

the

hoped

need

their

Britain's

great

defeatism

statements

economic

position

on

they render a
service in spurring

British

Government

and

people to intensified efforts, they
should take

to avoid

care

Although
to say that an inflationary increase
of costs might eventually make
devaluation

First Southwest
Trust

Braun, Bosworth & Co.

inevitable

Corporation

Harris, Hall & Company

Incorporated

;

Company

(Incorporated)

Hornblower & Weeks

Underwood, Neuhaus & Co.

R. S. Dickson & Company

Weeden & Co.

Roosevelt & Cross

Incorporated

Company of Georgia

Incorporated

Provident

Savings Bank & Trust Company

Incorporated

Geo. B. Gibbons &

Francis I. duPont & Co.

Company

Wood, Gundy & Co.

Incorporated

Incorporated

encour¬

aging devaluation talk.

stating

Union Securities

Kidder, Peabody & Co.

Incorporated

and

While

public

the

Amer¬

positions will

and

public

prospects.

Blair, Rollins & Co.

for

Equitable Securities Corporation
that

Halsey, Stuart & Co. Inc.

the

happy medium

a

eulogy

The National City Bank of New York

same

obviated

obviate

be

to

between

on

are offered, subject to prior sale, for
delivery when, as and if issued and
by us and subject to the approval of legality by Messrs. Vandcwatcr,
Sykcs, Heckler and Galloway, Attorneys, New York City.

required

of

exactly

icans in responsible

in

received

moderate

devaluation and which

a

now

is

to maturity

The above Bonds

is

second devaluation.
It

iApproximate yields

as

psycho¬
mattered

a

success

are

could

would

«■

restoration of confidence

a

which

be added)

'

ten-year call date

f

much

so

effect

reduction

a

sterling. The

to

riot

matters

prevention

a

rise

what

and

to

to

f

need for the

through

through

•Yields

They might have

of the

painful

logical

(Accrued interest

need

no

a

the

bred

:^1.05

1954

%t

1.35

statements is liable to be harmful

cency

2.03|

1.25

to

Nevertheless,

2.03

99%

1.25

by high

not

is merely
obvious, a frequent
repetition of such statements by
Americans in authority might eas¬
ily create an atmosphere in which

avoiding or deferring some neces¬
but
unpopular
measures.

sary

99%

1.95

1.30

was

be able to strike

Kenny

1.90%

1967

1956

ment

ing advantages derived from

1966

.95

1955

Having

incontestable

course, an

that if costs rise

.85%

.95

but

dient and then back to crisis."

truism

driven

.85%

costs

ationary

expe¬

2% Bonds

by devaluation talk.
History
might easily repeat itself unless
those in responsible position take

periodically

crisis to

Prices

de¬

good

from

or

21,4% Bonds

to

be accomplished or else the
British
economy
may
proceed

must

Yields
Due

2% Bonds

1953

confidence in sterling,
might conceivably
recreate
the
situation which required devalua¬
Britain

Prices

1952

dermining

tion.

or

2,V« % Bonds

1951

of devaluation talk which, by un¬

quickly recreate the situation
which required devaluation.
Therefore, adequate steps were
and are required of the British
these

be levied

may

recurrence

a

as

Yields
Due

that

flationary increase in costs could

of

interest; payable from ad valorem taxes which
prescribed by law.

within the limitations

her gold reserve.

on

ary

very

Opinion, the 2%% Road Bonds are Eligible as Legal Investments for
Savings Banks and Trust Funds in New York State

has spent its
force, Britain will be in a sub¬
stantially better position than she
was, say in 1948, before devalua¬

mains

trad¬

Any in¬

Existing Statutes and Decisions

chases deferred

ing advantage gained by devalu¬

rence

our

this temporary factor

"If costs and
are

In

Payments and pur¬
in anticipation of

distrust

follows:

Interest Exempt from Federal Income Taxes Under

elimination of fears of

due to the

unwarranted

causing
sterling.

ex¬

now

the ground that it
opens possibili¬
ties for misinterpretation
in

April 10, 1950. Principal and semi-annual interest (April 10 and October 10) payable in
Houston, Texas, or New York, N. Y. Coupon Bonds in denomination of $1,000.

pro¬

of

the sole benefit
Britain through the
of sterling has been

Up to

derived

volume

same

Dated

of the

yield due to the lower dollar

same

topic has been

2V4% and 2% Bonds

relation

in

in

Parliament

County, Texas

dollar

the

cent statement

re¬

Harris

of the

cut

sterling by full
to improve the

failed

has

tended

area, because the
increase in the volume of exports

on

$13,500,000

to be
somewhat high after the fall in
American prices during the first

f

o

1 i ng,

e r

abroad.

though

Moroney, Beissner & Co.

Fahey, Clark & Co.

Lyons & Shafto
Incorporated

Dittmar &

Company

Robert Winthrop & Co.

Laird & Company

Fridley & Hess

the

second

devaluation

come

necessary

plete

absence

even

of

tionary increase,

would

in the

such

an

Seasongood & Mayer
A. G. Edwards & Sons

be¬

com¬

infla¬

March 10, 1950.

Breed & Harrison, Inc.
The

Ellis & Co.

Weil, Roth & Irving Co.

Street.

formerly Kins-

To realize this it is necessary to

sterling last

E.

with R. S. Hays &

bear in mind that the devaluation

necessary

and

to The Financial Chronicle)

DURHAM,

Mr.

months'

two

total for this year

the

(Special

February, 1949, it

over

for

Oglesby With Hays

preceding

Only heavy construction

Rocky

increase of 44% over the

an

total

last

fell behind in February compared

last

7

February aggregate.

All classifications, resi¬

totaled

37%

pects of the British economic ef¬
fort. >

of

Sen¬

37

engineering works in

(1099)

$779,530,000, showing an increase
of 7% over January, 1950, and a

devaluation, and ascribes absence of increase in
U. S. price declines.

LONDON, ENG.—The statement

made

heavy

Mountains

have substantially increased in Britain

British exports to dollar area to
-

CHRONICLE

F. W.

Sterling Devaluation Talk

Dr. Einzig deplores talk in U.

FINANCIAL

&

Newhard, Cook & Co.
Freeman & Company

8

(1100)

THE

COMMERCIAL

LETTER TO THE EDITOR:

C. J. Stubner, of Stubner & Co. of
Pittsburgh, Pa., points out

successful

many

businesses

have

obtained

initial

satisfied by the
centage which the insurance

panies

can

allot

the

to

The

of

success

to

once

the

Services,

become

a

the

the

trust

nonsense"

Chronicle:
When I

the
the

entered

business, which

a

owned

kind.

Today
poration
has

securities

of

almost

as

of

placed

paigns,
called

cor¬

The

The Liberty Loan
furnished a vital im¬

the

investors.

new

As

canvassing

carried

Leach

not

was

stump

Mr.

from

in

Treasury

New

the
for

New

York

In

spite

that

utilities

the

of

industry

business

as

ness

the

beacon

is

lit

branch.

the
This

the path of mer¬

course

of

and

considered

was

uge

and

manned
ex¬

who have

men

holding
cus¬

tomer

ownership campaigns took
where the Liberty Loan cam¬
paigns left off, and made an indis¬

And

up

moved

into

by

inertia

pensable contribution toward

business.

ex¬

in

the

many

insurance

securities.

ways

the

created

vacuum

of

the

have

they

investment

short death

The meter reader and

in

dubious

be

old

-

investors later
fodder

in

became

in

most

economical

from

the

form

etnrv to tell

of

standpoint of

the

in +'irtheranno

And

significantly

whole structure

enough,

of the

insur¬

ance

business rests upon the man

who

goes

out and

offer to sell or a solicitation of an offer
offering is made only by the Prospectus.

the

Board

of

in Middletown, Mr.
Steel, and Mr. Sebald,
It was a very interest¬

Hotel

Armco

most enthusiastic

were

about the company's
management and personnel.

past
mer¬

This would

have

unifying the

business

and

be

a

throughout.
An important
exchange like the San Francisco
Stock Exchange has found it de¬
sirable to enter into arrangements
with non-members.
In

entering

homes,

many

average undertaker has

more

standing than the

Seated at the speakers' table are (left to right): F. D.
Danford,
Treasurer of Armco Steel Corp.; Fred H.
Becker, Field, Richards &

the

Co.; W. W. Sebald, President of Armco Steel Corp.; Joseph H.
Vasey, Geo. Eustis & Co.; Charles R. Hook, Chairman of the Board
of Armco Steel; Harry C.
Vonderhaar, Westheimer & Co.; H. H.

pro¬

aver¬

securities salesmen. Upon the

Tullis,

entrance of the United States into

men

ment

question

of

not

patriotism.

uncommon

And
find

to

nati, lor

plants.

slump

it

SECURITY

in

booming,
men

so
appeared
In

a

C.

or

official family of the
Queen City Club, Cincin¬
Next month

for

ASSOCIATION

the

14th

annual

OF

NEW YORK

dinner

and

entertainment,

O'BL

Murphy,

Merrill

Lynch,

Pierce,

Fenner

&

Beane,

Chairman of the Committee.

that invest¬
to

poll

be

in

a

TWIN

CITIES SECURITY TRADERS ASSOCIATION

conducted

The

on

page

Twin

City Security Traders Association will again hold
party, "Operation Fishbite," at Grandview Lodge on
Gull Lake near Brainerd,
Minn., the weekend of June 16, 17 and 18.
A large group of out-of-town traders is
expected at the party.

university of the vocational
preference of the graduates, as re¬
cently reported in the press, the

to

the

April 21, of the Security Traders Association of New York
Inc.,
at the Waldorf-Astoria
Hotel, may be made with Daniel G. Mullin,
Tucker, Anthony & Co.; James V. Torpie, Torpie & Saltzman,

a

a

Continued

TRADERS

Reservations

1937 depre¬
security prices, where¬
whole national economy

backwater.

by

in

of

the

ment

still

meet
at the

inspection trip through the Lawrenceberg, Indiana, plant and
laboratory of Schenley Industries Co. is planned.

following the

ciation
as

itself

will

an

The investment

found

21

preview of their 1949 annual statement.

a

J.

Relations

men

in the investment business and

business

March

on

Harry

&

Cincinnati Gas and Electric Co.

simultaneously holding down jobs
war

Westheimer

The Club

in¬

more

in

th§. war effort
in continuing in the invest¬
business, laying aside the

than

was

found

and

Comptroller, Armco Steel;
Co.; Hugh Wright, Public
Director, Armco Steel, standing.

II, many older and
experienced
investment

security

Vice-President

Hudepohl,

War

apparently

come

systematically

announcement is not an

the

of

tonic

men

can¬

The

investment

was

"wonderful

the

This

a

ties.

Doubtless many of these

non

or

of the sale of conservative securi¬

course

new

protection,

outlay, the investment

hpVo

the good
American
profit

fashioned

motive.

cash

grammar,

and with of

the

insurance

armed only
by their confidence in their com¬
pany

for

insurance, the desir¬
ability of which is beyond dis¬
pute, and which also happens to

soliciting busi¬
ness
in
the
operating company
preferred stocks, with no profes¬
sional experience and oftentimes

business.

effect as well of

highly

Beyond the province of

panding the public ownership of
lineman went out

them

the

consciousness of

a

Manchester

President, addressed the group of visitors.
ing and educational trip and the members

Chairman

Exchange to consider
cutting in dealers who can hand

World

mission, and a pride in their
calling.
They approach the busi¬
ness with a counsellor viewpoint.

the

at

areas

potential

in

as

dinner

Hook,

as
has been suggested
times before, for the New

aggressive

a

After

retail

Stock

age

and

a

business,
York

part-time

alert

by

now

of

CLUB, INC.

large group from the Cincinnati Stock and Bond Club on
Washington's Birthday, Feb. 22, made an all-day inspection tour
of the Armco Steel Plant and
Laboratory at Middletown, Ohio.

chandisers and therefore it might
be
deemed expedient and
good

with

is

of

only be reached by the

fessional

Today the business

field

mass

investors

new

can

salesmen,

infested

was

last ref¬

the

vast

down

broken

activities.

public

level, the so-called

company

con¬

efforts

& BOND

A

the

on

operating oftentimes in

A

time the insurance busi¬

one

and

banker.

the

on

most

the path that

beginning led di¬

meagre

kept

At

important

the

a

and

admitted
in

has
on

THE CINCINNATI STOCK

all, is at

remote from financial centers.

many

investment

chandising.

the

warmth

investment

been

outstanding,

the

of

that

path is of

Sub-

York

then

a

committed

cesses

the

branch

over-the-counter

himself

multitude,

surprising

eloquence

of

cam¬

not

rectly to the present widespread
public ownership of securities and

was

taking

the steps

haranguing
with

to

averse

on

still

are

sistently stayed

always,

B. Leach intensive
out.

these

today regarded as among

business

leadership of the late A.

zone

and

in

the

But

have

merchandising
men,

in

work

the choicest investments extant.

Street pitched in, and under

Wall

they

the

many

introducing the idea of securi¬

ties to

if

are even

the investment business

petus to
in

pioneer

securities

stockholders.

campaigns

this

may

at

distribution.

any

single great

a

who

askance

securities

was estimated that less
million people in the United

States

looked

for

1920's

late

professionals

very

crudity

was

I, it

than

the

have

investment

prior to the
Liberty Loan campaigns of World
War

of

bids

biggest group

industry and to

investment

Notes

Investors

which

whole, because it is based

Editor, Commercial and Financial

NSTA

challenge to the rest of the

investment

bring in business.

per¬

as
his share in the growth that he is
in such large measure creating.

fair

Thursday, March 16, 1950

com¬

agent

of mutual funds of them

throilgh merchandising of their securities by salesmen. Rec¬
ommends stock exchanges share commissions with dealers
who

adequately

Diversified

capital

CHRONICLE

calls on the public.
Of
his profit motive has to be

makes
course

Looks to Aggressive Selling
To Revive Securities Industry

&, FINANCIAL

their

29

summer

buy these securities.

Dealer-Broker Investment

Recommendations and Literature

$15,000,000

It is understood that the
send

to

New

Jersey Bell Telephone Company

interested

firms mentioned will he pleased
the following literature:

parties

Over-the-Counter Index—Book¬
let

showing

an up-to-date
com¬
between the thirty listed
industrial stocks used in the Dow-

parison

Forty Year 2Debentures

American

Trust

Co.

Circular

—

—William R. Stasts Co., 640 South

Spring

Street,

Los

Angeles

14,

Calif.
•

Jones
Dated March 15,1950

Du,e March 15,1990

five

and the thirtyover-the-counter
industrial

stocks

tation

Price 102.457% and accrued interest

used

Bureau

in the

National

Quo¬

Averages, both as
yield and market performance
over an
eleven-year period—Na¬
tional Quotation Bureau,
Inc., 46
Front Street, New York 4, N. Y.

'

i

Averages

Arkansas

Circular

Natural

•

Schmidt
The
Prospectus may be obtained in any Slate in which this announcement is circulatedJrom only such
oj the undersigned and other dealers as may lawfully offer these securities in such State.
'

.

;

'

Cenco

Corp.-— Circular

&

Co.,

30

Pine

Street,

Steel—Review

of

industry—Francis
1

Also

HALSEY, STUART & CO. INC.

Wall

trends

I.

du

in

Pont

&

Street, New York 5,

available

is

a

leaflet

COMPANY, INC.

WM. E. POLLOCK & CO., INC.

*

of

ROBINSON-HUMPHREY COMPANY

THOMAS & COMPANY

J.

MULLANEY,WELLS&.COMPANY CLAYTON SECURITIES CORPORATION




120

Broadway,

New

5, N. Y.

Central

Card

Public

Utility

memorandum—F.

Corp.—

S.

Yantis

&

Co., 135 South La Salle Street,
Chicago 3, 111.
Walt Disney Productions—Anal¬

&

Co., 150 Broadway,

5, N. Y.

&

Co.,

30

Broad

American

Mercury

Allen

B.

DuMont

Laboratories,

Inc.—Special report—Tyson & Co.,
Inc., Lewis Tower, Philadelphia 2,
Insurance

Pennsylvania.

To.—Renort—Peter P. McDermolt

PATTERSON, COPELAN D

KENDALL, INC.

&

Co., 44 Wall Street, New York 5,
York.

Telephone

&

Bond

&

Share

Co.—

Tele¬

graph—Analysis—E. F. Hutton &
Co., 61 Broadway, New York 6,
New York.

Electric

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

HAROLD E. WOOD & COMPANY
American

March 15. 1050.

Corp.,

Corp.—Circular—Wm.

Mericka

New

JULIUS A. RIPPEL, INC.

Utility Corp.—
Memorandum—New York Hanse-

Street, New York 4, N. Y.

New York

E.M. NEWTON & COMPANY

Public

ysis—Batkin

*

,

Acrovox

THE

•

—

the

switch suggestions.

BURR &.

Central

atic

New York.

(INCORPORA l£D)

,

Sills,
Fairman & Harris, Inc., 209 South
La Salle Street, Chicago 4, 111.

York

F*n.,

OTIS & CO.

115

*

Calls—Booklet—Filer,

New York 5, N. Y.

'

Corp.—

Co.,

Broadway, New York 6, N. Y.

*

~

&

to

Puts and

C •

Gas

Mabon

—

Emery

Air Freight

Corp.—Cir¬

cular—Reynolds & Co., 120 Broad¬
way, New York 5, N. Y.

Volume

Fedders

Heller & Co., 30
Street, New York 5, N. Y.

Globe-Union, Inc.

Circular

—

Texas Group

COMING

available

is

circular

a

Greer Hydraulics

Municipal Bond Dealers Group
Spring Party
and Outing at the Kenwood Coun¬
try Club (to be preceded by a
cocktail party and dinner May 25
for out-of-town guests).

Descriptive
analysis — Raymond & Co., 148
State Street, Boston 9, Mass.

29-30, 1950

(Chicago, 111.)

Central States Group of Invest¬
ment

Bankers

America

Association

of

conference

at

annual

lune 5-8, 1950

The Drake.
—Research bulletin discussing

the
outlook—Dept. C, White, Weld &
Co., 40 Wall Street, New York 5,

March 29,

1950

Bond Club of New York annual

—Shields

&

Co., 44 Wall Street,

-

Electric

Bond

circular

a

Share

&

York

annual

June

April 28-30 (Greensboro, N. C.)

'

Manufacturers Trust Co.—Anal¬

ysis—Laird, Bissell & Meeds, 120

Eboadway, New York 5, N. Y.
Mexican

Light

the

at

on

Corp.

Southeastern

'

dinner

W aldorf - Astoria.

New York 5, N, Y.
Also available is

Power

&

vestment

be

associated

officers

of

group

with

handling

(

•

Mexican

v
•■

•

trict.

L. G. Leslie With

years,

During recent
has

G. F. Cassell Co.

been

long-term

field

the

16-18,

(Minneapolis,

1950

CHARLOTTESVILLE,

VA.

and served

Life

Insurance

•

-

with

F.

C.

Cassell

Mr.
Breaks is
a
graduate of
Phillips Exeter Academy and the

&

Wharton School of Business and
City Security Traders As¬
Co., Inc., 114 Third Street, N. E.,
summer party at GrandFinance at the University of
in
charge
of their Customers' Pennsylvania (1926).
He is a
Lodge,
Gull
Lake,
near
Board Room.
native of Crawfordsville, Ind.
Brainerd, Minn.
view

ADVERTISEMENT

ADVERTISEMENT

R0YST0NE SAYS: NEVER BUY STOCKS

Zlppin & Co., 208 South La Salle
Street, Chicago 4, 111.
Mid

,

Continent

chure—White

Airlines

TO HEDGE AGAINST INFLATION

Bro¬

—

&

Co., Mississippi
Valley Trust Building, St. Louis 1,

The experience of half

U. S.

Missouri.

vinced

has

fortune

Minneapolis & St. Louis—Anal¬

ysis—Vilas

Wall

&

Hickey, 49
Street, New York 5, N. Y.
Also

available

current

is

developments

Rail¬

in

tions

a century has con¬
scientific formula for

fundamental.

most

be

to

roads.

to

sell

It is far better

ytical study—Paine, Webber, Jack¬
son
& Curtis,
25 Broad Street,
New York

Also

4, N. Y.

available

is

circular r/i

a

nent

recognition for long-term market re¬
That is why worried inveslors

merly

syndicated

nationally

pages

American Box Board Co.

under

heading,

the

England

Co.—Booklet

Public

available

for

insti¬

/-■.

Our

newspaper
when and what to

N. Y.

one

needs

No

Broadway, New York 6,

wonder

keep in
Paramount Pictures

Study—Newburger
Walnut Street,

Phillips

&

1342

Co.,

Philadelphia 7, Pa.

New York

& Co.,

1 Wall Street,

5, N. Y.

Riverside

Cement

analysis—Lerner

&

Co.—N

Co.,

10

e w

Post

Office Square, Boston 9, Mass.
Also available is a brief review

Southern

Smith,

Pacific

Barney

Co.—Study—
Co.,

&

Wall

14

available

Also

is

a

circular

on

Light Co.

Inc.—Memorandum—

Boenning & Co.,
1606 Walnut
Street, Philadelphia 3, Pa.
Also

available

is

a

circular

on

Southern Colorado Power Co.

United Gas Improvement Co.—

Leaflet—Colonial Associates, Inc.,
49 Federal

Street, Boston 10, Mass.

Westinghouse

Electric

Corp.—

Analysis—Eastman, Dillon & Co.,
15 Broad Street, New York 5, N. Y.

Albert Frank Elects

Kyle and Cullman
as

a

of

election of Milton T. Kyle

director and Richard A. Cul-

linan

as

Executive Vice-President

Albert

Frank-Guenther

Law,

Inc., advertising agency, was an¬
nounced

by

Chairman.
ident

in

Corrigan,

Emmett

Vice-Pres¬

Mr. Kyle,

charge

of

the

firm's

Philadelphia office, has been with

tl^e agency since 1935.
lman,

a

Mr. Cul¬

director, has been with

the firm since. 1929,




Wall

guidance

forced

Street

is

our

anxious

so

on

W.

buy

lo

in

H.

for

Now, thanks to
evaluating fun¬

investors

tell the

time

buy and
sell. We follow market
making fundamentals, not the public thai
buys during distribution and sells during periods of accumulation.
correct

to

Without such "insight" the average investor never has a fair
See how few make a profit in the
long run. Unfortu¬
nately, investors and traders are equally victims of psychological
distortions. Following popular sentiment, they too often are forced

buy when they should sell and sell when they should buy. To
clients against these errors, we developed our 27 Safety

protect

Rules for Investors and Traders.
we

puts

realize

too

we

have reached

a

condition in

our

economy

investments under shrinkage pressure and
so
have no growth futures. Investors should not seek "inflation
hedges" at the expense of fortune-building growth values.
Often, before the fifty-point break in 1946, we warned against a
drastic decline. We advised
getting into cash to buy special situa¬
many

tions, long-term growth possibilities independent of general condi¬

tions.^ Anticipating such breaks

to buy bargain bottoms makes all
fortune-building.
Naturally, the long trend turning points are absolutely essential
to the investor.
Knowing a "bull market" from a "bear market"
is the one guarantee of
security. Waiting and watching has built
most of the
large fortunes made in Wall Street. It would require

the difference between failure and

from

of

reprint the hundreds of letters of appreciation
now in our files.
thousands of smaller investors, intelligently accumu¬

space to

longstanding clients

"Diere

are

Read what the Press

from devoting many years protecting
from danger, wrote "America To¬
morrow," called "the most far-seeing eco¬
nomic guide for the future," sent free to his
personal clients with his "27 Safety Rules"
investors

damental psychological factors found in the
Roystone Heavy In¬
dustry Formnla, we are enabled to detect the difference between

Today,

That

That, and

costs.

ANALYST

Who,

buy with the "good buying" and sell
with the "good
selling" largely eliminates

thai

enhancement.

higher

their cash values shrink each year.

ROYSTONE

INVESTMENT

in¬

To

to

hedge against inflation is
fund

in

offset

fortune-building requirements, calls for at
a
fifty per cent fund gain each year.
Instead, the great majority of inveslors see

to

for reli¬

when and what

the hazards of speculation.
the discovery, made while

found
will

least

to

us

be

alone

analyses.

publish our comments
expensive weekly bulletins.

pages

The

to

know about the stock market.

This demand from everywhere
able

to

Talon,

The only true

buy and sell is about all

contact with

its

temporary scarcities.

i

that

chance.

Street, New York 5, N. Y.
Minnesota Power &

-*

<

realized

distribution and accumulation,

of the Cement Industry.
.

to

followers

than

equities and other "things" now being arti¬
ficially supported by government, gentle¬
men's agreements, fair trade measures and

-

Corp.—

Petroleum—Memoran¬

dum—Cohu

financial

Service

tutions and dealers—Ira Haupt &

Co., Ill

get

for¬

"ROYSTONE

SAYS."
New

on

other

Thinking from fundamentals, we must
currently the Dollar is in a
bull market and that tangible assets, in¬
cluding equities, are in a bear market. This
means there
could soon be a flight from

liability.

write from many parts of America to
the "Stock Market Appraisements" we

worth

conclude that

pre-emi¬

us

intrinsic

present, is the most desired currency. .It
was the quest for Dollars that inspired the
recent devaluations.

familiar with economic statistics.

Years of accuracy have built
National Bank of Detroit—Anal¬

#

to

buy from the pessimists than it

to

has

credit value. Therefore, the Dollar, for the

the optimists and

to

Dollar represents the Country that
best credit. No currency in the

the

world

building. Success over many years
proved psychological interpreta¬

the time
is

a

also

know the time
of

leaflet

a

has

there is

us

Co.

as

—

Abbott, Proctor & Paine, is now
associated

ADVERTISEMENT

Analysis—

—

of

business loans for the

Mutual

Penn

Mr. Breaks

in

active

sociation

Inn.

.

Railways

the

State-New Jersey dis¬

Analysis — New York Hanseatic
dorp., 120 Broadway, New York 5,
N. Y.

the

bank's commercial business in the

Twin

Association

Spring Meeting at the Sedgefield

Co.—

will

and

Holly¬

New York

(Canada)

Minn.)

Group of the In¬

Bankers

been

a

Financial Secretary
of that company.
His experience
Twin City Bond Club annual L. G.
Leslie, formerly Manager covers a
period of more than 20
picnic at the White Bear Yacht of the Charlottesville, Va., and years in institutional investment
Club.
Martinsville, Va.,
offices of and lending.

Security Traders Association of
New

the

at

has

Second Vice-Presi¬
dent of the Chase National Bank

wood Beach Hotel.

June 14,1950 (Minneapolis, Minn.)

April 21, 1950 (New York City)

Light—Circular

convention

Breaks

D.

appointed

Quebec.

dinner at the Waldorf-Astoria.

New York.

Iowa Power &

Jackson

1950 (Hollywood,

Investment Bankers Association
annual

of Canada 34th Annual Meeting al
the Seigniory Club, Montebello.

(New York City)

Hotel.,

Fla.)

Investment Dealers Association

Iowa Illinois Gas & Electric Co.

Jackson D. Breaks

Security Traders Associa¬

Nov. 26-Dec. 1,

of Cincinnati Annual

March

—

tional

of the Na

Convention

9

Chase Bank Appoints

Va.)
Annual

tion at the Cavalier

May 26, 1950 (Cincinnati, Ohio)

on

(1101)

Sept. 26-30, 1950 (Virginia Beach

Investment Bank¬

Association Annual meeting at
the Plaza Hotel.

Shearson, Hammill & Co., 14 Wall
Street, New York 5, N. Y.
Also

CHRONICLE

ers

EVENTS

—

Johns-Manville Corp.

FINANCIAL

May 4-5, 1950 (San Antonio, Tex.)

Corp.—Anal¬

Quigan

ysis—Stanley
Pine

COMMERCIAL &

THE

Number 4890

171

lating fortunes, who welcome technical data and

a

and

"What 'Roystone

traders.

reliable

.

.' is respected

long-term market diagnostician among

the

many

good

Wall Street technicians."

building until we appre¬
preponderant in human effort. We might go so
say that if there is a wrong way, human beings are prone
to follow that way.
That is why we earnestly believe there is a
tremendous need for honest investment and business guidance.
Such assistance can be derived only from factually appraising
future investment values in the light of political and social trends.
It was such factual appraisement that enabled us correctly to fore¬
see the 1948 election result and the resultant market break.
With¬
We cannot take

ciate that

far

as

error

our

first step in fortune

is

to

guidance, there is 6inall hope for the individual in his
for financial independence.
Now, to help you in your personal problems, we have created
our special protective and instructive Contact Service to replace

out

such

quest

newspaper comments. The fee (for 52 weeks) for the present,
only twenty-five dollars, or five dollars for advice covering the
next seven weeks of the current critical period.
our

is

These
seven

same

weeks,

weekly bulletins that cost you only

go to

ing those paying one hundred dollars a year
and to banks and big business.

What the

five dollars for

thousands of clients from coast to coast, includ¬

for personal guidance

Weekly Bulletin Said at Market Top,

May 31,1946, before the 50 point drop
dangerous.

ing the 1948 election.

eyed

"The

market

is

now

in

the

zone

"In 1940, when the averages were
down

ravages of monetary inflation, especially when such stocks are
bought during the time the public is inflation minded. This fact
applies with equal force to the purchase of gold stocks.
Regardless of the current popular discussion of inflation, the

.

"One thing is certain: Roystone knows the stock market. With a
truly remarkable record in earlier years, since he has been writing
for this service he has foreseen all the important market changes.
"Followers all over America look upon Roystone as the most

growth prospects in special situations such as those we have se¬
lected to buy at the next bargain bottom. While
they await oppor¬
tunities they need instruction to protect them from the
dangers of
popular misconceptions such as the universal mistake in forecast¬

STOCKS POOR INFLATION HEDGE

Says

by the best in Wall Street, from the small
speculator to the largest investment trusts.

diagnosis of

Statistics covering the recorded history of modern
industry show
equities have never been an effective hedge against the financial

Service that

syndicated his "Comments" said:

of distribution,

positively

'

138 and Wall Street was wild-

inflation, we alone were positive the averages would go
96. They did. Now that prices are again al a dangerous

over
to

level, everybody is most confident."
Remember, knowing when and what to buy is the secret of safety
and success in fortune building in Wall Street. When you send
check for $5.00 or $25.00, be sure to ask for "America Tomorrow"

Safety Rules for Investors and Traders.
ROYSTONE, Forest Hills 10, Long Island, N. Y. (Instituted
Mid-town consultation appointment $25.
and those famous 27

W. H.
1931).

JO

(1102)

THE

COMMERCIAL

Capital

CHRONICLE

$1,100,959 from $778,478 in the
prior year, an increase of 41%.
Earnings were equal to $4.21) per

By CLEM D. JOHNSTON*

A

living in expectation of

a

d i ng

c c o r

statement

U. S. Chamber of Commerce Director, asserting
emotionally

to

filed

registration

a

with

the

SEC

on

March 3, United Light & Rys. Co.
offer its common stockhold¬

we

catastrophe that impairs planning

.

of record

ers

March 22,

1950, the

privilege of subscribing for 1,904,-

taking.

003

Denounces government loans and guarantees to busi¬
sapping strength of our economic system, and points

as

function

corrective

out

Pictures

&

shares of Kansas

Light Co.

share

per

of price

reductions and depressions.
creeping Socialism engulfing nation. '

shares

less tax rates

the

Kansas

each

five

City Power

stock at $12
basis of three

common

on

of

mon

a

A thumb-nail summation of

stock

City

shares

of

held.

stock

United

Rights

in

the

expire

situation might be expressed this

appropriate brackets and the

re¬

wards for, risk

way:

look

ment

ion; (c) Emo¬
tionally
we

They

ant

pro¬

said:

"Make

Clem

lit¬

no

Johnston

D.

Service
of
proportions.

find

blood-stirring

Commendable

of

few

plans
I

progress

do

find—worn
equipment is being
replaced by new and modern
equipment, buildings are being

renovated, new additions are be¬
ing built, methods and techniques

being

are

turnovers

vidual
is

improved,
are

less

knows his

more

But

indi¬

the

job better

and

fields and

bold

a

new con¬

ditions.

i
of

logical out¬

a

of the anti-business attitude

in government, and
inordinately high rates

many

the

the

of
of

of stabbing you

way

back.

I

think

have been trying, to
obscure

some

Lord Halifax
best

a

good

history

and

memory

risk-

So

that

all

governments

which

tives for

lessened

properly
answer the question "What of To¬
day's Market for the Service In¬
dustry,"
answers

Are the

its. go

up

Will

to

go

business prof¬

down?

tomorrow's
formation

that,

a

Cli¬

unfavorable

of

new

ex¬

or

hard but inescapable fact

because

of

deaths, retire¬
ments, dissolutions, failures and
the increasing population Ameri¬
can Business requires $100,000,000
per week of new venture capital
to keep on an even keel. We need
than

more

pand.
Can

,

that

our

customed

if

we

to

are

ex¬

A

■

American Economy, ac-,
to
surge
forward by

great and daring leaps,
itself to this

adapt
process of inch¬

new

now

ing forward, feeding on increas¬
ingly meagre rations of undis¬
tributed profits when
on the raw meat and

it grew up

heady wine
speculative
investment
and
great risks in prospect of great
of

returns in the event of success?

With Soviet opposition and with
world conditions as
they
are,

questionable whether

we

can

it is
ef¬

fectively demonstrate the superi¬
ority of our American system un¬
less

we

continue

to provide

these

periodic and life-giving infusions
of great bodies of risk capital that
is fully prepared to chance the

rough-and-tumble
place.

of

the

That just won't

*An

market

come

by

adcjress

un¬

by Mr. Johnston at the
Marketing Conference sponsored
Chamber of Commerce of the U. S.,
r

-

Mich.,

March
-

(1)

incen¬

monotonously
This

govern¬

always takes place

stages:

(2)
dens.

It

stifles individual

think¬

$900,000 and $975,000, respectively, of 2%% equip¬
ment trust certificates, series
DD,
also dated April 1, 1950, and due
annually each .year to 1965.
V '
■'>

J

•

O
'

'

■

$

1,

tieth

'

1950.
•

*
•




V'

•„
'

-

i

"r

deem

April 7, next, at $103

on

share

and

•

j

..x

re¬

per

accrued

dividends, all
of
its
outstanding
cumulative
preference stock, series A, which
be convertible up to and

cluding April 6.
be

made

Co.

of

at

sales

Redemption will

the

New

Guaranty

York.

of

in¬

Trust

Consolidated

Monsanto

Chemical

Co., exclusive of those of the Brit¬
ish
for

and

Australian

subsidiaries,

the year ended Dec.

31,

we

with

our

vaunted Twen¬

Century civilization

so

dif¬

We have been

enjoying a post¬
Despite the efforts to

boom.

convince

us

mal" times

plateau

of

that
on

these

a

our

new

are

and

"nor¬

higher

economy,. we

$165,924,700, as compared
$161,609,441 for the preced¬

with

ing

calendar

after

year.

Net

amounted

taxes

to

or

$3.74

the

for

12

income

$17,236,common share,

per

months

of

1949," as
$3.95 per

-

against

many unmistakable signs pf
"boom" to call it
by any , other

213

women's

coast

shoe

stores

from

to

coast, shows consolidated
income of $2,081,053 for the

net

1949,

share

the

on

shares

to

equal

$2.14

846,197

outstanding

at

per

common

the

year-

This compares with $2,526,-

307 for the previous year, or $2.67

'

H>

Hi

Retail Stores, Inc., and its
subsidiaries, for the year ended
Dec. 31, 1949, was $31,512,640, a

decrease of 11.6% from 1948.
its

was

decrease

of

net

earnings

$3.73 per share in
per share in 1949.
Hi

1948

*

to

safe

a
our

as¬

grossly

to use every effort to extend
and
expand the "boom" cycle.

Therein lies

our

from

$2.05

Si:

payment

is

'513,696, und net income of $2,397,275, or $4.55 per common share in
(1948.

The

chief

higher earnings

was

one

a

natural

and

tive for the other.

they

net

operations

quarter

of

1949

V'"'

Hi

'

notice

of

it

phenomena,

as

an

a

sort

of

natural
indispensable at¬

or a service is

normally

after

taxes

Continued

on

page

34

in

liabilities
■

in

the

were

4.47-to-l.

was

General Bottlers, Inc., parent of

Pepsi-Cola Bottling Co. of Kansas
City, reported for 1949, net earn¬
ings of $100,445, or 26 cents, per
with

compared

in

$8,272

1948.

net

a

Sales

loss
were

$4,147,518, against $4,058,392.
'!

Union

amounted

reserves,

directors
the

of
on

Wire

Rope

Corp., ; St.

,

overhead

to

March

that

resports

cents

$3,010,336,
or
4.57% of the total sales, as
compared with $3,807,081 net in¬

share

per

Sales

year.

the

on

$1,496,095

and

paid

Current

out

in

cash

liabilities

declared

was

dividends.
reduced

were

Net

were

amount

of

$1,364,800.

Velvet

Freeze,

1949 amounted

share,

compared

56

or

share

in

cents

per

Sales

1948.

$3,578,075, against $3,291,294.

Working capital increased $298,504.

Otis

For

30,

the

fiscal

Appeals NASD
Suspension to SEC

1949,

Shinkle

Johnson,

Shoe

ended Nov.

year

Co.,

Stephens
St.

Louis,

&
re¬

ported net income, after taxes, of
$226,213, equal to $1.04 per com¬
mon

share, which
$320,458, or $1.55

compares

with

•.

-

-

The

stockholders

doah-Dives

City,

on

lution
issue

>•".

of

Mining

Shenan-

Co.,

Kansas

March 6 approved

6%

first

gage bonds to mature Dec.

in

a reso¬

permitting the directors to
$225,000 of

the

event

the

Attorneys for Otis & Co., Cleve¬
land

investment banking firm, on

March 14th requested a review by
the Securities and Exchange Com¬
mission of the recent

mort¬

1, 1955,
issue

present

which matures Dec. 1, 1950, is not
paid off or extended.
The oper¬

ruling of the

National Association of Securities

Dealers, whereby the firm
be

suspended for

riod

for failure

mation

"

to

requested

disclose

of Otis &

Co.

contract to

underwrite

a

issue

of

Corporation.

the

The

the

from

loss for 1949 was $81,781,
compared
with
an
operating
profit of $74,793 for the preced¬

ing year.
depletion

The

attorneys

also

asked the SEC to postpone its own

proceedings

against

Otis

&

Co.

growing out of the same transac¬
tion, pending its action on the
NASD's

ruling.

loss, after
and
depreciation
re¬
serves, was $158,901, against $12,287

in

1948.

Concentrates

pro¬

duced totaled
with

$1,236,300, compared
$1,425,314.
Hi

Profit

of

Hi

Inc.,

and

year

Laboratories,

ended Dec.

taxes

subsidiary, for the
31, 1949, before

amounted

(Special to The Financial Chronicle)

> CHICAGO, ILL.—Louis
rington
with

has

L.

F.

La

South

all expenses

increased

become

with

&

Street.

Otis

E. Cor¬

associated

Rothschild
Salle

Straus Securities

Co., 231
He

Corp.

was

Co.

&

and

,

With Paul H. Davis & Co.
(Special to The Financial Chronicle)

to

$1,773,913,
compared with the 1948 figure of
$1,249,478, and net after tax pro¬

Corrington is

With L. F. Rothschild

formerly

H>

Allied

its

Louis E.

net

ROCKFORD, ILL.
Lawson is with Paul

—

1

Albert

H.

E.

Davis &

Co., Rockford Trust Building,

v

2

April

Black, Sivalls & Brysou
Texas Utilities W. D.

No 41, bears the date of
1943, and represents in¬
terest at 5% per annum for the
six months ended Dec. 31, 1942.

Mississippi River Fuel

1,

Delhi Oil

Tennessee Gas Transmission
Texas

Eastern

Transmission

Rockwell Mfg.
Southern Union Gas

Southwest Gas Producing

Sti?c & Co.

509

Bought

SECURITIES

OLIVE

-f—

Sold

—

Quoted

STREET

StHERCR IHIIIIS
St.LouisI.Mo,
Landreth
MEMBERS
MIDWEST

STOCK

EXCHANGE

a

common

Kaiser-Fraser

coupon,

INVESTMENT

to

infor¬

regard'ng

withdrawal

stock

was

two-year pe¬

a

ating

1, next, of one coupon on the ad¬
justment mortgage bonds.
This
April

a

i)

■

equivalent to 83 cents

$177,557,

common

;

❖

■

of

leaving

\

a--

common

due

the

$100,000,

income

to $262,847,
with

in

by

Inc., St. Louis, in

$1,962,612 during 1949, the largest
item being the payment of notes

a

ratio

against 4.42-to-l a
earlier... Bank notes ; were

*

per

; was

6.31-to-l

year

reduced

year,

1949

current

balance of $233,334.

the

common

$1,873,157

come

for 1948.
Of the net profit
1949, which was equivalent
to $6.03 per share on the
499,016
shares outstanding at the end of

income

$4,759,368, com¬
Working

were

$1,920,262,
against
year
earlier.
The
was

net

$230,269, equal to 92

was

for

Missouri-

on

Louis,

for 1949

.

and

an

indication of lessened cost of
pro¬
duction somewhere
along the line

the

$7,464,410, or 10.1%
preceding year. Net in¬

vision and

The

tribute of

a free market
economy.
A decline in the
price of a com¬

1

Hi

In moderation

ever-expanding economy. I'm not
recommending
or
arguing
for
"boom"-"bust." I do take judicial

for

resulted

of

from the
come,

*

the

an

sus¬

shares

less than the record year of 1947.
Ratio of current assets to current

bf

was

of

earnings

second best in the
company's his¬
tory and only five cents per share

share,

loss of

a

darnings of about $300,000.

proper correc¬

to

These

that

approximately $700,000

danger.

healthy attributes

are

the

number

same

share in 1949

tained in the first quarter of 1948

iwhereas ~ the

The "boom"-"bust"
cycles are a
sort of -rhythmic

pulsations,

for

reason

per

against 1948

usual

authorized

It

The

not able to main¬
profit margin dur¬
ing the last half of the year
owing to a rapid decline in mer¬
chandise values,'with a resultant
company

tain

able

with

net
earnings,
taxes, of $3,238,018,

equal to $6.34 per common share.
This compares with sales of
$153,-

report of Edison
Stores, Inc., operating

RR.

overswollen size and cost of Fed¬
eral
Government, whatever Ad¬
ministration is in power is
going

and

income

1948.

annual

The

Brothers

Kansas-Texas

prob¬

that

after

'

name.
It is easier to
recognize
the boom than to
appraise its di¬
mensions or to estimate its

duration.

$142,105,705

$18,042,473, or
per
common
share, for 1948.
Working capital) share
for
the
preceding
fiscal
at Dec. 31, 1949, was $59,947,779,
year.
Net sales for the 1949 year
an increase of $7,998,140 over that
were
$7,917,271, against $10,118,of Dec. 31, 1948.
;
694 for the year ended Nov.
30,
Hi

see

.

sumption

Pet Milk Co. for the
year 1949
reported consolidated sales of

1949,

The volume of sales of Consoli¬

ferent from those which
preceded
us?
?

too

■"

&

f.

dated

Are

war

8j!

.

'

Monsanto Chemical Co. will

of

right

the
1948.

.v'

pared with $5,562,194.
capital at the close of

Brownsville & Mexico Ry. sold to

inevitable col¬

the

Hi

decrease

iLouis,

share on 843,247 shares then
outstanding.

the

suppresses

Hi

stock, compared with $289,499, or
$1.15 a share for the previous

St.

and

per

...

comes

equipment

on 261,290 shares
currently
outstanding, compared to $2.98 on

approximately $2,500,000.

as

underwriters

cost

Wagner Electric Corp., St. Louis,
for the calendar
year
1949 re¬
ported net sales of $65,940,766; a

RR.

S!"•

Then

■

March 6

on

2%%

of

;

the

to

cars

Northern

end.

(3)

ing.
(4) It

of

group

\

*

-" .* "

"•* -•

authorized
box

first

year

It beguiles with promises.
It paralyzes with tax bur¬

modity

National

Detroit,

the

na¬

lapse.

Business
or

panded enterprise?
It is

or

risk-taking and sought to

action

four

a

protest.
on

be favorable

the

the

questions:

of Venture Cap¬

sources

or

have

first

other

some

ital drying up?
Will tax rates

mate

can

must

we

to

one

im¬

substitute government guarantees
or government subsidies have no¬

mental

500

of

certificates, series NN? dated
April 1, 1950,'and maturing annu¬
ally April 1,-1951 to 1965. On the
following date, International Great

422,
a

since the dawn of history

and

tions

in

before

will

we

courses...

for

for

mediately have brought home to
us

identical

incentives

prophet is

a

also

purchase

totaled

good memory.

substitute

which

lessen

or

facts

said that the

once

qualification; of

to have

pursued

and

side-step

unpleasant

toriously

taking.

many

rather than meet them.

corporate and individual taxation

discourage venture capital

that

*

$

•

to
No

trust

net

any

This condition is

come

to

$3,000,000

faced have
in

*

1950.

Missouri Pacific RR.

will

Let's

in general this progress is
new

en¬

<

a

"

•*

19,

com¬

another group

serv¬

expanded

April

on

*

••

hope that I don't sound badtempered or unduly contentious
in trying to point out this situa¬
tion, but faqts that are not frankly

efficient at it.

leap into

and

new

terprise.

personnel

and

"inching forward"—not

an

our

I

field

the
I

and

industry of warehousing that
competition, even a
mere 3 or 5% of the
whole, when
accompanied by the threat or pos¬
sibility of still more1 government
ownership and operation, can ef¬
fectively paralyze whole areas of

stir men's blood."

Today " in

issues

have found in

we

potential

tle plans—they have no magic to

Industries

real

government

gress.
Someone has
well

palliatives

mere

the

ice

of plan¬

ning and

becloud

And

result¬

impair-

ment

guaran¬

postpone the day of reckoning.

catastrophe,
a

at best

are

that

n

with

Govern¬

1—

government

rather than strengthen our system.

g as in
expectation of
a

loans,

tees, government subsidies weaken

be

to

seem

'

sold

Today's substitutes

indecis¬

1 i v i

?

Economy

b y

uncertainty
and

increased.

are

Government Substitutes Sapping

char¬

is

acterized

reduced

are

for

are

Underwriting is involved.

(a) The short-term outlook
is good; (b) The long-term out¬

our

share

The; board

will

and progress, attributes situation to lack of incentives for risk

ness

Thursday, March 16, 1950

Catastrophe!

or

President, Roanoke Public Warehouse, Roanoke, Va.

are

FINANCIAL

to

More Risk
•

&

Bell

Teletype

SL 456

St.

COMPANY

Building

Louis 2,

Mo.

GLfiDld12325

\

Volume 171

Number 4890

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(1103)

Earning Power and Merger Trend
Of New York City Banks
By MORRIS A.

25%

of

the

City banks with

more

country's
an

banking
of

on

value.

These

money;

losses and

banks

outside

:

New

:

;

York,

dif¬

5%%

ferently in dif¬

for

ferent

places.

hear

are

is

low

compared

it

banks
run

member

dition

banks

v.,

by

Deposit

tal

This fact is not

tions

of

change; and that

the

been

interests of

cit

through

of

There,

hears that gov¬
restrictions
limit their

ernment

profits
sets

by

one

impounding bank

banks.

and

experienced
in

ters

taxes too high. None of
provides a satisfactory ex¬
examine

or

at

the

$2,340

about

rate

of

million

counts.

$135

5%%

The
of

stockholders'
or

equity.

to

are

important

cen¬

and

with

banks

these

banks

with

their

rela¬

difficult

and

1

means

have

in

40%

that

another.

The higher rate
paid by
the
mutual
savings
banks
for
thrift accounts has attracted funds

from commercial banks, im¬
pelling one leading bank this year
away

savings. Others
This condi¬

tion, however, is not general outr
side New York City.
It was dem¬
onstrated after Deposit Insurance
originally
introduced
that
depositors, including
na¬

tional

York

institutions.

proposal to

$10,000

raise the

will

intensify

Large banks
tition

with

The

City

with

one

New

York

by Mr. Schapiro before the
National Federation of Financial
Analysts

more

same

area.

ter of

receive

YORK

fact, there is

a

mat¬

a

general fear

are

this

to
trend.

also in compe¬

in

government

rates

in services, and New York
City banks in their dealings with
large national concerns are also
and

in competition for loans with nonbank lenders,
such as insurance

companies

and

others,

as

bank's

ings

$5 per share
book value of $100,
that in order for the

war.

destruc¬

so

must

is

value

appraise

times.

ings

situation 'is

earn¬

aggravated

operating
from costly

by

expenses

re^-

sulting
installations
and duplication of facilities
which
far

scarcely

seem

to

have

been

supported
by the results
achieved.
No
matter
how
one

Such

looks at the overall situation here
New York City, it is evident

well

as

the

at

last

low
two

earning

In

each

of the

of these

bank

previously

the

bank

the

compensation.

inade¬

Bankers

fervor

"to

in

get

business,"' even though it is
immediately profitable, have

not

usually had some indirect advan¬
tage in mind.
But too often this

Low

The

tracted

fact

is

that

banks

banking services in New York
City are essential and are being
used by
individuals, partnerships
and corporations
throughout the
country, as well as by States, Mu¬
nicipalities and the Federal Gov¬

ernment,

but

it

is

equally

to

to

full

activity and
high prosperity, the earning power

benefit

are

abled to

an

shares. The

for

offer

to

sell

nor a

They

reserve

in

do

trustees
assets

conserve

the

Banks
mean

more

at

discount

a

managements
find

have

adequate

Banks Based

on

to Total of

Average Net Demand

versely,

stockholders

whose shares
mium

obligation

are

of

quoted at

of

bank

managements to provide

earnings for stockholders is, there-

Continued

on

Corporation

CITY

$4.05 Per Share

and Time Deposits

(Including U. S. Government Deposits)
'

1940

Average Total
Deposits (000)
Chase

1945

Copies of the Prospectus may be obtained in
any State from such
of the undersigned as may legally offer these shares in such State.

1949

$15,122,275 $16,757,052 $25,810,914 $21,881,587

National

19.82%

____—

17.73%

17.60%

16.82

16.42

19.44

13.99

12.18

9.S0

7.80

City
Guaranty Trust

19.98%

16.70

14.70

National

Bankers Trust

1941

7.66

6.26

5.41

6.54

Central Hanover

7.61

*

7.40

Manufacturers

5.15 /,
4.56

5.31

7.53
4.89

5.56

Stone & Webster Securities
Corporation

8.67

5.14

_

Chemical

Bank

Irving Trust

4.61

First

4.89

National

Manhattan

*

5.63

4.46

3.95

4.20

4.42

4.89

3.71
4.07

4.39

Tucker, Anthony & Co.

Hayden, Stone & Co.

Hemphill, Noyes, Graham, Parsons & Co.

Lee

2.55

4.00

'

Smith, Barney & Co.

Paine, Webber, Jackson & Curtis

1 J. P. Morgan & Co._
New York Trust

2.74

2.56

3.00

3.03

2.75

Corn

Exchange

2.18

2.20

2.72

3.18

Bank of New York___

Robert W. Baird & Co.

1.53

1.51

1.37

1.50
2.08

Company

Incorporated

1.-39

Shields &

Higginson Corporation

2.42

-

___

Public National

,0.93

Marine Midland Trust

0.92

-

0.86

Commercial

___

0.77

National

-(-Brooklyn Trust

_

___

§Continental Bank—

jjFifth

0.39

1.08

1.21

0.86

0.92
0.89

0.92

0.66

0.50

___

_

0.38

Title Guarantee & Tr.

0.12

rfGrace National Bank

___

*City Bank Farmers,

___

0.28

0.11
___

0.15

0.31

-

3
-

100.00%

100.00%

^Clearing nonmember, joined in 1946.
tJoined in
sorbed by Chemical.
II Merged with Bank of New
York.




100.00%
1943.

JJoined

0.22

0.40
0.36

___

.

A. M. Kidder & Co.

Maynard H. Murch & Co.

Wagenseller & Durst, Inc.

Shuman, Agnew & Co.

Johnson, Lane, Space and Co., Inc.

American Securities Corporation

Stein Bros. & Boyce

Baker, Weeks & Harden

0.31

___

Totals

Hill Richards & Co.

0.54

0.41

__I

_____

Mitchum, Tully & Co.

Spencer Trask & Co.

0.73

0.45

___

Avenue

tLawyers Trust

0.89

'•

0.43

fU. S. Trust.

•-

100.00%

Bosworth, Sullivan & Company

1944.

§Ab-

-

Piper, Jaffray & Hopwood
March 14,1950

in

Richard W. Clarke Corporation

Incorporated

G. H. Walker & Co.
1

a pre¬

not

(Par Value $.10 Per Share)

Price

* on

Con¬

banks

likely to consider
proposals for liquidation.
In New
York City, of course, such banks
are the exception.
The obligation
are

Common Stock

All Clearing House

en¬

their

earnings

CLEARING HOUSE DEPOSITS

Showing Percentage of Each Bank

for

investment.

1,500,000 Shares

adequate
general

their

gain

are

ultimately

an

New Issue

on

at¬

banks out of business. Bank

solicitation of an offer to buy
any of these

General Public Service

cash.

beneficiaries.

offering is made only by the Prospectus.

more

in

naturally

\

This advertisement is neither

of

for

such proposals because

individuals,

true

that in these years of

price

stock, and stockholders

the

stockholders'

and

excess

quoted

in addition to the immediate

to

Earnings in Good Times

the value

cases,

far in

was

the

services

for

of

the

by their stockholders, the
business going to surviving banks.

and

rendered

In

sold

business

being transacted

because

power.

years,
several
of
the
New
York
banks
were

smaller

realized

competitive

for

Bank shares have

discount

a

Stockholders

their

Current

market

The prevailing ratio for
New York City bank stocks
is ac¬

that

quate

an

in

in

is

market

earnings at
earnings ratio

plainly too high under

conditions

their

difficult

increased

thus

the

these

tually but 15.

the

on

quotation to

book

been

can
only be
jungle business.

Meanwhile,

earn¬

5%

it follows

Stockholders equities.

Competition is
as

or

its

ment of operating a
monopoly if
they even discuss interest rates to¬
gether. The result has been a con¬

price

which

recurring operating

are

20

tinuous

at

a
low earn¬
rate on stockholders'
moneyshould be clear to us all.
If a

equal

bankers that they will be
accused
by the Justice Depart¬

value

quoted.

The significance of

.

As

are

time, these

and

NEW

compete

Banking in
monopoly. It is

no

book

ing

among

coverage

services.

OF

is

from

their shares

deposits

business, get better rates

compensation

Societies, New York City, March 2, 1950.

another.

intensely competitive.

current

the

loans

talk

compete with
other
principal

in

justify their

count

area

corporations, increased their has proved to be
"pie in the sky.'J
deposits in accounts with smaller

local

stockholders' equity is too low
investment. This
condition is reflected in
the dis¬
to

outside

are subject to lower
requiremnts than prevail

New

this

centers for every important avail¬
able
loan.
Finally,
the
banks
within New York

destructive

City. The banks here compete for
deposits with others and with one

was

banks

on

tive that the condition

competition in which these banks

large

large

the

described

are engaged is another
reason fol¬
low earnings power in New York

bound to follow.

in

suffer.

Highly Competitive
The

banks

In

field,

all banks are
competing with finance and fac¬
toring companies.
Then too, all

area.

banks

operat¬

DISTRIBUTION

at lower and
fully
rates, the impact is greater

loan

have succeeded

retail
*A

war.

investment markets.

small

growth greater than

City, while at the

The reten¬

net addition from

in

outside

the

per dollar of stockholders'
equity
than have the banks in New York

capital ac¬
dividends in 1950,

Cash

shift

higher deposit-capital ratio

14

banks

their

total

using current rates, are estimated
at $85 million, a rate of
3.60% on
tion

a

New York

New York

million
on

plants,

population,

throughout the country have

competition

were

economy

accumulating
large
banking?
capital, placing them in
active

Combined net current
operating
earnings of New York City banks
1949

There has

in

the

problem.

in

the

Banks

through required reserves,
by keeping interest rates too

us

It has been

Deposit insurance has
helped the deposit trend of small

as¬

and

Let

City.

continuing diffu¬

manufacturing

industry

and

planation.

York

factors.

low

these

to

compared

new.

vast and

a

new

story.

1

New

ment

different

a

to

in

financing and heavy Govern¬
spending.
Decentralization,

themselves

is

14

1

the

are

tively limited deposits.

are

of
liquid assets, resulting from defi¬

and

management and stockholders are
not always parallel.
In the banks

there

is

10 to

sion

ques¬

expansion

Growth

developing since 1933.

decisive

determining

economy,

ratio

only

profit; and that the stockholder's
of

,

First, deposits are high in rela¬
tion to capital.
The deposit-capi¬

that prestige
is m o r e im¬

not

>.'*

Greater

to¬

portant than

in

this

•

on

to raise its rate, on

Country's

day's realities;

often

9%

by

rather

than

is

with

outside

equity?

habit and tra¬

importance

other

Why do banks outside New
York City have about 50%
greater
earning power on stockholders'

said that New
York

Schapiro

or

book

and

they are
big business

refunded

are

charge-offs, profits and
reserves

must

Thus, when called
maturing Treasury obligations

before

are

banks

greater degree

a group

rates than

taxable

area.

You

interest

or

Earning power
of
the
New
York City member bank
group at

question is

Morris A.

combined

As

a

dependent

since the

million

figures

York

Earning power here is
more
adversely affected by the
refunding policies of the Treasury

capital transactions.

9%. Why? The
answered

$50

the

recoveries,

'
■

is

2.15%

average

stockholders'

on

earnings

New

low

institutions

land, but their
requirements
are

banks.

requirements. Sees realign¬

ing

financial

reserve

.

banking rela¬

the

liquidity.

on

earning

are

own

at

banks resulting from mergers and counsels creation of
larger reserves as cushion against shocks and adjustments in
bad times.

The New York

with

throughout

of

ment of

capital
5%%

tions

and

always maintain

Bank stock analyst,
noting comparatively lower ratio of earnings
to capital funds of New York
City banks, ascribes this to: (1)
slower growth of deposits in relation to
capital; (2) greater
reserve

correspondent

higher.

SCHAPIRO*

President, M. A. Schapiro & Co., Inc., New York City

competition, and (3) higher

New York City is the
country's
financial center. Banks here have

11

page

35

12

(1104)

&

COMMERCIAL

THE

about it in

For

how

can

entirely

an

to

all

blood transfusion, Mr.
dangerous col¬

this

of

buy.

manner.

crisis

again, I do not speak as

party, govern¬
anybody; no committee
in Washington has ever honored

ment,

or

and

have

asking
my opin-

me

oy

me

i

They

o n.

prefer

people
General

like

Chen

nault,

who

have

several

mil-

lions

slake,

at

tell

to

them

what

really the

are

facts in China.

Lsually,

have

wno

mil¬

several

lions
Leland

Stowe

stake

at

not exact-

are

rtveotive.

Nobody

a newspaper

to go down and say

man

to

asked

ever

of

one

anything
So,

committees.

these

nobody has ever asked my opin¬
ion down there, and that is all
right.
But I am saying, as an
independent
is

one

in

observer

bound

to

Europe,

"What

say,

going to happen in Europe, if
do

slash

the

Marshall

considerably?"

Plan

is
we

very

•

I

spent nearly three weeks

investigating

the

unions

in
Communists,

France,
that • the
although they are checked, have
very strong comeback possibilities
in the future.
not

do

we

And I believe that

begin

to

understand

this at home yet, because the ob¬
vious success has been so publi¬

cized
You

fundamental

have

talk

well

as

the

and

dangers

been

to

as

ignored.

so

officials,

European

ECA adminis¬

own

our

trators around Western Europe, as
well as do you own looking, and

discover

you

quickly

very

Marshall Plan has

been

the

success

a

within its original
has

intentions.
It
production, but you

restored

discover

with

needed

we

understood much
the

is

only
nothing

and

what

known

clearly at
the Marshall

blood transfusion,
more.
It is only a
a

blood transfusion.
And

know

we

transfusion

of

blance
if you

that

health,

but

blood

a

restore

can

a

sem¬

sometimes,

cut it off, veu can have

which unfortunately

here;

over

we

he

words

have not

said,

"The

Marshall Plan is rot to solve

problems, but to give
solve

time

and

the

tacked.

In

Geneva,

anywhere

members of the

Economic
saved

the

in

Old

for

saved

nothing
we

We

me,

world,

Myrdal's

"You have

but

one."

vou

That

has hanoened.
t^e

^ome^t,

fundamentally
And

new

<vr

still must snrnd

spend

to

^or Europe,

new

yet been built,
that

at¬

econo¬

the

World,

a

is exactly what

is

been

Gu^nar

of them said to

them,

mark

will

It
but

has

billions

however

either

be

*An address by M>". Stow^ at a luncheon
the joint auspice* <-f
Interna¬

under

tional

*r~-Woorta-

Trade Section

Section

of

the

New

which

after;

are

we

be

will

complete change in strat¬

a

egy and tactics if we are to
save Western
Europe from

really
Com¬

munism.

had, just recently,

Why is this so?
crisis

the

It is not

Let's look at

the

of

world.

western

just Western Europe. Our

whole western world is in

profound

nitely
too

crisis.

too

few

simple

York

Trade, Inc., Feb. 23, 19-0.




£oard

of

which

infi¬

it.

will

we

either prosperity or

and

is

That

of stating

world

very

production

much

way

a

have

We

customers.

western

and

the

followed.

most of

their

We

minor

a

I

And

have

stability until

crisis

the whole sterling

is ahead of

us

ing next spring

or

but

before next

autumn

and

that

and it is

com¬

next summer,

crisis when

anyway,

it

comes,

going to be tremendous.
going to knock an awful

is

It

is

lot

props out from under our assump¬
tions of solutions
already reached.

Because
best is

devaluation in

only

is

shot in

off

the

in

And

few

a

main

very

great

crisis

be.

is

arm

fundamental

not

arm, and

could

it

all

Britain at

shot in the

a

going to

months.

dollar

wear

Britain's

will
then

gap

great, and
will come.

going to be

the

re¬

the

That

is

Already it

that the Lon¬

seems

has

government

taken

not

advantage of the shot in the
to

do

arm

of the

some

very

things that are
imperative that it should do.

up

And

that

bring the ratio of customers
to somewhere near the ratio
of what we can produce and are
producing.
That is where you
in,

since

there

room,

First

the

has

this

in

everyone

because

been

World

terrific

a

shrinkage in the markets of the
world, while we were creating
the machines to produce more and

Now

more.

there

certain

are

to

the

to

be used
in the

to pay

meantime,

duced

much

a

crisis next year,

consider

standards

of

more

1950.

In

the

re¬

living of the

British people—and to go back to
London after having known it in
the

war,

is^to bq filled with

profound
life

a

the unjustice of
tragedy of
man.

sense of

the

and

gram

construction.

raised

*

to

vote

on

tenders

of

mum

to

Europe this last time.

Curtain.
Far

talk

about
there is

But

bigger than that.

Red

curtain,

the
a

Iron

curtain

There

is

report of The
Stanley Works reveals that sales
for

the

about

ings

year

Nearly one-third of
world

is

cur¬

very

I

antagonistic to Brit¬

of

charging
the

eral

respects, it is true.
But if
think that the British Social¬

we

peoples of the earth.

them,

ists

"How

have
been

second

a

equally tremendous revolutionary
We
here
in
America

change.

dangerous—I

are

or

British
think

Isles,

United

doubled

States

in

11

has

been

years—doubled.

What does that do

to

the

shrink¬

ing markets of the world?

What
earn¬

chances of

our

ing enough profits, selling enough,
making our standard of living
persist where it is, let alone rise?
A
very
profound and upsetting
thing, to double our capacity in 10

I

Finally, there is
factor

for

a

third

enor¬

uncertainty,

ized, and that is the fact that the
United States

is not yet acting as
only great creditor nation in
the world, and we are it.
We are
sitting on billions of dollars that
the

are

not

fare,
we

working for

let

alone

cannot sit

the gold
more

on

our own

mankind's.

wel¬
And

these billions and

at Fort Knox

for many

without finding our¬
steadily
more
impover¬

don't

make

know what the steadily

them

right wing

And

major

problems

that, too, is
which

one

of the

we

face.

Do you read much about it in the

Dapers?
it

on

Do you hear much about
the

radio?.

4Do

you

talk

been in the

ever

hundreds

several

past

of

on

Britain's fate is

It will

ahead, somewhere in '50.
affect

whole

our

prospects,
The

years,

ahead

with

business
things.

our

many, many

straight

are

relations

world,

decisive

years,

So the

left wing.

or

real showdown

than

radical

more

Englishmen have

I

as

see

it,

us—the

of

most

difficult, perhaps the most
dangerous. Pumping in the blood
of

the Marshall

Plan

did not

re¬

quire very much forethought; in
fact, it did not get much.
It did
not require very much cleverness;
most any dope could figure that
one

out.

Almost

give away money,
fact.

Ever

cannot

years

selves

you

falling standard of living of Brit¬
ain will do to the political think¬
ing of the British people.
But it
seems to me
inevitable, if it goes
very much farther, it is going to

as

yet profoundly disabling to our
whole economic existence, until it
becomes disciplined and channel¬

do

that

noticed

pat ourselves

we

have

great amount
The

yet

now,
*

can

matter of

a

it?
on

So.

we

the back

displayed

any

of perception.

necessity

comes

done

any
as

for

because

Continued

No.

perception
now
on

we

page

are

34

do¬

allowed

amounts

tax

for

Fed¬

358

in

an

for

extra
1950

of

New

for

Co.

1949

7%

drop in
sales the net earnings increased
from $0.33 to $1.28 a share. The

governments
share.

a

a

equal

of

to

book value

The

sole

140,000

$12.51'

a

of $60.40

capitalization
shares

of

no

stock.

Delafield & Delatield

1949, the company appro¬

priated

*

Peler Milholland With

In addition to

purposes.

2.85

was

report

Machine

par common

$675,855.
The
includes expen¬

Delafield

&

Delafield, 14 Wall
City, members
Exchange,

ditures of $3,000,000 for plant im¬

Street.

provements, largely for the Hand
Tool and Steel Divisions. Of this

of the New York Stock

have announced the association of

total

about half will

Peter

from

depreciation charges and the

remainder

ings

must

or new

1949

available

*

from

earn¬

a

Corp.

share,

common

increasing costs.
year dividends of

the

share

paid.

were

The

sheet at the year-end
and

a

balance

announced
a

its

a

of

r

*

intention

other

Mr.

associated

with

Gude, Win-

.

to

•

pro¬

synthetics.

j

Midwest Exch. Members
CHICAGO, ILL.—The Executive
Committee

of

has

Royal

the

Midwest Stock

elected

to

mem¬

E. Peterson, New

ville, Tennessee.

line of carpets made with

number

firm's

City;
and Ralph
Owen,
Equitable Securities Corp., Nash¬

Bigelow-Sanford Carpet Co. has
duce

the

York

shows cash

$40.82.
*

with

advisory department.
Milholland
previously
had

bership:

securities equal
share and a book value
*

Milholland

investment

Exchange

government

$28.38

York

mill & Co. since 1946.

*

Marlin-Rockwell

$7.75

New

been

come

capital.
*

In

be

been experimenting with acetate,
vinyon, nylon, protein fibers, and

of two
in the

where

and

the rest of the
mous

earnings a
depreciation in excess

for

*

annual

consists

against

to

like

you

was

23.5%

average

kwh

per

shows that despite

a

synthetic fibers. The company has

would be then?"

we

have

created, just «by the neces¬
sity of war, this second one. Since
1938
the productive capacity of

would

Communist Party
three
million
people
a

the

and

rate

share and

ask

would

25.5%

domestic,

*

the allowable deduction of $1,050,-

ain's Labor Government—and you
can make arguments against it in
many

the

During the past

three years the company has fol¬
lowed
the
conservative practice

$5.50

are

and

surplus.

financial position of the company
continues to be strong, with cash

share

ing

free trade, and that area con¬
tains more than one-third of the

of

has

a

compared to $9.30

common

a

tained off from the normal process

there

equal to $8.27

were

the previous year.

of

Now

$60,018*390,

were

below 1948, and earn¬

10%

the

on

to

the

annual

1949

10

ing is going down still farther.

kwh

Britain
The

after this magnificent courage of
But the British standard of liv¬

and

revenues

*

Dur¬

a

shutting out free
Vladivostok,

of

*

volume and

years.

stock

from

The
*

come

long

total

mestic

who

China.

1,935

pres¬

with,

little to

long-term
stock

cents.

would ask those American friends

surface

are

outstanding
$53 a share,

down from $9.82 the previous year
due
to
moderately lower sales

so

34%

industrial customers. The average
annual domestic consumption was

195,900 shares.
132,075 shares
could be purchased.

for

they have to live,

to

common

not

at

the little they have to do it

way

the

At

trade from Vienna to

the

There

of

preferred

common

derived

$7,000,000 would be spent

buy in stock.

equal

the

on

A maxi¬

share.

a

Light Co.'s

were

from commercial and 24.7% from

stock

own

$53

Of

di¬

invite

company

15%

ently

and from northern1 Siberia to Can¬

ton,

its

of

than

more

the

51%

excess

Capitalization at the year-

consisted

debt,

March 29

proposal of the

a

that

rectors

for

*

1949

share

a

stock.

the prospects of

until I went back to

we

$2.86
end

on

*

from

The Hartford Electric

earnings for

$

turing Co. will meet

earned

One,

*

of

Stockholders of Colt's Manufac¬

people, the

respects they had

some

me

and
the
remaining
working capital.

was

*

year

for
1950,
of
which
$1,000,000 will be available from
the
year's depreciation
accrual

recently
$0.40 to $0.45.

from

people than I have for the British

in

as

escaped

sorrier

rate

changes

spent

was

budgeted

would

shares

rate

During the

$2,500,000

presently

are

from

year.

construction and $3,300,000 is

new

which the quar¬

on

dividend

terly

just

felt

about

off notes incurred

2,800,000

stock

common

Never

I

for

par com¬

proceeds

There

outstanding

aspects of that shrinkage which I
think have escaped most of us,

have

early in the

additional

an

resulting

nue

company's construction pro¬
and to finance additional

budget

likelihood,

the

certainty of

serious
the

adds

The

stock.

mon

reserve

don

Tele¬

Commission

400,000 shares of its $25

of

to handle.

easy

England

to issue

of

we

come

permission

think

"That is fine;
that solves that problem."

of Britain and

Utilities

Public

devaluation

devaluation,

area

one

In the

not

Eu¬

here at home think of

us

I guess

that

ished.

tion

will

more

talking

Committee

have not built

what

part of the

scarcely

of the most Qualified

mists

which

revision in its ad¬
ministrative attitude, a revision in
Washington's and the American
public's ideas and conceptions of
a

short years.

solving

has

one

time to

us

have just a little

we

problem
some

our

problems."

our

Now

a

Plan

by

does it do to

very dangerous relapse.
A French
deputy said,

heard

Marshall

marked

world,
combined.

But the fact is that the real

We are just coming to this great
dividing line; second phase of the

and

more

beginning, that

Plan

speed

equal
have

to

that

demand

to

proceed

we

intend to build

we

shall build it.

War

And, then looking close, it be¬
comes
very
obvious,-- as it was
when

and
we

peo¬

ple

in large measure, or
they will be made constructive, if
know what

western
ours

manifestation of this greater crisis
in the British crisis of the dollar

thrown away

we

said

in

the

of

rope's

from Western Europe by $2 billion. Says we
got to discover how to create consumers with cash and
favors more U. S. foreign investment.

advocate of any

Now I have

a
very condensed,
simplified, pernaps,
It is a part of the great

shortage
an

how to cieate

New

Southern

phone Co. has applied to the State

and much too

annual imports

Once

discover

we

who have got casn witn

which

may cause

prosperity nor

new way

consumers

lapse. Blames present world economic crisis on "too much pro¬
duction and too few customers," and advocates increase of our
have

system can't pro¬

our

other until

any

with

consumers

duce and maintain

European Editor, "The Reporter" Magazine

a

And

discover

to

Thursday; March 16, 1950

Connecticut Brevities

.

got

create

to

cash.

LELAND STOWE*

Holding Marshall Plan a~d is only
Stowe contends, if cut off in 1952, it

have

we

CHRONICLE

meetings?
Gen¬
we did.

your

tlemen, it is time that

Buy $2 Billion Yeaily From
Europe and Save Marshall Plan
By

FINANCIAL

J. B.

Duffy Co. Formed

BROOKLYN, N. Y.—James B.
Duffy is forming J. B. Duffy Co.
with offices at 895 East 37th Street
to engage

He

was

in a securities business.

formerly

with

Blair

F.

Claybaugh & Co. and Brady & Co.

\

"Volume

substance

Pro and Con of Point IV Program
Vice-President, Irving Trust Co., New York City

President Truman "hit the
of

world's

the

when

jackpot

political emotions"
Point

the

announced

he

that

from

munism, such

North

the

and

positive

Four

Atlantic

the

ral address

countries and thus

in

tangible

January,

1949.

In

Point Four,
most of them

on

saying
the

Now,

a

United

conceive

States

be,

services.
Maffry

August

orig¬

inal announce¬

Four

ment, it is time to take stock and
find out where Point Four actually

Marshall Plan and

stands

filled

and

where

it

going.

be

be the

a

Four

of

reactions

home

at

is to

be

and

vagueness ".of

Point

and

to

their
to

the

concept.

These

Four

I

.reactions

are

and

am

to .the

underdeveloped-

of

areas

to find in this formula¬

any group

tion

clue

a

in i its

to what

interest

own

should

be

it

done

to

is seeking

thinks

or

improve

state of the world in

the

general..

,

#;

carry-

American

knowledge -and

Americanr wealth

the

to

under¬

privileged peoples of the«- earth;
They! think of it in terms of re¬
lieving hunger, eradicating -dis¬
-

private

these

that

Others, I

am

sorry

have people ask me whether 1
am
in favor of Point Four.
It is

a

attitude

and have

of

have

of

mature,

scale,

- not

to

and the employment of Amer¬

capital
•

in

underdeveloped

In order to go

further,
must know where

however,

one
Four actually'

Point

stands today
headed.

and where it appears to be

In terms

of'legislative proposals
under consideration by the Con¬
gress, Point Four consists of two
.

measures.
One of these
authorize the President to

pending
would

and raising levels of living.
Neither government nor business

:

this

eco¬

j
i

and World Bank

pub¬

capital irr carrying out Point
'Four brings into question also the

in

Point

being

Four, the only question

how

would

important

ease,

dismiss this

approach

as mere

hence of

humanitarian

no

do-goodism and

importance. '- On the
contrary, the missionary spirit of
the American people is not only
noble; it is a potent force in the
international

relations

.

United States.

f

o

-

v

t h

e

However, I do not
to dwell on the humani¬

propose

-

tarian aspect
Program.

of the

Point

Four

second

would

amend the

unable

in

of

Point
There

circumstances

institu¬

position

is

contro¬

vestments

Four

those

are

is

new

vate

ital

capital
is

so

attractive

long

available

to

as

to

made.

public

terms. Another is that

there

the

are

exporters

This is riot ah

issue

if it

as

foreign

some

indicate, there is

a

shall

later

deal of

good

wishful thinking in this appraisal
ol! Point

Four

induced

no

by the current pinch of

doubt

from

an

investment

of foreign
would

tfie

ing supply of, dollars available to
foreign countries and by the pros¬

tax

them

may

defy

tax

shall

return

•proposals in

1

Creating

;

Aside

Four

war

control, and electric

of

service

Still

on

another

funds

are

to

ments.

Powers i and

the

Western

welcomed Point Four.They
in it a promise that at long

last

the United

f\n address

States

is

Russia

turning

by Mr. Maffry before ChiChicago,

cajo World
Trade Conference,
Feb. 27, 1950.
'':' V-




Favorable Climate
•

legislation,

of bilateral

of

nor

in most instances

themselves. Hence, if the facilities

create

be

to

are

facilities which compete with ex¬

created, they must be
primarily by public, capir

created

isting

tal provided directly or

indirectly

by the United States.:
.

One

of

the

big

this connection

ties,
,

is the

economic

of.
-

Continued

; v

'V.

private
them

This

very

Supply Company
;

«...

.

March 23, 1950,

as more, fully, set forth

in the Prospectus

..

Subscription Price to Warrant Holders

a

States

permanent
goes

$21.50 per share

Point

Conies of the
the

fair

invest¬

favorable

capital

to

investment.

to

Prospectus may be obtainedfrom the undersigned only by person c to whom
.undersigned may-legally offer these securities under applicable securities laws.

thus in¬

Blyth & Co., Inc.

arfj increased flow of

objective

.

the- real,

March 14

1950.

)

in

great

development.
on

page

of such Shares,

invest¬

of

are

help create

United

for

..

*''•••

--

foreign countries and consequently
induce

any

to subscribe for these shares have been
issued by the Company. to holders of its Common Stock, which rights expire

climate for private investment in
to

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

Rig'its, evidenced by Subscription Warrants,

■

;

difficulties

aggregate cost of the basic facili¬

the United

American

These treaties

tended to

.

foreign countries giv¬

: formal a assurances

treatment

-•

j

With

part by underdeveloped countries

loans out ot

used

power.

is it realistic to suppose that they
will be financed, except in small

these

ment treaties between

amateur

fifid

a

a

.

/
.'

if

even

one

investment;

private investment*.
is that

f.f(Without Par Value)
•

of

some

possible exception of power,
supposes that these facili¬
ties will. be. provided by private
no

ment creates a preferred claim on
foreign countries to the detriment,
in times of exchange stringency,

Jamaica Water

legislative
few minutes. : *
•*

from

between

also

to

consists

ing
and

V..

corporations operating abroad and
to Americans residing abroad.
I

reduced.

professional

cerT

"'■**

American

concessions to

States and

The

and

solution

the

v

Congress,

to

President also proposed

pect of a further decline as ECA
appropriations : are" progressively

strategists in the cold

message

*

or

grey.

investment

for

insoluble,

Common Stock:
::

be

all black

economic development

be

50,000 Shares
:

are

not

cap¬

their-capacity to attract and serv¬
private investment/* A related
contention is that public invest¬

and

action of public

declin¬

a

should

of the key problems

em¬

confiscation, or seizure by
authority. In his

tion,

tain

I

a

Actually, it is all

coun¬

against the risks of (1) in-,
convertibility of foreign currency

Four another government prop for
the: present high level- of United

As

way

public investment is forthcoming.
ital, which is made available ex¬ There are certain
prerequisites to
clusively on a loan basis, ties up economic
development
such
as
the exchange resources of borrow
"sanitation,transportation,, water
ing countries and thus reduces

The

tries

recent

exports.

is

were

capital

abroad,

offering of these-Shares./or sale,

the bank to guarantee pri¬

power

vate investments in

both of goods and technical serv¬
ices, some of whom see in Point

States

in¬

the

open

Furthermore, in the absence of
public

easy

public

the

private

and implied, the loans

white.

all

cap¬

on.

and

by

improve

existing

The

agitated

pri¬

them

both

all

some

and under what conditions,

express

countries will feei
or main¬

conditions

of

under

can

investments. It

poses,

compulsion to create

tain

is the

loans

to
question
of where, to whom, for what pur¬

who

proscribe further loans by
Bank to for¬

that foreign

Indeed,

institutions

two

these

this

that

agree

result under any or

circumstances.

Export-Import

no

to

inevitable

Controversial Role
role

pre¬

are

judicial to both existing and new
private investment abroad. I am

these

The

countries

foreign

Export-

Import Bank Act of 1945 to

derived

"Another Government Prop"
Then

beyond certain

eign countries through agencies of

agencies of the United Nations and
private agencies and persons: The

I

some

the International Bank

Bank and

ments abroad.

countries.J The current apply particularly to operations of
operations of-these institutions are the Export-Import' Bank and in
bn a relatively small scale. ..Dur¬ smaller degree to the operations

(2) loss resulting from expropria¬
.

role.

a

under

that,

agree

circumstances and

by

to foreign

the United States Government or,
wherever practicable, through

approximately $1 billion of

funds.
They
are
un¬
doubtedly destined to play a role

less

private
facilities
or
to
establish government monopolies
to ,the exclusion of private under¬
current and future roles of the
- 4
;
Export-Import Bank and the In~ takings.
These observations are made to
iternatkmaF Bank in making loans
lic

the

present

to

loans

public

-;

The issue of private versus

was

ice

mention

Roles of Export-Import Bank

This

Ex¬

of

sources

them

of somewhat lesi

year

the

loanable

to¬

commitments

new

at

are

extend technical assistance to for¬

should

:

Bank

Hank

development. They have between

Banx

eign governments or their agencies
on the ground that such loans are
bad in principle and prejudice trie
investment of private capital in
several ways.
The chief argument,

but contributes nothing^ to equally important and even more
"stubborn political; social, and cul¬
say
that one is in favor of the
tural limitations. V
^ l ^
\
application of American technol¬
ican

International

Funds

that

limits, loans by the Export-Import

the

alone rule -out- new investment on

such

the

public or quasipublic funds for foreign economic

only

Accord¬

sense.

Loanable

remains

fact

national

1949

Export-Import

made

would

points of leference.

lack

broad

a

versial.

.multi-billion-dollar ^annual
The

than

the credit

port-import Bank and the Inter¬

by the Inter¬

during

$500 million.

tions,

rarely suggested that it may

-

less

no

States

unitea

The

being made on an extraor¬
dinarily heavy scale or that they
predominate in new dollar invest¬

forth¬

In

found.

be

to

strong

now

a

on

tne

Current

governmental and
inter-governmental agencies are

private

easy,

ogy

International

tne

opeia,es

that

desire

no

nomically feasible projects would
'any

part

Treasury,
distinction

so lar as tins

foreign countries during 1949.
ii
cannot be said, therefore, eithei

completely cynical in

are

with

than half of the amount of private
United States capital invested in

be

rate.

large

States

united

concerned,

Bank

to

the

the

than

will

obstacles

Bank

during the

for¬

v

to

countries.

First ofall, there are the hu¬
manitarians,; who welcome Point
Four because -df the promise that
it will be an : organized effort to
,

increased

instances

committed

in

gether

possible to maintain • the
present level of exports without
employing undesirable and im¬
prudent financial expedients; v
•
j
Another, and 1 think erroneous
assumption is that underdeveloped
areas - can absorb
foreign - capital
"at

in-

Government.

and

They

view, the present level of exports,
and hence the existing dollar gap,

not

is

ill

previously

of

poses

it doesn't do so, some other means

Notions

in

country

addi¬

private

broadly speaking, aUnough

certain

ingly,

are

of the present ob¬

aw are

to

coming

.

the world.; It is possible for almost

Some

view

the

vague

the

to

approximately $zab
million, also for development pur¬

scale sufficient to
close the present dollar gap of ap¬
proximately $5 billion and that, if

continually amazed to
-hear people
speaking of Point
tween
the
United
States! and
Four as if it were a program in
friendly
foreign
countries
de¬
signed to facilitate the -spread of being with definite scope and pur¬
pose.
I am also embarrassed, as I
American
scientific
technology
am sure many of you have been
and the flow of American
capital
sided

this

that private capital must be

will

that

cieait

a

for development pur¬

were

amounted

investment are
prone ot make assumptions which
prejudice the issue.
The most
common of these is the assumption

of fill¬

assist

national

and

see

role

funds

often confused notions about Poim

envisages a many-Four.
cooperative
program
be¬

hold

who

become tixed

enough to indicate the

volume

However, all who discount the

own

years.

varied

.

suLicient

in

be done by government.

abroad

explained by the breadth

as

an

Loans

private enterprise do the
job because they believe for one
reason or another that it ought to

mainly by ECA funds dur¬

Vague and Confused

tx.au

political overtones.

pri¬

eventually public capital win
to be piov.ded to carry out

say,

It is

variety

to

ana

obtain

Limed Slates rather

me

on

in

are

to

means

v^s.ors iu

Export-import Bank

be induced to go

that

Point

successor

Yugoslavia,

exception ot

to

poses,

government and

can

removed.

to

Point
source of

that

Israel,

acute shortage ol dol¬
lars, the bank's new commitments

are

believe

well

be

a

ing the dollar gap which has been

ing the past two

.

,

The

Point

to

seems

will

in

there

not

doubts

that

themselves

Chile

eign investment and have genuine

Some have been able to

persuade

that

do

stacles

to

This is

Government

observers

those

are

blan¬

our

it

grander

a

quite sincere and objective.

large-scale development
programs and the purchase of the
required
American
goods
and

y e a r

s

of

to finance

after the Pres¬
ident

of

some

on

the purposes cf Point Four.

there

Four will open up a new

what
to

who, like

exporters,

to

countries

foreign

many

Program

ought

have

Point Four.

words

devoted

tnat

point of view which empha¬
sizes
the
political objectives of

of written and

spoken

the

now

realize

I

abroad

giving them
to

doing what

on

capital

vate

underdeveloped

alternative

Afghanistan,

to

now

in 1949

who

out

the

flood

a

the

of

American

those

were

muse

irom

meeting

some

Pact,

dishments of Communism.

Since

then there has
been

lot

mitments

iaucr

tional

com¬

However,

Now

improving

for

measures

Program
in his inaugu¬

tne

lion, of which the principal

mil¬

fioni

the Marshall Plan

as

of the International Bank because

loans of $<i41

new

With the

go

century—only

essentially defensive mea¬
against the spread of Com¬

sures

to

for

ing 1949, the Export-Import Bank

certain Latin American countries.

as

said

aptly

cails

13

authorized

scale.

(I) technical assistance; (2) in¬
guarantees; (3) tax concession; (4) bilateral invest¬
ment treaties;
and (5) private foreign investment. Says it
would be mistake for government to replace private investment.
has

Four

(1105)

ican capital and know-how began
going abroad about the turn of the

vestment

Someone

Point1

in underdeveloped areas.

business

financing and is prejudicial to private capital. Reviews such

elements in program:

of

essence

CHRONICLE

has been doing ever since Amer¬

Commenting on vague and confused notions of Point IV Pro¬
gram, Mr. Maffry points out problems facing both public and
private capital in its implementation. Says roles of ExportImport Bank and World Bank in this field are controversial,
and holds loans rather than equity capital is wrong method

r

and

vestment

Point

of

FINANCIAL

Four, which is the stimulation of
private enterpr.se and private in¬

By AUGUST MAFFRY*

»•'

&

COMMERCIAL

THE

Number 43.90

171

33

14

(1106)

THE

COMMERCIAL

I

spoke

financial

Oi Gold Standards

couple

Director, International Monetary

Fund

with

hold

at

gold

a

far

so

for

the

My big

difference

with

Rex

is

gold

Leland

Professor

see

Robinson

that

he

gards

have

we

a

all

the

of

all

best

of

us

you

a

can

said,

it is

have.

am

a

that

But

skeptic.

on

I

do

a

pro¬

not

are

I

am

Dealer

thing.

is

that

have acted better than most
groups of industrials and many of the
issues have succeeded in
reaching the highest levels attained in
over three
years.

a

and

But don't

too

While a part of this
better-than-average performance can be
attributed to the general
improvement in investment demand for

on money

many

it nearly

because—I

quality equities, there are a number of other factors which
contributed to the better demand for bank shares.
The outlook for continued
stability

peo¬

you

rule:

a

brought

am

to be

us

be

of

source

ard.

I

you

Bernstein

is

Robinson

sor

M.

has

between

more

us

are

a

from

come

ard

seem

Let

us

make

no

we

what

mean

by

ard, why
does.

we

mistake

have.

the creation of money

second, it is

Gold

A

of

countries pursue

the

you

have

we

and

ought

our

be

to

It

purpose.

policy.

A

gold

standard

system.

We have

ard, for securing stability in in¬ the monetary
ternational exchange rates.
standard
That gold

a

will

had

system

with

pressed

for

tutory ininimum of, gold
1933,

and

withdrew

the

payment to $1.80

and

a

standard it is to take a bit of sub¬
stance and put a frill on it and
say unless it has the

good.
of

a

We

know

lamb

frill, it is

that

the

of

a

the

monetary system
The monetary system

quality

chop is in the quality
cooking, and

of the meat and the

starts

with

the lace panties by which the
diner will hold it.

never

ends

not

have that today?
We have a gold
that

provides

I think

we

standard

As I

of

States,
its

insofar

gold

as

can

creation, is dependent

inflow of
of

gold

the

or

banks,

limit

fundamentally the gold

upon an

will

give

No

matter

standard

monetary

you

you

a

what

kind

would

you

of

have

gold
had if

had the gold coin standard
that Professor Robinson has
sug¬

you

gested,
not

whit

the

upon

would have

we

one

more

creation

no

of

do¬

money

mestically.

Now,
having

I
a

gold

our

country

as

standard

bank

because
the world

in

can

acquire
all
the
dollars
it
wishes
by selling. gold to our

Treasury.

Any

central

the

if

has

world,

it

bank

dollars,

convert those dollars into
far as I can see, that

in
can

gold. So

provides suf¬
ficient restraint in the creation of
money

through the gold standard;

•Stenographic
Bernstein

Export

at

Managers

report of an address by
luncheon meeting of the

Club,

New

York

Feb. 2i, 1950.




City, |

*

System

and

because

near

-

reserves

the

gold coins?

acts

Treasury acts
intelligence.

with

But

the: most

wis¬

dom

the

and

restraint

part of

central

in

policy

on

businessmen, bankers,

banks and

treasuries,

you

get nowhere and I refuse to
surrender the concept that' it is
the policy that counts and
not the
trimmings on the standard that
count. It is the
policy that counts.
I

would, myself, be disturbed
to find the American
people pre¬
pared to trust
as

giving

the

so

simple

public

device

a

coins

as

the

intelligent people, witty

people,

people who
understand
money and the economy,
prepared

±

,

,

,

PUt SO much trust in the
gold

coins

as

to

Federal

the

and

believe

USe

that

Of

in

on

.A.

public

in

the

They had

Reserve

a

been

for

•

of

s/;"

in

the

Chase

First

get

a

dent

that

Bank

Mr.

this

of

is

gold

New

York,

vicious

a

it

is

Sproul,

Federal

have.

$1

P.

mistaken

addition

standard
is

have.

we

is

that

totally
gold

Mr.

vicious.

time

Lef¬

it into his head
a

couple
gold for

of

It

is

be¬

that he must get

thousand

dollars

of

thousand dol¬
threat¬
of the
and the mone-•

couple

a

not

need

think

that

a

I

everybody

behaviour

is

by

think

the real

36%

32%

441/4

37%

51

38

57

.

49%

66

3.00

4.55 '

107

3.00

2.80

107

101

102

82

80.00

6.40

1255

1185

1300

1145

304

309

287

295

252

:

67

56%

14%

4.07

59%

52%

54%

47

3.70

.

York

S.

Trust.—

272

240

243

47%

1.80

3.81

47%

42

45

371/4

92%

4.00

4.31

93%

85

90%

80

43% *2.00

—

Trust.

4.60

655

35.00

stock.

5.34
■■■

:45V4
670

39%

199

44%

625

<550

37

540

'

/

because of the added
deposits and accounts it obtains.
; ■
Because of these factors it seems

likely that the trend towards
larger banks through mergers will continue. Possibly the high
prices of some of the smaller institutions in the above list
gives

evidence of such

An
among

a

can

attractive

value

New York bank stocks

TRUST CO.
Circular

be

alerting

page

possibility.

MANUFACTURERS

35

NATIONAL BANK
of INDIA. LIMITED
Bankers

request

Laird, Bissell & Meeds
Members

120

New

York

Stock

Exchange

BROADWAY, NEW YORK 5, N. Y.

"

;

/ Telephone;, BArclay 7-3500
Bell
A.

Teletype—NY

Gibbs,

1-1248-49

Manager Trading Dept.)

the

Office:

Government

26,

in

Bishopsgate,

London, E. C.
Branches

on

to

Kenya Colony and Uganda
Head

in

Colony,

India«, Burma,' Ceylon
Kenya
Kericho, Kenya, and Aden
and

(L.

on

49%

10.00

problem in hand

Continued

411/2

52%

it

businessmen and alerting our
bankers and our monetary author¬
to

44%

3.70

270

our

ities

4.14

2.00

17%

reckless. On the contrary, I think 1
that
the
way
we
can
prevent
reckless

1.80

54

82%

17%

gold standard.

that

43%

97%

101%

19%

Now, don't think I believe, be-1
cause I don't want gold coins, that
don't

351/2

4.61

Banking System
tary system, and I think we have
no
right to submit our monetary,
system to such a threat.
' ";

do

38%

4.68

lars' worth of deposits, he
ens
the -whole
stability

And

4.17

shareholders realizing the book value or a price for their shares
substantially above the market price. At the same time the insti¬
tution acquiring the business is able to
expand its earnings base

nut takes

some

1.60

36%

152

95

City for the past few years have not
a
sufficient rate of return to support the shares of the
various institutions at book value. As a result
bank stocks have
been quoted at discounts of as much as
25% to 50% from asset
values. Because of the nature of the
banking business, mergers,
consolidations, liquidations or sale of assets can be accomplished
without too much
difficulty. These methods become the means of

"The place for gold

is

it

every

38%

139

earned

.

and

the Federal Reserve Banks
and not in the pockets of our
peo¬
ple."
But I want you to see why
cause

155

103%

New York, which has also been a factor in
the market action
and current price of some of the shares.
This is the merger trend.
The banks in New York

the

As

441/4

3.33
3.93

to

in

it

a

48%

5.00

While the above considerations have been
important in the
general rise of bank stocks, there is another
development, peculiar

the

don't

Morgan
to

$21%

2.40

■"Plus

T think

Co., thinks that this is

$27%
45%

0.90

U.

Leffingwell, the

J.

$25V2

4.00

Public National..

from1 experience
and
good sense.
I think it is no acci¬
dent that Russell
of

$27%

4.15

14.00

National City

comes

Chairman

Low

4,79

that

to
I

accident.

an

High

19V4

_

Morgan, J. P

the

thinks

Low

59

Reserve

addition

we

High

Manufacturers Tr.

acci¬

no

-1949-

%

Irving Trust

New

is

Allan

the

standard

think
it

of

it

Price Range

1250

National

Guaranty Trust.

to

stands in

one

Price Range
:
-1950-

150

Natl.

Corn Exchange._
Empire Trust

—

101%

Bank—

Commercial

Yield

Div.

$27% $1.30
48%
2.00

National—

Chemical

leeway
have

morning to
of gold.

Frankly, I think
President

Trust---

Brooklyn Trust—
Central Hanover.

gold—the

not

cated

Price

of Manhattan

Bankers

gold to liabilities,

they

Indi-

Bid

Bk.

System

some

would
worry whether some
line

Current

—

in

assets

be

ratio

that

so

we

a

''S,

what the liabilities

its

hope would

a

a good
policy. And
would, myself, be disturbed to

find

down

of

were

means

substitute for
I

and set

intelligence;, fingwell said,

and

have

can

will

regard

central

any

the

the

detailed
type, the most, if you
wish, oldfashioned type of
gold standard
that your minds can
conceive, and
without good sense, without

more—

limitation

—

intelligence, if

restraint

restraint

standard

good monetary
businessmen act with

if

-if

and

prepared to permit
basis of that gold.

are

the

on

with

expansion

the

commercial

put

was

important in increasing the interest
of investors in the shares of New
York City banks. The current
position of the different shares, showing the
present price, indi¬
cated dividend, market
price range so far in 1950 and for 1949,1 is
presented below.

to go to the Federal Reserve Bank
of Chicago and

have the

policy by the busi¬
Or maybe I better start
in the other direction
and say that

acquisition

secondary

where

we

nessmen.

Reserve

a

the

of

banking in

on

group of bank trust officers to

a

,

million worth

the

and

it—all

Dr.

by

restraint

and

top

on

with

wise

system,

authorities
:

policy

Federal

credit

starts

It

I believe what
we

of money on the basis of that

gold,

It

said, I believe

gold by the Treasury and the
Reserve System—the is¬

of

want

System,

wise

upon

Federal
sue

you

standard.

a wise
policy—a wise pol¬
icy by the Treasury, wise
policy
by the Federal Reserve

The crea¬
the
United

in

money

want.

you

need is

the creation of money.
tion

gold

there.

gold standard.

do.

today

limitation

a

the

good, wise policy
gold standard.

These two points: We need a
gold standard, because it provides
a limitation
upon the creation of
money within a country.
Do we
;

I

is

not, so far as I
see, any mechanical
concept
gold standard that gives you

can

no

It

out¬

V._V.J"

of the leading economists

one

These factors have

;

gold

we

standard.

the

reduction in

share, compared with $1.60 in 1948. Later the
quarterly basis of 45 cents as compared with
the former semi-annual
payment of $1.30. Recently Corn Exchange
raised its quarterly rate from 70 cents to 75 cents.

during wartimes,
attempt to bor¬
have had a collapse with row a
gold standard is.
$100 million.
-V-V;
///;!
When you say that a
the gold standard
gold stand¬
during a world
The people who worked in the
ard
must
be my kind of gold depression, despite the fact that Federal Reserve
System in 1933
'standard
or
his
kind
of
gold the country was in the hands of used to sit up every night
hoping
standard, or her kind of gold people who believed in the gold that when
they totaled the banks
-is what

a

,

in

misuse of

that

are

as against $12.00 paid in
Public National declared a stock dividend of

previous year;

stock

the Federal Reserve Bank of New
York was to oeing below the sta¬

monetary

back

,

Legislation is currently being considered in

10%, and Irving Trust declared an extra of 10 cents a share in¬
creasing the total payment from 80 cents to 90 cents. National
City, by paying 20 cents extra at the year-end, increased the 1949

:

Do you realize how

reserves.

System

emphasize this question

me

be

favored

$2.00, bringing total payments to $14.00

done.

pressed for monetary reserves.
that the Federal Reserve
will

,

which has

At the end of last
year Bankers Trust raised the annual
pay¬
a $2.00 rate from
$1.80; Guaranty Trust paid an extra of

means

Banks

consideration

ment to

The Gold Drain of 1933

are

ago.

to move, up in
response to this statement.

undone

.1

Of course there will
in general, earnings for
just ended.

year

investing a portion of trust funds in high qual¬
such as bank stocks. This had an almost immediate
effect upon the market and New York
City bank shares seemed

wise

not prevent misuse of

stand¬

same

has

in

even

believed

are

ity equities,

greater

a

Misuse of Monetary

internally;

they have

It

profits

adjustment in Federal Deposit Insurance

an

another

and the prospects

\ Sometime

the

Standard Does Not Prevent

Let

limit

device when other

a

am

device

to

the

choosing

have is adequate for

stand¬

a

First,

purposes:

from

authorities.

a

banks, but,

New York called the attention of
the desirability of

bur¬
If, for example, as in 1933 did
policy. happen, the public draws out a
if you choose a wise
policy, billion dollars in gold coin from
content to say that the gold the
banks, it means the banks will
of

standard

want it, and what it

we

A gold standard is

two

I

about

gold

a

tary

a

con¬

present rates,
in some
form, will result. This could add from 5%-8% to the level
of
operating earnings reported last year.

gold stand¬

a

not, unfortunately

freed

den

And

bright

so

in the troubled times

in

sense

possibility of

Congress

should say a gold coin stand¬
When you do that, you have

what

or

not

fact
little

a

nostalgic for the things that

passed and that

now

for

the

little older and

good

Whether you have

I

think, myself, that the differences
that he is

and

ore

Although
determining influence on

At present,

those of the year

look for bank shares.

instability and volatility

added to the economy a
n£wL ad¬
ditional source of instability and

policy.

ai d—

s

little.

very

wisdom

The

individual

near

assessments is

•

E.

running slightly ahead of

variations by

,i'-

right monetary volatility.
'
>>».;',v /; A- ^;"tj
There
is system,
the
right
In -technical
monetary
terms, every time
mechanism for a
very
little
I
community, by the public converts a dollar de¬
have
to
dis¬ adopting techniques. To
my mind,! posit into a gold
coin, it has en¬
agree with in what is far more important than
gaged in open market transactions
what Profes¬ techniques,
far more important, contrary to the will of the mone¬
,

decline in business.

1950 should be

gold standard, you have added
to the monetary system another

—I

a

have

attention.

banking operations, earnings should be well maintained
the event of

to
have

you

in earnings is

sideration that has been
attracting investors'
general economic conditions will exert

going

When

;

City bank shares for the past
During this period bank stocks

a

believe

not

am

We

New

This Week—Bank Stocks
The market action of New York
few months has been favorable.
-

gold.

gold

give

is as good as
enthusiastic dis¬

unfortunately,

.

he.

a

of

disaster,

us

the

get

sort

disaster

standard

our more

we

gold

standards.

as

have

By H. E. JOHNSON

ple think it is too important. We
have had a gold standard of the
type that Professor Robinson has
asked for, and it
nearly brought

ciples of the gold standard think
is, I would, myself, be quite
happy with the monetary system

standard

and

I

be¬

I do not regard my¬
self as a nut on the
question of
gold.
I think the biggest trouble

it

a

gold

giving

And

what

gold

some

T

as

from

the

as

standard.

of

purpose

standard.

is

so

I

disadvantage.

that

or

it is adequate

see,

Bank and Insurance Stocks

a

debating

underestimate my views

Now, if I believed in fact that

gold

regard it

can

Robinson.

that

-

really tne second aspect of the
gold standard which I emphasize.

re¬

what

not

I

as

'

;

York

ago—just

handicap

a

Democrat and

essential than gold coin standard.
have

we

at

Mr.

with

that

'

New

months

fessor—but

Cites gold drain on Federal Reserve Banks in 1933
and contends gold coin standard is not
required to maintain
gold as international standard. Holds solvent banking system

I

not

am

tration.

standard at $35 an otrnce and that
it is excellent for our trade.

of

"Alter all, he is only a professor."
But this is something in wnich I

International Monetary Fund expert maintains United States
not only has a
gold standard, but the best kind of gold stand¬
ard. Denies gold standard
prevents misuse of monetary system, and stresses need of a wise policy in monetary adminis¬

more

writers

Thursday, March 16, ,1950

than

£

this question to the

on

of

other

CHRONICLE

fore the election. And I told them
that I
know
it is easy to
say

By E. M. BERNSTEIN*

•

FINANCIAL

any way it would do
harm a wise policy.

We Have the Best

Research

&

Zanzibar

Subscribed Capital

Paid-up
Reserve
The Bank

Capital——
Fund.

•

•

-

£4,000,000
£2,000,000

£2,500.000

conducts

banking and

Trusteeships
also

every description oi
exchange business

and

Executorships

undertaken

.

.•

*r

Volume 171

Number

4890

THE

COMMERCIAL

Economist Sees Retail Business

Reverting to Normal This Year
/

Retail

fall

gains.

They

made

By J.

burg, Pa.,

Walker, Econ¬

sales to

Macy

the

&

Inc.,

Co.,

New

York

City,

pressed
view

tios

ex¬

tion,

easy

situa¬

rapidly

with

rapidly

ex¬

to

come

Q.

business

Forrest Walker

of

first

the

1950

and

quarter

the

imme¬

outlook, Mr. Walker stated:

"We

-

are

the

close

now

to

the

end

first

quarter oft 1950. 'It
has been characterized by unsea¬

sonably

and

uneasiness

somewhat

about

the

dustrial production
last

two

future.

In¬

has recovered
it

months

and

an

has

befen

moderately below the

only

same

months

of

one

March figure
substantial

year

is likely to

decline

The

ago.

show

account

on

a

Of

the

coal strike.
During most iof
quarter, production of auto¬
mobiles, steel, textiles and many
the

other

products

tained
tion

at

has

high

been

rates.

main¬

Construc¬

activity continues

at

high

a

level.
"There

has

partly

troubles.

increase

some

ments

assignable

Personal

for

however,

the

of

last

modity

labor

income

to

pay¬

quarter,
be

.

close

in the first quar¬

Wholesale

year.

prices

to

current

likely

are

to the aggregate

ter

have

com¬

been

fairly

firm and farm products and foods
have averaged a little

higher in

recent

about

5%

below

corresponding period of last

the
year.

"Total, retail

trade, including
sales, has been run¬

automobile

ning

only slightly below a year
but soft lines have been ad¬

ago,

versely affected in

by

unseasonable

not

sales.
now

sections

some

weather.

It

is

the

a little larger
period last year.

coal

strike,

the

confidence expressed by the yearend forecasts will have

been jus¬

tified."';

Durable

look

back

that

it

and

added,

to

now

readjustment

of

"If

"it is evident

price

was

largely an inventory
readjustment.
Stocks
became depleted
during the sum¬
months

mer

hard

lines

steel

and

the

situation ; in

was

aggravated by the
Rapid increases in

strike.

production in the last few months
are

rapidly

balance.

restoring

There

is

inventory

never

perfect
adjustment of production, inven¬
tories and
be alarmed

sales and

we

need

not

if, here and there,

we

later find that moderate cutbacks
in production have become nec¬

Indeed,

essary.
come

such

we

should

evidence

of

wel¬

in¬

our

creasing

ability to keep output
properly adjusted to current sales.
These

cutbacks

accumulation

prevent excessive

of

stocks

costly readjustments that
essary before production

and
are

the
nec¬

can

be

resumed.

"In

to

highly

the

great boom years after
the war, we have had large wind¬




of

and

be

examine

we

little

more

closely,

we

other

the

hand, sales of stores in

durable

grouping which in¬
cludes
automobiles,
have
been
absorbing higher percentages of
disposable income since 1944. In
the

nondurable

goods

classifica¬

tion, sales of department stores
have returned to the
prewaif ratios
to

disposable

normal

income;
apparel
quite close to the

are

ratios; sales of drug stores;

general

merchandise

filling stations

stores

and

below the pre¬

are

war

percentages; and sales of eat¬

ing

and

drinking establishments
are
still running higher than in
prewar years. Among the durable
goods
stores,
sales
of
jewelry
stores

which

group

the

the

represent

old

has

only

moved

sub¬

back

to

J.

R.

approxi¬

or

Dunkerley

mately
the

over

previous

in

savings

associations, but their
present

is

about

number

and

1.6%
These

year.

$55 billion of savings deposits are
more than double the
$26.4 billion
of savings deposits in 1940.

in

legal

$1,300.

of

policy¬
life

reserve

in¬

'

<■

Banks have

leadership

stitutions.

largest

They

block

savings

always maintained

among our thrift

hold

invested in the

now

ings bonds

still

of

the

United

the

A

banks

States

and

thousand

ployment
the

of

bonds

funds

have

Since

1940, these

nearly

grown

three

times.

During the
life

the savings in

year,

insurance,

depends
the

$48.1

policies,

Banks

billion

increase

lion,

to

$51.0

billion,

an

of approximately

exceeding

combined

savings

$3 bil¬
dollars
the

in

growth for the

deposits

in

year

banks

of

and

the

address

Annual

New

by Mr. Dunkerley before
Savings and Mortgage Con¬
Bankers Association,

American

York

City, March

13, 1950.

Must

If the banks of

by

Do

Better

'/

realize

competitive

that

period

in

such

a

let

of

case

savings
banks

companies,
tate

consider

us

of

investment

in
es¬

are

their largest

associations

invested

are

ing

of

hard

exceptions,

lines,

are

now

This announcement is not,

of

with

an

and is not to he construed

offer

to

huyy

any

con¬

compared
of

these

the

their

real

estate

savings

institutions

tween 1940 and 1949.

as, an

offer

loan

portfolios
same period?
Mort¬
in all banks increased from

billion

to

$18.0

Continued

billion,

on

page

period;

of

harder if

are

soft

they

improve

their
the

is

March 16, 1950

:

;

C

:

;

277,978 Shares

i

work

to maintain and

Commercial Credit

position;

competition of both

types of stores for the

solicitation

any

mer¬

must

relative

or a

i

predominantly

are

and

that

that

goods

sell,

secur¬

sonably hope to maintain for
who

to

of this Common Stock:

percentages of con¬
income than they can rea¬

consumer
■

■

■

Better Selling and Prosperity
"The long period of easy selling
and rapidly expanding sales ended

Common Stock

:

($10 Par Value)

-

likely to become much

keener.

•

'

in

1948.

sells

Merchandise

itself.

But

maintained

and

longer

no

sales

can

improved

if

be
we

The

Company has called for redemption all outstanding shares ot its 3.60%
Preferred'Stock, each share of which is convertible into 1H shares of

Cumulative

Common Stock. The Underwriters named in the

Prospectus have severally agreed,
certain conditions,.to purchase such of the above shares (which have

make the extra effort that
present

subject

conditions require.

been reserved for issuance upon such conversion) as are
expiration of the conversion privilege on April 4, 1950.

broadest
the

and

output

that

the

.We

of

farm

world

have

the

market

richest

for

factory

ever

has

and

known.

Our

public is able and willing to
buy if we offer the kinds of goods
it

wants

at

tractive.
a

prices

We

situation

be

deems

at¬

to

issued prior to the

and after the

tive Preferred
as set

not so

expiration of the conversion privilege of the 3.60% Cumula¬
may offer and sell Common Stock
Prospectus.

Stock, the several Underwriters

forth in the

confronted with

are

where

markets

must

cultivated

by greatly intensi¬
selling efforts. If we run into

fied

difficulties

in

1950,

it

have

lacked

will

merchandise,
ing
be

it

Prior

to

power

kind

latter

be

or

part

because

abundance

we

of

of
we

of

good
because purchas¬

is not available.

because

the

the

not

have

pricing

and

to

do

selling

that

keeps goods moving. Better
selling is vital to the continuance

of good

times."

.
.

Copies of the Prospectus may be obtained from any of the several -underwriters;
including the undersigned, only in States in which such underwriters are qualified to
as dealers in securities and in which such
Prospectus may legally be distributed..

act

It will

failed

,,

/

'The First Boston Corporation

be¬

What about

during that

siz¬

higher

sumer

in

$9.38

this

as

it

We

growth

"The

some

reve¬

producers.
Nearly all of the
employable funds in savings and

nue

these

merchants

In

and* insurance

Increased Competition Ahead

practical significance of
changing ratios of retail
sales to disposable income is that

em¬

important; but real

is

loans

the

the

funds.

gages

highly

is necessary to exert
siderable effort and to spend
one

Now

loan

maintain

to

paying 2%.

are

real estate loans.

country are
their leadership
in
field, it will be necessary to
do
a
better
merchandising job
than we are doing.
Many do not
to

few

the

this

seem

*An

thrift

Merchandising Job

from

grew

large

encouragement

net funds accumulated behind life

insurance

a

the services provided by banks to
take care of their savings.

represented by

as

to

a

Employment of Savings Funds

country
extent upon

the

of the Rocky Moun¬

some

states,

welfare

previous year.

in¬
one-

are

in

Seventeen thousand of the nine¬

of

as

England and on the
Coast,
some
commercial
paying 1%% and ll/2%;

West

sav¬

general

the

the

of

have

much

New

banking
offices
throughout the country
savings
facilities.
The

over

many

as

all savings.

on

In

scattered

approximately 13.8%

position.

now
paying 1% up to $2,500
$5,000; and some are paying

or

furnish

or

business

our

banks

creased their rate

billion,

$10.9 billion to $12,4
increase of $1.5 billion,

great

savings

creased from
an

our

to maintain

are

mutual

1%

Government.

teen

this phase of

A survey just
completed by the
ABA shows that the
general trend
of interest on
savings is slightly

tain

During 1949 the share capital in
savings and loan associations in¬

certainly have to spend
give more atten¬

money and

to

we

are

in¬

of savings, unless
with the billions of

you compare

commercial

a

throughout the country are still
paying 1%, many are paying that
rate on a higher amount.
Where
they paid 1% up to $1,000, many

companies is estimated at
80,000,000, or more than half of
the population.
a

have

of

half of 1%, so that many are now
paying 2%, and a few an even
higher rate.
While the vast ma¬
jority of all commercial banks

aver¬

surance

were

million,

snail

we

more

upward.

approximately $900".
approximately 10,000,-

investment

The

in
ac¬

are

shareholders

age

an

ference,

relationship.

savings

holders

$900

On

in

$55.1
billion,
increase of

Spend¬

ap¬

accounts

average

in

States

J

category
are
fast
proaching the prewar levels.

savings

The

United

the

are

durable

have

000

commei':

banks

60,000,000

banks.

loan

-

that

people

savings

the

estimated

count is

in

cial

over

than doubled.

Dec.

and

insur¬

if

is

bank

or

necessary to spend as much as
of 1% of our savings
deposits, but

more

It

savings
year,

a

heard

ever

tion

to

million

with $10 million of
savings
spending anything like $25,000 a
year to promote its savings func¬
tions?
It probably would not be

*

asso¬

their net funds have

$10

a

would' spend

bank

Since

There

banks

Percentagewise,

$10

a

1940,

we

end

of

savings and loan

institution

spending $25,000
you

companies gained 6.0%

31, 1949, "sav¬
ings
deposits

or

percentages of disposable in¬
come spent in stores of the non¬

the

the

As

figures a
find that

of

better

a

that

means

$25,000 a year in advertising and
promotion.
Have you ever heard

their 1948 year-end figures.

of the year.

:

the

at

ance

are

likely

are

expenditures

Nondurable

we

in

ciations.

at

and where

new

spending ratios

both

Iook

a

where

rose,

saved,

shares

com¬

to

Hence, it

take

As

the

the

1949,"

be

ing Ratios

dollar

Approaching Inventory Balance
we

well

satis¬

moving back to normal.

sellers

same

Walker

be

directly reflected in retail

than in the

Mr.

levels.

income

as

such

These

considerable

business

is

respect

savings and mortgages.
would

were

purchase

and

purposes
are

chants

"As

with

homes, services and various other

probable that the physical volume

for

1950

year

a

could

the

of goods sold will be

Except

an

all

high

Moreover,

money

During the current
wholesale
prices
have

averaged

As

new

for

weeks.

quarter,

for

urgent needs

stores sales

been

in unemployment, partly seasonal
and

decline.

greater

sharply since last October
the

to

more

weather, acute labor

warm

troubles

demand

used

end.

an

of

families created

new

more

Concerning
diate

The

petitive

fied, the spending ratios started to

panding sales,
has

of

merchandise.

the

com¬

bined

the

at

invento¬

must do

minimum ap¬
promotion ol

a

the

That

million

'

Association

leadership in this field they

as

propriation for

savings.

merchandising job. Notes more rapid growth of business of
mortgage institutions and reports better relations of banks with
other savings and loan associations.
'

;

.

types
result, the
percentages of disposable income
spent in retail stores rose very
of

conditions

selling

However,
consumer

to maintain

are

at

abnormal

competi tive
the

war,

were

ments

normal

and

year.

of

very low levels, re¬
placement needs and the require¬

re¬

turned to pre¬
war

not

to

ries

re¬

tailing has

do

United States
Savings and
League considers % of 1%

of share funds

Dunkerley reviews the rapid expansion in recent years of
savings and mortgage loan business, and points out if banks

Normally, these ra¬
change greatly from

year

The

Mr.

disposable income of

close

the

that

the

country.

Bankers

15

sums of
money in advertising
promoting the business.

and

R. DUNKERLEY*

American

little better perspective if we con¬
sider the changing ratios of retail

omist of R. H.

able

Deputy Manager and Secretary, Savings and Mortgage Division
'
too

us

complacent about our selling tech¬
niques. Perhaps we can obtain a

March 9, Q. Forrest

(1107)

Mortgage Business

Sales Training Conference at the
State Teachers' College at Bloomson

CHRONICLE

Loan

r

Annual

FINANCIAL

Status oi Savings and

Q. Forrest Walker reviews merchandising situation resulting
from 1949 readjustments, and holds
easy selling and rapidly
expanding sales have ended.
Speaking at the

&

Kidder, Peabody & Co.

or

41

16

(1108)

Our

By

Federal

inadequate and obsolete and ascribes present

sion movement
current

security

age

due to

as

benefits to take
Government

pen¬

Keening

Contends
designed as superannuation
of eld workers, and advocates Federal
provide mechanism whereby annuity

care

should

current

handling of our
pensions high¬

age

recent

lights the great deficiencies in
basic

collective

our

bargaining
is

ma-

There

inery.
no

pro-

vision

for

careful

def-

iiiition
s

u

of

is-

and

s

e

constructive

pla.
h

c,

for

n ng

handling

e

basic

of

labor

demands.

The

controversies
thi

are

into
d

own

caul-

a

The

r o n.

rent

not

articles

of

employment
among
salaried workers and

^anual and

between the latter groups and ex¬

ecutives

rapidly disappearing.

are

One

definite guidepost for future
collective bargaining must be the

complete
ences

which

in

the

exist.

now

lishment of

were

of

removal

this

popular

critical

a

direction.

most

differ¬

The estab¬

pensions is

Pensions

before

and

remote

wind

during

a

sions

making
conces¬

towers

will

hoping

blow

its

that

the

but know¬

over,

ing full well that it will not. They
will

have

out

an

concede

to

and

The

answer.

work

conflicting

parties participate in the sparring
until a pattern is molded by the
negotiations with one important
This pattern is then
blanketed widely as

employer.
necessarily
the

essential

characteristic

of

personnel.
tended

as

All

ees.

Now

must

assumption

anteed

weekly, term

extension

The

of

unionization)
this

of

problem

of

program

for

be

old

scheme applicable to

private

age

retire¬

with

a

and with

a

integrated
system

governmental
Moreover

all industry.
systems

can

objectives such as
supplementary retirement bene¬
varying

fits

its

for

workers

superannuated

own

establishment

the

or

of

supplementary retirement claims
by all workers. These can be de¬
veloped maturely only
through
careful
with

negotiations,

of

associated
the de¬
plan.
But the

agreement

an

tails

Federal

a

employers

forced

on

resisted

They

were

first step by a

stubbornly.
to

the

subject

collective

for

would

outlines
tacked
of

our

The

it

in

time

the

bargaining.
out freely

even

when its

to

genre

They at¬
of speech

welfare-statism.

as

approach

the

of

proper

indicated by a Fed¬

of

absence

of

a

as

finding board.

mands

lack

plan

a

were

eral fact

issue

not work

the details of

their

take

Federal court which

established

They

the

constructive

a

inevitable

time

among

"domestic

sional
of

not

the
in

frankly

lines

of

collective

on

the

seek

to

discussion

large employers to support of the
oaeral program.
They no longer
rear this Federal
activity since it
will

relieve

liabilities
burden

to

In

this

con¬
man¬

At such a national bar¬
gaining table, they can develop
the overall guides to detailed col¬
agement.

An

address

by

Mr.

Barkin

b^Ure the

JndusMa' n-'ations Research Association,
Dec. 29,

1949.




is

The

not

oersrmal

The

buying of the

L.

move

from

2%s and the Vies hold

currently being bought by institutions that

The price spread

tap bonds.
in

of the

favor

holders

senior
partner,
Earl
Co., who speaks on

of

The

of

the

field

to do

in

so

are

gree

in

earn

a

restricted

longer

bonds

taking

are

issues

so

.

the

of

steel

for

banks

for

higher

many

meet the

to

swaps

yielding

strong, despite the
NEW

FINANCING

a

pen¬

liberalized old

people

the

herents.

system

has

mentioned

Older

most

the

gained
employ¬

of

are

course

significant

ad¬

There has been

liberal

old

age

agitation
pensions for
drive gained

The
momentum during the last year
despite the high leve7s of employ¬

many

years.

ment.

and

issues,

demand

dent

which

to

seems

tivity

and

sions

and

movement

tions

are

which

certainty

subsequent

the

reces¬

the types of varia¬

spread

fear

and

un¬

older

persons.

they find

among

new

Trust

George A. Braga

Sugar

as

a

Vice-Presi¬
Czarnikow-

of

Company,
of

Co.,
the

announced

President

Company,

various

of

and

other

a

com¬

panies.

David H. Bangs
(Special

BOSTON,

MASS.

—

Bangs is engaging in
business

quite

offices

from

Street.

He

Trusteed

Opens

to The Financial Chronicle)

was

David

a

H.

securities

at

53

State

previously

with

Funds, Inc.

AWAITED
are

expecting

an

Named Directors

announcement
offering

of securities which will be used to finance the deficit.

Guy de Simone of Security Ad¬
justment Corp. and David Palley

There

seems

have been elected directors of the

general agreement in most quarters that there will not

South West Penn Gas Corp.

be any

long-term ineligibles (at this time) in the deficit financing.
On the other hand, it appears as though the securities that will be
used to finance the deficit will go mainly to commercial banks,

despite the mild deflationary pressure of the monetary authorities
on the money markets.
An increase in Treasury bills would not
be unexpected and an offering of certificates seems to have plenty

u. s.

of followers.
A longer

while

y

few

a

maturity such
in

the

note would not be surprising,

as a

financial

district

are

looking for

a

i

1%%

except for refunding purposes. This would
none
of the higher-coupon obligations until

mean

early fall.

1

>

WORLD BANK

BONDS

to
least

I

at

★

★

★

|
j

seem

coupons

TREASURY

r

obligation. As far as thej latter issue is concerned there are
not very many who are predicting the use of 1%% or higher

BILLS

i

>

>

CERTIFICATES

Termination

!

serial

job

more

Technological changes

Continued

difficult.

are

on

of-the syndicate, which bought the World

rapidly

page

41

Bank

obligations

resulted j in yields of these securities being
brought down to levels (about ..20 under original yields) which
are in line
with current money market conditions. Considerable
interest has been in evidence for. most maturities with the greatest
activity in

portedly

the longer-terms.

have

been

maturities.

the

The smaller commercial banks re¬
prominent buyers of the longer

|.

•

-

*

Wtt R. G. Mills Co.

Andrew J. Raymond

1

Dominion Securities

(Special to The Financial Chronicle)

Aubrey G. Lantsvon

CSppfial to The Financial Chronicle)

ST.

LOUIS.

MO. —Walter

A.

BOSTON, MASS.—Andrew J.
Raymond has become associated Stay has become associated with
G.
Mills &
with Dominion Securities Corp. of R.
Co., 314 North
New York

City.

He

was

formerly

Broadway.

with Carver &

Co., Inc. and in the
past
was
Boston
manager
f3i*
Schoellkopf, Hutlon & Pomeroy,

Inc.

BONDS

■

most

forward

current

W^en they are released,
a

City,

Manati

deposit

be

Schroder

director

and

director

into the

come

of

Banking

Schroder

Rionda

restricted

ef the

York

election

uncertainties?

Many money market followers

The surges in economic ac¬

the

a

NOTES

This drive for

have

are

wishing
B.A. de¬

Director

a

Henry

director. Mr. Braga is

about the first of next month, embodying the terms of an
to be rather

who

requirements.

Braga

they will continue to be attractive for switching pur¬
tvese

those

Students

work for

may

movement.

pension

it.

J.

New

However, will there be enough eligibles

poses.

is

public relations, or may
certificate, upon meeting

necessary

ad-

SCENE

THE

doubt Federal will keep the pressure on the

market from

for

or

already

It
has been evident
that
Federal
wanted
to
bring about
switching in the government security market and it appears as
though prices of many issues have reached levels which are re¬
sulting in these swaps being made. It seems as though the primary
purpose of these switches was to bring eligible bonds into the
market, because the authorities evidently are short of these secu¬
rities. This is what is taking place in not too large amounts and
the results so far have
been to broaden the eligible market,
especially in the 1956 and 1967 maturities.
No

"Times,"

series.

the

This course is one of 14 in pub¬
licity and public relations offered
by the New School this spring
which provide professional train¬
ing for persons wishing to enter

Corp.
BEHIND

26;

partner,

May 3.

York

New

Chairman

proceeds of the sale of certain other ineligible securities.

FEDERAL

April

senior

Ross,

course on

vantage of current price differentials to acquire the 2%s from
the

J.

Relations,

Corp.,

Benjamin Fine, education editor

sellers of other

are

Public

of

Foods

ineligible issue with the result that

shortest

of the

the

up

to be substantial enough

appears

March

Ivy Lee and T. J. Ross, who winds

price spread between them.
great deal of pressure,

on

&

Thomas

premium reduction also takes place.

a

University, who

off the series

General

now

which have been under

include

course

April 12; Carl Byoir, Chairman of
the Board, Carl Byoir & Associ¬
ates, Inc., April 19; Howard Chase,

exists between these various obliga¬
words holders of the eligible 2V2S of 1967/72 are

some

York

New

lead

Newsom

bond into the other because of the

one

the

Bernays, Public Rela¬

Newsom,

FEATURE

MARKET

West

29; Benjamin Sonnenberg, Presi¬
Publicity Consultants, Inc.,
who will speak on April 5; Earl

within the restricted issues themselves there is con¬

The 2%s,

people

advancement of the general

for

to

The restricted

66

New

dent of

mainly through switches.
be furnished by the longest

siderable switching because of the

the labor

converting the em¬
ployers, effecting such unanimity
and contributing so much to the
sion

will

issues

continues

PROMINENT

ou.er

Even

particularly to the

sacrifices

workers

the

of

American

movement and

in yield

Research,

Street,

abhorrent

will remain indebted to

netting
*

part

community.

state"

them.

tremendous

of

shift

the

to

"welfare

them

and

We

nerceive

troversies between labor and

many

the

irdus-

of economic

of

age

atmosphere it is essential to have
national
machinery
which
can
provide a place for more delib¬
erate

negotiations

conversion

support from many diverse groups.

developments

bargaining.

the

Congres¬
by-product

One

union

recent

sas been

the

on

over

at

sor

of
how far

that

the

expedients and

fu'u-e

issue

calendar.

among

They work

probable

groups
will agree that it
"should be the nation's number one

ers.

policy fnr American

is

most

tions

do

Legislation

de-

besoeaks

imagination

It

Social

tions Counsel and Adjunct Profes¬

be

Likewise,
swaps are now being reversed, that is, holders of the eligible 2V4S
of 1956/59 are selling this security and with the available funds
are buying the restricted 21/4S due 1959/62.
This is the opposite of
what was being done by many institutions not so long ago.

issues on which there is
"Mite general agreement. The first
is that the Federal Old Age Secur;+v
law
should be
immediately
liberalized.

what issues will

The uncertainty

issues.

restricted

other

creased, while

nificant

key men framing inh'stricl rela¬

try.

Federal

guess

being enticed by the substantial price differential between this
obligation and the Victory Loan 21/£s to dispose of the bank issue
and to put the proceeds into the longest tap bond.
Yield is in¬

aye persions, there are two sig¬

A

must

have

collective

a

Liberal

bank

leadership

in

With respect to the issue of old

of the

ment

be

of smoother

manifest in the han¬

dure is most

pensions.

If

proce¬

deficiency

dling

a

bargaining.

uniformity.

toward

basis.

constructive

more

on

would

we

to

"Public

American

the

Speakers in

the

digesting

of

One

guideposts for

an era

trying

process

might push quotations of the ineligibles seems

inclined to

tions.

the

guar¬

either

annual

or

develop
negotiations

such

of

the

in

in

speak

series,

York, on
Wednesday, March 29, 8.30 p.m.

financing, there has been good buying

large price spread, which

treatment

that

could

and

unionization and particularly since

is

employment

Tnus there has been

the

now

per-

classes of employees.

is

and

Twelfth

switching or swapping seems to be coming into its
own again in the government bond market.
That is, many holders
of Treasury obligations, particularly the longer-term issues, are

ex¬

upon

uniform

for

buy

can

weeks

Scene" opening at the New School

spotlight in the ineligible list.

economic

built

be

of

moving toward

(both before

relations,

who

six

new

leading public
will

counsels

Relations

Spread

higher-

being

and

significant field

we

is

is

and

and the 1956s.

many

policies
all

the

a

Edward

deficit

SWITCHING

right for all employ¬

a

benefits

lo^nel

for

it

industrial

American employment conditions.

tendency

the

paid executive and administrative

<.r

retires- to

smugly

for

war

relations

only very minor price changes from

means

subsiding and this has resulted
and

bank

and

sists

the

be

Vies

those

to

of America's

Six

are

Director

cur¬

negotiations have highlighted

step

re¬

will

needs.

our

?s that the disparities in the basic

stubbornly
Barkin

which

The second fact which the

management
Solomon

to

Market

relying upon the exi¬
gencies of the negotiations in sin¬
gle industries and companies will
produce solutions

the

Federal

down

The present haphazard

always happily meet

the

of

owners

attractive

bonds

market

the higher-income

of

system

the

financing,

in

used

lective bargaining throughout the
economy.

quotations

restricted

Although

be acquired through trust funds. Says plans should
be made for more extensive employment of older
persons.
The

the

them, it is believed,
prevailing levels.

are

credits may

problem of old

taken

to levels where non-bank

that be, want more of the eligibles to come into the market so as
to keen auotations of the bank issues from getting out of line.

deficiencies in program.

private pension plats

has

restricted obligations
starting to buy them
with
the
proceeds from the sale of higher-coupon
eligibles.
Accordingly, there seems to be no reason for an immediate lifting
of the piessure on the tap bonds, because it is believed the powers

of old age pensions and retirement ^benefits in collective bar¬

as

Round-Up Discussion
Series at New School

By JOHN T. CHIPPENDALE, JR.

down

constructive approach in current handling

no

gaining, Mr. Barkin tbscr.bes present Federal old
system

Governments

on

SOLOMON BARKIN*

Director of Research, Textile Workers Union of America, CIO

Asserting there is

Reporter

Superannuation Plans

or

Thursday, March 16, 1950

Public Relations

The Choice Batween Retirement
Benefits

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

a

number

Tegeler

or

&

He

was

years

Co.

Petersen & Co.

formerly

for

with Dempseyand

Eckhardt,

8c Co.
INCORPORATED

15 Broad

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

Telephone WHitehall 3-1200
Teletype N. Y. 1-3690

Volume

171

Number 4890




COMMERCIAL

THE

-Due

From the

work

to

Report

weather

mild

demand,

15%

as

CHRONICLE

well

as

-Dividends

reduced

were

of

each

dollar

paid to stockholders

totalled $5,596,290,

compared with 1948.

making the

forty-fourth consecutive
Operating

which

under 1948,

duced $10,637,766

despite

re¬

dends

were

expenses

-Notwithstanding increased costs

at

hopper

reduced traffic, basic oper¬

a

road

were

high level

as

ail classes of stock.

1,000-hp. diesel switch¬

locomotives,

ing

ating factors

on

-Fifteen

changes in working conditions.

and

in

year

Reading has paid divi¬

and

increases

wage

of

revenue.

affecting coal

revenues

(1109)

out

cents

in the

stoppages

coal and steel industries,
as

Annual

FINANCIAL

&

cars,

passenger

maintained

were

all-steel

750

and 6 multiple unit

cars

with 6 trailers

acquired.

the result of

improvements and the in¬

creased

of

use

diesel

locomo¬

tives.

-Taxes

1949

ations

charged to railway
were

$8,900,159,

oper¬

President

8.11

or

I ncrease

REVENUES,
Rk\

enijes

express,

and

EXPENSES

EARNINGS for 1949

from
Operation—Transportation of freight, passengers,
and all other.

or

m,,

Decrease

mail,

§109,717,175

$1-9,316,400

$19,r>69,225-D

91,266,297

101,901,063

10,637,766-D

$

18,180,878

$ 27,112.337

$

$

8,900,159

$ 13,282,669

$ 4,382,510-D

202,166

321,761

322,595-D

$

9,378,553

$ 13,601,907

$ 4,226,351-D

less miscellaneous deductions $

1,932,286

$

$

.

of Operation—Cost of transportation service, maintenance and
depreciation of road facilities and equipment and solicitation of traffic......

Expenses

Leaving

as

Net Revenue

from

Operations

Tax Accruals—Federal and state income, railroad retirement,

insurance, and other taxes applicable to railway
Net

Payments

for

Rent

of

Equipment

and

unemployment

operations
Jointly

Used Railroad

Facilities

Net Railway Operating Income

Other Income—Dividends, interest and rentals,

Cross Income Available

for

Fixed Charges—Interest on

Fixed Charges

,

.$ 11.310,839

Corporate Purposes.

WAGES

52.6?

for
.

1.812,136

$ 15,117,313

119,850

I

$ 4,106,501-D
L—

funded and unfunded debt, rent for leased roads,

3,121,781

5,323,535

3,889,05,*

and amortization of discount on funded debt

Net Income Available

8,931,459-0

$ 10,093,788

98,229 -f

Dividends, Capital Expenditures and Other

.

DISTRIBUTION
READING

OF

DOLLAR

•

THE

1949

DEPRECIATION,

EQUIPMENT
AND JOINT
HAiicm*

rrJflni
MATERIAL
A,

fACUITY RENTS,
ANI) SERVICES
TAXES

8.1

$

fIXED

CHARGES

4.9£

I

$ 4,204,733-D

17

18

THE

(1110)

COMMERCIAL

&

FINANCIAL

CHRONICLE

were sharply
expanded—rising by
nearly $1.5 billion—the total per¬
centage of income paid out to em¬
ployees directly and
indirectly

Some Economic Problems

Arising From Expanded Pensions

was

no

greater

(73.8%),

a

By MARTIN R. GAINSBRUGH *

terms

high

Chief Economist, National Industrial Conference Board

tivity.

of

than

in

pleading for change in reserve policy, states "jetpropelled" rise in programs has preceded proper analysis.
Maintains expanded public or private pensions must be re¬
strained iti 1950's in view of our already-existing vast national

period in
business ac¬

level

to

labor, no matter what new tech¬
niques of payment are devised.

Such fluctuations

Three

for

drive

of

aspects

the

current

pensions,

expanded

in

opinion, require far more ex¬

iny

ploration and intensive study than
have

they

far

thus

ceived.

re¬

Pen¬

sions, whether

privately
publicly

o r

f i-

nanced,

are

fre¬

more

quently
from

viewed

the

benefit

than from the
cost side.

Nu¬

been

devel¬

oped,

it

f

o

is

of

the

reseeable

costs entailed in broadening and
deepening public pensions for the

-

'

aged;

estimates

some

have

been

hazarded, too, of the additional
costs of private plans, were the
prevailing pattern in steel or the

;
'

*

f

Ford Motor Company to become
universal. I do not propose to

:

add

|

another

set

of

estimates

but

j rather to relate such cost figures
!

as

we

already have to

current

our

J wage-price situation and to spec¬
if ulate

about the impact of ex¬
panded pensions upon our future
cost-w&ge-price structure.
The

second

further
the

*

that

area

economic

investment

requires

exploration

problem

is

arising

from the growth of private plans.
The
jet-propelled
rise
of
such

v

has

programs

.

preceded

rather

( than followed careful, orderly an-

'

alysis of the

resulting
vested.

'

Even

public
require
;

in which the

manner

reserves
our

program

are

now

significant

a

to

in-

be

mature

more

appears

tional
the

in

policy, both conceptually
well as quantitatively.

Finally,

expanded

Can

absorb

we

achieve

not-greater, rate of
expansion
and
social

of the past 10

progress

ades?

still

and.

if

same,

what

At

point

20 dec¬
does social
or

become

overhead

oppressive to
expansion, if not to our way of
The

life?

tions

these

to

answer

determine the fate

pensioners far

of

tomorrow's

than any ex¬
agreement on pen¬

isting

more

legal
sions, no matter how ironclad
binding it may seem today.

or

Impact

drive

pensions

for pensions must be
against the already swol¬
labor
cost
position in

viewed

unit

len

which this nation

itself.

—

whether public or private
■—must be viewed jointly with

the

of

past

year,

wholesale and retail

prices alike
remain in the stratosphere. Whole¬
sale prices of manufactured goods
(excluding
f^rm, products
and
foods) are 80% higher than pre¬
war, while all wholesale prices are
their

double

counterpart.
The price correction of the reces¬
prewar

basis

of

all

through

payments

government

paid

be

"

to

di¬

indirectly

or

agencies

labor's behalf.

on

past
still

(retail prices)
15-20%

the

above

Living

currently
the

inflation.

1920

then,
ing

inflation."

postwar

costs

been in any

ever

are

zenith

of

Historically,

still appear to be walk¬
price stilts at the very pe¬

we

on

riod when further substantial in¬

private pensions, enter directly
into the cost of production.
Pen¬

or

contributions

tional

accounts.

tributions

are

for

treated

are

they

as

in

our

Employer

all

forms

of

by

con¬

by

direct

compound

of

corresponding

a

payments.

direct

and

The

indirect

more

a

matter of

have

1

about

$12

transfer

or

have

in

During the present fis¬

prospect.

I;

made

billion in the

payments

form

(transfer

of

in

the

tios

by

pay-

fments

are monetary payments to
individuals by the government for

j which

no

productive services

are

i currently rendered, e.g., social se¬
curity benefits, veterans pensions,

and

on).

so

In addition, state and

local governments will make sim-

i'ilar payments of perhaps $1.5 bil¬
lion or more. Thus, fully a fourth
of

all

government receipts are
already siphoned off for transfer
purposes,

even

under the

public

•j welfare

programs
as
currently
■constituted. With so heavy a cost

(burden already, should

we not
nation, examine the various
compounds of domestic social wel¬
as

a

forms
come

of

compensation have

increasingly

an

be¬

important

item in the wage bill of

will

1948,

a

further

rise

in

the

petroleum,

i

drive

and

plans would appear
raise the employer con¬

tributions
to

railroad

The target of the
for expanded pri¬

pension

below

in

the

average

industries

or

average

with

ratios

peak rate of payment in the in¬

dustries

with

above

average

Each additional 1%
expan¬
sion in employer contributions on
the basis of
prevailing

average

employer

or

below

contribution

average

currently,

the total annual increase in labor
costs would be about
$4 billion to

$5 billion.
As

in

case

of

direct

than

more

There

pute

as

rate

was

about
is

2%

per

considerable

an¬

dis¬

to whether this long-term

forties.

approached

during the
Meanwhile, hourly earn¬

five times

as

fast

rate of increase in

as

the historic

productivity.

By the year's end, the average
(esti¬ factory worker was earning about
mated total about $500 million) as $1.40 per hour.
Were wage in¬
well
as
expanded contributions creases tied to normal productiv¬
by employers to private pension ity gains, the full extent of a rise

tributions to social insurance

in

It is interesting to note in this
connection that labor's share of

crete entities?

!

including private pensions,
whole, rather than view the
components as independent or dis¬

plans.

as

the

tivity would be no more than
three to four cents per hour. If all
of this went into
employers' con¬

!

a

In

this

rising wel¬

connection,

fare costs for

domestic

pop* ulation have been
accompanied by
■{ a marked expansion in expendour

{itures for national

defense

and

income originating in private

corporate enterprise has remained
relatively unchanged, despite the
marked rise in indirect compensa¬
tion over the past two decades.

Employees
received

*An address

*<
'

a

|
'

by Mr. Gainsbrugh before

Pension Forum of the Chamber of Com-

merce

of

the

State

of

New

Feb. 16, 1950,




York,

in

$73.40

earnings

on a par

with produc¬

tributions for pension plans, there
would be nothing left for direct
wage increases.
In contrast, the
demands

for

pensions,

1948,

as

expanded
well

as

private

the

recent

for example,
wage targets for 1950 already an¬
of every $100 of
nounced
by some of the labor

income produced by corporations.

Although

the

payments

porations

for

welfare

by

cor¬

purposes

In

within

the

the
to

from

search

Dominion
in

likewise

advanced

is
ex¬

The National Re¬

Council

Commonwealth.

is

vigorously
exploring the possibilities of the
adaptation of the gas-turbine for
now

the

propulsion
of
locomotives
heavy trucks, bulldozers and auto¬

British

ment in Canada is
in

gas-tur¬

re¬

once

playing any influential role in the
development of the most promis¬
ing territory within the British

quently

of

current Ca¬

financial

world-powerful
"City" of London is incapable of

age of the future.

the fore

perimentation.

of; the

scope

strictions the

field

the related

air-frame.
in

Fuel also

unlimited

the recent
eries in

of

its

-

the

British

invest¬

virtually frozen

channels.

prewar

normal

private

Conse¬

participation

capital

many

spectacular

nomic

developments

in

postwar

in

the
eco¬

the

Do¬

minion

has

blocked

by autocratic officialdom

in

London

been

shortsightedly

Ottawa.

and

Given

a

freer hand, British private enter¬

prise

that

has

left

its

mark

on

is

available

quantities following

spectacular oil-discov¬

Alberta, and the vast

groups, are two to three times in

Continued

on

page

30

and

complicated

country.

'

During

this newest, fastest, and most eco¬
nomical means of propulsion over

tion

long distances.

internals

further ahead

still

+0

uneconomic

schemes for the steady dissipation
of the natural resources of this

section

Looking

the

of

responsibility of
avoiding world economic chaos by
means of endless loans,
hand-outs,

area

the time when atomic energy will
be harnessed to provide the mo¬

thus relieve this

trade and

of the Dominion provides a strong
incentive for the development oi

tinued

the

of

the

the

the

bond

mark

to

of

week

external

market

time

con¬

in anticipa¬

forthcoming $61 mil¬

lion Alberta

refunding issue. The

fractionally firmer
121/4%-ll3/4%, but the corpo¬
rate-arbitrage rate eased to 15%were

at

14V4%.

Free

funds

remained

tive power for land, sea, and air¬
craft Canada is again in an un¬

steady and virtually unchanged in
the neighborhood of 9%%. Stocks

rivalled position to exploit this
ultimate form of power.
Already

on

leading

a

Canada

supplier

would

of

uranium
still

uncover

fur¬

ther important deposits of this in¬
valuable metal in the event of the

the

Toronto

board

moved

ir¬

regularly. Industrials and Western
oils were mostly lower but mining
issues

most

active

were

Kirkland

Lake

heavily

and

golds

traded

higher.

were

the

and its

and
attention was centered particularly
on
Macassa Mines, Teck-Hughes,
and
Upper Canada.
The
base-

the production of atomic weapons
value of uranium is almost

ters and

fixed
wage

fare,

j

ofair-transport, which is con¬
stantly assuming greater impor¬

raising

the

increases since the war's
end, the
recent drive for
expanded pen¬
sions bears little
relationship to

or

joint influence of an
increase of 0.5% in employer con¬

other countries, with the possible

ra¬

tios.

1950

the

Jetliner

British

and

country

such

show

under

Avro

well in the lead of

now

nadian

world

industry.
ings were more than doubled over
supplements were
that decade.
This far more rapid
already equivalent to about 4%
rise in wage than in
productivity
of all direct wage and salary pay¬
has been reflected in
higher unit
ments. Industry's total bill for in¬
costs and in turn higher
prices for
direct compensation was in excess
goods and services.
Hourly earn¬
of $5 billion last year, as com¬
ings over the decade have been
pared with about $2 billion in
increased by about 10% annually,
1939 and $0.6 billion in 1929.
It
By

the

of

case

Canada is

shown

as

recovery.
As a result also of

about 4%. But

also reached in that
year

be to

to

no

supplementary

Freed

the shackles- of foreign exchange
controls and restrictions on trade

and

was

telephone

were

num.
or

the

and cooperation
phase of aviation

one of the world's
leading sources
of supply of the rare light-metals
telegraph
that are indispensable in the pro¬
companies, supplementary com¬
duction
of
jet-motors, gas-tur¬
pensation
amounted
to
about
8<¥2% of payrolls, and similar ra¬ bines, and the advanced form of

manufacturing

surance, as

These indirect

revolution.

dustrial

form

pensation of employees.

nation

a

as

new

mobiles.
As in the case of aerial economic
progress throughout the
jet-propulsion the Dominion is ad¬ world for many centuries, would
and time of payment than of sub¬ mirably
situated to exploit this have a glorious opportunity to re¬
stance.
new branch of
transport develop¬ peat in the new age of jet-pro¬
ment.
In addition to the invalu¬ pulsion
and atomic energy, the
Employers' contributions for
able technical assistance provided
welfare purposes vary widely
triumphs of the
19th
Century
by
industries.
In 1948, the national by British experts, who were the steam-age.
This in turn would
average of such payments for all pioneers in this field, Canada is correct the chronic imbalance of

change is

cal year, the Federal Government

S

we

in

bines

in

including old-age in¬
the the increase in
well as employer con¬
productivity.
tributions to private pension and Over the long term, productivity
or
output per man-hour for all in¬
welfare funds, are entered in our
national income estimates as com¬ dustry in general has increased at

other welfare commitments

■

this

revolutionary air

alone will distribute to individuals

;

insurance,

its

dozen countries witnessed

a

well

na¬

social

Canada's
Observers

responsible for the failure to
full advantage of the tre¬
mendous opportunities offered to
bring about another British in¬
take

spectacular

complished
offset

with

Expanded contributions by em¬
whether to government

Avro

of

Jetliner.

Rock-

is

that operate even between Britain
performance of and her senior Dominion, British
these two planes that have been private enterprise is deprived of
evolved as a result of Anglo-Ca¬ its chance to achieve an historic

the

larger share of indirect
payments to labor has been ac¬

payrolls
would mean a rise of about
creases
in
labor
$1 bil¬
costs, and in¬
lion in labor
costs; if contribu¬
evitably in the cost of production,
tions were raised in all
are
industries
being made or demanded.
ployers,

from

The

vate

it has

50-passenger

occa¬

at

CF-100 fighter plane and

tance
Offset in Direct Payments

left

as

Airport

the

on

test

recent

the exception of Britain, in this branch

madef to

private

or

costs

payments

labor, whether they
rectly to employees

current

high

the

development. Especially

the

correction in wholesale prices and

level about

of

cliffe

essarily compute their labor
on

coal industries.

the general price

amply demonstrated
sion

modern

sion produced no more than a 10%

employers

| again,

currently finds

Even after the recent price

corrections

the
was

initiative

Turning first to the question of mechanism, automatically assur¬
ing a higher return for labor. The
pensions and labor costs, the cur¬
rent

in

jet-propulsion

aerial

of

nadian

payments is relatively unaltered.
Employee contributions are, there¬
fore, not to be regarded as a new-

Labor Costs

on

field

preeminence

in

ques¬

are subsequently en¬
economic historians will

relatively unaltered.

Canada's

This reinforces my earlier con¬
clusion that employers must nec¬

they

as

tered by

sion

Joint Consideration Required

.j

output

economic

to

change

reserve
as

aid.

all three of these levies upon na¬

as
v

foreign

have

mates

true,

has remained

esti-

merous

Martin R. Gainsbrugh

for

secular pattern of distribution

or

today's promises.

on

do appear in

as

labor's share stem primarily from
cyclical variations in the dimen¬
sions of profit. But the
long-term

expansion wOuld prevent tomorrow's generation making good

By WILLIAM J. McKAY

Our national accounts, in

the proportion of income allocated

Warns interference with free economic

welfare commitments.

Canadian Securities

1929

comparable

fact, reveal surprising stability in
Economist

Thursday, March 16, 1.950

of its present arbitrarily
price. In view of its scarcity
present indispensability in

the

priceless.
ceive

is

It

difficult

to

con¬

therefore

why the price of
arbitrarily fixed
at such a fantastically low level
especially
when
comparison
is
made with the prices of other rare
uranium

by

and

uses

no means

and

vital.

matter is also all the

higher

source

priced
as

functions

The entire

more

a

a

radium.

consequence

certain
will

be

also active
the recent

CANADIAN BONDS

mys¬

Government
Provincial

of the extremely high-

metal,

Belgian

were

following

decline in this section.

tery when consideration is given
to the fact that pitchblende is also
the

by Consolidated Smel¬

Quemont

was

whose

metals
are

ore

metals led

group

However

Municipal

of current U. S.¬

negotiations

it

Corporation

almost

is

that a higher valuation
assigned to uranium.
In

this event the Dominion Govern¬
ment and various independent Ca¬

nadian

producers,
the
Belgian
Union Miniere de HautKatanga (producer of 60% of the
world's uranium) and the British
company, Tanganyika Concessions,
Ltd., will be the principal bene¬
company,

ficiaries.
It is somewhat

surprising how¬
advantages
possessed'by Britain and Canada
ever

in

that

these

the

new

A. E. Ames & Co.
incorporated

many

vital

fields

turned to better account.
to

CANADIAN STOCKS

exploit this situation to

are

not

Two Wall Street
New York 5, N.

V.

In order
a

fuller

WORTH

4-2400

NY

1-1045

degree it is first necessary to dis¬
pense with the manifold controls
and restrictions that

against

now

militate

efficient

economic

Anglo-Canadian
cooperation.
Lack
of

vision both in Ottawa and London

Fifty Congress Street
Boston 9,

Mass.

Volume

Number 4890

171

THE

ties

Lincoln Caffall Willi

Wainwright, Ramsey

business,

the

COMMERCIAL

association

tion

March

on

CHRONICLE

(1111)

undertsanding of the es¬
sential services performed by the
securities industry in the nation's

present the functions of the se¬
curities markets in our free enter¬

economy.

prise

Association,

Speakers

picture,
duced

will

the

use

"Money

at

New

motion

Work,"

York

Stock

system.

Exchange,

They will

to

also

be

prepared to conduct question and

periods about the securi¬

answer

pro¬

by March of Time for the

ties business.

The Investment Association was
in 1947 as the Junior In¬

vestment

Bankers

members

the

with

veterans

securities

them

of

15,

Lin¬

E.

Caf¬

fall,

who

several

the

was

for

years

Celanese

the

Corporation of America

Marks its

Man¬

of

ager

25th Year of Operations

Municipal De¬
partment

of

Standard

&

Poor's Corp.
At
Stand¬
ard

&

Mr.

Caffall

s u

Poor's,
vised

p e r

the

produc¬

tion

of

recently
bond

announced

rating

four

Lincoln

the

Mr.

For

nearly

Caffall. has

From the Chairman

also

been a weekly contributor to the
municipal section of the "Invest¬
ment Dealers'

(FROM THE 1949 ANNUAL REPORT TO STOCKHOLDERS)

Caffall

municipal

system.

years,

E.

Digest." Mr. Caffall

is

a
member
of; theMunicipal
Analysts Group and The Municipal

The

report for 1949 marks the completion of twenty-five years of successful operations. Some

growth and development of

Company

our

may

measure

Be had by referring to the Company's report for the

of the

1925;

year

_

Forum of

New

the first full year

of cellulose acetate

yarn

production at

York.

As of

As of

December 31, 1925

December 31, 1949

$9,823,713

$254,885,948

Prior to

joining the Standard &
organization in 1941, Mr.

Poor's
Caffall-

served

with

the

British-

Total Assets

Purchasing Commission, where he
installed

the

statistical

system

Sales

employed by the Small Arms Pur¬
chasing Division.
After leaving
Dartmouth

in

1936,

associated

was

Mr.

with

Moody's

Service as
a
municipal
analyst.
During the war
years, he was a member of the Air

Command

merous

trips

In

stationed
made

reviewing the year's operations in 1925 for
"The

at

Wainwright, Ram¬

Lancaster

consultants to

palities

specializes

shareholders, I took the

by the trade from day to day, and with the

advisors.

occasion to write:

etc., have met with increased

new uses

in which they have found

These words bear reaffirmation

prove to

a very prosperous

future and

no

difficulty

experienced in readily disposing of the entire production of the Company's plant and

the Increase from its
'present

Re¬

cently, the debt structure of Mont¬
gomery, Alabama, was reorgan¬
ized in connection with the com¬
petitive sale of $2,200,000 revenue

market, it is expected that the Company will have

will be

as

States and munici¬

fiscal

as

our

overseas.

The firm of

&

20,640,826

Company's products, 'CELANESE' Brand Yarn, Fabrics,

demand

nu¬

a

sey

171,292,005

305,360

In¬

bond

Washington, D. C.. and

*

1,642,126

Net Profit

Caffall

vestors

Transport

Amcelle plant.

our

today

be equally productive of

production should be readily absorbed by the trade."

as we

progress

look forward

to another quarter century

of operation which should

and growth.

bonds by the Water Works Board.
A

special

the

study of the affairs of
Washington Suburban Sani¬

tary

District

was

pleted. Among the
grams

recently
firm

is

now

engaged in various parts of the
United States, is
making a survey
for the State of Tennessee of
a

long-range

program

ination

pollution

of

of

its

rivers

streams affecting about 400
cities, towns and sewerage; dis¬
tricts, which eventually wiil in¬
an

CHAIRMAN

EARNINGS: The

1949, after

earnings

per

share of Common Stock in

providing for Preferred Stock dividends,

were

$3.19.

expenditure

estimated

$150,000,000 to $200,000,-

000.

N. Y. Inv. flss'n Forms

New

Speakers' Group

Formation

of

a

new

speakers'
group by the Investment Associa¬
tion
of
New
York
to
provide
speakers for organizations in the

metropolitan

area,

as

further

a

contribution of that association to
current efforts toward
improved

public relations for the securities

business, was formally announced
by Blancke Noyes of Hemphill,
Noyes, Graham, Parsons & Co.,
President of the association.
Better

than 35 members

on

the Common Stock totaled

such

60^ per

share represented by four quarterly dividends of
share, which dividend has been in effect from the

second

plant late in 1948. No further large

are

being considered for future

MARKET TRENDS: The most

quarter of 1948. The total dividends paid on the
5,514,107V2 shares of Common Stock outstanding amounted

significant trend of the

year was

the

of

expan¬

general economic conditions justify

steps.

$2.40 per

$13,233,649.

The

dividends

the

on

Preferred

amounted to $3,032,344. The total
payment
in 1949

was

Stocks

for dividends

$16,265,993.

development of the summer-weight suitings for both
men's and women's
apparel. This was pioneered by several
our

and

yarn customers

who took the leadership in the styling

technological development of entirely

fabrics

combining acetate filament

yarn

new

classes of

and staple fiber with

other chemical
TAXES: While the

earnings amounted to $3.19

the Common Stock and the dividends $2.40
per

Common Stock, the total direct taxes
to

per

share of

share

on

the

yarns and fibers. Through their efforts the
summer-weight suit business achieved a sound and profitable

foundation.

paid by the Company

Federal, State, and Municipal governments were equal to

$2.96 per

OUTLOOK FOR 1950: The

the last

share of Common Stock.
Company continues to be in

a

strong financial position, with net current assets at the end
of the year
sented

of $69,339,823 of which $43,970,546

by cash. Inventories

are at a

was repre¬

low level for the volume

being done. During the

year

the Company

re¬

as

can

be foreseen, the

promise of continuing at
time.
sumer

high level of textile operations in

quarter of 1949 is currently being maintained.

So far
FINANCIAL POSITION: The

of business
of the

plans

sions in the event that

DIVIDENDS: The dividends

to

between

commenced at this

were

expansions in the United States have been authorized in the
meantime, but

for the elim¬

and

volve

From the President

numerous pro¬

which the

on

com¬

Depending

a

Company's operations give

high rate of productivity for

some

psychological factors affecting con¬
purchasing, general economic conditions and govern¬

mental action

on

upon

taxes,

we

anticipate

a year

of satisfactory

results.

deemed $2,437,000 of its funded debt.

association, which is comprised of
some

200

of the younger

in

men

upwards of 80 investment banking
and
brokerage houses in Wall
Street, have offered their services
as

speakers

in

the

and

PLANT EXPANSION:

Celriver

During 1949 all departments of the

plant were brought into operation. Initial operations

participate
They will be
through Edward F.
Swenson, Jr., of Clark, Dodge &
Co., 61 Wall Street, to address

A

copy

of the annual report for 1949 will be

sent without

available

social

organizations,

institutions,

clubs

educational
and

other

groups.
Mr. Swenson is chairman
of
the
association's
education
committee and heads the

speak¬

ers' bureau.
s

PRESIDENT

will

program.

•

•

•

Well qualified
by education and
experience to discuss the securi¬




CELANESE

charge

on request.

CORPORATION

Please address Dept. 153

OF

AMERICA

180 Madison Avenue, New York
16, N. Y.
CHEMICALS. ..PLASTICS...

AND

TEXTILE

YARNS

AND

and

FIBERS

Brokers

many
of
its
who
entered

business

recent war.

with

coln

19

formed

in

setting up the
Wainwright, Ramsey & Lan¬
bureau, according to Mr. Swen¬
caster, 70 Pine Street, New York
City, consultants on municipal fi¬ son, is to convey to the public a
nance, announced
the
associa¬

FINANCIAL

clearer

speakers have

held a series of meetings to
formulate the material to be pre¬
sented to the public.
The aim of
the

&

after

the

THE

(1112)

0

of

program

E.

W.

Co.

Axe &

five

Investors Fund

ranked

1949

120

&

The

stockholders

Investors

CORPORATION

Fund,

of

Inc.,

Republic

of the

one

existing mutual funds with lever¬
age, which was formed in
1932,

BROADWAY, NEW YORK 5, N. Y.

voted

March 9 to retain

on

&

Axe

W.

E.

Co.,

Inc., as investment
Leffler Corporation
general distributors.

managers, and
as

E.

Bullock Fund
Dividend Shares

Nation-Wide

Securities

W. Axe

&

Co., Inc., is a na¬
tionally known investment coun¬
sel
and
research
organization.
Since 1938 this firm has managed
Axe-Houghton
Fund,
Inc.,
and
Axe-Houghton Fund B, Inc., two
balanced mutual investment funds.
Mr.
the

Bull, President, states that

officers

directors

and

Re¬

of

available

public Investors Fund, Inc., have
for a period of several months en¬

from

deavored to find

Prospectuses

lution
Investment
Dealers

CALVIN BULLOCK
Established1894

satisfactory

a

today

for the latest

;

Fund

Axe

A

&

with

f
[

Available

from

investment dealer

W. Long

Hugh

or

and

Wall

from

Company

Street, New

York 5

los anceles

chicago

10th

established national

organization through
affiliate, Leffler Corporation.

Hard to Be

Texas .Fund

Fund,

vestment fund

Investors cannot always be sure

have

already

as

much

as

7 %%.

The

producers;
insurance

and

in

still

general

achieve

in¬

proper

thirty Dow-Jones
which

stocks

showed

prices in general
lehem

Steel

Beth¬

rose, were

with

a

minus

minus

fornia, minus 3.3%;

International

Nickel, minus 6.2%; and Standard
Oil

INVESTMENT FUNDS
investing their capital

of

New

Of the five
DuPont

33.6%

IN

ican

(Series B1-B2-B3-B4)

Jersey,
the

followed

Can,

7.5%.

minus

showing the most gain,

lead

Gamble with

BONDS

is

in

a

list

by

with

a

plus

Procter

&

plus 31.0%; Amer¬

plus

30.5%;

tc

utilities,

gas

distribution

and

natural

gas

directors

company

of

its

Dillon

are;

Dykes, Edward Rotan and
A.

Perlitz

of

Houston,

Hutchings of Galveston,
T.

Ernest

Skinner of

Boston.

Investors

ton, Mass., filed March 2,
shares

of

interest.

underwriter.

There

100,000
will

Northeast

be

Irving
with

may

is

a

Hotel,

422

and

hon¬

the

who

Bank

had been with the company for 25
years

or

number

well

58

as

Included

more.

34

were

who became

new

in

who

are

this

members,

eligible this

the company.

year,

retired

as

from

New officers elected

"

-

stockholders




of

Counselors Investment

(formerly
ment

Fund, Inc.
American Invest¬

Pan

Fund, Inc.)

of Los Angeles,

of

acquires
the

the

assets

ter Bank.

George J. DeNike

Board

of ' Governors,

gerton

plan,

Pattison

A.

EdW.

Karl

and

Olson.
*

Long

increased

Island,

its

(par $1).

investment company.

writer

is

Coun-

diversified

Pasadena

Corp.,

open-

Under¬

Pasa¬

dena, Calif.

Y.,

N.

capital

from

sale of

to $350,000 through the
$50,000 of new stock. The

capital

was

figure

increased to the $350,-

as

Jan.

total

was

17,

former

to

of

the

first

Penn

the

Township.

National

the

as

The

Bank

Central

organized

was

hi

These two financial organi¬
zations were merged in 1930 after
the

Central

sorbed

the

National

had

ab¬

Bank

American

and

Trust Co. the previous year. Com¬

pletion

of

Charter

Bank

the

purchase
will

of

increase

the
total

assets of Central-Penn to approx¬

the result of

viz.

on

stock

a

*

John

was

weekly bulletin of the Office
the

of

The

It dates back

The Penn

chartered

Bank

the

of the oldest

one

city.

when

1828

was

of

the Cen¬

Vice-President.

as

imately $140,000,000. Capital funds
are
$14,415,000 and total deposits
will exceed $120,000,000.

enlarged from $200,$300,000, it is learned from

000 to

President

Charter Bank, will join
tral-Penn

dividend of $100,000, whereby the
amount

offices, bring¬
Ralph W.

six.

ear¬

An

made this year,

as

to

capital of the

of Feb. 28.

bank

a

the

1864.

$300,000

000

ing

National
*

lier increase in the

end

under

were:

assumes

Upon completion of the
Central-Penn will

on

the

the club's rotation

and

the

program

banks in

Raymond

Charter

the

deposit liabilities of the Char¬

Central-Penn is

succeed

of

capital stock

ap¬

both

supervisory
authorities.
Under the purchase
plan the Central-Penn National

B.

to
and

Calif., filed March 8, 85,000 shares

selors Fund is

of

the

Pitman,

Comptroller

elected

R.

*

Preston

President of

*

recently

was

the

National Bank of New

Citizens

Castle, Pa.,

Cur¬

succeeding the late
George R.
Balph.
At the same time John J.

Roy L. Robeson has been elected

post of Cashier to that of Execu¬

of

the

rency.
*

*

*

Maher

Treasurer of the Manufacturers &

tive
B.

N.

Y.,
J.

Trust

Co.

of

Buffalo,

succeeding the late Albert
Krauss.

Mr.

previously been

Robeson

had

Assistant Sec¬

an

retary.
*

Agreement

fTjoit

JO State Street, Boston

and

Delker; Vice-President, Frank E.
Fay; Treasurer, Lester L. Allen;
Secretary, Miss Edna A. Adwin.

Cedarhurst,

Westing-

Putnam Fund Distributors, Inc

boards

have two additional

to

*

purchase

the

Charter Bank of Philadelphia, for¬

Boston 9, .Massachusetts

the

by

this year at a meeting prior to the
dinner
were:
President, George

has

Counselors Fund Files

be obtained from

Congress Street -

9

women

March

on

men

The Peninsula National Bank of

PUTNAM

of Boston
50

proved

Traders

The Keystone Company
'i

purchase agreement has been

banks, subject to the approval of

ored

*
,

New

Quarter

Carlton

trust.

FUND
p.

of

investment

fj/te Scorqe

(Series S1-S2-S5-S4)

Prospectus

Co.

annual

Century Club Dinner at the Ritz

E.

.

Trust
its

*

diversified, "open-end

COMMON STOCKS

'

The

York,

Beach

Trust, Bos¬

PREFERRED STOCKS
(Series KJ-K2)

CAPITALIZATIONS

the

1.2%;

2.5%; Standard Oil of Cali¬

Bankers

and

REVISED

for

Northeast Investors Files

American Telephone & Telegraph,

in

BRANCHES

Named

Chas.

no

losses in 1949, even though market

News About Banks
OFFICERS, ETC.

Fund

gas

The

Northeast

The five of the

record of

a

CONSOLIDATIONS

NEW

market

their

objective through

Industrial

H.

full

a

it stands almost if not quite alone.

so,

NEW

Thomas D. Anderson,
Blaffer, Rorick Cravens,.

Robert K.

emphasize that in¬
only be assured of

John

only

particular corporation has
President gives it.

the

chemicals, banks and
companies, and general

management

POSSIBLY;

Washington.

the

and

oil

industries.

diversification.

Certificates of Participation

of

electric

are

Victor

and

But, if

as

rapidly growing industrial area of
the Southwest. Among its hold¬

ings

say

the

Funu

on

the

investments

its

publication also shows how
the thirty individual stocks ranked
as to gain in 1948 compared with
can

the kind

of

qualified

been

policy

make

we

Nothing of the sort the President speaks of "has
been proved time and time again in recent years."
Of that we may be sure.

Anderson,

The

vestment

unos

of

sale in California and

companies,

showed a gain of
13% in 1949, a period of generally
rising prices, five of the thirty
individual
stocks
comprising
it
losses—one

ance—this

the

16

Company

Shares

transmission

Average

&

distributors

Coast.

that while the Dow-Jones Indus¬

showed

Possibly—and

audit of confused accounts would bring full assur¬

in¬

announce

March

on

Troendle

wholesale

public funds."—President Harry

S.. Truman.

with headquarters

Houston, Texas,

West

Truman

ol

sponsors

mutual

a

President

can
engage in broad programs
of
benefit—and conduct them efficiently and

without waste of

Appoints

Inc.,

les¬

again in recent years.
It is
by wise use of its powers, the

social

Pacific Coast Distributor
Bradschamp & Co.,

a

proved time and

Government

Keynotes adds that "It is rela¬
tively easy to choose the proper

its

Wrong

*

Corporation illustrates

that

in

*

that has been

time

22nd to 30th.

Victor

Keynotes Notes It's Not

rises

Ei

Loan
son

from

appointment

participating

Custodian

❖

"The record of the Home Owners

29th;
and Standard Oil of New Jersey,

1949 to further

Keystone

good of the whole country."

down next to the bottom, to

Texas

own.

structive Government action for the

19th
year;

27; Standard Oil of
California, from 6th to 28; Inter¬
national Nickel, from number two
spot at the top of the list, way

vestors

*

last

free of
through no

to

trial

INCORPORATED

48

an

picking the right issues out of
even during ris¬
ing
markets,
according to
the
latest
issue
of
Keynotes, made
public by the Keystone Company
of Boston.
Keynotes points out

authorized

any

from

the best of stocks

Investment Company J

26th

to

eviction

"We should all be proud of this
demonstration
of
bold
and
con¬

American Telephone & Telegraph,

Co., Inc.,. could offer the

of

Registered

1948

from

self-

as

property, and

of

fault of their

As to
list,

went

threat

the

investment

distribution

Fundamental /

Investors, Inc.

in

place

Steel

helping hundreds of thousands of fam¬

hard-earned

the five at the bottom of the
Bethlehem

was

and

reliant home owners, secure in their

2nd; American Can, from 8th
place to 3rd; Westinghouse Elec¬
tric, from 28th to 4; and Johns-

Manville, from 18th to 5th.

Corporation was suc¬
cents.
But, much
successful in terms of human

dollars

ilies to maintain themselves

from

place in 1948 to 1st in 1949.

to

portfolio management. In

being able to provide
particularly well
suited management facilities, E. W.
the

an

.

of

pattern

moved

of

terms

important, it

more

Procter & Gamble, from 20th place

addition to

and other

descriptive material about

11th

DuPont

in

values—in

cujupai

another

showed

variation.

saw

segment of the market to gain a
management
characteristic speed of move: one
portfolio supervi¬
that moves faster, or about the
sion for the Fund.
After careful
same,
or
more
slowly than the
investigation of several proposals
market." However, it says, "It is
the Fund's directors recommended
also easy to choose individual is¬
E.
W. Axe
&
Co., Inc., to the
sues, even from the right class of
shareholders because this manage¬
securities, and find that they move
ment firm has a national reputa¬
uncharacteristically — perhaps
tion, ample resources and has an even
in the wrong direction."
established record

services of

prospectus

in

cessful

overall

of

send

Again?" When?

especially

company

I

so¬

the problems of a more

to

permanent

or

and

♦

"Time and Time

house
Electric, plus 29.8%; and
Johns-Manville, plus 29.5%.
The way the top five and bottom

to

Manage Republic

and

SECURITIES

RESEARCH

CHRONICLE

"The Home Owners Loan

request

upon

NATIONAL

FINANCIAL

By ROBERT R. RICH

INVESIMENT PROGRAM
An Open
Inve^mHfT^ccount
Details

&

Mutual Funds

NAT 10

prospectus

COMMERCIAL

prospectus from
your

* "*

investment dealer
or

PHILADELPHIA 2. PA.

merly The Morris Plan Bank, by
,

the
of

Central-Penn

Philadelphia

March

13 by

National

was

Bank

announced on

Casimir A. Sienkie-

wicz, Central-Penn President. The

was

promoted

Vice-President,
Howe

President.

was

from

and

elected

the

William
a

Vice-

Harry C. Dinsmore

named Cashier and Alfred

was

Owens

Assistant Cashier. Special advices
from New Castle Feb. 24 to the

Pittsburgh "Post-Gazette" report¬
ing this stated -that Mr. Preston is
the third generation of his family
to serve the bank in an official

capacity; his grandfather, John H.
Preston, was one of the original
stockholders
and
directors, and
his father, Harry G. Preston, was

Volume

171

stockholder and director before

a

his death.
*

The
Trust

Co.

March

Rupp

=!:

directors
of

7

the

Maryland

Baltimore, Md.,

elected

on

Christopher

A.

Assistant Vice-President,

an

nounced

Rupp

was

Treasurer

the

of

trust

company.
*

:|:

Spring, Md., has increased

its capital from $600,000 to $700,000 through the sale of $100,000
of

stock

new

stockholders

authorized
Jan. 10.

on

the

by

The

new

capital became effective Feb. 28.
♦

*

tional,

elected
dent

has

Assistant

an

of

the

bank

had

Union

Mr. Hall joined

National

First

Bank

in

Vice-Presi¬

that

announce

H.

Clifford Shall¬

has been appointed

cross

Manager
Planning

of the firm's Investment

Department.
Mr.

Shallcross has

investment
He
of

was

business

been

for

25

founder

several

and

mutual

a

funds

in

1941.

merger

chants

In

with

1947,

following the

Farmers

and

Mer¬

years.

and

was

named

head of

the

Oak¬

The Life
of

America

moved

into

its

occupy

the

seventh

building, will

Bache Adds

floor
move

of

the

into its

(Special

to The

Three

Financial Chronicle)

CINCINNATI, OHIO—Frank J.
Andress,
and

Jr.,

James E.

John

M.

O'Brien

added to the staff of Bache & Co.,

Dixie Terminal Bldg.

quarters March 24.

Facilities

be

to

Association and

funds.

clude

specializing in mutual
During World War II he
four years in the Renego¬
Branch, Headquarters,
Service Forces, attaining

ries
with

a

of

director's

three

a

room

by

and

conference

removable

will enable

shared

the Institute,
a

the

R.

in¬

(Special to The Financial Chronicle)

se¬

rooms,

partitions which

large meeting

room

H.

Johnson Adds

BOSTON, MASS.
Bye has

been

—

added

of R. H. Johnson

&

has

been

Director

Street.

the

the

of

Memphis Chamber of Commerce
since

December,
1945,
it
was
stated by Robert
Talley in the
Memphis "Commercial Appeal" of
March 10; the advices in that pa¬
added that Mr. Grace will be

per

associated with the bank's Public
Relations
ment

and

Business Develop¬

Department, according to
Alexander, President. It

Vance J.

further stat?ed:

was

"Caffey Robertson, President of
the Chamber of
Commerce, an¬

or THIS

nounced the appointment of Lloyd
V.
Hancock,
assistant
to
Mr.

ANNUAL REPORT

Grace,

Acting Director of the

as

ARE AVAILABLE

Industrial Department.
"Mr.

Hancock

Auditor for

the

was

Assistant

an

V

Memphis Branch

of

the Federal Reserve Bank be¬
fore joining the Chamber of Com¬

merce as Assistant Director of the
Industrial Department."
.

'

#

,

The

*

■

si:

American

Charlotte,

N.

Trust

C.,

Co.

of

issued
invitations to the opening of its
new North
Tyron Street Branch,
on March
14, when it planned to
unveil

mural

a

of "The Story of
Mecklenburg," adorn¬

Gold in Old

ing

recently

of the walls of the

one

new

branch.
*

*

The Board of Governors of the

Federal

Reserve

System

an¬

that effective Feb. 27 the

nounces

Citizens Bank & Trust Co. of Sa¬

vannah, Ga.,
Savannah

merged into the

was

Bank

Savannah,

&

both

Trust

State

Co.

the

As

a

result of

a

branch

was

the

former

location

merger

lished, in

2,471,352

Net Income

Working Capital..... •

• • •

'tJSSal™

W"

,

12,798,861

••7; ;'

3,291,838

2.047.808

11,922,197

10,379,292

.

mr;

»'*

w

of

members,

under the title and charter of the

latter institution.

WI.W"

Soles......

?.

estab¬
of

"SEX.
*

Based

on

>•■;
outstanding after payment
December 1948 and 1949.

402,607 common shares

dividends declared in

«•
of stock

the Citizens Bank & Trust Co.
...

Announcement

•

is

made

of

the

resignation of Ellis C. Ruggins
Chairman

Empire

of

the

State

Texas.

Board

Bank

of

of

as

the

Dallas,

He

will, however, it is
stated, remain as a director.
Mr.
Huggins, one of the organizers of
the bank which

began business in

September, 1948, served as Presi¬
dent until January of this
year,
according to the Dallas "TimesHerald,"

when

he

elected

was

Board

Chairman.

is

President of the bank.

now

*

Michaux Nash

❖

*

The capital of the Corpus Christi

National

Bank

of

Corpus

Christi, Texas, has been increased
from

$300,000 to $750,000;

dividend
amount

sale of

of

stock

up

stock to the amount of

made

capital

of

possible

$750,000

the

*

new

effective

on

*

a

GENERAL TIME
)

$

44-year tradition,

George W. Hall, Vice-President in
of

Crocker
San

TIME

CORPORATION

1.

Continuing

charge

GENERAL

to $600,000, while the

new

$150,000

March

a

$300,000 brought the

the

Oakland

office

of

First

National

Bank

of

Francisco

has

been

named

Secretary of the Oakland Clear¬

ing House Association, it




was an¬

LAFAYETTE

STREET, NEW

YORK 13

the

staff

Co., 70 State

Na¬

of

Department

Donald A.

to

phis, Tenn., effective April 1. Mr.
Grace

Gorman

have been

tional Bank & Trust Co. of Mem¬

Industrial

the

tu.e Insdiue will be located.

new

Avenue, in
New York City, on March II, oc¬
cupying ail of the eighth floor tnvi
part of the ninth, while the Insti¬
tute of Life Insurance, which is to

same

on

noor, where the execu¬
of.ices «nd aepartments of

Association

offices at 488 Madison

mission,

Army

Quarters

Insurance

These will be

seventh

tive

New

with

the Securities and Exchange Com¬

tiation

to be set up.

21

for

the rank of Lieutenant-Colonel.

land office.

(1113)

Life Ins. Ass'n in

new

served

Savings Bank of Oakland

the

President

several years was connected
1915 and became a Vice-President

in

been

Planters

Co., members of New
York Stock and Curb Exchanges,

organization of the As¬

sociation in 1906.

CHRONICLE

Parr sh &

Secretary

been

*

Grace

Porter

Merchants

to Crocker First Na¬

who

Crocker

and

predecessor

Bank,

in Oakland,

he

W.

Farmers

since the

*

The Suburban National Bank of

Silver

of

FINANCIAL

Mgr.
Of Parrish Go. Dep!.

Secre¬

turn, succeeded George

Savings

Mr.

previously Assistant Secretary and

as

&

H. C. Shallcross

has

Mr. Martens, in
S. Mere¬

tary since 1941.

which

Assistant

Hall

who

Bank,
retired,
served the Association

dith

that

Mr.

1.

tional

according to the Baltimore "Sun"
states

March

on

replaces Frank C. Martens, VicePresident of Crocker First Na¬

*

of

COMMERCIAL

THE

Number 4890

OH REQUEST

Continued

The
the

COMMERCIAL

THE

(1114)

:22

from

page

2

T. M.

is

sufficiently

estab¬

end, and 20,000 shares of privately$10 par preferred, plus a

lished that I have yet to be asked

held

nominal amount of Class "A"

largely explained by ventures out¬
side the field of textbooks, which
constitute

the

business.
tion

the

of

the

of

present management
largely to books of
educational nature. In 1948, the

to stick
an

backbone

very

earned $2.06 on a vol¬
little over $3,000,000,

company

ot

ume

a

and, I believe, 1949 earnings were
slightly better.
addition

In

increased

to

re¬

Modest leverage
is afforded by some $700,000 of
income 5s, due in 1969.
Current
finances are fully adequate.
deemable at $25.

It is the avowed inten¬

control

Effective

Dallas

Holt

associates

his

and

of

was

W. Murchison of

by C.

acquired

few

a

and this has accounted
general revitalizing of the

years ago,

for

a

present

then

charge of the large printing and

"war crop''

;Holt stock

currently sells on the
reason
to think
Curb at $9, and is paying a 500
schools will remain crowded, al¬ dividend. There is nothing in the
though total college attendance available printed statistics to dis¬
may drop as the GI's leave.
Cur¬ tinguish it from scores of other
rent
educational
standards
de¬ stocks in the same general price
mand more textbooks and contin¬ range
and selling around fourually up-to-date books.
This is and one-half times earnings. How¬
until

years

in

The

extraordinarily

long

where

market

a

rising sales

assured.

period

company's office building in El
Dorado, Arkansas.
It is one of

The

the largest producers of

anhydrous
ammonia, ammonium nitrate fer¬
tilizer and nitrogen fertilizer solu¬

company

referred
the

is

to

Lion

Oil

Company
o f
El Dorado,

tions in the world.

of

name

Since

borhood of ten million dollars for

corporation is

improvements

somewhat

to

.misleading
for the

is

this

plant,

increased the

reason

mately 20%.
space of time

that the busi¬
ness

1946, the Lion Oil Com¬
has expended in the neigh¬

pany

this

fensive
ties

about

taken

over, it is now producing
approximately 50% of the com¬
Norman S.Hill
1 pany's total revenue.
While de¬
tween the oil
velopments and earnings have in¬
industry and the chemical indus¬
creased materially in the last ten
try.
Limited space prohibits a
years, our close association with
detailed report on this company,
this corporation leads us to be¬
so that only the highlights can be

equally
divided

be¬

lieve

touched upon.

The oil division is a thoroughly
integrated unit, from exploration
for oil through the phases of drill¬

ing,
production,
refining,
and
marketing. The company operates
a
modern refinery with a daily
capacity of 22,000 barrels of crude
oil.
Its production from its own
wells
despite proration, almost

that

better

today.

it

is

still

one

of

the

growth situations available
We feel that Lion Oil will

continue to develop due to its ex¬

cellent

and

young

and because cf

tion

far

so

as

management,

its strategic loca¬
materials are

raw

growth

a

tential.

North American Company

the company with its principal subsidiary Union Electric of
Missouri, thus terminating North American's existence as a holding
company. The program would provide for a transfer of all assets
(subject to liabilities) to Union Electric, and a share-for-share
exchange of stock. Union Electric's outstanding shares would be
reduced from 10,150.000 to 8,572,626 to permit an even exchange.

merge

President Freeman of North American Co. disclosed that Union

line securities.
The

Electric would receive from

shares of

the

major oil

pipe line
panies
United

T. M.

have

Sterling

much

the

of

first requirement but unfortunate¬

ly most of these

closely held
are, there¬
fore, not available for direct in¬
are

It had formerly been assumed in the Street that

by oil companies and
In my

opinion the

than Union Electric and Missouri P. & L.) to its own stockholders

con¬

before

Saskatche¬

and Manitoba to the head of

consin

; possess

Superior, Wis¬
the
necessary

greatest

wholesale outlets. These facilities
524

their

of

miles of pipelines
own tank cars, and

281

591 rented cars,
and

or
possibly 42%
Navigation on the

110 bulk stations

estimate

gross

this

that

revenues

double

net

ing

ten

million dollar annual

payroll.

one

of the largest and finest plants

of its kind in "the world.

In 1946

Lion Oil Company purchased




the

On the other hand it appears

likely that the $20 million of net
mentioned by Mr. Freeman was on the conservative side.
The use of this capital should be considered a plus factor in valu¬
assets

ing Union Electric stock. With the money invested in plant earn¬
ing 6%, earnings might increase by $1,200,000 or 14 cents a share
on the new common stock (over $2 of estimated market value).
It seems probable therefore that one factor offsets the other.
Another plus factor is the fact that the
from certain properties of West

of only

23%, without

covered in the thirties.

In

1949,
the Lion Oil Company drilled and
had in operation 62 producing oil
wells

in

this

field

and

plan

to

debentures
common

Coal earnings in 1950 will, it is true,
(although the
nonunion). But economies in mining operation plus the
operation of Union Electric's fuel adjustment clause in its rate
schedules may offset this factor.

addi¬
al¬

convertible

are

stock

on

two shares for each

the basis of

believe

as

will

show

as

much

de¬

years

it has in the past. This security

is listed

are

Union

Electric

sued

last

maximum

ing

be

per

earnings

throughput (six

stations)

$11.95
to

October

share

on

outstanding

at

pump¬

estimated

were

is¬

at

360,012 shares

when

all

de¬

on

the

New

York Stock

the

figure

This would
on

each

seems
mean

costs

Exchange.

by

and

$72

$50-$60 earnings

$100 of debentures. The

relatively small

Exchange and the Midwest Stock

conservative.

the

direct

leverage

million

of

operating
supplied

3V2%

First

a

with

return

tax
.'

obtained

share)
North

tax

savings

by filing

a

American

of

$630,000

last

year

consolidated Federal income

Co.

Whether

the

merger

will

permit indefinite continuation of the present tax set-up is not yet
clear, but it appears likely that tax savings will decrease.

$100 principal

amount and in the prospectus

trans¬

be affected by the current increase in miners' wages

mines

tional pumping stations, would
most double net earnings.

cial

were

company's 1949 statement.

As a matter of
fact, it is calculated in the pros¬
pectus that an increase in through¬

put

full annual earnings

Kentucky Coal which

ferred to Union Electric during 1949 are not fully reflected in the

ditional financing.

into

velopment in the next ten

The Chemical Division operates

stock. Capitalizing this at 15 times earnings gives $1.80, as a pos¬
sibly abnormal component of the break-up values mentioned above.

inordinate dilution in ad¬

no

on

recognitiqn must be given to the fact that Union Elec¬
1949 reflected unusually good hydro conditions
(the company generates about
of its electricity from hydro). As
the result of generous rainfall last year hydro generation was 20%
above normal, permitting the company to save about $1,650,000
in production expense as compared with the previous year. After
adjusting for larger income taxes the net saving would approximate $1,020,000, equivalent to 12 cents a share on North American

in

retail service stations have twice that many completed bentures are converted.
Accord¬
operating in Arkansas, Mississippi, by the end of July, 1950.
ing to my calculation earnings will
Tennessee, Louisiana, Texas and
We regard the common stock run
$25-$30 per share when the
Oklahoma. The company employs of this
of pumping
company as a business¬ number
stations is
2,333 men and women, and main¬ man's investment, which we fully increased
and, as I have implied,
a

J

would more than
the equity assum¬

1,900

tains

Some

year-

increase

an

tric's earnings in

capacity at Su¬
around $20
million as against the total cost of
the 1.150-mile line of $90 million,
I

1949 had consolidated net income of $13,-

solidated Gas of Baltimore, Consumers Power, Pacific Gas and
Philadelphia Electric, which sell currently at multiples of 14 to 16
times earnings.

be

only

break-up

little high but Union
important utility and, with Missouri Power & Light,
will have annual revenues of $77 million.
It may perhaps be com¬
pared with companies like Boston Edison, Cleveland Electric
Illuminating, Commonwealth Edison, Consolidated Edison, Con¬

the storage

will

estimating

(in

The multipliers of 14 and 15 may seem a

Electric is

shipped to Superior will
fall off then even with large stor¬

crease

Accordingly, the estimated

added

Adding the net income
Light would increase the amount by $862,000,
-.bringing the total for the two companies up to $14,048,000. This
would be equivalent to $1.64 a share on North American stock.
Assuming that the stock were valued at 14 times earnings the
breakup value of North American would approximate $23; and if
a multiplier of 15 were used the result would be about 24 V2.

amount

perior

been

186,000 compared with $10,779,741 in 1948.

Great

unless oil is sold in adjacent mar¬
in
the
United 'States
the

had

of Missouri Power &

at

kets

develop¬

ported by means of pipelines, tank in January, 1949, which is now
cars, tank trucks and river barges claimed to be the largest oil dis¬
to
the
company's
retail
and covery since East Texas was dis¬
of

capacity
round. 1

dissolution program.

assets

.

of the line traffic

overall increase of about 65%

a

Union Electric in

will be increased by 50% and over
the balance by about 75%, or an

the history of Lion Oil,

equals their refining capacity. Af¬ was the discovery of the Diamond
ter refining, products are trans¬ M. Field in Scurry County, Texas,

consist

about 39%

over

these

While this can
no
longer be done, the cash and securities to be transferred to
Union Electric will naturally improve that company's financial
setup and aid in financing its future construction program, which
has been forecast at close to $400 million over the next 15 years.
Union Electric can perhaps defer equity financing for some time
to come, thus avoiding the dilution of earnings which occurs so
•frequently these days.
•

Imperial Oil (Jersey's
subsidiary), some months ago to
carry oil from the new fields of

the Great Lakes at

of

value) to the worth of its major utility holdings.

formed by

through

effecting

value

debentures of Interpro¬
vincial Pipe Line Co., which wqs

east

North Ameri¬

would complete the distribution of its remaining assets (other

can

vertible

Alberta

million of

including the equity interest in its 60 Broad¬
way building (New York).
Other North American assets include
a substantial interest in North American Utility Securities Co., an
investment trust which is currently involved in litigation. Missouri
Power & Light, now held by North American, is to be acquired
by Union Electric under an earlier program, if the SEC approves.

the

States

vestment.

North American over $20

estimated net assets,

com¬

of

recently announced that the man¬

agement had been authorized to develop promptly a program to

(about 7 cents
the

of

in

Utility Securities

po¬

This,

of course, ac¬
counts for the

wan

'

By OWEN ELY

The $17 million of Interprovin¬
One

the Canadian market.

North American Company

as

concerned.

ments

me

quali¬
well

as

enlargements
which expenditure age capacity. Sales in the vicinity
production approxi¬ of Minneapolis are expected. Since
During the short the capital outlay to install ad¬
since this plant was ditional pumping stations and in¬
and

indicates to

which has de¬

Lakes is closed in the Winter and

Arkansas. The

why leading American oil com¬
panies and investment trusts have
been taking these debentures off

Public

book field

choice

my

in¬

an

prudent investor is today seeking
a
security

*

of

Trust

sharp

the

net.

foregoing

the

ever,

for the future.

Collateral
for

has

for

I believe that while the text¬ requisites for sound investment.
is, of course, competi¬
.The
Canadian markets to be
The capitalization of Holt is at¬ tive, Holt from now on will dem¬ served
by the pipe line are cur¬
tractive for capital gains purposes. onstrate
the type of
sustained, rently consuming close to 200,000
There were only 127,814 shares of growing earnings that result in
barrels of oil a day and the line
common outstanding at the ye^r- re-appraisal by the market.
is designed to
deliver initially,
with
six
pumping stations in¬
stalled, about 100,000 barrels to
NORMAN S. HILL
Regina, Saskatchewan, and of this
Partner, Hill & Co., Cincinnati, O.
about 57,000 barrels to the ter¬
(Lion Oil Company)
minus at Superior. By the addition
of six more pumping stations it
It may surprise many readers of Chemical Plant formerly known
is estimated that throughput to
this article that a common stock as the Ozark Ordnance Works,
that has been split two for one built by the United States Gov¬ Regina can be increased to 150,000
barrels and to Superior to about
twice in the last two years, would ernment during the war, and lo¬
This means that
be the security
cated within three miles of the 100,000 barrels.
one

curve seems

.

there is every
grade and high

crease

activity

normal

and

account

lic utility and
especially na¬
tural gas pipe

publishing department. He is per¬
sonally a substantial stockholder
of
of Holt.
A. C. Edwards, Execu^babies.
Commencing in 1954, this
tive Vice-President, became Treas¬
population wave will commence
urer in 1945 after 16 years in the
swelling the last year of the ele¬
National City Bank, where he had
mentary schools (the lowest grade
considerable
acquaintance with
of importance to Holt) and then
the financial problems of the pub¬
surge on through high schools and
lishing industry.
colleges.
However, even in the
of the

onrush

•the

above

Thursday, March 16, 1950

bonds

terest in pub¬

may

agement capable, Holt is one of
the companies sure to benefit from

business

well

I feel further progresses

earn¬

ment of which I believe the man¬

Because
been

President of the company

reasons

Mortgage

growing in¬

of

one

is Edgar T. Rigg, who was a Vicebe anticipated President of Standard & Poor's
a larger share of the
before taking this position at Holt
market, an accomplish¬ in 1949. At
Standard, he was in

which
from getting
ings

STERLING

the

is

and

management
ahead.

CHRONICLE

(Interprovincial Pipe Line Co.)

what the company makes.

A poor
earnings record until 1948 can be

FINANCIAL

Partner, Watt & Watt,
Toronto, Ontario

Security I Likepest

public

&

Union Electric last year completed the first phase of its post¬
war

expansion program—more than three

construction which cost

years

nearly $94 million

and

of intensive new

which

increased

the investment in property and plant to some $341 million.

Budg¬

eted construction expenditures for 1950 total $37 million, and for
the five years
lion for the
built

in

ending in 1954, $137 million.

new

south

Meramec Plant, a steam

St.

Louis

County,

Included is $26 mil¬

generating station to be

including

the

first

section

of

110,000 kw. generating capacity.

With Waddell & Read

/

Two With J. Arthur Warner
1

(Special to The Financial Chronicle)

KANSAS

(Special to The Financial Chronicle)

CITY, MO.—Edwin E.

BOSTON, MASS.

ftippstein is with Waddell & Reed,

selle

and

Inc., 1012 Baltimore Avenue.

now

affiliated

was

He

previously with King, Merritt

& Co.

Warner &

Street.

.

Richard

—

V.

with

Jack FusRobb
J.

are

Arthur

Co., Inc., 89 Devonshire
.

-

Volume 171

THE

Number 4890

&

COMMERCIAL

FINANCIAL

Sees

CHRONICLE

(1115)

government economists

in Wash¬

ington

Salesmanship Shaping Business

so

that

who

1950

assure

will

be

W. W. Townsend tells

not better

year

Securities Salesman's Corner

economists, who

Peoria, 111., group 1950 will be a good
if willingness by public to spend is stimulated by sales
efforts. Sees growing evidence of price resistance.

By JOHN DUTTON

Speaking at
"Without any obligation, of

course." The other day we received
an interesting letter from William B.
Healy, of Comstock & Co.,
Chicago, who has written to us on several other problems con¬
nected with the

securities business in

times past.

conducted

Mr. Healy con¬

an

is consummated will drive business away, or that
expected, should be held in contempt, is beyond me."

ness

bankers, busi¬

manufacturers

last

night,

W.

of

W.

Inc.,

&Co.,
stated

the

to have their order

manship.
"During

executed,

that Mr. & Mrs. Inquirer will be

so

under

no obligation to anyone.
Also, that some firms have "taken
the bit in their teeth and demanded fees for services rendered and

surprising enough

the

doing quite well." He suggests that it might
be a good thing for the industry to put definite prices on services
and make it unanimous, then all would be on the same footing.
This question of for free is not new.
matter

either.

firms that

and

are

There

are

two sides to

of

On

hand

one

there

for advice

ask

even

on

real

estate transactions

One

of the

partners in this firm

story, and although he
will

results

show

may

that

there

is

earned about $10,000

year

office

one

on

a

gotten

er,"
VV.

housing

has

year,

supply

been

today

is about

see

"You

told

over

good

year

the postwar
to

be

if

a

All this is

carried

another

side

to

healthy, but any virtue
excess

one

becomes

duce the actions of the
"The

slowdown

in

is not

persuasion.
be a good

It is

a

there

could

dising ability of those individuals,
whose

responsibility it is to stimu¬

late the

of

prosperity is assumed

on

public's appetite for goods
shelves

the

or

in

houses."

The

ST. REGIS PAPER COMPANY
REPORTS ON 1949

help him repair his

shouldn't complain," replied

the partner, "in fact I
am surprised at you. You should
carry a tool chest along and when
any of our customers has that particular difficulty again, you go

SUMMARY OF CONSOLIDATED INCOME

right to work and repair it yourself. We must keep
tation for service; don't let it happen again."

FOR THE YEARS ENDED DECEMBER 31, 1949

There

are

two

can

go

our repu¬

to

seems

service, you can personalize your business, you
to extremes to obtain and hold accounts. If you do it propA'

erly it will pay.

But there is also

a

where

way

your customers to pay for special services.

ing business

are

sound.

People will

you

can

AND 1948

You

me.

render every

can

approaches to this matter it

up

educate

Both methods of build¬

for services if they under¬
stand that they obtain more benefits and that it
pays them to do so.
The thing to do, of course, is to have a
policy in your business.
Don't jump around.
If you are going to make a service charge,
give something special for the fee involved. If you are going to

"•

'

Net

".r...

V'

AA-A,IV-A A-.!.,'V-"

1949

1948

'

,

1127,335,591.23

$162,672,925.94

113,719,146.39

138,402,144.86

Operating Income

8,616,444.84

24,270,781.03

Income Credits

1,641,767.12

1,144,219.13

10,258,211.96

25,415,000.21

2,191,684.13

1,455,297.85

8,066,527.78

23,959,702.36

2,538,325.03

9,042,499.64

5,473,202.70

14,917,202.72

Sales, Royalties, and Rentals

pay

Cost of Sales and

Expenses

do it for

free, do it well and make enough profit to make it pay.
Under today's regulated profit margins (as Mr.
Healy rightly ob¬
serves) you must have a large voJume if you want to keep in the
black.

That means

building

a

business step by step, and block

block. Even fixin' up the old fellow's truss

in

once

Gross Income

on

while, I guess.

a

Income

Reports Gains for National Banks in 1949
Preston
of

Delano, Comptroller of Currency,
than $2 billion in national bank's

more

Net Income Before Provision for Federal and

Foreign Income Taxes
increase

announces

assets. Deposits in
from $81,648 million to $83,344 million, a gain of
than $1,696 million, while U. S. bonds held
by banks
increased $3 billion in 1949.

Provision for Federal and

year rose
more

National banks ended
an

increase

for

the

1949 with

year

of

more

than

$2,000,000,000 in total assets,
Comptroller of the Currency Pres¬

8.

Mar.

on

The

in¬

crease

was

shown
the

despite

fact

loans

showed

of

more

$1,000,000,000,

Deduct

sidiary's

or
approximately
10%, in the year; loans on real es¬
of
$6,000,000,000 were
up
nearly 7%;
consumer
loans
amounting to nearly $4,500,000,000
were up 17%.

national banks

with 27.03%

16

year

26.52%,

was

Minority

equity of minority holders of sub¬
common

stock in income

57,400.15

Net Income

5,478,202.70

Dividends Paid: Preferred Stock

counts to total assets at the end of

the

of

Interests

than

The percentage of loans and dis¬

that

during

Net Income Before Deduction

$10,389,000,000

decrease

a

the number of

declined

of

Foreign Income

Taxes

tate

ton Delano re¬

vealed

dustrial

Charges

$

Common Stock

14,859,302.57
$

793,575

3,102,423

compared

823,208

4,136,571

at the end of 1948.

Investments

the

of

banks

Provisions for depreciation and depletion charged against income

in

the

United States Government obliga¬
tions on Dec. 31, 1949, aggregated

Total depos¬
its in the na¬

$38,271,000,000, having increased
more
than
$3,000,000,000 in the

year.

tional banks at

end

higher

w e r e

by $1,698,302,-

Preston

1948. The totals

31,

Delano

Loans

and

Dec.

Dec. 31,

discounts at the end

nearly $24,000,000,000
after deducting reserves (of $312,000,000) for possible future losses.
This

were

total

$110,000,000 more
than the comparable figure for the
end

of

was

1948.

Commercial and in-




the

1949

investments
were

42.41%

the

at

end

with 39.69%
1948.
Investments

of

in

other

1949

were

13%

more

than

PAPER

of

at

the

end

of

ital

accounts

the

end

total

of

of
1948

deposits.

and

for

$4,568,416

1948.

COMPANY

1949

Total

230 Park Avenue, New York 17, N. Y.
Offices in

Products

were

cap¬

$5,671,000,000

at

6.95%

of

were

1949,

the

at

Total capital accounts of $5,934,-

7.12% of total deposits.

for

bonds,

of the previous year.

000,000

$5,376,929

at

stocks and securities at the end of

end

to

ST. REGIS

of total

compared

$5,937,000,000
were

1949, $83,344,318,000;
1948, $81,648,016,000.

of 1949

of

assets,

000 than at the
end of

These

year.

the end of 1949

amounted

I

—

Principal Cities. In Canada: St. Regis Paper Co. (Can.) Ltd., Montreal
Multiwall

Bags and Bag Filling Machines

and Converting Papers
...

,..

.

.

.

Printing, Publication

Bleached and Unbleached Kraft Paper and Board

Bleached and Unbleached Kraft

Pulp

.

.

.

business,

challenge to the merchan¬

a

A

man

people.

develop last year,
challenge to government.

from scratch, and last
commission basis, came into

"You know old

vice

which began to

years ago

50%

a

thing to be remem¬

is that government can re¬
strict and restrain but cannot in¬

if his

as

service.

free

unlimited

bered

can

foregone conclusion.

a

to

the

and

for¬

continuation

In today's pic¬

almost

growing evidence of price resist¬
postponement of purchasing
plans and an increased emphasis
on
saving rather than spending.

if it is left to its own

and

an

ance,

but it certainly \yill not be

devices

in

things that make

the following little

me

day and sort of complained.

if the fellow

only

a

the

us

capacity to spend but there is also

never

or

two

occa¬

"Well, he's getting to
quite a nuisance. I don't mind calling for him once a month,
then taking him to the post-office, then to the grocery, and then
over to the fish store where he
always buys his smelly fish. That's
all right. But this time he wanted me to take him to the hardware
and

and

the

Simmons, down in South Jersey," he said.

store

and

reversed

be

truss."

sell

"Nineteen-fifty

Townsend

either

have

to

learned the art of
W.

salesmanship became a lost art.
During the past 18 months this
situation

how

there is

ture

economy

salesmen

that

find

One

regards the tax angles).

as

have been kidding, it seems

salesman, who started about two
the

and

called

time

many,

1945

would

ingness to spend.

at the
the problem in¬
in
the
simple' fact that
if not most, of today's so-

herent

most

said, "demand
for
goods exceeded

are

are

sionally it is given to them (especially

all

years

guarantee¬

is the capacity to
spend and the other is the will¬

they

Most of the

concern.

confronting the
present time is

for

the

that

fact

a

serious

war

t hereaf t

going to every extreme to render service and they
are making it
pay in a big way.
I know of one small firm that
makes portfolio analyses, and gives clients quarterly check-ups;
they make up state tax forms, Federal income tax forms, and prac¬
tically run every phase of their clients' affairs. Some of their cus¬
tomers

sales¬

Mr. Townsend

And it isn't just a simple

it.

on

the

of

glibly
as, 1JE

the same

are

were

end
1946

are

business.

growth of this nation during the
150 years has been during
periods when salesmanship was at
a
premium.
The only problem

almost entire¬

ly

of

of

good

as

than, 1949

the

"There

are

past

depend

He states several other facts, such as that many people will ob¬
tain information that has been freely offered and then go elsewhere

in

one

1950

would

with the demand. Even

buyers' market, but there
nothing about that to give any¬

is

busi¬

in

ness

conscious

are

out¬

look for

up

the automobile manufacturers

us

the depths of a depression.

field in which the supply has not

caught

at

middle

very well be overproduced
during the year of 1950.
"All this means simply that we

Skinner

that

ing

may

Town send-

profit is

a

the

President of

obligation for information
and advice received in connection with investments just as there is
if you or I, or any investment securities salesman, wants the same
service from a physician, attorney, architect, or other so-called
professionals? Why the fear that a legitimate charge if no busi¬
"Why shouldn't there be

says,

111.,

Economic Forum

Townsend,

cludes that there is too much for free in the investment business.
He

by
and,

nessmen

Peoria,

an

23

Panelyte Laminated Plastics.

the

ware¬

THE

(1116)

24

Continued

from

COMMERCIAL

4

page

will then

be

able

to

programs,

selection

of

and the

adoption of

all in¬

You will note
to assign

tried

not

have

we

securities,

an ove*

vestment program.
that

in¬

consider

including the

individual

topics to specific lectures. This is
because

wish

we

keep

to

problem as may be necessary

a

before

passing

For example, it is probable
may be able to cover the

ject.
that

we

subjects dealing with the Nature
of Investments in a shorter time
while our efforts to understand
balance sheets and other financial
data

to the investor.

investments

and

your

is—American

ment

These

more

conception of what

mon

Tel.

com¬

invest¬

an

Tel.,

and

Edison

Consolidated

bonds, Great
Mining Co. — differ

Expectations

hope to obtain. You are also an
have a savings

or

account

insurance

or

policy, since

part or all of these funds have
probably been invested in securi¬
other assets.

ties

or

you

might be considered

In this sense,

"in¬

as an

direct" investor.

relatively

require

may

being meant to yield

or

some return

investor when you

to the next sub¬

on

yielding

The

Two Investment

Goals

greater time.
As

Specific Data
Wherever
to

we

will try

we

and

to

actual data and mate¬

with

rials.

ested

examples

specific

use

work

possible

when

Thus, this afternoon

discussing types of securi¬

are

ties, I shall pass around actual ex¬
amples of
security
When

forms

amine
and

security mar¬

to

come

we

will ex¬
annual
reports

operations

and

kets

of the diffeient
we
will discuss.

many

company

In

prospectuses.
of

sions

trade

discus¬

our

information,
statistical
reports,
of

sources

will

we

we

use

journals

and

gove

nrren*

publications. It is. therefore, par¬
ticularly important thaf you b^ar
in mind that any examples or ma¬
terials that
the

without

I

ar^

use

we

to*

iv

illustration

of

purpose

regard

to

a

and

oussib e
the

y

interest therein on the nar. of
lecturer

What

expect from t
It is crtairlv iiV

we

can

this?

as

course

Shaskan & Co.

or

intention

our

security

make

to

analysts out of you. Nor 'an this
course by itself provide sufficient

to
enable
you
to
handle any large amount of in¬
vestment
funds
without further

background

and

education

experience,

tion

and

discouraging—I cannot prom¬

ise

will

these lectures

that

make

richer nor will we be able
provide you with a marie for¬
mula for making money.
A good
rule to learn early is that none of
us in this field is infallble.
If we
you any

to

had

a"d

answers

al¬

vm

correct it would follow that
all be rich as Croesus

ways
we

the

all

would

have little time

would

and

from

in¬

or

public.

On

the other hand, we hope that these

will

lectures

arity

bring you a famili¬
the basic terms a,_d

with

concepts

the

in

acquire will make it possible
to form an independent
considered judgmert on such

may

for

you

and

investment advice

ceive

as

vou

re¬

may

those

For

others.

from

of

who wish to go deener into
the subject, we believe that this
course
will provide you with the

you

investment.

nately, the two goals

Unfortu¬

conflict

may

road to

sure

If

in the invest¬

acquire safety, your re¬
turn
is likely
to be commensurately lower. To obtain a greater
be necessary to take
But it is important

greater risk.

a

to

recognize

this

at

point

that

commitment of capital

every

volves
tween

risk.

a

facts
an

and
study
of such facts,
appreciation of psychological

forces

and

whole

a

host

of

other

considerations.
All

of

of you

us

investor and

an

.s

not always

It

will object.

investor when I

The

little

have

count

or

a

I

no

either

a

Some

am

I

an

securities?

I have
hold

savings

government
don't

How

own

money

savings bank;

have

investors!

o"ly

in the

few

a

bonds;
savings

I
ac¬

government bon^s, but I

small insurance policy.

All

these

are

other

return.

ply the productive empiovme^t of
capital—productive in the sense of




which

only

their

trustee

over

this property. An¬
other example of a mortgage bond,
in

pany's

part

of

the

com¬

is

specifically
pledged, is the Lehigh Valley Ter¬
assets

minal

5's

of

cured

by

the

track

line

which

1979

28 miles

which

are

of

So.

may

be said

speculator

a

that

the

investor

lator

openly accepts

jf risk.

high degree

a

Or, we might say that an
primarily interested in

investor is

ncome while a speculator is prin:ipally concerned with capital ap¬

preciation.

we

market

owavd

perhaps disinvestor and

can

inguish between
a
speculator
by

an

their

attitude

fluctuations.

.he line is difficult to draw
shall

see

Frazier Coip.
a

third

stated

But
we

as

in later lectures.

value

of the low market

cause

the

of

selling at only about

their

of

financial

be¬

appraisal
of the

position

latter company.

bonds

another

are

marks and

to

come

today's subject

which

is
"Types of Securities."
Basically all securities can be di¬

into two

vided
Bonds

divide

further

.o

major

principal

Stocks.

and

types

—

It

groups-

is

common

into

stocks

Preferred

nd Common Stocks.

two

Stocks

We shall

see

diat each of these securities have
several

sub-types and each differs

the

.heir

other

return

in

their

the

to

claim,

investor,

and
which

die

rights or obligations
diey give to the investor.
A

bond

is

the

issuer

principal

the

repay

evidence

an

which

under

at

future date and to pay
a

of

debt

to

agrees

stated

a

interest at

stipulated annual rate during the
Bonds are usually

life of the bond.
in

issued

although

denomination

of

$1,000,

bonds are available
in denominations of $500 and $100.
Interest payments are
generally
some

made at six-month intervals.

Description of
The

the

basic

issuer

a

and

the

bondholder is

act

a

against the issuer.

nature

of

determined

this

only

ture of the bond.

such

an

known

as

ally relate to (1) the type of stock

due

into which the bond

tant

feature.

have

a

will encounter is the
equipment trust obligation. These
are generally issued only by rail¬
you

roads and

used to finance the

are

purchase of rolling stock such
locomotives

and

freight

as

cars

secured

operation of the railroad—it gen¬
erally will have a high resale
other

instalment

railroads—and

be¬

maturity' which

the

be

by

the

can

conversion

debenture, through their trus¬

stock.

It may,

how¬
be convertible only during
part of the life of the bond and
it
may be convertible into fewer
common

ever,

shares of

passing

stock with

common

of

time.

Thus

Ameiican

Tel.

will

after 1958.

Tel.

and

stock

common

share

with

the

per

of

the

payment of
The Consolidated Edison 3s

$50.

1963

convertible

ture

would

Consolidated

If the»debenture

mon

bbnd.

$150

the

time

risk than

poorer

share

one

at

surrender

plus

con¬

$100 of deben¬

is convertible into

tures

a

a

convertible

be

not

until

During the active

version period each

in

issued

convertible

not

were

and

of

not

con¬

vertible debenture 23As of 1961 of

automatically be
able to seize any specific property
but would have to rely upon the
general credit of the issuer along
with other general cred:tors. This
does not necessarily mean that a
would

tee,

the

the

shares
latter

are

of

were

mately $1,000, the conversion fea¬
interest
Edison's

$25

any

share.

which

deed of trust.

bondholder's

claim

and

1he

bondholder's

ment

of

claim

than

better

a

holder of

a

is

which

which

a

by

Of

worthless.

where

course,

both

has

a

mortgage

debenture

and

property
relatively

become

corporation
bonds

status
mortgage bond

secured

has

actually

may

investment

bonds

out¬

standing, the mortgage bond will
also
provide its holders with a
claim

prior

holders

when

even

debenture

the

issued

been

has

bond

the

over

ketwise

been

have

which

The

later

a

are

is

appointed
bond

A

in

issue

by

protection

of

* corporate

Every
have

is

is¬
the

the

represent

the

must

corporation

a

trustee.

considerably
term, but for our

complex

more

to

a

purposes,11 believe it will be suf¬
ficient if

describe it

we

as

a

com¬

with certain characteristics,
including the right to issue bonds
pany

and
and

the

stocks,
be sued,

right

to

sue

the right to continue
to any

person

limited

or

and

persons,

liability of its share¬

also

the value

Where
pay¬

principal and interest is

One of these is

encounter.

the guaranteed bond of which the
principal and interest or possibly

only the interest is guaranteed by
a company other than
the issuer.
Such
the

bonds

are

railroad

the

fact

found

field

that

and

one

largely

West

Shore

railroad

Railroad

in

arise from

leased another railroad.

has

Thus, the

4s

of

2361

guaranteed as to both princi¬
pal and interest by the New York
are

Central

Railroad.

A

field

Income

the

is

income

adjustment

or

those

paid

which the in¬

on

only

when

In other

and declared.

earned

words, the

payment of interest is not manda¬

of most other
contingent
upon

tory as in the case
but

bonds

earnings.

is

In

for ex-

cases,

some

emple, the Chicago, Indianapolis,
and Louisville 4s of 1983, the in¬
terest cumulates
bonds

that when the

so

unpaid in¬
terest must also be paid at that
time; but for most income bonds
the interest is only payable when
earnings are sufficient to make
this

due,

come

possible.

bine

any

bonds com-*
and
contingent

Some

fixed

both

interest

qualities. Thus, the Dela¬

of

event

of

the

the

guarantor.

In

inability of the

the

is¬

by

case

of

1970

or

that is

issue

Some

1955.

se¬

Commonwealth
first

mortgage

part of which carries
interest rate of 3%%

coupon

a

and matures in 1968 while another

part

has

and

matures

rate

coupon

a

in

1979.

of 314%
Generally

speaking, interest rate will differ
with different maturities.
A few
bonds

have

called

are

maturity date and

no

perpetual bonds.
Sinking Fund

Bond indentures

vide

for

frequently pro¬
sinking fund. This is

a

on

the

aside

a

obligation

an

issuer

to

be

varying with
production, or some

or

of

the

these,

sum

earn¬
com¬

monies to

generally for the retire¬

used

bond

the

of

ment

the

of the

part

definite

amount

an

ings

set

bination

Usually

issue.

is calculated to
substantial portion of the

sinking fund

retire

a

issue by maturity. This in¬
creases the likelihood that the is¬
bond

suer

will

able

be

the

redeem

to

remaining bonds at maturity and
is

consideration in

important

an

evaluating bonds.
o

•

Call

The

Feature

mortgage

a

they

a

Maine

&

Boston

be

may

in the

as

4V2s of

A

In

shall

see

measures

later

a

must

case,

number of other
be

used

in

com¬

Generally speaking the
pay a small premium,
in the indenture,
to the

maturity.

issuer will

stated

prior

his

at which Jones

lin Steel Corp.

of

bonds

$1,020

1959.

The

usually
no

it

$1,005 in
provision is

1951

to

callable

to

the

by

issuer

to

off its debt if it

pay

longer has

varies

callable

are

in

used

enable

Thus,
the
& Laugh-

314s series C $1,000

1961

from

called

is

bond

maturity.

to

need for it

a

to

or

refund its debt at more favorable

should

terms

conditions

market

permit.

Thus, Public Service of
Colorado recently called its 31/2%
bond

of

issue

issue

an

and

refunded

it

with

carrying a .coupon rate
27/g%.
As we shall see

only

later, this callable provision is one
of

criticisms

the

Graham

Coupon
Before

of bonds
bonds

Professor

that

brings against

investment

an

in

bonds

program.

Registered Bonds

or

our description
should also note that

ledving
we

generally

available

are

to

the investor in two forms—as reg¬

istered bonds
A

or

as

in

registered
and

the

which is
name
of its
one

be

can

bonds.

coupon

registered bond is

owner

paring them with other bonds.

if

bondholder

amount

unsecured,

income
bonds as a
class generally lack
the qualities of safety
and sta¬
bility of income, although as we
any

frequently

giving the issuer

calling the bonds for
prior to the date of

retirement

debenture, as in the case
& Western Class

bonds.

clause

a

the option of

of the Green Bay

transferred

only \Vith the endorsement of the
Bond

guarantee

adds to the bondholder's claim the
credit

to

ries. For example,
Edison Co. has a

bond

each

$533,000

1941

issued to mature in

are

Bond indentures also

ware,

.

The Guaranteed Bond

may

from

1

bonds

in 1940, mature

of

amount

contain
newcomer

secured

holders.

July

Bond

relatively

bond

terest

rights.

bond

the

bonds

A trustee

bondholders
their

to

is simply

a

the

to investors.

Income

recent

perhaps require definition

of

generally proved

of tremendous value

bond.

party

suer

not

bonds have

corporation,

at this time.

the

-claim
through
his
position.
Actually,
as
shall
see
later, convertible

preferred
creditor
we

a

mortgage
at

referring to two
and

trustee

of capi¬

appreciation should the com¬
pany prosper and the value of i's
stock increase significantly, while
at the
same
time giving him a

A

We

bond¬

the

possibilities

tal

date.

terms,

providing

by
with

holder

classes of bonds which you

At this

to

debentureholder

enjoy

mar-

other

The value depends,

of the bondholder's claim.

a

attractive

more

might also mention several

point we should
probably dis¬
tinguish between the nature of the
of that claim.

is to make it

We

inden¬
is

The' purpose of a convertible bond

company's credit is excellent,

in

com¬

a

rather than in

year,

series 214 s issued

or

stock sold above

spread over a suc¬

40

the deben¬
purchased at approxi¬
of

of

they are known as
serial bonds.
Thus, the Pennsyl¬
vania
Railroad
equipment
"K"

assuming

be

issues

is they all are scheduled
to be
repaid at the same time. Where

In the

stock.

common

case,

tures

into

impor¬

an

bond

single maturity date, that

single

into

convertible

is

is

Some

are

(3)

bond becomes

a

years

bond

debenture

a

privilege

and

fourth lien

a

repayment

cession

the event of

of

during

is

in which

for

maturities

of

default, the holders

period

con¬

a

be

would

1995

maturity or the time and

manner

convertible

specific property are gener¬
ally classified as debentures. In
a

be

may

exercised,

usu¬

issue

the
ratio at which the bond may be
converted.
Generally speaking, a
may

1947

any

the

(2)

which

conditions

the

The

specified in the in¬

These

verted,

1946

not secured by

are

denture.

re¬

siderably before the expected ob¬
solescence of the equipment.
Bonds which

the conditions

con¬

quires that they be paid off

is

Every bond has

indenture
a

claim

Railroad .prior

be a prior lien as its
indicates, but as a practical

which

verting the bond into stock under

ex¬

The

ex¬

to

appear

this

The

creditor and has

not

For

system.

con¬

Lackawanna and Western
4-6s of 2042, pay fixed interest of
4% and up to an additional 2%
if earned.
Income bonds may be

bondholder

it is
inden¬

may

this.

and

1957

of

particular

that of debtor and creditor.

of

its

name

Erie

the

4s

bond

a

indicate

the

establish

to

of

the

since

matter

the

relationship between

ture

com¬

junior

are

examine

to

necessary

name

in existence without regard

Bond

order

priority

class. A bond which is convertible

is the only debt of a company and

As time is running on, we must
leave our
introductory re¬

bonds

In

exact

The

assets.

lien

Bonds

the
now

liens.

and

other

gives the holder the option of

mortgage
Types of Securities

earnings
pany's

ample,

Convertible
Convertible

is the

properly

debenture is

Professor Graham sug¬

that

gests

the Graham Paige 4s

guaranteed by the Kaiser-

plicable to all bonds.

Plainfield,1 New Jersey to Jersey
City and by some 92 acres of ter¬
minal property.
A special type of secured bonds

to

to distinguish.

easy

the

we see

of 1956

se¬

from

run

principal or interest
holder may also

pay

due,

Thus,

double

the bonds generally call for

investments.

"im¬

through

take

may

value

bonds,

Investmnril

holders

pay¬

bond¬

cause

Your as we shall see later, on the finan¬
s-vincrs
ac¬ cial condition of the issuer, that
count, and your insurance policy is, his ability to pay, and may have
provide you with an income or little or no relation to the nature
of

government

or

the

in¬

wishes to reduce the degree of risk
„o a minimum whereas the specu¬

claim

are

payments

principal

be¬

The difference

ment field—that successful invest¬

ing requires constant supervision
and review, diligent search for the

of

ment

return it may

extent

the

we

success

interest

of

obligations generally enjoy a high
market rating because the equip¬
ment is important to the efficient

mat

To

to

Thursday, March 16, 1950

One of these
priority of claim. We have
know as a secured bond or a mort¬ look to the guarantor for
payment. already noted that mortgage bonds
If the guarantor is in a strong
take precedence over debentures.
gage bond. For example, the Ala¬
bama Power
Co. first mortgage financial position this may mean
But
frequently we will find a
a great deal.
3%s
of
1972
are
secured
On the other hand, company which has more than
by
a
if the guarantor is in a weak fi¬
one
mortgage
on
tne
entire
mortgage bond.
In such a
nancial
physical
property
of the
com¬
position, this guarantee case, the first mortgage is a senior
pany.
In the event of a default may not be worth a great deal. lien and has first claim upon both

you

another.

one

stated as a per cent, for example,
shall have
succeeded in our purpose, perhaps 4%, or 6% and such payments are
the most important thing that you usually made semi-annually. Thus,
on a 4%
$1,000 bond, two interest
will take with you is the under¬
payments of $20 each would be
standing that there is no easy or

tools.

necessary

when

by the pledge of spe¬
property the bond is usually

Equipment trust obligations are
by a lien on the equip¬
ment acquired.
Eouipment trust

with

investment field.

We hope that the background vou

inter¬

are

two

its

rom

terest to work with the

you

principal
goals—
safety and return; that is, the
preservation of your capital and
the income which you will obtain

sort to sources

most

in

re¬

or

having such educa¬
experience.
—

investor

an

suer

cific

only in the degree of risk involved
and the return which you obtain

our¬

selves free to devote as much time
to

CHRONICLE

reinforced

u

vestment

FINANCIAL

&

Having

Issue

Features

reviewed

the

*

principal

registered

addressed

and

amine

owner.

some

of

the

features

ap¬

owner.'

The interest on
check
the registered

such bonds will be paid by

classes of bonds, we next must ex¬

A

to

coupon

bond,

on

the

Volume

other

type

is

from

of

payable

which

it

"bearer"

name

THE

Number 4890

hand,

bearer
the

171

bond

the

to

also

gets

bond.

carries

be

paid

upon

somewhat greater marKet-

ability of

coupon bonds, the latter
usuahy sell slightly higher than
registered bonds.

Meaning of

We

turn to

now

stock.

Stock

While

Since

tors,

debt, and bond¬

stockholders

important

to

fundamental
of

event

the

a

comprehend

distinction.

of

of

stockholders.

set

and

in

be

liquidation,

What

nature

of

stockholders

any payments.
The
stockholder's interest

a

will
a

depend upon whether he is
preferred stockholder or a com¬
stockholder.

mon

is

ev.dence

an

corporation
ences

exact

with

stock in

common

man¬

of the corporation.

Tne

nature of those preferences

be determined

can

only by refer¬
corporation's certifi¬
cate of incorporation.
the

to

ence

The

Stock

preferred

is

principal

prefer¬

interest

to

investors.

This

preference generally assures
prefeirej stockholder of divi¬

a

dends
be

before

paid

dividends

any

may

stockholders.

to common

However, it is important to rec¬
ognize at the outset, that this does
not

that dividends will

mean

essarily

be

paid

stockholders

to

for

be

the

nec¬

legal

same

Voting

are

share¬

is

limited

to

the

holder's

interest

preferred
in

preferred

management.

stocks

have

voting rights at any time.

no

Others

that

minimum

in default

are

Under

when dividends

as

by

stated amount.

a

such

circumstances, the
shareholder, as in the
of Cudahy Packing Co.'s 6%

as General
Electric, National Dairy and Mont¬

Ward

gomery

without

are

majority

rectors.

of

the

Some

vote share for share with

shares

the

in

as

Di¬

of

Board

shares

preferred

common

of the pre¬

case

mentioned

Virginia

Coal and Coke Co.

stock
while

that

dividends
fened

fixed,

are

stocks

ings in
dend

share

titled

of

excess

to

its

will

en¬

and

stock

common

has

similar rate of dividend

a

with the

additional

any

.ion of earnings.

with

pany

divi¬

is

dividend

participate

in

earn¬

stock

a

stated

after the

pre-

the

the stated

Such

rates.

some

in

com¬

distribu-

Thus, if

a

com¬

$4 participating

a

pre¬

ferred stock distributed dividends
of $6 to its common

suing

stockholders,

the

entitled

to

additional

an

above their regular dividend.
important provision of many

Like

stocks

is

the

into

that

of

provision
which

states

the

An
pre¬

privilege of
stock.

common

convertible

a

$2

the

bond.,

security

preferred

stock

ion.

corpora

later, this

As

re¬

shall

we

be

may

distinct

a

holders

and

earnings

if

even

its

directors

to withhold dividend

the

the

is

are

elect

may

In

payments.

that the preierred divi¬

.t

eve

dend

Were

"passed," that is omitted,

preferred stockholder has

claim

future

on

omitted

no

earnings for the

dividend

unless

dends are cumulative.

the divi¬

A cumula¬

tive preferred stock provides tnat

omitted dividends accumulate anp
such
accumulated
dividends are

referred

generally

to

"divi¬

as

dends in arrears."

Thus,

preferred

the

Mengel Corp.
3

shares of

time.

stock

common

Electric

at

any

Boat's

the

preferred

Iron

Coal

vertible

shares
Coke

and

into

two

stock only

mon

then

become

shares
time

hand,
Virginia

of
Co.

are

shares

of

con¬
com¬

through 1952; they

convertible

into

IV2

through 1957, after which
they are convertible only

share for share.

This

conversion

Thus, for example, the preferred

feature,

as

Missouri-Kansas-Texas

vertible

bonds, is designed to in¬

shares

of

Railroad
This

som^

are

does

$127 in

arrears

as we have
ex¬
the company's pre¬
ferred shareholders of
$127 but
simply assures them that no divi¬
dends will be paid to the com¬
pany's common stockholders until

plained,

those

not,

assure

dividend

have

arrears

been

either by full payment or

cleared

by a recapitalization of the com¬
pany's financial structure to which
the

to

shares,

Some

agree.

the

as

preferred

just mentioned

one

cumulative whether there

are

are

earnings
the

as

issue

or not, while others i&fch
Chicago, Indianapolis and

to

the

of

case

attractiveness

investors

possible for him

by

con¬

the

of

making

it

to beneft should

the

company's growth and prosoerity reflect itself in a substan¬
tial

of

increase
its

in

the

market

shares.

common

verting from

share plus

per

dividends. Others
at

at

a

this

case

accumulated
redeemable

are

varying stated prices.

For

ex¬

preferred

In

As

preferred
have

stockholders

preference

a

out

Occasionally
we
will
with more than

of

preferred stock.

find

a

class

one

Thus Worth-

ington Pump Corp. has a prior
preferred 4J/2% convertible series,
a
prior preferred 41/2% series, a
Class A 7% series and a Class B
series.

6%

which

such1 cases,

In

important

do

not

the

preferred

accumulate.

dividends

corporate

Dividends-

on

of

assets

in

the

a

may

be stated,

as

percentage where there is a par

value
annual

for the

stock

in

or

dollar amounts.

previously

actual

Thus, the

mentioned

Missouri-

Kansas-Texas preferred stock car¬
ries

the
par

the

a

dividend

of

7%, that is at

annual rate of 7%

value

or

preferred

$7

per

stock

of its $100

year;1.While
of

General




are

common

stock

of

Standard

event

of

value

of

shareholders may
7%
preferred
Rddiator

Sanitary

with

$100 is entitled

par¬

a

to

&
par

$175.

We shall

sion

of

terms

total

interest

stock

Although

have

have

in

probably the
of security.
the

represents

the

of

corpora¬

all

not

corpora¬

bonds, and not

or

preferred stock, they all
stock.

common

As previously
stock may
In either

not.

which

value and

type

tions have debt

mon

is

discus¬

mentioned, com¬
have par value or

case

it is

a

purely

sets

has

little

the investor.
a

company

In

practical
most

must

value

cases

liquidate

to

where

it

is

and

common

based

similar
A

and

example,

par

stock

B

common

ash.

restriction

primarily

in

dividends,jand

Dividend

of

on

stock
is
contingent
earnings and in the discre¬

common

tion of the board of directors. Un¬

like the preferred

Unlike

the

bondholder, the
normally

but

the

receive

has

earnings

have

in

past

unless

dividends

no

company

for

earnings
been
and

years

dividends.

Generally
of

or

Motors

are

When

split

meet

a

improve the service.
Redemption prices for the bonds
range

from 105.457% to 100%.

With Reinholdt & Garcnes
:'(Special

ST.

to The Financial

LOUIS,

have

associated

of

one

dividend

influenced by the

is

case

working capital
position of the company. For ex¬
ample, while earnings have been

Reinholdt &

cf

the

New

York

and

j Midwest Stock Exchanges.
Lofgreen

Mrf

previously

was

1 Slaytcn & Co., Inc.

with

•

sim¬

par

by

value
as

or

West-

to

$12.50.

A

re¬

or

value

stated

Canada's Leading

as

Cigar-Whelan reduced its
outstanding shares from almost
6 000,000
to 2 000 000 by raising
their par value from 3 0 cents ner
share

30

to

cents.

Life Assurance

•

ability when

a

tract
verse

comnany's shares
too

high

•

when

or

splits

public
are

interest.

Re¬

generally made to

Over

one

dollars

insufficient shares to at¬

wide

Increased dividends to

policyholders in 1950.

be made to improve market¬

mav

price level which is out of the

With H. M. Byllesby & Co.
to The Financial Chronicle)

NEB.

OMAHA,

hundred million

paid out in benefits

during 1919.
•

1

All-time record set for
Sun Life

Group protection

of workers in business
and

industry throughout

North America.

"penny" class.

(Special

Company

Announces:

snlits

Stock

Adeline

—

From the

1949 Annual

Report

Benefits paid to policyholders and

beneficiar'es

R.

during 1949:

$114,799,174

Jones

with

is

H.

M.

Byllesby &

Total benefits

Sun

Co., First National Bank Bldg.

Life

policy

paid since the first
was

issued in

1871:

$2,240,555,979
New Assurances issued

With Bache & Co.
(Special

to The Financial

FOREST
P.

now

connected

year:

Assurances in force:

$4,187,193,642

CITY, N. C.—Morgan

is

Bodie

during the

$372,509,847

Chronicle)

with
JVrite

Bache & Co.

today for

a

copy of "Sun

Life of Canada Reports to You."
fust address: Sun Life of Canada,

With Westheimer

Four

Transportation Bldg., Washing¬

'Special to Thf Financial Chronicle)

a

usually

with

Inc., 400 Locust Street,

United

CINCINNATI, OHIO—Oliver S.

Richard

Stickler

of

R.

both
a

accomplished

$50

value

oar

Roberat

dividend

Chronicle)

MO.—Howard

Lcfgreen and Elmer C. Faulstich,

similarly reduces the
number of shares by raising the

of

a

form

Distillers

for

further

split

whiskey for each five shares held.

National

to

Split-Ups

is

from

verse

Ackley,

ago

demands

and

inghouse increased its shares four
one
by reducing their par

value

available

declared

recently

the

for-

de¬

The

speaking,

stated value of the stock

dividends

Radio gave its stockholders

clared

to

telephone service

the

to

property. Thus, while Gen¬

eral

order

may
sometimes
change their number of shares by
stock-splits or reverse-splits.
A

unless

dividend of $1.50 per share, Emer¬
son

applies

will

stock

Stock

accumulated

distributed they may be paid
in cash—the usual form—in stock,
in

pany has been making large ex¬
penditures for new construction in

B

the

are

or

parent, which are expected to ap¬
proximate $18 000,000 on March
14, 1950.
Since the war the com¬

for¬

com¬

will

the

of

Corporations

stockholder, the

stockholder

mon

sale

ilar market appraisal.

a

dividends

the

applied toward repayr. ent of advances from Ameri¬
can
Telephone & Telegraph Co.,

value and

pany's shares by bringing them to

Payments

payment

The

upon

from

improve public regard for a com¬

assets.

a

be

shares of American Pot¬

B

classes

earnings, particularly

upon

distributed

as

is

Prcceeds
bonds will

shares which differ only as
may
buy the shares—
aliens being
restricted in their
purchase of domestic shares.
A

are

value

on

who

there

real
latter

competitive sale March 14

bid of 102.101%.

eign

the

the

The

at

vote. International

no

of

to

interest.

than

stock. Amer-

dividends,

to

shares have

lation
shares.

15, 1990 at

accrued

Gardner,

Stock

mere

for

same

climbed

stockholders.

as¬

Co.,

have

years

to

Tobacco

rights

have

common

re¬

Wright Corpo¬
ration share equally with common
as

class of

no

10% stock dividend, while several

preferred

be¬

restric¬

Common

may

arbitrary amount and has

On the other hand, Class A stock¬

The

stock

simply reducing the
a

stock

ownership

tion.

to

market

important

Common

all

turn

now

common

of

basic

Stock

holders of Curtiss

stockholder's preference

Types of

stock
Common

specific rate of dividend.

The

American

and

assets

and

The group won award of the bonds

now

each with the

stockholder is not prom¬

Boat,
without
par
entitled to $50 per share

participate.-

to

ised any

Electric

value,
before

preferred shares

respect

common

liquidation.
The extent of such
Louisville RR. class A shar^'^rb1
preference is stated in the certifi¬
cumulative
only
to
the
extent cate of
incorporation.
Thus, in
earned.
That is, if there are no liquidation, the preferred shares

earnings

preferreds take preference

common

stockholders in the distribution of

preferred

it is
fully

understand

to

generally

over

1942

to

con¬

have earlier pointed

we

and

and

shares to

shares, the stockholder,
of
course,
loses
any
preferred
status he may have had.

divi¬

not receive

1922

Telephone has domestic and

company

Jersey
Telephone Co. 40-year 2%%

dtben.uves due March

wit¬

as

ample, Dow Chemical $4 preferred
is callable at $110 through
1953
at $107 thereafter.

Halsey,
March 15

New

members

has

$105

in

—

by
on

disadvantage

~

can

amount

value

common

stockholders would

preferred

have

the

crease

in

did

Companies

at

redeemable

are

stated

most

other

of

Dual

fixed

stock

investor

the

which

one

its

On

stock

Inc.,

can

Worthington
Machinery's
common

dends between

Sunshine Biscuits 5% preferred

as

preferred
is convertible share for share into
common.

falls

tions.

convertible into

are

com¬

of

case

&

Co.,

$15,000,000

re¬

provisions

stockholders

common

the

the

capitalization
Such

considerable

Pump

bonds, since it tends to place an
upper limit on the market price of
the stock. Some preferreds such

ticularly to dividends.

which

on

preferred
Power

payments on the
to 50% of net earnings if

total

ness

parable to the callable feature of

be
made.
shares
of

may

Consumers

20%.

cause

the

conversion

accumu¬

The

common's equity in

com¬

exercised and the terms

may not—pay
preferred stock¬

its

to

may

of

earnings

1946.

dividend

of

to
are

disadvantage to the investor

preferred shareholders would

be

shares

the option of the is¬

of

out

after

shares

be

we

preferred

lated

below

quired to—in fact it

re¬

dend payments on common shares

except

pany's

investor.

the common

on

working capital would
be reduced below $1,000,000.
This
company's 3s of 1977 restrict divi¬

interest to the average

see

dividends,
most

a

the

of

be declared

agement will generally be of little

deemable at

discussion of

our

preferred

mon

man¬

Redemption Clause

find

it

Iron

International

Many preferred

to

below

For

stock if net

value.

Returning

earned

may

a

par

Participation and Conversion

that

or

of Northern States Power to elect

the

leading securities such

stated

a

reduced

amount.

indenture

common

Many

company.

be

not

&

102.457%

be

headed

group

offered

capital

amount

votes per share, or, as in the case

case

the

A

Stuart

Bell

preferred stock, is entitled to two

dividends

not

surplus

or

example, in
recently
called Cities Service 5's of 1952,
it is provided that no dividend

preferred

Offers W. J. Bell Debs..

stock
provisions.
limitations require

working

stated

which

in bond indentures

such

conditions such

Halsey, Stuart Group

stock

provisions

preferred

Usually

preferred stock's interest in

this

is

by

4 votes to the common's one. The

shareholder in

a

pro¬

common

on

by

may appear

provide for voting under certain

with

earnings

dividend

ultimate claim of

liquidation of

expansion

instances, the payment

some

a

respect
Some

In
of

strict

any

cash for its

conserve

television

large

Rights

be converted, the period dur¬
ing which the conversion may be

accumulated

wished to

ly

general rules with

no

25

good, Emerson Radio undoubted¬

Harvester's preferred shares have

into

or

credi¬

the

viously

should

earnings

no

after

Nor, as we shall see
later, is par value of particular
significance in determining the

A corpo¬

paid.

has

that

$20.

conversion

bondhol.ers

ration

of $50 but the stock sells

ferred

redress

not

value

par

$150; conversely,
RR. shares have a

Pennsylvania

preferred

have

as

is

it

about

preferrea

do

nor

stockholders

dividends

if

$100 per share while the stock

sells

received

stock's

dividends is usually its

to

as

term.

value of American Tel. & Tel.

par

then

Preferred

ence

tnis

it is important to keep in
mind that the par value is a purely
arbitrary, nominal value given to
the siock by the certificate of in¬
corporation and bears no relationsnip to the market value. Thus tne

ownersnip in a
certain prefer¬

earnings, assets and possibly
agement

There

Preferred stock

of

against

as

Stock

par

say

stock,

under

be

which

forces

of

assets

(1117)

gram.

will be equally ap¬
plicable to both
preferred and
common
stock.
Corporate stock
may be either par value or no par
we

par value

indenture

bond

before

discuss

and

moment

a

those

over

result

a

few

CHRONICLE

Value

mentioned

have

we

obvi¬

Interest must

the

met

receive

may

the

other requirements

any

forth

must

this

In

bondholders

ously takes precedence

paid

It

owners.

are

corporate

claim

evi¬

an

consequently ereuirepresents
ownership

stocK

and

is

are

are

Par

stock,

description of

a

dence of corporate

holders

Defined

bonds

leave

value it might be well to stop lor

value

Corporate

usually

FINANCIAL

&

tors have been taken care of.

detachable

presentation
indentification.
Because

without
of the

value,

par

no

dividend of $5 a year.

a

This

interest coupons wnicn, wnen due,
will

which has

Motors,
carries

COMMERCIAL

B.

Durbin,

Heberling and Charles F.
are

now

with

West¬

heimer & Co., 322 Walnut Street,
members

of

Exchange.

the New

York

ton, D.C.

C.

Stock

SUN LIFE
OF CANADA

2G

(1118)

COMMERCIAL

THE

Continued

CHRONICLE

FINANCIAL

&

from

Thursday, March 16, 1950

4

page

of the Kansas

City Southern alone

is heavier than that of any other

Most

west of the Mississippi.
Passenger
traffic
is
extremely

Favorably Situated

light,

Chicago, Rock Island & Pacific

demned,

with

buying noted pretty much throughout the list. This latest move on
the upside was apparently generated by the particularly persistent
strength in Atchison, Topeka & Santa Fe common.
Also, the
favorable

being accorded the Southern Pacific Con¬
vertible Debentures has helped to focus the attention of specu¬
lators

reception

investors

and

railroad

the

list.

Based

expectations
that 1950 earnings will show at least some improvement over the
generally good 1949 results, that dividends for the most part are well
protected, and that yields on rail stocks are exceptionally liberal,
there appears to

on

on

be ample basis for looking for a continuation of

on the part of railroad analysts
Chicago, Rock Island & Pacific
common has not been
participating to any great extent in recent
market
activity.
This is in marked contrast to its position
well up among the leaders for some time previously.
Apparently
there has been some hopes among investors that once the com¬
pany's refunding was out of the way there was a good chance

the

that

a

road

prospects,

liberal dividend

more

however,

its

and

elected

policy might be instituted. Directors,
the regular $0.75 quarterly rate.

maintain

to

Sources close to the company are convinced that this conservative
regular rate will be continued and that if any larger distribution

is to be made it will be in the form of

extra toward

an

the year

end.

The

exceptionally

strong

other

In

capital

structure

of

Chicago,

Rock

Island & Pacific is well known to all followers of railroad securi¬
The reorganization plan consummated a
couple of years ago
was in itself one of the most drastic ever conceived
by the ICC.

ties.

however,

cases,

41/2s.

This $55

million

$13 millions.

over

capitalization consists of 705,382 shares of $5 convertible
preferred (annual dividend requirement $3,526,910) and 1,409,346
shares of common.
In connection with this capital structure it is
also pertinent to note that depreciation accruals are more than
sufficient to

the combined total of serial equipment maturi¬

cover

ties, fixed charges, and the liberal sinking fund
Mortgage bondSi> Obviously the capitalization is
sion proof as is apt to be found in
any railroad.
There

thing,

other elements

are

the

territory

served

the

on

new

1st

depres¬

near

as

of

strength in this picture.
For one
has been experiencing considerable

industrial growth.

This tends to lessen dependence of the road on
agricultural conditions (particularly wheat) as well as to increase
the

overall

traffic

potential.
The road's competitive status with
respect to profitable transcontinental freight has been improved
materially in recent
is in

and further betterment in this respect
term prospect in connection with new terminal
arrange¬

near

ments in Denver.

years

Finally, large property improvements and sub¬
operating efficiency.

stantial diselizfation have vastly improved the
Last year

the

outstanding in this

re¬

be

spect.

the

favorable

factors

needed

reported earnings of $9.83 a share on its
opening month of the current year there
was a modest
year-to-year decline in net despite a further paring
of the transportation ratio.
Traffic prospects for the year as a

list of stocks here to

a

should

presented
the

on

far, I have spoken mostly of

an

basis

of

be

such

selected

possibility

a

My candidates
peka

outlined,

A brief word about each:

sirable not to
little

of

have,

for

most

another—not

that

traffic

coal

coal

is

traffic

four

a

is

months

production

adverse.

We

of

and

high

very

heavy

revenues.

will

volume

to

of

of

capital

In
I

any

diver¬

Stocks

reaction of importance

of

railroads

reasons

ought

or

about $60

and

road

equip¬

year, revenues
times what they

average

were

during the

1935-/

years

were

of the western area served. Main¬
tenance

expenditures

have

been

heavy; transportation ratio is low.
haul is second only to

Average

the Union Pacific.

City

1930's had

Southern

little

as

Southern
the

in

$10 millions

as

revenues

annually.
acquisition of

This

before

the

Arkansas.

&

two had

Last

fixed

year,

system
or

revenues

Last year,

the

of $58.5 millions.

charges

about $2.5

were

was

Louis¬

of

the

millions,

less than

those of Kansas City
alone
15
years
ago.

rather well this year, even though

Southern

developments affecting the indus¬

practically
all
of
the
system's
mileage is main line.
Traffic is
relatively heavy. Freight density

try should not turn out as satisfac¬
tory

as now

three L

are

in the late

Its

physical and financial ,r
improved. Re- :
organization
cut
fixed
charges V
from over $10 million to $2 miL
lions annually, and created an ex-; ?i
tremely strong working capital.
position not fully disclosed by net ll
current
assets, there being $25
millions government bonds above ;o
not included

the line and
rent

Retained

assets.

in

cur¬

earnings

have been

tremendous, but are not
easily calculated for the bank¬
ruptcy period.
In the past three
years, close to $25 per share of
stock

common

which

$2.50.

received

Maintenance

heavy,

and

of

earned,

was

stockholder

the

any

benefit

share

of

the

was

indicated. There may,

decision

recent

indi¬

An

stock.

common

of

the

first
mortgage 4% bonds.
Those who
worry
about citrus fruit traffic
in mind

bear

less

than

derived

'of

of

5%

from

large

a

the

that in

total

1948

revenues

A

movement

the

Seaboard

citrus.

making

refund

to

management

was

Kansas

do

V.

been

has

in

investment

equipment, particularly diesel lo¬
comotives,
and
other
improve¬
ments, and further substantial ex- H
penditures are indicated. However,
to an increasing degree, net income
belongs
to
the
common ;;v
stockholder.

,

mention

Honorable
lantic

Coast

Line,

to At-

goes

:i

Rock

1

Chicago,

Continued

on

27

page

whole appear

bright, there should be continuing benefits from last
year's property improvements, and charges ahead of the stock will
be

lower than in

1949.

It

seems

reasonable

DEBT

AND

FIXED

CHARGES

-Ratio-

^Fixed

Main-

+Net

Fixed

Interest

Fixed

Operating

tenance

Current

Int. Debt

Debt

Charges

Revenues

Charges

Assets

(Millions)

Col.

CHICAGO, ILL.—The program
the

Fourteenth

ference

of

the

Annual

Central

Con¬

States

Gipup of the Investment Bankers
Association of

America, scheduled
for
Wednesday
and
Thursday,
March 29 and 30, at the Drake
Hotel,
Chicago,
has
been
an¬
nounced
by
Hempstead Washburne, Harris, Hall & Co., Chair¬
man
of the Group.

E.

R.

Needles,
Howard,
Needles, Tammen & Bergendoff,
New York—"The Engineering As¬
pects of a Revenue Bond Project."
James E. Day, President, Mid¬
west Stock Exchange—"The Mid¬
west Exchange."
George W. Davis, Davis, Skaggs
&

Co., San Francisco—"Merchan¬
dising Securities."
Officers

of

the

Central

$11.2

$267.2

$90.6

$70.1

258.3

11.0

157.3

60.2

59.6

1948

171.8

6.6

526.7

171.0

140.5

$18.9

$5.4

Se¬

curities."

Annual Conference
for

Trust

$260.2

1936

Boston—"Investment

States

tKansas City Southern—
1929
$67.7
$2.4

to

Oper.

Revenues

1929

Mayo Adams Shattuck, Attorney,

Central States IBA

COMPARISONS

to

expect, therefore,
that for the full year earnings will be at least somewhat
higher
than those for 1949.
Considering the company's modest debt and
adequate finances such a performance would certainly justify
hope of a year-end extra dividend.

Fxd.

Oper. Ratio

Chgs. Fxd. Chgs.
to

Oper-

Needed

to Net

ating

to Cover

Fxd. Chgs.

to Main-

Operating

tenance

Current

Ratio

Fixed

Revenues

Charges

Assets

Actual

Charges

89%

4.2%

15.9%

66%

18.3

18.3

80

87

1.3

32.6,

12.3%

6.9

97.4%
165.4

3.8

4.7

73

94

358.2%

12.7%

44.4%

67%

84%

1936

64.5

2.9

13.9

3.5

1.7

464.0

20.8

82.8

170.0

63

69

1948

70.8

2.5

62.1

12.4

.10.3

114.0

4.1

20.2

24.4

55

84

$234.2

$11.1

$58.2

$17.5

—^$6.2

402.4%

19.1%

63.4%

73%

75%

194.4

9.3

38.3

13.6

—0.4

507.5

24.3

68.4

83

67

64.7

2.1

132.7

44.0

-43.8

43.8

1.6

4.7

$5.1

47.1%

Seaboard Air Line—
1929
1936__

1948

4.8%

$157.3

$6.9

,

.

$72.4

$23.9

$24.1

217.3%

9.5%

28.6%

28.9%

74%

«

92

79

Atlantic Coast Line—
1929

h'"

•

92%

1936

149.6

6.5

43.6

13.1

9.7

343.1

14.9

49.5

66.9

77

82

1948

101.7

4.0

136.3

50.0

20.9

74.6

2.9

8.0

19.1

87

94

day and discussion sessions Wed¬

Group, in addition to Chairman
Washburne, are: Charles R. Perrigo, Hornblower & Weeks,' ViceChairman; and Holden K. Farrar,
Smith, Barney & Co., Secretary-

nesday

afternoon and Thursday
morning and afternoon; a formal
dinner
Wednesday in honor of

Treasurer.

Albert T.

Illinois, Indiana, Iowa, Nebraska,

1948

Incorporated, Boston, President of
the IBA, and an informal dinner

and

Wisconsin—it

Great Northern—

that,

as

and

from

There

will

dress both

be

a

luncheon

ad¬

Wednesday and Thurs¬

Armitage, Coffin & Burr

entertainment

on

Thursday.

from the Central States

will

Speakers and their topics
Dr.

Edwin

are:

ance

G.

Nourse, formerly
Chairman, Council of Economic
Advisors—"Superficial and Fun¬
damental

Conditions of American

Business in 1950."




»

in

all

be
of

pated.

$47.5

$3.6

1936

317.4

14.6

78.1

28.0

—8.5

406.9

1948

82.2

1.7

197.4

53.7

32.6

41.6

3.1

—

90

69%

83%

80

5.2

84%
70

73

—

66

?

$38.8

$13.4

$10.2

343.3%

16.7%

48.5%

6.5

28.5

11.7

—4.7

453.0

22.8

55.5

57.1

2.1

68.5

19.4

-.15.8

83.3

3.1

10.8

13.3

71

89

$125.9

$37.4

$23.7

267.3%

14.5%

48.9%

77.2%

66%

88%

*27.6

385.7

19.9

79.8

64.5

63

75

42.1

114.8

3.5

10.6

17.8

75

91

1929

$336.8

$18.3

the

country

1936

345.6

17.8

89.6

22.3

total

attend¬

1948

248.4

7.5

216.3

71.2

than

Conference

400

is

antici¬

$413.9

$18.4

$181.0

,

$64.9

389.0

17.1

115.0

34.1

Forgan
&
Co.,
Chairman of the Group's Meetings

1948

248.9

10.3

268.2

88.9

of

E.

Glore,

and Entertainment Committee.

«.

—

i

Illinois Central—

1936

charge

—

i

bankers

A

63.7%

$6.5

1929

Parker,

0.9

—

129.1

Cummings

in

,

52.2

73%
86

333.3%

25.3%

18.7

$133.2

1936____

of

sections

more

expected

1929

years,

past

present.

is

area—

arrangements

are

8.1%

191.2%

Denver & Rio Grande Western—

In addition to investment bank¬
ers

Chicago, Rock Island & Pacific—
1929
$282.4
$12.0
$147.7

*Where

reported

in

'•>

its

condition is greatly

should
'>v

Kansas City

for

i:

cation of the overall improvement

Last

three

iana

to

Tre¬

stock.

common

In

the

Revenues

what they were

to

prosperity, but the tremendous
population and industrial growth

since its

that

resemblance

little

1930's.

Railroad

Line

has
been
reduction would
per
share earnings con¬
siderably,
maintenance
charges
last year having
been $50 per

on

My candidates for the title Miss
stocks

millions,

additions to

over

American Railroad of 1950 include

numerous

strong

now

share of

ment.

low point nine months ago.

the

It greatly

already

an

Air

39, reflecting not only agricultural

selection of stocks such

here

the railroad share market has had
no

its

mendous amounts have been spent
on the property for improvements

trying to make, other
matters than those just mentioned
deserve
consideration—length of
haul, age of equipment, need, or
absence thereof, for large future
expenditures
for
additions
and
betterments, abnormally large or
subnormally low maintenance ex¬
penditures—all these are impor¬
tant and have been weighed to the
extent possible in the following
selection.
From a market point
of view, price too is important,
particularly when, as at present,
am

to

About
In this

bonds and working
each well in ex¬

are

of $150

cess

and
as

$6.5 millions.

government

lower

per

Selection

retained.

Airline
,

times

working capital position. Cash and

other fuels.

Basis

to

dividend

common

Seaboard
Seaboard

predecessor.

10 years, Santa Fe
$175 per share of

was

strengthened

coal carThereafter

much

be

lions

or

coal

a

bonds.

bears

stock, and paid
$55 a share.

share

a

for the

such

are

is greater than that for most rail¬

Line.

period, it reduced debt from $332
millions to less than $220 millions,
and fixed charges from $11 mil¬

ob¬

period of three

Air

stockholders

$120

unprofitable, in fact the contrary
is true; but because the trend of
viously face

past

about

common

Coal traffic is

part.

the

earned

is commutation business,

as

the

Seaboard

and

Santa Fe
In

business, particularly of the short
haul, branch variety, is one of
these,

Santa

to have as
Passenger

or

possible.

as

of safety

Atchison, To¬
Fe, Kansas City

Southern

&

dividends

common

are

There are,

however, as previouslysome features it is de¬

net

road

only.

to

qualify a railroad as one of the
most favorably situated in
1950.

company

stock.

common

lock, stock, and barrel.
Because
earnings are such a large part

small part of net earnings, margin

represents the road's only non-equipment debt and compares
$300 million of non-equipment debt for the old com¬
pany before reorganization.
Serial equipment obligations are out¬

Stock

owned

now

doubt that

with close to

of

.

is

which

Arkansas

have been

now

standing at only about $27 million and fixed charges are indicated
at roundly $2,500,000 per annum.
The old company had charges

re¬

duction, and modernization; some
of
it
to
pay
for Louisiana &

of operating revenues, and because

than in recent years due to

Income

per¬

should

companies.

Most of this was used for debt

extremely strong stock
embracing in its scope.
This may, of course, happen but I

sion

and

we

retained in

were

constituent

have

for

4s

if

common

two

market all

the

1st

probability, show large

centage price gains

the

earnings per share are
important clue to future
position, and the rails I like best

loadings and

the

in all

an

This program reached its climax early this year
with the sale of $55 million of 1st
Mortgage 2%s to provide funds
of

substantial merit but would,

lack

share of

retained

from the courts.

retirement

the market stand¬

point — particularly some of the
extremely low-priced shares that

poor

a

probably will, be others that

do better from

often

Even this did not satisfy the management and a
sive debt retirement was instituted

policy of aggres¬
immediately on emergence

and

cases

position has resulted from a longterm liberal dividend policy. Thus

So

Despite widespread enthusiasm

some

for additions and betterments.

pay

the upward trend of stock prices.
for

in

because

resulted from large use of
retained earnings to retire debt or
they

»..

operating

efficiency with
diesel electric power is among the
highest in the country.
In the
past 10 years, close to $100 per

Railroads in 1950
As the week started railroad shares again came into favor,

,.*«

company

228.7%

10.1%

28 4%

77%

85%

9'6

338.3

14.8

50.1

178.1

74

75

•

47.8

92.5

3.9

11.6

21.5

75

88

n

*.<$1.3
•

S.

i)

tlncludes U. S. Treasury bonds
important, includes rentals capitalized at 5%.
current assets.
|1948 figures include Louisiana & Arkansas; preceding years

1,415.4%

field
do

as

not.

investments

and

nol
•

'>

Volume

Continued

from

Most

THE

Number 4890

171

COMMERCIAL

26

page

&

and

Pacific, Denver & Rio
Western, Great Northern

Tell

Berna,

Builders'

Atlantic

Coast

the

Line

Line

has

bene¬

fitted greatly from the industrial¬
ization of the Southeast and the

great

growth

year's

revenues

of

Florida.

Last

2%

were

times

the average for 1935-39, compared
with 21/4 times for Class I Roads.

During
$123

the

last

share

a

10

about

years,

earned

was

the

on

stock, of which less than $29 per
share
was
paid to stockholders.
Close to

$94 a share was retained
in the company—this despite an
extraordinary program of main¬
tenance

which

included

of almost all rail.

is

relatively

heavy,

haul not exceptional.

efficiency

indices

result,

a

been

not

outstandingly good, although rec e n 11
y
showing
improvement.
However, this disadvantage is off¬
set by the growth just mentioned;
also by the fact that non-operating
income
tends
to
equal
fixed
charges and net debit for equip¬
ment
and
joint
facility
rents.
Fixed charges have been reduced
from a peak of about $7 millions to
about $4 millions/all through debt
reduction, and the 1952 debt prob¬
is

lem

that

one

will

be

solved

ex¬

garding

Manager of National Machine Tool
writes Editor of appalling lag in
machine tool replacements.

in

iron

additions

for

expenditures

problems

entirely

are

Thus, the dividend of $4
a
high safety factor

absent.

is

accorded

and is considered much safer than

close

a

would

10%

to

yield basis alone

suggest.

concentrating

debt

1955

years

the

on

this

of

None

1950-

Retained

been tremendous.
1940-49, $102.50

have

10

earned

was

reduction

on

maturity problem.

the

In

common

This

measure,

the

stock.

paid to share¬

was

holders.

explains, in large
reduction in fixed

charges from $17 million in
to

1937

Cash
working capital positions are

about.$10 million today.

and

extremely, strong, even stronger
than
indicated
by
the balance
Management is of extreme¬

sheet.

of

revenues

each

of

equity

its

in

appraised

at

about

the

for

ACL's

other

Nashville

of

$5

than

and

the

ties

high;

change in operating ex¬
amounts to $1.50 per share

Rock Island
Rock

Island

beneficiary
drastic

of

railroad

of

took

has

Cash

little

over a

also

the

the

most

reorganizations
of

$100 millions when the
pany

is

common

one

conceived.

ever

been

almost

new

com¬

over a year

an

important

factor in the

outstanding recovery
of high credit regard.
Financial
strength of Rock Island was re¬
cently demonstrated by sale of $55
million first mortgage bonds on
2.90%

a

scale

interest

basis.

improvements to

Large

the

prop¬

strong finances, and excel¬
lent management all suggest a fu¬
ture
greatly different from the
past.
Continued earnings of $10
per share could reasonably be ex¬
erty,

pected to
as

a

very

former

were

on

recently

18-year period,

an

and its securi¬
headed back to their

seem

is

common.

ago

after

share.

per

stock

common

resumed

Dividends

size.

of

is

stock

stock

the

larger dividend,
large part of earnings cannot
well be directed to bond¬
mean a

company

positions of prestige.

Denver

&

is

Rio

Rio

Western

connecting link with the Pa¬
It was thoroughly rephysically during the
long bankruptcy. It shows greater
a

cific Coast.

hibilitated
'

than average revenue

growth, and
its efficiency indices are good, de¬
spite the physical handicap of
crossing the Continental Divide
Reorganization cut its fixed
charges from $6 to $2 million. The
company
is in strong cash and
working
capital
position.
The
stock

has

tremendous

leverage
year having
been
$186
per
share,
maintenance
charges $60 a share.
Under fa¬

revenues

101 x/4%

at

The

the

and

accrued

underwriter
bonds

a

Great Northern
Great

fixed
more

road

Northern

reduced

charges in the past 15
than any other large

13

bonds,

pany's

treasury

of 1939.

In other words, in spite

been

tools

a year, which means a com¬
plete turnover in about 50 years.

American

industry
was

increase
hour

consider that only an
the output per man-

we

in

the

average will make
higher standard of liv¬
ing in the United States, this is a
shocking situation and one which
on

possible

a

deserves

the

careful

attention

of

progress

every

of machine tool

machine

This Association has prepared a
booklet entitled "Computing Re¬

"is modern" for about
and then

design

a

or

years
a

new

render

to

it

What happens to a man

tries

to

present-day

pay

and show

wages

seven

method

along

comes

obsolete.
who

new

a

profit and yet

a

compete in the market, with ma¬
chine tools that
years
old, may
imagination.

be

the

left

the

to

turn

thoughtful citizen.

outlines

an

appalling lag

modern

machines

of

their

cured

of

Bureau

man-hours

Labor

has

been

they

required

surprised

the

in

and

to

retaining

are

of loss in sticking to

machines

tool

after case, man¬

a

their

failing

to

necessary

money

to

shops.

(Signed) TELL BERNA,
General Manager,
National

Machine

Tool

Builders' Association

I

Statistics

10525

find

to

can

machine

case

modernize their

study

a

In

that

source

is not

made

the

from

agement
find

only a falling off
quality of the equipment,
there is a falling off in the pro¬
ductivity of the average worker.
The

Cleveland 6, Ohio.

the

both

in

figures

take

$100,000,000
take

as

the

year;

a

of

the

between

of

the

AFL

is

some¬

$75,000,000 and
$100,000,000; the Miners' is around
$50,000,000 a year in dues.
"Three

for

men can

practically speak
union
members

15,000,000
this

in

John

L. Lewis,
Murray. What
they say sets the policies of their
organizations.
Furthermore, not
country:

Bill Green and Phil

Feb.

have

only

they

they the money which
appropriate for doing

can
own

type of selling, but they
plenty of door-to-door vol¬

have

unteer

salesmen

stewards.

in

the

form

of

If you will talk to your
and
Congressmen,

Senators

own

they will tell

these

you

men

are

the

ones that they are
very con¬
cerned about in their district. But

will also find if

Congressmen
what

to

as

is

you ask those
Senators of yours

or

kind

being done

of

selling job

a

in Washington for

American

business, they'll
say
haven't got anybody—that

they

businessmen have let them down.

value of

machines as com¬
pared with those that can be se¬

the

has

concern

present

invest

consumer

which

whereby the management

metalworking

a

old

the

produce
needs of today.

Capital"

appraise the productive

used

to

the

annual

where

you

extremely simple

an

method

that the machine tool industry has
to offer and what is actually being

There

Invested

on

builder.

There has been
between

20, 30 and 40

are

as

approximately

annual

their

10 years ago.

Actually, with the rapid

design,

the

is

up

.

in

lower, not higher, than it
When

by the "Amer¬

equipment as has
the
output per

installed,

man-hour

"If

you

to

go

outstanding

the

ment who have gone

of

purpose

kind of
us

so

those

of

some

in

men

govern¬

there for the

helping

the
country that has made

a

great,

preserve

sit down and talk

you

with them

quietly, and they will
admit that very, very seldom do
they see a businessman calling
upon them to tell them what a
good job they're doing, to encour¬
age them to stand fast, but they

will

tell

you

nessmen

who

to

criticize

of

plenty

of

busi¬

to

Washington
because they're

come

them

not

Carnegie Ave.,

doing this or that or the other
thing for their particular com¬
for their particular com¬

28, 1950.

pany or

Sees Government and Labor

of

W.

Herman
of

Steinkraus, President of Chamber of Commerce

In

to

address

an

bonds

100%,

range

while special

scaled

are

from

from

prices for
104V2% to

redemptions

101 *4%

to 100%.

Executives

the

Club

National

selling

in

City on Feb. 28, Herman W.
Steinkraus, President and Chair¬
of

man

the

of

Board

l

the

organize

of

of

the

U.

30 State
New

Street, members

York

and

Boston

of

Stock

Exchanges.

is

ness

S.,

lag¬

ganized

Combest

KANSAS

CITY,

W. Scofielcl is

now

Baltimore Avenue.

With Russell,

Berg

BOSTON,
MASS. — John
Borys is with Russell, Berg
Co., 19 Congress Street.

are

&

a

curities

business.

Offices

said.

poll

was

did the

the

today,"

taken

Mr.

as

people
Stein¬

long

so

ago

to whom did

believe

good for the people

government?

leadership?—or

ness?—and

are

what

"Not

most

it

was

union

FLUSHING, N. Y.—W. T. King
Co. is again active in the se

see

the people of this country

—

King & Co.

to

thinking

kraus

V

have to do is to look

polls of public opinion from
one
of
the
representative

concerns

(Special to The Financial Chronicle)

&

American busi¬

on

at the
any

W. T.

discrediting poli¬

ness.

you

the

—

was

was

it

it busi¬

percentage

ran

something like this: 43% govern¬
ment, 42% union, and 15% busi¬
ness.

That

outsold

that

are

departments of this country there

affiliated with

Prugh, Combest & Land, Inc., 1016

rail¬

H. W. Steinkraus

ticians' attacks

"All

selling

mission Reports recently disclosed
that in the various government

labor

relations and in

MO. —George

the

"For example, the Hoover Com¬

or¬

cultivating
better
public

(Special to The Financial Chronicle)

of

Sales Executives Club.

in

Joins Prugh,

to

sales campaign to swing

door-to-door

behind
and

are

probably larger than any organi¬
zations represented in the National

government

a

analyze what we
it's pretty hard

fact, but there are
some
extremely well organized
selling
organizations,
including

the

ging

Mr.

"I don't know whether you are

fact that busi¬

staff of Townsend, Dabney & Ty¬

against,

aware

Commerce

deplored

country

the tide the other way.

President of

BOSTON, MASS. —William F
Harvey has been added to the
son,

we

Brass

is, at present,

this

continued:
"Why are
facing this situation? Because,

up

Co., who

before

Steinkraus

unless

is how

by others

we

on

have been

the biggest

are upwards of 35,000 government
employees devoted to the so-called
subject of 'public relations.' Every
single department has a wellorganized staff looking after the
public relations of that depart¬

ment
and

the

1,500,000

Service

Securities

publicly

of¬
shares

additional

Corp.

at

$4.05

per

Proceeds from the

sale, together
with a projected increase of
$2,205,000 in the present bank loan,
would be used by the corporation
to

add

tape-recording in¬
everything else that

necessary

with publicity and public rela¬
Those

have

just one
in mind, and that is sell¬
ing their goods day in and day
men

further investments to

its

portfolio.

The effect of this pro¬
gram would be to more than dou¬
ble

the

size

the

of

corporation

without, the management feels, a
proportionate increase in oper¬
ating expenses. The leverage char¬
acter

of

its

financial

structure

is

being retained.
General

Public

Service

incorporated in 1925
to

as

Corp.,

successor

Public Service Investment Co.,
had been founded in
1909,

which

is

investment

an

closed-end

comprised
issues

of

of the
portfolio is
diversified list of
company

type.
of

a

basic

Its

American

indus¬

tries.
Total
were

assets

$4,953,130

at
as

market

value

of Dec. 31, 1949.

With Merrill Lynch

with

struments and
go

13

stock of General Pub¬

common

lic

experienced reporters
photographers and with all

tions.

Webster

March

share.

Bridgeport

the Chamber

the

job

"Now, why is that true?"
we

&

on

fered

today.

New

underwriting group headed

Stone

Corp.

rests.

economy

York

the

by

of

during 1950.
The company con¬
templates expenditures fqr con¬
struction during 1950 of approxi¬
mately $4,430,000.
redemption

An

U.

our

Group

Offers Gen. P. S. Com.

S.f tells sales executives, business is losing fight on
statism and is failing to sell to public the foundation on which

Sales

Regular

Stone & Webster

Business in Public Relations

to be made

or

Outstripping

com¬

located at 149-45 Ash Avenue.




of

industry is at the moment
replacing about 2 % of its machine

construction

for

expenditures made

years

$216 mil¬

modernization

together with other funds,

will be used to reimburse the

10 years

was

lagging far behind

are

vast

Proceeds from the sale of these

that remained solvent—from

net income

the

com¬

has been conservative. In the last
-

up during the war and is
falling off again, and is now
actually at a level lower than that
now

labor,

disclosed

CIO

went

is

bid of 100.73%.

a

on

at

its

$19 to $7.5 million. Dividend policy

certain
specified prod¬
Assuming that products are
not changed in design, we
find
that
the
output per man-hour

customers
in

to

came

the annual take

was

organized

were

ucts.

equipment for American
metalworking industry knows
painful experience that his

interest.

award

won

March

on

petitive sale

vorable

$10

pro¬

question

munity."

last

conditions, earnings of
share seem quite possible.

more

the

at

At the

Stuart

Townsend, Dabney Adds

Grande

Grande

furnish

to

from

& Co., Inc., on
March 15 offered $3,000,000 Penn¬
sylvania Power Co. first mort¬
gage bonrls 2•%% series due 1980
Halsey,

(Special to The Financial Chronicle)

&

is

it

ductive

in

Halsey, Stuart Offers
Pennsylvania Pr. Bds.

holders, equipment manufacturers,
or the
treasury.

Denver

of

indirect shop labor,

of such modern

ly

1%

penses

of

assets

&

Leverage
each

shares,

own

all

Louisville

Nashville

The machine tool builder whose

job

ican Machinist" indicates that this

solution of its

and

earnings

Mises entitled "Economic As¬

A recent survey

Illinois Central

of

very

their plants.

Illinois Central has for 10 years
been

are

direct and

look

a

Congressional
couple of years ago

to how much

produce

much impressed by
excellent statement
by Dr.

the

and

high calibre offsetting con¬
siderably the burden of passenger

&

Chronicle:
We

pects of the Pension Problem," in
your issue for Feb. 23.

pre¬

appear

Working capital is large,

debt

Financial

von

betterments have been substantial
and

&

revenues

ore

mature.

Commercial

take

a

the

when

General

early, serious decline

an

without any great difficulty. Due
to ACL's ownership of one share
Louisville

Editor,

period of

a

hearing before the
Committees

follows:

penditures have been large. Nonoperating income has been in ex¬
cess
of fixed charges.
Fears re¬

average

As

have

maintenance

and

marked

Freight density
passenger busi¬

relatively light,

ness

relaying

is

"Secondly,

Efficiency of operation

stock.

real opposition for

good many years.

labor—at organized labor.

Association,

in

Coast

a

Lower Than 10 Years Ago

lions, and dividend payments $72
millions.
Retained
earnings of

,27

in selling, especially when they've
been left to themselves without

Output Per Man-Hour

$144 millions ($47 per share) are
excess of the market value of

Illinois Central.
Atlantic

(1119)

any

Favorably Situated

&

Grande

CHRONICLE

LETTER TO THE EDITOR:

Railroads in 1950
Island

FINANCIAL

SAN

Edward

FRANCISCO,
M.

connected

Baker

with

CALIF.

has

—

become

Merrill

Pierce,
Fenner
&
Montgomery Street.

Lynch,
Beane,
301

purpose

Schwabacher Adds

out to

jihe American people.
"Furthermore, they have only

one

directive head in the long run

who sets their

policy. Thirty-five
thousand people in that game can
certainly do

a

very

effective job

SAN

FRANCISCO, CALIF.—C.

J.

Shattuck

&

Co..

ber

of

600

the

is

with

Market

New

Schwabacher

Street,

York

mem¬

and

Francisco Stock Exchanges.

San

2G

COMMERCIAL

THE

(1118)

FINANCIAL

&

'

28

(1120)

THE

unavailing
aim

real

sphere,

disintegration v star ted: with the
national
policies and
witn
the
ideologies responsible for them.

obvious

the

it,

begin to
for instance the offi¬

as

cials of the Economic
ft is

familiar

are

Hitler

since

ever

to

the

of

repressed inflation, collectivist
controls, "full employment," ex-

(

the

of

mixture

strange

1949).

the

examples

wegian
mild

British

cases

or

down

of France

or

could

made

be

which

a

has

national

success

the

This be¬

level.

But, with the
exception
of
Switzerland
and
Belgium, all European govern¬
ments still practice National Col¬
lectivism to that extent that they

The

belief

lectivism

is

reasoning.

international col¬

in

based

faulty

on

In practice, there is

however, which is the real key¬
stone of National Collectivism.
It

collectivism that it makes the

is exchange

control which is the
whence proceed all
the evils: bitlateralism, deficits of

government.

box of Pandora

ough

the balance of payments,

entirely dependent

strangu¬
lation of international trade, and

wiil

be

there

will

be

be Na¬
will be
as

control

exchange

international

eco¬

and disequi¬

nomic disintegration

librium. Inversely, if you want to

in¬

economic

international

have

tegration and equilibrium you must
first
remove
exchange
control,

want to remove exchange
you must dismantle Na¬
tional Collectivism and say fare¬

If

you
control

j

ideolo¬

the corresponding

well to

gies
of
planning, of
"full
employment through thick and
thin," of the excessive Welfare
State

That

socialism.

fiscal

and

it

nomic

the

logic which the

is the inescapable

This is

affair

an

be¬

so

of

essence

very

process

eco¬

of

life

which

becomes

the orders

on

its

with

administration

the

International

collec¬

tivism, therefore, supposes an in¬
ternational state able to give and
its

enforce

To

state.

like

orders

the collectivist
systems of several national gov¬
ernments is to merge these gov¬
into

themselves

a

To visualize such an
practical proposition is
difficult at any time.
But the
prospect becomes simply utopian
under present circumstances be¬
superstate.

event

as

cause

a

now

have

we

do

to

with

collectivist governments and their
union into an international super¬

Collectivist

government means
possible degree of cen¬
which

tralization

excludes

any

who has eyes to see and
It is a logic which
is as true after the devaluations
as before.
The devaluations cer¬

Consequently, the political union

everyone

hear.

the strain, and they,

tainly eased

most countries the

in

were

indis¬

which is the

prerequisite of inter¬
national planning and collectivism
is not even possible in the mild
and loose form of

federation.

international

an

Since

everybody,

!
for the re¬ however, admits that an internamoval
of exchange control and | tional federation is the only way,
the dismantling of National Col¬ j if any, to achieve a political union
lectivism.
But the chance offered of Europe, it follows that col¬

condition

pensable

by the devaluations has not been

lectivism makes such

used, which means that the Euro¬

possible

governments resemble a sur¬
who
opens
the abdomen
without
removing the inflamed

pean
geon

It

is

situation

this

mind

in

when

which

we

we

that

say

National Collectivism has led Eu¬

into

rope

ism has

Collectiv¬

impasse.

an

become

responsible for

a

degree of national isolation, inter¬
frictions

national

which

means

failure
the

on

disequihbria

it is

that

interna¬

and

economic

tional

much

as

the international

The

level.

national

as

a

on

crisis

of

the international economy—which

the ERP is to
until
crisis

overcome

1952—is
of

in Europe

tantamount

to

Collectivism.

National

The first cannot be overcome

less the latter has

Everything
I

been

is

un¬

removed.

rhetoric

and

quackery.

.

^

,

else

the

The price of National Collec-

tivism

is,

in

the




international

makes

ism.

a

The

it

only

sort

collectiv¬

of

interna-

which

is

a

practical possibility is that which
had
been forged by Hitler
has been imposed

now

the satellites of Moscow.

the

imperialistic

"Grossraum"

form

It

known

is
as

"Co-Prosperity

or

Sphere."
Let

anybody who is not yet

vinced of the logic

ing

consider

the

con¬

heres

to

what

a

sort

of

which,

National

though

Col¬

some¬

mild compared

Great

Britain,

with that of
nevertheless
is

characterized by a rigid system of

exchange control and a fair
ure of repressed inflation.
the

the

make

follow¬

experience

of

five

meas¬

After

years

of

now

goes

National
Collectivism has
Europe into an impasse, and
is incompatible with an inter¬

(1)
led

national
the

of

federation

the

(see

case

Benelux).

somewhat,
be genuine unless there is

the

real

conditions

dismantling

which

Collectivism,

offer

to

seems

however,

supposes,

an

escape,

interna¬

an

tional state.

free

This international state, as
act of democratic nations,

unthinkable

because
it

state

as

a

would

col¬

be

a

hyper-centralized one excluding
any genuine federal structure.

Consequently, international

(4)

collectivism is

Consequently, Collectivism
means practically always National
(5)

Collectivism.

the

Consequently,

(6)

integra¬

voluntary act
governments is in¬

tion of Europe as a

with collectivism and
only feasible if the opposite eco¬
nomic system, the Market Econ¬
in

is made the dominating one

Europe.

been

is

it

that

ways.

many

have

Others

Serfdom.

to

collectivism can

It has
maintained that it is a Road
in

stated

economic

to

way

a

shown

paralysis and disorder. With
equal force, it can be argued that
it is the path to Supermonopoly
which

from

what

But
rope

we

there

is

no

escape.

realize now in

Eu¬

is that, in addition to all this,
means
by necessity

collectivism

autarchy

national

and

of

disintegration

interna¬
the most

possible kind.

this is not the most distressing

If

aspect of collectivism, it is at

least

It
the
sense of a free,
multi¬
rational and
balanced
but when we try to mend
any
conscious e'fort of

phraseology

fanciful

and

be

blocks

we

our

find
the

way.

believed to be
reveals itself as dynamite.

lowing the American suggestions,
but
afterwards
being
severely
criticized for this, the Bonn Gov¬
ernment has opened its frontiers

policies in Europe are as impor¬
tant
us

they are numerous.

as

name

Our

Let

must be

that

reasoning which we
analyzed pervades like a bad per¬
fume
all present discussions on
the political and economic union
of Europe.
Nothing can be more
certain
than
that
the
national
the

faulty

policies of most Euro¬

countries

which

exchange

control

incompatible

more

impatiently

for

European

"integration" without asking first
for
the
removal
of collectivist

policies which both make this in¬
tegration necessary and impos¬

must

course

tional

Holland

buy

long

exports to France or

into dollars

or

materials

raw

of

to

seems

the convertibility of

as

long

as

have

as we

again,

lectivism

and

socialist

multilateral

no

of

control

it

as

last

and

There

the

sion.

It is

pressed inflation to

that

lem.

is

To

convertibility

the

cardinal

restore

however,

is

of

prob¬

convertibility,

tantamount

abol¬

to

and sound monetary

most

in

made

of

and

of

German

collectivist

of similar projects.

point,

ernments retain

of

has

exchange control

hardly

American

have

if

then the idea

Currency

European

a

national gov¬

If they do,

not.

or

is

however,

whether the

again

more

Union

than

sense

an

Currency system would
United

the

States

at

free

economy.

masses

the

ity

saw

Union.

If

abolish

between

the

idea

the

however,

restore

that

countries

European

partially

convertibility
would mean,

this

disequilibria

the

and

brought about by in¬

convertibility

would

tween

Europe

world,

and,
be

is,

exchange control only

thus to

must

ma¬

Monetary

European

a

be¬

recur

and

outside

the

secondly,

there

that

established

sort

a

of

however, would
tivist

suppose

European

a

An

been

end

by

On

the prospects of the

latter, enough

has been said above.

commod¬

same

price
touch

same

almost comical

given to this inglorious
oversensitive author¬

some

who

tried

to hold up their
prestige by forc¬
ing, under threat of penalties, the
recalcitrant
population to coihe

badly

and

battered

get their ration books which

they

did

not

want.

This

is

per¬

haps the most striking illustration
of

the

effect

economic

book,

the

of

have

had

had

now

forced down the throat of
which

longer

no

been,
life

of

matter

a

but

ration

the

which

ago,

of

remedy

freedom:

to

lation

be

to

a

popu¬

cared

to

have it.
But the restoration of free

Western
most

prices
all the problems in
Germany. The worst and

solve

cannot

pressing

is

unemployment.

The

temptation

very

great to follow the easy road

of "full

of

and

was

still

is

employment," but in spite
coming from the

admonitions

German

socialists

ment has had the

Govern¬

intelligence and

the commendable courage to
stand

this

the

from

and

Western allies, the Bonn

temptation and

with¬

to

ac¬

cept the heavy risk of the unpopu¬
larity of sucn an attitude.

collec¬

superstate.

a

ago,

point in using

no

be had at the

can

has

need

we

cumbersome

new

chinery of
to

have all

we

monetary integration

without the

ex¬

seen

prefer

A few weeks

when the

coupons

death,

exchange

abolished

work,

rationing had
scrapped altogether because

to be

the

years

state

busi¬

having

the whole system of

two

of

because

system,

systems

and

they

dare

return to the

after

would

and

the

cannot

leaders,

split into 49 systems of state col¬
If

stu¬

less than the

no

al¬

so

even

that

propose a

masses

ities

or

from

view,

socialists

openly to

great
the

that

stupendous

indeed

situ¬

the

see

we

point

any

is something "almost just as good."
It is the idea of a European Clear¬
crucial

the

after

pendous

pol¬

economy

comparing

1948,

is

freely.

The

re¬

essentially

policies has proved to be the big¬
gest and most conclusive experi¬

ishing exchange control. Not dar¬
ing to face this thorny issue, many
people prefer to believe that there

ing Union

from

and

an

both

being realized by most

observers

drive,

change

Collectivism

ness

third conclu¬

profitable

antiliberal

has been Western Ger¬

National

the

our

explodes the

most

this

of

many.

old

leads to

toler-

of exchange
passive balance

the

and

however,

will get us out of the ruts of dis-

That

success

of payments.

equuioria and dislocations.
Exchange Control Crucial

a

less

so

mythology

reform

"liberalization"

no

of

provocatively
impasse of National Col¬

from the

success

cur¬

in¬

is

sort

a

the

it differs

as

As

rencies has not been restored, i.e.,

interna¬

socialists

spread

the

all

the

"atrocity propaganda" against this

and

pesos

overseas.

be

since

chorus

defatigable

before

its

are

consider

favorable

of,this country. The

stressed

When

The German

exceedingly
of

and

the

case

good

the dangers of

is, indeed,
illustration

an

of

"full employment"

faulty

reasoning

on

which it is based.
The Good Road

We

"Liberalization" policies and
such

even

culminate satory

are just as
with European in¬
tegration as it is senseless and
Utopian to repeat this collectivism
on
an
international level.
For
this reason it Is putting the cart
before the horse to ask more and

in

liberal
more

which

we

less

in both countries, of this

success,

ever

had
pro¬

of

ceeds

European exchange control, which,

only a few.

first remark

circumstances

ation

Government

possibility to turn the

dislocations

which follow
for practical

if

immeasurably

icy.

German

first,

reasoning

L..e

ment

the

only

our

results

remarkable

also

if

had the

mortar

The consequences

achieved

Italy

free economy

French

these

and

from

with astonishing suc¬
the same method

by

and

or
Dutch imports, but
imports have been much
larger than they would have been

to

What formerly was

Practical Consequences

years

cess,

The

the

as

country

a

Belgium traveled during the

object

change control, then

which

which

way

last

re¬

genuine
lateral,

that collectivism is once more

employment/

"full

and

is the

like

example shows. Fol¬

positively harmful,

lectivism

obstacle

word

(like Fritalux, Uniscan, Scandanglia and what not).
This spurious "liberalization" may

control.

by
international cooperation

flation"
That

all

perhaps the most indisputable.

this

tional Collectivism, "repressed in¬

fact

combinations

of

sanity,

farewell to Na¬

say

which

destroys the world economy in

system,

economic

is to

able

unfounded
that
the
initiative in "liberaliza¬
might be even bogged in
mire
of
fictions,
illusions,

currencies

The paradox of
be

not

of

price

Europe

inconvenient

compatible

omy,

is

fear

the

tion"

trade

of nations and

new

present

to

illusion.

an

National

of

The

cent German

International

(2)

intra-Euro-

of

trade, while alleviating per¬

the

ing statements:

it

But

better.

obvious that
under the name

altogether

whole reasoning,

to

able

are

pean

countries, Holland still ad¬

lectivism

Collectivism

vs.

our

the

equally

"liberalization"

a

Integration

Resuming

economic

the

much

Collectivism.

of

case

what
of

cannot

reason¬

of this

projected economic union of Bel¬
gium,
Luxemburg
and
Holland
known as Benelux.
Among these
three

the

must

the

once

on

of

most

bound

Luxemburg.

union im¬

collectivism
necessary if we

collectivism

and which

is

same

international

an

tiohal

appendix.

have

which
want

the

—

shrift

incurable and worst

genuine regional self-government.

to

drop some

practices
of
foreign
policy or to loosen some

trade

pean

tional

state.

the highest

a

mean

col¬

be per¬
of the least
can

intelligent

haps

national

a

merge

ernments

short

a

as

which

state

now

present state of Europe teaches to
ears

to

suaded

na¬

the

It means the thor¬
"politicalization"
of
eco¬

nomic

of

is

sanctions.

all the rest of it.

there

been

telligently or
lectivist governments

idiosyncracies of the Dutch,
Belgians and the people of

no

otner sort of collectivism than na¬

cause

State

would

one

lectivist

tional collectivism.

long

have

collectivism
either in¬
stupidly, and if col¬
even

be carried through

can

tional

is

Collectivism

compelled to retain exchange
control.
It is exchange control,

feel

As

Benelux

a

might

Benelux

(3)

The Illusion of International

tangle themselves.

control.

into

that

make

to

a

,

exchange,

If

centralized

Utopia.

Denmark,

long as there will
tional Collectivism there

countries

State.

on

lief, however, is nothing else than
the flight from bankruptcy into

and Western Germany
laudable efforts to disen- i

As

Undoubtedly,

success.

the

on

international

the

while Italy
make

failure

a

level

Nor¬

to

collectivism

that

been

the

from

vary

the

of

three

we

lieve

applied in the different Euro¬

countries

economic

final

having recognized the bank¬
ruptcy of National Collectivism,
try to save their socialist faith by
taking refuge in the idea of Inter¬
national Collectivism.
They be¬

degree and the thoroughness with
which this National Collectivism

pean

suppose

deprive the Marshall Aid

after

consumption
and of public waste which goes
under the name of Austerity.
The

maximum

to

its

of

restriction of private

is

the

however, is not
either, since this would
a political union of
the

feasible

However, most of these socialists,

policies,

money"

"cheap

cialism,

of

collectivism

Benelux,

lectivist

and

change control, state monopolies,
bilateralism, subsidies, fiscal soand

tra-European

be

tially equal to those of the Third
It
Reich, is bound to balk every ef¬
combination j
fort
in
international
integration

well-known

an

ating

interests

present efforts to leaven intrade
restrictions.

the

this

make

so

in 1948,"
These socialist

Collectiv.sm.

National

call

is

as

Col¬

Geneva,

j

and,

power

tins

long

it

"Eco¬

report

under the! critics of National Collectivism
guidance of Dr. Schacht, set the' realize more and more that it is
a
example of a type of national eco¬
policy which, by methods essen¬
nomic policy
which we propose
to

came

become

that
as

in¬

European

repeat:

controls

its

irvrn

Thursday, March 16, 1950

tegration begins at home.

this

(cf.

Europe

8 n

illusions and vested
(including that of inter¬
national bureaucracy) and by con¬
Intra-European Trade Restrictions fusing
the real issue.
All,' the
more firmly must it be said that
Our second conclusion concerns
We

sible.

possible in former liberal times, it
is
altogetner Utopian today since

for

They

policies.

Commission

has

an

nomic Survey of Europe

longer necessary to de¬

no

fine those national

intelligent

more

iv/r

j

CHRONICLE

the

as

National

to

To

international

socialists

sincere

admit

by Hitler

that

sticks

lectivism. *

whole

it

everyone

impossible

HQlland

autarchy " and
That is so

•

to

is

union

realize

to

Benelux

tne

union,

obvious

international anarchy.
and

Started

national

efforts
of

economic

Fight For Economic
Sanity in Europe

FINANCIAL

&

COMMERCIAL

Continued from first page

The

rpi

CHRONTCT.F

1

countries

ERP
ible
to

the

steps as multicompen-

the

arrangements between
are

things if they

smooth

over

ultimate

not
are

transition

the

goal

contempt¬
meant only

of

the

end

of

they

may

widen

it

by

verting attention from it by

by "full employment"
is something quite special.

It is

policy which wants to

a

press

every

sort

of

di¬
cre¬

and

sons.

caused

Since

or par¬

by whatever rea¬
is, however, a

there

normal tendency towards all
of

sup¬

unemploy¬

ment, however temporary

convertibility of currencies.
But
the real. danger is that, instead
of shortening the distance to that
goal,

meant

tial

all-round

see

today

of

Collectivism, the
dis¬
mantling of exchange control and
establishment

is

want to

course,

employment, but what

to

National

the

all, of

maximum

sorts

changes, resulting in

gree

some de¬
of at least temporary unem¬

ployment,

the goal of "full em¬
ployment through thick and thin"
can

a

be achieved only

permanent

excess

by creating
"effective

of

'

Volume 171

demand"

by

total

over

creating

i.e.,

the

boom

the

European countries to follow
path of National Collectivism,

we

have

supply,

permanent

a

condition by means of a
policy of
constant inflationary pressure.
In
order
to
prevent this
pressure

from
it

leading to

is turned

tion

an

into

inflation,

open

repressed

infla¬

by the well-known machin¬
of collectivist controls.

ery

That

causes, besides the familiar effects

tactless

be

payments,
the

and

which

that

means

total of consumption

sum

investment

always exceeds
production.
The whole
of
"full
employment,"

current

policy

therefore,
some

the

that

supposes

foreign

there

which

source

is

fills

more

tries.

In

So far the German Government

is

determined

road.

It

not

follow

to

this

prefers the

example of
Belgium and Italy, and there can
be

doubt that it has to be

no

reality,

gratulated

its

on

con¬

firmness.

It

en¬

coun¬

have

we

little of that.

very

to

the anti-collectivist

courage

But

unbelievable

all

was

least

at

reason

seen

the

now

has

been

The Bonn

stead

Government, in¬
being
encouraged
or

of

helped in their endeavors to fol¬
low

the Good

verely

Road, has been

reprimanded

by

who

turn

a

CHRONICLE

begin

spectacle

to

been

basis

the

made

remonstrances

all

have

mans

that
most

this

of

to.

They

strenuous

have

Gov¬

while still stag¬

dislocations

of

Continued

from

is

begin

feel

to

It

is—

the least—curious that

say

international

organization

market, among which the
of refugees from "Eastern
Planning"—whose number still in¬

sembles most

which, with
that

of

closely that of Italy
population equal to

a

Western

Germany, also
an almost equal size
unemployment. Its main cause
in Italy is the difficulty
of the
great annual increase of popula¬
suffers from

of

tion to be absorbed by a national

industry

which

capital.

sary

other

look.

"full

In

the

depends

success

of

National

should
a

into the bog.

neces¬

to

us

over¬

what

to

an¬

enthusi¬

most

employment"

contrast

Lord

Keynes had in mind when speak¬
ing of "full employment" there is,
in
all
European countries with
the

exception of Switzerland, no
"oversaving" and no abundance

of

"idle

capacity"

shortage

but
capital in

of

little saving in
investment plans.

of too
the

ployment"

in

such

involve

would

genuine

a

the

sense

relation to
"Full emsituation

a

the

since

it

would

the

be

"re¬

pressed" variety of inflation, this
policy would necessarily mean a
National

to

return

the

Fortunately,

Collectivism.

Germans

had enough of this.

have

Both in Ger¬

in Italy, the only sound

many and

to combat unemployment

way

alleviate the shortage of

to

is

quickly

and

on

a

increase

an

of

national

large

effective

only

is the import

remedy

scale

by

savings

and

promnt

of foreign

capital.

sizable

Marshall

for

influx

probably
to

perhaps

have

We

believed that

always

sound anti-

a

inflationary
and
liberal
policy
with a legitimate need of capital
for
the
increase
of
productive
equipment constitutes the ideal
for

case

fessor

the

of

stress

like

many,

Einaudi's

cisely

in

the

Europe

of

the

great
the

loss

can

the

temptation

country

end

of

the

order

By

the

of

"full

German

devoutly wish

pean

and

be restored. By avoid¬
em¬

Govern¬

to

the

do

every

if

"dollar

return

of

it

Euro¬
wants

shortage"

international

and

equilibrium in Europe.
National Collec¬
and
by fighting against

dismantling

tivism

and

the

enter

point

is

business

that

and

to which

the
then

was

lucrative

a

fied profession
self for life.

In contrast

in

Illinois

small

a

quoted

in

columns

your

effect that he

town

was

the

to

preferred to let his

go into pedagogy instead of
following in his father's footsteps

son

in

his

investment
is

there

cause

forward

in

to

the

to

In

counter
ment
a

to

section

business

fact

and

the

of

over-tne-

it, the

invest¬

is confronted

not

theory.

a

with

This

hard fact is that over-the-counter

securities

public, and therefore the fu¬
of

over-the-counter
be

everybody
there
as

already placed with

are

is

tribute to
for

such

benefit

also

Whatever

of

that

will

con¬

creating a better esteem
securities, will not only

dealers,

vast public.
I believe
only around 1,500 stocks

a

so

often claimed but

so

rarely

un¬

derstood.
Whenever it has been

ing the last
to

assure

Marshall
should

do

years,

the

Aid,

final

its

that, in order
success

of the

administration

everything to dissuade




be

to

merchandised.

If the

men,
the real estate
investment trusts, the
profession in estate work,

the

men,

by

reprqr

such

securities, there
overwhelmingly more individ¬

are

sentative

speak

of

disparagingly

investment trust
ter

standard

a

of

compensa¬

their

that

professions gen¬
erally conform to, it would be a
great help in the over-the-counter
business

if it became

sound

market

profession¬
ethical
to
do

and

within

Otherwise the

flexible

over

tends to

-

the

free

are

with

pricing

that

ter

securities

possible

types

such

only

be¬

of

organization, and carry it.
This
pricing policy may be geared to
a
velocity of turnover, or an abof sales solicitation expense,
of basic dependence on

sense

lack

a

the

over-the-counter

other

any

factors

market

that

or

have

no

relevancy
to the
economics
merchandising securities.
As

the

to

why

premium,

so

of

to

question of
should pay a

speak, to buy an
security, it^can

over-the-counter
asserted

carries
the

that

after

all

service

investor, oftentimes in

into

his

home

or

the

essentially

man

investment

the

often
of

man

wares.

unfavorable attitude

enough

the

The

by

other

segments

investment business.
controversial

philosophy
nomics

of

of

business,
edged

as

that

difference

ing

and

the

the

was

a

eco¬

over-the-counter

it impliedly acknowl¬
there

is

order

a

profound

merchandis¬

taking.

able

on

to

person

office.

If

the

satisfactorily to

high grade obligations

If

it

is

are un-

precedentedly low at a time when
the purchasing power of the dol¬
lar

is

years

be

half
a?o,

worth

client

of

what

the
the

prefers

it

service

was

ten

well

may

premium.

himself

If

the

is

qualified and
chose his own securi¬

to

ties

so-called 5%

NASD

between

over

i t

the

-

s

is

so

immediately

Because

firm

a

rather

and

tenders

than

to

him

an

employ the
experience of the securities man,
order

for

a

listed

stock because it is a by¬
word, he stands ready at all times
to take care of it, without any

All this is not to rule out those

spirits

who

suit¬

over-the-counter

always

exist¬

are

ent

but

question of timing of listing

is

not

of

widely

recognized.

paramount

importance.
it is like bringing out
promising young operatic singer
before her voice is ready. As soon

Otherwise
a

as

over-the-counter

an

the

Big Board

security
Curb, the

or

the

-

the

tivities

major part

and

relative

is

of

per

abilities

to

relate

and

nomics of

taking,

coalesce

eco¬

entirely dis¬

similar bases.

lished,

not only will bids more
nearly reflect the statistical real¬
ities

of the

securities

themselves,

so

market obscurity, so
listing defeats its own.

of creating a better

mar¬

the

time

has

arrived

people who have stuck with
investment

business

through

thick and thin to rededicate them¬
selves to

any

that will
all

and ideas

measures

contribute

welfare

and

the

to

over¬

attractiveness of

the investment profession so
as

long
they are not incompatible with
public welfare, with which

the

the

If

situations,

in
of

think

I

of

known

ket.

the

order

vs

act

for

the

the

merchandising

which have

languish

ac¬

se

men

preoccupied

newcomer, regardless of
meritorious it may be, may

purpose

the

of

be

the

the

con¬

firms

criterion

no

respective

its

And

the

of

unless

business

interests.

size

better

how

leadership by

counter

-

with

that

reason

no

logically

may

neces¬

hot potato at

SEC

is

concerned,

primarily and rightly
in

and

which

reposes

the future of the business, or any
business for that matter.
C.

March

J.

STUBNER.

9, 1950.

966 Union Trust

Pittsburgh

Bldg.,

19, Pa.

Reports Home Mortgage Debt at $38 Billion
United

States

impetus

Savings and Loan League publication holds
borrowing lies in current trend toward lower

to

interest rate.
The current issue of the "Quar¬
terly Letter" of the United States
Savings and Loan League, writ¬
ten

by

Dean

Arthur

Dr.
the

of

Indiana

League

Weimer,
Business

of

University,

economist,
the

M.

School

and

trust funds

are
growing
being invested in
home mortgage loans.
How long
this trend toward lower mortgage

rapidly and

interest

are

will

rates

continue

and

League

pends

Norman

and

Strunk,
reports

cluding

continuation

volume

of

Vice-President,

volume

sion

home

of

mortgage

tion,

the

de¬

number of factors in¬

a

on

of

residential

rate

heavy

a

construc¬

which

at

people

debt rose in 1949 to

place

$38 billion.

lending institutions and the Fed¬

a new high of
They state that "al¬

this

though
secutive

burden

of

the

of

fifth

the

was

year

con¬

increase,

debt

when

the

meas¬

in terms of personal

ured

dispos¬
substantially below

able income is

demand

for

mortgage

funds,"

the writers note, "came
largely from buyers of new
and

substantial
of

by a
purchasers

of

existing homes.
The markel
houses, while not as active
immediately after the war, re¬

flects

spite

turnover

a

faster

than

in

the

of

considerably

prewar

great

In
for

years.

demand

mortgage funds, however,

compe¬

tition among mortgage lenders in¬
and

terms

to be

of

on

mortgage

competi¬

mortgage loans

forecast

by
and

United

were

Committee

the

no

volume

will

most

con¬

of

this

Officers Appointed by
Curb Clearing Corp.
Bertram

Economic
States

Policies

Savings

R.

Lowenfels

has

been reappointed President of the
New
York
Curb
Exchange Se¬

curities Clearing Corp. for the en¬

suing year, it was announced fol¬
lowing a meeting of the board of
directors of the corporation. Mr.
Lowenfels is
of

Richard

partner in the firm

a

K.

Kaufman,

Alsberg

& Co.
Other

reappointments

include

David

for

the

U.

Page as
Vice-President, Wm. B. Steinhardt
as
Secretary and Treasurer and
C.

E.

Sheridan

as

Assistant Sec¬

retary.

on

of

and

Loan League in its report last fall.
Increased mortgage competition is

due,

competition

throughout

year."

year

"Increased

Trends

tinue

favorable to bor¬

tion and somewhat lower interest

the

mortgage

monetary and
Probably growing

policies.

mortgage

lending

rowers.

rates

in

Government's

fiscal

augmented

was

number

for old
as

savings

levels."

prewar

homes

eral

their

doubt, to the substantial
of funds coming to the

Philip F. Hartung, a partner in
Harris, Upham & Co., was ap¬
pointed Second Vice-President
and

Andrew

& Co.

was

Baird

of

Josephthal

named Assistant Treas¬

urer.

have

the

savings associations and savings
banks, the decline in yields on
high-grade bonds with the re¬

Mr.
Baird, Mr. Hartung, Mr.
Page and Mr. Steinhardt were ap¬

sultant desire of

compensation whatever.

intrepid

the

has

be

important

The

over-

counter market

-

over

forms

continued

fellow's

present

is

of

An

time when their merits

people,

it in the effort to rehabilitate the

ings account interest and interest

insurance

pre¬

in the efforts of

for the assertion of

another

of

for that mat¬

the

other

industry

committees

"The

crucial

investor

an

listing.

been
the
grooming of securities for listing.
The
public benefits because it
goes into
these situations at a

hits

to

business,
such as listed stocks and bonds,
municipals and syndicates, are the
major concern of that particular

or

experience to

for

the very time that customers'

the

will

at

distribution,

being

other

cause

by

able

people

disor¬

tend

may

found

limits.

a

intrude

to

tain securities that have not been

a

ganized jungle into which other
segments of the investment busi¬
ness

lessening of positioning risk, to
of the public.
The NASD, I believe, is study¬
ing the question of delisting cer¬

the price advantage

sarily drop it like

counter

-

become

of

exclusively

manned

industry

over-the-coufiter

creased

successful

a

knock
The

or

concerned

currently

over-the-counter

over-the-counter

trust

repre¬

investment

an

and

lions of people by the present era
of cheap money, under which sav¬

a

the

curities a larger and more de¬
pendable flow of trading is estab¬

tion

salesman

heard

solely

problem

by

act

speak

would be encouraged to narrow
thehir spreads under the stimulus

even

Stock

solve the dilemma created for mil¬

seldom

the

observe

York

portfolios of the general public.
have

If

by virtue of elevating the
standing of over-the-counter se¬

New

ual over-the-counter issues in the

I

asso¬

Exchange
itself have found it practicable to

the

over-the-counter

value

in

insurance

With due allowance for

step toward rationalizing the

said, dur¬

have

be

money

se¬

harmony with a basis found real¬ principals. Such committees should
istic in practice for securities that
not follow a blind alley by trying

the New York Stock Ex¬

decisive

sented

believes

who

over-the-counter

change.
the

securi¬

concern

future for the business

a

whole.

a

vital

a

of

number

a

committees

the

pricing

respect

are

the-counter securities is

fair

tinuing interest in over-the-coun¬

of

by

functioning in the invest¬

established.

be¬

retailing

And

actually executes orders in

look

securities.

Motors.

securities

who
to

so

of

demoralize the business of people
who have a serious, vital and con¬

business

little

so

himself with

salesmen.

cerned

ally

on
the
part of many investors
relapse, the German Govern¬ toward over-the-counter securities
ment just makes the most impor¬
as such has not been ameliorated

contribution, to be expected
from every country, towards that
European "integration" which is

pros¬

they are not
already set up, it might be ex¬
pedient to establish serious work¬

consistent not to mark them up

likewise,

dealer

a

their

business.

ment

relationship
to the market, as defined by the
NASD, then as your columns have
already contended it might logi¬
cally by the same token from a cer¬
tain standpoint be considered in¬

digni¬

any

tant

curities

these

reasonable

a

young

a

could confidently attach him¬

man

does exactly what the ECA

ment

the

of

not

perhaps with no
the business.
But

important

considered

on

sanity

depression

did

to

investment

are

pre¬

But under

picture,

listed

which

the

29

that the confidence of that section

securities

legal

Professor
in

out

with

up

the banks in trust work and

but

follows

con¬

sought

any serious intent
doing the leg work that is an
indispensable concomitant of es¬
tablishing a numerous clientele,
they have long since passed out

there

economic

ployment,"
must

Italy,

except

mark

business'with

Pro¬

of

men

them

was

when
with

above

inconsistent

to

of

Ger¬

that, direction

alone

ing

that

the

they

in

course

many

in Wall Street.

Aid.

Marshall

Erhard's

1920's,

voluntarily

ties should

this combination of

blood

new

the

Groton accent and

a

because

ture

Aid

being attract¬

commend

nections,
the

of

in

others

among

little

the

Case

The

not

are

appreciable numbers. The last

any

capi¬

tal, and since this cannot be done

the

men

considered

practice

ed into the investment business in

serious

most

danger of inflation from the start,
and

New

of

houses

exchanges,

business

market

hugging

was

trading

function

sented

the bottom of the list.

the
stock

for the over-the-counter

today have gotten their in¬

dising

ing

but
as

useful and successful busi¬

many
nesses

ciations

consider it its job to push such

government back

find

General

There

Collectivism

and

another

abolition

the

on

an

8

page

investment business

careers

This leads

point which

for

asts

lacks

with

to

pro¬

ade¬

are

though I myself have

day

some

by

influx

largest.
In this
respect the German situation re¬

bonanzas,

stressed

even

whose

Looks to Aggressive Selling
To Revive Securities Industry

labor

creases—looms

quately
pect,

with

the

on

future

out

firm* itial capital through the merchan¬

re¬

infla¬

repressed

to

made

efforts to get out

bog, and

they

Bonn

eco¬

before where

seen once

leads

under their feet.

tion, to the rejoicing of the social-

right in pointing out
unemployment in Ger¬
today is the sum total of

sorts

enthusiasm

vided the risks involved

program
which *is*-in~alL neygr Jiad any taste for that kind
essentials, that of the Third Reich, of operation."With~aTT the genuine
the program of National Collec¬
advantages that the general in¬
tivism, Neo-Mercantilism, Aut¬ vestment trusts offer the public,
archy and forced savings. The Ger¬ a stockholder will never wake up

ground

buked for its reluctance to restore
and

an

gering,

official

of

the

to

into, accepting

se¬

The latter has been

collectivism

the

many

and

seek

essentially
that

imagination

the

of

allies trying to bully the

Western

(1121)

We

of the tide.

the

seen

group

a

of allied experts whose report has

ernment.

gap.

if the

FINANCIAL

nomic

the

paralysis,
now

But

so..

&

everywhere

hope for
have

openly discouraged there

almost

deficit of the balance

would

Germans

done.

a

do

to

it

that

told

been

ists

collectivist countries could not be

of internal economic disorder and
of

COMMERCIAL

THE

Number 4890

dent

to

switch

funds

some

institutions

from

bonds

mortgages, and the fact that

to

pen-

pointed
as

to

serve

the

with the

Executive

Presi¬

Commit¬

tee of the corporation for the en¬

suing year, it was announced.

'

30

(1122)

THE

COMMERCIAL

Continued from first page

As

are

and who it is that furnishes them.

being pressed by the Admin¬
subsidize housing for the "mid¬

dle income" groups, and the so-called Health Insur¬
Plan of the Administration—serve well as cases

Of course, the

in point. Of course, disguise it as
they may, what is
being offered is housing and medical services the cost
of which the recipient pays
only in part. The tech¬
niques employed to obscure this fact vary from pro¬

In

covers

situation

a

which

comes

down

the

to

thing.

these

points—as

are

measures

Continued

are

attack

to

open

at

to

seems

us more

In

it

tempted

so

produces.

the vast numbers

as

are

concerned—the

vast numbers who have vast numbers of votes.

The basic

dividual,

appears

to be that each in¬

member of the human race, is entitled to

as a

food in amounts and of the kind to

keep him properly
nourished, clothing to keep him comfortable, housing
to shelter him "in
decency," medical care when he
needs it

thinks he needs it, "education" in liberal

or

amounts, and much else.

If he happens to be indolent
disposed to obtain all this for himself and his

and not

family; if he is without those
to

traits which enable him

earn

substantially; if he insists upon wasting what
he does earn in riotous
living; if he through his union
pursues policies which cut seriously into his annual
earnings — none of all this is particularly important.
He is a human being and as such is entitled to live in
suitable to his status

a manner

as a

member of human

longer

no

for

the

ac¬

automotive

and

in the two industries favored

by greater output

per

attempt to

pass

hour

man

on

Taking

Closer Look

a

higher

labor costs in their finished goods.
These attempts would be resisted
and the

It is doubtful, of
course, if any

sales,

output

of those who

subsequent curtailment of

a

as

demand decreased, with

now plan
"Washington
would put all this in
quite this way. Indeed they would
probably recoil from some of it. It is likely that most of
them are not even aware that some such
philosophy
underlies what they are
advocating, or that a complete,
logical defense of it would require postulates of this sort.

under similar circumstances." The

Advisory Council on Social
curity views are in striking

It is,

ate the downward drift of the

fense of much of what

ond half.

hodge-podge of socialistic

nonsense

in

however, quite impossible to find a full logical de¬
they propose except on the basis
of some such
reasoning. Indeed, proponents often come
very close to such statements, if the implications of what
they say as well as their precise language is taken into
full account.
But

there

these low,

or

are

now

other

questions which arise.

If

"middle

income," groups—which
apparently are to be defined as those who, even un¬
der present conditions, are not
producing what the
politicians and the professional social workers around
the Administration believe
they need for

existence—are

as

a

a

"decent"

matter of

right entitled tp receive
the difference between what
they provide for them¬
selves and what they
"need," then, obviously, there
is

some

one

somewhere

or

some

other elements in the

population which are by the same process of reason¬
ing obligated to supply this difference. Otherwise the
major premise has
answer

meaning whatever.

or

"the

general public" must furnish
But, of course, this makes no sense, either, un¬

less it is

implied that those elements of the population
who regularly produce more than
they consume will
bear the whole burden.
Reduced

employment

the final out¬

as

business

The

come.

Essentials

That is to say, that the funds

required for

Se¬
con¬

Kodak

Co.

this magnitude would be a temp¬
tation to raise benefits or to in¬
crease

appropriations

for other
(He might have added

purposes."
"or

both.") "Thus," he concluded,

"there

are

against

both

you-go

method

practical
the

arguments

strictly

and

the

tinued
able

outlook

for

accumulation

contingency

of

pay-as-

full

re¬

reason¬

a

during

reserve

the early years.
Before the fund
reached large proportions, a deci¬
sion could be made

as

to whether

to continue to increase the

payroll

taxes

or

at

time

on

without

to

the

put

plan

the contingency reserve."

generally viewed

less favorable

event,

there

than in the initial months. A fur¬

sional

interest in

ther

to

as

expansion in the wage-price
equation and the subsequent con¬
sec¬

flected in the cost structure of in¬

dustry.
which

At
we

present stage, in

our

striving

toward a
productive
capacity
and
existing
demand,
these heightened labor costs would
are

balance

further

between

cloud

an

already murky

outlook for business.

In so far as

employer contributions would not
be

reflected

in

higher

current

employees,
there
would be little possibility of an
offset to this decline through ex¬
panded expenditures for personal
consumption.
payments

to

The second major area to which
I

like

would

refer

to

briefly, in
the hope of provoking further dis¬
cussion and exploration today, is
the problem
of investment and
reserve

policy

arising

panded pension plans.

that

from

ex¬

By way of

bility 50

years

the

actuarial

hence

lia¬

would

$100 billion to $125 billion

is

to

be

"and

insurance company would have
hold

the

industry which

the

company

and

prosper

expand

for

venture

profes¬

the

constant

assure

proportion of such funds
equity purchases. A set aside

even

public
appraisal

area

and

reexamination.
But what of the investment de¬

little

as

as

10

to

of

20%

annual

increment would pro¬
much needed expansion in
the flow of funds into riskless se¬
a

curities.

Such

a

program

might

also stimulate competition for re¬
serve funds by sellers of fixed ob¬

ligations,

within

as

well

out¬

as

side government confines.

My third and final section, the
burden of social overhead: This is

perhaps
three

the most puzzling of all
Governments

areas.

only two

means

demands

have

for redeeming the

fbr

performance, pen¬
others, when they fall
promissory notes. What
are they? They are
gotten through
funds
raised
from
taxation, or
through
increasing the existing
sions

and

due—the

stock of money, and under that I
include deficit financing or bor¬

rowing.
Turning

to

the

first,

excessive

taxation

reduces incentive, stulti¬
fies risks and risk taking, and may

lead to

diminishing tax yields. We
point at the
moment, perhaps.
are

not far from that

Turning to the second, continued
financing can un¬

resort to deficit

dermine confidence in government

credit, reduce rather than stimu¬
late
private investment, and, if
unrestrained, it is a prelude to
hyperinflation.

At any

sufficient

The cost, 25 years from now, of

old-age insurance promises, under
the benefit levels proposed by the

President,

are placed at about $8^
billion by the Council of Economic
Advisers.
The Council then adds

mand

arising from private pro¬ another $14 billion to $16 billion
Last year, only about $800 for the cost of existing and
pres¬
million was paid to life insurance ently proposed
programs of insur¬
companies for annuity premiums. ance for
survivors, the disabled,
As I suggested earlier, the target the
unemployed, and medical
of
raising
average
and
below care.
The
whole
compound of
average employer contributions to welfare costs would
rise, then, to
existing above average payments $25 billion within the quarter cen¬
might produce about $4 billion to tury, or five times the current
$5 billion of private pension funds level,
according to the Council.
seeking investment • annually. To the Council, this is a
large but
Henry Steinhaus of the Equitable not alarming
figure. Why? Be¬
Life Assurance Society has esti¬ cause
national output might be
mated that it would cost about $5 doubled
while welfare costs were
billion per year to provide half of
being quintupled. That's the halfour working force with a
pension trillion-dollar national income.
of $100 per month, supplementary
With $250 or $300 billion more
to social security benefits under
in
output, an increase of $20 bil¬
pending legislation. (This assumes lion in
welfare costs, to the Coun¬
retirement at age 65; 214%, aver¬
cil, is moderate indeed. But along
age cost $160 per worker).
Shade with
this expansion in welfare
either figure downward in the in¬
costs
terest

of

conservatism

would still arise

an

and

there

almost insati¬

able demand for riskless

funds, if

conservative investment programs
of the past govern the allocation
of these reserves.

The amount

the annual increase in all forms of
life insurance assets.
One could

sion

funds

reserves

of

amounts to meet its

pen¬

competing with other

thrift groups could drive the inter¬
est
to

rate down still further, if not
'

negative interest.

comparable

The

legal liability

serves

ultimate

r; size of such

would come other
tions in the functions of
or

future

piecemeal,

we

fail

see

re¬

to

government
Several
half

the

as an

of

the

periods

of

yet,

even

rise

in

or

entire

of

serially,
cost

of

entity.
decades

century have

and

By

expenditures

the

been

economic

of

the

marked

expansion,

in that decade, the

local, State, and Federal

expenditures

growth

has led s6me to suggest ex-

innova¬

ordinary

extraordinary government.

examining these

in

question does not fall far below

i

an

ago,

interest

grams?

In summary, expanded pension
payments mean heightened labor
costs, particularly where the bill
is
footed
by
the
employer in
whole or in good part.
Such ex¬
penditures
are
necessarily
re¬

new

that

a
pay-as-you-go
basis
further accumulation of

the second half of 1950 is already

estimated

philosophers in private do not hesitate to say that such
problems as these can be solved very simply by "progres¬




Eastman

background, under H.R. 6000, it is envisage the possibility that
to

The fact of the matter is that most of these social

sive" taxation.

less

The stock

(for public consumption, at least) is that "the

Government"
it.

no

the

of

som

traction of markets would acceler¬

the

than

of

vide

likely to lead to greater serve method of financing OASI.
unemployment today rather than The logical solution would be a
to the familiar upward spiral of modified
pay-as-you-go plan
which would provide for the con¬
prices as in the past.
Producers
would

years

of

Is government

the parallel another step, is
private pension plan sounder

the

more

probable outcome, in my
opinion,
would
be
diminished

society.

sounder

of

at the

by continuing backlogs, consumers
have grown steadily more price
conscious, and price competition,
in turn, more severe. Unlike the
early postwar years, a further ex¬
pansion of labor costs not offset
is

10

inclusion

full decade.

a

Perhaps an unanticipated salu¬
tary outcome of this pension drive,
then, may be an enlarging market
for private equities.
Labor itself
might be persuaded to join with
management in allocating a sub¬

Conference Board's pension
industries, our
present capacity to produce is in meeting last November: "A re¬
serve fund anywhere
excess of
approaching
existing demand.
And
construction

even

after

even

reserve

purchasing
in many instances,

today,
actually less than
over

for

capital or risk
funds, is not the whole reserve ap¬
proach more fictitious than real?

cepting goods or services at any trast. Their view is typified by a
price, because of urgent shortages. statement made by Marion B. FolExcept

philosophy

are

be
their

stantial

of what might be absorbed
by expanded productivity.

Consumers

with

-

power

lack

18

excess

At least this is what is at¬

a

purposes

cannot

Arising From Expanded Pensions

many

Deal, is to
family unit gets from

or

or

far

so

measures

individual

an

earns

in

as

since the initiation of the New

measures

divorce what

the idea here

essence,

government bonds

to

proved

which under¬
pension bill? To
yet another question to this
succession, if private enterprise

Some Economic Problems

important that the

specific

be laid bare.

have

for

rank and file understand the basic weakness of
all such
schemes than that the flaws of these

what

page

"riskless"

how

than

the many which have preceded them to the

statute books—but it

other

from

many

a

as

pri¬
exclusively
or
primarily into riskless invest¬
ment? One might frankly inquire

add

Basic Flaws

Both

security

But should

takes to foot the

as
in others,
everything depends upon continued
extraordinary productivity of these elements. Why
should they go on
indefinitely producing only to have
what they produce taken
away from them?

same

social

carry

interested. Even the recipients of this modern
largesse
had better be interested. In this scheme of
things,

In the others, the term "insurance"

of

vate pension funds go

any

good of their country at heart, and who understand
how things work themselves out in
everyday life, are

excessively low interest rates are factors. This is
another way of saying that
taxpayers, mostly falling
in other categories, grant charitable aid to the middle

pension

better alternative.

forms its productive backbone? To

not

are

numerous, and hence in all have a relatively
small percentage of the votes. And so the
politician
has little interest in them. But those who
have the

and

income groups.

extraordinarily productive

very

of these, liberalized loans

one

matter

as a

These

ance

to program.

Thursday, March 16, 1950

services and this aid are
really for the time
being at least free to the recipient, but are free only be¬
cause it is extracted from some one
else against his will.
It is in no sense free to the
economy or to the public. If
we
may be excused for using a blunt analogy, it is "free '
to the
recipient just as the burglar's loot is free to him—
but hardly free to his victim.

Two programs now

gram

CHRONICLE

largely obtained — from those who
extraordinarily productive. Thus it all comes down to

this:

the real nature of these
programs, asked himself carefully
in what sense the benefits are
really free, to whom these

istration—the bill to

FINANCIAL

the purposes in hand should be obtained—and
of hard fact are now

We See It

free benefits accrue,

&

of

outstripped

our

national

the

income.

Decade by decade, taxes took a
heavier percentage of our national

v

^Volume

"P

171

Number 48.90

income, and public

J brokenly.
I'r-'hl

'

THE

Continued

debt

rose

un-

!•'

r

'

■

4

tion of the late '30's to
unparalleled
A' expansion
as
of the early '50's,
A but
whatever the

prospect

en-

visaged, the role

of government is
P'always greater rather than dimin-

ished;

whether

contraction

pect

is

or

the

for

unconditional.

the

pros¬

welfare
future are

our

the

Our growth pros¬

pects may or may not materialize
at that rate.
Until

we

have had

experi-

more

*

the

well

with economic expansion,

in

'50's? it might be prudent to

i*

der this heading, I would include
only
hospitalization and
surgical plans, but also planning

not

-

P

our

housing,

communities, and

our

T

even

-7

grams

with

You

have

adult

education

pro-

h

of the

an

all

pictographs
dwindling number of pro-

ductive

seen

workers

tomorrow.

/:■) graphs

in

Most

show

the

of

world

these

of

picto-

ever-increasing
riding piggyback through eternity on the backs
of the dwindling number of pronumber

:;)i

i

of

an

The

tribute toward

of

1

the

economic

our

maximum

Most steel

use

during the coal crisis, but with some notable exceptions,
those who did are really hard up, and they are not getting the
steel they need right now.
Their situation will take a rapid turn
for the better when normal deliveries start
•

The auto makers

•

ing

v

The

more

generation

-

promises,

f,

present

make good today's
even
that they will

or

the Board of Governors and Act¬

t

ing

President, have announced
the appointment of the following
special committee to review anc

•

make

;
f

^

recommendations

with

Harold

C. Mayer, Bear, Stearns
Chairman; Reed P. An-

*

&

Co.,

Last

of

this trade

year,

business

The
week

David S. Foster, Pershing &
Co.;
Henry
U.
Harris,
Harris
Upham & Co.; Murray D. Safanie
Shearson, Hammill & Co.; Harold
5 W.
Scott, Dean Witter & Co.

Vilas,

Cyrus J. Law¬
and

Sons,

Henry

M

Watts, Jr. Mitchel, Whitmer, Watts
& Co.
The

of

results

study

will

Board

of

be

the

authority observes, the steel industry

by

correcting their inventories too far and

American

Iron

for

to
its

the
con-

is

Steel

Institute

announced

\

a

permanent

known
stocks

•

has closed Saturday during
•

June,

July, August and September pre¬

viously.

whether

to

ficient,

the

Corporation

PHILADELPHIA, PA.—Euler &

1518 Walnut Street, is now
business as a corporation.
Officers
are
Joseph
D.
Euler,
President and Treasurer;.. Charles
L. Kauffman, Vice-President; A.E
Euler^ Secretary; and Albert R
Christman, Assistant Treasurer.
Co.,

:

.

"

doing




daily wholesale commodity price index, compiled by
Bradstreet, Inc., moved irregularly during the past week.

At 249.79

or

a

whether production

is moving

ahead

102% and 1,880,400 tons, and for the

1940, highest
ELECTRIC

prewar year,

mated

a year ago

The sugar market developed a somewhat firmer
tone as
the week ended. This followed
early weakness which brought
a drop
of 10 cents a hundred pounds in the
price of refined

of

average

electrical

energy

distributed by the electric
esti¬
Electric

Loading of

cars,

week's

below

current

season.

was

re¬

month earlier.

Totaling approximately

TRADE A

TRIFLE

ABOVE

LIKE

212,000
a

week

WEEK

OF

1949—

total

represented

a

the

slightly larger volume of apparel
than during the week previous.

Television sets remained among the
in retail outlets the previous
week;

general

Among

and

23,004 trucks built in the United States and

a

total

of

and trucks built in Canada.
The week's total compares with 84,484 cars and 24,617 trucks
cars

produced in the United States in the like 1949 week.
BUSINESS FAILURES
Commercial

and

failures

to

221

in

the

152

be

less

exceeded

the

154

of

this

or

size

a

more

rose

year

ago.

to

1950, showed
week

to

179

42

An increase occurred in all industry and trade groups ex¬
cept commercial service.
Construction, at 26, doubled its
previous week's total and reached the highest level so far this
year.
Manufacturing was the only line having less casualties
than in 1949; a sharp year-to-year rise appeared in retail trade.

Pacific

and

weekly increase.

New

that

attracted

foam-rubber

shoppers

mattresses

England States accounted for most of

New England casualties at 31 were at the

period ended

estimated to be from

1

no

through
pillows,

and

to

5%

on

Wednesday

below that of

of

1949.
a

change from the like period of last
a

decrease of 5%

For the

decline of

but for the

year

four

was

a

a

year ago

year.

4,
In the

registered from the like

weeks

ended March 4,
1950, sales
corresponding period a year
to date show a drop of 4%.

1%

from the

Retail trade in New York last week

was

affected by

unF""

seasonably cold weather which resulted in a decline of
2% in
department store sales compared with the similar
period of a
year ago.

in

Small

was

preceding week

week

than

those having liabilities under $5,000, increased
from 27 and compared with 25 in the similar 1949 week.

were

Department store sales on a country-wide basis, as taken from
the Federal Reserve Board's index for
the week ended March

According to the Federal
store

involving liabilities of $5,000

and

casualties,

numerous

housewares

South and Northwest —1 to —5; Southwest
and Pacific
Coast +1 to —3; New England
+3 to —1; East —2 to —6; and
Midwest —4 to —8.

preceding week, Dun & Bradstreet,
Inc., reports.
Although this increase brought casualties notice¬
ably above the totals of 179 and 102 in the comparable weeks of
1948, failures continued to
1939 when 286 occurred.

those

above the

Regional estimates varied from the levels of
by the following percentages:

ended March 9 from 179 in the

and

popular appli¬

year ago.

ago,

rose

range

Total retail dollar volume for the

reflected

SWING UPWARD

industrial

refrigerator and

promotions

of last week

with

week

made up of 96,849

was

in

more

they, together with a
buying, helped bring

bridge tables and cooking equipment.

additional overtime operations made possible by easing of coal
and steel shortages.

The total output for the current week

rise

bought last week

dollar volume of
house-furnishings moderately
level of the previous week.

various

next

up

was

the

According to "Ward's Automotive Reports" for the past week,
vehicle production in the United States and Canada ex¬
panded to an estimated 126,051 units compared with the previous
week's total of 124,072 (revised) units.
to begin moving

<?

A

of

motor

Output is expected

states Dun & Bradstreet, Inc., in its current
summary of
promotions evoked favorable' response in

Early Easter
scattered localities.

131,157 cars, or
1949 and 217,589 cars,

decrease

helped to increase moderately the nation's shopping
ended on Wednesday of last week.
Total retail
slightly above that for the corresponding week

was

ances

AUTO OUTPUT IN LATEST WEEK EXPANDS FURTHER

the

a

News of the coal strike settlement
coupled with mild weather

according

corresponding week in
27.5% under the comparable period in 1948.

The

the

in many areas
in the period

below the corresponding week a year ago, but an increase

prewar

pound, unchanged from

YEAR AGO

of 6,203 cars above the preceding week this year.

1949

for

RETAIL

Coal loading amounted to 58,183 cars, a decrease of 80,251

cars

mid-February

bales, last week's shipments compared with
only 63,000
previous and 72,000 in the same week last year.
*

in 1949,

freight for the week ended March 4, 1950,
to the Association of American
Railroads.
This was an increase of 27,604 cars, or 5% above the
preceding week, which included the Feb. 22 holiday.

or

cotton *in

According to the New York Cotton Exchange, exports of the
the week ended March 2 set a new high weekly

trade.

revenue

574,395

18.6%

a

for

staple dpring
record

dollar volume

CARLOADINGS POINT HIGHER IN WEEK ENDED MARCH 4

The

price

WHOLESALE TRADE CLOSE TO SIMILAR PERIOD
OF

ago.

cars

trading, and a further slight
Inquiries in spot markets were fairly
totaling somewhat larger than a

sales

was

57,798,000 kwh. higher than the figure reported for the
previous week, 405,957,000 kwh., or 7.3% above the total output
for the week ended March 12,
1949, and 651,945,000 kwh. in
excess
of the output reported for the corresponding period two

totaled

parity

ported at 29.88 cents

was

years

reported

.

The

Institute.
It

with

week.

it

week in

industry for the week ended March 11,
5,936,586,000 kwh., according to the Edison

seven

ago.
Repayments on loan cotton continued to run ahead
entries, the latter showing a decline for the fifth successive

at 1,281,210 tons.

power

at

fairly steady with current
offerings about equal to trade requirements.

week

WEEK

of

little interest shown in
oats; prices were

numerous

OUTPUT GAINS MORE PRONOUNCED IN LATEST

amount

The corn market was
irregular and prices tended to lag at
times, reflecting slow demand for the cash article, increased mar¬
ketings and a comparatively small export demand.
There was

weakening in textile prices.

Steel Institute spokesman said.

90.7% and production amounted.to 1,729,000 tons;
stood at

Late strength in wheat was attributed to active
buying of
futures for export account, continued
dry weather in parts of the
West and Southwest and reports of
spreading green bug infesta¬
tion due to continued mild weather.

weeks.
Early strength in the
export buying against ECA allotments and the
prospect of a small crop next season as a result of decreased acre¬
age.
Easiness in late dealings was attributed to
profit-taking,
the slower tempo in cotton
goods

ingots and castings for the entire industry compared
1,401,100 tons one week ago.
A month ago the rate was

to

week

to-week decline recorded in

industry has been able to replenish coal

extent

any

Failures

a

The

Dun &

market reflected

This week's operating rate is equivalent to 1,711,800 tons

from

Now

SHOWS

new

the assumption that day-to-day coal shipments will be suf¬

on

Members of the

Exchange have
protesting, the decision of
the governors to shorten the pe¬
riod during which the Exchange
will be closed on Saturdays, which
is scheduled only for July and
August this year.
The Exchange

cost-of-living index.

a

Early advances in the domestic cotton market lifted prices to
high levels for the season, but a subsequent reaction
brought
closing prices below those of a week ago. This was the first week-

that

Steel output is showing marked recovery from the depres¬
sive effects of the recent soft coal strike. However, it is not

6,198

policy.
been

:

this

advance of 16.3 points from last week's rate of 73.5%.

an

connection with the
of

It is not

WHOLESALE COMMODITY PRICE INDEX
FRACTIONAL IMPROVEMENT

sugars.

and

*

establishment

still

are

the

committee's

submitted

Governors

sideration in

pretty

a

the operating rate of steel companies having 93%
steel-making capacity for the entire industry will be
89.8% of capacity for the week beginning March 13, 1950. This
of

er;

&

is

struggling to rebuild them.

thony, Tucker, Anthony & Co.; J
Booker, Corlies & Book-

rence

cars

prophets were only partly right. Auto demand held fairly strong
throughout the year.
The appliance market did become glutted,
but the production cutbacks were too sharp and severe shortages
developed again later in the year.
Some companies lost plenty

I Marshall

A.

of

more

"

i Homer

stock

re-

spect to the whole problem of
trading hours and holiday and
Saturday closings:

of 31 foods in general use.

Price movements were largely held to
very narrow limits
but most grains finished with small net
gains for the week.

The

Boylan, Chairman of

unchanged at its previous level of $5.85.
This repre¬
over the comparable 1949 figure of
$5.81.
The index represents the sum total of the
price per pound
rise of 0.7%

a

are worry¬

big

a

true of appliances.

ex¬

can

Robert P.

.

pace,

about the future demand for autos than the auto people
They admit that the industry looks good for another 2%
But, after that, they are worried.
They point out that if the market for autos becomes saturated, steel
orders from auto companies will drop out of sight.
The same is

provi¬

Exchange to Review
Trading Hours, Closing

•

hot production

'

bargaining

light and

■-

a

of steel
our

States where

in 1949.

good

that

ago

want to.

.

setting

are.

pansion and the
free
flow
of
human and physical resources, the
less likely it is that tomorrow's

i

*

are

months of all-out production.

his shoulders.
sions interfere with economic

as

Judging from comments heard this week, steelmen

promissory notes fall due, the
likely it is that they will be
honored by the fellow who is having someone ride piggy-back on
L

Central

on March 7, the latest figure
compared with 248.93 a
earlier, and with 258.81 on the corresponding date a year ago.
Activity in grain futures last week on the Chicago Board of
Trade increased materially overl that of the
previous holiday
week, but sales volume continued well below that of a year ago.

long

more

:

reaching them in the

except for
strikebound Chrysler.
General Motors Corp. has the added in¬
centive of trying to fill their dealers' showrooms with cars before
they hit the May 29 contract deadline with the United Auto

our

t

North

as numerous

The Dun & Bradstreet wholesale food price index for March 7

next few days.

*

■

failures were-less than one-half

didn't reach the bottom of their inven¬

consumers

tories

when

resources

More

sented

skill-

more

fully we design our present security provisions so that they con¬

East

for alloy steel.

oldsters

ductive workers.

r

the

remained

aged

Ij

expanded
population in mind.

our

in

all] the carbon steel they need, and steadily expanding applications

individual

security
through private mechanisms. Un-

'■!:

occurred

WHOLESALE FOOD PRICE INDEX HOLDS UNCHANGED
FROM PREVIOUS LEVEL

weapon.

might try to stimulate

we

31

only notice¬

able exception

through the second quarter.
This is significant be-:
expansion of alloy steelmaking capacity was
believed to be far in excess of potential peacetime demand.
Steel¬
makers say the resurgence of demand for alloy is caused by con¬
sumer willingness to pay extra for alloy because
they can't get

Workers. Most auto firms, "The Iron Age" points out, have learned

expanded

remained at 55 and East North Central fell to 21 from 27.
concerns failed than a
year ago in most areas; the

wartime

terim,

■7

-

Industry

restrain further expansion of our
welfare commitments.
In the in-

♦

!

(1123)

highest level to date in 1950; the Pacific Region at 69 reached a
postwar peak.
Contrary to this rise, Middle Atlantic failures

filled

cause

is

prospect

whether

expansion,

commitments

ence

CHRONICLE

5

page

The State of Tiade and

Expansion

v>

rry The pendulum of economic
opinion has swung from stagna-

:

FINANCIAL

*'

'

'

Mi

:

&

*»*

Pendulum From Stagnation to

>

X.u

from

COMMERCIAL

sales in New York

Reserve Board's index,
department
City for the weekly period to March 4,

1950, rose 2% from the like period last year.
In the preceding
a drop of 13% was
registered from the similar week of 1949.
For the four weeks ended March
4, 1950, a decrease of 5% was
reported from the like week of last year.
For the year to date
volume decreased by 7%.
week

NOTE—On

another page of this issue the reader will
find the
most comprehensive
coverage of business and industrial statistics

showing the latest week, previous week, latest
month, previous
year,

of

etc., comparisons for determining the week-to-week trends

conditions, by referring to "Indications of Current Business
Activity."

6

Continued from page

rise

in

tion
mi

■

■

Low-income families
children cannot afford
all the
milk, they should have.
The question is: will a decrease in
the farm milk price increase con¬
tional

goal.

quotas would J?e the most cheerful
sign at a time when all we hear
about

and the need for more

CCC in order to sup¬

tions for the

expectation that even as more
beef will become available, pork

the

surpluses
appropria¬ consumption

agricultural

are

That

if

is,

will remain high.
employment remains

and

Animals

wartime

Farms

on

But

expected.

and mules, as was

bly.
been

But production per cow has
rising steadily, and may still

further, due to better feed¬

go up

cattle numbers was

the increase of

ing methods and increased ratios
of
concentrated feed. However,

larger than assumed. Cattle num¬
bers had steadily declined
since

other

somewhat, but dairy cattle were
still on their way down, and on

of

this was then a source of
a
number of people,
though the highly increased yield
of milk per cow and the decreased
consumption of butter (which ob¬
viously could not be reversed to
any great extent) seemed to make
to

fact

unnecessary.

1948

370

to

which is expected be¬
the acreage allotment for

not

in pastures

and other crops.

Only

Payments

Shifted From Feedgrains to

question
arises, of
course, whether the higheif corn
consumption, which will reduce
the need for government support
of feed grains, will not lead to the
necessity to support livestock and
livestock
products instead.
The
the

Now

ernment

of

The

butter.

buys,

at
the

past

year

back to the market in the winter¬

milk

when

production is
however, with

lagging. So far,
milk production holding

ex¬

up

ceptionally well, the CCC has only
sold
14 million
pounds through
commercial channels, and the but¬
is

ter

CCC

Grade

offered

has

the

Already

deteriorating.

butter

C

sale, although it bought only
A
and
B.
It
has
also

for

the

prices for

eggs as
prices had led to
in chickens
(other

feed

to

increase

an

from 441 million to

than broilers)

Thus, egg production

481 million.

is

last year, when it
However,
first of January the sup¬

higher than

since the

price

port

Farm

down.

Grades

The

the other,

from one commodity to

purchases

butter

ment's

gained.
This, however, does not seem to be

to come into the

the

CCC

the case.

rid

of

nothing would have been

In

first

the

most of

place,

96 million hogs were

65

our

In 1949,
born against

is going into hogs.

corn

million

1948,

in

high figure

a

though not nearly as high as the
122 million born in 1943, for which
insufficient feed was available and
mand

Support for hog prices

now.

the

during

would be no de¬

there

for which

and
since

December

past

January had been expected
ifc seemed unlikely that the

total
supply could be taken up by the
markets.

such sup¬

However, no

port was needed though an un¬
usually large proportion of the
hogs born in the first half of the

slaughtered before Jan.

year were
1.

demand

The

pork proved

for

soon as

its hope of getting

sees

its

before

stocks

starts

season

sure

are

limelight

flush

the

disappear.

will
much

It

probably be highlighted as
as has been the potato surplus and
the
situation will become even
in

difficult

more

1950, since but¬

production will be higher still
consumption is unlikely to
increase as yellow margarine will
become cheaper in a number of

ter

be

result of current legis¬
lation
repealing
long-standing
Federal taxes. How many millions

States,

of

a

CCC have to
and what is to be¬

pounds will the

buy this year,

of them?

come

Butter exports

potatoes.

for eggs has come
prices have dropped

basis,

even

of

out

are

on

a

European cattle herds have

been

down,

increask

The

numbers

year.

of

was,

in

flected

if

course,

cattle

otherwise

slaughterhouse
breeding
herds

purposes.

are

for cattle

have

re¬

in

be

that

been

the

built

past

more

eaten

would
to
the

retained for
The increase

ther. However, the very

dicates

not

much in

up

to

that

gone

was

show

not

cattle

beef

the supply of beef last

Rather,

have

will

in

if

up

that

had

farmers

the

rightly
prices
with

and

decrease

a

spite of
in

some

would
little

too

is

milk

fur¬

undesirable, in

overproduction

view of the

nutritive

now,

value

of

tion.

would

been

the

and

At present,

45%.

bring

down
in

chickens

than in the same period

the

Thus

signs

increasing popula¬

Certainly the Secretary of Agri¬
will ask for

a

trial

plus will take care of itself, or in
any event cost the Government
much less than in the past years.
Potatoes

the

in

Most

wasteful

the

because

surpluses,
in

the long

potato surplus.

run,

harvested
that

CCC

the

here

better
any

he

run

would

stand

other

all

most
is the

The acreage in¬

acreage

is so
total

of 352 million

million which the
on
their support in

$500

spent

the

past

The

years

main

mistake

prices

so

seems

in

was

duction unlimited

of

than

have

so

that a huge

overproduction was a clear in¬
evitability. As the situation stands
now,
so

deteriorates
transport it to

since the potato

easily, to try to

tent would only
loss.

large ex¬

entail additional

Also, most European coun¬

in the war and

post-war

period, have

enough potatoes of their own.
In
A fact, in 1949 the potato acreage was

with

commodity.

making

leaving pro¬

high and

high the farm income too
though the record

remain

should be high,

who

women

it

war

mostly

was

watching

were

po¬

Be¬

eaten.

the
the

the men have fol¬
lowed suit. The Metropolitan Life

scales;

now

advertisements

Insurance
the

shorter

waistline and

longer

lifeline

made

have

to

seem

about

a

greater number of men conscious
of the dangers
But

the

of overweight.

apart from

problem

that, here also
marketing costs
potato retail

the

farmer gets only 50
price of potatoes

the

dollar,

of

Of

in.

comes

The farm

increase

spuds

in

,

down to nearly

to go

before

nothing

the

for

demand

the

be expected. Thus mar¬

can

keting quotas seem a much safer
to
the
potato
problem

answer

than subsidies.

Will the

How Much More Money

Need?

CCC

ton

and

was

1950-51

crop

flaxseed

1948

year,

it

July,

In the

seems

which begins
that mainly

wheat and cotton will have to

be

As to cotton, the out¬

supported.

lay will probably be much lower
than in the 1949-50 crop year be¬
cause

cotton

the

unlike

restricted,

acreage

Therefore,

dollar.

will be

would

which

level

bring

to

increase

sumption substantially,
have

would

ernment

the

price really down to a
con¬

the Gov¬
support

to

and distributors as
the primary producer of

processors

well

as

food, the farmer.

which such a sys¬
bring about
economy would be greater

The changes

tem of subsidies would
in

our

anybodv wants to see devel¬

than

oped in the United States.

Gurrey to Be Partner
In Bendix Luitweiler
David

Currey will acquire
Stock Exchange

P.

York

New

the

membership
and

rence

Herbert H.

of

Law¬

March 23 will be ad¬

on

partnership in Bendix,
Co., 52 Wall Street,
York City.
Mr. Currey has

mitted

to

Luitweiler &
New

with

been

the

for

firm

many

years.

last year when

incentive to increase the
acre.

ing the costs of processing and
transportation, often take more
than 50 to 60% of the consumer's

for wheat, cot¬

another"major item.

this

through lower consumer prices.
The "marketing charges," includ¬

of the CCC in

In

corp.

pay¬

farm price sub¬
sidies, alone are not sufficient to
achieve
higher
consumption
that is,

ments,"

appreciable

any

"production

that

evident

it

consumer

scandal, to our mind,

immediate

and

much

of

volved, less than 2 million,
as compared with our

small

ucts,

almost

the

less

the

are

the past year was

limelight

tries today, unlike

a

fore

bread

The main outlay

his subsidy plan with dairy prod¬

have been surprisingly independ-

with

that

are

support prices the egg sur¬

lower

the

let

would

He

available,

and

would have

be at least not higher
last year.

may

year

made

tatoes

of

Consequently egg pro¬
last quarter of the

1949-50.

are

cents.

duction in the

other continents to any

culture

half

second

pends
and

would like

the sec¬

agricultural pro¬

our

should decline.
Much de¬
on the level of employment
national income. If they

gram

Agriculture

of

of

costs

plan to be tried

of

number

the

the

the

fantastic.
it rose
by 3.6 million acres in
is not
response
to
profitable
support
that the surplus will be allowed
prices. Marketing quotas for cot¬
to spoil.
There is no other way
ton have been agreed upon, which
out in the case of so perishable
afraid a commodity as the potato. The means that the farmers have no

incentive to maintain their herds,

available. Prices of beef and pork




is

milk

lower

leave

high price

beef

Agriculture

1950

months in¬
it

of

to

definitely cheap as com¬
pared with other high
protein
foods, and consumption seems to
be on the rise.
Also, it seems that
the
lower
support
prices will

of

commercial
out of ECA money,
the question, as the

importance

any

very

went

40

as

marketing
the new poli¬

out levels of 1947, should they ever
the recur, would probably remain a
potato price drop to its market sign of general shortages.
price and pay the farmer the dif¬
Postpone Brannan Plan
ference between the support price
and the market price.
With
these
This, he
piecemeal adjust¬
hopes, would increase the con¬ ments in farm output and prices
sumption of potatoes.
However, going on, it will be worth while
the per capita consumption of po¬
for our legislators to watch for
tatoes has been falling, from 131
another year before contemplat¬
pounds before the war to
108 ing such radical steps as the
pounds last year.
Not only in Brannan plan.
America, but also in other coun¬
Moreover, the difficulties even
tries, the more and the cheaper in
giving away potatoes to schools
high-quality, less starchy foods and other institutions have made
support

for

eggs are

and

elasitc.
As the price nearly completely restored.
consumption
rose.
Dairy farmers did not share in
Pork production will further in¬ the war and postwar farm profits.
crease this year. But there is hope
That is the reason why dairy cat¬
that
if employment
remains as tle numbers diminished so much
high as it is now, the government more percentage-wise than did
will not have to go into the hog other cattle: a number of cattle
market to support prices or, if it farmers found it more
profitable
does, it will be only for a short until last
year to sell their dairy
period late in the fall.
cattle for beef. So the Secretary

to

much

Secretary

his

spent last
sharply.
Since
the marketing
bought cheese and dried skim
year a great deal on the support
charges for eggs are small — last
of eggs and about $100 million on milk, so that the total outlay for
spring and summer the farmer got
the support of dairy products.
If dairy support amounts now to 70-72 cents out of the retail dol¬
about $100 million. The govern¬
supports were only to be shifted
lar—retail prices have declined as
government has already

As soon as

the

under

cies have had time to work them¬

against 84 million bushels
January 1, 1949.
This is a

has announced that he

already too high.

was

then
restriction of

quotas.

1950 the CCC had had to buy
million
bushels of the* 1949

allot¬

acreage

sharper

ments

January

below those of last year.

(Last

But at the present
nobody in the world
actually wants them. For all prac¬
tical purposes,
those eggs have
been destroyed.
Egg production
is now at its post-war peak, since
support

Until

1948.

be¬

are

crops

under
first, and

put

ond half of this calendar year on,

eggs.

high

ing

record 445 million

a

otherwise being

are

Basic

decreased.

It is also interest¬
ing that the acreages just reported
from the early potato states are

moment,

related

levels

basic crops, support

for the

price

selves out, let us say from

a

dried

the
CCC bought 114 million pounds at
60-62c
per
pound, hoping that
it would sell a good deal of it
In

take.

least

good showing.

During the war the Brit¬
were
happy enough to get

ish

does

market

1950 Expected

on

cost the
past
three

has

pound.)

gov¬

in

bushels

alone the CCC bought 68.8
million pounds at about $1.26 a

price,

fixed

a

the

that

butter

time,

Products?

Livestock

in

year

used

manufacture

Support in the

crop as

oft-quoted cave in Kansas.

Milk that cannot
goes into the

pounds.

otherwise

the

Government

dropped

1,

in

agree¬

production
has
1949 to 402 million

bushels from

great deal.
Eggs were
processed
into dried eggs and
stored, among other places, in the

years

pounds, and the BAE

382

to

500
j

By now the costs to the nation

potato

tendency to go

a

surplus

egg

Government

expects a further decline in 1950

promising in view of the increase

Are

The

prices over the year, has not
in fact, it decreased
from 387 pounds per person in

be

of

and cream, in spite
4% decline in re¬

increased;

after so many years,
though only a little, and the in¬
crease in beef cattle numbers are

cause

shown

marketing

quotas)

Eggs

tail

have gone up

wheat

be easily

down thus far.

average

an

to

1951.

Second Half of

(though without marketing

ments

they represent
mostly labor and fixed costs which
have not

and

allocations

because

of

consumption

capita

milk

liquid
of

The
that the dairy cattle numbers
worries

such

liquid milk dol¬

15

Per

this July

bushels

Lower Costs of

those

by

carry¬

of wheat from just over 400

million bushels in July

institutions
(though
they
will have some
more money left to spend on other
market

the

of

increase

further

million

the commercial

will be bought on

Unfortunately, processing and

reduced,

feed

other

and

should

marketing costs cannot

of the total util¬

corn

the potatoes from

grain.

of 15%,
worry

of

ization

for

milk

on

about 58c of the
lar.

dairy cattle is a relatively

to

small percentage

24,416,000 —was for the
first time below the prewar level.
In view of the population increase

and

corn

fed

—

oilmeals

of

high-protein feed have been

greater importance than those
and other feedgrains: corn

of

of dairy

1949 the number

1,

cattle

ratios

increased

peak in 1945.
During 1948
beef cattle numbers had increased

their

Jan.

percepti¬

utilization of feedgrains

an

of the farm program have become
have some
more evident.
Public opinion has
consumption. foods).
Higher use of fertilizer and been aroused against such mis¬
However, here we are confronted
closer planting as a consequence
uses as the spoilage of
eggs and
with the
problem of marketing
of high support prices have in¬
and processing charges. While the
potatoes, though this was prob¬
creased the yield per acre from
retail price of milk fell by 4%,
ably inevitable.
Even among the
122 bushels in 1939 to 215 bushels
the price to the farmers fell by
farmers, there are conflicting in¬
But it terests among the various regions.
about 10%. The dairy farmer got in 1948 and 211 in 1949.
have
gone
unnoticed Though price supports at rigid
about
54c
of
the
retail
dairy seems to
products
dollar last year, and that, under the impact of acreage fixed levels are still upheld, at

impact

supply of milk or the

the

crease

figures for animals on farms
on Jan. 1, 1950 show a new sharp
decline in the number of horses
The

in butter increased

milk

fluid

of

in¬

too slight to

is

low

This would make for
outlay of nearly $200 million
the CCC.
It would also mean

bushels).

over

consumption by only 6%. A more
drastic decline in the retail price

of 325 million

export demand

an

Europe

a

in¬

not

100 million

spoiling. Send¬
ing them to hospitals and other
institutions, which is being done,
means
only that fewer potatoes

capita consumption as

of nearly 20%

situation is much more dif¬

million acres ficult, however, as regards dairy
hay for 87 million. Corn is
products and eggs. The increase
our most important crop.
in dairy cattle of 200,000 from its

still

did

butter

and

per

weather

if the

now

the surplus would be about
bushels (figuring with

is fair,

that could have been done to save

expected. Even a price reduction

Surpluses

Dairy

The

148

for

accounted

milk

of

indicated

as

there

1948,
potatoes
are not only the mainstay of food,
but also very important as ani¬
mal feed.
So there is very little
in

though

even

sumption? We don't know. In 1949
the decreases in the retail price
crease

After ail, out of high.
acreage of 352
in 1949, feed grains
The

port farm prices.
a
total harvested
million acres

to

leads

that

other;

each

of

ent

number of

great

a

European countries because
had been an oversupply in

with many

"

in

down

cut

capita milk consump¬
something like a na¬

per

seems

Thursday, March 16, 1950

CHRONICLE

FINANCIAL

COMMERCIAL .&

THE

(1124)

32

yield per

The wheat acreage has been

too, but the acreage is
high in view of the
domestic and export demand—at

Two With First California
(Special to The Financial Chronicle)

R.

Charles

Gibbs

have

Parker
First

CALIF.

FRANCISCO,

SAN

and

joined

California

—

George A.

the

staff of

Company,

300

restricted

still

very

least

73

about
when

62

million

million

the

acres,

as

before

export

against
the

demand

With average yields, the
production will be as large as in
1948 when the yields were below
to

If
be

wheat

Shearson, Hammill Co.

was

year.

were

Frank Klutow Joins

war

small, and 83.3 million acres last

average.

Montgomery Street.

production

1,135 million bushels

LOS ANGELES,

Klutow
with

has

CALIF.—Frank

become

associated

Shearson, Hammill & Co. as

manager

of the

Los Angeles of¬

fice, 618 South Spring Street.

Volume 171

COMMERCIAL

THE

4890

Number

Continued from page 13

and

difficulty

already menpublic capital is
only
on
loan
terms,

is

that

available
which

means

repaid

and

that

it

has

cannot

to

be

remain

as

limited

who

major unsolved financial problem
of foreign economic
development,

pices.

,The paradox is that

he

to

be

done

be

can

what

wants

done

only in
is, by loans

the wrong way, that
rather than by
equity

investment,

and in

a
way which is often prejudicial to private investment.

back

go

of

Point

and

These

assistance
ment

as

are

(4)

sions,

stands

(1)

(5)

today

each

in

the technical
(2)

invest-

tax

(3)

conces-

bilateral

treaties, and

elements

with

program,

guaranties,

Program

the

it

to deal

propose

turn.

Four

to

now

Four

investment

private

foreign

investment.
The

assistance

pro-

House bill

a

introduced both by Chairman Kee
of the Foreign Affairs
Committee

Congressman Herter

sachusetts.

It

takes

the

place

other put forward
an

integrated

plementing Point
bill

is

a

for im¬

measure

Four. The

compromise

largely through the efforts
Herter, who has worked
:nttU.

*

new

reached
of Mr.

untir■

.

nartTn;
.secuYf a maximum
Erfol !p ;L
enter"
KiV t/S
^ Program.
pLenf V;
I
authorizes the
\° ex,tend techmcal asr,

eyes

.

.

Opinions Differ

Government
Guaranties

go
aus-

There

private enter-

which

is

on

minority

a

favors

opinion

investment guaran-

As regards the proposed investment

guaranties,
of

would,

is

that it

wide

a

in both govbusiness circles. The

risks:

countries

the

one,

tibility
rived

of

against

risk

of

foreign

from

the

from

expropriation,

risk

of

loss

confiscation,

for
Investment Guaranties
in

is

through the

the

in

be

net

no

favorable investment climate

a

can

by themselves

never

there-

serve

in

capital to foreIgn

agency of the Export-

Import Bank

will

foreign countries and

lore

invest-

current

there

precedent for the

a

Whatever

first type of guaranty, that

is, the
guaranty against inconvertibility.
The
authority given to EC A to

this

the

the

matter,

view

correct

of

dollar

new

compared

with

action by the

_

investment

and

Issue

authorization

an

the

majority

business

because the Export-Import
Is™
*°
foreign
countries
Bank will either have guaranty
Sr®ughP agencies of the United at ons and $150 miHi0n during the Powers or not have them as ConKmCn
^ Par second year- There were compli- Sress decides. However, the Bank
ticipation, wherever
practicable,

aPpro.Pr.iation for

Purpose of $35 million.

The
bill

important

from

the

American

feature

point

business

of

ment

in

of

is

the

view

the

Congressional

policy

authority to extend technical

as-

sistance.

This statement of
policy
places emphasis on fair treatment

private

investors,

establishes

standards for assistance to
foreign
countries whether of technical aid
^

^

or
of money, and makes
it clear
that the Congress intends that re,

n

,

.

th

j

.

.

+•

tlnh " ?

whinh

•

!

/n?!C?J assistance
^Int Ph^nnled
•

>

.

fhn+

.

with the result

M+iif

,11

f ^ou t a
riictirp+inn
ool1S
nran+ipaHio Wk
tbouSbt not to be
,

.oruof]

•

.

-t

.

y

government

J..V? any eY.e^n*'Yffs2J0^

...

J

n

pp

o

-ar

Q,nj

•

.

-

5

-a.Ye a,good

^ of; Pass.age lp

°
111
form

ent management of the Bank

guaranties

PoseAo

investments

new

one

for

reason

Tof

terest

and
th'c:

cour

lark

of

iTto Eurone ^thetaceofm^
fnt pohticaTand economic
uncer-

with

tection

of

ties

withouTthemo

or

convertibility

whether

the

guaran-

interest would

besubstantia?^greater^rECA

gLrantv extended to
gua. anty extendld^
of

foreign

risks,

war

would

risks

other

investment,

now

upon

present

ardy

relation

expected

turn

on

expect

the
over

The

latter

the

oppose

exten¬

are

guaranties

principle

on

usually able to protect
their interests abroad without ex¬

traordinary

assist¬

government

ance.

It

be noted

that, whereas
experience auccuj
already
guaranties of convertibility

may

there
«iwC

with

is

some

of return
there is

CaHC1iC1h.c

foreign investment,
experience on under-

on

no

investment, willingness to

writing "loss from expropriation,
confiscation, or seizure by action
bility given by recipient countries, of public authority." This would
£nd unwillingness to seek the for- involve the determination of value
mal approval of a foreign govern- of investment lor purposes of

nient) as is required,
proposal

or to pass an

through

the

compensation in the event of loss
without prompt,
adequate,
and

effective

compensation,

the

as

phrase

The amount suggested for technical assistance for the first
year

Intrusion

by

Government

..

Eusi,ness sentiment towards the

P™POsal to give the Export-Irn-

at home and abroad hut aiso sma,
in terms of the vast

goes, by agreement both
between the Export-Import Bank

oped

which may seek tech¬
assistance and the very nu¬

areas

nical

merous
ance

brought
the
to

types

of

technical
which

programs

forward.

first-year

cause

eign

this

or

to

be

sense,.

is not likely

much excitement

countries

concern

In

program

assist¬

may

in

cause

for¬

much

taxpayers
and
champions of private enterprise in
among

the United States.

What the tech-

^uaiTfbecome routrao?

There

is

a

business

who

on

principle

to

because

.

s,°"

,

.

.

by. g?vernment

sphere of

pr

hold

also that United States Gov-

ernment
„

the

guaranties
.

effect

"f

v

c

of

usually

would
•

~

relieving

con-

have

f

foreign

The

tax

concessions

..

tax

.

on

abroad
(2)

the

immediate

limitation




is

the

American

the

vestment

climate
if

they

for

foreign

Federal

income

resident

time

in-

of

abroad

an

he

becomes

from

bonafide

a

resident

abroad
(instead of requiring that he be resident abroad
during the entire taxable year),

on

foreign

Present

income

is

and

credit

earned

brought home;
generalize
the

for

taxes

paid

abroad; and
(3)
liberalize
the
.
'
foreign residence requirement for

in-

The

wish to attract

would

first

of
of

income

Stimulus

These concessions
to

be

get

clear

no

they

will

provide

stimulus

to

certainly
although I

substantial

a

investment.

new

endeavor

in

the

A

same

direction is the negotiation of tax
treaties with other countries to

is

not

Foreign

to

be

supposed

to foreign investment

be

that

most, of the obstacles

or even

can

will

or

removed

by
international
agreements, by investment guaranties extended by the United
States Government,
or
by any
other

If

means.

the

risk

of

convertibility is reduced by
ment

eliminated under

or

in-

agree-

Ex-

an

port-Import
risk

Bank guaranty, the
depreciation of foreign

of

assets

will

flagrant

remain.

forms

against

of

if

Even

discrimination

American

investors

are

eliminated by unilateral action

by

bilateral

treaties,' there

the

threat

called

of

what

creeping

or

will
has

expropria-

through burdensome taxes,

jaJws'.»a?,? welfare legl®la":
llon- Even+.lf the

of ac*ual

expropriation
without prorrtpt,
®deciu.
' .ant!
Ye c°mPensa~
Y1011 lsf eliminated by treaty or

guaranty, no mvestoi will knowln&ly ineur the trouble and ex~
Pense of establishing a foreign
operation only to have it taken
away (rom blm> even with cornPensation, after it has become a
£°in& enterprise,
There is also nothing which will

eliminate double taxation and for

remove

other purposes.

rent to

The negotiation of

bilateral

in-

the

chief

present

deter¬

foreign investment, which,
high return on domestic in¬

is the

going s.eadily
forward. A treaty with Italy has
been duly ratified and is in ef-

v.estments^ free of the peculiar

feet.

C01P°rate investments abroad

vestment treaties is

Treaties

Eire have

with

Brazil,

Uruguay and
signed and await

been

ratification.

Negotiations

Colombia,

India

have

nounced,

with

France,

publicly
annegotiations with

and

under

are

™sks °f

mreign investment. The
earnings on American

everage

Quhe favorable.in

Pear

way

or

?.b-

earnings

ln

1?

f0'

•

.

oWan

ow

i

^as
and H.1%, respec
.

"ve*y> after foreign taxes. How
domestic

ever,

in prospect.

ap-

an

s0\ute sense-The rate of

-and

been

other countries

investments

in.

roughly similar industries earned
in

Laudable Effort

This

effort

United
tain

worth

ob-

the

basis

ference

States capiforeign countries
laudable and should
in

community. Indeed, much of
impetus behind the effort and

ness

of

many

the

provisions

of

treaties already negotiated
der

negotiation
,

have

•

u

private
national

Chamber

t

The
of

4.

Inter-

Commerce

anditsUnited States affiliate, the

Council, brought foi th last
year

Proposed

a

Treatment
ment'

for

which

was

comprehensive
assurances

Code

of

Foreign
a

Fair

Invest-

detailed

statement

and

of

the

which the international

community
considered
necessary and appropriate on the
part of foreign countries seeking
outside
capital.
Other
business

have

groups

provisions

concluded

lieve,

closely

studied

of the treaties
The

some

These bilateral treaties, entered

and

in which

will

both
to

certainly
American

to

foreign

be
in-

countries

capital is invested. However, it must be rec-

for

form

no

governmental
itself

create

agreement
a

American

of

favorable

private

intercan

of

climate

investment

abroad.

Performance

be

persuasive than promises,

more

will

and American investors

tinue to
of

look

to

always

will

con-

the

performance
foreign countries in their treat-

ment

of

acid

more,

risks

foreign
test

there

proposals

elements

the

reinvest-

"climate"

investments

as

of climate. Furtherare

many

summed
which

up

intangible

in the word

can

never

the

at

to

of

On

the dif-

overall

home

rewards

is

not

very

seem

hardly suf-

the

additional

offset

foreign

American

investment,

Postwar

Foreign.

Investments

Despite
this
comparison
and
despite all the obstacles to foreign

investment, American capital
tinues to go abroad

in

con-

substantial

volume.

During the four postwar
1946-1949. new invectments
fore[gn ,countries by American
corporations exceeded $4 billion,

years

in

In

times

prewar

been

thig would

acc0Unted

small in

pears

several

smaU

as

a

its postwar setting
First
it is

reasons.

compared

wi

am0Unt of government

ing

the

have

phenomenal
investment.
It ap~

am0Unt of new

fi

the

loans dur-

period and very
with govem-

came

be

as

compared

grants to foreign countries,
Second, it is small in comparison
wj^b tbe donar gap, which
has
ranged between $10 billion in 1947
and $5

billion in each 0f the years

1943 and

0f

new

on

^be

1949.

Finally, the amount

investment

is

discounted

that such a large
proportion of it consists of oil inground

vestments

in

Venezuela

Middle East motivated
and

perhaps

and

the

by special

inceti-

temporary

lives.

American

that

taxes.

ment

are

faith,

in

ficient

small

that the transfer of earnings is not
given sufficiently high priority in
the event of exchange restrictions.

good

S.

investments abroad and in-

vestments

be-

offered, : as for
example ■ regarding
the
recent
treaty with Uruguay to the effect

beneficial

U.

this sample,

great and would

gen-

I

are

erally satisfactory, although
reservations

the

already

consensus,

that the treaties

is

after
of

un¬

from

come
mu

business.

from

the

or

years

7.7%, 9.1%,
12.0%, and 13.8%, resDectively, on

fair

to

have the full support of the busi-

the

same

net

for United

entirely

the

the

of
of

assurances

invested

is

part

States Government

treatment
tal

the

on

formal

these

encourage

It

all,

been

of their prob-

sense

to

written

a

Investment

are

recommended,

further

the

earned

Obstacles

remain
New Investment

cgnized

,

until it

extend

tfheir incent'vea and abroad.
exemption
fa-

vorable

.

corporate

rlghtful obl'gati°n to create

ter.

e.

Concessions

income proposed by the Adminis.

tend

view

Tax
•

the tration consist of (1) postpone the

Those

who

this

atricate ana

it

.

into

vate business.

from

earned

tax

^"^^000011^000"^ °f The

the

represents to them another intru-

these

beginnings is another matWashington experts insist that

exempting

into in good faith and carried out

of

group

object

encourage

in

opposition.

numerous

men

proposal

in

small
*

by

come

vestors

crystallized

to

and tbe assured and between the

underdevel¬
have

intended

is

business

upon assurances of converti-

ECA machinery.

tCT^saof7omeSo^fnainasphnations

of

and

re-

l'ely

investment
Technical Assistance Small

to

not

investors.

generally

sion

and in other parts of the world.
where investments have been
^ad^ ^ ERP Countries without
^e protection of an ECA guaranly, the reasons for foregoing it
would include the cost of the guar-

does

guaranties issued

corporate

including

depend

powers, if it rein a cautious way,

the next fevv years to ag§regate
any large sum' There is also indl~
cation that the Bank expects its
Vestment guaranties to be
sought larSely by sma11 investors
unaccustomed to foreign opsratlons or upable to c°Pe unassisted
with the risks °f foreign invest"
ment rather than by present large

reiuctance of American caoital to

ta in ties

that it

smount

5n

elral

the

e

pro-

its

use

them,

ceives

in

1

pri- prospective rewards, as compared
.,^s ,aa with alternative investment opy?Kld,.a S° P°rtunities in the United States

fl*

.

-i—

in

to

American technicians to go abroad

in the application of its powers.
The indications are that the pres-

mainly upon

pnHP;nmr

p

^

regards

ERP countries.

of

state-

interest

taxes paid abroad

investments represent-

wlB be left with widest discretion

both

against the risk of inconvertibility
as

of

which precedes and
conditions the

of

little

verv

initiaI

an

,

oresent

n6"01? °f the.United Nations

I he

P

factors

view

private agencies and persons. yearSj but the fact remains that
American
investors have shown"
Presidents budget contem--

«nd

I

for this purpose of $300 million
during the first year of ECA oper-

(ating

tnird

Administration

will press for early

Congress authorizing the Exportin ERP countries against this risk Iniport Bank to extend investment
has been sparingly used. Guaran- guaranties. Incidentally, there is
ties issued to date amount alto- obviously no compromise between
gelher to less than $5 mil]ion as the government position on this
guarantee

for

on

Othcr

reduce

provide some stimulus to able effectiveness in stimulating
foreign investment and may be additional investment abroad. The
taken advantage of under some Treasury and the Administration
circumstances by corporations In¬ do regard them as important convesting abroad, but that they can cessions to corporations operating
never be a
satisfactory substitute in foreign countries and believe

thority.

There

would

sibly

de-

and,
resulting

seizure by action of public au-

or

of

a
middle view, which is
that government guaranties of tor¬
eign investment risks may pas¬

inconver-

currency

second

ing less than a majority ownership and
by
giving additional
recognition to losses as well as
gains on operations abroad. The

called

two

investment;

an

that

lowance

Joss to the government in the long
run.
There is also what might be

the Export-Import Bank to
guarantee private investments in

power

foreign

The

means

flow

larger

a

to foreign counconceivably be so admin-

tries ar.d

istered

effective

an

stimulating
private capital

legislative
measure
I have already said, em-

as

be

may

of

opinion

ernment and

pending

there

33

instrument,

income

prise under appropriate incentives ties by the government, or which
and safeguards would be many,
least noes not object to it on
times greater.
principle, because of the chance

of

by Mr. Herter

Jon or the same status in the
°1 foreign governments,

many

of Mas¬

Sni ^nPr0^e0ntn7 A£e
as

government

from

two.

technical

gram is embodied in

and

under

to

reduced to the terms of

vestment

to existing investments, which the total tax burden on foreign
would not enjoy the same protec- operations by extending the al-

The number which would

available

division

Elements of Point
I

abroad

available

be

ment of

States.

the

technicians

of

number

might

retain outside capital.
There
related argument that Ex¬

(1125)

investments, would be prejudicial

lack of qualified technicians available
to
carry
their
scientific
knowledge to foreign lands. What
they must be thinking of is the

permanent investment. Here is the

CHRONICLE

port-Import ' Bank guaranties, if
applied as intended only to new

Pro and Con ol Point IV Piogiam
tioned

FINANCIAL

earnings from foreign inby making the Federal
income tax applicable only to in¬
come brought back to the United

is

Another

&

These comparisons
to

tend unduly
depreciate tae current flow of

private

United

States

capital

to

other countries. I think the record

js

impressive
and
considerably
than might have been anticipated in view of the uncertam-

better

ties

of the

vestment

light
and

jcan

postwar world. Furth-

the record of postwar ir>-

ermore,

on

throws

the

ruling

considerable

compulsions

motives which induce Amer-

corporations to put
The compulsion

abroad.

case

money

in

the

tbe od industry and other
Continued

on

page

34

34

(1126)

THE

Continued

jrom

COMMERCIAL

33

page

much, and certainly

as

we

Pro and Con of Point IV Program
extractive

industries

additional

is

of

sources

find

to

mate¬

raw

rials in order to maintain and

their

pand

operations.

ex¬

With

re¬

spect to oil, this may be a declin¬

against

under'

will

in the case of

foreign

become

order to hold

is

existing markets and
Since

ones.

difficulties

the

of

believe

direct

States

from United

I

export

plants to for¬

eign markets will increase, I be¬
motive affecting manu¬

lieve this

facturing corporations will become

investment,
which

but
far

are

Yet Point Four
important eco¬

an

political force only if
rate of private investment is

maintained

new

the

up

and

panies is to jump over trade bar¬
riers and currency restrictions in
enter

step

to

conditions

nomic

com¬

urged

propitious.

ing compulsion. The ruling motive

manufacturing

is

of

from

American

Communism.

business
rate

the

other

no

the

increased.

and

plausible

There

in which

way

benefits of American technol¬

ogy and American
carried effectively

developed

capital can be
to the under¬
of the world, no

areas

other way in which

our

for¬

own

eign trade and international trade

stronger rather than weaker over

in general

the

stimulus of sound investment.

next

period.

Whether

the

investment

abroad

corporations
billion

of

rate

per

total

American

by

continue

will

new

at

$1

is problematical;

year

yvhether it will rise to some higher
annual

is

rate

Incentives

lematical.
investment

sistent

more

even

by

per¬

investment.

to

deterrents

Socialistic

to

blunted

are

prob¬
foreign

tendencies

eco¬

affecting

nomic nationalism

and

many

foreign countries threaten the suf¬
focation of private enterprise or

expropriation of private holdings.
Exchange
controls
are
almost
everywhere in effect, and the
prospect is that they will continue
indefinitely into the future. Over¬
hanging all is the spectre of another
incalculably devastating
And

war.

counter
and

-

there

is

attraction

always

of

the

profitable

relatively riskless investment

home.

at

Everyone

business

Here

is

the

Four which

paradox

its

lies in the contradic¬

tion of attempting to

enlist private
capital in fighting what is essen¬
tially a part; of the cold war

his

and

improve

tht

countries

for

The

United

should

efforts

its

history

of

the

in

nations

western

demonstrates
tions

that, under condi¬
political and economic

of

freedom, there is
road

to

no

proof

enough

should

war,

that

it

can

be

rapidly and most
efficiently under a regime of free,
competitive enterprise.
Govern¬
and

to

should take

meas¬

facilitate
and
private

and

encourage

investment

enterprise.

It is

however, to

suppose

ments

replace

can

pull

very

find

some

fatal mistake

a

It stands

hat.

a

that

govern¬

private en¬
of economic

deavor in the process

development.

to

world revolution

a

going

to

be:; able

to

rabbits out of a
hat, and get the right rabbit. And
if you do pull them out, you may
many

unpleasant

things

from

page

immediately in these

next

six

Western

America

the

question, How
the

save

and

rope

sphere?

the

Hew

viously,

can

nobody

do it?

we

is

else

we

the

save

Communism.

from

Communism

being—period.
when

appropriate

cost

us?

to

rich

openhearted

so

giving

not

are

to accept

several billions
another five
or
10

And

other,

as

saved

cost

for

And

time

the

what

will

does not
France and

Congress

to

to

us

prevent its going it
still going to be very great. One of
the

top economists of the Myrdai

Committee

ploring

said

this

to

for

after ex¬
hour, very

me,

an

still go Com¬
free choice within the
space of five years if things get
bad.
Fclon't believe that is going
to
happen.
I am not speaking
alarmingly, but I am insisting that
the fundamental job of having a
Western Europe which
is basi¬
cally, democratically and econom¬
ically sound and can at least

thoughtfully, and he was a man
speaking with great objectivity
and not representing any one gov¬

swers,

one

maintain

of

minds

in

be

"I

Italy

both

can

munist by

its

living,

that

done.

We

present

yet.

But

standard

remains

job
have

to

touched

not

it

must, therefore, ask

we

ourselves, what will it cost us if
don't get this job done?
If

we

do

we

ing

not

the

going

of

means

What will it

ahead?

if Western Eu¬

mean

One

thing, I think

would

rope

If

mean.

goes

Red,

all know,

you

Western

where

Eu¬

spend

we

billion for defense this year,

$15

will certainly spent $30 or $40

we

billion within 18 months.

That is

in 18 months than four years
of the Marshall Plan will cost us.

more

There would
as

you

can

well

have to double

defense
rope

be

went

Red.

alternative

We

see.

or

expenses

no

triole

"I
to

don't think there

should

our

own

if Western Eu¬
Therefore, the
if it means giv¬

is any way

giving away
for many years."

not
A

who

man

his

time

found

ica and in

spending all of
to find the an¬
of the most qualified

the
think

of

there

Europe!

away

news,

be

is

I

am

That is bad
bad

more

any

way

dollars—not
Now, that is

years."
isn't it?

payer, too.

will

whole

giving

many

bad

is

tax¬

a

news.

if

news

It
the

American

people, beginning with
responsible men in the pro¬

our

and

straight

on

It

would

this

reasons

for

this

be

terribly bad news if
unpleasant fact should

very

become

business, do not get
the

the

football

of

men's

orejudices, their emotions, their
hysteria, rather than our solemn
thought.
I

am

not

who

one

saying this to
considers

economist.

I

you

himself

merely

am

a

as
an

re¬

porter,
working
for
"The
Renorter," but I know that this is a
fact.
to

Now then,

if

we

are

going

are

That

one

per

pretty

of

our

businesses

Wait

same

tries,

and

Marshall

way

or

an¬

overseas—if

we

home

at

minute!
presents

Plan

coun¬

schedule,

present

our

of this year, is only 1.2%,
two-tenths.
So these $2

as

and

one

billion extra that
enable

need to buy
maintain its

we

imports

pean

in

Europe to

this

America

bring

us

of Euro¬
absorbing

were

we

country

'37
before
its productive

in

doubled

capacity.
From
don

conversations in Lon¬

my

and

Paris, in Rome and Ge¬

all the

West,

serious

a

Continued

from

In Sunday's New York "Times"

special

a

which

Europe,
its

of

investigating

ECA

the

published;

was

commission

Wayne

to

summary

headed

a

by

C.

Taylor; 200 pages in
Gentlemen, if you
time to do any reading what¬

this

report.

have

if

and

interested

are

you

Wayne Taylor ECA report is
of the most
can

read.

important things
think any¬

I

And

a

coming

are

re¬

against the

up

rock bottom problem of what our
own

prosperity

how

much

is

we

likely

to

or

may

can

save

may

have;

whether

we

West;

how

be;
not
the

are

going to use
our
billions if we are going to
keep our kind of a free society
and get some profits along with
we

the freedom.

Three

first

weeks

talk

before

here at the

to warm

we

I

choices

by

had
not

to

talk

these
a

three

the

found

added

I did

and I

choices

In the Taylor ECA

have.

Report,

group

cold,

in

same

three

They

experts.

fourth

which

had

I

mentioned, because it seemed
it was so disastrous, you

me

could not count it in.

certain
to

of

amount

find

that

oendent

So it

was a

gratification

little inde-

own

my

investigation

consumer

rates that might well be re¬

wage

duced

in

all—I

the

interest

best

predict that

substantial

of

number

price reductions
few months.

and

But

as

its

uses

us

a

and

rate

within the next
long

as

ernment continues to

reductions

of

will see

you

national

a

tragedy

to

artifici¬

revenues

least

at

ally

these

obstruct

rective

river
tinue

natural

our

economy

back

to

behind

these
series of hastily constructed dikes,
necessitating further and
more
up

higher until finally us poor folks
in the service industry lowlands
downstream get so we

don't sleep

well at night.

that

believe

thought of

I

*

speak

in the service in¬

many

dustries when I say that we
that

the

think

help can keep Western
Europe free and solidify it in a

free

condition—and

that

we

do

to

make

it.




sure

occupying

citizens

as

well

our
as

a

minds

(as

government)

in

figuring out how can we give
away the least; what else can we
do

to

avoid

having to give

away

the

into
a
major
depression—unemploy¬
ment, hunger and despair for a
period of a few years.
Such a depression can be pre¬
vented.

what

But

two

next

do

we

in

the

three years

is going
decide whether we prevent it
or
not, whether it comes within
five years or longer.
How much
or

to

think, how much

we

stand, the choices
be

decided

diately

the

in

ahead

of

with the next

under¬

we

make, will

we

yearsyimmebeginning

us,

;

12 months.

our

level

of

far

and

relaxation
mix

and

measures

the

like

would

we

progressive

to

see

imports- and
to

getting

without that business.

have

And

re¬

along
so we

economic

stagnation
No solution,

at home, and abroad.

obviously.
A

the

choice

third

loans

to

such

dollar

tions

of

who

will

to

large

a

gap

the

But I have

is

build

investments

and

of

deeree that

our

West

can

Allied
be

not yet met an

admit

or

up

abroad,

say

na¬

more

our

of

current

"Boom" instead of building up to
a

cataclysm of
to

or

even

one

that

I think

in

the

hearty

1929 proportions,
bigger.

our

watchful

Kremlin

approval
up,

move

com¬

to

our

never

giving

are

current

down, and

that the bottomless United

Treasury

sovereign
human ill.
is

a

Depressions,

States

specific

I

a

Perhaps
about

Year

Federal
like

1949

overconcerned

am

things.

Mine is
to survive

and

either

be lucky
sensitivity.

extra

Perhaps

easily.

industry
to

I

these
too

scare

A service

out of the

has

one

develop

or

I

service

a

an

industry is seldom in¬

dispensable.,

It

itself

price

can

market almost without

knowing it.

Allow the quality of

service to drop and your custom¬
ers
will
switch
to
alternatives
without
a

bothering to register

even

complaint.
Of

that's not peculiar to

course

service

industries.

Coal

give

I

well

various

remember

all

of

the

depressions and recessions
later, and I don't share

monopoly, but
years of in¬

a

and

alternate

uncertainties,

impose

John

and
can

shut-down

much

and

over

heat

Lewis

L.

involving

than irritation
to

of

permanent

a

without

switching

sources

and

power,

little

a

more

terruptions
to

railroads

just

with the resulting

more

inconvenience

the average man.
To

stay where

line of

business,

times
you

referred

have to

you

even

to

run

survive

as

in

are

those

any

some¬

monopolies,

like anything.;

in

this

competitive

not only
better, cheaper and more
satisfactory service but you must

render

dimly remember some of the
of the depression of 1907

and

the

had

three

what

Look

when

once

us

To

Corrective

events

ours

one

must

a

also

convince

you

are

We

your

doing

don't

customer that

so.

have

much

Bigness

in the Service Industries, and we
dread of have nothing of Monopoly, but
even
a
slight downturn in the Competition we have in abun¬
business indicator.
I am certainly dance.

that

came

the

politicians'

not

arguing for depressions as a

ica

at their

a

morbid

when

expert

do without
ents

worst, here in Amer¬

depression is merely a time
some
people are forced to

closed.

that it is

Boom

a

—Tying down the safety valve!

a

such

of

bit

a

with

"bust"

I omitted),

one

exports to fall off to
our

ourselves

would

Five-Billion-Dollar

a

Deficit in

world of

(this is the

to allow

sign

many

come

That's the only way I can think
of

rates

years.

Two

the

for

to

rates!

for every

but

have

will

the pieces.

up

their

two

years,

folks

pick

truck

One, to
continue giving billions of dollars
away;
giving billions.
Not for
more

in to

above

ways

more

outside

hiked

concept that everything must al¬

choices?

commodity market and in the
market we
are,
in effect,
tying down the safety valve and
insuring that, when the explosion
comes, it will be so violent that

lier retirement age have gone too

gating committee.
our

the

labor

mands for shorter hours and ear¬

rades

are

is that in refus¬

scares me

ing to permit minor corrections in

happened '

had the support in its findings of
this very highly qualified investi¬
What

Catastrophe!

What

price supports,
lending for housing,
government support of labor de¬

even

which

the world is for America and

government

government

and

course

our

pleasant choice, is it?

a

other western countries to go

expensive dikes. But the level of
surpluses still rises higher and

start

with

away.

the one way for

cor¬

the flowing
will con¬

movements,

of

good thing, but in my experience

large

to

want

But not impos¬
either, because we all know
Joe Stalin to-win

sible

gov¬

as

regard such

with United States private capital

away

not

billions

No, not pleasant.

standard of

our

benefits.
There are a lot of prices for
goods and for services and some

my

folks,

you

come

that

in

that

to

gave

little

a

living—the

I

Advertising Club

for

up

want

not

I

ago

increase in

an

care¬

to

man

and

would be to take the

give

That is not

Moie Risk Capital or

mission

10 weeks

consensus,

report,

special

for

sent

amounts of dollars for some years
to come, surely it behooves us to

to

do

giving

sums

10

page

cheaper way, even
ing away some billions for some
time, the cheaper way, certainly,

have

from

more

continue

figures to show that in 1937 we
were buying the equivalent of 2%
of our gross national income from
these

"

,

have—buying much

we

doesn't

a

Committee

same

(

the only alternative

seems

investing large

steep,

badly.

That

abroad—and

Sounds like that would knock

pretty

the next decade.

billion.

buying—$2

sounds

from

year

countries than

Plan

now

enlarged. Into" billions of dollars
we are going to have reasonable
prosperity in the United States lor

depression.

cited

trying

don't

to avoid

for

dollars—

imports

we

says

going to be enlarged, and must be
if

going to have a very
serious depression both in Amer¬

over

avoid

fessions

does go Communist?

rope

it

capable of find¬

prove

ernment; he said:

is

there

dent Truman's Point Four

we are

fully, is too foolish

is

we

if these billions

yet,

main in business long.

Western Europe goes Red, it is ter¬
rible and almost unbearable. The

more' of

recovery,
would only
back to the percentage

away

for

year

years.

ex¬

Athens, and in Germany,
no
question that Presi¬
(which
has been neglected and sneered
at, and which is only asking, for
$35 million this year to make a
study as to how we can provide
neva,

$2 billion

consume

dollar

the

going to find
enough, nor our

does not read it. and read it

Yes—if

and

to

body in business in America who

saved

It

more?

the

The Taylor Committee
must buy

which

not

are

ourselves

tc

got

doing it

greatly, reduce

people

West?

have

we

of

means

We

what

is

the combination, the

as

a year,
maybe, plus making very large
U. S. private capital investments
abroad.
S
? ,y • Jy- /.

now

can

dole.

our

Ob¬

going to
can't,

sunk.

a

will

Hemi¬

If America

Well, first of all
find

can

West, both Eu¬

Western

be able to do it.
are

solution, they
part.

a

choice

fourth
see

That

face

you

not

is

Europe

from

happen

Well,

only

jlarge amount—$2 billion

must

We

against the hard real¬

The

perts

some

one

up

say, but it is

months; immediately in these
coming
few
months
when
we

the

getting
ity.

That is part of the

it?

coming

it

something to sell and a
customer to buy :it, V would say

Buy $2 Billion Yearly From
Europe and Save Marshall Plan

billions to

fast

to

ever,

12

invest enough
enough—enough
close the gap that way.
to

us

and

the Marshall

in having

Continued

abroad

about the rabbit when
you get it.
So we have not yet come to the
decisive point, but we are

a

most

can

not

are

possible for

bigger,

that in

you

Thursday, March 16, 1950

improvisation; only other alternative to close the the know-how for undeveloped
was
another .dollar gap abroad by buying more
countries, and the techniques and
yes,but from abroad to the tune of a very technicians)—that Point Four is

Plan

pulled out of
reason

development

during and since the
achieved

Marshall

improvisation,

short

easy or

economic

The really incredible performance
of the American economy, both
be

the

sheer

was

How

false expedients

by

course

UNRRa

same

the guise of short cuts. The whole

must, if

we

tions, certain,y we must then rec¬
ognize one tact.
So far, since the
war ended,
we have been doing
nothing but improvise to meet one
of the greatest crises of centuries.,

con¬

the

on

CHRONICLE

ask ourselves these ques¬

even

we

objective and not be diverted from

private

Point

of

to

foreign

Government

states

foreign

lend

government

investment.

centrate

ures

of Point Four

in

private

to

efforts

climate

in

therefore

support

ments

Paradox

interested

should

trade
full

receive the lasting

can

FINANCIAL

&

never

things that their
had.

par¬

We don't have any
Chains

dries

or

of

big National

Warehouses

or

Laun¬

Beauty Shops.

We don't attract much attention
when

we

make

a

are

alive

born

are

very

and

we

don't

big splash while

and

our

demise

is

we
us-

Volume 171

Number 4890

THE

COMMERCIAL

&

.

FINANCIAL

CHRONICLE

(1127)
ually unobstrusive, but

make

ws

Is that Freedom?

up for that in numbers.
Like Lin¬

coln's

common

must

love

people,

the

the

service

industries

will

have

sonnel

to

service

neither rule
devil

take

-

its

of

treat

fancied

that

per¬

don't

make

prog¬

way—not through

Ludwig

and moralists

to

nor

the generos¬

ity of the masters.
Demand and Supply,

Adaptability,
know

Ingenuity
quickly

they do
learn in

must

or

Servile

petition of free labor.

itability

tinker

with

its

com¬

in

of

controls.

A

re¬

security

our

markets

for

to

them.

serve

The
vast

only

real

obstacle

to

this

new

omy.

with

Sometimes I get

little put out
Government!

our

a

tries

in

is

to

to

link

exchange

sta¬

in

excnan&e

wise

when

the

policy

and

res-

in

that

aware

and

14

1

res-

We Have Best of Gold Standards

we are mental defectives!

creased

living

our

seven

With the

advantages of modern

technology
other

American standard of
times!

increase it

we can

times

seven

and 1999 if

between

they leave

an¬

1950

■J * But we can't do it with

horde
spiteful little men

of vengeful and

a

clothed with vast powers of
gov¬
ernmental

authority continuing to
interpret and administer and distort laws and
regulations to fit
their belief that all
profit is evil,
that
bigness is

monopoly,

that

outstanding success in business
can
only be gained through dis¬
honest connivance. / ■'
The A&P case is a
good exam¬
ple, and I certainly honor the
A&P

for

the

grand job

they did
showing up the pettiness of the
charges against them."
If we all
in

;

had

'

the

guts

to

fight

that

way,

could soon restore a free
ket economy in America.
we

>'■

Civilization is

Golden

Age

standards
within

have

trade

of

to

living
-come

will

if

we

permit

incentive, of

production

flow

free

com¬

and

and

of

unob¬

structed.

A

The

Reactionary would dam this

stream of

Today,

of

on

concept of managed money is the
opposite, the very opposite, the
very contradiction of the concept

ten into the Bretton Woods

of

managed economy.
of

the

fruits

Coin

distribution of

of

of

the

melancholy
gullible citizenry

a

bring bribed with its

own

under

the

guise of a
prophet of better things to come
seeking to outbid every other ad¬
venturer
and

with

promises

of

more

better

benefits, more and
security through more and
more
controls, the whole founded
on
the shifting sands of
govern¬
-

more

ment

credit.

Our

danger

is

not

from

any

dramatic
abandonment
of
the
American way of life, but from a

leaking away of principles — a
Creeping Socialism that under the
guise

of

benefit

gulfs

conferring

almost

our

anyone.'

this

or

that

imperceptibly

en¬

nodding citizenry. Does

believe

Commonwealth

that
can

a

Socialist

do

without

coercion and compulsion? Look
at

England, for so many centuries
the strong bulwark of
individual
freedom.
England today, by law,
may
work

jail

a

at

the

urider the

man

who

refuses

to

job assigned to him

unemployment system!




in there.

There

fore, all the
New York

is

nothing wrong
He is glad to have the

with that.

tary

system.

down

or

If

want

you

to

want

prices
them

prevent

from

going up, you don't slap
down price controls or
something

in

dollars

and

there

is

disturbed about is the question of
whether, when the time comes,
the
Brazilian
authorities
will

make the dollars available to the
you do is to operate
monetary system and let importer to pay the exporter. That
is the essence of the
businessmen adjust themselves to
gold standard
it.
that is important—not that
So don't get frightened
any
by this
else.

"a

mistakenly,

monetary

system."

means

a

monetary

which

the

tem,
are

the

Federal
of

it

is

merely
system
in

Reserve

Sys¬

Reserve

Banks,
responsibility.

their

because

I

system

a

managed

It

Federal

aware

system,

want

such

which

a

allows

businessmen to adjust themselves
within the framework of a mone¬

tary

policy—and
free

are

to

that

I

that

do

cannot

want

after

they

as

a

that

please

monetary

backfire

they

system
start

or

an

explosion which will end in dis¬
aster.

Brazilian

can

Brazilian

importer, who must

make

a

Now,

Relations

the international side,
what is it that we want in inter¬
on

national

monetary

to

seems
a

that

me

relations?
what

It

want

we

monetary system which will
American

English

businessmen

businessmen
and

and

and

French

Brazilian

deal

nessmen

with

busi¬

certainty,

know what they are doing.

Now,

you

can

that

say

standard will do that.

that,

and

need

for

that

there

settle

is

having

If,

purpose.

country

but that

to

payment

a

North

a

American exporter can know that
he will get the dollars for that

In

short,

about

the

purpose.

portant
is
of

what
gold

is

im¬

standard

exchange stability and absence
exchange restrictions
and I
—

might add to that absence of other
types of restrictions which have
the

effect

same

exchange

as

restrictions.

Now, that I think is an objec¬
tive well worth having.
I think
much is it an objective well

were

a

gold

It will do

absolutely
gold

in

coins

no

for

fact, every
freely to

prepared

its

in

whether

having that

attempted

we

through the Bretton Woods Agree¬
ments, through the International
Monetary Fund, to establish pre¬
cisely that policy; that the cur¬
rencies

of

all

countries

that

are

members of the Fund shall be de¬

fined

the

evils

not

aware

can

come

coins.

that

may come.
I am
of any great
good that
from the

giving of gold
today, I agree with

As of

Professor
make

afraid of it be-

more

City

Robinson.

It

does

not

There

difference.

any

are

important things than that.

more

pressing in the

i

area.

This

pressure

bank

Within
New

to

the

last

York

ready

two

years, five
banks have al¬

City

been

absorbed

by

this

process.

naturally varies
bank, depending

Realignment
The situation would
appear to be

upon
the special conditions
pe¬
culiar to the individual
institution.

in

terms

of

gold,

that

the

inw
low

a
a

nf
of

Why
here?

ing

4 9
4.2

The

+r»
to

self

correcting. So compelling

the

i'
1.

circumstances,

that

are

banking

such

present-day

it

as

only

with

the

concur¬

Fund, and that

be

peo¬

free

to make pay¬
ments for current business
without

restraint

from

their

monetary

authorities.
So

far

as

the

gold

and

that, it

I

can

see,

standard

get without

that is all
give

can

seems to me,

seizing

on

you

you,
can

the circu¬

lation of gold coins.

de-

against the period during the two
just prior to Pearl Harbor.
large Wall Street banks whose

years

Six

That

the

or

not

essence

seem

of

businessmen

it

at

to

me

all.

to

But

be

if

can

deal, knowing
that the currencies they are deal¬
ing in will have a value, that they
can
be freely used; that
they can
engage in these transactions with¬
out fear of
restriction, then you
have what you want in the mone¬

tary system.
Here

is

that when
man

I

mean:

reason

I

mean

American business¬

exports to Brazil,

contract

tional

he makes

in dollars, and I see
why he need be a bit

I

believe

that

interna¬

trade and international in¬

vestment

will

depend upon the
stability in international currency

relations,

upon

freedom in inter¬

national currency relations, upon
giving a square deal to the in¬
vestors and exporters of the other

who

a

pleasure to

want

see

countries,

The

realignment

operation

points.

This represented

Based

House
loss

ending

1949.

position of
on

totals

of

of

a

14

percentage
today's Clearing
$22 billion, this

position

amounts

to

$3

whole

Of more

being equal to
the sum of its
part, the $3 billion,
however, has not just disappeared
but is held now
by other Clearing
with

the

now

These other banks

higher

enjoying

deposit-capital

on

money.

These

therefore,

greater

their

power

are

earning

stockholders'
the banks hav¬

ing broader contact with the pub¬
lic, merchandising their services
most effectively to little business
and generally
providing a retail
type of operation.
Within the limits set by
today's
difficulties, these banks are in the
more
favorable
position.

tors.

For

this reason, since their

capital is fully employed, they are
less likely to acquire other banks
of important size.

But

they, too,

faced with many of the same
problems of maintaining earnings
which confront the other banks.
are

On

the other hand, banks with
lower
deposit-capital ratios

find

themselves

tion

to

investment, aware of
their responsibility in the job. The utilizing

solve

in

their

a

better posi¬

problems

is

ess

and

more

by

their excess capital in
the purchase of
new
series
of
treaties
banking institu¬
that the
United States is entering
into, the tions, thereby acquiring existing
arrangements
with
Brazil
and i facilities, branches and
deposits.

effective

importance in the

the

deposits

fact

that

their

proc¬

surviving

deposit-cap-

,the additional

and

facilities

acquired,
immediately improve their earn¬
ings.

The

ment

is

pressure

on

manage¬

eased.

While

still

re-

««

this, of course,
provides large economies in
oper¬
ating costs.

billion for these six banks.
The

process

of funds. All of

"al ratio and

of

sensi-

efficiency

in
use

Dec. 31,
loss

development,

increasingly

banks increase

the

countries.
It is

what
an

vestment.

aware of the im-

this

tive to the situation,

the

or

does

of

become

combined deposits
averaged 57.5%
the Clearing House
totals for
104
weeks ending Dec.
31,
1941 showed an
average of only
43.51% for the 52 weeks
of

not somebody in Sao
I would like to link these two
They
have succeeded in
somebody in Chicago— things
making prog¬
together.
I believe that
(they are much alike, those two the
prosperity and well-being of ress, having adapted themselves to
wonderful
cities)—or somebody, the world will
depend upon inter¬ existing conditions while attract¬
in Marseilles can get a
gold coin. national trade, international in¬ ing deposits from their competi¬

Paulo

have

exists°Zday and results in greaterof
dUC6S the duPlicati°"

changed

of the

capital 0f retiring banks,

stockholders,

plications

Holi-I

situation

the

ratios that resulted
are,

shall

and

circum-

stances, is one that has been
veloping since the Banking

House banks.

ple

I jng the

variations

condition, while strik-

under

ac(3uirinS banks is replac

~

i
^

there

are

exchange rates for these curren¬
cies shall be kept stable and ex¬
rence

international transac¬
geld, we would have an
international
gold
standard,

tions

get gold,

so

Gold in International

no

it when he wants
it,

What

term

his

a

the

on

is

gold

solvent banking system. That
is the difference.
I am afraid of

Banks Vary

contract

mone¬

can

of

Earning Power of N.Y. City Banks

exporter

Brazilian importer.
He
the contract in terms of
a

dollars.

Harry

full

Continued from page 11

nothing to be afraid of as to in¬
from
stability.
What he is much more

money,

accepting at face-value the prom¬
ises of political
adventurers, each
adventurer

sells to

Agree¬

am

and

sack

of those

one

American

an

makes

making

Mill, to manage the

businessmen
see

wanted it

Now,

was

Smith and David Ricardo and John

taxation.
we

who

man¬

system

of

ments Act and I

I

withdraw

in

Standard

of

time's sake.

Stuart

let

spectacle

monetary

is the classical method

labor, expropriating
these fruits through
confiscatory
/. Today

The

the economy behave the
way you
want it. It is the method of Adam

effec¬

and conditions of

wages

work and upon the

the

gold to be changed without Con¬
gressional action.
That was writ¬

worth

our most

tive Reactionaries call themselves
Liberals and seek to impose con¬
trols and restraints upon produc¬

tion,

the value of the dollar in terms of

frightened by this
"managed money."
If we
would only realize
it, the very
get

Progress.
some

Dick

little

a

coins, with an insolvent
banking
system, but that he can have a
deposit and be sure of
being able

Comes in Crisis
All

term

And

march. A

and

lifetime

our

mar¬

improved

can

the channels of

petition,

the

on

of

Don't

j

agement

alone.

us

a

Tom,

every

monetary

are

Under a free market
economy
from 1840 to 1940 we
actually in¬

they do is on
they are trying to
bit lor themselves and

when

If

sition.

Danger of Gold

about what

care

what

people aon't want gold coins
now, it cannot be very important
to them now.
It is for assurance
of the future.
The assurance I
want for the future is
not that

these things you see—I
getting fed-up with gov-; —to
am not
give the community a mone¬ disturbed about the
disagreeing with Professor
ernment-kept
stability of Robinson
economists
(and
at all. - We are
tary system well managed, and the dollar.
With some of their
As Professor Robin¬
disagree¬
bosses) who one which has
ing about a fringe—about an ut¬
as its
objective a son said, since the establishment
strut like roosters
claiming that stable
terly
unimportant
the
economy, one that " works of
thing.
He
International
daylight came just because they
Monetary wants
well.
,
it, I think, merely for old
crowed!
X-.IV
Fund, it is quite impossible for
V-'a*' *

We

;

effect of

to

not, is fine for mental defec¬
tives, And if we embrace such j a

uncertainty, when
thinking clearly,

not

what they see as
impending ruin.
That is tne danger.

straint, conservatism, good sense,
wisdom in dealing with their
do¬
mestic fiscal credit

of

are

salvage

exchange

payments, in the transfer of fUuviS
for
current
business, comes in
those countries in which the
mon¬
etary authorities have unfortu¬

nately not been

is

they don't

others,

biggest threat to
stability, the biggest
freedom

ii

tjmes

peo^ie

coun¬

in
the
United
what would
happen

aemand

btates.

The

to

mucu

you

monetary

how dangerous it

see

be—not oruinarily
because, as
rrofessor Jtiobinson
said, if you
give people ti.e
right to get gold
coins
now,
tnere would not be

tnat

in

35

cau

Unfortunately,

except in those

is

I can

cause

De

statement

shows

on

which

strained.
threat

do

freedom

exchange

or

system

and

seem

policies, is the sine qua non of a
strong international payments
po¬

benevolent

page

bility

encouraging

my

second.

count

domestically

are
there just over the
horizon,
ready for the taking by him who
develops them and earns the right

to
of

experience

Progress— Prosperity — Enhanced
Living Standards. These markets

whip for the freeman's
participation in the market econ¬

jrom

part

the

transactions,

progress is this growing
authoritarian complex of our gov¬

Continued

first

cannot

Service In¬

our

ernment.

econ¬

the
with
our

master's

government, providing cradle-tograve security whether
you want
it

ited

the

omy—to institute controls for the
sake

we

dustries—and for all industries—

Its unprof-

doom

shall

together in the
of the Welfare

economy.
Rome became
great when she traded the slave-

country is getting pretty
fed-up with these constant
to

sealed

be¬

or

huddle

for

investment,

all to the good.
What I want

back

market

Fed-Up by Controls
The

efforts

disappeared

it could not stand the

cause

order to survive.

well

labor

and

countries

American

Today I glimpse almost unlim¬

,

The
abolition
of
slavery and
bondage is to be attributed neither
to
the
teachings of theologians

know

Columbus

as

other

glittering

the horizon.

over

State?

com¬

Mises

von

just

push the horizons

we

even

pulsion.
As
points out:

ence.

)i. Alertness,

/

Mine

Shall

Workers

ress

it

hindmost exist¬

-

United

member

a

gentlemen—we

formula in their

the

the

can

rightly be called Free Labor? No,

because

industries

nor

-

other,

quadruple
its budget

and

(host

each

A great new world of
promise lies

Here in America

so
many of us.
If the Federal
Government ever
starts in to
"protect" us service

against

that Happi¬

ness?

Lord

because he made

industries

Is

this

process

offers

a

so¬

lution to the immediate
problems,
when carried too far it can
be

contrary to the community's best
interest.

The

requires that
banks

country's

ized.

New

our

remains

business

York

strongly

City

capital¬

To attract and hold

banking
capital, earning power is required
large enough to provide a rea¬
sonable
as

accumulation

well

as

vestors.

fair

of

reserves

return

to

In good times like

should

reserves

cushion

a

be

built

in¬

these,
up

to

the

shocks and readjust¬
bad times.
The mone¬

ments

of

tary

and

banking

authorities

should

determine the
extent to
which their policies and decisions
are

restricting banks from realiz¬
ing
adequate
earnings on
the
capital
supplied
by
these
in¬
vestors.
A
question which can
properly be raised is the neces¬
sity of continuing to discrimi¬
nate against the banks in New
York

and Chicago
quirements.

The

on

reserve

re¬

long range solution to the

problems

of

banking,

consistent

with the public interest, can
only
be met by the continuous
cooper¬

ation

of

practical,

ernmental
ward

their

agencies

looking

realistic
and

bankers,

responsibilities

stockholders

business.

and

the

of

gov¬

for¬

aware

to

of

their

country's

36

THE

(1128)

Continued

from

3

page

A Test of

Speculative Behavior
total

loss of each
student
thus computed
was
checked against the capital gain
or
loss determined by deducting

prices remains level.
Organization
A

of

the

class of about 40

investment
of

sets

fund

students in

obtained.

were

net

was

required to be invested in a
group of six stocks. These s. cks

stock

the

indicated

was

regular

Dividend

dates

were

on

ratings

and

was made concern ng

price

trend

of

with

of

the

six

The per share earnings of
each stock for tne
preceding 12
months was also guvtn and as tne
month

progresced

earnings

announced.

were

The purpose of these

12

new

interested in

racings and

investor-spec¬

were

students

of

gains or losses.
The evidence
reliability will therefore, be
presented in connection with the
tests of the various hypotheses.
Even if we had desired to develop

in¬

were

structed to arrange the investment
of the theoretical initial fund of

$20,000.

Each

nished

with

student
sheet

a

of

a

formula for

success

ulation, entirely
consideration,
it

fur¬

was

consistency

of

prices of the six
placed on the black¬

and

of

concept

terns and not with the

opening

stocks
board

to do
what¬

reliability in
connection with this study has to
do with the consistency of the evi¬
dence
concerning behavior pat¬

ulator reaction to certain dividend
yields and price-earnings ratios.
The

has

which

to

being measured is meas¬
consistency. It is clearly

Our

dividends will be evident later.
It is sufficient here to
say that we
were

extent

to

impossible to measure validity in
an experiment of this kind.
Valid¬
ity of experimental evidence is de¬
termined generally by
repeated
experiment and not by internal
analysis.

stocks.

experiment

is

ever

the previous

each

the

in pure spec¬

divorced from
is improbable

mimeo¬

that this could have been done by

graphed general instructions and
adequate supply of monthly

looking for consistencies in gains

an

or

record sheets.

The
to

opening

prices

be those of

recorded

said

were

Students
transactions on a

that

that make for

montnly
as

record sheet designated
Month 1.
As soon
as
these

transactions
record

Each

sheet

tion"

carried

forward

sheet

which

to

his
a

then

blank

order
have

that

as

periment progressed
the
plete cumulative data.
At the

is

for

Month

2

the

able in Month 2

the blackboard.
ed themselves

stocks

held.

At

(3) To a considerable extent it.
be true that speculative aft
consists in knowing how to "push
your luck" or to "ride a winner."
This
means
experimenting and
observing until it appears that a
particular stock is dynamic and
then concentrating resources on

it, following it
to

on

same

up

intermediate

without regard

declines.

But

if

this is true, it is quite likely that
the
successful
speculator
will

Students credit¬
the

con¬

may

ex¬

written

been

are

'

placed on the
dividends pay¬

were

(2) There is no doubt that luck
an
important factor in pure

sistent luck patterns.

com¬

with dividends

stubborn

most

are

speculation and it has not

were

blackboard,

who

demonstrated that there

time that the prices

same

speculator. . But given the
price pattern, those specu¬

taking losses will be, most
successful.
^
+

student
the

An

on

show large

time

gains in one stock and
gains or even losses in
In short, there will be no
consistency in the gains on differ¬

dividends
normally due
to
be
payable the following month were
placed on the blackboard for in¬

others.

formation,

ent stocks.

small

The experiment covered a the¬
oretical period of 36* months and

Luck in Initial Selection

*

(omitted
here) that luck in initial selection

each

played

session

the

There

monthly record

is

evidence

sheet for return to the student at

significant but not dom¬
in determining final
gains or losses.
In view of the
absence of opportunity for secur¬
ity analysis perhaps the signifi¬
cant thing is that luck was not
more closely related to final re¬

the beginning of the next session.

sults.

sheets of each student

were

inant

seg¬

regated and audited. The security
and
cash position for the
last
month

sition

were
was

verified and this po-

placed

on a new

record

>

dend

credits

from

the

value

a

role

Hypothesis 1: "That security buy¬
ers
prefer low-priced stocks
to

high-priced... stocks where

the fund at the prices effective at
the end of the thirty-sixth month,

other

and

-

dend yield; earning rate,

dividend credits.

then arranged on individual

sheets by stocks.

Other

factors

are

constant.

factors

general

refer

measures

to

divi¬

and

of quality."

This experimental evidence does
not support

the above hypothesis.

as

were

established

exactly alike in all respects ex¬
The likeness included

cept price.

The

dividend yield, price-earnings ra¬

loss of each student on
•each stock was then computed and

tios, quality rating and pattern of
price movement. The only differ¬

summary

gain

or




period

did

the

aggregate in A.

students

initial

investment

in

eight had

E.

both A and E.

from A but it

Three

was

the

At

A

were

either A

or

should

It

avoided
course

di¬

the
of

end

vestors

eight had a
in E.
Eleven

not

represented in

E.

be

not

concluded

on

speculators

or

have

a

preference for high-priced stocks
as compared to low-priced stocks.
While it is true that there

dollar

aggregate

was

a

invest¬

ment in A than in

E, this was not
sufficiently consistent to warrant

such

conclusion.

a

We

can

con¬

clude
only that price level as
such, did not appear to be a factor
in selection.

.

It is possible that this is related

problem of the relative vo¬
latility of high-priced and lowpriced stocks.
It is widely be¬
lieved that low-priced stocks are
relatively more volatile than highpriced stocks and this is undoubt¬
edly true.
It has been shown1

that

high-priced stocks and lowpriced stocks tend to fluctuate on
basis

stocks

fact

that

price

likely

was

by an amount almost ex¬

actly equal to1 the amount of the
When a large dividend

Hypothesis

strong

is
paid,
incentive

there exists a
for the upper
bracket taxpayer to sell his stock

accrual

"That

2:

strong

there

tendency

to

is

stock

a

pay

when

it

a

for

buy

is

order

just before the ex dividend date
and perhaps
to repurchase im¬

to

in

dividend

a

about

to

The

purchase

of

dividend into

im¬

dividend has the effect of

verting capital into income.
Un¬
ordinary circumstances, it re¬
sults in the payment of a higher

income tax than would otherwise

It therefore

to be illogical.

pears

It has

full

demonstrated, however, that
entirely a mat¬
ter of logic.
Many brokers be¬

there

is

is

It

tendency,

a

it

tion

and

to

based

tween 34 and 46 and

least

paid a semi¬
$2, equal to

of

approximately 10%

on

annual

an

basis.
It is

appropriate to appraise the
the dividend factor by
measuring the change in net posi¬

ac¬

force

of

tion

pre-dividend

on

dates

and

pre-dividend dates.
If the
capture of an immediate dividend
is an inducement to buy, it must
non

it may be
have of deceiv¬

also

ing ourselves.
At

dividend

annual

on

way we

This stock ranged be¬

in stock C.

In other words,

pleasant

a

most evident in their transactions

logical grounds.
Buying for the dividend may be
merely a means of rationalizing
the desire to spend rather than
save.

before the ex
this was offset by
buying for the divi¬

experimental group dis¬
tendency to buy for the
dividend, this tendency should be

pretend

to themselves that their

is

tax

If this

played

to
save.
Saving
(when not carried to excess) is
logical but unpleasant. Men have
the capacity to take the easy and
pleasant course but to rationalize

even

income

dend.

toward

behavior

the

was

indica¬

possible

a

just

other persons

difficult

their

as

while

sell

to

sons

saving and
It is pleasant to spend.

spending.

that

dividend date,

such

attitudes

in

situation would induce many per¬

is interesting to speculate as to
why it exists. A possible explana¬
tion may have to do with instinc¬
tive

taken

tion

buy for the dividend.
If

of

that

dividend

of the

amount

then

tendency to

a

amount

fact

The

dividend.

general the price dropped by the

never

human behavior is

there is

the

than

less

amount

the
ap¬

been

lieve that

upper
bracket taxpayers
probably take this course of
action, it would appear that the
price of the stock would drop on
the
ex
dividend
date
by
an
very

con¬

der

have to be paid.

a

many

mediately before the payment of
a

that date.
This
converting the
capital gain. Since

of

effect

the

has

stock

a

after

mediately

receive the dividend."

be

deterrent

a

to sale.

cordingly the change in

Ac¬

net

po¬

non-experimental sition for each month for each of
study4 points to the possibility of the five stocks was computed and
existence of a tendency to buy for comparison made between the po¬
the dividend.
This study had to sition
change on
pre-dividend
do with the price effect of the dates and
position change on other
payment of large accrued divi¬ than pre-dividend dates.
These
one

dends in cash.

It

found that

was

of

the

to

fall

to

dividend.

a

to the

the

in

was

immediately preceding the
split-up.
..

the

larger in¬

a

the basis of this evidence that in¬

larger

it

as

months

and

investment

larger

students

larger

a

not in

was

E.

in

A

drift away

a

test, 14 students had
vestment

a

in

During the

of the test there

of

had

investment

than in E while

rection

in such cases the

at the end

same

month

data for the five stocks follow:5

Stock

Average change in position
pre-dividend dates

B

Stock

.

Stock

Stock

C

D

E

+ 1220

+112

+493

-194

-33

—61

on

Average change in position

Stock

A5'

on

+208

___

other

low-priced

than

+ 59

-

pre-dividend

dates

those - of
marginal or high leverage com¬
panies.
It has been shown2 that

Median change in position on

there is

Median

commonly

are

«.

little difference in vola¬

tility between

of highpriced stocks and a group of lowpriced stocks where the stocks are
paired to eliminate all differences
except price.

that

appears

stocks

are

In other words, it
while ' low-priced

-

more

volatile

high-priced stocks, they

than

are

not

pricedness. This suggests but does
not prove that investors have no
innate preference for low priced
stocks simply
because they are
low priced.
It

has

also

been, shown5

which

served

to

Stock A
up

(high-priced stock) was

on

a

29th month.

conclusive
the

as

.

Summary

.-Stock

Stock.

i

A

whether

price

or

not

reduction

Purchase in the month of

sharply

and sales

were

increased

but

initial

burst, purchases
nearly equal.
As
was

-

Stock

D

E

-

Pre-Dividend Months4

3

1

3

0

4

0

1

0

0

0

0

6

6,5

6

12

16

17

13

1

0

30

_____

6

5

Showing decreases--___i
Showing no change

29

.

5
1

,

Months Other than Pre-

Dividend Months—

Showing increases

------

Showing decreases-----Shewing no change
_____

Perhaps the best expression of
the data is in the form of

an

an¬

pre-dividend dates.
There
six pre-dividend dates on
stocks B, C, E, and five pre-divi¬

on

total

a

33

13

14

16

13

16

•

16

0

0

0

29

30

29

'

of 28.

Since

there

subjects the number of

low

924;%

was

shows

to which these

utilized

stocks A and D, or

Position

were

decrease

foldings.

Analysis of Individual Change ii

or

be¬

extent

opportunities

increase*

to

were

oppor¬

The* table

by stocks the

were

dend dates

on

on

Pre-Dividend Dates

-No
Increase

matter of fact the net position

equivalent old shares

+190

Stock

•

C

alysis of what individual students tunities

to

Stock

B

did with their opportunities to act

resulting

—60

of Changes in Position.by Months
Stocks A, B, C, D, E
'

2 for 1 basis in the

after this

in

440

+390-+580

unduly affected by a. few large
changes. - The following tabula¬
tion is based only on the number
of months showing increases or
decreases* in1 holdings. • .v

The evidence is in¬

served to stimulate interest in the

a

+90

preceding tabulation is ex¬
pressed
in
terms
of
average
change in position for the entire
group of 33 students.
It is possi¬
ble, of course, that these data are

mate¬

rially change the price level of a
stock, would result in a relatively
higher price.

+961

pre-dividend

dates

that

major stock dividends, or
split-ups, occur, the new stock
does not sell at a relatively higher
price than the old. If there were
an innate investor preference for
low-priced stocks, it would ap¬
pear that a major split-up or stock

-10

on

The

when

split

than

volatile because of their low

more

+ 190

___

change in position

ther

o

+115;

30

pre-dividend dates

group

a

—23

__

Di

Stock A——.-

3

Stock B

al-

34

22

10

•

Total

Change'

crease

128
-

165

166

-

198

'

Stocks A and E

The transactions of each student
were

the

split-up

TEST OF HYPOTHESES

of

substraeting from this total
the beginning fund of $20,000. The
resulting figure represents the net
capital gain or loss exclusive of

36-month

aggregate investment in E exceed

stock.

At: the conclusion of the experi¬
ment the net

gain or loss of each
student was computed. This was
done by deducting the total divi¬

the

36th

the dividend, i.e., to purchase

initial investment
of the group amounted to $173,700
in A, and $81,100 in E.
The aver¬
age investment over the 36-month
period was $153,908 in A and
$107,414 in E. In only five months
of

Thursday, March 16, 1950

exactly the

the

The aggregate

dividend

required six class sessions for
completion. At the conclusion of

of

stock A.

due

record

each

available

situation.

about

were

in

another

in

most

in

than

lators

the

on
which tp record price, divi¬
dend, and earnings data as given

and

speculative success

situation may produce only

E

hot : necessarily
associated with
their low pricedness.
It may be

poor

collected the prices of
the stocks, for Month 2 were
placed
on the blackboard.
Students were
furnished a blank summary sheet

would

stock

proper

posi¬

as

record sheet for Month 2.
As soon as all Month 1

sheets

1

record

served

in

equal percents of
extreme
reluctance
to
accept; their square roots. But this greater
losses is perhaps an attribute of a volatility of low-priced stocks is

a rec¬

"net

one

losses

student,

hbwever, before turning in
ord

in

the

Covering Month

collected.

were

recorded

were

sheets

reasons:

(1) It is reasonable to suppose
the same behavior patterns

January.

their

This is true for the fol¬

losses.

lowing

investment

Twenty-two

ured with

statement

a

that stock A was initially
priced at 180 and stock E at 2Q.
If there had been a preference
for low-priced stocks that prefer¬
ence would presumably have been
translated into a greater dollar

larger

purports

Reliability

measure.

a

semi-annual basis for convenience.
The
stocks
were
also
assigned

quality

to measure the

it

what

measures

dates.

mace

price

the

to

as

Validity has to do with the ex¬
tent to which a test or experiment

weL

as

dividend

well

and

accuracy

Reliability and Validity

designated simply as A, B, C,
I), E, and F. The dividend paiu on
as

done in order to

adherence
as

thirty-sixth

the

capital gain or loss by stocks.

were

each

was

schedule

theoretical fund of $20 000 which

a

of

arithmetic

strict

member of this group started with

value of the fund

the

This

month.

initial

the

and

end

insure

Eacn

or

credits

from

the

at

made

data

capital gain

dividend

Strdy

up
tne
'sub¬
From this group, 33 usabls

jects."

CHRONICLE

FINANCIAL

&

ence was

moving both up and down even
though the general trend of

|

COMMERCIAL

1 The

and

Stock C__——

of the American

sociation," December, 1945, by Dr. Zenow
Szotrowski.
See
also
two
articles
by

Harry D. Comer in "Barrons," March 13,.
and March
2 Price

136

12

136

51

10

137

184

37

Totals

t

-

198
165

f

198

703

924

20, 1944.

High-Priced
and Low-Priced Stocks, "The Commercial
and Financial Chronicle," April 21, 1949,
by O. K. Burrell.
3 Price

2

17

Stock E__

Statistical. As¬

60

Stock D____—

relationship-between price change
level
for
common
stock*,

price

"Journal

Fluctuations

Effects

of

of Stock Dividends and

Split-Ups,."The Commercial and Financial
Chronicle," Dec. 2, 1948, O. K. Bufreli.

4

Market Effect of

Large Accrued Divi¬
dend
Payment,
"The Commercial and
Financial Chronicle," March 11, 1948, by
O. K. Burrell.
5 Stock

because

F.

was

omitted

of the omission

6 Stated

in

terms

of

from

the

test

It is evident that students
■

were

likely not to act than to act
pre-dividend dates. This is hot

more
on

at all

surprising

nor

does it neces¬

of the dividend.
.

pre-split

shares.

sarily .reflect

,

an

indifference

to

Volume

171

Number 4890

the dividend factor.
sell

to

ure

dicate
to

act

ly

A

the

no

in

interest

the

An increase in

on

the

dividend.

It

however, that unless
factor

is

about

as

tion

a pre-

in

position

matter

a

fact

of

in

been

decreases

more

than

in¬

This is because there

creases.

was

consolidation of

a

the

holdings during
period, i.e., fewer stocks

test

owned

were

the

the

at

end

than

at

beginning.

It is evident, therefore, that the
preponderance of increases in po¬

sition

decreases

over

confirm

tends

to

hypothesis. Moreover

our

the confirmation is strongest in the
cases of the stocks with the
high¬
est

dividend

The

dividend
is

the

in

yields were lowest.
conceivable that on

hardly

purchases

of stock
We

this

and

conclude,

may

definite

a

then,

that

evidence

tendency

retain stocks for

indi¬

to

buy

impending

an

will

10% divi¬

a

dividend.

be

true

Toward

Dividends

Buying

less
the

Here

other

the

essential

basis

interest

of

logic.

in

is

test¬

not it is true for

or

not

there

is

difference in

any

the behavior of the most

success¬

ful and the least successful
opera¬
tors. It would appear, on the basis
of

logic, that sometimes

of

earnings

in

pocket would
dollar of

be

and

stockholder's

preferable to

sometimes

companies

dynamic

in

are

a

growth,

it

If

not.

phase of

a

is

perhaps

better for the stockholder to have

the

earnings

for

retained

and

rein¬

vested in the business.

of

earnings in

dividends

but

the

had

an

tunity for reinvestment

re¬

form

oppor¬

on

vol¬

a

untary basis, although this would
in a higher income tax.

result

In this experiment stocks C and

almost

were

exactly equal

ex¬

cept with respect to the dividend.
These two stocks sold in the

price

general

ings

ratios

same

almost

exactly
given the

they were
quality and growth ratings.

But stock

C paid a dividend of

semi-annually

$2

with

compared
dividend of

semi-annual

a

only $1

by stock D.
The

sheets

show

factor.

asserts

dollar

months

whose
operations resulted in substantial

casual examination of the

losses.

cates

We

did

as

the

only guess as to why
speculators
did
not

can

succcessful

buy

dividends

and

unsuccessful

It

is certain

the

fact

tively

group

speculators did.

that

that

it

is not due

prices

unfavorable

dividend

mediocre

while

dates.

the

on

other

In

to

rela¬

were

pre¬

words

sheets

for

stocks

that the

distinct

only speculate

can

of

nature

factors.

other

these

to the

as

It

tion

that successful specula¬
requires a considerable de¬

gree

of boldness and

be

may

drive for
small profits,
a

rather than
practice of buying divi¬

large

the

indi¬

preference

for

a

C

stock

stock D. The average monthly
investment in stock C amounted

$146,430 as compared with an
investment in stock D of $88,599.
This is

65%

a

in C than
the 36

in

greater investment
D.

months

cessful
fused

This

In

only four of
the

was

est

versal

after substantial

in

interested

obtain

a

It

dend.

gains and

buying

of

C

induced
the

profit

lower

In any

"That

lated

into

value

of

of

sales

D

be

addi¬

event, it is clear that the
for

preference

the

a

dis¬

higher

greater

a

than

market
a

retained

dollar

in

sur¬

Stated in another
stocks

Attitude

of Most Successful

Detailed

nificant

stock

buyers

will

prefer

the

fact

equal.

This

is

distinctly not equivalent to saying
that stocks sell only on the basis
of dividend yield. Very many fac¬
tors enter into

investor-speculator




nature

have

is

the

profits

upward

if

tion

is

analysis shows

no

sig¬

between

the

(a), (b), (c): "That

price

paid

for

a

stock

ments

and

he

is

reluctant

(a)

He

tends

but cut profit

price
cost

if

moves

he

the

above

is

his

let

below

not

price

to

losses

run

short, i.e., when the
his

purchase

likely to sell, but

moves

purchase

even

a

little
he

cost

is

likely to sell.
(b)
moves

When the price of

a

stock

below the investor's cost he

to

30.

As

shares

held

de-

the

fol-

in

Shares

Held

positive and

negative results,,
it is perhaps useful to summarize

the results of the

(1)

36

6702

41

6622

23

43

6322

24

45

5292

25

46

4482

This

26

46

3502

27

somewhat stronger

45

3312

than

It is clear that

clined there

lators to such

in

18794625

(1) That

the

move

up¬

by at least
six months period.

a

That

the

price

pattern

insure that every

to

ticipant had
was

profit if the

a

upward,

be

par¬

move¬

loss if the

or

downward.

was

that

made

in

by

downward

or

over

ment

price

the

in

who

the

29th

owned

month

of

this

since the

month.

stock

rise

stock

in

B

holders
who

in

however,

high

(2) The
of

stock

downward
from

F

30

to

in

movement

in

50

the

the

19th

12th

month.

Anyone who owned stock F from
the

13th

month

month

through the

had

a

new

in

was

19th

low ground.

since

loss

the

stock

position

sheet

involved

for

analysis

gtock B.
No
required to

is

the 11th month just
vigorous upward move¬
ment began, the group as a whole
held 7,220 shares of B.
But this
In

before the

of

dropped

to

only 3 points.
the

basis

points,

67%

on

were

were

of

their

only

2,370

on

a

rise

In other words,
rise

a

of

only 3
holdings
were
Moreover, the liqui¬
as

only
no

following

in

sharp

month

recovery

,

20

shares

of

It

not

prior

the

Most

that

"averaged

group

little

Successful

This

portion

of

this

stock

in

(4)

The price

mind

decline
and

50

to

12th to the

the

subsequent
to 46 in the 25th month
Shares

Bougl

the

successful

down"

even

a

than

On the other hand, when
price turned upward, the suc¬

cessful

60

delayed sales

group

longer

reached

but

when

about

they
selling.

in

he is reluctant to

itial valuation.
inclined
cut

stock,

a

its value in the

the buyer, and, regard¬
subsequent developments,

to

modify that in¬
a result, he is

As

losses

let

profits

short.

likely

buy

to

price

from

to

when

cost, he is
When the

more.

recovers

but

run

Indeed

the price moves below

low

a

point,

full cost.

recover

Both the successful

and

unsuc¬

demonstrated

groups

tendency clearly.

this

The successful

group showed a somewhat greater

tendency to average down but to

a

lit¬

price
were

As

a

(5)

It

it

any

a group of specu¬
approximately break
although wide
individual

will

even

differences
to

reason

based

F

although

three
showed
three gains.
The un¬

and

losses of

As

aggregate

the

experiment
no

Hypothesis 4

(e): "Because of the

previously
and

reactions, the

vestor

to

stocks

and

up

though

average in¬

profit in

a

which

both

traits

the

trend. of

innate

speculative

tendency
losses in
a

market in which individual prices

widely but the averages re¬
main constant. The group as a whole

vary

came

about

as

close

Shares

breaking

skill.

KogEe to Admit

Howard and Gomes
J. A.

the

Hogle & Co., members of
York Stock Exchange,

New

admit

will

Kenneth

and Harold L.

Howard,

J.

Gumes to partner¬

April 1. Both will be with

ship

on

the

firm's

Raoul

Thierry Go.

Opening in New Yorfe
The

Raoul

Thierry Co. will

gage

in

from

securities

offices

New

will

the

York
act

as

at

141

City.

The

broker

en¬

business,

Broadway,
new
firm

and

dealer

in

general market securities, oils and

Balance

Sold

to

what

is manager.

evidence, that there is hny
or

measure

even

It does not appear, on the basis
of this

some

moving

are

down

prices remains level."

inherent

be

is

New York
office, 61
Broadway, of which Mr. Howard

a

general

in

are

There

that these dif¬

market

speculator is unable

or

show

in

mentioned

exist.

differences in
called speculative

J. L

developed,

opportunity to ade¬
quately test hypothesis 4 (d).
was

will

suppose

upon

may

(d)—

Hypothesis 4

there

had

group

$35,897.

that

appears

lators

ferences

on

intermediate

an

not
appear
that
inherent tendency
toward speculative losses.
In a
speculative market without trend

matter

of
fact,
the
successful
actually had a profit of $230

on

does

there' is

group

Position

Price

7,220

34

public

utility

common

stocks.

37

4,910

2,370

0

510

1,860

250

1,630

0

•

the

45

vigorous

more

20

13

group

group.
the

—

.

both,

recovery.

toward

from

larger

of

of

of

less

*

gained
157% during the price decline as
compared
with an increase
of
only 79% for the unsuccessful

B

in¬

true

paid for

tends to establish

sell promptly

the

the

the

pays

was

successful and unsuccessful specu¬
lators.

cessful

enthusiastically

more

in unsuccessful

he is inclined to sell without wait¬

of

appears

be-

to

appears

that

one

dividend.

the unsuccessful group. The hold¬

shares of B held.

Month

20

"pro¬

and

not holders

Group

By the 19th month

30 in stock F from the

19th

position"

were

Behavior

the price con¬

itial phase of the rise:
The

were

to the decline.

of

actually

The

clearly that the
holdings were those of

previous holders who

tecting

analysis,

shows

increases in

tle

The tendency of the group to
take short profits is evident in the

holding

were

fer

ings of the successful

ground.

month

Detailed

?

strong

successful speculators.
If 'two stocks are equal in
respects, stock buyers pre¬

ing to

profit

a

possible, how¬

attracted by the de¬

were

or
,

in

(3)

significant amounts not
who were
previously

price.

rather

a

tendency

other

the price de¬
great increase

purchases

is

when it is about to pay a dividend
in order to receive the dividend.

of the stock but by those
not previous owners,

clining

first

new

is

There

tendency to buy for the dividend,
i.e., to purchase or retain a stock,

were

but who

Anyone
the

had

was

those

It

a

these

those who

The price movements that meet

61

position.

ever,

as

was

an

pref¬

low-priced stocks
high-priced stocks as such.

22

successful and unsuccessful specu¬

on

evidence of

no

investor-speculator
for

2832

test periods were selected
following basis:

There is

erence

(2)

2162

These

be done

may

follows:

as

7202

44

movement.

tests of the hy¬

potheses made. This

8052

39

skill

tests showed

our

21

down¬

per¬

measure

some

32

28

price

of

some

30

is

sus¬

some

in

speculative

19

the

vigorous and

in

20

29

a

difference

innate
Price

will analyze the posi¬

we

the

Summary
Since

sheet.

tion sheets in the particular stocks
to measure the reaction of both

to

This general tendency has the
following results:

of

indicated

as

Month

losses

or

movement

50

price

lowing data taken from the posi¬

of

movement

from

number

creased

insure that all holders

to

stock

periods,

there

tends to establish its value in
the mind of the buyer regard¬
less of subsequent develop¬

philosophy.
A dol¬
lar of earnings in the pocket of

in

the

price

down

the

as

the price recovered from 30 to 46

the

held and by the 21st month, there

difference

Hypothesis 4:

hand"

are

hypothesis,

moved

ward. After selection of these test

modify that initial valuation."

earnings retained in the
corporation but only if other fac¬

to

occurred

might be called the "bird

dollar of

rather

least successful group.

the

a

but

and

position sheet for stock B clearly
shows the rapid liquidation that

that pays the larger divi¬

preferable to

sell

dividend yield of
the most successful
group and the

dend."

the stockholder is

to

losses

attitude toward

earnings and general quality,
one

losses

tinued to rise.

Speculators Toward Dividend

in

equal

are

have

disposed

dation continued

way,

two

who

where

liquidated.

dividend stock.

of

trans¬

those

shares in the 12th month

displayed

dollar

a

will

stock

earnings

plus.

the

of

group as a whole

be

dividends

of

This

taking

price

investment.

Yield

3:

vigorous and sustained

doubled

successful

tinct

earnings paid out in the form

profits, i.e., sell too
postulated, however,

is

nearly

that

variations

The number of shares of F held

profit.

a point or two
above the initial price.
It may be
the slightly increased price

that

jecture.
Hypothesis

be

losses

emphasized,
however, that this is entirely con¬

if

re¬

relatively small divi¬
must

upturn,
will

while stock C sold

not

selling

and

an

profits

demonstrate the group tendency to
sell at almost the first sign of a

are

are

such

They will in effect

be

as

as

in

8052

such

tained

of

be¬

to

reason

30

a

the

such

is

19

in

have

previous

(2)

there

to

perhaps be accounted
the fact that during these
months, stock D was selling 3 or 4
points
under
the
initial
price

con¬

roles—they

of mod¬

brief

may

tional

their

This

for by

and

to

months, 4, 5, 6,

excess was

proportions.

suc¬

as

in

was

and 7 and the

bold

mark

not

behavior,

per¬

basis

variation

formance is due in

movement

to

the

does

6287

to

over

In other words,
speculators are not

dends

operator.

44

of

the

on

7072

downturns

25%

consistency

and

demonstrated

some

16

shall need to select the
vigor¬
and
sustained
upturns and

ward

of

formance

15

D

and

5237

sharp

a

of
stock B from 34 in the 11th month

in C.

We

tors

C

4337

46

were
lucky, or it might
that tney were skillful. On

basis

5307

position

entire group had

50

13

dents
prove

the

41

sustained

In order to test this

entire

aggregate
investment in D greater than that

apparently it tended to measure
other
qualities which were not
themselves directly measurable.

in

the

Shares Held

12

in each of these stocks for ,these tests were as follows:
the period of 36 months.
(1) The upward movement
Even

not in itself unprofitable. But

was

to

for

Price

6967

not

the

practice of buying dividends

the

and

investment

Month

monopolized by six students. This
might prove that these six stu¬

7207

It

such

sig-

34

in

the

The

gen¬

buy more, i.e., to "average down."
we

decline.

37

downturn

ous

the

on

nificant data bearing on this point
are
shown below.

had gains and only 15 losses. It
is
true that the profits were
rather

34

that

accept

sheet

unmistak-

18

short

will

indicates

ably the tendency to accumulate
stock

it would be possible to do.

as

aggregate net loss was $141
per student although 18 students

14

during

and

quick to sell.

that

to the position

F

even

37

The

17

who

soon.

hypothesis

-

up¬

or

take

stock

both

(b).

Reference

price

in

concerned

vigorous

turn

those

of

test

a

and 4

downturn. Our hypothesis

and

group

dividend

the

to

group

the

.(11291

lieve

movement

position

when

eral with behavior

price-earn¬

range,

were

here

are

where

if the stockholder

(a)

approaches purchase cost.

still

the

pur¬

a

likely to sell

of

better

investor's

an

toward purchase
cost, the investor

It may be
argued, however, that it would be

ceived

stock

a

prolonged period, and
subsequently moves upward
is

affords
4

which

for

below

moves

earnings retained in the

company

two

the

dollar

a

did not tend to con¬
centrate purchases in predividend

different
This

stock

When the price of

We

the group as a whole and whether
or

(c)

equal.

on

ing whether

same

Analysis
of
the
data
shows
clearly that the most successful
speculators
were
relatively
in¬

a

if

even

the same, and

Attitude of Most Successful Group

in

company

primarily interested
this hypothesis ought

whether

Our

be

not

are

to

D

C.

a

not

are

in

only two sales

experimental

cates
or

weakest

basis of pure chance, out of
opportunities there should be

198
60

is

of stocks B and D, where

case

the
It

rates,(A, C and E).

confirmation

the

company

all

stock with

a

yield of

We

ex¬

periment,
under
conditions
of
pure
chance, there should have

holdings of the

cost

be

on

this

ing

chase cost, and remains below that

factors

these pre-dividend dates.
This is
because students were required to
maintain a fully invested position.
As

stock

is likely to sell other stocks in
order to obtain funds for increas¬

pre¬

at

promising industry
earnings are equal.

decreases in posi¬

many

increases

the

CHRONICLE

with

chemical

ferred to

special

would

constant, that

dividend

dend

evident,

some

there

present

as

is

as¬

other fac¬

FINANCIAL

has declined.

no

dividend date may not in all cases
have been motivated by a desire
for

hypothesis

where

&

growing

repre¬

particular stock.

holdings

are

that

COMMERCIAL

with a dividend, or with a larger
dividend, will be preferred.
It
may be that the stock of a rapidly

mere¬

or

Our

only

tors

not

also have been

may

result of

a

of

decision

awareness

factor.

sentation

preference.
serts

dividend, would in¬

keen

a

Indeed, fail¬

motivated by a desire

to receive the

dividend

THE

530

1,100

38

Raoul

H.

Thierry is sole proprietor.

Harrison & Co.

A.

42
.

40

Harrison & Co. is engag¬

H. A.

0

1.050

43

450

650

45

60

40

670

43

40
—•

50

50

690

20

48

York City.

480

46

Harrison, Thea Harrison and John

0

49

F. Nixon.

-460

0

10

490

■

ing in
offices

a

securities business from

at

15

Moore

Partners

Street,
are

1

f

New

Henry A.

38

(1130)

COMMERCIAL

THE

&

FINANCIAL

CHRONICLE

Thursday, March 16, 1950
t

•.

Continued

Dow industrial

figure would
important one to hold.
Up to this writing the aver¬
age is well above it. Nothing
has happened in the past few
days to change that opinion.
be the

Tomorrow's
Markets

Walter

Whyte

I

Last

,

ssJ

WALTER WHYTE
market

week's

went

practically sidewise

every day
and what action there was in

stock

one

counteracted

was

non-action

on

two-for-one

after

hunch that

a

by

better than

a

basis

of

upper resis¬
there is no cer¬

through the
But

tainty and most assuredly it is
not based on the Dow theory.
*

a

other

in

Maybe somebody

can

In

*

the

*

meantime,

still

their interpretation

on

of the Dow

thing I

The only

theory.

out of the cur¬

can get

rent market* is that the

it

longer

[The
article

the

breakout when it
*

the

*

That's

breakout

come?

question that's more
easily asked than an answer
be found for.

can

it

a

To

Croxford

t'fi

'

»S«

■

hasten

me

add, be¬

fore I get complaints,
not
a
Dow theorist
strictest

that I'm
in

will determine its

own

direc¬

tion and any

forecasts at this
point are strictly in the realm
of crystal gazing.
❖

out

$

*

example, I

a case

be

get in.

bullish

to

hock

By the

the

he

so

that will lead the

can

token, I

bearish

a

of six of

one

same

It's

or

another; take
Last week

rities

facts
question

business.

He

pick.

*

SAN

formerly
Goodwin, Inc. for a

Paul

to

is

C.

South

The

Financial

on

Coast Exchanges

connected

now

Rudolph

First

Members

&

Street.

Exchange

York Curb

Exchange (Associate)
San Francisco Stock Exchange

Chicago Board of Trade
New York 5, N. Y.

with

Co.,

He

40-D
for¬

was

With Link, Gorman

pretty pictures.

common together with
any
proceeds remaining from the sale

first

Substantiation of this conclusion including the overall
picture :*
an extensive survey made
by Weston

is contained in

future of $7,995,000 of

mortgage

bonds

after

6% in 1940 to 50% in their 1948 documents. Mr. Smith also finds v
that the cost of
report-printing now averages somewhere around
40 cents per
copy (exclusive of management time and

repay outstanding bank loans
totalling $1,450,000 and for other

and 8%

Francisco—Santa

Offices

CHICAGO,
Campbell is

ILL.

now

Gordon

—

stock

In the

currently

and

common

Peck

Salle

Street, members of the Mid¬

&

west Stock

holder-reader of the company's activities.
quent questionnaire to the stockholders
showed that the articles in this section,

funded debt; 22,500
shares
of
preferred stock, out¬
standing in two series, and 150,000

P

;

The results of
from

the

including

to

stock.

the

a

J

subse-

management

p;

"folksey" letter Y
from Elsie-the-Borden copyrightedstockholder preference behind the President's

stockholder

trailed

cow,

in

a

children

previously with Stone & Young-

Hence the magazine division
dropped in the current statement; and the size
(The report is still plenty dolled-up,
however, with a 4-page gatefold of 12-color Breughel-like art.)
The relative
popularity of the supposedly duller statistical sections,
as
indicated in the Borden survey, is in direct contradiction
to
last year's poll taken
by the General Motors Co., showing that 80%
of those questioned liked the
pictures against only 56% able-and-

willing to stomach the operating report.

and Elsie have been

SAN

FRANCISCO,

Morton

Lichtman

E.

affiliated

reduced from 28 to 22 pages.

CALIF.—

has

become

with Hannaford & Tal¬

bot, 519 California Street.

He

was

*

V

-,

Co., 208

sort

a

in

SAN

FRANCISCO, CALIF.—
Kenneth
Fazackerley
has been
added to the staff of Irving Lund¬
borg & Co., 486 California Street,
members

of

the

New

York

South La

He

was

&

formerly

With R. H. Johnson Co.
(Special to The Financial Chronicle)

BOSTON, MASS.—Raymond F.
State

Co., 15

Street, members of the New
and

Boston

Stock

Ex¬

BOSTON,

with

Hamilton

Management

Corporation, Boston Building.

added

income

data.

a

MASS.—William

4-page

A

Allied

Nichols

has

added

to

postcript

in

S.

of

its

common

factual
1949

balance

report

Chemical is

the

1930s—no

a

sheet

the

Wanted

between

yifhin the past

the

dividend) has reverted

and

Inc., 50 State Street.

Happy Medium

no

now reporting in the manner
photographs, no advertising to

plain

all debt liabilities.
gray

If still plainly
the 1949 report has

covers,

year grown from 7 to 9 pages,

one

of the added

now

folio of investments.

Per 100 Shares Plus Tax

(Special to The Financial Chronicle)

Cop. @ 50%
@ 26%
Cities Service.. @ 70%
Continental Oil @ 56%
Std Gas $4 Pfd. @
60%
Amer. Woolen
@ 23%
U. S. Steel
@ 33%
Studebaker..
@ 27.90
Youngstown Sh. @ 82
J. I. Case
@46%
Intl. Paper
@ 36%
Intl. Harvester

.

.

June 17 $387.50
June 16 225.00

.

.

Subject to prior sale

May
Apr.
May
June
Sept.
May
May
Aug.
May

or

Put

&

become

associated

487.50
537.50

18
10

575.00

cago.

262.50

is

a

13
23
10
4
13

with

350.00

325.00
225.00

price change

Calls Brokers

Link, Gorman, Peck & Co. of Chi¬
He

formerly

was

with

Willy Winkle Joins

&

Broadway, New York 4, Tel. BO 9-8470

With Goffe & Carkner

Dempsey-Tegeler Co.

200.00
250.00

good constructive compromise for the benefit of the intel¬

ligent conscientious investor.

Dayton & Gernon.

Dealers Assn., Jnc

50

has

12
22

THOMAS, HAAB & BOTTS
Members

Perhaps, in the over-all reporting picture, the traditional
technique of the 1930s, a la Allied Chemical method in
1950,

MADISON, WIS.—Hugh J. Win¬
ters

Samuel Johnson

(Special to The Financial Chronicle)

BERKELEY, CALIF.—Samuel S.

LOS ANGELES, CALIF.—Willy
Winkle
has
become
associated
with Dempsey-Tegeler &

(Special to The Financial Chronicle)

GRAND

(Special to The Financial Chronicle)

Opens

Co., 210

Johnson is engaging in a securities

West Seventh Street.

was

from

merly with Conrad Bruce &

Co.

Warring

Street.

ISLAND, NEB.—Am¬

brose E. Evans is
with

Goffe

Kansas

&

now

associated

Carner,

Inc.

of

City, Mo.

for¬

business

offices

at

2400

and

He

will

handle

Butler-Huff

thereto

principally securities of companies

&

owning timber lands.

office.

he

Hecht,

was

&

He

Co.

1

.

company

color,

on

j;

to the

a five-year comparative table, with the President's
taking 2 pages instead of 1.
It clearly shows for the
first time, at their book and market
values, the company's port¬

report

With Link; Gorman Co.

Kennecolt

j.

and

p^ges showing

Distributors,

SPECIAL CALL OFFERINGS
•

.

company

*

\ cash^and-governments at double

MASS. —Horace
been

,

stockholder-consumers. But to some stockholders such absence of
glamor is assuaged through the different kind of "color" which
may be found in the uncartooned balance sheet
figures showing

V

(Special to The Financial Chronicle)

staff of Putnam Fund

in

usual

Co., 70 State Street.

BOSTON,

>

^

simple uncluttered 1938 format.

K.

associated with R. H. John¬

&

son

'fy

publications during
in the form of data

Back-to-Normalcy

Subsequently,

(after the omission of the

With Putnam Fund

With Hamilton Manage.

is

Gray and Charles Ulin have be¬
come

separate

,

Estabrook Co. Adds

Ehler is with Estabrook &

in

flip-flop policy by the American Woolen Company is revealing and interesting. In 1938 this farflung textile organization
issued its report simply in the form of 4 un-colored
pages of expla¬
nation, 4 more pages detailing balance sheet and income results,
and 1 page of the auditors' report.
In sharp contrast, Woolen's
1948 report is a super-duper
display hinged on the company's
50th anniversary. The cover is
largely taken up with a gorgeous
"skin-you-love-to-touch" photo offset of a blue-gray Glen
Urquart
Plaid suiting pattern, and there are a full 40
pages of beautiful
photos of patterns, mill operations,
spindles, etc., with detailed
textual explanations of
industry processes; after all of which

Co.

Timberland

activities

A

Middlebrook, Inc., 465

Congress Street.

commendable

Yankee

and

Exchanges.

Rowe has become associated with

with

Exchange.

such

performance?

(Special to The Financial Chronicle)

&

uses

of

the year, letting the annual
report remain
relevant to operations and management

PORTLAND, MAINE—Harry E.
Coburn

many other companies in consumer
industries,
the annual report as a method to build
up trade—
catalogue technique. Would it not be better to engage

avowedly

(Special to The Financial Chronicle)

Monterey—Oakland—Sacramento




f

by the Borden Co., whose 1949 statement was issued Tues- '
day of this week. Last year's 1948 pamphlet carried a so-called'?
"magazine section" of popularly-written articles telling the stock-

of

common

V

coming to hand, quite frequent instances

now

taken

mortgage bonds, the company's
capitalization will consist of $7,-

995,000

Disillusionment—Elsie-the-Cow Chased

reports

back-tracking from the modernization-high are to be noted. A
1948-to-1949 step toward
simplification, although slight, has been

first

new

dollar per copy.

a

of

Following the sale of ad¬

ditional

J.

with Link, Gor¬

man,

Barbara

Rosa

of the reports now cost over
1949

common

}j

postage),

to

the

"Financial World," showing that the /
reports definable as "modern," grew from

proportion of annual

demption of the company's pres¬
ently
outstanding $6,995,000
of
first mortgage bonds, will be used

on

Smith, Exec¬

utive Vice-President of the

re¬

With Coburn, Middlebrook

(Special to The Financial Chronicle)

Teletype NY 1-928

Principal

Fresno—Santa

a full-blown 28-page booklet '
replete with photographs, and containing a comparative statistical J
demonstration going back 20 years. And now
Remington Rand has ;
really "gone to town" with an extravaganza display of charts and

Proceeds from the sale of addi¬

near

dur-n

throw-away has been transformed to

subscription price.

San Francisco Stock

...

Sun

pur¬

the company all un¬
shares at the original

tional

in the

big jump in report "modernization" occurred

By 1948 the above cited National Cash Regis-1'
Company's meagre effort of the '20s had grown to an elaborate *
21-page multi-colored brochure.
The former 2-page Pepperell

(Special to The Financial Chronicle)

merly with Capital Securities Co.

.

to

from

1

ter

Irving Lundborg Adds

of Oakland.

.

-

Wires

Blyth & Co., Inc., will

this

Schwabacher & Co.

Private

1950.

'

>.;

ing the past decade.

scription price of $21.50 per share
expires at 3 p.m. on March 23,

Chronicle)

JOSE, CALIF.—Willard J.

Hammel

•

Orders Executed

OOrtlandt 7-4150

the sub¬

'

Borden, like
(Special

Securities

14 Wall Street

at

The second

-

l'<
1

purchase

chase

quite satisfactory annual

Progress in the 1940s

on

to

subscribed

a

to form and content.

as

•

changes.
in

wrote

Stock

record

offer

additional shares

the

With Paul C. Rudolph

is

York

of

report—both

each

was

number of years.

York

Pacific Coast

New

held

The

not until the

berg.

A.

opened

(Special to The Financial Chronicle)

New

7.

and

Company, for example, in 1939 delivered

the

at

for

Joins Hannaford Talbot

DENVER, COLO.—Jack Adams

Pacific

shares

(V

;

report and the financial statements.

Chronicle)

MASS.—Gardner

with Bond &

inno¬

that I believed the 198

space

Caverly Opens

BOSTON.

are

a

your

I

stock

share

new

case

half dozen of

*

two

one

was

there

thing he has. There
both sides.

of

(Special to The Financial Chronicle)

cent to run out and sell every¬

on

Co.

(Special to The Financial

make

that

same

make out

can

rate

a

.

1930s, following imposition of SEC regit*!
tightening-up by the Stock Exchanges, that the first!
decisive enlargement of annual reports took place.
Making up for«
lost time, a notable improvement did become
widespread in the-1
middle and latter part of the last decade.
The Remington Randv

;

can

naive reader will look around

for what

It

lation

additional 50,000

common

shares of

for the market that

so

White

B.

with

the

up to the same thing: When
the.market is ready to move it

For

&

Gardner

Yet it all adds

sense.

dis¬

water

a

in the Borough
in the towns of

an

r

.

Epochal Reform in the 1930s

being paid at the
quarterly rate of 37% cents per

office at 53
State Street to engage in the secu¬

■

,

to

for

of

Julian share.

—

Ezra

and

associated

Caverly has

sjs

Let

now

son

answer

theory.

subscribe
shares

are

Draper,
Sears & Co. Both were formerly
with Boardman & Freeman, Inc.
and prior thereto with R. H. John¬

probe into "sys¬
including the Dow

tems,"

will

are

has to

one

one-line profits statement.

Hempstead and North Hempstead,
N. Y., are being offered rights to

Dividends

Draper Sears

(Special to The Financial Chronicle)

question im¬
mediately follows, which way
will

with

They

PORTLAND, MAINE

the

course

this

and

.

modernization; consisting of only two pages which included

no

corporate purposes.

K.

Of

coincide

Two With

comes.

*

*

in

necessarily at any
those of the
are presented as
those of the author only.]
time

will be the

greater

expressed

not

Chronicle.

stays lethargic and in this

rut

views

do

operates

system

.

Jamaica Water

of

public utility which

a

Queens

March

:■«

based

and

owns

will firm—turn around— and

you're
long of Cooper-Bessemer
make something out of all and Mead
Corp. The former,
this. I can't.
bought at 24, has a stop at 22;
$
the latter bought at 16 has a
I've read a few market let¬ stop at 14%. Neither is the
ters in the past few days, most best stock in the world but
of
which
either
quote the they'll do until something
Dow theory or imply some better comes
along.
hidden meaning to the market
stocks.

Stockholders

tribution

go

Supply
Offering

Common Stock

the

tance.

Observations

Jamaica Water

a

sudden slide down to about
199 figure, the market

5

page

Blyth Underwrites

Supply Co.,

Says—
LssBy

have

from

i+'.

.•

Francis H. Geer Dead

*

Prior

with Huff, Geyer

Inc. in the New York

Francis

H.

Geer, partner in
Farr & Co., New York City, died
at his home at the age

of 58.

-

•<

..Volume 171

Number 4890

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

*

men who are
at this time uncer¬
tain of the direction in which
they
wish to turn, is it not clear that

Bafttlefronts oi the Cold War

must

encouragement

worship
people

subordinate

these

Cold

na¬

the

seriousnes of

ing—but
careful

I

wish

to

and

significant

these five

the

the

fallen

and
victims

as

Communist rulers in

Kremlin.

In

their

man

thority.

American

not

are

the

persecuted.

A

espionage

and

of

'

World

r

Peace

and

much

mosphere
and

and

peace

stability

we

tipn at such high cost against Hit¬
ler and Japan has been
destroyed..

As

the

Papal

Encyclical of the
Holy Year, issued on March 11
states, "Even though; war has
ceased

almost

desired

peace

stable

a

everywhere,
has

and

not

solid

the

yet come,
which

third

a

then,

is

World

urgent

my

the

'

American

people

armaments

which

leaves

the

souls of all fearful and uncertain.
It

can

than

well be said that in less

five years time

has

lost

the

our

up

iously in World War

cold

Russia

war.

West.

If

he

would

set

aside

Vandenberg, Senator
Ta'ft, Senator Henry
Cabot Lodge, General
Dwight D.
Eisenhower,
President
Herbert
Hoover, and General William

party, such

these

men

velop

the

would

which

moves

begin

affirmative,

to

people

ask

that

themselves

those

policies

their

government

contributed
loss

has

cold

major

this

been,

is

strengthen

basis.

war

this

on

a

third

in

wrong

war!

.America

offensive

a

cold

'.

must

strategy

war

■;

enter

in

as

The

our

has

second

major

this

the

administration

essential

crucial
cans

issues.

were

to

invited

or

for

joined
ment

on




passed

devel-.

secret

ac¬

Meet

fortuitous

Should

in

in

with

Be

Peace

The Adminis¬
to

seem

Gubitchev

the

the

the United

Nations, with the

this
we

are

to

not

indicate

Such

a

conference must have lead¬

of both political parties of this
country participating. Such a con¬

ference

must

have

its

complete

proceedings taken down and re¬
leased to the world.
Such a con¬
ference must be held

i

in

neutral

a

such

as
Helsinki, or
Vienna.
Our willingness to hold such a

or

is

essential

for

is

essential

real-, favorable

in

view

around

men

our

struggle for

in

the

however

more,

the

the

minds

It
a

of

in

clear

it is held, the
organization does

Nations

S.

Should

the

case*

was

not to

Russian

convicted of

understand.
turn

our

our

es¬

verbally

slap

in

been

our

boundaries.

route

to

of

It

is

on

the

We

must

in¬

crease

ing.
be

We

advance

conference that
America's
position

be

a

road in

it

of

would

never

to

a

competition should be carried
information

and

on

race

toward

The President and the

conference for peace. Let
we

cannot

hold

me

the

plead

leader¬

This

is

true

commander-in-chief
in a cold war.

Thinking

now

of the battlefront

of

a

nation

For a people whose literature
of the minds of those millions
of;; and
conversation
abounds
with

only evolve a modern
capitalism with remark¬

freedom

and

living for its

high standards

own

people, but

ples striving for freedom every¬
where, and the prospects will be
bright not only for winning the
cold

but

war,

World

for

preventing

War III.

My plea then is an urgent one.
us,
without
further
delay,
utilizing the leadership of both
our
political parties, analyze the
Let

battlefronts of the
out

move

action,

essential for

security,

cold

them

upon

resourceful

our

and

in

and

war,

with
a

firm

manner

future peace and

holding the best
expanding freedom

hope

of

and

rismg standard of living for

a

an

all mankind.

ANGELES, CALIF.

—

Day

J. Apte and Robert M. Wasserman
are

connected

now

Schoenbrun,

1385

with

Leo

Westwood

Boulevard.

With Marache Sims Co.
(Special to The Financial Chronicle)

LOS
sell

ANGELES,

CALIF.—Rus¬

Warner

J.

with

is

Marache

members of the Los Angeles Stock

Exchange.

expressed
such

its willingness to hold
top level conference in a

a

Oscar F. Kraft Adds
(Special t,o The Financial Chronicle)

rebuffed by the lead¬

is

LOS

held, and it does not result in

ren

F.

have

ANGELES, CALIF.—War¬
Harding and Arthur Sloane

been

Oscar

F.

added

Kraft

&

to

the

Co.,

staff

of

530 West

Sixth Street.

constructive agreements, the
United States would be in a
any

With

stronger position than it is today.
And
ence

finally,
is

held

agreements

if such
and

a

peace

information

of

with

must

reach

out the
ence

around
the

world.

does

not

the

South

peoples through¬
If such

succeed

a

confer¬
then

it

become

affiliated

Spring Street, members of

Exchange.

With First California

such

world

has

Bateman, Eichler & Co., 453

the Los Angeles Stock

(Special to The Financial Chronicle)

conference and of the relevant

happenings

ANGELES, CAL.—Michael

Graham

and progress of the world.

Complete
a

LOS

constructive

reached, and are
then
measured
by
the actions
taken to carry them out and not
by the words on the papers, then
are

Bateman, Eichler

(Special to The Financial Chronicle)

confer¬

ship of the world by expressions
of
hopelessness.
Leadership is the United States will have made
lost
through
expressions
of a major contribution to the future

hopelessness.

confident that it

am

To make my position
very clear,
I believe that if the United States

Secretary

of State have expressed an atti¬
tude of hopelessness about such a

of mission in the

sense

Sims & Co., 734 South Spring
St.,

and

armament

free¬

travel throughout the world.

its

be

own

informed and

an

open

was

may

the

ingenuity

its methods will be copied by peo¬

territory, and if that will¬

devastating third World War.

that

of

different social and economic
sys¬
tems; that we believe that this

ingness

move
toward peace, in¬
sliding down this tragic
an

able

success,

bombs

not

peoples

objection to a
peaceful continued competition of

open

full

(Special to The Financial Chronicle)

agree to any division of the world
into spheres of
influence; that we
would
have no

with

the

if it
just

provide

people, if it will keep

a

world, then I
will

LOS

should state in

will

its

use

freedom

Two With Leo Schoenbrun

neutral

our safeguards
against spy¬ whether it be the
corporal of a
Spies who are caught must
single squad in a hot war or the
punished to deter future es¬

pionage.
•

of

official' stead

back

wrist, and
send
home, convicted espionage
agents of Russia, then we are. in
fact, encouraging espionage with¬
on

chance

atomic

interested

Position

such

it

develops in

before it

Announce Its

Further¬

world.
small

U.

the

willingness of this country to meet
in conference for that purpose?

China

provide the locale.

who

must

status of

country, ' if

United

men

are

President

tur-

necessity of such a conference be¬
ing on the highest level, and in¬
volving both political parties in

Willing to

men,

unsettled

ni^tkrover

Conference

the minds of

present

for

dom

and

progress,

a
part.
Further statements have been
made that any
negotiations with
the Russians should be
held
within the United
Nations.
The
President of the United Nations

not

are

agents, moral leadership in the world.

to

made
come

are

outbursts

Is it not clear that if

Department conference

over

charges involving conduct of a
traitorous nature, and if it be our
further official attitude to simply

of

of

of

employees of our government who
have been convicted by a
jury of

permit¬

basis

State

our

been

attitude

had

bipartisan

es¬

efforts

most

difficult to

participate in the
pivotal
phases, even

a

in

the

view that if it be

to

in- the

and

my

constructively
favorable develop¬

the

atomic

are

which has resulted in
great losses.-

foregoing
though they

President

Stockholm,

of

secrets

na¬

follow

not

is

organizations

war

at Moscow, the
Policy, and the European
Advisory
Commission, each of

have

riots

and

if

openings

leaders of free peoples must
constantly
seek
to
use
that
method, or they betray the very
system of freedom of which
they

to describe

on

negative,

principal methods by which free
the

but

principles of

its approach to the
world,
will be affirmative and not

the

peoples have made

great

in

a gimmick.
A conference
leaders of men is not a
gim¬
mick. Conferences are one
of

of

shipped wheat

and initiative which its

been
not

not

we

oifr country will

own

of

Soviet Union."

violence

If

through

lies

living

why have

from

ers
of the Kremlin, the United
in this age of
hydrogen States would be in a stronger po¬
pionage activities with the clerk bombs, we absolutely owe it to sition in the world than it is to¬
in the Department of
Justice, and our children and to humanity to day.
their actions in the Alger Hiss case
continuously seek every possible
Secondly, if such a conference

Foreign Ministers

Republicans

colo¬

now

official who

Chinese

The

of

of any

and

are an organized struggle led
by the Communist Party.

territory,

tin

meeting

the

ize the seriousness of this situa¬
tion—their handling of the Valen¬

ted to participate in the
major
decisions of the Potsdam Confer¬
ence,
the Big Three

permitted

sabotage

of the Communists.

bipartisan policy in
Thus the Republi¬

not

con¬

peoples iof

battlefront

tration still does not

an

reason

dependent

and

opment

cold

extensive loss in the cold
been the failure of our

tional

distress

borders

have
would

peace

hungry people in India, with

to India?

have

The weak

agreements

Arguments

integral component
anti-imperialist camp

by the

valuable

...

upon

States

Communists attacking Nehru,
who is one of the great leaders not
only of Asia but of the world,

excluded.

that

but

to

as

Russia
dis¬

an

and

clear through the de¬
cisions of our courts that the most

it

United

established

the

sub¬

a

Assembly or other selected United
India, in Burma, in the Philip¬ Nations observers
should be pres¬
pines, in Indonesia, in Malaya, and ent at the
conference, but clearly
then declared that

are

the world.

It is

war!
•

its

The article went

those

territories.

Communist

around

tions

hot

already

strikes

they favor in the cold

fourth

have

a

the

ago

have

of bushels of surplus wheat
here,

with

Republicans

Voprosy

headed

men, on
both
curtain, who at

battlefront is

and

the

full of holding a line,
containment, of defense, of
waiting for thp dust to settle. An
exclusively defensive strategy is
as

of

prove to

pionage

statements

if

an
Eco¬
nomic Office for all of Asia under
the leadership of an able Amer¬

America has suffered
these
five years have been
those from which the

and

ers

defen¬

Long
should

which

were

the

A

tragic

for

are well informed the lead¬
of the Kremlin know that
they
cannot make of them an
aggres¬
sive war machine.

in

are
now
uncertain, that we
sincerely seeking a just and
honorable and lasting peace that

of

is in

curtain,

standard

spontaneous

of

uncertain

are

which side

have been

just

of

the iron

the

part of the

war.

-

Official

-

minds

iron

these

the world.

for our loss
national policy
of

a

the

time

of

reason

waging-: the cold
sive

of

nial

which ; have

war.

all

stood the test of time.

Economiki on
Oct. 26, 1949 stated bluntly that
"The People's Republic of China

war.

millions

many

A

how

practices

toward

in the

The

and

of

sides

Amer¬

happen! It is high time
they insist on a change in

outside,

they

ers

included, the interna¬

international

exaggerates

outside

ticle

de¬

believe these battlefronts

leading

Russia, which are all officially
edited, are more and more reveal¬
ing in their content.
A recent ar¬

as

Principal Battlefronts
I

the

be

other peoples.
The Communist publications in

They might well begin by con¬
sidering what the battlefronts are

first

to

torts all economic

kind
about

the hand of America in world af¬
fairs.

in the cold

the

constantly

dramatic

would

Inside

;

A.

own

claims

been

and

devastating economic crash.

H.

Robert

colonial territories

Throughout the world Russia
claims that capitalism has a fatal
weakness and will experience a

two

three days at the end of his
Key West visit and invite Senator

Arthur

have

tional agreements have
had
stance and a
balance

friend of independence.

or

A second battlefront is the

this could

the people within Russia well in¬
from the

formed

one

Asia, Russia is further seek¬

Communist-held

(It is. high time that the
ican

all";

inventive

conference would be
guarantee against sham
agree¬
ments, for the whole record of the
five years of the cold war
shows
when
the
Republican
leaders

of exploiting

dition of living in those countries
of
Asia
now
bordering on the

II!

use

keep

America a strange to observe
such a weak,
that refuses trifling, and
negative leadership
peace,
that is in foreign policy.

toward

In all of the

offensive strategy in

an

might this be done speci¬
fically? The President is at Key

country

of, that for which
valiantly and victor¬

whose

failed

at

of

tries.

How

most

it fought so

States

ing to arouse the Chinese minor¬
ities in all the non-Chinese coun¬

could

for

nation

a

tried

warmonger

move

In

insist

peace

happily resolve the many
and
ever
increasing motives of
discord. Many nations are hind¬
ering each other, and as confi¬
dence decreases, there is a
race

for

have

plea.

of

Secretary Dean Acheson, Secre¬
tary Louis Johnson and Senator
Tom
Connally, I am confident

economic progress for which
fought with such determina-

not convinced.

are

to

never

One of the most important
bat¬

tlefronts of the cold war is to
all ingenuity and methods to

resources.

continue to lose the cold
war,
an increased likeli¬
of
the
necessity of ulti¬

Donovan to meet and confer with
him and with the foreign
at¬

than

and

only in terms

any

policy

world

the

tried

whose

war

little likelihood of
hot war. But if

very

leaders of his

desired

of

is

for

cold

their

of

Stability

of

have

Asia's

the

open

man¬

peoples

to

world.

think

importance

win

are

Destroyed
The

war

to

promptly put
foreign policy on a strong,
bipartisan basis and that America

de¬

United

capitalist

au¬

electronic

the

success¬

that their President

imported from the United
States, the Communits rulers of

today

of

"Better

in all languages
throughout

us

War!

is

This,

through

the Kremlin have
begun the
ufacture of atomic bombs.

to

of this cold

we

That

vices

by
the

mately defending ourselves in the

in

;In these five
years, with the aid
of information

obtained

millions

But

aggressor."

the con¬

holocaust

if

being

we

spews

out of official sources.

the

be made clear in
that the

building up its armament, and
Arguments have further been ican
parallel to Paul Hoffman in
Secretary of Defense is made against a conference on the
Europe. This should be done now
constantly threatening them.
basis that sham agreements would
without delay.
In Asia, the leaders of Russia
It is difficult to
not be a solution.
Of course they
understand
why
these
months
repetitiously
charge
that
the would not.
No one has
proposed have been permitted to
United States is abandoning Asia, sham
slip by in
agreements.
The presence a
deteriorating Asiatic situation.
that we do not care about the fu¬ of both
Republicans and Demo¬
I gsk, for example, with millions
ture of the Asiatic peoples, and crats in
the

of

stream

of America

was

then there is

The clergy are

steady

vitriolic attack

say

is

world

war.

the

citizens-

to

and

hood

respected.;

handmaiden of

thrown in prison.

it

the

territories

rights of;
Terror is

a

there

war

in*'Hungary

have

pressing forward try again," "The best defense is a
for world good
offense," "Damn the torpe¬
does,
full
speed
ahead,"
"God
helps those who help themselves,"
—
"Clearly the "Little strokes fell great oaks,"

avenue

inclined

Plan,

Joint Partici¬

hot

as

there

than a half, billion
of the
peoples of the world—in
Poland,
in
Rumania, in Czechoslovakia, in

Bulgaria,

we

many

Democrats

tremendous

clearly

more

China

war

of

during

cold

of

The waging

mean¬

that

of

years

cold

family of

your

fact

39

complete pro¬
ceedings and complete facts about
all the issues will be
distributed

inclined to say, "Of
want peace."
We are

are

Kremlin

Marshall

War Requires

fully fight

one

give
implica¬

the

course

ference

,

would

you

thought

tions for you
the

their

peace? We

Na¬

be

an

challenges i should

begun to fight,"

"If at first you do not
succeed, try,

given us the tele¬
Republicans
Tactics of Kremlin
phone, the radio, the air plane, and
The joint participation of Dem¬ '•! The tactics of the
Kremlin Po¬ the
automobile; for a people which
ocrats and Republicans is
just as litburo are these today. Through¬ has lost many battles and
gone on
essential to successfully fight a out the world
they constantly call to win every
war,
it is indeed

•

to

the

of

such confident and bold
as
"I have only

geniuses have

constant repe¬

tition. of dangerous facts
dulls

United

Atlantic Pact.

pation

rights
apd this status of freedom for ourr
selves.
know that too

the

Charter, the Inter-American

and the

tions in a United Nations
organi¬
zation for peaceful
progress; and
above all maintain these

I

in

Agreements,

to- ourselves^ nor
and extend to each nation

participation with other

actions

tions

neither

others,
full

living, and
the
right to

in

God;

other

of

ever

search

we

in

proving conditions

(1131)

—————

Continued from first
page

LOS
F.

ANGELES, CALIF.—Bruce

Arrrst-ong has joined the staff

of First California

Spring Street.

Co., 647 South

40

THE

(1132)

COMMERCIAL

The following statistical

of Current

latest week

week

Business Activity
Latest

operations

steel

Indicated

1,401,100

1,729,000

Mar.

Mar.
Mar.
—Mar.

(bbls.)

output

Kerosene

(bbls.)

Gas, oil, and distillate fuel oil output
fuel oil output (bbls.)

(bbls.)

Kerosene

fuel

Residual

2,158,000

7.048.000

6,890,000

7,335,000

8,121,000

8,595,000

at

Mar.

4

:—Mar.

-—

of

4

46,086,000

126,266,000

133,888.000

127,437.000

15,466,000

16,227.000

18,095.000

18,999.000

51,670,000

Revenue

WROUGHT

Mar.
Mar.

GAS

56,050,000

64,039,000

48,663,000

54,590,000

58,978,000

gas

(M
gas

Mixed

CONSTRUCTION

ENGINEERING

§546,791

§612,524

705,552

ingots

§518,611

§508,502

§571,508

630,756

construction

Private

construction

Public

municipal—

and

State

—

__—

—

Federal

Mar.

1

-

$133,448,000

$141,900,000

$184,579,00f

87,578,000

69.400,000

66,103,0ft

45,870.000

72,500,COO

118,476,000

76,547,000
11,885,000

9
9
9

38,455,000

66.8C0.000

67,962,000

7,415,000

5,600,000

50,514,Oft

(tonsi—

anthracite

Pennsylvania
Beehive coke

4

3,075,000

2,620,000

6.540.000

--Mar.

4

662,000

620.000

703.COO

Mar.

4

2,300

16,600

:—

:

Benzol

RESERVE SYS¬

Mar.

►221

244

4

INSTITUTE:
(in 000 kwn.j —

EDISON ELECTRIC

226

AND

INDUSTRIAL)—DUN

COMPOSITE PRICES:
steel (per lb.)

Finished

—

—!——

(E.

PRICES

5,970,919

5,530,629

221

9

179

195

17S

—

3.837c

+3.837c
$46.33
$27.42

7

7
7

3.837c

$46.38

$46.38

$46.74

$27.08

$27.25

$36.25

refinery at..——
refinery at——'
—

—____—___Mar.
————Mar.

Lead

(New York)

tin

Straits

York)

(New

Lead

at

—

at—

—

1

Louis) at
( East St. Louisi

Zinc

at

—

<

._

18.200c
18.425c

8
8

Mar. 8
Mar. 8
-Mar. 8*
.—Mar. ,8

—*

(St.

74.500c
12.000c
11.800c
9.750c

1S.2C0C

18.200c

23.200c

18.425c

13.425c

23.425c

74.375c

74.500c

103.000c

12.000c

12.000c

19.500c

11.800c

11.300c

19.30Or

9.750c

9.75 Cc

'17.500C

end

at

U.

S.

69,639

Aaa

Mar. 14

103.25

103.28

103.75

116.41

116.41

113.12

121.46

121.46

118.80

-

Mar. 14

116.22
121.25
120.C2

120.02

120.02

117.20

Mar. 14

115.82

115.82

115.82

J12.K

!Mar. 14
Mar. 14

108.70

108.70

104.83

111.62

111.62

108.34

-Mar. 14
Mar. 14

108.70
111.62
117.40
120.22

117.40

117.40

120.43

117.40

Mar. 14

2.26

2.26

2 23

Mar. 14

2.84

2.83

2.83

COKE

2.59
2.65

2.53

2.58

2.71

2.65

2.65

2.79

2.86
3.24

2.86

2.86

3.05

3.24

3.24

3.46

3.08

3.08

3.C8

3.26

2.78

2.78

2.73

2.96

2.64

2.64

2.63

2.78

Mar. 14

355.9

359.2

358.9

371.1

;

-

-

—-

-

-

A

-

Baa"—-———

Railroad

Industrials

—

—

Group

—

Utilities

Public

—

—

Group.

Group

-1

—

._

—

21.100

45,131

52,941

87,338

11.808,000

31,277,000

*46,315.000

2,587,000

2,914,000

2,927,000

20,000

95,100

634,000

5,457,800

5,617,906

6,733,475

5,372,655

5,537,941

6,076,003

95,145

79,965

657,467

1,280,984

1,713,886

1,541,117

85,612

80.004

69,433

95,223

94,947

73,298

——

111,668

1107,662

94,070

stocks at end of period (tons
2—

101,070

116,027

91,053

U.

DAILY
Bonds

YIELD

BOND

Government

S.

—

Aaa

——

Aa

:

—j

A

-

—

Baa

Mar. 14

-

Railroad

Group

Utilities

Public

Industrials

Group.

1

Group

».

Production

(tons

(tons)

of

period

and

ignite

anthracite
(net

(tens)

i.

tons)______

(net

(net

tonsi

tons)

(net

68,522

Crude

tons)

(net

stocks

of month

at end

of

(tons

Refined

month

in U.

(tons

of

S.

S.

A.

lbs.)

2,000

of

January:

A.—

lbs.):

2,000

of

(tons

(net tons)

lbs.)

2,000

Deliveries to customers—•
U.

Jan.:

tons)

production

Copper

of

tons)——„

(net

coke

MINES)—Mcnth

INSTITUTE—For

COPPER

*

ll>s.)_

2,000

.

—____

I'

—

—

INSTITUTE:

ELECTRIC

EDISON

Kilowatt-hour
month

of

sales

ultimate

to

consumer?—

.951,177

Number

of

!_ '
ultimate

sales

of

Factory sales

of

of

i

HOME

275,576

COMMERCE)

Shipments

nn112.8

HtI117.0

120.6

772,000

622,000

728,000

18.200c

18.200c

23.200c

18.425c

18.420c

23.432c

12.000c

21.500c

11.800c

11.800c

21.300c

73.250c

middle

73.250c

of

(DEPT.

PRODUCTS
Month

—

28,300

12.000c

at

of

December:

pounds)*—

(In

172.400

19,400

COMMISSION—

Employment

WROUGHT

237,591

20,300

—

(1935-39 average =100)

MAGNESIUM

40,721,983

ASSOCIA¬

washers (units)
ironers (units)

Railway

February

42,693,131

—

Januaiy:

of

COMMERCE

INTERSTATE
Index

IRONERS

(AMERICAN

SIZE

31

Dec.

at

AND

MANUFACTURERS'

TION)—Month

Factory

customers

WASHERS

21,465.106
390,128,300

of

December

HOUSEHOLD

20,690,305
391 078,300

1,850,781

customers—month

ultimate

),417,000

omitted i—

(000's

December

from

Revenue

OF

INDEX——

COMMODITY

MOODY'S

grades

(BUREAU OF MINES)—Month

LAUNDRY

AVERAGES:

Average corporate

snd

at

STANDARD

MOODY'S

period

(BUREAU OF

3.0C

—Mar. 14
..Mar. 14
————Mar. 14

Mar. 14
Mar. 14
Mar. 14

'

j

Aa

*82,037

all

cutput,

113.89

120.22

—

i

—_—

69,193

*82,132

67,419

coal

coke

101.68

-Mar. 14
-Mar. 14

-

—

—

69,948

84,257

INC.—Month

February:

Bituminous

of

——

corporate

tt4,960,000

of

orders

Unfilled

In

BOND

Average

204.842,000

4,449,000

INSTITUTE,

Refined copper

PRICES DAILY AVERAGES:
Government Bonds-

MOODY'S

*196,086.000

19,227,000

(bbls.)—

lbs.)

Oven coke

Electrolytic copper—
Export

215,375,000

—

(tons of 2,000 lbs.)

Oven coke

Domestic

10,642,000

5,450,000

3.754c

QUOTATIONS):

M. J.

&

28.000

14,547,000

8,051,000

smelter

zinc

Beehive
METAL

30,000

*13,036,000

ZINC

2,000

of

Mar.

.-Mar.
—
-Mar.
—-—Mar.

—_—■J—

Pig iron (per gross ton)-—:
Scrap steel (per gross ton)

13,448,000

30,00G

stocks

Pennsylvania
AGE

J 89,805.000

176,329,000

14,235,000

15,041,000

(bbls.)

——

Beehive
IRON

170,550,000

156,285,000

14,681,000

February:

Slab
of

5,878,788

BRAD-

&

———

——

6,056,28?

155,754,000

_

(bbls.)

imports (bbls.).
consumption—domestic and export

Decrease—all

244

5,936.536

Mar. 11

INC.

7,480,724

3,296,809

42-gal-

of

(bbls.)

(bbls.)

output

COAL OUTPUT

(COMMERCIAL

STREET

"7,930,372

5,410,902

alloy

Dec.

products

Stocks

FAILURES

ibbls.

output

output

gasoline

Shipments

output

116,782,448

produced

including

170,465,000
oil

(bbls.)

of

Electric

132,160

INSTITUTE—Month

production

crude

AMERICAN

DEPARTMENT STORE SALES INDEX—FEDERAL
TEM— 1985-30 AVERAGE — 100—

238,035

112,612

159,500

——

(tons)

3,490.051

3,119,736

219,951

INSTITUTE:

castings

February

products,

Crude oil imports

697,000

*2,900

steel

of

each)

Natural

*10,611.000

for

steel

domestic

Domestic

———Mar.

coal

3,775,497
3,442,934

230,897

118,725

STEEL

AND

and

of

Indicated

(U. S. BUREAU OF MINES):
and lignite (tons)—u
'—:

OUTPUT

Bituminous

125,890

3,975,603

therms 1

iM

therms)

(M

PETROLEUM

lons

Refined

COAL

80,742

December:

of

$210,567,000
122,135,000
88,432,000

9
9

93,051

Month

For

—

stainless (net tons)—Month ol

and

Total

—.—Mar.
Mar.
—;—Mar.
—r—Mar.

(DEPT.

4,325,231

sales

tons)—Month

Shipments

NEWS-

ENGINEERING

—

Construction

S.

U.

53,474
Not avai.:

Deeembet.

of

therms)

iM

gas

IRON

AMERICAN

RECORD:
Total

PRODUCTS

39,733

29,101

Dec.

therms)
sales

sales

gas

AMERICAN

CIVIL

of

35,865

41,161

December—

tons—end

52,108,000

§574,395

4
4

of

ASSOCIATION

Manufactured

(net

OF

Ago

January:

Total

Steel

Revenue

tons)—Month

Natural

134,208,000

AMERICAN RAILROADS:
freight loaded (number of cars)—*
freight received from connections (number of cars)

ASSOCIATION

Year

Month

primary aluminum in the U. S.

shipments (thousands of pounds;_____

AMERICAN

7,015,000

7,855,000

4
4

(bbls.) at

Previous

MINES) —

COMMERCE)—Month

Total

5,526,000

8,140,000

Mar.

—

of that date:

are as

17.427.OC0

2.513,000

Mar.

(bbls.)

oil

17,830.000

2,484,000

4

at.

and distillate fuel oil

oil,

17,703,000

2,184,000

4
4

4,945,100
5,420,000

5,242,800

5,277,000

17,707,000

4
4

5,000.000

in pipe lines—

bulk terminals, in transit and
unfinished gasoline (bbls.) at

and

OF

4,909,250

Mar.

;

Stocks at refineries, at
Finished

short

(in

OF

Stocks of aluminum—short

115,316,000

Mar. 4

—

(bbls.)

Residual

Gas,

Production oi'

ALUMINUM

of 42

(bbls.)

stills—daily average

to

runs

Gasoline output

(BUREAU

ALUMINUM

1,880,400

•——-—;

either for the

Latest

1,711,800

(bbls.

average

—

of quotations,

cases

are

Month

102.0

Mar. 19

output—daily

condensate

and

oil

gallons each)

in

or,

Ago

Ago
90.7

'

Dates si* own in first column

Year

Month

73.5

*

Crude

Week

production and other figures for the

cover

that date,

PETROLEUM INSTITUTE:

AMERICAN

Crude

Previous

on

89.8

(net tons)

ingots and castings

month ended

__n—^-Mar. 19

of capacity).—;

(percent

Equivalent to—
Steel

Week

STEEL INSTITUTE:

AND

IRON

AMERICAN

or

tabulations

month available.

or

Thursday, March 16, 1950

CHRONICLE

FINANCIAL

&

;

'

•

received

Orders

Production

AND,

PAINT
AVERAGE

=

4

249.542

172,503

248.603

178,515

Mar.

4

195,468

200,998

202.942

157,814

Mar.

4
4

88
371.003

90

91

79

314.640

383,173

287,302

—

Percentage of activity
Unfilled orders (tons)

OIL,

Mar.

(tons)

(tons)
—

—Mar.

at

PRICE

REPORTER

DRUG

100

INDEX

—

(E.

month

for

Average

ODD-LOT

DEALERS

SPECIALISTS

AND

ON

refinery
refinery—

Electrolytic, export
(per pound)—
Common, New Ycrk
Common,
St. Louis
Silver and Sterling Exchange—

Lead

120.9

121.7

121.8

138.1

EXCHANGE—SECURITIES EXCHANGE

sales

Odd-lot

(customers'

by dealers

N.

Y.

of
of

COMMISSION:

Tin

:

value

Odd-lot

purchases by dealers (customers'
orders—Customers'

of

Number

Customers'
Customers'

Number

other

Customers'

sales

26.406

27.823

16,429

Feb.

25

650,791

813.684

822,964

447,420

25

$26,303,809

$29,843,368

$33,473,610

$16,666,468

Feb.

25

28.864

23,960

28.330

15.380

Feb.

total

sales.

25

141

245

267

223

^_Feb.

25

23.819

28,619

28,063

15,157

Feb.

25

815.590

660,535

770.638

406,300

.-!

9,C88

5,464

9.363

10.014

Feb.

25

655,071

805,227

760.624

397,212

...Feb.

25

$23,227,829

$28,179,563

$28,91?,865

$13,751,774
118,340

—Feb. 25

1

sales—
—

by dealers—
sales!

Feb.

25

204,980

288,140

269,550

Short

sales

Feb.

25

Other

sales

Feb.

25

204,980.

283T40

2~69~550

118~340

—Feb.

25

206,280

248,130

303,470

176,320

Round-lot

purchases by

Number

dealers—

shares—

of

—

1926
All

=

SERIES

—

U.

S.

DEPT.

OF

Gold

(per

commodities other than farm and

Fuel

**Nickel

Month

of

years
1946

1941
to

to

1943

date.

allied

33.200c

41.730c

27.318c

29.520c

27.818c

30.420c

39.000c.

Nominal

Nominal

Nominal;

$66,000

$69,000

$85,455

$2.00000

$2.00000

$2.00000-

$2.07500

$2.07500

$2.05000*

$2.15000

$2.15000

$1,800

$1,800

17.000

17.000

Not avaii.

20.500c

20.500c

20.500c

40.000c

40.000c

40.000c

15,174,000

152.0

152.6

151.6

7

158.0

159.4

157.2

Capacity

used

16,936,000

15,261.00(1'

$2.10000

$17,000-

9,593,000

11,606.000

8.756,00ft

14,671,000
78%

17,591.00ft

$657,044,390
546,665,008
83.20
;
$64,111,602
before charges'
32,757,854

$710,829,884

$730,690,952.

568,291,720

616,283,039.

——-

73%,

172.
RR.

CLASS I ROADS (ASSOC.
AMERICAN RRS.) — Month of Dec.:

EARNINGS

—

7

164.0

162.9

158.5

164.6

7

201.8

*200.7

199.2

208.1

OF

7

156.0

157.8

156.0

163.7

Total

operating

revenues

Total

operating

expenses._!

7

215.8

219.7

211.5

220.4

7

145.4

145.4

145.1

151.2

Operating

144.8

Tuxes

137.4

_

7

130.1

130.4

130.5

134.4

Net

railway operating income

7

169.3

169.2

169.3

174.8

Net

income

7

193.2

*192.5

191.2

200.8

115.6

122.4

runs.

7

136.8

115.9

tThe weighted finished

136.9

ratio—per cent

7

Mar.

crude

38.500c

20,267,000
70%

—

:_Mar.

products

Ulncludes 483.000 barrels of foreign

115.5

revised for the
1937 to 1940 reclusive and

steel composite

The weights used are based on the average product shipments for the 7 years
§Reflects effect of five-day week effective Sept. 1, 1949.




$88,091

30.598c

(BUREAU OF MINES) —

Mar.

inclusive.

$35,000

$71,000

January:

—Mar.

lighting materials
metal products
and

102.000c

$71,000

(bbls.)

Mar.

materials

Chemicals

103.000C

75.070c

$35,000

--

CEMENT

PORTLAND

Mar.

foods

and

*Revised figure.

76.070c

c

74.352c

—

Mar.

products

and

Metals

17.500c

73.352

ruin.

U

Mar.

_•

—

Building

9.763c

$35,000

Straits

99%

ounce

Mar.

:

;

Meats

43.000

$4.02750

pound)—

York

York,

Mar.

Grains

Textile

7

Mar.

Livestock

All

159.0

Mar.

—

products

Foods

64.000

$2.79750

9.750c

Louis—

(§§)
S. price)
Quicksilver (per flask of 76 pounds)
flAntimony (per pound), (E. & M. J.) —
Antimony (per pound), bulk, Laredo—
Antimony (per pound), in cases, Laredo
Antimony (per pound), Chinese Spot
Platinum, refined
(per ounce)
tCadmium
(oer
pound)
tCadmium
(per poundf__
§Cadmium
(per pound)
—
Cobalt, 97%
Aluminum, 99% plus, ingot (per pound)
Magnesium, ingot (per pound)
New

70.803c

64.000

$2.7975G

ounce)

Shipments from mills (bbls.)
Stocks (at end of month) Ibbls.)

LABOR—

100:

commodities

Farm

NEW

PRICES

ounce)
per

Exchange (Check)
pound)—East St.

Production
WHOLESALE

—

„—

shares—Total

of

Number

1

sales

value

Round-lot

sales——

short sales
otner

21,774

sales)—

short sales

shares—Customers'

of

Customers'
Dollar

total

25

(per

(pence

(per

(per

New

Feb.

shares

Dollar

Zinc

purchases)—

orders—

Number

London

Sterling

STOCK

—.Feb.

Number

New York

Silver,

ACCOUNT OF ODDTHE

February:

of

(per pound)—
Electrolytic, domestic

'

LOT

QUOTATIONS) —

Copper

Silver,
TRANSACTIONS FOR THE

STOCK

J.

M.

&

....

1926-36
——Mar. 10

-

PRICES

METAL

ASSOCIATION:

PAPERBOARD

NATIONAL

i

was

.

after

charges

(est.)—

——

11 500,000

7Q qc:

34.34-

$57,508,091

$67,093,223:

69,309,386

33,769,17ft

82,000,000

13,000,000'

tBased cn the producers' quotation, t Based on the average of
the producers' and platers' quotations.
§Based on platers' quotations. flDomestic, five
tons or more but less than carload lot packed in cases, f.o.b. New York.
**F.O.B. Port
Colburne. N. S., U. S. duty included.
§§Tin contained. IIHPreliminary figures, ttlncrease all stocks
(bbls.) _ *
♦Revised

figure.

,

Volume 171

Number 4890

COMMERCIAL

THE

Continued from page 15

FINANCIAL

&

CHRONICLE

of

result

almost treble.

insurance

$5.9

Mortgages held by

companies

billion

to

from

grew

$12.9

billion, or
more
than doubled.
Against all
savings deposits, banks have em¬
ployed 32.7% in real estate loans;
against all share accounts, savings
and

loan

associations

their

policy

loaps.

Thus,

associations

savings

and

look

must

loan

either

to

funds gathered from share¬
holders
or
to
borrowing
from
new

government

loans

Banks

and

the

on

if

agencies

to

are

be

made

insurance

other

further

them.

b,y

companies,

hand,

have a long
before they would

yet to go
either reach their statutory limits
way

for

lending

tary

exceed the

or

limits set

constituting

by

lending

conferences

and

Loan

National

held

League

Savings

the

and

and

Loan

country

ferences conducted by the Nation¬

with
shortages rapidly. Neverthe¬
less, while the shortage remains,

al Better Business

there

between

we

catching

are

up

the

continue

socialistic

proposals

the

ease

be

to

housing

with little

or

effect such

no

introduced

designed

shortage,

concern

to

and

to the

as

Relations with

Savings and Loan

Associations

and

business
mortgage
be complete without a

would not

reference to the relations between
banks and savings and loan asso¬
ciations.
We have gone

through

period

a

where

strained

there

relations

have

been

between

and loan
on

relations

industry

Whereas

the

savings

appearing

were

and writing articles

programs

If

savings institutions

our

We feel that
many people
investments in shares

have made

Continued

ap¬

to

now

in

better

see

the

pleased

are

informed

lead¬

savings and loan field

making public statements designed
to discourage such practices.
If the

current

negotiations

con¬

tinue favorably, and if the super¬

visory and legislative authorities
take proper

in the

action,
future

near

we
our

believe that
indus¬

two

tries will be able to work in har¬

and

mony

to the

credit of the borrower

satis¬

were

factory, there would be about $10
billion

in

potential credit for

mortgage purposes available now

—enough to absorb the probable
increase in all mortgage loans
required for 1950.
This

amount

does

include

not

funds which would be avail¬

new

able for mortgage placement each

derived

year,

from

the

annual

from

better

service

16

page

Benefits
substituting

weaken the hold of older
persons
diminish the security given

the system to all persons gainfully

and

by

seniority

protection.

rosters

union

and

The failure of modern

industry to work out jobs for these
is
threatening the security of

men

mended

immediate

ligious orders.

pension

10%. Commercial banks, often re¬

pension for his protection.

quiring

a

rapid

more

tion, have

annual payoff rang¬

an

ing from 10 to 12%.
of

these

would

add

rates

reservoir of

mortgage investment.

on

The

approximately

The lower
effect

in

Most

10%

rates

the

of

down

for

rate

average

is

country

the

4V2%.

generally in

are

cities.
members

our

feel

that

payment of not less than
the

on

purchase of

home

a

curity

system

by all
The

has

been

inadequate

as

final

vote

of

branded

and obsolete
the

House

Representatives in favor of
bill

333 to 14 with 130 Repub¬

was

joining

bill.

of

new

a

One

in

fact

approving

that

has

made

inadequacy apparent is that
sioners

have

had

assistance

to

the

turn

its

pen¬

old

to

to be

replaced in time by the

old age

security plan, has become
mainstay for older persons.

the

the age of 65 years is now

loans.

ing

Originating and holding mort¬
gage loans as a permanent invest¬
of

ment

of

four

every

past
receiv¬

persons

in

contrast

to

the

pavments

mortgage markets
tive

factor

most

The

not

are

an

ac¬

activity

mortgage

amount of savings

average

time

and

in

cases.

mercial

deposits held
banks

by

generally

com¬

range

to

to

$55; for

$41
To

one-half

bar

to

in

be

by

which

a

high

80%

as

of

all

Activity
in
d

e

growing

assistance has of

alarmed

the state

ernments.

The

and

of

cost

course

also

local

gov¬

Governors

of

service

p o

charges

are

savings

and

with

use

si t

of

s

states recently demanded
liberalized
pensions in order to

relieve them of the burden.

commercial

We

are

therefore challenged to
Federal law which gen¬

of

and

that

sum

and

workers,
plan for the

the

restricts

the

and establishes benefits
result

in

single

a

benefit

of

$50

and wife would receive

The benefits would be calcu¬
to

up

maximum of

a

month.

Earnings

under

$50

of.

$300
older

month

per

of the

benefits.

The

by

Social

plan

proposed

Security

Council

develop

of from

erously advances the adequacy of
old age pensions.
While the bill

10 to 25 cents for each withdrawal

passed by the House of Represen¬

feasibility has been con¬
firmed repeatedly by study.
Any
other system can only pretend to

tatives

meet

transaction

in

month

or

one

of

excess

six

During the past
ican

fee

a

in

six

year

two

in

Bankers Association

a

makes

a

substantial

ad¬

months.

the Amer¬
has ap¬

vance,

it is far from adequate. Nor

do

believe that

we

Federal sys¬

a

peared before Congressional Com¬

tem can at any

mittees, opposing

bills which

high

lending by

suffice unto itself for all people.

would

the

provide

many

direct

government

at

low

interest

rates, easier terms, and long ma¬
turities. While the housing short¬
age
so

is still with
acute.

us,

There

it is not nearly

are

many




indi¬

plan
sup¬

There

system
tions

is

much

controversy

on

should take.

of

private

limita¬

The

systems

as

now

constituted and the financial costs
involved have greatly affected the
current

Existing unionnegotiated plans must not be con¬
systems.

ceived

final

the

as

in

form

make

which

word

the

on

these

payments

The plans

standards

time establish such
as

to

be

able

We endorse the proposed

suggested
cil

on

to

terms

by the Advisory Coun¬

Social

Security at the be¬

ginning of 1949

as a

minimal pro¬

the
the

supplementary

systems.

Its

eco¬

nomic

of

the needs of the great mass

organized

workers.

The

movement

has

and

unorganized

American
been

in

the

labor

adoption of this legislation

when

many

cates

and

is

now

of the current advo¬

snipers

grams were

direction

in

dents of the problems of pensions,

the

Federal

our

failure of

be

an

designed

to

to

deficiencies

legislation

at

union

in

the

and

industry to organize

q.
It seeks to take
the superannuated or the
persons
who
can
no
longer be

real

pension plan.
of

caie

productive in
zation.

an

existing organi¬

The vast majority of the
who had been employees

of companies with
will attain

plans and who

pensionable age will
taken care of.
They win

be

not

have to reiy on the Federal
pen¬
sion and other resources.
Those

qualify

who

might
normally
enjoy these bene¬

may not

fits for other reasons such

the

as

liquidation

of businesses, the fi¬
stringency of specific es¬

nancial

tablishments,

or the deficiencies
the provisions in the fund
for

in

protecting

the

claimant's

rights-

Moreover, these plans suffer

from,
otner defects since they are
inherently unable to deal with

many

problems

of

rising prices,

needs of those who do not

The

the

or

qualify.

recent

tendency among
ployer-operated systems to

em¬
pro¬

vide

supplementary benefits to
particularly the consulting actu¬
pensioners and to provide benefits
aries, must shed their traditional
to ineligible
employees illustrates*,
thinking and do more imaginative
these issues.
work.
They have obfuscated the
Two basic
present controversies because they
types of superannua¬
tion
have
pension systems now exist
not
clearly diagnosed the
for employees.
differences
between
These have been
the
present
pension movement anj the pri¬ shaped by the exigencies of indi¬
sponsored employer sys¬ vidual plans and industries. There
They have been outraged at are first the limited liability
the new departures only because plans, which provide for funds to
they have not fully appreciated be set aside, typically by employ¬
the nature of this new movement. ers alone, to be used for the re¬

vately

tems.

In order to

fully state the basic

problem which

we now

face in the

tirement

eligible

persons

pension.
limited to

is

development of

of

the

The

fund's

for

liability

the amounts placed
an old age pension
it is necessary to dis¬ into it. The number of person**
retired is determined
tinguish between two types of pri¬
by the fund's
vate pension systems.
There are no uncer¬
They may resources.
be designated superannuation pen
tainties as to the financial under¬
sion plans and retirement bene¬ taking, which is to guarantee the

system,

fit

plans.

funded

In

completely

some

private

pension rights to persons who

discerned.

been

future

plans,

in

But

the

shall have to recognize

we

more

clearly

plans

are

the aims which the

to

the

such

Some

Superannuation Plans
first

class

plans, which by and large includes
the vast majority of the plans now

being

negotiated

retirement

of

the

unions,

the
superannuated

by

is

being sharply emphasized.

is

a

in

the

liberal

executive

and

for

other,

no

evaluation.

This

that

needs

It

pension

reason,

complete

if

is

intended to handle the

who

utive

was

the

exec¬

reluctant to

retire

of

designated

-

negotiated

plans

above

category. The
directed against them

actuaries

and

students

of

so¬

insurance stem from the fact

that they are

attempting to endow

the plans with purposes which far
transcend
their
current
under¬

takings.
The

second

is

the

inclusive?

all

liability

type which entitles all
employees who survive the retire¬
ment

age

re-

designed to re¬
move or permit the retirement of
aged persons with long service
with the company, whom the em¬
ployer no longer desires to keep
on the payroll.
The provisions for
compulsory retirement are hang¬
overs from executive plans which
were

by
cial

from the emphasis

carryover

union

in

criticisms

of- pension

se¬

eye

cost

persons.

designed to realize.

the

the

pensions for the

are

In

and

resources

are

so
an

and meet other specific

qualifications, to pension benefits
of

the

type agreed

butions

must

be

Contri¬

upon.

made

funds

and

established to meet the full liabil¬

ity assumed un-'er the plan. The?
plan is typically represented by
many

of the recently

plans.

The variants of these plans

are

numerous.

arise

on

negotiated

Major differences

issues of normal and op¬

tional retirement ages;

compulsory
though
his
presence
ob¬
efficient operation of the retirement; retirement benefit for¬
mulae; methods of "determining
organization.
structed

The

plan

of

care

a

is

designed

most

select

to

take

group

of

workers; namely, those who meet
certain age and service and other
supplementary requirements.
not constructed to

who

help all

It is

persons

might retire no matter how
the allegations may be

generous

in

the

preamble of such a plan.
The qualifications established for

credited past service;
maximum
benefits; eligibility for the system;
contributions; cash payments vat
termination of service or death;
vesting; and methods of funding:
the liabilities under the plan. They
meet

substantial part of our cur¬

a

rent emergency

needs of affording
pensions to the superannuated.
Retirement Benefit Plans

the

van¬

guard of this fight and has pressed
for the

specific

considered

program

for

up

persons

the exact form this supplementary

had the almost unanimous
support

of all groups.
It would provide a
sound base on which to

savings banks.

principally to

the

even

liberalized

the

develop

late

between

inadequate Federal
adequate one

programs

plan

banks, but rarely used in mutual
Their charges re¬

devised both

are

gap

moie

a

no

would be exempt from calculation

11

western

widely
time

The

benefits,

employers

man

such

$43.38.

of

workers'

the

as

the

in

workers.

Earnings

earnings, contributed

would

some

deposits.

and

start

A rate of 1.5%

coverage,

lated

as

the

65.

excess

House

in

represent

sense

bridge

for
The

$80.

age

from

first period.

insurance

old

$25.93

time

finance

in

banks,
savings deposits

has been

be

emergency

have

by $1 for each

both

per

commercial

issue

therefore

for widow

reduced

workers

of which

that

bar¬

and

earnings.

dollar of

of

smaller

collective

The present systems

definite

a

for

but

removed.

to

for

wife, from

the

receipt

with average assistance payments

10% to 50% of the total de¬

majority of them either die or
otheiwise terminate their
employ¬
ment before they reach a
pension¬

and

man

the

benefits
would

compared

the

sin¬

a

to $35 per month would be

monthly bene¬

average

was

the

normally re¬
because the great

varying retired, and the number
combinations of these basic types lected is determined with

of the system to age
up

and

under

of

whichever

eligibility of
persons
the
applicants
only have to have worked

posits, with higher ratios usually

from

a

accelerate

lion.
fit

the

and two children from $49 to $118.

retired

program

80%

or

to about $85;

dependents, the actual sums
going to pensions, was $546 mil¬
The

times

The benefits for

lion

of $688 million under the Old Age

a

$20

gle retired worker would be raised
from the current $26 per month

would

and Survivors' Insurance
program.
After withdrawing the sums paid

is

bank

wage,

of employee

predomi¬

the

three

is lower.

to

family benefits

on

benefit,
monthly

primary

wage

up to
minimum

raised

at

set

assistance. The 1949 cost of
old age assistance was $1,380 mil¬

characteristic, and secondary

nant

in

One

monthly
The

be

ceiling

average

Many are not now covered
by the old age security law. The
old age assistance system, which

desirable precaution for both
borrower and lender on veterans'
a

subject

a

gaining,

remainder

month.

be

many

was

the

would

the

would

for

of

per

would

$75 of the ben¬

average

15%

supplementa¬

age

tion.

valuable,
it
benefits be raised

to 50% of the first

eficiaries'

and

The present Federal old
age se¬

licans

show that interest

surveys

states.

is

mortgage loans
$1 billion

possible

mortgage loans fall large¬
between 4% and 5V4% in all

ly

a

Replacement

than

more

the

funds for
Our

in

funds

to

more

amortiza¬

a

of
re¬

To make the pro¬

that

proposed

sible, the older worker looks

to

of

immediately

gram

$350

annual

extension

occupied with the exception
clergymen and members of

ability makes employment impos¬

at

be

controversy

whether such plans shall

on

evolving plans may
ultimately move.
The older stu¬

It should supplant the one
adopted by the House.
It recom¬

mortgage payoff in mutual
savings banks is between 8 and

cates that

by

time

which

gram.

and

loans

considerable

was
a

define

for older
in¬
dustries.
Industrial migration is
uprooting
entire
plants.
These
new

em¬

would

...

pensions

agreement is the propriety of
establishing a supplementary sys¬ able age."'
tem
of
pensions or retirement
The plan or
industry superan¬
benefits in private industry. There
nuation approach to pensions must

ahead of all students of this prob¬
lem to examine the issue to help

Superannuation Plans

or

the
entire group.
The pressure
for pensions is therefore
great. If
jobs are not there; if personal dis¬

of

check

which there

is

hastily developed and are
adaptations of the earlier pension
systems.
There
is
a
challenge

already held. A
the ABA indi¬
the present time the

payoff
recent

Systems

on

will eventually evolve.

with

public.

The Choice Between Retirement

their savings deposits in mortgage

loans, and the mortgage terms and

Pension

were

investment of 50% of

an

Private

plemented by a system of perma¬
nent retirement
benefits for all

cies.

proached

ployees

The second issue

41

relatively small percentage of
ceive

present

as

poli¬

can

emphasizing the alleged similarity
between savings and loan associ¬

the

savings and loan industry and
banks.

improved
two groups.

our

misguided leaders in

ers

A discussion of the status of the

savings

of

we see

which

program

ations and banks, we

legislation would have

the mortgage business.

upon

evidence

Bureau,

con¬

liberal

most

be secured.

with

League, and also because of

volun¬

themselves

sound

of

cations that in certain parts of the

in real estate

reserves

ings

loaned

are

to a little under 100%; and
insurance companies hold 25% of
up

associations

loan

and

representatives of the U. S. Sav¬

Mortgage Business
almost doubled; in the savings and
associations, the increase was
from $4 billion to
$11.7 billion, or

the assumption that they were

depositing their money in banks.
I am glad to report that as a

Status of Savings and
loan

savings

on

(1133)

pensioners will tend to limit
No matter hew sound the above
Mortality, labor turn¬
supp^mentation
of the Federal
over and employee service records
system may be, it cannojt be the
will comb cut substantial
the group.

propor¬

tions of the employees. Mr. Eugene

Grace
pro¬

arrayed against it.

It

arrayed solidly behind the

in

his

statement

to

stock¬

holders on Dec. 19, 1949, confi¬
dentially stated that "Bethelehern's
experience has shown that only a

answer

of

to the demand of the

mass

penole for adequate retirement

benefits.
gency

At

best

it

is

an

emer¬

provision designed to take
Continued

on

page

42

42

(1134)

COMMERCIAL

THE

Continued from page 41

limited number of plans.

In addi¬

tion, the period of deferment until
claims

the

The Choice Between Retirement
of the

care

at

immediately pressing

problems within

organization.
supplementa¬
tion of Federal pensions is likely
to continue, and it is probable
that such supplements will con¬
tinue in a society where there are
variations
in
earnings and re¬
wards, and many prosperous com¬
panies and industries, the above
systems will finally have to be
supplanted by a more satisfactory
program which seeks to take care
To

the

extent

an

that

of the great mass of workers. This
must be

credits

workers

select

system which currently

a

retirement
and

few

specjfic

benefits

all

to

merely to the
which have the

qualifications

particular industry

within

a

If the
present discussion has
produced any new basic concepts
of what we are trying to do, it is
that the
pension is a deferred
wage.
The nature of the recent

collective

bargaining process has
highlighted this fact. The pension
has been substituted for
wage increase. The benefits have

program
a

to be widely shared by all work¬
ers in
a
bargaining immediately
after

the

by

created

emergency

past failings has been

overcome.

The deferred wages rnust be paid
to all.
The supplementary pen¬

sion program must establish pen¬
sion

rights for all, both young and

supplementary

is

shall

years a

ture of

sible for
of

ones

and

benefit claims which
individual

supervision

bend their attention in that
direction. We must begin to ex¬

service.

amine

service.

must

which

the

procedures for such a
transformation and the types of
mechanisms which will best serve

rights

ment

benefits

supplements to

as

liberal federal program.
Initial

has been made

progress

in this direction in

ing

programs

provision.

one

of the

In

the

next

stock

all

tion

a

member for

a supplementary
benefit to all workers covered by
the agreement
drawbacks of

a

number of

Disability
Benefit Systems

years

In the current discussion of old

pensions, one must not lose
sight of one of the most serious
problems; the care for the per¬
manently disabled person who has
age

to service.

But

this

type

vision

has

been- used

of

vesting

Akron, Ohio

36,500 shares of

common

(3/22)

(par $1).

share. Underwriter—M. A. Kern, President
will sell the stock. Proceeds — For stated
capital and paid-in surplus to carry on business.
per

Alumitape Sales Corp.,

writer.
blind

Los Angeles, Calif.
(letter of notification) 130,000 shares of common
be offered at par ($1 per share). No under¬
Proceeds are to promote and advertise Venetian

tape

expenses.

and

other products

Office—5404

and

Alhambra

Federal pension program and
the inadequate provisions for re¬
tirement by individual employers.

The delay experienced in mod¬
ernizing an obsolete
insurance
program and the willingness of
employers to negotiate a careful
program have catapulted us into
the
present situation.
There lis
need for haste to make up for our

tardiness in

old

eral

Debentures

share.

per

recommendations

•

Andrew

legislation. This should embrace
both the provisions for old age
pensions and disability benefits.

requirements

set;

are

a

40

period immediately preceding
onset of his disability.
The
for

benefits
be

would

disabled

the

retired
but there would be none

equal to those of the

person

the

dependents.

The

current

private

pension

plans are designed primarily as
superannuation benefits to take
of the accumulated liabilities

care

to the older persons

As

industry.

in American

debt to them,, is

our

which considerable

met, we must convert the private
systems into a system of supple¬
mentary retirement benefits cur¬

additional work has to be done is

rently credited to each and every

that

Older

for

Jobs
One

area on

relating

for

older

that

their

tion of such

The life span is

government

know

number is rising.

increasing.

Workers

jobs

to

We

workers.

Workers are continu¬

ing to be productive for longer
periods. As the medical and psy¬
chiatric sciences continue to im¬
prove

itself

and

worker.

of

the

productive

Constructive studies

life.

have been made and

tributions
the

But

the

years

work

original
this

in

offered

con¬

field.

declarations

proj¬

by definite constructive

but
ects.

(See Solomon Barkin, "The

administra¬

system, the Federal

should

half of the individual worker.
In

drive for

our

a

well

tensive employment

for older per¬

sons.

With Waldron & Co.
(Special

to The

Financial

Chronicle)

CALIF.—J.
Huntington Davis is with Waldron
SAN

&

FRANCISCO,

Company, Russ Building,

INDICATES

ADDITIONS

SINCE PREVIOUS ISSUE

derwriters—Dempsey & Co., Chicago, and. G. H.
&

devel¬

oped system of old age pensions,
we should also plan for more ex¬

specific opportunities must be

pressed not by pious

the

ease
a

provide the
the annuity
credits
may
be currently pur¬
chased through trust funds in be¬

increasing

toward

To

mechanism whereby

they will extend both life

to be offered at par and the stock at $11

Walker

Co., St. Louis.

Statement effective Dec. 9.

Beverly Gas & Electric Co.
20 filed 33,000 shares of capital stock (par $25)
be offered to stockholders at the rate of 1V2 shares

Dec.

Legion Memorial

County American

Senate

quarters of coverage and has
to
show employment during
at
least one-half of the time within

bility

Proceeds—To be used for economic develop¬

ment of Israel.

the

of

worker has to have a minimum of

Registration
are

liberalizing the Fed¬
pension law.
The

age

Park, Savannah, Mo.
8
(letter of notification) $50,000 of bonds. No
underwriter. Proceeds to develop a 20 acre public park.
March

to

The proceeds

held

notes

Appalachian Electric Power Co. (3/21)
17 filed $25,000,000 first mortgage bonds, due 1980.
Underwriter—To be determined by competitive bidding.

held, at $30 per share. No under¬
will be used to pay off $575,000 of
by the New England Electric System and

for each two shares now

writer.

bank loans.

Feb.

Probable bidders include: Halsey, Stuart & Co. Inc.;
Kuhn, Loeb & Co. and Union Securities Corp. (jointly);
Harriman Ripley & Co. Inc.; First Boston Corp. Proceeds
finance

construction

program.

Bids—To

be

re¬

•

Edison Co.

Boston

March

14

filed

$18,000,000

of

first

mortgage

30-year

bonds, series B, due 1980. Underwriters—To be deter¬
mined by competitive bidding.
Probable bidders: Hal¬
sey, Stuart & Co. Inc.; Lehman Brothers; First Boston

ceived up

Chicago, III.

of company,

to

a

in

—To

American Casualty Co.,

Feb. 27 filed 1,000,000 shares of common stock

stock

pro¬

only

be

movement

our

•

March 22.

Feb. 28

in

Now

of debentures, due 1961 through
1973.
Underwriters—First Boston Corp.; Smith, Barney
& Co.; Harriman Ripley & Co.; Wood, Gundy & Co., Inc.;
A. E. Ames & Co., Inc.; Dominion Securities Corp., McLeod, Young, Weir Inc., all of New York; Halsey, Stuart
& Co. Inc., Chicago. Price—To be named in amendment,
along with interest rate. Proceeds—To redeem $61,067,300 of outstanding debentures, maturing 1961. Expected

Price—$2

without any of the
existing plans.

Need for Federal

,,

March 7 filed $61,000,000

All

a

organiza¬
mechanism, the

ing will provide

to
graduate the percentage
claims to the annuities according

or

(par $1). Price—$8.121/2 per share. Underwriter—
Cleveland. Proceeds—For working capital.
of)

such

of

the

pension programs devel¬
oped through collective bargain¬

participant. The more com¬
practice is to defer the vest¬
ing until an employee had been

Discount Co.,

(Province

With

workers.

newer

contributions in the interest of

Otis & Co.,

Alberta

annuity program be or¬

to

pension

is the result of the deficiencies in

Advisory Council on Social Se¬
curity should become the nation's
minimal program for immediate

now

ganized to permit the current pur¬
chase of retirement benefits for

plan.

Securities
&

plan

mon

trade - unions.
The
will be supplanted

Investment

operates in Can¬
We therefore urge that such
a

federal

a

gain these vested rights.
Few
plans allow immediate vesting of

few

(letter of notification)

solvency of such plans, the

demonstrated

are

suffering from disability which
will be long-continued and of in¬
definite duration. Stringent eligi¬

for

ada.

At the retirement age
eligible for a paid-up
annuity. The plans now differ as
to the period after which they

liberal Federal system sup¬
plemented by a retirement bene¬
fit plan which guarantees retire¬

Aid

are

months

the

a

Feb. 27

but

the recommendations of the
Advisory Council on Social Se¬
curity. Payments would be made
to
those
permanently
disabled
who after a waiting period of six

the

Such

the person is

we

these

'

minimum pro¬

a

as

ade¬

less

are

gram

these retirement benefit annuities.

con¬

employee leave his contributions
and the interest thereon within

all

deferred

not

of

and

aged

disabled

the

intense than those

more

We endorse

ing out a federal system of annui¬
ties which can be purchased with

tributory plans, there is frequently
an additional requirement that the

the

realization

The

the

they present, and the need
for the simplification of the meth¬
ods of accounting and payment of
final benefits, justifies our work¬

all of the benefits already
purchased by the employer's con¬
in his behalf.

of

of

problems

even

quately taken care of.

that

such

or

tributions

to the

period

The eco¬

benefits to the disabled.

financial and investment problems

plans
the employee who terminates his
employment before he is eligible
for retirement gains a
right to a
part

accrue

each

They are a deferred wage
automatically comes with
are

term

pri¬

through the vest¬
Under

with

retirement

Conclusion
The present

pensions extend similar

of old age

of

immediately established.
This type of retirement claim
can
be operated as private pen¬
sion programs as they are now.
But the many objections to long-

the demand for permanent retire¬
a

radical change in the na¬
pension programs ne¬

present

ceived of as permanent

Older Worker in Industry," New
York, 1933, for detailed discussion
of techniques.)
,
V

It is essential that every program

nomic

pensions de¬
veloped by the private pension
systems must be increasingly con¬

thinking of the problems

integration

pensions
and
union - negotiated
plans are inadequate on this score.

are

privi¬

The supplementary

been

The students of pri¬
vate pension systems and the
pub¬
lic authorities who are
respon¬

our

by

by

likely that

within

gotiated

has

the

therefore

see

system

Unfortunately most of the private

nuation

plan, the vesting
leges have been limited.

pensionable age.

attained the

not

in the framework of the superan¬

all

established.

old.
It

to

engaged in
the class of employment where a

vate

plant.

or

benefits

ment

not

aged

true retirement bene¬
fits. But since they were conceived

tablishing

Superannuation Plans

or

have

mobility. They
best initial attempts at es¬

been deterrents to
are

Benefits

established

are

Thursday, March 16, 1950

CHRONICLE

FINANCIAL

&

selling
Angeles,

for

general

Ave.,

Los

to 11:30 a.m. (EST) on March 21, at office of
American Gas & Electric Service Corp., 30 Church Street,

Corp.; Harriman, Ripley & Co., Inc.; White Weld & Co.
Proceeds will be used to pay $12,000,000 bank loans and

New

for

York, N. Y.

Rubber Co., West Haven, Conn.
March 8 (letter of notification) 1,000 shares of 4%%
cumulative convertible preferred stock and 3,000 shares
of class A no par value common stock, to be sold at $40
and $14 per share, respectively, by Frederick Machlin,
Executive Vice-President of the company. Underwriter
—F. Eberstadt &

Nov, 3 filed $3,250,000 10-year 3%

sinking fund deben¬
tures due 1958 and 200,000 shares ($10 par) class A stock.
Underwriter—Israel Securities Corp. may be underwriter.

Oil

•

Mfg. Co., Providence, R. I.
March 8 filed voting trust certificates for 693,100 shares
of common stock (par $10) to be issued to stockholders
•

Brown

depositing
Feb.

& Sharpe

these

&

27 filed 50,000

shares

with

the

voting

trust

dated

1, 1950.
Canam

Co., Inc., New York City.

Refining Co., Ashland, Ky.
shares of $1.20 cumulative (no par)
convertible preferred stock (convertible into common
prior to July 15, 1958). Underwriter—None. Price—$20
per share. Proceeds—For working capital.
Feb.

Ampal-American Palestine Trading Corp., N. Y.

L

Armstrong

Ashland

Calif.

redemption of $6,000,000 25-year 3% notes due 1970.

Expected about the middle of April.
•

Mining Corp., Ltd., Vancouver,

B. C.

Aug. 29 filed 1,000,000 shares of no par value common
stock.
Price—800,000 shares to be offered publicly at

share; the remainder are registered as "bonus
Underwriter—Reported negotiating with new
underwriter.
Proceeds—To develop mineral resources.
Statement effective Dec. 9.
Indefinite.

80 cents per

shares."

Associated Development &

Research Corp.
of com¬
mon stock (par $1).
Price—$2.50 per share. Underwriter
—Bioren & Co., Philadelphia, Pa.
Proceeds—For loans
to General Computing Machines Corp. and Transonic
Corp. and for general corporate purposes. Office—150
March

9

(letter of notification)

40,000 shares

Broadway, New York, N. Y.

CO

Associated

Grocers, Inc., St. Joseph, Mo.
Feb. 23
(letter of notification) 1,500 shares preferred
stock.
Price—At par ($100 per share).
Underwriter—
None.

Proceeds

—

working capital.

To

erect

a

Boston

Pittsburgh

Chicago

San Francisco

Private Wires to all




offices

Cleveland

and

for

St. Louis, Mo.
7,000 shares of class B
common stock (par $1)
and 500 shares of class A com¬
mon stock (par $1) to be sold by Sidney Strauss, Vice23

Me

Firing Corp.,

(letter of notification)

President of the company.

Price—$3.50 per share.

Un¬

UNDERWRITERS)
v;>"'v>'/

*•

stock

York

Ex'1""1*"
?»«•*

cag°

chv

DEALERS

'■

mie"
01

Bo'10"

BROKERS

"

Automatic

Feb.

Philadelphia

warehouse

Office—804 S. 4th Street, St. Joseph,

Missouri.

New York

new

ded

<

' ''

£OST°*

Volume

Carolina

,

Feb.

:

171

27

Number 4890

Natural

Gas

THE

Corp., Charlotte,

(letter of notification)

100,000

FINANCIAL

&

CHRONICLE

Georgia Power Co.

701

NEW ISSUE CALENDAR

—

Wilder Building, Charlotte, N. C.

>ior sale

Not to be offered

publicly.

March

Cincinnati Gas

&

Electric

Jamaica Water

Co.

Lone

Feb. 24 filed 556,666 shares of common stock

20, 1950

Supply Co.,

Star Steel

Co._

Bonds

(EST)

noon

Common

_

(par $8.50),

of which 498,666 will be offered to stockholders of record
March 15,
1950, at $28 per share, at rate of one new
•/share for each five held (rights to expire April 7) and

.

March 21,

in previous years.
•

11:30

(EST)

a.m.

Texas Utilities

Engineering

Corp.,

Pasadena,

_Bonds

Co., 11

Price—To be filed by amendment.

Consolidated

—To

Appalachian Electric Power Co.

58,000 shares will be sold to officers and employees.
Underwriter—None. W. E. Hutton & Co. headed groups

a.m.

March
Alberta

•

(Province

(EST)

Common

_

22, 19S0

of)

Debentures

__

California

(letter of notification) 1,000 shares of common
stock (par $1) to be sold
directly to Robert L. Smallman at $5
per share.
No underwriter. Proceeds are for

capital.

Office—620

N.

Lake

Avenue,

Seaboard
Noon

Air

Line

March

Coffee

Co., Cleveland, Ohio

101,250 shares of

;

Business—Coffee

i

common

Expected

27, 1950
1

Co.
March

Preferred

Bonds

April

during last week
Gundel

1,

April

6

(letter of notification) 2,000 shares of common
stock (par $5) at the market price ($4% or more), to be
by Robert C. Caldwell, Indianapolis, a Director.

4,

stock to

ceeds

to

be

El Portal

Jan. 27

1950
_

-Bonds

__

United

Debentures

v-sold

underwriter—"any broker."
Boulevard, Chicago, 111.

Office—700

N.

%

Sacra¬

mento

"j'9

March 9

(letter of notification) 500 shares of prior pre¬
at $53 per share, the proceeds
going to the

April

stock

Curtis

Estate

Trustees.

Underwriter—To

through Hecker & Co., Philadelphia.

No

J"

be

Utah Fuel

Co., 11

offered

underwriting
'

■

Power

&

Light Co.

March

8

shares

of

(par
April 5,
1950, at the rate of one share for each six held, and then
to be offered
employees with a maximum purchase of
150
shares
per
employee.
Underwriter—(For1 unsub¬
scribed shares) to be determined
by competitive bid¬
ding. Probable bidders: W. C. Langley & Co. and Union

Public Service Electric

amendment.

Proceeds—To

finance

the company and two subsidiaries.
received up to 11:30 a.m. (EST) on

Dome

Exploration

construction

Iowa

(Western)

Ltd.,

Toronto, Canada
Jan. 30 filed
at

1%

in

$10,000,000 of notes, due 1960, with interest

the

first

year,

2%

in

the

second

year,

3%

and
(par

thereafter, and 249,993 shares of capital stock
To be sold to 17 subscribers (including certain part¬
of Carl M. Loeb, Rhoades &
Co., State Street Invest¬
ment Corp. and State Street Research &
Management

$1).

ners

Co.)
'

Underwriter—None.

Proceeds—For general funds.
Business—To develop oil and natural
gas properties in
Western Canada.

Douglas Oil Co. of California
Feb.
^

3

(letter of notification)

penses.

1950

common

(par $1) to be sold at the market price of about
$3.75 per share by Woodrow G. Krieger, President. Un¬
derwriter—Shearson, Hammill & Co., Los Angeles, Calif.

Drewrys Ltd.,
Feb.

U.

S.

A.,

Inc., South Bend,

Ind.

20

(letter of notification) 8,015 shares of common
stock (par $1) to be sold by Carleton S.
Smith, President,
for $12 per share. Underwriter—R. C.
O'Donnell & Co.,
Detroit.

Office—1408 Elwood Ave.

Drewrys
March
stock

1
to

Ltd., U. S. A.,

South

Bend,

(letter of notification) 9,000 shares of
be sold

at the market price

Ind.

Weld

&

-Bonds

stockholders.] Rights will expire March

9

com¬

The Philadelphia

Feb.

14.

Securities

&

Howard

Balanced

Fund,

Inc.,

Stores, Ltd., Los Angeles, Cal.
Dec. 16 (letter of notification) 30,000 shares of class A
common stock, of which
22,778 are to be issued in ex¬
change for 3,254 shares of Roberts Public Markets, Inc.
the

rate

of

seven

share of Roberts.

shares

of

Proceeds—For working

Fitzsimmons

at $10 each.
capital.

Stores,

for

7

filed

No underwriter.

shares

of

capital

stock.

writer—Eaton & Howard, Inc.,
Boston, Mass.
—-A diversified open-end trust.
•

cumulative convertible

stock

(par $25). Underwriter—Lester & Co.,
Angeles, will buy all 40,000 shares at $23 each, of
which 4,000 will be held for investment and
36,000 sold
at $25 per share. Proceeds—To reduce bank indebtedness
to

buy

subsidiary, Roberts Public Markets,
Business—Grocery stores.

Inc.

a

Florida

Grocers

Building Co., Tampa,

Fla.

7

(letter of notification) 770 shares of common
stock at $100 per share. No underwriter.
Proceeds are
for

working capital.
Garfinkel

(Julius) & Co., Inc.
(letter of notification) 5,000 shares of common
stock (par 50c) to be s'old by Mrs. Dee M.
Schmid, Wash¬
ington, D. C., at the market price of between $19% and
$16% per share.
Underwriter—Auchincloss, Parker &
Feb.

2

Redpath, Washington.

Columbia,

buy

mining

machinery

and

for

Atlantic

Transportation

Co., Jacksonville,

Co.

Underwriters

shares

plus

ocean

pay

•

be

offered

Proceeds

homes
West

at

will

and

for

125th

$20

*''

:%

135,000

new

common.

complete

and

and

terminal

facilities,
provide working

to

and

used

be

to

other

$50 per share, respectively..
place first mortgage loans on
realty transactions.
Office—209

Street, New York 27, N. Y.

Gyrodyne

Co. of America, Inc.
(letter of notification) 150,000 shares of com¬
stock, class A (par $1) and 18,000 shares of 5%

March 3
mon

Proceeds—For
80 Wall
•

development
of
Street, New York City.

(par $4).

Hahn Aviation

model,

etc.

Price

Office—

Products, Inc., Phila., Pa.

March 9 (letter of notification) 100,000 shares of
stock to be offered at par ($1
per share).

capital

Proceeds for

the

manufacture

©

Hoffman Radio

and

sale of

patented aviation spark
plug.
No underwriter.
Office—2636
No.
Hutchinson
Street, Philadelphia 33, Pa.
a

Corp., Los Angeles, Calif.

March 9 filed 50,000 shares of 66% cents
par value com*
mon stock.
(In addition, warrants

outstanding for

pur*

chase of 45,000 shares of common stock to be

purchased
$4 per share may now be exercised.)
The 50,000
block is being sold by Frances E. Hoffman and Jane
Leslie Hoffman, wife and daughter of H. L.
Hoffman,.
at

President

of

the

Underwriters—William

company.

R.

sums

at

Associate

HENDERSON, Inc.

••••iondan Associate
The IEAGRAVE PRESS, Ltd.

Paul H. Davis & Co., Chi-?
by amendment. Proceeds-*

Price —To be filed

working capital.
Housecliff

$900

7

Co.

(letter
per

of

unit.

notification)

Proceeds

Howe

Sound

50

be

to

play tentatively entitled "House

participation units

used

on

to

produce

the

the Cliff."

Co.

Feb. 28 filed 76,983 shares of 4J/2%

cumulative preferred
stock, par $50 (convertible into common stock on or be¬
fore April 1, 1955), to be offered first to common stock¬

holders

of

record

share for each six

/'

the

Proceeds—To

$5
dock

obligations

remaining

of

(J. B.) & Co., Inc., N. Y. City (4/1)
(letter of notification) 10,000 shares of class A
stock and 2,000 shares of class B common stock

8

March

80 SOUTH ST., NEW YORK 7, N. V.

VmcCOKMIC* T&d

A

ferry, to finance

current

common

•

PRINTING CO., Inc.

Business

class

the

Gundel

March

For

CONFIDENTIAL

Under¬

of

buy
shkres

capital.

cago.

SINCE

unsubscribed

Offering price
an

will

Staats Co., Los Angeles, and

6




British

by amendment
Bergen & Co. and A. M. Kidder

&

Los

Boston,

(letter of notification) 600 shares of common
stock
(par 200).
Price—At market (about $2.50 per
share).
&
Co.
Underwriter—Reynolds
Proceeds—To
selling stockholder.

Ltd.,

cumulative participating preferred stock

Emery Air Freight Corp,

March

Corp.,

—Preferred at par and class A at $1.50
per share. Under¬
writer—Jackson & Co., Boston, on a "best efforts" basis.

mo
500,000

Mines

25 cents per share. Underwriters—Names
and may include John J.

each

Ltd.

Feb. 20 filed 40,000 shares of 6%

preferred

Fitzsimmons

Any additional shares not needed for

the exchange will be sold

Mass.
March

leases, drilling equipment and ex¬
Texas Avenue,
Grand Junction,

Proceeds—To

Gulf

to

Fitzsimmons

SERVICE

Eaton

*

100,000 shares of common non-assessable
(par 50c). Price—35c per share. Underwriter—

to

Co.

Underwriter

Proceeds—To be used, along with a
$2,500,000
loan, to provide mining and milling facilities to
mines potash in Eddy
County, N. M. Statement effective

W., Grand

May 31 filed 620,000 shares of class A participating ($1
par) stock and 270,000 shares (25c par) common stock.
Offering—135,000 shares ol common will be offered for
subscription by holders on the basis of one-for-two at

—None.
bank

Ave., N.

filed

None.

Preferred

Dec. 21

capital stock, has agreed to purchase at the subscription
price any shares of stock not subscribed for by other

Turner

working capital.

Co., Indianapolis, Ind.
Feb. 24 (letter of notification)
$100,000 of 5% sinking
fund debentures.
Underwriter—City Securities Corp.,
Indianapolis. Proceeds—For working capital.

•

filed 375,000 shares of capital stock
(no par) to
be offered to stockholders at
$13.50 per share at the rate
3/4ths of a new share for each share held on Feb.
14,
1-950.
[The United Gas Corp., owner of 373,557 shares,
or
74.71% of the outstanding 550,000 sharr,i of Duval

16

stock

& Gas Co._

unspecified number of shares of

an

to be sold by

Equitable

March

of

Proceeds to pay costs of erect¬

Canada
Feb.

common

Sulphur & Potash Co., Houston, Texas

Office—874

Granville

Co., Pitts¬
burgh.
On March 15 it was announced that 2,000,000
shares would be publicly offered.
Price—To be filed by
amendment.
Underwriters—Kidder, Peabody & Co.;
Merrill
Lynch, Pierce, Fenner & Beane; and White,

by Alfred Epstein.

No underwriter.

Duval

stock,

incurred

Inc.,

participating

25

Common

Equitable Gas Co., Pittsburgh, Pa.
March 2 filed

at

15,000 shares of

stock

Inc.
1,004 shares of 6% nonpreferred stock at $100 per

Florida

mon

April 5.

Rapids Stadium,

ceeds for oil and gas

Public Service Co._

for

Bids—Expected to be

Office-

Petroleum Co., Inc.
(letter of notification) 2,295 shares of common
capital stock at $100 per share. No underwriter. Pro¬

Common

1950

May 22, 1950

&

by

underwriter.

No

Building, Las Vegas, Nev.

No underwriter.

Jan.

Securities Corp.

(jointly); Harriman/Ripley & Co., Inc.;
Kidder, Peabody & Co.; White, Weld & Co. and Shields
Co. (jointly); Lehman Brothers.
Price—To be filed

($1 per share), the pro¬
buy mining and milling equipment

Granmesa

City Power & Light Co.

stock

common

to

be offered at par

used to

cumulative

Common

May 2, 1950

to be offered to stockholders of record

232,520

10,

each

(letter of notification)

share.

1

(4/5)

$13.50)

filed

1950

(EST)___

April 21,
Kansas
*

Delaware

a.m.

for

expected

are

Colorado.

commitment.

1.•

5,

share

new

ing stadium. Office—2500
Rapids, Mich.

Delaware Power & Light Co.
11:30 a.m. (EST)

Curtis Publishing Co.

ferred

April

(no par)

Ranch Mining Corp., Los Vegas, Nev.
(letter of notification) 100,000 shares of com¬

March 3

Common

__

Georgia Power Co., 11 a.m. (EST)
Representatives Inc.

one

Rights

and provide for construction.

1950

(J. B.) & Co., Inc.

stock

stockholders of record March 15 at

common

10 held at $28.75
expire March 31.
Underwriter—Blyth & Co., Inc., New York. Proceeds—
For additional working capital.

mon

(CST)_

a.m.

of

share.

Gold

______

Northern Indiana Public Service Co.
11

rate

per

Common

28, 1950

Monongahela Power Co.

Cribben & Sexton Co., Chicago, III.

,$o

Products

to be offered

Grand

/•

/ March

Bids

April 4.

Feb.

(3/27-31)

of March.

roasting.

Coffee

stock

(no par)
10,000 shares will first be
offered to employees of the
company.
Underwriters—A.
G. Becker & Co. Inc.,
Chicago, and Merrill, Turben &
Co., Cleveland. Price—To be supplied in an amendment.

•

(EST)

Glidden Co., Cleveland, Ohio
24 filed 178,825 shares of common

RR.

Equip. Trust Ctfs.

Pasa¬

tp be sold by 10 stockholders.

i

a.m.

Co., Fremont, Mich.
140,000 shares of common stock ($10 par
value), of which 10,000 will be offered to employees
directly. Underwriter—A. G. Becker & Co., Inc., Chi¬
cago.
Price—To be filed by amendment. Proceeds—To

the

Cook

Cook

Gerber

11

March 10 filed

1950

(EST)

dena 4, Calif.

March 6 filed

•

Proceeds—To finance construction program.
be received up to

expand and for working capital.
March 23,

March 6

working

(4/4)

bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Blyth & Co., Inc. and Kidder, Peabody & Co. (jointly);
The
First Boston
Corp.; Union Securities Corp. and
Equitable Securities Corp. (jointly); Shields & Co. and
Salomon Bros. & Hutzler (jointly); Lehman
Brothers;
Drexel & Co.; Morgan Stanley & Co.; Harriman Ripley
& Co.

1950

..

]

43

March 3 filed $15,000,000 of 30-year first mortgage bonds
due 1980.
Underwriter—To be decided by competitive

com¬

Price—At par ($1 per share). Underwriter—
Proceeds
For
working
capital.
Office —

None.

(1135)

C.

shares of

stock.

mon

//r'

N.

COMMERCIAL

March

20

common

in

ratio

of

shares held.

one
preferred
Rights will ex¬

pire April 4, 1950. Underwriter—Union Securities Corp.,
principal underwriter. Proceeds—To be used to complete
the development of the Blackbird cobalt mine in Idaho,
Continued

on

page

44

...

44

(1136)

Continued
®

COMMERCIAL

THE

from

Hytron Radio & Electronics Corp., Salem, Mass.

March 10 filed 200,000 shares of 6% cumulative convert¬
ible preferred stock ($8 par value) and 440,000 shares of
stock (par $i), of which 40,000 shares of com¬
stock will be sold by four officers of the company.
Underwriters—Barrett Herrick & Co., Inc., New York,
and Sills, Fairman & Harris, Inc., Chicago.
Price—$3
common

mon

for the

preferred; the common stock price to be filed
by amendment. Proceeds—To finance expansion of Hy¬

Investors,

Boston,

Mass.

Proceeds—For

syenite deposits.

construction

and

for

past capital expenditures.
pected end of next week.

to

reimburse

Palisades
Feb.

treasury

Offering postponed.

Ex¬

•

Michigan Gas & Electric Co., Ashland, Wis.
24 (letter of notification) 12,000 shares of com¬
stock

at the

to

be

rate

No

of

share for each

one

2nd

stockholders

to

underwriter.

W.

fice—101

sold

Proceeds

of

record

ceeds

Parker

Corp., Boston.

Business—An

open-end diversified management company.
4

Iowa Electric Light &

Rapids,
March

filed

13

stock

(par

(par $5).
used

108,834 shares

925,000

and

$50)

These

retire

to

Cedar

Power Corp.,

Of¬

•

Street, Ashland, Wis.

cumulative preferred
of common stock

of

stocks, along with cash, will be
shares of series A 7% preferred

new

49,290

stock. 15.605 shares of series B 6Vz%

preferred stock and
43,939 shares of series C 6% preferred stock. All unissued
shares will be offered by underwriters. Underwriters—
The First Boston Corp., New York, and G. H. Walker
& Co., Providence, R. I.
Proceeds—Will be used to
redeem unexchanged shares of old preferred stock at
$102.50 per share.
Iowa

Public

Service

Co.

(5/22)

Feb. 21 filed 50,000 shares of cumulative preferred stock

*

(par $100). Underwriter—To be determined by competi¬
tive bidding.
Probable bidders: A. C. Allyn & Co.;
Harriman Ripley & Co. and Merrill Lynch. Pierce, Fenmer & Beane (jointly); Kidder, Peabody & Co. and Blyth
& Co.
(jointly); Equitable Securities Corp.; Lehman
Brothers; White, Weld & Co.
Proceeds—For payment
of bank

loans

Jamaica

and

for

Water

construction.

Supply Co.

Feb. 17 filed 50,000 shares of

Expected May

common

Common stock

1,

offered to common' stockhold¬

was

of record March 7 at $21.50 per share on basis of one
new for two
shares held (rights to expire March 22).
ers

•

common
stock:
Blyth & Co., Inc.
syndicate. For bonds: Names to be determined by
competitive bidding. Probable bidders for bonds: Halsey,
Stuart & Co. Inc.; White, Weld & Co.; Blyth & Co., Inc.;
W.
C.
Langley & Co. and Union Securities Corp.
(jointly); Kidder, Peabody & Co.: Carl M. Loeb, Rhoade«
& Co.
Bids—For purchase of bonds will be received

up to noon (EST) on March 20 at the New York Trust
Co., 100 Broadway, New York, N. Y.
Proceeds—To
redeem as of May 1, 1950, $5,745,000 first mortgage 3%%
bonds, series A, and $1,250,000 first mortgage 3%%

bonds, series B, to repay bank loans, and for construc¬
other corporate purposes. Statement effective

tion and
March

10.

Kansas City

Power & Light Co.

Mountain

share to United Light

per

March

23

on

the

basis

of

stockholders

three

shares

of

of

to

expire April 20.

Lincoln

record

Kansas

stock for each five shares of United stock held.
are

City

Rights

Underwriters—None.

Telephone

&

Telegraph

Co.,

Lincoln,

Nebraska
March

2

(letter of notification)

15,000 shares

Exchange via Delafield & Delafield.

June 27.
Radioactive

par

ing

Mich.

Remington Rand Inc.

March

record

27

at

the

Feb. 20
stock

rate

for each five shares; rights to expire, about April
Underwriter—None.
Price—At par ($100 per share).

National
14

Research Corp.,

Rotella
Feb.

tal.

Cambridge, Mass.

4,000 shares of common
stock (par $1), to be offered at the market price for the

tal

stock

ceeds

are

5

cents

2

No underwriter.

filed

underwriter.

Public

Service

Co.

of

com¬

•

Lit

Pa.

$6,000,000 sinking fund debentures (sub¬
March 1, 1970.
Price—To be filed by
amendment.
Underwriter—Group to be managed by
A. G. Becker & Co., Inc. Proceeds—To retire $5,987,000
of 6% preferred stock.
due

Lone Star Steel

Jan.

25 filed 592,185

Co., Dallas, Tex.
shares of

common

to be offered to common stockholders

(3/20)
stock

on

a

(par $1).

two-for-five

basis.
Price—$4 per share.
Underwriters—Straus &
Blosser, Dallas Rupe & Son, and Estabrook & Co. Pro¬
ceeds—To build

cast iron pressure

pipe foundries (esti¬

mated to cost $1,250,000) and to discharge part of current
indebtedness. Expected either March 17 or 20.

Lowell Electric Light Corp.,
Dec.

30 filed

Offering—To

stockholders at the rate of
shares

held.

one

new

Underwriter—None.

Proceeds—To

repay

bank

loans, for construction and to make further im¬
provements.

Lytton

(Henry C.)

& Co., Chicago, III.

March 1

(letter of notification) 7,000 shares of common
stock
(par $1).
Price—$8 per share.
Underwriter—
Straus & Blosser, Chicago, 111. Proceeds—To two selling
stockholders.

shares

stockholders at

offered

common

common

National
Webber,

Curtis, Boston.

shares are either held in the treasury or will be re¬
acquired. The maximum number of shares which can be
sold under this plan in a five-year period is 598,700, or
5% of the outstanding shares.
Proceeds—For general

funds.

stock (par $20)
each

Slick Airways,

to
10

the rate of

one

for

Feb.

it

is

entitled.

will be

(par $10), into which the debentures will be convertible.
Underwriter—Fridley & Hess, Houston. Proceeds—For

underwriter, but any
stockholder with a subscription
paid 25 cents per share. Price—To be filed by

amendment.

helping

a

Proceeds—For

general corporate purposes.

construction.

South

Nov.

pre¬
ferred stock and 40,000 shares of common stock (par $1).
Price—At par.
Underwriter—None. Proceeds—If paid

of

Herman

B.

Pilger,

&

first

will be returned.
Rigi Avenue,

at

per

share

on

the basis of

one

Price—At par.

Corp. (jointly); Carl M. Loeb, Rhoades & Co.; Halsey,

shares of 6% preferred stock.

standing. and 640,957

shares,

78.17%

or
•

of the 620,000

3%%

bonds.

Expected this

Southern New England

Telephone Co.

shares of common capital stock (par

Standard-Thomson Corp.

share

1

(letter of notification) 21,500 shares of common
price of about $4.50 per

by Reginald N. Webster (President), Lillian M.
and John M. Kimball, Lincroft, N. J., and

Webster

Audrey J. Webster, Greenwich, Conn.

Underwriters-

Lee

>

Higginson Corp., Carreau & Co.! apd Reich&Co,,
New York. 1
" • ■'
V*'
•

pay

bank loans made for construction purposes. Ameri¬
can Telephone & Telegraph Co., parent, owns 3,732,493
shares, or 91.75% of the 4,068,165 common shares out¬

and

stock to be sold at the market

Feb. 23 filed 814,694 shares of common stock (par $100)
to be offered common and preferred stockholders of rec¬

shares of $100 par value cumulative preferred
stock (par $100).
Underwriters—Names to be deter¬
mined by competitive bidding. Probable bidders: Drexel
& Co.; Harriman Ripley & Co. and Union Securities

3%%

construction.

Telephone & Telegraph Co.

Jan. 20 filed $7,000,000 of first mortgage bonds, due 1980,

$22,200,000 first and refunding mortgage
1979.
Underwriter—Names by amendment

mortgage

Feb.

for each six
Underwriter—None.
Proceeds—For Construction, and to re¬

Columbia,

28, 1950, at the rate of one new share for each seven held.
Rights will expire April 21, 1950.
Underwriter—None.
Price — At par.
Proceeds — To repay advances from
American Telephone & Telegraph Co. and for further

new

shares held; rights expire April 21.

Co.,

$25) to be offered common stockholders of record March

fective March 14.

Pacific

Gas

filed

March 9 filed 400,000

Electric Co.

share for
each five shares held.
Rights will expire. April 5.
Underwriters—To be named by amendment. Nationwide
group may be headed by Blyth & Co., Inc. Proceeds—
To finance in part construction program. Statement ef¬
$30

&

month.

218

Feb. 23 filed 1,656,156 shares of common stock (par $25)
to be offered to common stockholders of record March
14

Electric

(probably Halsey, Stuart & Co. Inc.; Kidder, Peabody &
Co.; The First Boston Corp.; Union Securities Corp.).
Proceeds—To
redeem
a
like amount of outstanding

•

Pacific Gas

22

bonds, due

subscriptions for $150,000 are received, proceeds will be
used for capital funds for the proposed corporation;
Office—Care

Carolina

South Carolina

Onondaga Hardware Co., Inc.
March 6 (letter of notification) 20,000 shares of

otherwise subscriptions and payments

Inc., San Antonio, Texas
$194,000 of 4% convert¬

(letter of notification)

income debentures, due 1957 (non-interest bearing
until March 1, 1952), and 19,400 shares of common stock

Underwriter—No

NASD member

10

ible

held. Standard Gas & Electric Co., owner of 550,041
shares, plans to subscribe to the 55,004 shares to which

and 30,000




Boston, Mass.
notification) 700 shares of

Oil Corp.
598,700 shares of common stock (no par) to
be offered to officers and employees of the company
and subsidiaries under a stock purchase plan.
These

ord March 21, 1950 at the rate of one share

Metropolitan Edison Co.

Association,

(letter of

Jan. 27 filed

Syracuse, N. Y.

share for each three

27

Sinclair

Lowell, Mass.

55,819 shares of capital stock (par $25).
be offered at $35 per share to common

($1 each).
Underwriter—Dempsey
Co., Los Angeles.
Proceeds—For working
Office—607 S. Hill Street, Los Angeles.

&

Jackson &

now

March 13 filed

ordinated)

(letter of notification) 65,000 shares of common
Price—Par

Oklahoma Gas & Electric Co.
be

Brothers, Philadelphia,

Downing Street, Newark, N. J.

stock (no par) to be sold at $16 per share by the
Shawmut Bank of Boston. Underwriter—Paine,

$12,000,000 first mortgage bonds series E,
due 1980. Underwriter—Names to be determined by com¬
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; Blyth & Co., Inc., Central Republic Co., and Merrill
Lynch, Pierce, Fenner & Beane (jointly); Union Secur¬
ities Corp.; First Boston Corp.; Harriman Ripley & Co.,
Inc.; Lehman Brothers and Bear, Stearns & Co. (jointly);
White, Weld & Co.; Equitable Securities Corp. Proceeds
—To pay for construction costs.
Bids—To be received
up to 11 a.m. (CST) on March 28 at Harris Trust and

March 6 filed 97,900

con¬

Radio

Shawmut
Feb.

(3/28)

pansion.

19

Tegeler
capital.

Savings Bank, 115 West Monroe Street, Chicago, 111.

stock (par $16.66%). Price—$20 per share. Under¬
writer—None.
Proceeds—For working capital and ex¬

(N. J.)

(letter of notification)

stock.

No

mon

share).

Service Finance Co., Los Angeles, Calif.

diversified, open-end investment trust.

Indiana

15

Dec.

Pro¬

Investors Trust, Boston, Mass.
100,000 shares of beneficial interest.

A

market

open

per

Corp., Evanston, III.
40,000 shares of common
(par $1). Price—$6.50 per share. Underwriters—
Sulzbacher, Granger & Co., New York. Proceeds—For
working capital.

to settle with the Reconstruction Finance Corp.

Northeast
March

share.

per

the

stock

Majestic Mining Co., Provo, lltah
(letter of notification) 100,000 shares of capi¬
at

Beverages, Inc.

Office—45

Feb.

Coolidge and others. Underwriter—
Paine, Webber, Jackson & Curtis, Boston.
Office—70
Memorial Drive, Cambridge, Mass.
New

in

employees at cost ($11.25

(letter of notification) $100,000 10-year 5%

Sentinel

account of Clara A.

•

17

26,600 shares of common

be.purchased

to

vertible income debentures, at par, in New Jersey only.
No underwriter.
Proceeds for additional working capi¬

(letter of notification)

March 7

(letter of notification)

(par 500),

resold to

and

Proceeds—To pay indebtedness to its parent, American
Telephone & Telegraph Co., and for corporate purposes,
including construction.

Feb.

Products, Inc., Detroit, Mich.
75,000 shares of common stock to be offered at
($1 per share). No underwriter. Proceeds for work¬
capital. Office—3201 E. Woodbridge St., Detroit 7,

March 1

Telephone & Telegraph Co.
183,918 shares of capital stock, to be

stockholders of

Proceeds—To Wal¬

Mack, Jr., President.

Power Petroleum Ltd., Toronto Canada
April 25 filed 1,150,000 shares ($1 par) common of which
1,000,000 on behalf of company and 150,000 by New York
Co., Ltd.
Price—50 cents per share.
Underwriters—
S. G. Cranwell & Co., New York. Proceeds—For admin¬
istration
expenses
and drilling.
Statement effective

one

23.

S.

ter

Feb. 23 filed

March 3 filed 1,904,003 shares of common stock (no par)
to be offered by United Light &, Rys. Co., Chicago, at

$12

to

through Delafield &

stock

States

filed

Northern

(4/21)

Co., Inc.
notification) 1,000

6

10

the New York Stock Exchange

Pepsi-Cola Co.
28 (letter of notification) 3,500 shares of capital
(par 33%0). Price—At market (about $11.50 p$r
share). Underwriter—To be offered on New York Stock

R.)

Monongahela Power Co. (3/28)
Feb. 23 filed 60,000 shares of cumulative preferred stock,
series C (par $100).
Underwriter—Names to be deter¬
mined by competitive bidding. Probable bidders: Blyth
& Co., Inc.; Drexel & Co.; Harriman Ripley & Co., Inc.
and Union Securities Corp. (jointly); Lehman Brothers;
Carl M. Loeb, Rhoades & Co.; Kidder, Peabody & Co.;
Smith, Barney & Co., and Goldman, Sachs & Co. (joint¬
ly); Glore, Forgan & Co., and W. C. Langbey & Co.
(jointly). Bids—Expected about March 23. Proceeds—
For construction expenditures.

Underwriter—For
heads

(Walter

(letter of
shares of 6%
share). Un¬
derwriter—George D. B. Bonbright & Co., Binghamton,
N. Y. Proceeds—To assist in acquisition of 1216 shares
of company's common stock.

of

stock (no par) and

on

Delafield, New York City.

cumulative preferred stock at par ($100 per

March

Pepsi-Cola Co.

Feb.

Miller

offered

(3/20)

$7,995,000 first mortgage bonds, series C, due March
1975.

22.

debts, buy new equipment and provide
Office—928 E. 13th St., Tempe, Ariz.

8
(letter of...notification) 750 shares of capital
(par 33V30) to be offered by Walter S. Mack, Jr.,
President, at Market ($11.62V2 per share). To be offered

—

March

to pay

stock

on a
one-for-five basis.
Underwriter
Clark,
Dodge & Co. Proceeds—To pay notes and for additional
working capital.

shares

earlier.

March

Middlesex Water Co., Newark, N. J.
Feb. 9 (letter of notification) 5,200 shares of common
stock to be offered to common stockholders at $50 per
share

Iowa

are

working capital.

per

for construction.

or

Enterprises, Inc., Tempe,

(letter of notification) 100,000 shares of class A
caiptal stock at par ($1 per share). No underwriter. Pro¬

March

held at $21

10

Expected March 27

Palmer Agriculture
Arizona

(par $1
Under¬

March 6

Feb.

mon

Nepheline Mining Co., Ltd.
1,000,000 shares of capital stock
funds). Price—40 cents per share.

filed

21

Canadian

March 13 filed 985,658 jhare's of common stock (par $5).
Underwriter—The

Thursday, March 16, 1950

writer—F. W. Macdonald & Co., Inc., New York . Pr6ceeds—For mining costs.
Business—Mining nepheline

share.

Incorporated

:

& Co. Inc. (bonds); Kidder, Peabody & Co.;
White, Weld & Co. (bonds); Lehman Brothers (bonds);
Kuhn, Loeb & Co. (bonds); Smith, Barney & Co. and
Goldman, Sachs & Co. (jointly on preferred); Glore,
Forgan & Co. and W. C. Langley & Co. (jointly on pfd,).

7

tron and its subsidiaries.
•

CHRONICLE

Stuart

43

page

FINANCIAL

&

Corp., N. Y. City •';
March 8 (letter of notification) 15,000 shares of com¬
mon stock
(par 200). Price—$1 per share. Proceeds—
To selling stockholder.
Office—420 Lexington Avenue,
New York, N, Y.
•

•

Stanwood Oil

Volume

171

State

'Number

4890

THE

Bond

& Mortgage Co., New Ulm, Minn.
$500,000 of series 1305 investment certifi¬
cates; $1,000,000 of series 1207-A accumulative savings
„

Feb.

27

filed

certificates, and $10,000,000 of Series 1217-A accumula¬
tive

savings certificates.

No underwriter.

An investment

company.

Sudore Gold

June

7

filed

Mines Ltd., Toronto,

375,000 shares of

per share (U. S. funds). Underwriter — None. Proceeds
■—Funds will be applied to the purchase of
equipment,

road

construction, exploration and development.

Teco, Inc., Chicago
Nov.

21

filed

100,000 shares ($10 par) common stock.
Offering—These shares are to be offered to holders oi

common stock in

for each

five

Zenith Radio

Corp. at rate of one share
Underwriter—None. Proceeds—For

held.

working capital and the promotion of Zenith's "Phonevision" device, whereby television users could
pay a
special fee for costly television programs
by calling the
telephone company and asking to be plugged in.
•

Tennessee Gas Transmission Co.

March

filed 100,000 shares of cumulative
preferred
stock
(par $100).
Price—To be filed by amendment.
Underwriters—Stone & Webster Securities Corp. and

White, Weld & Co., New York.
to

general funds for

use

in

Proceeds—To be added

construction.

Texas Gas Transmission
Co., Owensbcro,
March 9 filed 213,306 shares of common stock

Ky.
(par $5),

owned
&

by

10

stockholders.

Co., Inc., New York.

Underwriter—Dillon, Read

Price—To

be

filed

by amend¬

ment.

Texas Utilities Co.

(3/21)
Feb. 16 filed 400,000 shares of common stock
(no par).
Underwriter—To be determined by competitive

bidding.

Probable bidders: Blyth & Co., Inc. and The First Bos¬
ton

Corp. (jointly); Lehman Brothers; Goldman, Sachs
Ripley & Co., Inc. (jointly); Union
Securities Corp.; Merrill Lynch,
Pierce, Fenner & Beane
and Kidder,
Peabody & Co. (jointly); First Southwest
Corp., Rauscher, Pierce & Co. and Dallas Union Trust
Co. (jointly).
Bids—To be received by 11 a.m. (EST) on
&

Co. and Harriman

March 21

at offices

of company, Room

Street, New York, N. Y.
stock

investments

March

in

2033, Two Rector

Proceeds-*-To increase

subsidiaries.

Statement

common

effective

6.

Texmass Petroleum Co.,
Dallas, Texas
Jan. 13 filed. $3,000,000 of 42/2% senior cumulative
terest

debentures

1965; $1,200,000 of 5% junior
income debentures due
1970; 32,000 shares of $5 class A
cumulative preferred stock (no
par), with no rights to
dividends until 1956; 52,000 shares of $5 class B cum¬
ulative

preferred stock (no par), with no rights to
dividends until 1956; and 2,000 shares of common stock
(no par), represented by voting trust
certificates; to be

issued

under

plan of debt adjustment.

a

Any interest
payable on debentures must first be approved by RFC,
which recently loaned the
company $15,100,000.
Unde**
writer—None.

Feb.

Business—Oil production.

Representatives,

Inc.

•—None.

Purpose—For development of
financing foreign
Office—250 Park Avenue, New
York, N. Y.
Offering—Expected April 4.

shipments.

Feb.

Thermo

Control

Co.

21

(letter of notification) 20,000 shares of common
(par $1) to be sold by William Hecht,
Minneapolis.
Underwriters—Harris, Upham & Co., Minneapolis, and
Piper, Jaffray & Hopwood. Price—$3 per share.,
stock

&

Co.

&

common

(par

10c).
Price—$1 per share. Underwriter—
George J. Martin Co., New York.
Proceeds—For addi¬
tional
working capital.
Business—Assembles
a
coin
operated combination television and phonograph. Office

—701—7th
this

Avenue, New York, N. Y.

Expected end of

month.

•

Wall

Street

Inyesting Corp.,

March 6 filed

N. Y. City

200,000 shares of capital stock.
Business—An investment
company.
West Virginia Water Service

No under¬

writer.
•

Co.,

6

(letter of notification) subscription warrants
17,647 shares of common stock (no par) and a like

for

number of shares to be issued
upon exercise of the war¬
rants at $16.75 per share.
Warrants issued to stockhold¬
ers of record March 13 to

expire March 27, to subscribe
on a 1-for-14 basis.
Underwriters—Shea & Co., Inc., Bos¬
ton, and Blair F. Claybaugh & Co., New York, to head a
group of 30 dealers. Proceeds—For construction.
Western

Uranium

Cobalt

Mines,
Vancouver, B. C., Canada

Feb.

28

800,000 shares of common
capital stock
Price—35 cents per share.
Underwriter—None.

Proceeds—Exploration

Westinghouse
March

Ltd.,

filed

(par $1).

and

development

Electric

work.

Corp.

2

filed 500,000 shares of common
stock
(par
to be offered to employees under
company's
employee stock plan.
Underwriter—None.
Proceeds—
For general corporate
purposes.

$12.50),

Prospective Offerings
American Can
March
of

3

be

bank loans and to pro¬

announced

long-term

Co., New York, N. Y.
company

financing

for

is considering

a

program

working capital. Probable
Underwriters:
Morgan Stanley & Co.; Clark.
Dodge &
Co.; F. S. Moseley & Co.




Columbia
March 4 it
refund

Gas

System,

Inc.

reported that in

was

$77,000,000

of

reclassifying 500,000
par) into 500,000
(par $50).

(no

stock

case

company decides to

outstanding

3Vss, such operation
also involve retirement of $14,000,000 serials issued

may

under same indenture.
&

Co.

Inc.; Morgan

Probable bidders:

Stanley

&

Co.;

Halsey, Stuart.
Lehman Brothers;

Salomon Bros. & Hutzler; Merrill
Lynch, Pierce, Fenner
& Beane.

Commonwealth Edison Co.,
Chicago

announced

units) will be sold publicly.
•

stock

common

Natural

Gas Corp.
unexchanged new 3%% preferred
(issuable in exchange for 6% preferred
stock,
for share, under proposal to
split company into two

6

stock

shares of unissued

shares of unissued preferred

bonds, the proceeds

(jointly); Union Securities Corp.; Smith, Barney

Arkansas
Feb.

•

Columbia Gas
System, Inc.
April 27 stockholders will vote on

considering offering of

first mortgage 3%

Brooklyn Union Gas Co.

March 8 company announced it
plans to issue $8,000,000
of mortgage bonds and sell
186,341 shares of convertible

have

value of $40 per
share. Latter will be offered for
subscription to common
stockholders on a one-for-four basis and
may be under¬
may

a

par

Dec.

it

13

was
indicated that $90,000,000 additional fi¬
nancing will be necessary for the period 1950-1953 to
cover in part a construction
budget of $290,000,000. Prob¬
able bidders:
Halsey, Stuart & Co. Inc.; The First Boston
Corp.; Glore, Forgan & Co.
,

•

Dayton Power & Light Co.
7 said to be
planning sale, probably in May or
June, of $7,500,000 each of common and preferred stocks.
March

Probable

written

underwriters: Morgan
Stanley & Co.; Lehman
Brothers; W. E. Hutton & Co.

and

El Pasc Natural Gas Co.
March 2 announced
company will issue and sell
tion to private
financing)

by Blyth & Co., Inc. and F. S. Moseley & Co.
Probable bidders for bonds include:
Blyth & Co., Inc.
and F. S.
Moseley & Co. (jointly); Merrill Lynch, Pierce,
Fenner & Beane; Lehman
Brothers; Kuhn, Loeb & Co.
&

Lazard

Freres

&

Co.

(jointly); Harriman, Ripley

Co., Inc. and First Boston Corp. (jointly).

Carolina, Clinchfield
Feb.

4

reported

& Ohio RR.

planning

company,

of

Proceeds to pay notes due to Louisville &
Nashville RR.

Carolina
10

cost

Natural

Gas

cost

of

new

construction

$7,332,200, to be financed by sale of

common

stock and debt securities.
•

Celanese

April

12

Corp.

of

stockholders

America

will

be

asked

creation

of 1,000,000 shares of a
(par $100), 505,000 snares of which

time.
year,

to

authorize

preferred

new

the

stock

be issued at any
formulated for the issuance this

Plans^ are being
if market conditions

initial series of this

an

be convertible into

are

new

common

can

considered

satisfactory, of

preferred stock which
stock.

may

Net proceeds would

be used in part for expansion of the
business, including
additional production facilities.
Probable underwriters:

Central
March

1

it

States

was

Electric

announced

Corp.

that

under

amended

an

plan

reorganization it is propd&d to issue to holders of all
classes of 6% preferred stock for each old share the
right

buy

a

unit consisting of eight shares of

new

common

stock and $14

prirtcipal amount of new 4^2% income de¬
bentures for a package price of $18. The common
stock,
except for approximately 4,600,000 shares held by Harri¬
son Williams and
associates, would be offered the right
to buy a unit of one new common share and
$1.75 of new
income debentures for
common

shares

a

package price of $2.25 for each

held.

The

issue

of

new

stock

and

debentures would be underwritten by Darien
Corp. and
a
banking group headed by Hemphill Noyes, Graham,
Parsons & Co., Shields & Co., Blair, Rollins &
Co., Drexel
& Co. and Sterling Grace Co.

Chicago,

Burlington

& Quincy RR.
March 7 it was reported that this road
may later this
year be in the market for $25,000,000 in new bonds to
provide for retirement of $12,500,000 of
outstanding 4V2S

of

1977 and

make

Power & Light Co.
McGregor Smith, President, said company
plans
spend $18,000,000 in 1950 for construction. The
fol¬
lowing have groups to bid on the 191,590 shares of com¬

available

the

balance

bidders:
Halsey, Stuart
Stanley & Co.; Lehman Brothers.

&

as

Co.

new

Inc.;

capital.

Morgan

July 1, 1952. Re¬
funding of the first and refunding mortgage 4V4%
bonds,
series A, due Sept. 1,
1962, is also said to be a

Lynch, Pierce,
Beane; Glore, Forgan & Co.; Union Securities

Corp.
Gatineau Power Co.
Feb. 6 announced courts had ordered
that at least
000 of common stock held

$5,000,by International Hydro-Electric
System be disposed of by trustee of latter. First Boston
Corp. as financial adviser to Gatineau has been
engaged
to develop a plan for
liquidation of International.
•

General Motors

March

15

company

amount of

from

new

21

re¬

classify and change 1,000,000 shares of its unissued com¬
stock (no par) into 1,000,000 shares of
unissued pre¬

mon

ferred stock (par $50).
tional equity

While it is anticipated that addi¬
financing of the construction program will
be required in 1950, it has not been determined
whether
or not
part of such requirements should be obtained from
the sale of preferred stock. Such determination will
be
made when the
financing "is closer at hand." The com¬

pany's program currently calls for the sale of
$10,000,000
of additional common or
preferred stock and $17,000,000
of debentures to finance its
expansion program. Under¬
writers—May be named by competitive bidding, Prob¬
able bidders for equities:
Blyth & Co., Inc.; Shields & Co.
and R. W. Pressprich & Co.
(jointly); Merrill Lynch,
Pierce, Fenner & Beane; Lehman Brothers,

Goldman,

reported to

financing (said to be

be

seeking

around

Power

large

a

$300,000,000)

Co.

company reported to be

planning $6,000,000 ad¬
ditional financing before the end of
1950 (in addition to
$15,000,000 of bonds soon expected to be
offered); $18,000,000 more in 1951 and $16,000,000 more in 1952.
•

Green

Mountain

Power Corp.
plan of reorganization filed with SEC
of approximately
100,000 shares of
new common stock for cash to the
public through under¬
writers, subject to prior subscription rights by
present
preferred stockholders. Hearing March 28.
Exemption
from competitive
bidding has been requested. Probable
underwriters: Harriman,
Ripley & Co., Inc.; Goldman,
March 7 amended

provides

Sachs

for

&

Co.

working

sale

Proceeds—To

retire

4V4%

notes

and

for

capital.

Gulf States

Utilities Co.

Feb. 16 reported company
may offer
stock and $13,000,000 "new

$7,500,000 preferred
money" bonds later in April
May, this year. Probable bidders for bonds:
Halsey,
Stuart & Co. Inc.; Blair, Rollins &
Co., Inc. and Carl ML
Loeb, Rhoades & Co. (jointly); The First Boston
Corp,;:
Equitable Securities Corp. and Union Securities
Corp.
(jointly); Glore, Forgan & Co.r'Kidder, Peabody & Co.,

or

20

vote

on

to

Watcli Co.

announced

that stockholders on
April 20 will
proposal to authorize the directors to incur up
$3,500,000 of indebtedness on a long-term basis, so as
a

to place the
company in a position to do such
when deemed necessary.

financing

Idaho Power Co.
Feb. 7 T. E.

additional
up to

Roach, President, said company plans to seli

4%

preferred

stock

later

this

year

to

raise*

$4,000,000 to finance, in part, its 1950 construction

program.

Traditional

underwriters:

Blyth & Co., Inc.',

Wegener & Daly Corp., Boise, Idaho.
Illinois

authority to

Acceptance Corp.

was

banks and private institutions.

Georgia

System, Inc.

17 company applied to the SEC for

of

American Power &
Light Co.
plan: Blyth & Co. Inc.; Dillon, Read & Co.
Inc.; Lehman
Brothers; First Boston Corp.; Merrill

possibility.

Probable bidders: Halsey, Stuart & Co. Inc.;
Morgan
Stanley & Co.; Lee Higginson Corp.; Harris, Hall & Co.
(Inc.); Drexel & Co.; Kuhn, Loeb & Co. and Salomon
Bros. & Hutzler (jointly);
Harriman, Ripley & Co., Inc.;
First Boston Corp.; Lehman
Brothers; Paine, Webber,
Jackson & Curtis; Kidder,
Peabody & Co.
Gas

consummation

upon

Feb.

Jan. 31 reported
company will probably issue in the near
future some bonds to refund the 4%
non-callable con¬
solidated first mortgage bonds due

Columbia

stock which Electric Bond & Share
Co. will receive

mon

Hamilton

Chicago & Western Indiana RR.

Feb.

12

to

Feb.

of

to

Florida

Fenner &

Corp.

told FPC

company

(in addi¬
$6,500,000 convertible second
stock, first to stockholders.
Underwriter
White, Weld & Co. Proceeds—For construction
purposes.
Expected in April.
preferred

Jan.

sale

$3,885,000
mortgage bonds. Probable bidders: Halsey, Stuart & Co.
Inc.; First Boston Corp. and Kidder, Peabody & Co.
(jointly); Dick & Merle-Smith; R. W. Pressprich &
Co.;
Harriman Ripley & Co. and Drexel & Co.
(jointly).
•

•

—

Proceeds—
retire bank loans of
$14,625,000, and to pay part of
cost of conversion from manufactured
to natural
gas.
To

Probable

Charleston,

West Virginia
March

to

Fenner & Beane.,

Co.

Co.; Equitable Securities Corp.

five

Videograph Corp., N. Y. City
Feb. 2 (letter of
notification) 300,000 shares of
stock

reported

company
new

Gas

The sale of these bonds
is contingent upon approval
by SEC and favorable Court
action on Arkansas Natural Gas
Corp.'s plan to split
itself into two new
companies. Probable bidders: Halsey,
Stuart & Co. Inc.; First Boston
Corp. and Lazard Freres

March

S.

Louisiana

to be used to
repay $21,125,000
vide additional
working capital.

(4/4)

1
(letter of notification) $300,000 10-year 6!/2%
debentures, due April 4, 1960. Price—Par. Underwriter

sey, Stuart & Co. Inc.; Salomon Bros. &
Hutzler; Morgan
Stanley & Co.; Lehman Brothers; Merrill
Lynch, Pierce,

years

Dillon, Read & Co. Inc.

United

U.

6

$27,500,000

will

in¬

45

gan

years). Probable bidders: Halsey, Stuart &
Inc.; Union Securities Corp.; Salomon Bros. & Hutzler; First Boston Corp.; Harriman Ripley &
Co., Inc.

March

due

(1137)

Sachs & Co. and Union Securities
Corp. (jointly); Mor¬
Stanley & Co. Probable bidders for debentures: Hal¬

$27,-

Co.

preferred stock which

•

CHRONICLE

l-to-20

or

share

14

FINANCIAL

•

Arkansas

Price—$1

&

American Gas & Electric Co.
March 3 announced
company plans in May to sell
000,000 of serial notes (to mature either in l-to-15

Canada

stock.

common

COMMERCIAL

Feb.

24

Power

Co.

reported

planning the issuance of $15,000,000
first mortgage bonds.
Probable bidders include:

Halsey,

Stuart & Co. Inc.; White, Weld & Co. and Merrill
Lynch!,
Pierce, Fenner & Beane (jointly); Harriman Ripley &
Co.,' Inc. and Glore, Forgan & Co. (jointly); Union Se¬
curities Corp.; Kuhn Loeb &
Co., and Lazard Freres &
Co. (jointly). Expected in
April.
Indiana
Feb.

27

&

Michigan

Electric

Co.

reported to be contemplating the
issuance and sale of $20,000,000 first
mortgage bonds in
June or July, the proceeds to finance construction
pro¬
gram. Probable bidders: Halsey, Stuart & Co.
Inc.; First
Boston

company

was

Corp.; Union Securities Corp.; Harriman Ripley

Continued

on

page

46

'

46

THE

(1138)

Continued

from

page

COMMERCIAL

FINANCIAL

&

CHRONICLE

with other funds, will be used to finance the company's
construction program. Probable bidders for the deben¬

45

Thursday, March 16, 1950

program will be financed initially by bank
will be refunded later through the sale of

loans, which
bonds.
The

1951

of $5,000,000

& Co., Inc. Possible refunding of privately held $22,500,000 3y4% first mortgage bonds is also said to be under

First Boston Corp.; Kidder, Peabody & Co. Offering of

additional

consideration.

stock expected in May and

under preemptive rights.
Probable bidders for bonds:
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc., and Kidder,
Peabody & Co. (jointly), and The First Boston Corp.

•

Interstate

Power

tures:

Co.

Halsey, Stuart & Co. Inc.; Blyth & Co.. Inc.: The

May 2 stockholders will vote

Feb.

50,000 shares

at competitive

on authorizing an issue of
preferred stock (par $25). Company
planning to issue in late Spring $0,000,000 of bonds.
A group headed by Merrill Lynch, Pierce, Fenner &
Beane and Kidder, Peabody & Co. has been formed to

of

also

bid

on

•

Investors Telephone

March
term

the latter issue.

31

borrowing of

up

Co.

will

stockholders

vote

approving

on

long-

to $6,000,000, the proceeds to be

used to redeem $2,320,500

first lien collateral 3% bonds
1961, $359,000 first mortgage 3ys% bonds of Platte
Valley Telephone Corp., a subsidiary, and $150,000 of
bank loans, with the remainder added to working capi¬
tal.
•

Iowa

Electric Co.

10

reported that early registration with SEC is

expected of
and

offering of about $18,000;000 preferred

an

stocks through a negotiated deal.

common

Probable

underwriters: First Boston Corp. and G. H. Walker & Co.
Kansas City Power &

Light Co.

Additional

public
financing will be necessary by
probably $20,000,000 of funded securities.
Probable bidders for bonds: Halsey, Stuart & Co. Inc.;
The First Boston Corp.; Glore, Forgan & Co. and W. C.
Langley & Co. (jointly); Lehman Brothers and BearStearns & Co.
(jointly); Equitable Securities Corp.;
Kuhn, Loeb & Co.; Salomon Bros. & Hutzler and Union
Securities Corp. (jointly); Shields & Co. and White,
Weld & Co. (jointly); Smith, Barney & Co.

mid-year,

•

Keyes Fibre Co.

planning issuance of a new
preferred stock and redemption of two present preferred
issues;

Knott Corp., New York, N.

Y.

March 2 the directors authorized discussion with

Hayden,
Stone & Co. as principal underwriters of a proposed of¬
fering of 100,000 shares of new unissued $5 par common
stock, subject to approval on March 20 by stockholders
of proposed plan of recapitalization and change in name
to Knott Hotels Corp. Proceeds will be used to reimburse
treasury for capital expenditures already made and to
increase working capital.
Laclede Gas Light Co.
On

Feb.

stockholders

14

voted

to

authorize

a

new

ders; The First Boston Corp. and Blyth & Co., Inc. (joint¬
ly); Smith, Barney & Co. and Goldman, Sachs & Co.
(jointly); Lehman Brothers, Merrill Lynch, Pierce, Fen¬
ner & Beane and Reinholdt & Gardner (jointly); Harriman Ripley & Co.; White, Weld & Co.
Proceeds—To be
used to finance part of $20,000,000 construction program
planned over the 1950-1953 period.
Louisiana Power & Light Co.

Feb. 6 reported company may sell between

$4,000,000 and

$6,000,000 of bonds, and refund the outstanding $6 pre¬
ferred stock.
Probable bidders: W. C. Langley & Co.
and First Boston Corp. (jointly); Halsey, Stuart & Co.
Inc.; Merrill Lynch, Pierce, Fenner & Beane and Kidder,
Peabody & Co. (jointly); Kuhn, Loeb & Co., and Leh¬
man Brothers (jointly); Shields & Co. and White, Weld
& Co. (jointly); Salomon Bros. & Hutzler; Blyth & Co.,
Inc.; Harriman Ripley & Co., Inc.

Mississippi River Fuel Co.

March 10 reported that early

expected of
mon

stock

basis.

an

to

Union

Securities

registration with SEC is

stockholders

24 reported

on

a

one-for-four

Montana Power Co.

reported the company may issue in a few months
approximately $22,000,000 in new securities, which may
include bonds and debentures and possibly some addi¬
tional common stock. Financing of $10,000,000 or more
in bonds may be undertaken in May.
The proceeds are
to be used for expansion and extension of its gas and
electric lines. Probable bidders for bonds: Halsey, Stuart
& Co. Inc.; Blyth & Co., Inc.; Union Securities Corp.;
Merrill Lynch, Pierce, Fenner & Beane; Smith, Barney
& Co.; First Boston Corp.; Lehman Brothers.
New York Central RR.

reported that offering of $9,000,000 equipment
trust certificates is expected early in April. Probable
bidders: Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutz¬
ler; Harriman Ripley & Co., Inc. and Lehman Brothers
(jointly). Expected in April.
Gas

20-year debentures and to sell 304,500 shares of common
stock on the basis of one share for eight shares now

outstanding,

the

latter to




Co.

Feb. 16 directors approved, subject to ICC approval,
offer to stockholders of record March 10, 1950 of

the
the

who named

Hutzler

associates

and
a

awarded

the

issue

March

on

9

3% coupon and $735,688.20 as underwriting

compensation to be paid by company.
Pacific Power & Light Co.
March

7 the company expects to issue and sell some
$12,000,000 bonds about the middle of April. Probable
bidders: Halsey, Stuart & Co. Inc.; Kidder, Peabody &
Co.; W. C. Langley & Co. and The First Boston Corp.
(jointly); Union Securities Corp., Equitable Securities
Corp. and Salomon Bros. & Hutzler (jointly); Blyth &
Co., Inc., White, Weld & Co. and Harris, Hall & Co.
(Inc.) (jointly); Carl M. Loeb, Rhoades & Co.; Lehman
Brothers. Proceeds would be used to pay off bank loans
and to pay for new construction costs.
•

writers: Morgan Stanley &

•

Spencer Chemical Co.

March

10 company reported planning issue in April of
200,000 shares of common stock with Glore, Forgan &
Co. and

Kidder, Peabody & Co. as underwriters.

Texas-Illinois Natural Gas Pipeline Co.
5 it was announced company plans to build a
1,400 mile pipeline, which.it is estimated will cost be¬

Dec.

tween $140,000,000 and $150,000,000.

James F. Oates, Jr.,
Light & Coke Co., stated fi¬
new project would probably consist of
25% stock.
Probable bidders: (1) for
Stuart & Co.; (2) for preferred stock:
Co.; Glore, Forgan & Co.

Chairman of Peoples Gas

nancing of the

Peninsular Telephone Co.

75%

March 8 reported company may do some new finacing
this year to pay for construction costs. Probable under¬

debt

and

bonds: Halsey,
White, Weld &

Co.; Coggeshall & Hicks.
Texas Power & Light Co.

Public Service Co. of Colorado
Feb. 16 reported company expects to sell about the mid¬

dle of this year $7,500,000 debentures and $7,500,000 pre¬
ferred stock;
Probable bidders include: Halsey, Stuart

(debentures only); W. C. Langley & Co. and
Glore, Forgan & Co. (jointly) (preferred only); Blyth &
Co., Inc.; and Smith, Barney & Co. (jointly); First Boston
Corp.; Harris, Hall & Co. (Inc.); Lehman Brothers; Har¬
riman Ripley & Co., Inc. and Union Securities Corp.
(jointly); Kidder, Peabody & Co.; Eastman, Dillon & Go.

Feb. 13 reported planning permanent financing probably
to extent of $7,000,000 of bonds before August, 1950.
Probable bidders for bonds:

Halsey, Stuart & Co. Inc.;
Corp.; Blyth & Co., Inc.: Kidder, Pea¬
body & Co. and Smith, Barney & Co. (jointly); W. C.
Langley & Co. and Glore, Forgan & Co. (jointly); Carl
M. Loeb, Rhoades & Co. and E. H. Rollins & Sons
(jointly); Union Securities Corp.; Drexel & Co. and
Hemphill, Noyes & Co. (jointly): Lehman Brothers;
The First Boston

Salomon Bros. & Hutzler.

Funds will be used to finance

construction costs.

Public Service Electric & Gas Co.
Feb.

7

announced

(5/2)

•

plans to offer $26,000,000
refunding mortgage 30-year bonds. Underwriters—Names
to be determined by competitive bidding. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.
and Drexel & Co. (jointly); Kuhn, Loeb & Co. and Leh¬
man Brothers (jointly); First Boston Corp.; Union Secur¬
ities Corp. and White, Weld & Co. (jointly). Proceeds
—To refund 3%% bonds duer1966. Expected about May 2.
San

company

Diego Gas & Electric Co.

March 4 it

was reported early registration with the SEC
500,000 shares of common stock is expected. It
is planned to ask the California State Commission for
exemption from competitive bidding. Traditional under¬
writer: Blyth & Co., Inc.

of about

Thompson

vote

Property Custodian is pre¬
to offer at competitive bidding 440,000 shares
of common stock (total issue outstanding) late in March
or early in April.
Registration with the SEC expected
shortly* Probable bidders: A. G. Becker & Co. (Inc.),
Union Securities Corp. and Ladenburg, Thalmann &
Co. (jointly); Merrill Lynch, Pierce, Fenner & Beane;
Kidder, Peabody & Co.; F. Eberstadt & Co.; Allen & Co.

paring

Cleveland,

that stockholders will

increasing the authorized

on

Ohio

on

common

March 28

stock from

500,000 shares, no par value, to 1,000,000 shares, par $5,
in order to provide for a 1.20-to-l split-up and for future
financing, acquisition of property and other
Utah

Puel Co.

purposes.

(4/10)

The

referee will offer at public auction at 11 a.m. on
April 10 all of the 100,000 outstanding shares of stock of
this corporation at the Guaranty Trust Co. of New York,
140 Broadway, New York.
Business—Mining of coal in
Utah and Colorado and manufacturing of coke in Utah
and sale of said products.
,
■

Utah Power & Light

1950

Jan. 26 announced the Alien

Inc.,

Products,

March 2 announced

Feb. 17 it

Schering Corp.

to

was

issue

basis of

one

Co.

announced that company proposes during

and

stock

sell common

share of

new

on

the minimum

stock for each eight shares of

outstanding, and to issue and sell $10,000,mortgage bonds. Probable bidders for bonds:
Halsey, Stuart & Co. Inc.; Drexel & Co.; Harriman Rip¬
ley & Co., Inc. and Union Securities Corp. (jointly); Kid¬
der, Peabody & Co.; White, Weld & Co.; Lehman Bro¬
thers; Carl M. Loeb, Rhoades & Co. Proceeds—To be
used to repay loans and for construction.
common

now

000 of first

Seaboard Air Line RR.

West Coast Transmission

Co., Ltd.

Feb. 7 directors appointed a committee to proceed with
the refunding of the approximately $31,800,000 outstand¬

Feb. 10 reported that Eastman, Dillon & Co. and the First
Boston Corp. were ready to underwrite the financing

ing first mortgage bonds, provided satisfactory terms
be arranged.
Probable bidders include Halsey,
Stuart & Co. Inc.; Kuhn, Loeb & Co.; Lehman Brothers;
First Boston Corp. and Harriman Ripley & Co. (jointly);
Union Securities Corp.

of the

(3/23)

Gallagher & Walton, 15 Broad Street, New York, N. Y.,
by noon (EST) on March 23 for the purchase of $7,065,000
1 to 15-year equip, trust certificates, series G, dated April
1, 1950. Probable bidders: Halsey, Stuart & Co. Inc.;

1,400 mile pipe line proposed by the West Coast

Transmission Corp., along with

Nesbitt, Thomson & Co.,
Ltd., of Montreal, Canada, and Wood, Gundy & Co. of
Toronto, Canada. The financing would be divided 75%
remainder to preferred and common
amount of the bonds are expected to
be taken by life insurance companies. Arrangements will
be made to place in Canada part of the securities. It is
expected an American corporation will be formed to
construct and operate the American end of the line in
to

bonds

stock.

RR.

Hutzler; Harriman Ripley & Co., Inc.
and Lehman Brothers (jointly); Harris, Hall & Co. (Inc.)
and Lee Higginson Corp. (jointly).
•

Southern California

March 3 it

Edison

and

A

the

large

Washington, Oregon and California. The completed line,
it was announced, will cost about $175,000,000.

was

summer

Shields & Co.

Proceeds would be

used to

supply from

$9,060,000

to

The net proceeds, together

Wheeling & Lake Erie Ry.
9

announced

bonds

company

early

amount of bank loans.

reported that company expects to issue
$55,000,000 of bonds. Probable bidders:
The First Boston Corp. and Harris, Hall & Co. (Inc.)
(jointly); Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.;

this

•

March

$4,000,000

Co.

refund

Southern California Gas Co.

reported company may issue and sell approxi¬
mately $20,000,000 of bonds, probably in May. Probable
bidders: Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.;
Lehman Brothers; Harris Hall & Co. (Inc.); White, Weld
& Co.; Merrill Lynch, Pierce, Fenner & Beane; the First
Boston Corp.; Shields & Co.; Kidder, Peabody & Co.

next

plans

month

to issue

to

and

refund

a

sell

like

Probable bidders: Halsey, Stuart

& Co. Inc.;

First Boston Corp. and Kidder, Peabody &
(jointly);
Salomon
Bros
& Hutzler; Lehman
Brothers; Harriman Ripley•& Co. Inc.
Co.

White

$30,-

000,000 314 % bonds and for construction costs.

(S. S.)

Dental Mfg. Co.

Feb. 2 announced stockholders will vote

April 4

on

in¬

creasing the authorized capital stock (par $20) from
300,000 to 450,000 shares, through issuance of 150,000
additional

shares.

Wisconsin

Public

Service

Corp.

Jan. 19 announced Standard Gas & Electric Co. proposes
to sell at competitive bidding all of the 1,625,000 shares

authority to construct natural gas facilities at an esti¬
mated cost of $32,520,000, which will be financed through
the issuance of additional securities.
Of the total cost,

of common stock (par $10) of this subsidiary, and the
Philadelphia Co., its principal subsidiary, seeks to sell the
common stock of Equitable Gas
Co. to be outstanding
following its proposed reorganization (see Equitable
above). It is the intention of the System to sell only
one of these holdings.
Probable bidders for Wisconsin
stock: First Boston Corp. and Robert W. Baird & Co.

$18,360,000 will be applicable to the 1950 program, and
the remaining $14,160,000 to be spent in 1951. This year's

(jointly); Harriman Ripley & Co.

Southern Natural Gas Co.

Co., Omaha, Neb.

Jan, 20 announced that the company proposes to issue
and sell at competitive bidding $40,000,000 of 2%%

$10,657,500 of new capital.

sale

Co.

Dec. 19

7

Natural

Pacific

the

offered to stockholders

be

Salomon Bros. &

Dec. 20

Northern

stock to

privilege to subscribe, at par, on or before March 31,
1950, for $37,727,600 of convertible debentures, due April
1, 1960, convertible into common stock at $55 per share.
Underwriters—Blyth & Co. Inc. and Salomon Bros. &

Bids will be received at office of Willkie, Owen, Farr,

company

Southern

through

be

may

common

Halsey, Stuart & Co. Inc.; Morgan Stanley &
Co.; White, Weld & Co. and Glore. Forgan & Co. and
Union Securities Corp. (jointly); First Boston Corp. Pro¬
ceeds would be used to redeeming all outstanding first
mortgage bonds and serial notes of Ohio Public Service

Seaboard Air Line

plans issuance of $1,680,000
equipment trust certificates some time this month. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Salomon Bros.
& Hutzler; Harris, Hall & Co. (Inc.).

Feb.

instalment notes.

include:

Corp. may be underwriter.

Missouri-Kansas-Texas RR.
Feb.

on

borrow $4,200,Probable bidders

or

could

offering of about 250,000 shares of com¬
common

to issue and sell
bidding $52,000,000 of first mortgage bonds

000 from banks

of

480,000 shares of preferred stock (par $25),
of which 160,000 may be presently issued, and to change
the name of company to Laclede Gas Co. Probable bid¬

•

announced company proposes

& Co. Inc.

March 14 company reported

issue

21

due 1980 and to issue additional bonds

due

March

of bonds in June.

Ohio Edison Co.

financing

Jan. 4 announced company has applied to the FPC for

(jointly); W. E. Button & Co. and Glore, Forgan & Co.
'

/olume

171

Number 4890

THE

of bids much

Bell's did

Company

the New

as

on

COMMERCIAL

Jersey

Reserve

Tuesday.

officials

and

pros¬

pany,

set

York

forth

in

the

covering

regis¬

lag in moving highlow-yield new corporate

issues apparently is
making for a
considerable degree of caution on
the part of
underwriting firms.

to be

this

week's

sale at competitive
of $15,000,000 of new
40-year debentures by the New
Jersey Bell Telephone Co.

The

offering attracted
bids being, as it

six

the much-welcomed "Street"
that is an issue which does

\
'

of

Statistical

debentures

going to

un¬

derwriters.

of

size,

[coupon

on

j91.05 for
'he

The

Economic

of

the

nounces

All

of

he

With G. H.Walker Co.

latter, it is understood,
have been
getting fairly active
inquiry for the issue.

not

is

who

successor

has

had

an¬

Superin¬
Mr.

as

served

as

Manager of the

DIVIDEND NOTICES
WESTERN

Notice is

been

TABLET

&
STATIONERY
CORPORATION

hereby

given

that

dividend at

a

the

rate of $.50 per share oil the issued and out¬
standing shares without par value of the Com¬
mon
Stock,
of
Western
Tablet
&
Stationery
Corporation has been declared payable on April
15. 1050, to holders of record of such shares at

Hq succeeds

the

W.

He

as

appoint¬

close

of

business

March

en

E.

United

H.

Shoe

29.

BACH,

Treasurer

Machinery

Corporation
The

Directors of
this
Corporation have
a
dividend of 37*,aC per share on

clared

de¬
the

Preferred

capital stcek. They have also declared
dividend of 62:/2c per share on the Common
capital stock. The dividends on both Preferred
and Common stock are
payable April 5, 1950, to
stockholders of record at the close of business
a

James Streets branch in Montreal.

Knickmeyer

MacRae

Manager
of
the
bank's Chicago office.
Previously,

Montreal

following

Legislative and the Ontario division.
for

Mr.

tendent in British Columbia.
Eric
B.
Lavelle
succeeds

Appointments

BanK

Affairs—

to W. H. Raikes,
appointed to suc¬

March

14, 1950.
WALLACE

DIVIDEND NOTICES

M.

KEMP,

Treasurer,

OLD TOWN

GENERAL REALTY & UTILITIES

down to the lowest of
the same interest rate,

DIVIDEND
The

group, it is unembraced a total of 26

Capital

projected

f

too

rich

J

present.

for

14

bid

a

the

firms

decided

however,

debentures

102.457

to

to

for

return

big

for

llh

The

the

first

volves

the
of

ties

re-offering
indicated

an

deals

Pacific

got

Gas

&

such

operation
stock

common

preferred.

to

be

cumula-

Any

stock

would

by

bankers

for

unex-

be

taken

public

and the proceeds

Pacific

volves

Gas

1,650,156
to

common

ord

expire

14.

"Rights"

April

subscribed

offering

shares

of

5

stock

|,down by bankers

and
will

in¬

-

for

for

New

around the

of

Economic

new

put

Economic
1948

Survey
—

had

Com¬

of

United

dividend of 30

of

Pulp

and

and

Midwest

and

appraising its

problems

and

trends

been

Guthrie—Bureau

un¬

corporate is¬

$42,000,000 figure,
a

week

comparatively

active market. And
moreover, it
is pointed out that the
major

associated

for

A.

of Economic and

cloth, $2.50;

paper,

GENERAL

the six

European Steel Trends in the
Setting of the World Market—
Steel

Underwriting Group.

Boston

Corp.

will

head

will

underwrite

Credit Co.'s
tion of its

National

New

15,

M.

a

York,
Y.

FOX,

LION OIL

|

The Trustees have declared a
quarterly dividend of twenty-two
and one-half cents (22]4,<t) per
share on the COMMON SHARES
of the Association payable

COM PAN*

|

April 15, 1950

|
|

of record at the close of business
March 20, 1950.

|

'

E

A regular quarterly divi'
dend of
per share has

|

=

been declared

Company, payable April 15, 1950,

—

E

holders

of

the Capital

on

record

March

Stock of this

31,

to

1950.

The

March 8,

W.

Federal

-

State

-

Local Relations

—William H. Dillistin

—

open.

Earning Statement

Holders

|

New England Gas

| and Electric
|
1
|

ARUNDEL]
^rcORMRMWtt^
0MTINOM

|
|

M mm AMD

The

Board of Directors of The
Arundel Corporation has this

day

(March
cents

14,
1950)
share as

value

dividend

stock

issued
on

declared
the

per

quarterly

of

the

25

regular

the

no

|
1
I

after

on

the

cor¬

poration's books at the close
business March 21, 1950.
MARSHALL G.

for

|

March 9, 1950.

EXPERIENCED

siiiiiiiiiiiiiiimiiiiiniiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii

RfYflOLDJ

REYNOLDS

Secretary

METALS
Reynolds Metals Building
Richmond 19, Virginia

and

PREFERRED DIVIDEND

The Dayton
made

With

a

position

Jersey City desires
with

an

over-the-

&

11(a) of the Securities Act of 1933,
as
amended, an earning statement for the 12
month period ended December
31, 1949, which
began after the effective date of the Com¬
pany's Registration Statement, SEC file No.
2-7736, (effective November 19, 1948), relat¬
ing to the $15,000,000 principal
amount, First
Mortgage Bonds, 3% Series A, Due 1978, of
the Company,
Copies of such earning state¬
ment

Box

ces.

S 316,

Financial

Park

Commercial

Chronicle,

Place, New York 8.

company

25

will

be

holders of the

parties.

mailed

on

request

to

security

Company and other interested

The

regular

5V2%

198th Consecutive

Dayton
25

Power
North

and

Light

Main

Street

Dayton 1, Ohio

March 14, 1950.

Company

of

one

dollar

cumulative
stock

has

convertible

been

declared

pre¬
for

the quarter

ending March 31, 1950,
payable April 1, 1950, to holders of

Quarterly Dividend

record at the close of business March

21, 1950.
The Directors have declared from the
Accumulated Surplus of the Company

a

dividend of fifty ceiits ($.50) per share
on

the Common

Stock, payable March

A dividend of twenty-five cents
(25^)
a
share on the
outstanding common
stock

has

April
at

1,

the

been

declared

payable

1950, to holders of record

close

of

business

March

31, 1950, to stockholders of record at
the close of business on March
16,

1950.

1950. Checks will be mailed.

The transfer books will not be closed.

Checks
The

DIVIDEND

dividend

thirty-seven
and
one-half
cents
($1,375) a share on the outstanding
ferred

Section

good clientele in New

York and

Power and Light Company has
generally available to its security hold¬
in accordance with the provisions of

H. C ALLAN,

Secretary and Treasurer

Philadelphia 32, March 3, 1950.

|
=
~

NORRI^

The Electric Storage battery

1
|

1
Treasurer

of

Month

§

20, 1950.

COMMON
Twelve

§
|
|

1950 to shareholders of record
the close of business March
H.C. MOORE, JR.,

=

a

at

corporation

outstanding, payable
April 1, 1950, to the

stockholders of record

The Trustees have declared

§
|

quarterly dividend of$1.12'/2 per
share on the 414% cumulative
convertible preferred shares of
the Association payable April 1,

par
=

and

and

on

|

Association

PREFERRED DIVIDEND NO. 12

of

Period Ended December
31, 1041)

Power Co.




ri"">"Htiii""»»"i"»imiiiiHmiiiiiiiliilii||||||||||||||||||||||||||||||||||||{B
^!llllllllllllfllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll^

Light Company

counter house. Best referen¬

nicely
proportioned projects, $25,000,000, which should attract a host

Security

|

|

ATKINSON, Treasurer

Dividend Notice

common

The Dayton Power

SITUATION WANTED

first mortgage bonds
being put up
for bids by
Appalachian

This is another of those

H. C. MOORE, JR., Treasurer

March9, 1950.

COMPANY
to

|
|
1
|
|

1950.

on

I of $105.50

Notice

|
|
1

shareholders

Federal

Appalachian Electric

Electric

|

to

stock-

stock transfer books will remain
E.

=

|

COMMON DIVIDEND NO. 12

|
|

Commercial

shares of

|

Treasurer

forthcoming redemp¬

1%

|. New England Gas
| and Electric Association

Bank

Trustee,

1950.

outstanding 3.60% $100

the rate of

on

j

|

March

April 14, 1950, are
convertible into common stock at

ers,

new

I

which

of preferred.
The
Division, United Nations?
Department of Economic Affairs? conversion privilege ends at the
close
of
business on
—Columbia University Press,
April 14,
2960?
Any preferred shares re¬
Broadway, New York 27, N. Y.—' 1950.
maining unconverted will be
Paper—$1.50.

SALESMAN

should be keen again for the

of business

above-

Realty
&
on
March

paid

15, N.

SAMUEL

for each share

said to be small.

Tuesday promises another
day of brisk activity on the part
of
underwriters, since competition

close

months

the

on

many

Kidder, Peabody & Co. and The

been

Next

the

at

11

REALTY
&
UTILITIES
CORPORATION

By

E

demption

$1.50.

of

equity securities,
finding brisk
reception, the inventory problem
have

April 1, 1950 to stockholders

on

Coupon

=

Heads

utilities.
case

of

NO.

by

General

be
Commercial

at
The
Trust
Company

pay¬

^iiiiiiiiiiiiniiiiiiuiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiniiinmiiiiiiiniiiie

for

representing interest for
ending) March 31, 1950

Wall Street, New York

a

the

on

JEROME A. EATON, Treasurer

1969

the amount called

1950

and

share

Company,

Debentures

COUPON

Research, State College par value cumulative preferred
Washington, Pullman, Wash.— stock. The shares, called for re¬

portion is made up of issues of
high investment quality, chiefly
the

per

March 14, 1950

Business
of

John

31,
46

Kidder, Peabody and First Bos¬
ton

Paper,: First

particular

—

Co.,

OF

mentioned
Debentures
of
Utilities Corporation,
will

Stock

Mr. Knickmeyer was
Secretary jof
Albert
Sons, Inc., wkh which he

The---Study analyzing the indus-< group of investment firms
try

&

To Redeem Pfd. Stock

Latin

,

Economics

Walker

11

period

Commercial Credit Co.

Department of Economic Affairs
—Columbia University
Press, 2960
Broadway, New York 27, N. Y.—

due

the

cents

Common Stock of the

Treasurer

years.

Nations

Paper—$2.

H.

No.

Income

September 30,

PAYMENT

Payment of

Street, members of the

York

Theis &

the

University Press, 2960 Broadway,
York 27, New
York—Paper

-America

G.

OF

formerly

Columbia

—

Due

NOTICE

redeemed at the redemption price
per share plus accrued
previous. This does not take into in Agriculture—John D. Black—<
dividends from April 1, 1950.
As
National Planning
account
rail
Association, 800 : of March
equipment
issuer
13, 1950, there were out¬
where the backlog was
estimated Twenty-first Street, N.W., Wash- f
ington 6, D. C.—Paper cumulative ? standing 158,845 shares of 3.60%
[..around $31,000,000.
preferred stock and 277,978 shares
supplement No. 2—50c.
This
is
not
considered
a
Historical Directory of the
burdensome carry for corporate
Banks of the State of New York
FINANCIAL NOTICE
securities
in a

which

The Board of Directors has declared

record

able

Cumulative

„

Chronicle)

Exchanges.

Europe,

Division

with

503 Locust

Build¬

Research

—

Europe

ciated

New

rec¬

any un¬
be
taken

about double the total

In

FOX,

payable

of

1950.

1950

4%

Knickmeyer

ST.
LOUIS,
MO.—Lester
W.
Knickmeyer has
become
asso¬

$5.00

report
Investors Re¬

1949

Nations

mission

of

for reoffering.

estimates

sold balance of
sues

basis

L. W.

(Special to The Financial

recent

Bulletin

Planning

United

are

Corporate Backlog
Current

trial

a

with

Quarter

new

shareholders

March

and

of-

applied

redemption of the preferred.

The

Third

in¬

offering of 427,948

;nged

to

M.

CORPORATION

—50c.

3.6%

;

on

booklet

Economic

>

id in redemption of the Com¬
ma! Credit's
e

weeks

$2.00)—Dept. F-i,
search
Company, Mihran
ing, Santa Barbara, Calif.

Corp.

ctric

six

sub¬

under way this
week, one for the
Commercial Credit Co., and the

.

15,

Anal¬

ysis—Manual analyzing principles
of "Basic
Strength Data"—Manual
plus Basic Strength Reports for

(or

"standby"

second

Security

took

Standby Deals Under Way

Two

\

to
stockholders
business March 21,

of

DIVIDEND No. 30

the

GENERAL REALTY & UTILITIES
Sense

and

yield of about 2.65%.

-

1950,

close

on

Corporation,

car

semi¬

a

share

March 21, 1950.

were

which

sequently ...priced

<!'

the

COMPANY, INC.

SHARES

declared
per

of record

was

rate, report has it that
of

entered,

Big

March

a. little
number of those

.

withdraw from the
group. The bid

'at

has

cents

SAMUEL

Common

any

some

3.

31,

20

di'scu/V.ed, it appeared that

the

was

of

the

final meeting, at
vhich last minute
pricing ideas

tli

Shares

the

CAPITAL

Directors
of

at

at

ON

of

dividend

March

were

At

Board

annual

jrrrur'
But

RIBBON A CARBON

CORPORATION

successful

t-rslood.

is

ceed

the

Waterloo, Ont., branch.

Makes

Exports and
Nations De¬

ranged all the way from
the highest of 102.101 for a
2%%

or

for

47

Bids

;

tq

reserved

were

provide

Bank of Montreal

Under-Developed

Information

L W.

The

require the gathering together of
great aggregations of banking
capital.

e

to

Tritschler

Wagnalls Com¬

United

of

bit bewildered.

a

scribed

total

a

was,

of

—

partment

issuance

conversion.

Prices of

Countries

stock

common

for

T. Aikins
MacFayden, who is
winning group bid 100, less the United States and for
Numer¬
an
retiring on pension after 44 years
underwriting fee of $735,688, ous Other Countries and
Jurisdic¬ in
banking.
specifying
a
3%
coupon.
The tions—Commerce
Clearing House,
Lawrence E.
runner-up bid 100, less a fee of
Tritschler, in
Inc., 214 North Michigan Avenue,
$464,049 for 3s. The issue is being Chicago
charge of the bank's Chicago of¬
1, 111.—fabrikoid.
offered
fice since 1947, has been
first to
stockholders of
appointed
record
March
Manager of the St. Peter and St.
10, with unsub¬

bidding

of

of

33

153 East 24th Street, New
10, N. Y.—cloth—$3.50.

The

rate that appeared to
case
in connection with

the

York,

York, N. Y.

—

At any

be

New

New

(1139)

Investment—Benjamin

Imports

Pacific

of

CHRONICLE

ments:
"standby" job on Southern Pacific's Columbia
John
MacRae, formerly
University Press. 2960
$37,727,600 of convertible deben¬
Superintendent
of
the
bank's
Broadway, New York 27, N. Y.—
tures last week aroused no end
branches in British
Columbia, has
Paper—$1.
of interest in
been appointed Assistant General
underwriting circles
Tax Systems, 12th Edition
A
and some observers still
Manager in Toronto in charge of
profess
reference Book

The recent

*•

Peace by

Relative

The outcome of
bidding for the

priced,

Bank

A. Javits—Funk &

stg|i£ment.
Southern

FINANCIAL

Liberty Street,
—Paper.

pective bidders are slated to get
together tomorrow to review and
bring up to date the information
tration

&

will

be

the Manhattan

ALLYN

mailed by
Company.

Bank

21,

of

DILLARD, Secretary

Dated, March 9, 1950

48

COMMERCIAL

THE

(1140)

FINANCIAL

&

CHRONICLE

Thursday, March 16, 1950

ing competition." This proposi¬

BUSINESS BUZZ

tion passed the House last year.
*

Washington...
/§

Behind-the-Scene Interpretations
from the Nation's Capital

its

g-gg m

91/9.9/

JLM.

objective

St

as

tion

JL Cr 19/

the

of

chances of

rated

gJ

-gg

*

Despite the limited rent control

Administration,

success

This

even.

the

year,

hardly

are

being

elec¬

an

Administration

would like to say that it had rent
control

continued, for the sake of
city vote. However, the
Administration is willing, it is re-^
the^..big

WASHINGTON,
doubted

D.

seriously

C.

is

It

—

with

and

no

exaggeration that the latest batch
of 21
proposed government re¬

organizations submitted to Conjgress will cut as much as a dime
from the expense of running the
establishment.

Federal

these

Instead
if allowed

to

reorganizations
into ertect, wRl

go

actually boost the cost of govern¬
The

ment.

only thing which had

bearing

any

costs

on

President's proposal

tives

are

to

get so

from

sored

Robertson

assistants

little

or a

more

all

shopping,

wives

their

and

work

to

While

Truman's

Mr.

pro¬

posed reorganizations hold no
promise of saving any money,
they do show that Mr. Truman
just |

knew

what he was doing
before the Hoover

when, shortly

Commission

Organization of

on

government

ready

was

around

arms

to the White

Hoover

figuratively

House,

public,

re¬

called ex-

the President

port,

President

to

his
in

threw
Hoover

Mr.

what a
Mr. Hoover

declared

and

wonderful work

was

this

In

Mr. Truman's
two-fold. In the

respect

smartness

was

place it helped him get the
law under which he can take the
first

the

reorganizing

in

initiative

government. Without the prestige
publicity achieved by the
report,
the
President's

and

Hoover

Con¬
gress to give him some power to
reorganize would have been du¬
of

chances

the

persuading

af¬

has

President

the

Second,

fixed the great seal of the Hoover
J

report to everything he has done.
reorganization plans,

The latest 21

more

concentrate

they

though

<even

in the Executive, and

power

political objectives
the Administration,
just drip with language to show
propose
favored

by

just what Dr. Hoover

that they are

the

In

lbas

trouble.

of

Just

confusion"

to a lot
"eliminate

Congress

the

put

the President

process,

to

President

the

pro¬

posed to kill off the independent
Oeneral Counsel of the National
Relations

jLabor

President

the

labor

and

to

want

While
organized

Board.
kill

Hartley Act, the thing that the

Labor

Big
to

do

independent

the

is
to

NLRB.

Denham's job is the chief target
of

Labor.

President

The

has

been unsuccessful in persuading

Congress to repeal Taft-Hartley.
But

with

this

proposed

"reor¬

ganization" one of the two Houses
of Congress must take positive
action within 60 days and by a
vote of a majority of one of the
two Houses
(not a majority of
those present),
declare its dis¬

approval of this trick or it will
go

into effect. In these busy times,

that will

take

some

*

Behind
move

to

the

set up

*

effort.
*

Administration's
a

commission to




Joint

ment

re-i.

Economic

Committee, this idea of

govern¬

policing of price increases

to

ALL

of

Senator O'Mahoney.

industry is

idea

old

an

(This column is intended

hearings.

to

If

and may or may not coincide with
the "Chronicle's" own views.)

commission is conducting a

a

full-scale
tend

this

study,

there

Wesley Roberts will shortly
form C. W. Roberts & Co.,
Inc.,

of

with

would

New

number

a

doctrinaires

who

its

or

White

aides

closest

have

in

all,

mission

proposed com¬
be
so
obviously

would

its

in

ficials,

down

dampen

to

as

re¬

is already
dampening down enthusiasm for
the idea in Congress and
there
is

work.

will

be created.

"sick

lems

that

111.).

(R.

or

128%,

200%.

violation

all

from

thing

the dairy bloc. They
if

that

oleo

in

50%,

into

could

they

repealer

order

a

the

of

bill

Senate

hoped

fine

FTC,

$5,000

of

of

any

whether

on

misrepresentation in the sale of
oleo

anything

or

Mason,
sick

"the

facts

would

so

into

of

is

industry

coal

as

Hep.

observed

Senate

a

industry

largely
because,
first, coal has been priced out of
the market, and second, the great

inconvenience

the

caused

public

through coal shortages, artificially
created by the ruthless exploita¬
of

dictatorial powers by
*

*

the

not

the

oleo

H.

Douglas

(D., 111.)

has just learned what

few

hundred

have

known

other
all

a

legislators

along,

which

an

FTC

staff

get

this

way,

out

bill

Then

to

if

kill

the

who

southern

wanted

a

conserva¬

oleo legalized

hesitated
"sleeper" for fear

penalty

off this

they made

oleo

after

FTC

an

firmed

fine

taxes,

order

had

victim

passed.

had

elapsed,

business

in the

Roberts

represen¬

in

until

been

af¬

unless

or

failed

Trust Co.

to

to The Financial Chronicle)

LINCOLN,
Evans is

First

NEB. —Gordon

Trust

L.

associated with The

now

Co.

of

Lincoln,

10tl?r

and O Streets.

Cement Stocks:
Riverside Cement

Spokane Portland Cement
Oregon Portland Cement

Coplay Cement Mfg.
Giant Portland Cement

ap¬

peal to courts.
The

FTC

would

$5,000-a-day

apply

to

fine

The

"liberals"

proposal

are

Sherman

acts.

of

the

committee.

full
it

case

House
in

Judiciary
get

may

are

into

the
little

out

to

of

of the

the

"lib¬

The

up

bill subjecting

such

of

of

1950"

Request

Missouri Pacific
General 4s

Convertible 5
Common

A

and

1975

Vis 1949

Pfd.—When Issued

to the

acquisition has the

"substantially

Stock

on

the

of the assets of another

where

Cinderella

Analysis

odds

FTC ban, the acquisition by one
company

"The

pretty

a

take

Walt Disney Productions

which

in

floor

passing.

of

straining hard to get

Senate

Kefauver

run

a

of

favor

the

proposition

House

on

with

Teletype BS 69

Telephone HUbbard 2-1990

or

Celler subcom¬

committee,

fight

good

Securities

Squire, Boston 9, Miss.

Clayton and

This

It

will

the

10,

by

Investment

10 Post Office

$50,000, the fines

has hurdled the

mittee

pushing

multiply

to

LERNER & CO.

issued

orders

under the FTC and similar acts.

effect

big effort to kilt it,

would fail to get

would

is

by the court and 60 days

thereafter
the

stiff

a

Mr.

First

(Special

accord¬

not be applicable

case

erals"

conference.

and

aided

it works out,

way

such

that
any

the

how¬

because the story
generally until
was
well along in

largely

ever,

did

tives,

*

Paul

work

The

for violation of the

the

the

ing to the official explanation

day¬

So

that

$5,000 per day.

living

for this purpose.

didn't

It

without

Senator

adopted

as

from $5,000 to

repealer.

it sounded, a

FTC

the

for

they

possible the killing

oleo

proposal

one

John L. Lewis."

make

to

as

engage

that

hope

a

complacency

else,

the

scare

was

bad

as

of

City, to

Syracuse

BATKIN & CO.
30 Broad

Street, New York 4
Tele. NY 1-1965

Tel. WH 3-3388

lessen-

is

that two million government em¬

ployees

can't

be

Senator got only

The

wronged.

HAnover

Teletype—NY 1-971

2-0050

14 votes for his

Firm Trading Markets

Hill, Thompson & Co., Inc.
NEW

YORK

5

motion to suspend the rules of the

Senate

days

so

a

as

to

employees

cut

off

year

three

take.

can

four

or

sick

the

leave

FOREIGN SECURITIES

TELEVISION STOCKS;

All Issues

Stromberg Carlson

The opposi¬

Preferred & Common

tion

totaled

57.

The

Senator

be¬

lieves that if the sick leave abuse
and

the

long

annual

curtailed,

were

drones

could

be

and

if

from

the

Federal payrolls, that the
govern¬
ment

could

save

several

hundred

Hytron Radio & Electron.
Magnavox Pfd. "A"

FOREIGN SECURITIES

the

that

fired

r.ABl MASKS 4 r.O-

vacations

SPECIALISTS

50 Broad Street

Trading Department

New York 4, N. Y.

AFFILIATE: CARL MARKS & CO. Inc. CHICAGO

*

Street,]

1

abetted, by pointing out never,
Oh, never, would they actually
think of asking for a fine any¬
where near approaching as much

the

get into

violation

for

day

the

lights out of business generally

these

all

consideration,"

tion

tax

of how

the

or

that

by

illustration

was

wages

50%.

man,

oleomargarine

main impetus for getting

The

only

railroading

the

final

whimsically the
Congress sometimes operates.

10% and in
actually increased

by

for

Com¬

got into the

irrelevantly and

in manufacturing generally they

declined

possible
day

Trade

an

accidents

decreased

decade

Federal

orders

of

per

the

of

of
per

is

asserted

coal mine

$5,000

Truman

$76.84,

to

business

to

up

presented to President

in

miners'

also

He

whereas

this

How
fines

be

to

out

feeling
lawyers

#

>i!

as

observed

wages

$23.88

mil¬

two

employees

repealer

increased

coal

from

that

Pine

tative for G. H. Walker & Co.

it

the proposed fine would not work

represent too many votes.

draft

$23.86 in 1939 to $54.41 in 1949,

rose

is

Finally, there

ap¬

Noah

Rep.

He

the

whereas

of

this

prob¬

industry"

from

came

Mason

interpretation

coal

With

government

mission

different

A

the

trouble

The

lion

It

commission

the

chance

a

not

its

for

spect

annually.

praisal, few disagree.

of

make-up

-when

cigar points up the market is gooddroops down the market is bad!"

70

business.

With
millions

the

political

his

House
as
yet

embraced this idea.
All

"When

is doubted,

the

that

however,

at

formerly

was

in favor of nationaliza¬

report

tion of the industry. It

offices
York

securities

like to have the commission slant
a

Company

C.

are

the
Administration,

among

socialist

Form Own

to

Act.

naturally
bright Ph.D.'s of the

Finally,

Wesley Roberts EH

from the

Administration

the

of

the Taft-Hartley

flout

G.

will

also

divert attention

to

Den-

status

before

cases

most

Robert

with

away

fram's
open

want

boys

projected steel

the

pretation from the nation's Capital

Taft-

the

of

I

"Taking

ordered.

the

allowing

/

idea

this

manufacturing

bious.

the

on

port

Congressmen and government of¬

doing.

of

to re-

effort

with drivers.

complete

idea

fleet the "behind the scene'' inter-

govern¬

take them

limousines to

ment

Although

ritates union leaders.

then they

to

only

trust laws, but the agitation ir¬

they will be

now,

entitled

be

a

what

was

«

political line-ups, subject unions
to the inhibitions of the anti¬

they get $10,000

boosted to $14,000, and

■will

strike

coal

brought

depart¬

of

heads

and

Whereas

to

*

in-j

Willis
subject

A.

Va.)

(D.,

control

rent

a

Congress will not under present

great deal of the work for the

ments.

Senator

by

The

powerful individuals, largely
who actually handle

secretaries

Note:

spon¬

move

call

the government to regulate and
hence
to
prohibit
price

the unions to the antitrust laws.

anonymous,
a

the

fur¬

present

it has something

as

can

still

a

the

the books beyond June 30.

O'Mahoney

study probably would divert at¬
tention

to

of

creases without its approval
is
advanced in this particular case

such

thing,

another

For

it

on

S:

economy.

•with salaries of $14,000 per year.

Jsuce

law

entire

nation's

the

submit

long

so

which

allowed it
far out of hand that it

threatened

to

broadening

law,

having

for

situation,

that the de¬

administrative

ther

only secondarily economic.
For one thing, it is hoped that
such a study would tend to divert
attention from the mess the Ad¬
ministration
made
of
the
coal

partmental
administrative
offi¬
cers be given a subcabinet status
"These

ported,

variety of motives.

the

was

"sick coal industry" is
These mo¬
primarily political, and

study the
a

120
Tel.

BROADWAY
REctor

2-2020